Profile

Small direct
current
electric motor

Marketing
We engage in marketing to rapidly,
sufficiently and appropriately ascertain
market and technology trends aroundthe world and the motor functions that
customers require. We provide our customers
with low-cost, high-quality products andexcellent delivery response times while
analyzing information we collect on diverse
customer needs to discover commonalities
that permit standardization.

1

MABUCHI MOTOR CO., LTD. Annual Report 2010

Research andDevelopment
Continuing to respond to a variety of needs withregard to motors, primarily the ability to be highly
efficient and low in noise, Mabuchi Motor has
always been leading the market of small motors.
From basic research, product development,
product design and production technology to
motor-applied technology in these small machineparts, Mabuchi has collected every wide range oftechnical capability that has been acquired overmany years.

Production
Mabuchi is establishing production bases
across Asia with the aim of developing acompetitive motor production system andproviding employment opportunities inhost countries. Furthermore, we strive to
combine high quality and low cost in our
production process by seeking an optimalbalance between people and machines.

Quality Assurance
Small motors from Mabuchi play animportant role in many different settingsin everyday life, mainly in the automotive
products industry. To enable people touse our motors with confidence even in
demanding environments, we conduct
rigorous quality testing of every aspectof product performance, including thematerial quality and processing accuracyof parts, noise, change in temperature andhumidity, and vibration.

Small
Motors at
Work— Making Our Lives Better
Ever since its founding, Mabuchi Motor Co., Ltd.
has been a specialist manufacturer of small
motors that deliver consistently high quality andefficiency at low prices in line with our basic
policy “Bringing better and more reasonably
priced goods to the market.” Small motors from
Mabuchi contribute to convenient, comfortableliving for people the world over as functional
components in a wide variety of applications inmany industries, including automotive products,
audio and visual equipment, optical and precision
instruments, home appliances, power tools, toys,
and hobbies.
The Mabuchi Group is the world’s leading
producer of small motors. Our annual production
volume of approximately 1.615 billion units (2010results) is testimony to the excellent reputationand trust we have built with our customers anda source of great pride for us. In the coming
years, we will continue to aspire to create newvalue through product development adaptable tomarket needs and a flexible supply system.

MABUCHI MOTOR CO., LTD. Annual Report 20102

Table of Contents

Our Business

Financial Section

01

17	Financial Summary

ProfilePresident’s
Message04
Forward-Looking
Statements
This annual report contains
forward-looking statements about
Mabuchi’s future plans, beliefs,
strategies and performance thatare not historical facts. Thesestatements are based on current
expectations, forecasts, estimatesand projections about the industry
in which Mabuchi operates and thebeliefs and assumptions made by its
management. As such expectations,forecasts, estimates and projections
are subject to a number of risks,
uncertainties and assumptions, they
may cause actual results to differ
materially from those projected.
Mabuchi therefore cautions readers
not to place undue reliance on
forward-looking statements.
Furthermore, the Company undertakes no obligation to update any
forward-looking statements as aresult of new information, future
events or other developments.
Risks, uncertainties and assumptions mentioned above include,
but are not limited to, exchange
rates and economic conditions; theoutcome of pending and future
litigation; commodity prices; andthe continued status of financing,financial instruments and financial
resources.

3

To Our Shareholders

How We’re Doing
09	Segment Information by Motor
Application
11	Research and Development
Activities

Activities for
Sustainable
Management
12	Mabuchi’s Management Vision
13

Corporate Governance15	Board of Directors, Corporate
Auditors, and Executive Officers
16

MABUCHI MOTOR CO., LTD. Annual Report 2010

Corporate Social Responsibility

19	Management’s Discussion andAnalysis
21

Business and Other Risks

23

Consolidated Balance Sheets

25	Consolidated Statements ofIncome26	Consolidated Statements of
Changes in Net Assets
27	Consolidated Statements ofCash Flows28	Notes to Consolidated Financial
Statements
36

Independent Auditors‘ ReportCompany
Information
37

Investor Information

38

Corporate DataTo Our Shareholders

We are promoting a new axis of growth and rationalizing costs to drive progress inpromising business areas

Although the gradual recovery trend in Japan continued
as well, the second half of the year brought fears of an
economic slowdown due to a decrease in exports accompanying the slowing of recovery in developed countries,
appreciation of the Japanese yen and a slowdown in therecovery of domestic demand triggered by the discontinuation of economic stimulus measures. However, even though
recovery came to a standstill, the economy showed underlying stability thanks to upside factors such as last-minutedemand prior to the discontinuation of economic stimulus
measures.
Under these business conditions, demand in the markets
in which the Mabuchi Group operates showed a recovery
trend on the whole. The automotive products market inparticular saw a sharp increase in demand as a result of

Shinji Kamei,
Representative Director and President

gradual demand recovery in developed countries coupledwith continued market expansion and higher demand in
emerging countries. Although demand increased in theGroup’s other markets as well, because sales of many of
the key products in these markets are dependent on de-Overview of Sales during Fiscal 2010

mand in developed countries, recovery in demand was
gradual due to the slow pace of economic recovery in theseIn the fiscal year ended December 31, 2010, although there

countries.

were geographical pockets of strength and weakness, theworld economy continued its gradual recovery trend fromthe end of the previous fiscal year. However, the impactof economic stimulus measures implemented in a numberof countries began to weaken, and economic recovery indeveloped countries lost momentum in the second half ofthe year. On the other hand, the expansion trend in emerging countries continued, and overall the world economy
showed underlying stability.

Financial Highlights
Millions of yen

Thousands of
U.S. dollars

Rate ofchange

2009

2010

2010

2010

Net sales ¥70,369
Operating
3,019
incomeNet
5,450
incomeTotal
192,362
assetsNet assets 180,311¥82,752$1,021,629+17.6%

6,624

81,777+119.4%

5,260

64,938-3.5%

185,4082,288,987-3.6%

174,570

2,155,185-3.2%

MABUCHI MOTOR CO., LTD. Annual Report 20104

In fiscal 2011, the Company will focus on establishing
new growth axes and cost rationalization alignedwith the business environment.

As a result, consolidated net sales for the period amounted
to 82,752 million yen (17.6% increase on a year-on-yearbasis). Sales of motors, which account for the majority
of consolidated net sales, came to 82,658 million yen(17.6% increase on a year-on-year basis). Next, looking
at operating income, despite such negative factors as thesteep rise in labor costs and raw material costs, capacity
utilization improved in the wake of a sharp year-on-yearincrease in sales volumes, and the profit margin improved
as the collection of fixed costs per product unit increased.
At the same time, profitability improvement activities
In these circumstances, the Mabuchi Group implemented

continuing from the previous year bore fruit. As a result,measures to address the following issues: expansion ofoperating income for the year amounted to 6,624 million

priority businesses (acceleration of the growth strategy), re-yen (119.4% increase on a year-on-year basis). Ordinaryorganization of production bases (reinforcement of manu-

income amounted to 7,587 million yen (39.9% increase

facturing infrastructure), and rationalization of costs (trans-

on a year-on-year basis). This was due to an improvement

formation to earnings structure and strategic investment).

in operating income, which offset deterioration in nonoperating income and loss due to factors including aSpecifically, the Group sought to increase sales and market

decrease in interest income on financial investments andshare, ensure stable product supply and improve quality,

the recording of a foreign exchange loss as a result of theincrease profitability and productivity, and increase future

strengthening of the yen. Income before income taxes

Group management efficiency by actively devising mea-amounted to 7,291 million yen (142.0% increase on asure including (1) sales promotions of motors for power

year-on-year basis). This was due to the non-recurrence thiswindow lifters and motors for power seats; (2) product line

year of the loss on the closure of production bases that was

expansion for compact, high-output, lightweight motors;

the principal special loss recorded the previous year. Net(3) transfer of production from China to Vietnam in ac-

income amounted to 5,260 million yen (3.5% decrease on

cordance with the medium-term plan (production ratio

a year-on-year basis). This was partly due to the elimination

optimization); (4) a rapid start of operations at MABUCHI

of a special factor, namely a non-recurring gain on the

MOTOR (YINGTAN) CO., LTD., which was established inreversal of deferred tax liabilities recorded during the same

Jiangxi Province, China; (5) conversion of MABUCHI MOTOR

period last year as a consequence of an amendment to the(JIANGSU) CO., LTD. into a dedicated plant for the automo-

Corporation Tax Act, resulting in the return to the usual tax

tive products market; and (6) strengthening of the budget-

expense this year.

ing system and focused investment in facilities to rationalize
production.

5

MABUCHI MOTOR CO., LTD. Annual Report 2010

Implementation of a Growth Strategy and Cost
Strategy in Preparation for a New Breakthroughof next-generation models that will be more compact andlightweight and cost less.

In fiscal 2011, the Company will focus on continued

We will also work to develop motors for power seats intostrengthening of the automotive products business, sales

a second key product line comparable to motors for power

expansion in China, reorganization of production bases,

window lifters by concentrating resources on development

and plant efficiency improvements necessary for theand sales expansion. We will take advantage of our prod-

establishment of new growth axes and cost rationalization

uct competitiveness and successful track record to steadilyaligned with the business environment.

convert product inquiries, which are increasing in number,
into purchase orders. At the same time, we will create

Continued Strengthening of the Automotive
Products Businessgreater synergy between our power seats business and

To strengthen the automotive products business, a medium-

competitiveness.

power window lifters business to further reinforcement ofterm initiative currently being implemented, the Mabuchi
Group will continue to make focused investments in the

Furthermore, with regard to increasing sales of compact,

markets for motors for power window lifters and motors

high-output motors, anticipated growth of the compact car

for power seats and take measures to increase sales ofsegment in the automotive industry is expected to bringcompact, high-output motors.

increased demand for motors with a focus on lighter
weight, lower noise, and environmental durability. We

First, with regard to motors for power window lifters, we

regard this change in the market environment as a newwill strive to increase sales by further strengthening ourbusiness opportunity and will work to expand our line ofsales systems and technical service systems in emerging

products that meet this market need and increase sales bycountries and will vigorously proceed with development

publicizing the benefits of those products.

Focus on Investments in the Markets for Motors for Power Window Lifters and Power Seats
Step Up the Development and Increase the Sales of Compact, High-Output Motors

Motors for power
window lifters
34 助手席ドア

Motors for power seats

MABUCHI MOTOR CO., LTD. Annual Report 20106

Optimizing Production Base Allocation and Maximizing the Benefits of Reorganization

Jiangsu Province, China (MABUCHI MOTOR (JIANGSU) CO., LTD.)
Increase production capacity of motors for power window lifters
and power seats
Jiangxi Province, China (MABUCHI MOTOR (YINGTAN) CO., LTD.)
Establish a low-cost production base by selective production andconsolidation of manufacturing process
Guangdong Province, China (MABUCHI MOTOR DONGGUANDAOJIAO CO., LTD., MABUCHI MOTOR (DONGGUAN) CO., LTD.)
Launch operation as a wholly owned production base, enabling
lower fixed costs and flexible management
Central Vietnam (MABUCHI MOTOR DANANG LTD.)
Expand production; start production of motors for automotive
products

Sales Expansion in China

according to production base location and organizational

To strengthen our business in China, an enormous mar-capabilities.

ket that holds promise for future growth, we will develop
competitive products appropriate for the local market bySpecifically, we will further boost global cost competi-

optimizing the performance and structure of our products,

tiveness: for instance, production capacity expansion forestablishing quality standards, and reviewing parts and ma-

motorsterials procurement methods to adapt them to the market.

for power window lifters and power seats at Mabuchi
Motor (Jiangsu) Co., Ltd., production expansion and start

We will also take advantage of the strengthening of ourof production of motors for automotive products at Mabu-

technical service system in China, such as utilization of thechi Motor Danang Ltd., production expansion at Mabuchi

Economic Cooperation Framework Agreement (ECFA), andMotor (Yingtan) Co., Ltd., and fixed cost reduction and as-

the benefits of wholly owned production bases in Guang-surance of management flexibility through full ownershipdong Province to increase sales to customers in China.

of the factories in Guangdong Province.

