Annual Report

2016
Year ended December 31, 2016

Boosting Motors toDrive Growth

Motor forpower window lifters
GD-558RE

Motor forpower window lifters
GD-558RC/LCProfile

Small Direct-Current
Electric Motors
Boosting Motors to Drive GrowthEver since its founding, Mabuchi Motor Co., Ltd. has been a specialist manufacturerof small motors that delivers consistently high quality and efficiency at low prices

in line with our basic policy “Bringing better and more reasonably priced goods tothe market.” Our small motors find diverse applications in automotive products andconsumer and industrial products, including home appliances, power tools, precisionand office equipment, audio and visual equipment, and toys. In this way, we contributeto convenient, comfortable living for people the world over.

The Mabuchi Group is the world’s leading producer of small motors.

Our annual production volume of approximately 1,467 million units (2016

Table ofContents

results) is testimony to the excellent reputation and trust we have built withour customers and a source of great pride for us.

In the coming years, we will continue to aspire tocreate new value through product development adaptableto market needs, and a flexible supply system.

1

Profile2

Mabuchi’s Management Vision

3

To Our Shareholders

8

Five-year Summary

9

Segment Information by Motor Application

11

Research and Development Activities

12

Corporate Governance13	Board of Directors, Audit & Supervisory Board
Members, and Executive Officers

1

14

Corporate Social Responsibility

15

Management’s Discussion and Analysis

17

Financial Data

41

Investor Information

42

Corporate Data

MABUCHI MOTOR CO., LTD.

Forward-Looking Statements
This annual report contains forward-looking statements about
Mabuchi’s future plans, beliefs, strategies, and performance thatare not historical facts. These statements are based on current
expectations, forecasts, estimates, and projections about theindustry in which Mabuchi operates and the beliefs andassumptions 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 thoseprojected. Mabuchi therefore cautions readers not to place
undue reliance on forward-looking statements. Furthermore, theCompany undertakes no obligation to update any forwardlooking statements as a result 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; the outcome of pending and future litigation;commodity prices; and the continuing status of financing,financial instruments, and financial resources.

Annual Report 2016

Mabuchi’s Management Vision
MANAGEMENT PRINCIPLE
Contributing to International Society and Continuously
Increasing Our Contribution
Mabuchi believes that a company can continue to exist andgrow only if its business activities contribute to society on anever-expanding basis. It goes without saying that acompany 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 ourlevel of contribution to society through ourbusiness activities and remain a company thatsociety considers essential. This
“Management Principle” is at the core of
all our activities, unchanging throughtime and irrespective of the people atthe management helm.

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

Our Management Vision

MANAGEMENT GUIDELINESMANAGEMENT SCHEME

Mabuchi’s management guidelines, which flow from ourmanagement 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 thepotential of small DC (direct-current) brush motors as ourcore business, we mobilize our organizational skills andpromote business activities in which we can continuously
exert a unique “Mabuchi-ism” that cannot easily beemulated. Naturally, we do not aim at diversification
without contributing to society, namely, diversification only
to expand sales. We generate revenues and profits as aresult 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 andachieving sound growth.

2

To Our
Shareholders
We will steadily implement priority
activities and aim to further improve
corporate value.

Hiroo Okoshi
Representative Director and President,
President & CEO

income was 24,225 million yen, and profit attributable toowners of parent was 20,598 million yen.

Business Results for Fiscal 2016
We will report on the consolidated performance for the
fiscal year ended December 31, 2016 (January 1 to December 31, 2016).
For the fiscal year ended December 31, 2016 (fiscal 2016),
consolidated net sales were 140,699 million yen, operating

Economic Environments of Major Countries and Regions

Financial Highlights
Thousands of
U.S. dollars

Rate ofchange

2016

2016

YoY

¥140,699$1,212,925-1.7%

Millions of yen

2015
Net sales ¥143,143

3Operatingincome22,961

24,225

208,836+5.5%

Profit attributableto owners of parent

18,546

20,598

177,573+11.1%

Total
assets256,196258,387

2,227,478+0.9%

Net assets

233,245

232,917

2,007,909-0.1%

MABUCHI MOTOR CO., LTD.

During fiscal 2016, the world economy as a whole showed
underlying strength, despite a sense of uncertainty about
the outlook for the future. The economic environments ofthe major countries and regions were as follows.