Reorganization of Production Bases

Plant Efficiency Improvements

The Mabuchi Group has engaged in activities from a

Serious problems such as sharp wage hikes and increas-

medium-term perspective to optimize production base al-ing employee turnover have arisen in the employment

location with the aim of ensuring stable supply of products

environments in China and Vietnam, and the questionand enhancing operating efficiency. We have implementedof how to increase production efficiency is emerging as

an initiative to decrease the ratio of production in China

a major factor that will affect future competitiveness. To

from 80% to 60% and increase the ratio of production in

respond to these developments, the Mabuchi Group will

Vietnam, where labor costs are lower, from 20% to 40%

pursue manufacturing processes that can ensure moreby the end of 2011. Since the transfer of production fromstable, higher quality while proceeding with the systematic

China to Vietnam progressed according to schedule in fis-

introduction of laborsaving facilities and improving worker

cal 2010, prospects for achieving this target are good.

efficiency.
At the same time, the Group will strive to transform

7

In the future, we will seek to maximize the benefits of re-

manufacturing fixed cost levels to levels that enable it toorganization by continuing activities to further strengthen

compete worldwide. To this end, the Group will review

our production bases, including the reallocation of models

the roles and functions of all work associated with its

MABUCHI MOTOR CO., LTD. Annual Report 2010

In China, we will develop competitive products appropriate for the
local market by optimizing the performance and structure of our
products.

worksites, consolidate and streamline the organizational

priate as a flexible response to changes in the share pricestructure and functions, abolish redundant functions, andor management environment and capital policy and as afurther systematize operational procedures.

method of returning profits to the shareholders.

 asic Policy on Returning Profit to Shareholders
B
and Dividends for the Year

Remaining surplus will be used for measures aimed atfurther strengthening our existing businesses and investingin areas of future growth, with a view of further increasing

Our basic policy on the appropriation of retained earnings

corporate value.

is to retain necessary earnings for sound business activities,
to maintain healthy financial strength and to ensure ade-

Outlookquate dividends to our shareholders based on performancefor the year. Based on the above policy, the Company

The outlook for 2011 is for gradual overall improvement

makes it a principle to consistently distribute an ordinary

in business conditions. In emerging countries, economic

dividend of ¥60 per share on an annual basis plus a special

growth is expected to continue and remain stable despite

dividend equivalent to 20% (paid out on a per share basis)

some concerns. In developed countries, on the other hand,of the annual consolidated net income. In addition, theeconomic recovery will remain anemic, and factors suchactual full-year dividend amount shall be based in principle

as soaring resource prices and credit uncertainty in Europe

on the above calculation standards and calculated in con-give cause for concern. In general, it appears additional

sideration of dividend payout ratio, dividend levels prior totime will be required for full-scale recovery of the world

the previous period, internal reserves, cash flows and othereconomy as a whole.

situations. The amount shall not be less than the expectedfull-year dividend amount announced during the full-year

The situation in the markets in which the Mabuchi Group’s

period.

products are sold is mixed as well. There are markets inwhich demand is increasing due to growth in emerging

As a result, the Company has decided to pay a year-end

countries and markets that depend mainly on demand

dividend of ¥50 per share (consisting of an ordinary divi-

in developed countries in which recovery is only gradual.

dend of ¥30 and a special dividend of ¥20). Since the Com-

Nevertheless, demand is trending up in the Automotive

pany has already paid an interim dividend of ¥50 per share

Products market, the Audio & Visual Equipment market,(an ordinary dividend of ¥30 and a special dividend of ¥20),

the Optical & Precision Instruments market, and the Home

the annual dividend for fiscal 2010 will be ¥100 per share

Appliances, Power Tools & Toys market.

(an ordinary dividend of ¥60 and a special dividend of ¥40),
as planned.

At this point, it is difficult to figure out the impact of theearthquake off the northeast coast of Japan, which oc-

The Company purchased a total of 12.0 million shares

curred on March 11, 2011, on our business performanceof treasury stock through public tender offers or market

although we are continuously examining the impact closely.

purchases and purchases of fractional shares from 2002 to
fiscal 2010 and has cancelled 5.2 million of these shares

Therefore, we are still leaving our earnings forecast for(including 2.0 million in fiscal 2010). The Company will

fiscal 2011, which we announced on February 15, 2011,

continue to consider purchases of treasury stock as appro-

unchanged.

MABUCHI MOTOR CO., LTD. Annual Report 20108

Segment Information by
Motor Application
During fiscal 2010, the world economy continued its gradual recovery trend from theend of the previous fiscal year. Against this backdrop, demand in the markets in which
the Mabuchi Group operates reflected this development on the whole. As a result,sales in the Group’s mainstay motor business increased 17.6% year on year, to ¥82,658
million, with sales volumes showing a sharp increase from the previous fiscal year.

Automotive
Products

Major Applications
Car mirrors, door locks, air conditioner damper
actuators, power window lifters, steering locks, etc.

Automotive Products Market
Net sales in this market increased substantially to 40,063 million yen (32.0% increase on a year-on-year basis). A
sharp increase in demand occurred as customers experienced parts inventory shortages from the start of the year
into spring due to recovery in automobile production. This resulted in a sudden recovery in sales of motors formirrors, door locks and air conditioner dampers, products for which the Group has high market share. Growth insales of power window motors continued as a result of demand expansion in emerging countries. With regard toother applications, sales of motors for power seats remained strong and increased sharply.
Net sales

Net sales by principal item

(Millions of yen)(100 millions of yen)

42,82036,781(Year-on-year change)

40,06338,6337

30,346

29
29 24
24
79
79

7

62

2006

2007

2008

2009

2010

62

99
99
2009
2009
Door
locks

DoorPower
locks window liftersPowerwindowPowerseatslifters
Power seats

Audio & Visual
Equipment

42
42 15
15 31
31
107
107

143.2%
143.2%
226.9%
226.9%
126.6%
126.6%
134.5%
134.5%

81

131.2%
131.2%

121
121

121.9%
121.9%

81

OthersOthersPower seats
Power
Airseats
conditioner dampers
Air conditioner
dampers
Power window
liftersPower
window
lifters folding)Mirrors (including
Mirrors(includingDoorlocks folding)
Door locks

Door locks
DoorMirrors
locks (including folding)Mirrors(including
folding)Powerwindow
liftersPower
lifters
Airwindow
conditioner
dampers
Air conditioner
dampers
Power seats
Power
seats
OthersOthers2010

2010 (including folding)Mirrors
Mirrors
folding)
Air (including
conditioner
dampers
Air conditioner
dampers
OthersOthersMajor Applications
DVD players/recorders, CD players,
car component systems, video games, etc.

Audio & Visual Equipment Market
Net sales in this market increased to 11,435 million yen (7.1% increase on a year-on-year basis). Sales of motors
for car CD players surged, accompanying the recovery in automobile production. Sales of motors for DVD players
decreased due to the impact of customer inventory adjustments that occurred in the second half of the year.
Net sales

Net sales by principal item

(Millions of yen)(100 millions of yen)

(Year-on-year change)

822,361

8

21,3084242

15,908
10,67911,435

9

2008

2009

2010

MABUCHI MOTOR CO., LTD. Annual Report 2010116.2%
116.2%
75.0%
75.0%

72
72

2009
2007

9
31

31

56
56

2006

9

2009

129.8%
129.8%

2010
2010

CD players

OthersCD players
DVD players/recorders

Others
DVD players/recorders

DVD Others
players/recorders

DVD CD
players/recorders
players

OthersCD players

Optical & Precision
Instruments

Major Applications
Inkjet printers, PC drives, digital cameras, etc.

Optical & Precision Instruments Market
Net sales in this market increased to 13,821 million yen (6.1% increase on a year-on-year basis). Sales of motors
for both inkjet printers and digital cameras increased as the market recovery trend continued.

Net sales

Net sales by principal item

(Millions of yen)(100 millions of yen)

16,6587
9
18

18,13915,896
13,024

2007

2008

2009

7
9
18

9
10
14

125.4%
125.4%
111.4%
111.4%
76.2%
76.2%

13,821

94

2006(Year-on-year change)

9
10
14

2010

Home Appliances,Power Tools & Toys

94

104 104

109.8%
109.8%

20092009

20102010

printers
InkjetInkjet
printers
DigitalDigital
camerascamerasPCs CD/DVD
PCs CD/DVD
drivesdrives
OthersOthersInkjetInkjet
printers
printers

OthersOthers

PC drives
PC drives

DigitalDigital
camerascamerasDigitalDigital
camerascamerasPC drives
PC drives

OthersOthersInkjetInkjet
printers
printers

Major Applications
Personal care products, power tools, toys, health andwellness products, etc.

Home Appliances, Power Tools & Toys Market
Net sales in this market increased to 17,337 million yen (6.8% increase on a year-on-year basis). Sales of motors
for hair dryers, shavers, personal care products and tooth brushes remained robust throughout the year due to
weak but stable demand in developed countries and demand growth in emerging countries.
Net sales

Net sales by principal item

(Millions of yen)(100 millions of yen)

23,90012
825,17822,071

29
16,230

62
2007

2008

2009

29

17,337
49

2006(Year-on-year change)

12
8

2010

10
7
30

49

55

62

69

2009
2009

10
7
30

80.4%
80.4%
90.8%
90.8%
102.7%
102.7%

55

111.5%
111.5%

69

112.8%
112.8%

Beauty-related equipment
Beauty-related equipment
OthersOthersPower tools
Power tools
Toys
Toys
Health-related equipment
Health-related equipment

Health-related equipment
Health-related equipment
Toys
Toys
Power tools
Power tools
OthersOthersBeauty-related equipment
Beauty-related equipment

2010
2010

Beauty-related equipment
OthersBeauty-related equipment
OthersToys
Health-related equipment
Toys
Health-related equipment

Power tools
Power tools

MABUCHI MOTOR CO., LTD. Annual Report 201010

Research andDevelopment Activities
Mabuchi’s R&D System
The Mabuchi Group conducts most of its research and development
activities in-house. In this section we provide an overview of the Group’s
R&D activities.
The R&D organization consists of Research and Development Headquarters and its subordinate organizations: Research and Development
Dept. 1, Research and Development Dept. 2, Production Engineering Dept.,
and Production Engineering Innovation Center. The R&D organization
pursues in-depth technical development in their respective areas of specialization within a collaborative framework. The Research and Development
Headquarters directly controls fundamental technology, intellectual property, and testing and evaluation, and the headquarters general manager
and deputy general manager control cross-departmental functions in theinterest of efficiency and prioritization. The Company has newly establisheda technology research department in fiscal 2010 to pursue new product applications by strengthening benchmarking activities and enhance information acquisition in our existing markets.
With regard to the ongoing strategy for transferring design improvement activities to China, further expansion of the scope of transferredwork has made it possible to more effectively allocate headquarters R&D
resources to focus on high-value-added work.

Strategic R&D Fields
There is strong demand in the marketplace for functional improvement,
cost reduction, and shorter delivery times. In our research and development, we pursue noise reduction, miniaturization, higher performance,and higher torque in response to requirements for functional improvement. To satisfy cost reduction requirements, we engage in rigorous cost
reduction activities that extend even to materials structure. To shortendelivery times, we have stepped up the use of concurrent engineering by
introducing a design review system that makes flexible collaboration anddecision-making possible. We are also applying CAD, CAM, and CAE to
implement rational work process innovations that span functions including
design, facilities production, and die making and machining.
In new product design, we render a valuable service to our customers
by establishing and deploying technologies to take maximum advantage
of inexpensive, readily available ferrite magnets and by lowering costs. In
manufacturing, we have implemented group-wide production technology
activities to ensure efficient production and have contributed significantly
to manufacturing cost reduction through production process innovations,such as reducing inventories, shortening man-hours and saving space.
The Production Engineering Innovation Center was established three
years ago within the Research and Development Headquarters to explore
and realize production systems unique to Mabuchi by applying innovative
perspectives unfettered by conventional thinking. The Center has launched
an initiative to devise measures to dramatically reduce production line
man-hours in response to steep increases in labor costs in recent years in
the countries where our overseas factories are located.

R&D expenses / R&D expenses ratio

R&D personnel(Millions of yen)
4.1
3.9

(Persons)

4,076

4,187

4.2

4.7

2006

2007

3,892

2008

2009

The SZ-466WB motor for automobile power seats and tilt/telescoping automobile steering wheels
This addition to Mabuchi’s small, high-torque motor line realizes a weightsavings of approximately 33% compared to previous Mabuchi products.
Further improvement of the SZ-466WA, developed last year, has resulted
in a motor that delivers the product performance and quiet operation
required for power seats. The SZ-466WB, which completes the line ofcompact, high-torque products, makes possible dramatic weight savingsin power seats and tilt/telescoping steering wheel applications. Mabuchi
will continue to develop products that satisfy market needs for fuelefficiency improvement and weight savings by motors.
The SF-266SA low-noise motor for automobile power folding
mirrors
This motor realizes a weight reduction of approximately 18% and a
volume reduction of approximately 22% compared to previous Mabuchi
products and has satisfied an important market requirement by solving
problems of noise during operation. We have succeeded in reducing noise
during operation to an unobtrusive level by reducing mechanical noise
by approximately 30% compared to previous Mabuchi products. The
SF-266SA is suited to a market environment characterized by decreasing
hybrid car and electric car noise levels. Mabuchi will continue to aim todevelop products that can contribute to comfortable living.

Number of intellectual properties(Intellectual properties)

335

338

348

368

3,337

2010

R&D expenses ratio (%)

11

The Fruits of Recent R&D Endeavors

4.0
329

3,298

In the automotive products business, a high-priority business sector,
we have developed low-torque and medium-torque models to enhance
the line of motors for power window lifters, which have developed froma new business into a core business, and have seen a steady increase indemand from Japanese and foreign automakers. Moreover, we ensure ourposition as the leading company in this business by constantly expanding
our new line of small, high-torque motors and by continuing to meet ourcustomers’ requirements.
We are also remodeling existing models for applications in othermarkets by means of R&D to modify basic performance specifications.
Through R&D based on a technology roadmap and growth in core technologies, we will continue to aspire to develop and manufacture motorsthat will become industry standards in the markets in which Mabuchi
products are used.
A summary of technical achievements in the year under review follows.
R&D expenses for the year were ¥3,337 million. The total number of intellectual properties held by the Company stood at 591 (118 domestic and473 overseas), and the total number of domestic and overseas new intellectual property applications during the year was 74. A total of 368 employees
engaged in R&D activities (232 at headquarters and 136 at MABUCHIMOTOR (DONGGUAN) CO., LTD. Motor Research & Development Center).
Since the Mabuchi Group engages in business activities in a single
business sector related to small motors and conducts a single business, no
explanation by business segment has been included.

MABUCHI MOTOR CO., LTD. Annual Report 2010

2006

2007

2008

2009

2010

496

497

133

132

363

365

2006

2007

Overseas

591

536

545

129

126

407

419

473

2008

2009

2010

Domestic

118

Activities for Sustainable
Management
The “Management Principle” of Mabuchi Motor encompasses the belief that we at Mabuchi
must elevate our level of contribution to society and persevere as a prominent entity theworld cannot do without. This principle is not only a guide for running our corporation but
a gene to be carried down to subsequent generations of the Mabuchi enterprise.

Mabuchi’s Management Vision

Our Missions
MANAGEMENTGUIDELINES

MAN

MAN

Mabuchi’s missions embrace a setof values for all Mabuchi Group
employees to share in overcoming
various difficulties and conflicts that
occur in carrying out their duties andachieving further growth.

AGEMENT POLICIESAGEMENT SCHEME

Our Management Vision

MANAGEMENT
PRINCIPLE

Contributing to International Society andContinuously Increasing Our Contribution

Mabuchi believes that a company can continue to exist and grow only if its business activities contribute tosociety on an ever-expanding basis. It goes without saying that a company cannot expand or even remain
in business unless it generates profits. However, profit is not Mabuchi’s sole management objective.
Our ultimate objective is to continue raising our level of contribution to society through our businessactivities and remain a company that society considers essential. This management principle is at the coreof all our activities, unchanging through time and irrespective of the people at the management helm.

MANAGEMENT GUIDELINESMANAGEMENT SCHEME

Mabuchi’s management guidelines, whichflow from our management principle, spell out
specifically how we “contribute.” These guidelines
outline the mission of Mabuchi’s business activities.

Based on Mabuchi’s business policy of maximizing the potentialof small DC brush motors as our core business, we mobilize ourorganizational skills and promote business activities in which
we can continuously exert a unique “Mabuchi-ism” that cannot
easily be emulated. Naturally, we do not aim at diversification
without contributing to society, namely, diversification only to
expand sales. We generate revenues and profits as a result of
our contributions to markets in which we are truly welcome. We
plan to continue reflecting this management philosophy, which
has served us well in the past, into the future.

MANAGEMENT POLICIESMabuchi’s management policies provide guidelines
for its corporate activities, which are a starting point
for creating value and lead to greater levels of social
contribution and achieving sound growth.

MABUCHI MOTOR CO., LTD. Annual Report 201012

Corporate Governance
Basic Approach to Corporate GovernanceWe understand that realizing this principle is our raison d’être,and we recognize that corporate governance comprises theorganizational/management systems and various managerial
measures that support those systems. Accordingly, we believethat the fundamental objective in establishing and implementing
an appropriate corporate governance framework is to further theinterests of our shareholders and other stakeholders on an ongoingbasis through the creation of fair profits and the enhancement ofcorporate value.
Constructing and maintaining a corporate governance systemalong the lines given below are indispensable for Mabuchi as a listedcompany.
1. To clearly separate management decision-making and efficientbusiness execution, and to clarify the scope of accountability;
2. T o build and operate a sound internal control system, namely, toeffectively work the internal check system and the management
supervision system;
3. To appoint a suitable number of independent officers whose
interests do not conflict with those of general shareholders toensure the objectivity and neutrality of management supervisionfunctions;
4. To foster a corporate culture in which all Group employees
recognize and share the understanding that the practices ofcorporate ethics and compliance support the organization’s social
impartiality and are fundamental to living up to the trust andexpectations of all stakeholders; and5. T o disclose corporate information to shareholders and otherstakeholders in an appropriate, fair, timely and clear manner andto ensure accountability through the Board of Directors, the Boardof Statutory Auditors and other bodies.
The Mabuchi Group employs a simple corporate
management structure by establishing a corporate groupconsisting of Mabuchi Motor Co., Ltd., and its wholly owned
subsidiaries as well as focusing and specializing its businessresources on and in the small DC motor business. The Mabuchi
Group employs the Corporate Auditor System as the bestsuited organizational design after considering such matters as
directors’ duties, management efficiency and the maintenanceof a management supervisory system that is appropriate to theabove business contents and corporate management structure.

Outline of Corporate Institutions
Board of Directors and Executive Committee
Significant management decision-making is carried out by the
Board of Directors, consisting of seven directors (including six
resident in Japan) familiar with the Company’s management
environment and business, and an Executive Committee, primarily
composed of an executive director. The Board of Directors
quintessentially serves the function of supervising management
decision-making and the execution of directors’ duties and,as required by laws and ordinances, reporting on important
executive management decisions and conditions. Responsibility forexecuting decisions that have been made by the Board of Directors
is transferred to the representative directors and the executive

General Meeting of Shareholders
Appoint/Dismiss
LiaiseReportIndependent
Auditors

Board of Statutory Auditors
Advise(Including three outside auditors/
independent outside officers) Audit

ReportStatutory Auditors

DirectInternal Reporting
SystemAdviseMABUCHI MOTOR CO., LTD. Annual Report 2010

Group Ethical Standards
Other Supervisory Frameworks

Consult
Executive Committee(Executive Managing Officers)

Company Departments(Responsible for Compliance)

13

Basic Policy on Internal Control

Supervise

ExecuteInternal
Audit

Group Management Vision

Subsidiaries(Internal Audit Committee)

Meeting of Head of Group Offices(Risk Management Committee)

ReportManagement Principle

ReportRepresentative Directors

Internal Audit Department

Accounting
Audit

Board of Directors(Director Responsible forInternal Control)• Environmental Management
Committee (Audit of the Environmental
Management System)• Quality Management Committee (Auditof the Quality Management System)• Design Reviews• Division of Duties/Company Rules andRegulations• Ringi System and Other Regulations• (Subsidiaries) Regulations on Powers ofApprovalofficers. The Board of Directors convenes regularly once a monthand at other times as required.
Mabuchi has established an Executive Committee, primarily
composed of executive officers, with the objectives of supporting
the functions of the Board of Directors, conducting preliminary
consultations relating to important issues for deliberation by the
Board of Directors, carrying out executive business decision-making
outside the scope of the Board of Directors’ legal powers, andreporting on executive business conditions. This arrangement
enhances the Board of Directors’ function, as it allows the Board toprioritize deliberation of reports and proposals, making decisions
on these topics and monitoring and supervising the execution ofduties. The Executive Committee meets regularly once a month.
In addition, Mabuchi has introduced an Executive Officer
System that centralizes strategic decision-making and supervisionfunctions on directors and delegates powers and responsibilities to
executive officers for the everyday execution of their duties. Thissystem serves to enhance the functions of both directors and theexecutive officers.

Internal Control System
In accordance with the Basic Policy on Internal Controls approved
at a meeting of the Board of Directors under the provisions of theCompanies Act, Mabuchi is working to establish an internal control
system that includes systems for risk management, complianceassurance, document management, Group management, andauditors’ audits. In this way, inadequacies in internal controls andother issues discovered in risk management activities, complianceactivities, auditors’ audits, and internal audit activities are reported
to the directors and statutory auditors on a periodic or nonperiodic
basis, and appropriate corrective measures are taken in a timely
manner. Moreover, the Company is developing a framework
for continuously enhancing the functioning and effectivenessof the internal control system. By establishing and ensuring theappropriate application of internal regulations governing theapproval system, job authority and division of responsibilities,
and other matters, the Company seeks to further ensure theappropriate conduct of business. These various internal mechanisms
serve to support the directors and statutory auditors in theirmonitoring and supervision of the conduct of business by directors.

Board of Statutory Auditors
Mabuchi has appointed four statutory auditors, three of whom
are outside auditors with a high degree of independence.
Mabuchi has also established a department for statutory auditors,
with one employee assigned to the department to assist thestatutory auditors with their audits, and has made it possible
for the statutory auditors to request audit-related assistancefrom employees of the Internal Audit Department and otherdepartments where appropriate.
The statutory auditors (three of whom are outside auditors)
carry out audits of the execution of duties by directors and otherbodies in accordance with legal stipulations and the auditing
standards, policies, plans and apportioned duties determined by
the Board of Statutory Auditors. Specifically, statutory auditors
attend meetings of the Board of Directors and the Executive
Committee and other important meetings, oversee major businessexecution decisions and documentation related to their execution,
if necessary, requesting directors and employees to provide such
documents or to submit reports, in order to audit and supervise
the execution of duties by the directors. The Board of Statutory
Auditors convenes every second month and holds regular monthly
meetings for the exchange of opinions between statutory auditorsand essential deliberations regarding the execution of duties bydirectors.

Risk Management System

Internal Audit Department

Disclosure of Corporate Management Data

Mabuchi has established an Internal Audit Department, with two
full-time members, under the direct control of the president. Thisbody liaises with the Board of Statutory Auditors and the Director
Responsible for Internal Control on a timely basis and conducts
ongoing supervision of the upgrading, running and effectivenessof the internal control framework for Mabuchi and its Group
companies. The Internal Audit Department reports its findings to
the president, directors and statutory auditors.

Mabuchi’s basic policy is to strive to carry out impartial, timely
and clear information disclosure to ensure a fair evaluation of theCompany’s corporate value and to gain the trust of its shareholders
and investors. We innovate and improve our information disclosure
to ensure highly effective data delivery that will cultivate broad
understanding of the Company’s business activities.

In accordance with the Basic Policy on Internal Controls, Mabuchi
has designated an executive officer with overall control overrisk management and the departments responsible for risk
management; has prepared and established internal rules andprocedures necessary for appropriate management of risk; andhas taken necessary measures, including informing and educating
employees about risk management.
In addition, Mabuchi has established the Risk Management
Committee, whose members are the persons responsible forrisk management at each company department and subsidiary;
has made possible cross-organizational activities concerning risk
awareness and assessment in routine business activities, risk
response, and information provision; and has put in place a Group
Emergency Response System to prepare for contingencies, with theobjective of protecting all the Group business activities in the eventof an emergency.
Furthermore, the Internal Audit Department periodically audits
the status of risk management and reports the audit results to theBoard of Directors and Board of Statutory Auditors. The Board of
Directors reviews the report and takes any necessary measures.
In this way, Mabuchi pursues continuous improvement of the risk
management system.

MABUCHI MOTOR CO., LTD. Annual Report 201014

Board of Directors, Corporate Auditors, and Executive Officers(As of March 30, 2011)

Directors

Representative Director
and Chairman

Takaichi Mabuchi

Representative Director and President
President and CEO

Shinji Kamei

Executive Managing Director
Senior Managing Executive Officer

Nobuyo Habuchi

Managing Director
Executive Officer and General
Manager of Operations Control
Headquarters

Takashi Kamei

Director
Executive Officer and General
Manager of Research andDevelopment Headquarters

Akira Okuma

Director
Executive Officer and General
Manager of Sales Headquarters

Director
Executive Officer and General Manager
of Administration Headquarters

Statutory Auditor

Statutory Auditor

Kaoru Kato

Hiroo Okoshi

Corporate Auditors

Full-time Statutory Auditor

Masahiro Gennaka

Ichiro Ando

Executive Officers (excluding those also serving as directors)

Executive Officer and General Manager
of Quality Assurance Dept.

Masato Itokawa

15

Executive Officer, Chairman and Presidentof MABUCHI TAIWAN CO., LTD.

Chin Tai Yen

MABUCHI MOTOR CO., LTD. Annual Report 2010

Toyokuni Yazaki

Statutory Auditor

Keiichi Horii

Corporate Social Responsibility

Mabuchi’s wide-ranging CSR activities include a social action program for which
the Group is particularly well suited—sharing the importance and wonder ofmanufacturing.
Basic Approach to CSR Activities

Summer Vacation Handicraft Workshops

Mabuchi conducts corporate activities in line with its
management principle, which expresses the Company’s aimof “contributing to international society and continuously
increasing our contribution.” In other words, Mabuchi’sbusiness objective is not the pursuit of profit for its own
sake, but rather a high priority on continued existence anddevelopment, which are achieved by continued increases
in its contribution to society. The ultimate objectives of theCompany’s corporate activities are to raise the level of its social
contributions through the business of small DC motors and toremain an enterprise that society considers essential.

Mabuchi held Summer Vacation Handicraft Workshops forparents and children to provide kids—the leaders of the next
generation—with experience in the magnificence of making
things and in the mysteries of science, thus stimulating theirinterest in manufacturing.
Every Friday during thesummer holidays, we
invited 24 parent-childduos who used motors
as power generators tocreate handicrafts using
readily available materials
such as discarded CDs,
PET bottle caps andParents working with their children
to build their own engineering
corrugated board.

Science Lessons for Fifth- and Sixth-year Elementary
School Pupils by the Company’s Technical Staff
The aim of this program was to encourage children toexperience the joys and wonders of science classes, whileknowing that what they learned was useful in their everyday
lives. Based on thisprinciple, Mabuchi
dispatched employees
to teach science classes
for fifth- and sixthyear elementary school
students at three schoolsin Matsudo City and at the
Science Museum in Tokyo.
The sessions took place
Children working in groups to carryout investigations by dismantlingas a group activity, with amotors and experiments under thelead instructor facilitating
direction of an assistant instructor
the overall progress of
the lesson, while assistant
instructors took charge of five or six pupils each. Lessons
primarily comprised dismantling equipment and experiments,using the Company’s motors as educational aids. During theclasses, pupils also learned how the rotational mechanismof the motors and electrical power generation result fromelectromagnetic properties. In addition, we illustrated just
how many motors support our everyday lives through adisplay of products that contain motors.

masterpieces

Robot Contest SponsorshipTo support the education of tomorrow’s technologists andencourage developments in science and technology, Mabuchi
has sponsored various robot contests every year since 2002,
providing funding and motors. Mabuchi agrees with theoverarching objective of these contests, which is to share withyoung people the importance of creativity and the fun ofmanufacturing through the building of robots.

Providing Educational Opportunities
Since 1996, Dalian Mabuchi has been supporting the establishmentof schools and carrying out other activities with the objective ofproviding children with the opportunity of gaining an education.
To date, the company has helped to establish three Mabuchi
Hope Primary Schools in three cities in the north of Dalian. In
2007, Dalian Mabuchi assisted in the foundation of a Mabuchi
Hope Junior High School in Liaoning Province. Subsequently, thecompany has continued to furnish the school’s students withinvitations to tour its factories and to provide them with facilities
and equipment. In addition, Dalian Mabuchi has established ascholarship system to support children and young people whose
economic circumstances prevent them from attending schools anduniversities. This program helps reduce the economic burden ofpoor families, enabling their children to focus on their studies sothat they can grow into adults who will benefit society.