In the U.S. economy: The employment and income
environments improved, and strong consumer spending
continued.
In the European economy: Gradual recovery
continued, driven by domestic demand.
In the Japanese economy: Consumer spending
was weak, and business conditions were flat, despite
improvement in the employment environment.
In the economies of emerging countries: Although
the economic slowdown in China eased, overall growth
remained low in emerging market economies.

Annual Report 2016

Issue

1

Acceleration of Growth in the Power Window Lifter
Motor BusinessIn fiscal 2016, the Mabuchi Group achieved continued growth in the
Result Winning of orders from new customers by strengthening
Automobile Products Market, led by expanding sales
sales
for medium-sizedof new motors for power window lifters
automotive motors. We also implemented new initiatives toward further
Expansion of Medium-sized Automotive Motor Sales andIssue
2
New Applications
improvements in laborsaving.
ResultExpansion of orders for medium-sized automotive motors
for each application by means of application-specificstandard products

The Group’s applications by market were as follows.

Applications by Market

3

Development of New Applications in the Consumer andIndustrial Products Sector

ResultSecuring of adoption for motors for the new applications

Issue

for medical equipment and home appliances, following

In the Automotive Products Market: Healthy demand
continued overall, and demand in China increased due toa tax cut on small-engine cars.
In the Consumer and Industrial Products Market:
Although demand remained stable, markets for some
applications continued to contract.

entry into the light electric vehicle (LEV) and commercial
office equipment sectors
Issue

4

ResultImplementation of Laborsaving Measures andEstablishment of Next-Generation Manufacturing
Expansion of laborsaving in production processes andman-hour reduction in primary parts production
processes through the introduction of facilities to

Main Initiatives for the Fiscal Yearrationalize production

The main initiatives and results of the fiscal year underreview are as follows.
Issue

1

ResultAcceleration of Growth in the Power Window Lifter
Motor Business
Winning of orders from new customers by strengthening
sales of new motors for power window lifters

2

Expansion of Medium-sized Automotive Motor Sales and
New Applications

ResultExpansion of orders for medium-sized automotive motors

Issue

Issue

Implementation of Global Base Strategy

Result

The decision to establish a new production base in Poland

5

We have been able to actively promote and realize various
measures to expand sales and market share, develop newmarkets, and further advance progress in quality and efficiency, and achieve results that will lead to business growth
now and in the future.

for each application by means of application-specificstandard products

3

Development of New Applications in the Consumer andIndustrial Products Sector

ResultSecuring of adoption for motors for the new applications

Issue

for medical equipment and home appliances, following
entry into thelight Margin
electric vehicle (LEV) and commercial
Net Sales/Gross
Profitoffice equipment sectors

32.8(Millions of yen)

Issue

4

30.4

(Millions of yen)

16.0
13.8

29.1
Implementation of Laborsaving
Measures and
143,143
140,69924.8
24.7
Establishment of Next-Generation
Manufacturing
122,544

22,961

17.2
24,225

8.6
16,875

5.9

108,401

ResultOperating Income/Operating Income Margin

Expansionof laborsaving in production processes and85,254
man-hour reduction in primary parts production
processes through the introduction of facilities to

9,335
5,052

rationalize production
2012
2013
Issue Gross profit margin (%)

5

Result

2014

2015

2016

Implementation of Global Base Strategy
The decision to establish a new production base in Poland

2012

2013

2014

2015

2016

Operating income margin (%)

4

Aiming to further expand our business worldwide through the introduction of
new and improved products.

Outlook for Fiscal 2017
The economic environments of the major countries andregions for fiscal 2017 are forecast as follows.

Economic Environments of Major Countries and Regions
In the U.S. and European economies: Although theforecast is for both economies to remain strong, there
are also many uncertain factors, such as the policiesof the new U.S. administration, Brexit, and elections in
European countries.
In the Japanese economy: Business conditions are
expected to continue to recover gradually.
In the economies of emerging countries: Although
the economic slowdown in China has bottomed out, thelow economic growth in emerging countries overall is
expected to continue.
The Group’s applications by market are forecast as follows.

products introduced at the time of the start-up of thepower window lifter motor business continue to increase,and these products have become the foundation for development of the business.
We started mass production of a high-torque standard
product for a second major North American automaker inthe second half of the year and will approach the remaining
North American customer in earnest with the aim of winning orders. At the same time, taking advantage of the
product features—compactness, lightweight, high performance, and high quality— we will further step up sales
activities for high-torque standard products targeting major
European automakers and China, the world’s largest automobile market, and link these activities to orders.
There is an increasingly greater need among Japanese automakers for size and weight reductions to increase freedom indesigns of components inside doors. We will accelerate thedevelopment of new products that are compact, lightweight, and price-competitive, and will become a standard
product for the next generation, and aim to win orders.