MABUCHI MOTOR CO., LTD. Annual Report 201016

Financial SummaryMarket Environment

Net Sales and Operating Income Margin

Demand in the markets in which the Mabuchi
Group operates showed a recovery trend on
the whole. The automotive products market
in particular saw a sharp increase in demand
as a result of gradual demand recovery indeveloped countries coupled with continued
market expansion and higher demand in
emerging countries.

(Millions of yen)(%)

120,000
10.6%

Net sales
Operating income margin 12

10.9%

100,000

10
8.0%

80,0008

6.1%
60,000100,517

107,640

40,00020,000
0

2

2006

2007

2008

2009

Millions of yen

234

100000

2006

2007

2008

¥ 107,640 80000¥

92,602

Cost of sales

100,517
71,91977,207 60000

68,799
11.6%

Selling, general and administrative expenses

17,89818,747

18,15010,70011,685

40000

5,652

3,019

Net sales¥

Operating income

482,75270,369120000
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries (Years
Ended December 261
31)

For the year:

6

4.3%
92,602

2009¥

70,369

169
2010
122
¥

0

2010

12
Thousands of
U.S. dollars
204
10

2010

82,7528$ 1,021,629

51,80560,062

741,50612.1%
6

15,5446.4%-1.4%

16,064-1.0%

198,3206,624

481,777

15,914

16,530 20000

5,330

3,013

7,291

90,012
2

10,603

10,914

3,565

5,450

5,260

64,938

Capital expenditures

3,627

3,700

3,777

3,659

3,210

39,000Depreciation and amortization

5,360

4,913

4,408

4,031

3,603

44,481R&D expenses

4,076

4,187

3,892

3,298

3,337

41,197

Income before income taxes
Net income

00Cash flows:
Net cash provided by operating activities¥17,500¥15,447

Net cash (used in) provided by investing
activities

¥

6,542

¥

10,708

¥

5,457

$

67,370(6,321)

3,687

45(1,630)8,601

106,185

Net cash used in financing activities(4,009)(13,531)(18,641)(3,927)(3,507)(43,296)

Total assets¥ 236,999¥ 230,960¥ 188,691¥ 192,362¥ 185,408$ 2,288,987

Net assets

219,217

213,314

178,291

180,311

174,570

2,155,185

150.14$

At year-end:

Per share data:
Net income
Net assets
Dividends payable(Yen and U.S. dollars)¥

268.03¥280.90

¥

94.77

¥

155.54¥1.85

5,541.46

5,577.84

5,088.18

5,146.04

4,982.43

1.51

114.00123.00123.00100.00100.00

1.23

Other data:
Operating income margin (%)

10.6

10.9

6.1

4.3

8.0

—

ROE (%)

4.9

5.0

1.8

3.0

3.0

—

Shareholders’ equity ratio (%)

92.5

92.4

94.5

93.7

94.2

—

Number of shares outstanding(Thousands of shares)

39,56038,24335,04035,03835,037—

Number of employees (Persons)45,01545,601

41,32838,251

37,466—Notes
1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥81=U.S.$1, the approximate exchange rate on December 31, 2010.
2. ROE is calculated by dividing net income by the average of total shareholders’ equity plus the revaluation/translation adjustment during the period.
3. The shareholders’ equity ratio is calculated by dividing the sum of total shareholders’ equity and the revaluation/translation adjustment as of the end of theperiod by total assets as of the end of the period.

17

MABUCHI MOTOR CO., LTD. Annual Report 2010

Net Sales by Application
2009
2009

30,34630,3462010
2010

10,67910,679 13,024
13,02440,06340,0630 0

Net Sales by Geographic Area

11,435
11,435 13,821
13,821

20,00020,00040,00040,000

8,056
5,995
5,995
10,476
10,4762009
20098,056

16,230
16,230 8888

17,337
17,33760,00060,0009393

29,42329,423

10,0697,438
7,43811,793
11,7932010
201010,069

80,00080,0000 0

16,327
16,327 8888

34,477
34,47720,00020,00040,00040,00018,88018,88060,00060,000(Millions(Millionsof yen)of yen)80,00080,000(Millions(Millionsof yen)of yen)Home
Appliances,
Power
Tools
& ToysHome
Appliances,
Power
Tools
& ToysOther
Other

Automotive
Automotive
Products
Products
Audio
Audio
& Visual& Visual
Equipment
Equipment
Optical
Optical& Precision& Precision
Instruments
Instruments

9393

China
China
& Hong& Hong
Kong
Kong
Asia
Asia
Pacific
Pacific
Other
Other

Japan
Japan
North
North
& Latin& LatinAmerica
America
EuropeEuropeConsolidated net sales in the fiscal year under review rose 17.6% from the previous fiscal
year to ¥82,752 million (US$1,021 million).

Net sales

Sales of motors, which account for the majority of net sales, increased 17.6% to ¥82,658 million (US$1,020
million). The main reason for the sales increase was an overall demand recovery trend in the markets in which
the Mabuchi Group operates.

Operating income rose 119.4% to ¥6,624 million (US$81 million).
Despite such negative factors as the steep rise in labor costs and raw material costs, capacity utilization
improved in the wake of a year-on-year increase in sales volumes, and the profit margin improved as thecollection of fixed costs per product unit increased. At the same time, profitability improvement activities
continuing from the previous term bore fruit.

Operatingincome2010

11,122
6,580
10,753 million (US$64 million), down 3.5%.
Net income
was¥5,26017,56534,978Other income was ¥666 million (US$8 million), a ¥672 million (US$8 million) improvement from the previous
term. The reason for the increase was nonrecurrence of the losses on closure of production bases despitea decrease
in interest income due to lower interest rates and the recording of a foreign exchange loss as a
16,32729,423
10,476 5,995 8,056
2009
result of the strengthening of the yen.
Net income
As a result, income before income taxes in fiscal 2010 was ¥7,291 million (US$90 million), up 142.0%020,00040,00060,00080,000100,000
from the previous term. Income taxes were ¥2,030 million (US$25 million), up ¥4,467 million (US$55
million), a change principally attributable to the elimination of a special factor, namely a non-recurring gainon the reversal of deferred tax liabilities recorded during the same period last year as a consequence of anamendment to the Corporation Tax Act, resulting in a return to the usual tax expense this year.

Analysis of Operating Income

Cost reduction¥2.8 billion

16,23013,024 10,679

Change inselling prices
and model mix-¥0.2 billion

Rise inmaterials andcommodities prices-¥0.6 billion

Foreign exchange-¥0.5 billion

Other-¥0.9 billion

30,346

Volume increase¥3.0 billion
Fiscal2009 Result
22,071
15,896¥3.0 billion

0

20,00015,90840,000Fiscal 2010 Result¥6.6 billion

38,63360,00080,000100,000

Factors Affecting FY2006 –FY2010 Consolidated Operating Income
Selling, General and Administrative Expenses

Foreign Exchange Gains/Losses(Millions of yen)

25,000(%)

SG&A

20,00017.9%
15,00010,000

17.4%

19.6%

22.1%

2,000

19.4%

25

1,000

20
15

17,89818,747

18,1505,000
0(Millions of yen)

SG&A ratio

15,544

16,0640

102008 Result
5.6 billion yen

2007

2008

2009
2010
Sales Price Increase
and Model Mix
Soaring of Prices of
2.2 billion yen
Materials and Commodities
1.5 billion yen

500
100
2006

2007

2008

-1,000

5
2006

900

0

-2,000
Cost Increase-700 million yen
Decrease in Quantity-5.2 billion yen

2009

2010
-1,000-1,500Currency Exchange-400 million yen

MABUCHI MOTOR CO., LTD. Annual Report 20102009 Result
3.0 billion yen

18

Management’s
Discussion and Analysis
Net sales /Gross profit margin

Market Conditions
The year under review brought continuation of the gradual recovery trend in the global economy that beganat the end of the previous term. However, the impact of economic stimulus measures implemented in a
number of countries began to weaken, and economic recovery in developed countries lost momentum in thesecond half of the year. On the other hand, the expansion trend in emerging countries continued, and overall
the world economy showed underlying stability. Although the gradual recovery trend in Japan continued aswell, the second half of the year brought fears of economic slowdown due to a decrease in exports accompanying the slowing of recovery in developed countries, appreciation of the Japanese yen and a slowdown in
the recovery of domestic demand triggered by the discontinuation of economic stimulus measures. However,
the economy showed underlying stability thanks to upside factors such as last-minute demand prior to thediscontinuation of economic stimulus measures. Under these business conditions, demand in the markets inwhich the Mabuchi Group operates showed a recovery trend on the whole. The automotive products market
in particular saw a sharp increase in demand as a result of gradual demand recovery in developed countries
coupled with continued market expansion and higher demand in emerging countries.

Operating Results(Millions of yen)
28.5

28.3
27.4

100,517

26.4

25.7

107,640

92,60282,75270,369

2006

2007

2008

(Millions of yen)
10.9

10.6

Consolidated net sales in the fiscal year under review rose 17.6% from the previous fiscal year to ¥82,752
million (US$1,021 million). Sales of motors, which account for the majority of the net sales, increased 17.6%
to ¥82,658 million (US$1,020 million). The main reason for the sales increase was an overall demand
recovery trend in the markets in which the Mabuchi Group operates.

10,70011,685

8.0

6.1
4.3

6,624

5,652
3,019

Cost, Expenses and Operating Income
Operating income rose 119.4% to ¥6,624 million (US$81 million). Despite such negative factors as thesteep rise in labor costs and raw material costs, capacity utilization improved in the wake of a year-on-yearincrease in sales volumes, and the profit margin improved as the collection of fixed costs per product unit
increased. At the same time, profitability improvement activities continuing from the previous term bore fruit.

Other Income (Expenses), Income before Income Taxes and Net Income

Net Sales by Application

2006

2007

2008

2009

2010

3.0

3.0

5,450

5,260

2009

2010

Operating income margin (%)

Net income / ROE

Other income was ¥666 million (US$8 million), a ¥672 million (US$8 million) improvement from the previous term. The reason for the increase was the nonrecurrence of losses on the closure of production bases,
despite a decrease in interest income due to lower interest rates and the recording of a foreign exchange
loss as a result of the strengthening of the yen.
As a result, income before income taxes in fiscal 2010 was ¥7,291 million (US$90 million), up 142.0%
from the previous term. Income taxes were ¥2,030 million (US$25 million), up ¥4,467 million (US$55 million), a change principally attributable to the elimination of a special factor, namely a non-recurring gainon the reversal of deferred tax liabilities recorded during the same period last year as a consequence of anamendment to the Corporation Tax Act, resulting in the return to the usual tax expense this year.
As a result, net income in fiscal 2010 was ¥5,260 million (US$64 million), down 3.5% from the previous term.

(Millions of yen)
4.9

5.0

10,603

10,914

1.8

3,565

2006

2007

2008

ROE (%)Net Sales by Geographic Area
Thousands of
U.S. dollars

Millions of yen

2007

2008

2009

2010

Automotive Products¥36,781 ¥42,820 ¥38,633 ¥30,346 ¥40,063

2010$494,604

Thousands of
U.S. dollars

Millions of yen

2006

2007

2008

2009

2010

Japan

¥10,902 ¥10,980 ¥10,663¥8,056 ¥10,069
5,995

2010
$124,308

Audio & Visual Equipment

22,361

21,30815,908

10,67911,435

141,172

North & Latin America

10,459Optical & Precision
Instruments

16,65818,13915,896

13,024

13,821

170,629

Europe14,43016,912

13,914

10,476

11,793

145,592

Home Appliances, Power
Tools & Toys

China & Hong Kong

41,10541,29036,68629,423

34,477425,641

23,90025,17822,071

16,23017,337

214,530

Asia Pacific22,80426,56422,75816,327

18,880233,086

815

194

92

88

93

1,148

Other

815

194

92

88

93

1,148

¥100,517 ¥107,640 ¥92,602 ¥70,369 ¥82,752$1,021,629

Total¥100,517 ¥107,640 ¥92,602 ¥70,369 ¥82,752$1,021,629

Other
Total

Note: Other includes parts and equipment sales.

19

2010

Operating income/Operating income margin

Net Sales

2006

2009

Gross profit margin (%)

MABUCHI MOTOR CO., LTD. Annual Report 2010

Note: Other includes parts and equipment sales.

11,697

8,487

7,438

91,827

Financial Position
AssetsTotal assets as of December 31, 2010 were ¥185,408 million (US$2,288 million), down ¥6,953 million (US$85 million),or 3.6%, from a year earlier. The most noticeable changes included increases of ¥7,078 million (US$87 million) in cash
and bank deposits and ¥2,052 million (US$25 million) in merchandise and finished goods, and decreases of ¥7,378
million (US$91 million) in short-term investments and ¥6,674 million (US$82 million) in investment securities.

Total assets(Millions of yen)
236,999

230,960
192,362 185,408

188,691

Liabilities
Total liabilities at the fiscal year-end were ¥10,838 million (US$133 million), down ¥1,212 million (US$14 million).
The most noticeable changes were decreases of ¥1,453 million (US$17 million) in the allowance for loss on closing
production bases and ¥551 million (US$68 million) in the allowance for retirement benefits for employees.