Applications by Market
In the Automotive Products Market: Gradual growthis expected, with continued strong demand in Europe
and North America compensating for softening ofgrowth in China and other emerging countries.
In the Consumer and Industrial Products Market:
While demand for motors for home appliances, power
tools, and office equipment in the business-use market
is expected to be flat, contraction of demand for motors
for office equipment in the personal-use products market
is forecast.

(2) ‌Expansion of Medium-sized Automotive Motor Sales
and New Applications
Motors for power seats, electric parking brakes, engine
peripheral equipment, and other medium-sized motor
applications constitute a market sector for which continued
market expansion can be expected in light of today’s emphasis on automobile safety, comfort, and economy. The

Power Window Lifter Motor Sales Results(Billions of yen)

35

Medium- to Long-term Management Strategy
and Issues to Be Addressed

30

Accelerated pace of growthin power window lifter motor
sales amount each year

4 years

Achieved sales of
10 billion yen

15

Achieved sales of
20 billion yen

Approx. 10 years

10

In the power window lifter motor business, sales growth is
rapidly accelerating, with new high-torque standard products for the European and North American markets driving
growth. At the same time, sales of improved versions of
5

MABUCHI MOTOR CO., LTD.

2 years25
20(1) ‌Acceleration of Growth in the Power Window Lifter Motor
Business

Achieved sales of
30 billion yen

5
0

2000

2010

2014

2016

Annual Report 2016

Mabuchi Group will work to increase sales to new customers and develop new applications by leveraging highly
competitive application-specific standard products, and aim
for further sales growth.
The Mabuchi Group will engage in sales expansion activities
for power seat motors with the aim of winning orders frommajor customers in Japan and overseas by means of improved
slider motors, products that are already competitive due totheir compact and lightweight features. Electric parking brakemotors are an application for which Mabuchi has maintained
the top global market share. To further strengthen andexpand this business, we will undertake share expansion byadding improvements to existing motors, which are standard
products, and introducing them to customers that are someof the world’s largest automakers as well as to new customers. In addition, door area motors are an expanding new
application. In fiscal 2015, we obtained orders for geared
motors for backdoor closers from a major Japanese automaker, and we will seek to win additional orders through further
deployment across multiple applications.

(3) ‌Development of New Applications in the Consumer andIndustrial Products Sector
In the consumer and industrial products sector, in addition
to business activities centered on existing small brush motors, we are reinforcing initiatives to develop and increase
sales of brushless motors in order to focus on new applications and create new demand. With regard to brushless
motors for LEVs, we continue to sell motors for electrically2017
Medium-sized Automotive Motor Sales Results andForecast
Plan(Billions of yen)
(%)

25

300

Sales amount
Sales quantity (2013=100%)

20
200

15
10

100

5
0

2013

2014

2015

2016

2017
Forecast

Note: Medium-sized Automotive Motors: power seats, parking brakes, steeringcolumn adjusters, engine peripheral equipment, and seat belt pretensioners

0assisted bicycles, and full-scale sales to a second major
Japanese electrically assisted bicycle manufacturer are set tobegin. Moreover, we also engage in in-house developmentof motor production facilities. We use standard motors for
LEVs as the drive units of these production facilities, which
are used in actual motor production at our plants, and at
the same time are working to secure adoptions for use as
drive motors by industrial equipment manufacturers. We willcontinue to develop new applications and realize deployment across multiple applications on the basis of application-specific standard products for LEVs. We will aim forsales expansion of brushless motors for multifunction printers (MFPs) by introducing new products with improved
controllability and option adaptability. In the home appliances market, in recent years a movement toward high-end
products, such as the inclusion of new products with increased power in cordless vacuum cleaners, hair dryers, andother product lines, has gained impetus. As these high-end
home appliances require a wide range of motor performance characteristics, we will meet customer needs bydeveloping and introducing new high-performance products that leverage Mabuchi’s advanced technological capabilities as a specialized manufacturer.

(4) ‌Implementation of Laborsaving Measures andEstablishment of Next-Generation Manufacturing
The Mabuchi Group is working to mechanize productionlines and undertaking laborsaving by introducing facilities in
response to a major change in the business environment;
namely, sharp increases in labor costs in countries where
production bases are located. Under the Phase 2 Laborsaving Plan to achieve laborsaving exceeding 30% during thethree-year period from fiscal 2014 to fiscal 2016, we
achieved laborsaving in excess of 30% as planned, andproduction process innovation progressed significantly. We
have again set high targets in the Phase 3 Laborsaving Plancovering the three-year period from fiscal 2017 to fiscal
2019, and will accelerate activities with the aim of achieving
laborsaving of 30% from the fiscal 2016 level.
In addition, we will install at our headquarters a new andinnovative core production line for the purpose of establishing next-generation manufacturing to further strengthen
our manufacturing capabilities. This core production line willrealize the ultimate in laborsaving and high-speed operation
through new facilities, methods, and processes. We will
6

We will continue to reward shareholders for their commitment and dedication.

proceed with development of the line, with the aim ofstarting operations in fiscal 2017, as a new technology tolead the way into the future evolution of manufacturing.

Number of Direct Workers
Phase 1

Phase 2Phase 3

Achieved laborsaving
exceeding 30%

Achieved laborsaving
exceeding 30%

Aim to achieve laborsaving
exceeding 30% in Phase 3

More than -30%

More than -30%
-30%

2010

2016

2019

(5) Implementation of Global Base Strategy
The Mabuchi Group has long provided a stable supply ofhigh-performance, high-quality, low-priced standard products to customers around the world by concentrating production of motors in the Asian region. In recent years,
customer needs for “local production for local consumption” have increased, especially with regard to mediumsized automotive motors. We have received strong requests
from customers in European markets to manufacture locally,
and to meet these requests, in January 2017 we establisheda production subsidiary in Poland. We are now making
preparations for the start of plant construction, planned forthe third quarter, and will proceed with construction withthe aim of starting operations in 2019.

Planned Site of Poland Mabuchi
Directly connected to the German border by land route(approx. 450 km)
PolandBerlinGermany

7

MABUCHI MOTOR CO., LTD.

Planned site ofPoland Mabuchi

Basic Policy on Profit Sharing, and Dividend
Payments for the Current and Next Periods
Mabuchi maintains a basic policy of actively returning profits
to shareholders in accordance with its business results. We
do this while also providing funds from internal reserves forcapital expenditures, research and development which arenecessary for the growth and development of the Company, and while maintaining our financial soundness.
Under this policy, apart from when business results are
remarkably sluggish due to a sudden deterioration in thebusiness environment, we consistently distribute an annual
ordinary dividend of 30 yen per share as payment of along-term stable dividend, plus an additional special dividend equal to 30% of the consolidated net income divided
by the number of outstanding shares, depending on theperformance of the Company.
We will continue to consider repurchasing more treasury
stock as necessary, as a way of flexibly responding to changes in the share price and the business environment, and as ameans of fulfilling our capital policy and returning profits toshareholders.
It is our policy to appropriate internal reserves to further
strengthen and deepen our existing businesses and to invest
in areas of growth, with a view to increasing corporate
value.

Annual Report 2016

Five-year Summary
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries(Years Ended December 31)

Millions of yen

Thousands of
U.S. dollars

2012

2013

2014

2015

2016

2016

¥   85,254¥ 108,401¥ 122,544¥ 143,143¥ 140,699$1,212,925

Cost of sales

64,21481,54686,92999,673

94,510814,745

Selling, general and administrative expenses

15,987

17,51918,73920,50821,963

189,343

5,052

9,335

16,87522,961

24,225

208,836

Income before income taxes

8,426

15,01523,595

26,593

26,539228,787

Operating income ratio (%)

5.9

8.6

13.8

16.0

17.2

6,385

10,51918,09018,546

20,598

177,573

Capital expenditures

6,825

5,755

9,597

16,187

11,23696,862

Depreciation and amortization

3,410

4,301

4,771

6,386

6,016

51,862R&D expenses

3,794

3,763

4,503

5,164

5,024

43,310Exchange gain

3,647

5,624

5,124

2,329

493

4,253

Net cash provided by operating activities

9,091

11,75018,118

20,11527,958241,017

Net cash (used in) provided by investing
activities

8,230

4,264

(11,977)(1,178)(3,440)(29,659)