Net Assets
2006

2007

2008

2009

2010

Cash Flows

Shareholders’ equity/
Shareholders’ equity ratio

Net Cash Provided by Operating Activities(Millions of yen)
94.5

92.5

92.4

211,284

208,671

94.2

93.7

193,597

Total net assets at the fiscal year-end were ¥174,570 million (US$2,155 million), down ¥5,741 million (US$70
million) from a year earlier, mainly due to a decrease of ¥14,362 million (US$177 million) in both retained earnings and treasury stock due to treasury stock cancellation. As a result, net assets per share were ¥4,982.43(US$61.51), ¥163.61(US$2.01) lower than at the previous year-end. The shareholders’ equity ratio was 94.2%,
up 0.5 percentage point.

193,895 195,644

Net cash provided by our operating activities amounted to ¥5,457 million (US$67 million), a decrease of ¥5,251
million (US$64 million) compared to the previous year. The change is mainly attributable to increases
in inventories and trade receivables, and a decrease in the allowance for losses on closing production bases.

Net Cash Provided by Investing Activities
Net cash provided by our investing activities amounted to ¥8,601 million (US$106 million). Principal factors
were proceeds from the sale of short-term investments that exceeded payments for the purchase of short-term
investments, and purchases of property, plant and equipment.

Net Cash Used in Financing Activities
2006

2007

2008

2009

2010

Shareholders’ equity ratio (%)

Net cash used in our financing activities amounted to ¥3,507 million (US$43 million). The principal item was cash
dividends paid.
As a result of the above factors, the balance of cash and cash equivalents increased ¥5,901 million (US$72
million) from ¥61,639 million (US$760 million) at the end of fiscal 2009 to ¥67,540 million (US$833 million) on
December 31, 2010.

Capital Investments, Depreciation and Amortization

Working capital/Current ratio(Millions of yen)

13.9

106,779

12.4

11.3

10.2

9.8

114,520
94,621

103,186 105,935

Capital investments decreased ¥449 million (US$5 million) year on year to ¥3,210 million (US$39 million). Major
components were capital investments of ¥3,076 million (US$37 million) for equipment upgrades and investment
in facilities for the mass-production of new products at production subsidiaries and ¥133 million (US$1 million)
for investment in facilities and equipment for research and development at the Company and subsidiaries.
Depreciation and amortization decreased ¥428 million (US$5 million) year on year to ¥3,603 million(US$44 million).

Outlook
2006

2007

2008

2009

2010

Current ratio (%)

Capital expenditures/
Depreciation and amortization(Millions of yen)
5,734

4,913
4,408
3,700

3,627

2006

2007

3,777

2008

4,031
3,659

3,603
3,210

2009

Capital expenditures
Depreciation and amortization

2010

The outlook for fiscal 2011 is for gradual overall improvement in business conditions. In developing countries,
economic growth is expected to continue and remain stable despite some concerns. On the other hand, economic recovery in developed countries will remain sluggish, and factors such as soaring raw material prices andcredit uncertainty in Europe give cause for concern. Many uncertainties remain, and it appears that the global
economy will not see a full-scale recovery for some time.
The situation is also somewhat mixed in the markets in which the Mabuchi Group’s products are sold. There
are markets in which demand is increasing due to growth in developing countries, while at the same time there
are markets that depend mainly on demand in developed countries, where the economic recovery has been only
gradual. Nevertheless, demand is improving in the Automotive Products, Audio & Visual Equipment, Optical &Precision Instruments, and Home Appliances, Power Tools & Toys markets. As a result, we expect net sales infiscal 2011 to increase 6.3% from the previous fiscal year, to ¥88,000 million (US$1,086 million).
In terms of business results, despite the negative impact of yen appreciation and concern over increases in
raw material prices, we expect profit growth to accompany increases in sales volumes. Consequently, we expect
operating income to increase 5.7%, to ¥7,000 million (US$86 million), and net income to increase 23.6%, to¥6,500 million (US$80 million).
At this point, it is difficult to figure out the impact of the earthquake off the northeast coast of Japan, which
occurred on March 11, 2011, on our business performance although we are continuously examining the impact closely.
Therefore, we are still leaving our earnings forecast for fiscal 2011, which we announced on February 15,
2011, unchanged.

MABUCHI MOTOR CO., LTD. Annual Report 201020

Business and Other Risks
Changes in Economic Conditions
The demand for Mabuchi products, which are incorporated into our customers’ products, is influenced by the economic
conditions present in the diverse markets in which our group operates. Consequently, our group’s business results andfinancial position may be adversely affected by economic recessions and corresponding contractions in demand in
Mabuchi’s key markets, including Japan, North America, Europe and Asia.

Fluctuations in Foreign Exchange Rates
Items denominated in local currencies on the financial statements of our overseas subsidiaries are converted into
Japanese yen to prepare the consolidated financial statements. Consequently, amounts that are to be recorded after
being converted into Japanese yen are subject to the foreign exchange rates at the time of conversion. In particular,
appreciation of the Japanese yen against the U.S. dollar has a negative effect on our group’s consolidated businessresults, and conversely, any depreciation of the Japanese yen has a positive effect. Appreciation of local currencies inregions where the Mabuchi Group carries out production pushes up manufacturing and procurement costs, which aredenominated in those local currencies. Such increased costs lower our group’s profit margins and price competitiveness,
and negatively affect our business results.

Development of New Products and New Technologies
The new product development and sales processes, by their very natures involve both complexities and uncertainties, andinclude a broad array of risks. In the event our group cannot fully predict changes in market needs, is unable to develop
appealing new products in a timely fashion, or a technological innovation or the like emerges that causes our products tobecome obsolete could have a significant adverse effect on our group’s business results and financial position.

Price Competition
Our customers are businesses in a diverse range of sectors that belong to the electrical/electronic equipment andmachinery manufacturing industries, and price competition in these industries is extremely severe. In these environments,
prices are a major contributing factor to competition in all sectors, and with the rise of rival Chinese manufacturers,
competition is becoming even more intense. The inability of our cost-reduction activities to keep up with falling prices
over the long term could have a significant adverse effect on our group’s business results and financial position.

Potential Risks in International Economic Transactions andExpanding Business Overseas
The majority of our group’s business activities are conducted in various countries in Europe, North America and Asia.
These overseas business activities involve certain intrinsic risks, including changes in political and economic environments,
inadequate infrastructures, changes in laws, tax affairs and various other systems, and social upheaval. For example,
much of our group’s production takes place in China and Vietnam. The occurrence of an unexpected event (such as achange in the political or legal environment, a change in economic conditions, or a change in the social environment,
including the employment environment) may lead to significant problems for our production and/or sales activities, andthese may have a significant adverse effect on our group’s business results and financial position.

Product Quality
There is no guarantee that all of our group products will have no major quality issues. If a quality issue occurs, theamount of compensation may be influenced by the effect on the quality of the final product in which the Mabuchi
product is incorporated. The unlikely event of a product defect that leads to a large-scale recall or product liability
compensation may trigger an accrual of a large amount of costs or downturn in sales due to a loss of credibility, and may
have significant adverse effects on our group’s business results and financial position.

21

MABUCHI MOTOR CO., LTD. Annual Report 2010

Protection of Intellectual Property
We recognize that the acquisition of intellectual property can greatly influence the growth of the Mabuchi Group.
However, in certain regions, for certain inherent reasons, our group’s intellectual property rights may not be completely
protected. In such instances, any third party may use our group’s intellectual property without permission to manufacture
similar products, and we may suffer damage as a result. In addition, our competitive superiority may suffer from outflowsof other of our technologies or expertise, which was then exploited by other companies. Furthermore, the Mabuchi
Group could face claims of infringing on the intellectual property of another company. The failure of protection by or theviolation of intellectual property rights, or the outflow of intellectual property could have significant adverse effects on
our group’s business results and financial position.

Securing and Developing Human Resources
The Mabuchi Group operates in a highly competitive corporate arena. This situation renders essential the recruitment anddevelopment of employees who are highly skilled in related areas: engineers with specialist scientific and technologicalexpertise, and managers with top business strategy acumen and executive capacities. Mabuchi is fully cognizant of theneed for the continuous enhancement and improvement of its human resources for the next generation and beyond.
The failure to recruit and cultivate such a workforce on an ongoing basis through the requisite expenditure and longterm human resource development vision would invite adverse impact on the Group’s future performance and financial
position.

Procurement of Raw Materials
Depending on the type of raw material that our group procures from external sources, we may be dependent on alimited number of suppliers. There is a possibility that the supply of a raw material may be suspended due to an accident
befalling a supplier or for some other reason, or that a shortage of supply may transpire due to a sudden upsurge indemand. If such conditions continue over a long period of time and it is difficult to obtain alternative materials, ourgroup’s production activities could be affected dramatically, which in turn would undermine the assurance of delivery
and quality of products to our customers. Also possible are sharp increases in the prices of such materials, which would
trigger a rise in manufacturing costs. If such an event were to occur, our group’s business results and financial position may
be subject to significant adverse effects.

Natural Disasters and Accidents
The Mabuchi Group has established a specialized international system. We conduct business activities in various countries
throughout the world, and at each of our bases we own facilities and equipment, including factories and offices. Ourgroup has implemented measures to prevent our exposure to risks associated with the occurrence of disasters andaccidents at these bases, and we have implemented measures to reduce damage from disasters and accidents, including
insurance. However, there is no guarantee that such measures will completely protect us against, or can reduce asplanned, the effects of disruptions to our business activities caused by disasters or accidents at our Head Office orindividual bases. In the event these kinds of unforeseeable events occur, our group’s business results and financial
position may be subject to significant adverse effects.

MABUCHI MOTOR CO., LTD. Annual Report 201022

Consolidated Balance Sheets
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
December 31, 2009 and 2010
Yen(millions)

U.S. Dollars(thousands)

2009

2010

2010

¥ 56,687¥ 63,765$ 787,222

11,661

11,449141,345

(246)

(224)

(2,765)

Short-term investments

28,86721,488265,283

Finished goods and merchandises

8,375

10,574

130,543870

940

11,604

Raw materials and supplies

4,285

4,574

56,469

Income taxes refundable

655

206

2,543

Deferred tax assets – current

846

796

9,827

1,166

1,650

20,370113,169

115,221

1,422,481

Land

6,022

6,022

74,345

Buildings

41,68438,764

478,567

Machinery and equipment

51,80145,131

557,172

Construction in progress

1,200

821

10,135

100,709

90,7391,120,234(66,914)(58,963)(727,938)

33,79531,775392,283

42,82136,146446,246

82

59

728

Deferred tax assets – non-current

1,332

869

10,728Other investments and other assets

1,161

1,335

16,48145,39738,410474,197¥192,362¥185,408$2,288,987

ASSETS
Current Assets:
Cash and bank deposits
Trade notes and accounts receivable
Less – Allowance for doubtful receivables

Work in process

Other current assets
Total current assets

Property, Plant and Equipment:Less – Accumulated depreciation
Property, plant and equipment, net

Investments and Other Assets:
Investment securities
Long-term loans receivable

Total investments and other assets
Total assets

23

MABUCHI MOTOR CO., LTD. Annual Report 2010

Yen(millions)

2009

LIABILITIES AND NET ASSETS

U.S. Dollars(thousands)

2010

2010

Current Liabilities:
Trade notes and accounts payable

¥

3,485

¥

3,739

$

46,160Accrued income taxes

187

424

5,234

Accrued bonuses to employees

210

214

2,641

Accrued bonuses to directors

37

37

456

1,834

381

4,703

0

0

0

4,227

4,490

55,432

9,982

9,286

114,641

Allowance for retirement benefits for employees

939

387

4,777

Deferred tax liabilities － non-current

10

5

61

1,118

1,158

14,296

Total long-term liabilities

2,067

1,551

19,148

Total liabilities

12,05010,838133,802

Net Assets:
Shareholders’ Equity
Common stock, no par value:
Authorized: 100,000,000 shares
Issued: 4
 3,875,881 shares in 2009 and 41,875,881
shares in 2010
Additional paid-in capital

20,704
20,41920,704
20,419255,604
252,086

Retained earnings

216,230

203,625

2,513,888

Treasury stock, at cost: 8,837,029 shares in 2009 and
6,838,777 shares in 2010

(63,459)(49,105)(606,234)

193,895

195,6442,415,358

Net unrealized holding losses on securities

(32)

(257)

(3,172)Foreign currency translation adjustments(13,551)(20,817)(257,000)(13,584)(21,074)(260,172)

Total net assets

180,311

174,570

2,155,185

Total liabilities and net assets¥192,362¥185,408$2,288,987

Allowance for the restructuring of production bases
Deferred tax liabilities – current
Other current liabilities
Total current liabilities
Long-term Liabilities:

Other long-term liabilities

Total shareholders’ equity
Revaluation/Translation Adjustments

Total revaluation/translation adjustments

The accompanying notes to consolidated financial statements are an integral part of these statements.

MABUCHI MOTOR CO., LTD. Annual Report 201024

Consolidated Statements of Income
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2009 and 2010
Yen(millions)

U.S. Dollars(thousands)

2009

2010

2010

Net Sales¥70,369¥82,752$1,021,629

Cost of Sales

51,80560,062

741,506

18,564

22,689280,111

15,544

16,064

198,320

3,019

6,624

81,777

Interest and dividend income

1,080

786

9,703

Exchange gains (losses), net

596(1,036)(12,790)

Gain on sale of raw material scrap

548

995

12,283

Loss on disposal of fixed assets

(1)

(98)

(1,209)(1,863)––

Loss on revaluation of investment securities

(35)

(217)

(2,679)Other, net

(330)

236

2,913

(6)

666

8,222

3,013

7,291

90,012Current

532

1,366

16,864

Income taxes refundable

(452)

–

–

(2,515)

664

8,197

(2,436)2,030

25,061¥ 5,450¥ 5,260

Gross profit
Selling, General and Administrative Expenses
Operating income
Other Income (Expenses):

Allowance the restructuring of production bases

Income before Income Taxes
Income Taxes:

Deferred
Net Income

Yen$64,938

U.S. Dollars

2009

2010

2010

Net income¥155.54¥150.14$1.85

Dividends applicable to current year earnings

100.00100.00

1.23

Per Share Data:

The accompanying notes to consolidated financial statements are an integral part of these statements.