Net cash used in financing activities(3,509)(3,031)(6,014)(13,312)(11,860)(102,247)

Total assets

196,702227,253

256,368

256,196258,387

2,227,478

Net assets

181,372

208,791

233,312233,245

232,917

2,007,909

For the year:
Net sales

Operating income

Profit attributable to owners of parent

Cash flows:At year-end:

Per share data:

Yen

U.S. dollars

Net income

91.12

150.10258.02266.98300.702.59

Net assets

2,588.38

2,978.02

3,325.99

3,363.01

3,405.14

29.35

50.00

70.00

107.00110.00120.001.03

Operating income margin (%)

5.9

8.6

13.8

16.0

17.2

–

ROE (%)

3.6

5.4

8.2

8.0

8.8

–

ROA (%)

5.6

7.9

9.9

10.6

10.2

–

Shareholders’ equity ratio (%)

92.2

91.9

91.0

91.0

90.1

–

Number of shares outstanding(Thousands of shares)

35,03535,14535,144

69,46868,587–

Number of employees (Persons)

29,05828,18825,354

24,41923,768–Dividends payable
Other data:

Notes:
1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥116=U.S.$1.
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.
4. Per share data: The Company conducted a stock split on January 1, 2015, in which each share of the Company’s common stock was split into two shares. Per
share data has been calculated based on the number of shares issued after the stock split (excluding treasury stock). The results for fiscal years 2012 through2014 have been adjusted and restated, and reflect the amounts after the stock split to facilitate year-on-year comparison of results.

8Segment Information by Consumer andIndustrial Products
Motor Application

28.8%

Below is a description of the market conditions for motors, theMabuchi Group’s main business, and a report on the Group’s
sales situation.
In fiscal 2016, consolidated net sales amounted to140,674 million yen, down 1.7% from the previous fiscal year.

Consumer and Industrial Products Market
Net sales in this market fell, to 40,541 million yen (a 13.3% decrease on a year-on-year basis).
•	Decrease in sales of motors for inkjet printers due to a policy of maximizing
profitability, market contraction and foreign exchange impact•	In the market for beauty-related equipment, solid sales of motors for the high-end toothbrushand hair dryer segments
Net Sales by Principal Item•	Decrease in sales of motors(100 millions of yen)for power tools due to foreignexchange impact, despite
strong sales to the North
American market•	Slight decrease in sales of
MFP/LP motors due to foreignexchange impact•	In Others, increases in sales ofmotors for medical equipment
and housing equipment(Year-on-year change)

Others
90.7%

500
400

125

300

24
61
55

200

89
100
0

113
23
46
50
80

111

90

2015

2016

Net Sales by Application

Inkjet printers
81.5%(Millions of yen)Thousands of
U.S. dollars

Millions of yen

2012

Multifunction printers (MFP)
and laser printers (LP)97.2%
Car CD players
76.7%Power tools
90.7%
Beauty-related equipment
89.0%

2013

2014

2015

2016

46,76440,54143,753

2016
42,119Automotive
Products¥49,055 ¥ 66,220 ¥ 78,748 ¥ 96,369 ¥100,132

863,208

Consumer andIndustrial Products

36,07640,541

349,492

Total Sales¥85,131 ¥108,340 ¥122,502 ¥143,134 ¥140,674

1,212,700

42,11943,753

46,764

Consumer andIndustrial Products

36,07649,055

Automotive Products

66,22096,369100,132

2015

2016

35,55734,39678,748$1=¥116

2012

Net Sales by Region
Thousands of
U.S. dollars

Millions of yen

2012
Japan
North & Latin
America

9

2013

2014

2015

2016

¥ 9,664 ¥ 10,109 ¥ 11,307 ¥ 11,615 ¥ 12,010
8,714

11,475

12,85017,204

17,360

2016
103,535

29,940149,655

14,211

19,71323,62429,262

30,117

259,631China & HongKong

32,27041,52844,77949,493

46,790403,362

32,27020,27034,396

296,517

Total Sales¥85,131 ¥108,340 ¥122,502 ¥143,134 ¥140,674

1,212,700

14,2118,714
9,664$1=¥116

2012

MABUCHI MOTOR CO., LTD.