25

MABUCHI MOTOR CO., LTD. Annual Report 2010

Consolidated Statements of Changes in Net Assets
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2009 and 2010
Number of Shares(thousands)

Yen(millions)

U.S. Dollars(thousands)

2009

2010

2009

2010

2010

Beginning balance

45,87543,875¥ 20,704¥ 20,704$ 255,604

Treasury stock cancellation(2,000)(2,000)–––Ending balance

43,87541,875¥ 20,704¥ 20,704$ 255,604

Beginning balance¥ 20,419¥ 20,419$ 252,086

Ending balance¥ 20,419¥ 20,419$ 252,086¥ 230,288¥ 216,230$2,669,506

Decrease due to subsidiaries’ accounting policy changes(1,221)--

Net income

5,450

5,260

64,938Dividends paid

(3,924)(3,502)(43,234)

Treasury stock cancellation(14,363)(14,362)(177,308)¥ 216,230¥ 203,625$2,513,888¥ (1,122)¥$

Common Stock:

Additional Paid-in Capital:

Retained Earnings:
Beginning balanceEnding balance
Net Unrealized Holding Gains (Losses) on Securities:
Beginning balanceEnding balance

(224)

1,089

Net change during the year

¥

(32)

(32)

¥

(257)

(395)
(2,765)$(3,172)Foreign Currency Translation Adjustments:
Beginning balance
Net change during the year
Ending balance¥ (14,183)¥(13,551)$(167,296)

631(7,265)(89,691)¥ (13,551)¥(20,817)$(257,000)¥ (77,816)¥ (63,459)$(783,444)

14,357

14,353

177,197¥ (63,459)¥ (49,105)$(606,234)

Treasury Stock:
Beginning balance
Net change during the year
Ending balance

The accompanying notes to consolidated financial statements are an integral part of these statements.

MABUCHI MOTOR CO., LTD. Annual Report 201026

Consolidated Statements of Cash Flows
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2009 and 2010
Yen(millions)2009
Cash Flows from Operating Activities:
Income before income taxes¥ 3,013
Depreciation and amortization
4,031
Impairment loss
27
Decrease in allowance for retirement benefits, net of payments(974)
Interest and dividend income(1,080)Foreign exchange (gains) losses(33)(Gain) Loss on sales of short-term investments and investment securities
162(Gain) Loss on disposal of fixed assets(18)
Losses on revaluation of investment securities
35
Increase in trade notes and accounts receivable(1,988)(Increase) Decrease in inventories
3,712
Increase in trade notes and accounts payable
1,641
Increase (Decrease) in allowance for the restructuring of production bases
1,834
Other, net(1,308)Sub total
9,057Interest and dividends received
1,146Interest paid(0)
Income taxes paid
(940)
Income taxes refunded
1,445
Net cash provided by operating activities
10,708

2010
¥

2010

7,291
3,603
(483)
(786)
1,156
(82)
93
217
(1,009)(4,548)897(1,333)
171
5,186
785
(1,069)
554
5,457

$

90,012
44,481(5,962)(9,703)
14,271(1,012)
1,148
2,679(12,456)(56,148)
11,074(16,456)
2,111
64,024
9,691(13,197)
6,839
67,370Cash Flows from Investing Activities:
Increase of time deposits
Proceeds from withdrawal of time deposits
Purchases of short-term investments
Proceeds from sales of short-term investments
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Other, net
Net cash (used in) provided by investing activities(31,572)
32,293(22,649)
23,722(3,029)72(11,259)
10,883(89)(1,630)(13,229)
13,756(13,771)
25,159(3,398)29(8,697)
8,886
(134)
8,601

(163,320)
169,827(170,012)
310,604(41,950)358(107,370)
109,703(1,654)
106,185

Cash Flows from Financing Activities:
Cash dividends paid
Purchases of treasury stock
Net cash used in financing activities(3,921)(6)(3,927)(3,499)(8)(3,507)(43,197)(98)(43,296)

414
5,566
56,073¥ 61,639(4,650)5,900
61,639¥ 67,540(57,407)
72,839760,975$ 833,827

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

The accompanying notes to consolidated financial statements are an integral part of these statements.

27

U.S. Dollars(thousands)

MABUCHI MOTOR CO., LTD. Annual Report 2010

Notes to Consolidated Financial Statements
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
December 31, 2009 and 2010
1. Summary of Significant Accounting Policies
a Basis of presentation
The accompanying consolidated financial statements of Mabuchi Motor Co., Ltd. (the “Company”) and consolidated subsidiaries areprepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to the applicationand disclosure requirements of International Financial Reporting Standards, and are compiled from the consolidated financial
statements prepared by the Company as required by the Financial Instruments and Exchange Law of Japan.
For the purpose of this report, certain reclassifications have been made to present the accompanying consolidated financial
statements in a format which is familiar to readers outside Japan.
The consolidated financial statements are expressed in Japanese yen. However, the consolidated financial statements as of and forthe year ended December 31, 2010 have been translated into U.S. dollars at the rate of ¥81 = U.S.$1, the approximate exchange rate
prevailing on December 31, 2011. Those U.S. dollar amounts presented in the consolidated financial statements and related notes
are included solely for the reader. This translation should not be construed as a representation that all the amounts shown could be
converted into U.S. dollars.
b Principles of consolidation
The consolidated financial statements include the accounts of the Company and all significant subsidiaries. All significant intercompany balances, transactions, and profits have been eliminated in consolidation. Investments in unconsolidated subsidiaries arestated at cost.
c Translation of foreign currencies
All monetary assets and liabilities denominated in foreign currencies are translated into yen at the rate of exchange in effect at thebalance sheet date. Exchange gains and/or losses resulting from such translations are included in income.
Foreign subsidiaries’ assets and liabilities are translated into yen at the rates of exchange in effect at the balance sheet date. The
components of net assets are translated at historical rates. Revenues and expenses are translated at the average rates of exchange forthe year. The resulting foreign currency translation adjustments are shown as a separate component of net assets.
d Cash equivalents
For purposes of the statements of cash flows, the Company considers all highly-liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
e Short-term investments and investment securities
The Company classifies securities as “trading securities”, which are held for the purpose of earning capital gains in the short-term,“held-to-maturity”, for which management has the positive intent and ability to hold to maturity, and “other securities”, which
represent securities not classified as either trading or held-to-maturity, primarily available-for-sale securities.
Held-to-maturity securities are reported at amortized cost. Available-for-sale securities are stated at fair value with changes in
unrealized holding gains or losses, net of the applicable income taxes presented in a separate component of net assets. However,when the fair value of held-to-maturity securities and available-for-sale securities declines significantly and is considered to be
irrecoverable, such unrealized holding losses are recognized as impairment losses. Available-for-sale securities for which fair value is
not readily determinable are stated at moving average cost.
Corporate bonds classified as held-to-maturity securities and debt securities (corporate bonds) classified as available-for-salesecurities include compound financial instruments.
The Company considers securities to be irrecoverable where market values decline to more than 50% of acquisition costs. Where
market values decline to between 30% and 50% of acquisition costs, the Company judges the necessity for recognizing any
impairment losses by assessing the recoverability of market values taking into consideration declining price trends and other individual
relevant factors.
f Inventories
Finished goods, work in process and raw materials are stated at average cost, however, where net realizable value is lower than cost,
the carrying value of the inventory is reduced.
g Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost. Depreciation is computed primarily by the declining-balance method for theCompany (except for certain buildings) and for overseas subsidiaries, principally by the straight-line method over their estimated useful
lives. Buildings acquired by the Company on and after April 1, 1998 are depreciated by the straight-line method. Maintenance andrepairs, including minor and improvements, are charged to income as incurred.
The Company changed the useful lives of machinery and equipment from 4-11 years to 4-7 years from the ending December 31,
2009 after having reviewed useful lives in accordance with the 2008 amendment to the Corporate Tax Law. The effect of this change
on income was immaterial.
h Leased assets
Assets under finance leases, except for those under lease agreements which stipulate the transfer of ownership of the leased assets tothe lessee, are depreciated using the straight-line method over the lease period and assuming no residual value.
Finance leases, which existed at January 1, 2009 and which do not transfer ownership of the leased assets to the lessee, continue tobe accounted for as operating lease transactions as permitted by the standard.
I Income taxes
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax basesof assets and liabilities and their reported amounts using current enacted tax rates.
MABUCHI MOTOR CO., LTD. Annual Report 201028

j Retirement benefits
The Company and certain subsidiaries have funded noncontributory pension plans covering substantially all qualifying full-time
employees. Under the plan, eligible employees are entitled to a 10-year annuity or a lump-sum payment based on the rate of pay at
the time of retirement or termination, length of service and certain other factors. Annual payments to the trustees for the pension
plan, which are deductible for tax purposes, are based on the actuarially determined costs of the plan.
Allowance for retirement benefits are provided based on the amount of retirement benefit obligation reduced by the fair value ofpension plan assets at the end of each fiscal year.
Actuarial gains and losses are amortized commencing in the year following the year in which the gains or losses arose primarily by
the straight-line method within the average remaining years of service of the employees, which is mainly 10 years.
Prior service costs are amortized using straight-line method over mainly 10 years.
Certain subsidiaries have pension plans similar to the Company or unfunded retirement and termination allowance plans for
qualifying employees, any amounts required under the rules of the plans have been fully accrued.
k Derivative and hedging activities
If a forward foreign exchange contract is executed to hedge a future transaction denominated in a foreign currency, the Company
defers recognition of gains or losses on revaluation of the forward foreign exchange contract until the related losses or gains on thehedged items are recognized.
l Allowance for the restructuring of production bases
On January 28, 2010, the Board of Directors resolved and one of the commission based processing contracts entered between
Mabuchi Industry Co., Ltd, a wholly owned subsidiary and a Chinese company, was terminated at the expiry date in December 2010.
In this connection, the Company accrued certain expenses and losses as at December 31, 2009 which are expected to be incurredfrom the gradual reduction or discontinuation of operations of the processing plants. Impairment losses in respect of buildings
intended to be disposed of, which had a book value of ¥68 million, are included in the related loss in 2009. At December 31, 2010
accrued expenses for certain cost such as termination benefits and assets disposal remain and there was no effect on income.
m Change in accounting policies(Accounting standard for measurement of inventories)
Effective for the year ended December 31, 2009, the Company and its subsidiaries adopted the new accounting standard for thevaluation of inventories. Accordingly, the company changed its method of valuing inventories from the average cost method to theaverage cost method with reduction to the carrying value of inventory where net realizable value is lower than cost. The effect of thischange was to decrease gross profit, operating income and income before income taxes by ¥32 million, respectively, in 2009. The
effects of this change in specific segments are described in segment information section. (Note 13)(Unification of accounting policies applied to foreign subsidiaries for the consolidated financial statements)
Effective for the year ended December 31, 2009, the Company adopted “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for the Consolidated Financial Statements”
The effect of this change was to decrease the beginning balance of retained earnings by ¥1,221 million in 2009.
(Accounting standard for lease transactions)
Until the year ended December 31, 2008, the Company accounted for finance leases that do not transfer ownership of the leased
assets, as operating lease transactions. Effective for the year ended December 31, 2009, the Company adopted “Accounting Standard
for Lease Transactions” and “Guidance on Accounting Standard for Lease Transactions” and accounted for finance lease transactions,which commenced on or after January 1, 2009, as finance leases, recognizing lease assets and lease obligations on the balance sheet.
In addition, finance leases, which existed at January 1, 2009 and which do not transfer ownership of the leased assets to the lessee,
continue to be accounted for as operating lease transactions as permitted by the standard. There was no effect of this change on
income.
(Accounting standard for retirement benefits)
Effective for the year ended December 31, 2010, the Company adopted “Partial Amendments to Accounting Standard for Retirement
Benefits (part 3). The adoption of this accounting standard had no effect on operating income and income before income taxes in thecurrent fiscal year.
2. Cash and Cash Equivalents
Cash and cash equivalents as of the years ended December 31, 2009 and 2010 are reconciled to the accounts reported in the
consolidated balance sheets as follows:
Yen (millions)
U.S. Dollars (thousands)
2009
2010
2010
Cash and bank deposits¥ 56,687¥ 63,765$ 787,222
Time deposits with maturities over three months
at the time of purchase(4,552)(3,733)(46,086)
Short-term investments
28,86721,488265,283
Securities exposed to price risk
(19,362)(13,981)(172,604)
Cash and cash equivalents¥ 61,639¥ 67,540$ 833,827
3. Financial Instruments
Effective from the year ended December 31, 2010, the Company applied “Accounting Standards for Financial Instruments” and“Implementation Guidance on Disclosures about Fair Value of Financial Instruments”.
(1) Financial Instrumentsa. Policies for financial instruments
The Company funds R&D expenditure and equipment investment through retained earnings to maintain a sound financial position.
According to this policy, the Company limits management of surplus funds to short-term deposits and other highly secure financial
assets. The Company uses derivatives to mitigate risk as described below, and does not engage in speculative transactions.

29

MABUCHI MOTOR CO., LTD. Annual Report 2010

b. Financial instruments description and risks
Trade notes and accounts receivable are exposed to customer credit risk and some are also exposed to foreign currency risk
Short-term investments and investment securities, primarily held-to-maturity securities, other securities and investments in thestocks of trading partners, are exposed to the risk of fluctuations in market price.
Trade notes and accounts payable are due within one year, and some are exposed to foreign currency risk.
The Company uses forward foreign exchange contracts to hedge the risk of foreign exchange fluctuations associated withreceivables and payables denominated in foreign currencies.
c. Risk management of financial instruments
1: Management of credit risk (risks associated with the default of counterparties)
The Company and its consolidated subsidiaries manage credit risk, in compliance with internal control rules and procedures. The due
dates and the balances of trade notes and accounts receivable from major counterparties are monitored and managed regularly toensure early detection and to mitigate the risk of doubtful receivables.
2: Management of market risk (risks associated with fluctuations in foreign exchange rates and interest rates)
The Company and some of its consolidated subsidiaries hedge the risk of foreign exchange rate fluctuations on foreign currency
denominated receivables and payables, using foreign exchange forward contracts on a monthly and individual currency basis. The
Company enters into exchange contracts based on the decision of the board of directors and these are monitored regularly by thehead office administrative department.
The Company monitors the fair value and the financial position of the respective issuers of short-term investments and investment
securities regularly in the head office administrative department, and continually reviews the condition of stocks held. The Company
reports the condition of stocks held and their fair value to the board of directors, and monitors the rating and financial conditions ofissuers.
3: Management of liquidity risk related to financing activities (risk of non-payment on due date)
The Company manages liquidity risk centrally through the administrative department, which ensures a certain amount of liquidity
through the preparation and update of cash forecasts based on reports from each department and the finance plans prepared by theaccounting departments of each subsidiary.
d. Supplemental information on the fair value of financial instruments
The Company calculates the fair value of financial instruments based on market prices, or by using reasonable estimates when market
prices are not available. These estimates include variable factors, and therefore may change depending on changes in the underlying
assumptions. The contract amounts of the derivatives are described in Note 5. Derivative Financial Instruments below are notindicative of the market risk associated with derivatives transactions.
(2) Fair Value of Financial Instruments
Fair values and variances with the carrying value presented on the balance sheets as of December 31, 2010 are as follows. Fair values
that are not readily determinable are not included in the following table.
Assets:Carrying value(1) Cash and bank deposits
63,765(2) Trade notes and accounts receivable
11,449(3) Short-term investments and investment
57,514securities
Total
132,729
Liabilities(1) Trade notes and accounts payable
3,739
Total
3,739
Derivative instruments(4)(forward exchange contracts)

Yen (millions)
Fair value
63,765
11,449Variance－－

U.S. Dollars (thousands)
Carrying value Fair value
Variance
787,222787,222－
141,345
141,345－

56,395(1,118)710,049

696,234(13,802)

131,610(1,118)

1,638,629

1,624,814(13,802)

3,739
3,739

－
－

46,16046,16046,16046,160

－
－

(4)

－

(49)

(49)

－

1: Method for calculating the fair values of financial instruments, short-term investments and derivative transactions
Assets:(1) Cash and bank deposits (2) Trade notes and accounts receivable
Carrying value is used for fair value for these short-term items because these amounts are approximately the same.
(3) Short-term investments and investment securities
Market prices on exchanges are used to determine the fair value of stock. Prices quoted by exchanges or financial institutions are used
to determine the fair value of bonds.
Liabilities(1) Trade notes and accounts payable
Carrying value is used for fair value for these short-term items because these amounts are approximately the same.
Derivative instruments
Please refer to Note 5 Derivative Financial Instruments.
2: Carrying value of financial instruments for which fair values were extremely difficult to determine
Unlisted stocks

Yen (millions)
121

U.S. Dollars (thousands)
1,493

These items are not included in “(3) Short-term investments and investment securities” because market prices do not exist for these
items and their fair values are not readily determinable.
3: Redemption schedule for receivables and marketable securities with maturities at December 31, 2010

MABUCHI MOTOR CO., LTD. Annual Report 201030

Within1 year
63,765

Yen (millions)
1-5
5-10
years
years
－
－

Over 10years－

Within1 year
787,222－－

141,345－－－

15,500－6,000－

12,345
24,691

28,395－

191,358－

74,074－－－－－
15,500

－
－
－
－
6,000

148,074
24,691
24,691
1,163,086

75,308－－2,222
105,925－－－－
191,358－－－－
74,074

Cash and bank deposits
Trade notes and accounts
11,449－receivable
Short-term investments and investment securities
Held-to-maturity securities
Corporate bonds
1,000
2,300
Commercial paper
2,000－
Other securities
Corporate bonds
11,994
6,100
Certificate of deposit
2,000－
Money in trust
2,000－
Investment trust
180
－
Total
94,2108,580

U.S. Dollars (thousands)
1-5
5-10
years
years
－
－

Over 10years－

4. Investment Securities
The carrying value, fair value and variance for securities classified as held-to-maturity securities and other securities as of December 31,
2009 were as follows:

Carrying value

Yen (millions)2009
Fair value

3,856
3,856

4,381
4,381

524
524

27,402
27,402
31,25925,33325,33329,715(2,068)(2,068)(1,544)

Carrying value

Yen (millions)2009
Fair value

Variance

2,122
5,423
283
7,829

3,040
5,619
305
8,965

918
195
22
1,136

1,268
15,5393,689
20,49828,327

1,008
15,2133,084
19,30628,272

(260)
(326)
(604)
(1,191)(55)

1: Held-to-maturity securities

Securities whose fair value exceeds their carrying value
Corporate bonds
Sub total
Securities whose carrying value exceeds their fair value
Corporate bonds
Sub total
Total

2: Other securities

Securities whose fair value exceeds their carrying value
Stock
Corporate bonds
Other
Sub total
Securities whose carrying value exceeds their fair value
Stock
Corporate bonds
Other
Sub total
Total
3: Securities for which fair values were not available as of December 31, 2009
Securities with no available fair value
Commercial paper
Money management funds
Certificates of deposit
Money in trust
Stock of a non-consolidated subsidiary
Other equity securities
Total

31

MABUCHI MOTOR CO., LTD. Annual Report 2010

Yen (millions)2009¥  5,497
2,505
2,000
2,000
70
83
¥12,156

Variance

4: The contractual maturities for securities classified as other securities and held-to-maturity at December 31, 2009

Corporate bonds
Commercial paper
Certificates of deposit
Money in trust
Investment trust
Total

Within 1 year
¥16,864
5,497
2,000
2,000
–
¥26,361

Yen (millions)2009
5-10 years¥17,856––––¥17,856

1-5 years¥9,372–––
137¥9,509Over 10 years¥8,000––––¥8,000

Total¥52,092
5,497
2,000
2,000
137
¥61,727

The carrying value, fair value and variance for securities classified as held-to-maturity securities and other securities as of December 31,
2010 were as follows:
1: Held-to-maturity securities

Securities whose fair value
exceeds their carrying value
Corporate bonds
Sub total
Securities whose carrying
value exceeds their fair value
Corporate bonds
Sub total
Total

Yen (millions)
Carrying value

Fair value

Variance

2,875
2,875

3,428
3,428

553
553

35,49335,49342,32042,320

6,827
6,827

23,282
23,282
26,157

21,61021,61025,039(1,671)(1,671)(1,118)287,432
287,432
322,925

266,790
266,790309,123(20,629)(20,629)(13,802)

2: Other securities

Securities whose fair value
exceeds their carrying value
Stock
Corporate bonds
Sub total
Securities whose carrying
value exceeds their fair value
Stock
Corporate bonds
Other
Sub total
Total

U.S. Dollars (thousands)
2010
Carrying value
Fair value
Variance

Yen (millions)

U.S. Dollars (thousands)
2010
Carrying value
Fair value
Variance

Carrying value

Fair value

Variance

1,240
8,985
10,226

2,143
9,005
11,149902
20
922

15,308110,925
126,246

26,456111,172
137,641

11,135
246
11,382

2,161
9,468
9,933
21,562
31,788

1,699
9,072
9,435
20,20731,356

(461)
(396)
(497)
(1,354)(432)

26,679116,888
122,629
266,197
392,444

20,975
112,000
116,481249,469
387,111(5,691)(4,888)(6,135)(16,716)(5,333)

Unlisted stocks are not included in “Other securities” because their market prices do not exist and their fair values are not readily
determinable.
5. Derivative Financial Instruments
The Company enters into forward exchange contracts and options, and forward precious metal contracts as a normal part of risk
management efforts. The Company also utilizes compound financial instruments for the purpose of efficient management of surplus
funds. However only principal guaranteed instruments are used, derivatives are not used for speculative trading purposes. As aresult, the Company is exposed to risk of currency rate fluctuation and commodity price risk. The Company is also exposed to credit
related losses in the event of the nonperformance of the counterparties to foreign exchange contracts, precious metal contracts andcompound instruments. Management believes such credit risks are minor because of the high credit worthiness of the counterparties
and as such financial instruments are not held for trading purposes.
Forward precious metal contracts are used by the Company to hedge the risk of changes in market prices resulting from purchaseof precious metals as raw materials for motor products. The contracted amounts outstanding at December 31, 2009 and 2010 were
¥1,045 million and ¥118 million ($1,456 thousand), respectively.
The estimated fair values at December 31, 2009 and 2010 were ¥1,827 million and ¥193 million ($2,382 thousand), respectively.
Gains and losses deferred, arising from contracts related to future trade transactions, are insignificant, at December 31, 2009. The
currency option contracts outstanding at December 31, 2010 were ¥973 million ($12,012 thousand). The estimated fair values at
December 31, 2010 were ¥4 million ($49 thousand).
MABUCHI MOTOR CO., LTD. Annual Report 201032

6. Retirement Plans
The table below sets forth the plan’s status and amounts recognized in the balance sheets at December 31, 2009 and 2010.
Yen (millions)
Projected benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized prior service cost
Unrecognized actuarial gains
Net retirement benefit obligation
Prepaid pension costAccrued retirement benefits

2009¥(8,631)
7,990
(640)
162
(301)
(780)
158
¥   (939)

2010¥(8,717)
8,663
(54)
148
(331)
(236)
150
¥   (387)

U.S. Dollars (thousands)
2010$(107,617)
106,950(666)
1,827(4,086)(2,913)1,851$ (4,777)

Effective as of April 1, 2008, the Company amended its retirement benefit plan to introduce a “point” based retirement benefit plan.
Under the amended plan, the estimated amount of all retirement benefits to be paid upon retirement is allocated to each service year
based on the points earned.
Effective for the year ended December 31, 2009, the Company adopted the new accounting standard “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” to align the accounting
policies of overseas subsidiaries with those of the Company. The effect of this change was to increase the projected benefit obligationin Mabuchi Taiwan Co., Ltd and Mabuchi Motor Taiwan Ltd.
The components of net periodic pension cost for the years ended December 31, 2009 and 2010 were as follows:
Yen (millions)
Service cost
Interest cost
Amortization of prior service cost
Expected return on plan assets
Amortization of unrecognized actuarial gain
Net periodic pension cost

2009
¥474
169
20
(82)
(24)
¥556

2010
¥427
168
20
(104)
(30)
¥481

U.S. Dollars (thousands)
2010$5,271
2,074
246(1,283)(370)$5,938Other than the above pension cost, temporary severance benefit costs of ¥339 million in 2009 and ¥84 million ($1,037 thousand) in2010 were incurred, respectively.
The assumptions used in accounting for the above plans were as follows:
Discount rate
Expected rate of return on plan assets

2009
mainly 2.0%
mainly 1.0%

2010
mainly 2.0%
mainly 1.0%

7. Income Taxes
The Company and its domestic consolidated subsidiaries are subject to a number of taxes based on income with a normal tax rate
aggregating approximately 40.4% for the years ended December 31, 2009 and 2010. Foreign subsidiaries are subject to income taxes
in the countries in which they operate.
The following table summarizes the significant differences between the Japanese statutory income tax rate and the effective income
tax rate on pre-tax income for the years ended December 31, 2009 and 2010.
As a result of a revision of the Corporate Tax Law in Japan in 2009, dividends received from overseas subsidiaries are no longer
subject to Japanese income tax. Accordingly, part of the deferred tax liability that had previously been recorded in respect of theundistributed earnings in foreign subsidiaries has been reversed.