49,493
41,528Asia Pacific

35,557

Asia Pacific

25,513

Europe29,9402014(Millions of yen)

20,27025,5132013

19,713

46,79044,77923,624China & Hong Kong
EuropeNorth & Latin
America

29,262

30,117

11,475
10,10912,85017,204

17,36011,307

11,61512,010

2013

2014

2015

2016

Japan

Annual Report 2016

Automotive Products Market
Net sales in this market rose, to 100,132 million yen (a 3.9% increase on a year-on-year basis).

Medium-sized Automotive Motors•	Increase in sales of power window lifter motors due to strong sales to the North
American, European, and Chinese markets•	Slight decrease in sales of power seat motors due to foreign exchange impact•	Increase in sales
Net Sales by Principal Itemof electric parking
brake motors due tohigher installation
rates and increasein the numberof equipped car
models•	In Others, increasein sales of motors
for seat belt
pretensioners(100 millions of yen)

(Year-on-year change)

56

500
50
400
300

51
109

60
105

Others
113.6%
Electric parking brakes
116.9%
Power seats
96.7%

200
274

309

100
0

2015

Power window lifters
112.9%

2016

Small Automotive Motors

Automotive
Products

71.2%•	Slight decrease in sales amount due to foreign exchange impact, despite strong
results in sales
Net Sales by Principal Item
quantity for eachapplication due
to stable demand
for automobiles,
higher installation
rates, and higher
market share(100 millions of yen)

(Year-on-year change)

500
400
300

27
25
65

32
26
63

166

160

0

Air conditioning damper
actuators
97.0%
Mirrors (including fonding)
96.7%

200
100

Others116.6%
Headlight level adjusters
103.6%

192

184

2015

2016

Door lock actuators
95.9%

Sales Forecast by Market
Automotive Products Market
Medium-sized Automotive Motors: 60.5 billion yen(a 13.7% increase on a year-on-year basis)•	Increase in sales of power window lifter motors to the North
American, European, and Chinese markets due to an increasein adoptions of high-torque standard products•	Increase in adoptions of new power seat motors by North
American and European customers•	Increase in sales of electric parking brake motors due to anincrease in the number of equipped car models and higher
installation rates•	In Others, increases in sales of motors for engine peripheral
equipment, seat belt pretensioners, and door closers
Small Automotive Motors: 47.0 billion yen(a 0.4% increase on a year-on-year basis)•	Maintenance of a high market share of motors for door lockactuators, car mirrors, and air conditioning damper actuators•	Increase in sales of headlight level adjusters due to market
expansion to result from legislation and the spread of highlow switching•	In Others, increases in sales of motors for steering locks, grilleshutter actuators, and shift-by-wire systems

Consumer and Industrial Products Market
36.4 billion yen (a 10.2% decrease on a year-on-year basis)•	Decrease in sales of motors for inkjet printers due to a policyof maximizing profitability and market contraction•	Decrease in sales of motors for beauty-related equipment due
to continuation of a policy of maximizing profitability•	Increase in sales of MFP/LP motors due to higher sales of anew product•	In Others, increases in sales of motors for medical equipment,
light electric vehicles (LEVs), and housing equipment, despite asales decrease overall due to a policy of maximizing profitability
10Research and Development Activities
billion yen in fiscal 2015, making this a core business for the Group.
In fiscal 2016, we commenced mass production of the GD-558LE/RE,
a medium-torque model aimed at large North American automakers,
and we are currently working to further expand sales and provide
technical support.

The Mabuchi Motor Group’s R&D activities are spearheaded by
Mabuchi Motor Co., Ltd. (the parent company) and MABUCHIMOTOR (DONGGUAN) CO., LTD. (in the Asia segment). In thissection, we provide an overview of the Group’s R&D activities.
The R&D organization consists of the Research and Development
Headquarters and its subordinate organizations: the Research andDevelopment Dept. 1, the Research and Development Dept. 2, and
the Production Engineering Dept. In addition, the Research andDevelopment Headquarters directly controls groups that engage inactivities pertaining to new technology development, intellectual
property, test evaluation, technology research, and engineering
management. The organization engages mainly in high-value-added
work, including the development of elemental technologies basedon the Group’s technology roadmap, described below, as well as
new product development centered on strategically important
applications. From its inception, the Research and Development
Center of MABUCHI MOTOR (DONGGUAN) CO., LTD. (the “R&D
Center”) has mainly engaged in design improvement work. The R&D
Center also handles new product development aimed at rapidly
launching products in the Chinese local market, as well as new
product development tasks entrusted by the Company.
To materialize timely new product development and new
product introductions, Mabuchi has prepared the technology
roadmap based on information obtained from market research andbenchmarking-based technical investigation, and is steadily
developing elemental technologies in accordance with the roadmap.
Our Technical Research Group, established in 2015, is implementing
measures specific to this roadmap, including development of new
product-out-type offerings.
Mabuchi is focusing particular attention on the strategies
described below for examination and implementation of urgent
measures, with the aims of strengthening its responsiveness to new
motor-related fields and applications and addressing the steep rise inlabor costs in overseas countries where it operates plants.