Statutory income tax rate
Different tax rates applied to foreign subsidiaries
Foreign and R&D tax credit utilization
Undistributed earnings in foreign subsidiaries
Reversal of tax effects on undistributed earnings in foreign subsidiaries
Tax credits on dividend income
Other, net
Effective income tax rate

2009
%
40.4
8.5
(11.6)－(121.3)(1.3)
4.4(80.9)

2010%
40.4(16.9)
(1.7)
2.7
－
(1.5)
4.9
27.9

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets andliabilities at December 31, 2009 and 2010 were as follows:

33

MABUCHI MOTOR CO., LTD. Annual Report 2010

Yen (millions)Deferred tax assets:
Unrealized profits on inventories and fixed assets
Evaluation losses on investment securities and other assets
Depreciation
Allowance for retirements benefits
Unrealized loss on securities available for sale
Other
Total
Deferred tax liabilities:
Tax on undistributed earnings in foreign subsidiaries
Other
Total
As reported in the consolidated balance sheet:
Deferred tax assets
Deferred tax liabilities

U.S. Dollars (thousands)
2010

2009

2010

¥   432
1,441
84
144
22
960
¥3,086¥   815
1,024
81
78
175
800
¥2,975$10,061
12,641
1,000
962
2,160
9,876
$36,728¥   789129¥   918¥   987327¥1,315$12,185
4,037$16,234¥2,178
11¥1,665
6$20,555
74

8. Shareholders’ Equity
Under the Japanese Corporate Law (“the Law”), the entire amount paid for new shares is required to be designated as common stock.
However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one half of the price of the
new shares as additional paid-in capital, which is included in capital surplus.
Under the Law, where a distribution of earnings is made, the smaller of an amount equal to 10% of the dividend or the excess, ifany, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve must be set aside as additional
paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying consolidatedbalance sheets.
As of December 31, 2010, the total amount of additional paid-in capital and legal earnings reserve exceeded 25% of the common
stock, therefore, no additional transfer is required.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. However, by the resolution of shareholders’meeting, additional paid-in capital and legal earnings reserve may be transferred to other retained earnings and capital surplus,
respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial
statements of the Company in accordance with the Law.
Year end dividends are approved by the shareholders after the end of each fiscal year, and semiannual interim cash dividends are
declared by the Board of Directors after the end of each interim six-month period.
On September 17, 2010, interim dividends (¥50 or $0.61 per share) of ¥1,751 million ($21,617 thousand) were paid to shareholders
based on the shareholder’s records at June 30, 2010. On March 31, 2011, the shareholders approved the declaration of dividends (¥50
or $0.61 per share) totaling ¥1,751 million ($21,617 thousand).
9. Per Share Data
Net income per share was computed based on the net income reported in the consolidated statements of income and the weighted
average number of shares of common stock outstanding during each year. In accordance with the accounting standard for earnings
per share, basic net income per share was computed based on the net income available for distribution to shareholders of common
stock and the weighted average number of shares of common stock outstanding during the year.
10. Contingent Liabilities
As of December 31, 2010, the Company was contingently liable principally for forward precious metal contracts in the amount of¥118 million ($1,456 thousand).
11. Research and Development Expenses
Expenditures relating to research and development activities are charged to income as incurred and amounted to ¥3,298 million and¥3,337 million ($41,197 thousand) for the years ended December 31, 2009 and 2010, respectively.
12. Impairment of Fixed Assets
Impairment losses relating to fixed assets of ¥27 million were incurred in 2009. Accumulated losses on impairments are directlydeducted from the related assets. There were no impairment losses relating to fixed assets in 2010.
13. Segment Information
The Company and consolidated subsidiaries manufacture and sell small electric motors, parts and equipment used for production
purposes. Substantially all of the consolidated net sales and operating income are generated from a broad range of motor products.
Information on net sales, operating income and assets by geographic area, and overseas sales is summarized as follows:

MABUCHI MOTOR CO., LTD. Annual Report 201034

Segment Information by Geographic Area
Net sales:Japan
External customers
Intersegment
Total
Asia
External customers
Intersegment
Total
U.S.A.
External customers
Intersegment
Total
EuropeExternal customers
Intersegment
Total
Corporate and elimination
Consolidated
Operating income:
Japan
Asia
U.S.A.
EuropeCorporate and elimination
Consolidated
Assets:Japan
Asia
U.S.A.
EuropeCorporate and elimination
Consolidated2009

Yen (millions)2010

U.S. Dollars (thousands)
2010¥  12,125
31,97044,096¥  12,327
44,03256,359$    152,185
543,604
695,790

42,12933,24275,372

51,29542,73594,031

633,271
527,592
1,160,876

5,681
12
5,694

7,396
(0)
7,396

91,308(0)91,30810,432–
10,432(65,225)¥  70,369

11,732–
11,732(86,768)¥  82,752

144,839–
144,839(1,071,209)$ 1,021,629¥     (994)
2,960
145
378
530
¥    3,019¥    1,574
4,334
296
231
188
¥    6,624$     19,432
53,506
3,654
2,851
2,320
$      81,777¥  66,650
93,567
4,174
5,345
22,623¥192,362¥  64,788
89,6793,183
5,362
22,394¥185,408$   799,851
1,107,148
39,296
66,197
276,469$ 2,288,987“Corporate and elimination” is the net of corporate assets of ¥87,612 million in 2009 and ¥87,338 million ($1,078,246 thousand) in
2010, which comprises principally cash, short-term investments and investment securities and inter-segment eliminations.
As explained in Note 1(m), effective for the year ended December 31, 2009, the Company adopted “Accounting Standard for
Measurement of Inventories”. The effect of this change was to increase operating loss by ¥14 million in Japan and to decrease
operating profit by ¥18 million in Asia.
Overseas Sales
Overseas Sales
U.S.A.
EuropeAsia and Other
Total
Net Sales% of Overseas Sales to Net Sales

Yen (millions)
2009

2010

¥  6,004
10,47645,812¥62,293
70,36988.5%¥  7,441
11,79353,448¥72,682
82,752
87.8%

U.S. Dollars (thousands)
2010$

91,864
145,592
659,851$ 897,308
1,021,629
87.8%

Overseas sales are the total of exports by the Company and sales by consolidated overseas subsidiaries.
14. Subsequent Event
On February 15, 2011, the Board of Directors resolved to cancel certain treasury shares to further improve capital efficiency andshareholders’ return on investment. Accordingly, on March 4, 2011, 2 million ordinary shares were cancelled. The number of issued
ordinary shares outstanding after the cancellation was 39,875,881.

35

MABUCHI MOTOR CO., LTD. Annual Report 2010

Independent Auditors’ Report

MABUCHI MOTOR CO., LTD. Annual Report 201036

Investor Information (As of December 31, 2010)
Stock Data

Composition of Shareholders

Number of Shares Authorized...................... 100,000,000
Number of Shares Issued. ................................ 41,875,881

Treasury Share

Number of Shareholders......................................... 13,104

16.3%

Financial Institutions
19.7%

Major Shareholders

By type ofshareholders

Number of
Ratio of
Shares Held Shareholders(Thousands)(%)

Major Shareholders

2,500
1,900
1,900

7.1
5.4
5.4

Mabuchi International ScholarshipFoundation

1,500

4.3

Japan Trustee Services Bank, Ltd.
(Trust Account)

1,164

3.3

Premiere Corporation

1,034

3.0

The Nomura Trust and Banking Co.,
Ltd. (Trust Account)

956

2.7

The Master Trust Bank of Japan, Ltd.
(Trust Account)

840

2.4

Northern Trust Co. (AVFC) Sub-account
American Clients

750

2.1

Morgan Stanley & Co. Inc.

726

2.1

Takaichi Mabuchi
Takashi Mabuchi
Tamotsu Mabuchi

Financial Instruments
Firms
1.2%
Other Corporations
9.6%

Individuals andOthers27.1%

Foreign Corporations
26.1%

Less than 100 0.1%

100- 499 3.7%
500-999 1.6%
1,000-9,999 5.1%

More than 1,000,000
40.2%

10,000-99,999 11.3%

By number ofshares held

Notes: 1. In addition to the above, Mabuchi Motor Co., Ltd. retains
6,838,777 treasury shares.
2. Ratio of Shareholders excludes the number of treasury shares.

Cash Dividends per Share / Payout Ratio

Total Dividend / Amount for Repurchase of Own
Stocks / Total Dividend Payout Ratio
(%)

129.8

36.4

50.9

42.5

64.3

43.8

100,000-999,999 38.0%

516.8

66.6

171.0

(%)

122.7

139.3

64.3

42.5
(Yen)

115.0
51.0

92.0

114.0
63.0

50.0
64.0

2004
Interim

42.0

51.0

2005

2006

Year-end

123.0

123.0

62.0

62.0

61.0

61.0

2007

2008

100.0

100.0

50.0

50.0

50.0

50.0

2009

Standard Value for Calculating
Special Dividend

2007

60 yen20% of consolidated net income

2005

60 yen20% of consolidated net income

2003

50 yen1999

50 yen8,682

13,957

4,664

6,559
3,681

4,509

4,703

4,468

2004

2005

2006

2007

2008

Total Dividend

3,503

3,503

2009

2010

Amount for Repurchase of Own Stocks

Total Dividend Payout Ratio

Trend of Stock Price and Related Indicators
2006

2007

2008

2009

2010

High (Yen)

7,710

7,990

6,740

5,010

5,520

Low (Yen)

5,710

6,610

2,845

3,230

3,920

20% of consolidated net income

At Year-end (Yen)

7,080

6,740

3,690

4,580

4,185

5% of consolidated net income

PER

26.4

24.0

38.9

31.2

27.8

(* Additional policy) Actual full-year dividend amount shall be based on
the above calculation standards and shall not be less than the expected
dividend amount announced during the full-year period unless asignificant profit warning is issued.

PBR

1.3

1.2

0.7

0.9

0.8

(*)

37

18,042

Payout Ratio

Ordinary Dividendper Share

Year(Millions of yen)

2010

Changes in Standards for Calculating Dividends

66.6

MABUCHI MOTOR CO., LTD. Annual Report 2010

Corporate Data (As of December 31, 2010)
Company Name
MABUCHI MOTOR CO., LTD.
Corporate Headquarters
430 Matsuhidai, Matsudo-City
Chiba 270-2280, Japan
Tel: 81-47-710-1111
Fax: 81-47-710-1141
Established
January 18, 1954

Number of Employees
748 (Non-consolidated)
37,466 (Consolidated)
Ordinary General Meeting of
Shareholders
The Ordinary General Meeting of Shareholders
will be held at the end of March in Matsudo.
Independent Accountants
Ernst & Young Shin Nihon LLC
Tokyo, Japan

Shareholders’ Register Custodian
Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Department
10-11, Higashi-suna 7-chome, Koto-ku,
Tokyo 137-8081, Japan
Tel: 81-120-232-711
Stock Listing
Japanese Stock Exchange Listing
Tokyo Stock Exchange

Paid-in Capital¥20,704,818,800

Corporate Directory
Consolidated Subsidiaries
MABUCHI INDUSTRY CO., LTD.
19 Sam Chuk Street, San Po Kong,
Kowloon, Hong Kong
Tel: 852-2328-5575
Fax: 852-2352-5266
MABUCHI MOTOR (DONGGUAN) CO., LTD.
Guancheng Science & Technology Park,
Shilong Road, Guanlong Road's Section,
Dongguan City, Guangdong Province
523119, China
Tel: 86-769-2225-6985
Fax: 86-769-2220-2117
MABUCHI TAIWAN CO., LTD.
No. 18, Chunghwa Road, Hsinchu Industrial
District, Hsinchu 30352, Taiwan
Tel: 886-3-598-1111
Fax: 886-3-598-6256
MABUCHI MOTOR TAIWAN LTD.
No. 66 Kai-Fa Road, N.E.P.Z., Kaohsiung
81170, Taiwan
Tel: 886-7-362-1111
Fax: 886-7-361-2446
MABUCHI MOTOR DALIAN CO., LTD.
No. 41 Harbin Road, Dalian Economic andTechnical Development Zone, Dalian
116600, China
Tel: 86-411-8761-1111
Fax: 86-411-8761-2900
MABUCHI MOTOR WAFANGDIAN CO., LTD.
Laohutun Town, Wafangdian City, Liaoning
Province 116322, China
Tel: 86-411-8537-0241
Fax: 86-411-8537-0291

MABUCHI MOTOR (JIANGSU) CO., LTD.
No. 1 Liuxu Road, Wujiang City Economic
Development Zone, Jiangsu Province
215200, China
Tel: 86-512-6345-1111
Fax: 86-512-6345-0438
MABUCHI MOTOR (YINGTAN) CO., LTD.
Yingtan Economic and Technological
Development Zone, Yingtan City, Jiangxi
Province 335000, China
Tel: 86-701-6689168
Fax: 86-701-6689166
MABUCHI PRECISION (DONGGUAN)
CO., LTD.
Ludong Industrial Area, Humen Town,
Dongguan City, Guangdong Province
523935, China
Tel: 86-769-85564792
Fax: 86-769-85564791
MABUCHI MOTOR VIETNAM LTD.
No. 2-5A Street, Bienhoa II Industrial Zone,
Bienhoa, Dongnai, Vietnam
Tel: 84-61-3836711
Fax: 84-61-3836712
MABUCHI MOTOR DANANG LTD.
Lot A2, No. 3 Street, Hoa Khanh Industrial
Zone, Lien Chieu District, Danang City,
Vietnam
Tel: 84-511-3731931
Fax: 84-511-3731932
MABUCHI MOTOR AMERICA CORP.
3001, West Big Beaver Road, Suite 520,
Troy, MI 48084 U.S.A.
Tel: 1-248-816-3100
Fax: 1-248-816-3242

MABUCHI MOTOR (SINGAPORE) PTE. LTD.
111, North Bridge Road, #12-05 Peninsula
Plaza, Singapore 179098
Tel: 65-6339-9991
Fax: 65-6339-9091
MABUCHI MOTOR (EUROPE) GmbH
Herriotstrasse 1, 60528 Frankfurt am Main,
Germany
Tel: 49-69-6690220
Fax: 49-69-66902229
MABUCHI MOTOR (SHANGHAI) CO., LTD.
Room 1901, Kirin Plaza Building, No. 666
Gubei Road, Changning District, Shanghai
200336, China
Tel: 86-21-6208-5666
Fax: 86-21-6208-8466
MABUCHI MOTOR KOREA CO., LTD.
Room 328, Central Plaza G-five, 1685-8
Seocho-Dong, Seocho-Gu, Seoul 137-070,
Korea
Tel: 82-2-534-8131
Fax: 82-2-534-8135
MABUCHI MOTOR TRADING(SHENZHEN) CO., LTD.
Room 1704-05 Great China International
Exchange Square, Jintian Road, FutianDistrict, Shenzhen City, Guangdong
Province 518034, China
Tel: 86-755-2399-8568
Fax: 86-755-2399-8566
MABUCHI MOTOR (MALAYSIA) SDN. BHD.
This company closed in 2005.

Non-consolidated Subsidiary
MABUCHI REAL ESTATE CO., LTD.

MABUCHI MOTOR CO., LTD. Annual Report 201038