Motors for power seats
Mabuchi’s introduction of distinctive, small, high-torque motors for
power seats has led to increased adoption by large customers andsharp growth in sales and market share. Seeking to further increase
market share, we are reinforcing our products and conducting sales
expansion activities.

Engine peripheral equipment
Our engine peripheral equipment offerings have high future
potential because they contribute to energy savings through precise
engine control, and are also suited to engines subject to hightemperatures and vibration. We are currently working to increase
sales of the RS-4F5, a high-durability model that went into mass
production in fiscal 2014.

Motors for light electric vehicles
In this market, we have continued our proactive productdevelopment activities in fiscal 2016, centering on the IS-92B and
IS-94B brushless motors. These are finding widespread applications,
including their adoption on new power electrically assisted bicycles
and electric carriages, and are generating high demand.
In regard to existing models for other markets, Mabuchi willcontinue harnessing its know-how to improve its product features
while remodeling to enhance added value. At the same time, we will
deploy the aforementioned R&D Center to build a structure forpromptly meeting market and customer needs.
In fiscal 2016, R&D expenses amounted to 5,024 million yen. At
fiscal year-end, the total number of industrial property rights held by
the Company stood at 748 (157 in Japan and 591 overseas), and thetotal number of new industrial property applications domesticallyand overseas was 62. A total of 436 employees engaged in R&D
activities (257 at our headquarters and 179 at the R&D Center of
MABUCHI MOTOR (DONGGUAN) CO., LTD.).
Below is a major new product launched in fiscal 2016:(1) Strengthen technologies of brushless motors and their drive circuits(2) Consider further laborsaving for production lines in addition toexisting laborsaving efforts(3) Shorten and eliminate development lead-times and processes
Meanwhile, our technology and sales teams will join forces toaddress applications in our core automotive motor business andapplications that we must concentrate on in businesses earmarked to
become operational pillars in the future.

Brushless motor for printers (RS-655VA)This brushless motor, intended mainly for use in laser printers,
generates less heat during load times than the RS-645VA, ourexisting model, and has broader applications in the products ofour customers.

Motors for power window lifters
Thanks to increasing sales to large-scale customers in Japan andoverseas, sales of motors for power window lifters exceeded 30

R&D Expenses/R&D Expenses Ratio(Millions of yen)

R&D Personnel

Number of Intellectual Properties(Employees)(Intellectual properties)
748

4.5
3.5

3.7

4,503
3,794

2012

3.6

3.6

5,164

5,024

425

432

437

436

600

99

95

508

505

2012

2013

638
109

682
120

157

3,763

2013

2014

2015

R&D expenses ratio (%)

11

414

607

MABUCHI MOTOR CO., LTD.

2016

2012

2013

2014

2015

2016

Overseas

529

562

591

2014

2015

2016

Domestic

Annual Report 2016

Corporate Governance
Basic Approach to Corporate Governance
The Management Principle of MABUCHI MOTOR CO., LTD.

•	To separate clearly management decision-making and(the “Company”) is “Contributing to International Society

efficient business execution, and to clarify the scope ofand Continuously Increasing Our Contribution” throughaccountability;

the Company’s small motors business. The Company•	To build and operate a sound internal control system;

understands that realizing this principle is its raison d’être.

•	To appoint a suitable number of independent officers

Corporate governance of the Company comprises thewhose interests do not conflict with those of shareholders,organizational structure and management systems thatto ensure the objectivity and neutrality of management

support the realization of its Management Principle andsupervision functions;various managerial measures that maintain these systems.

•	To foster a corporate culture in which all employees

Accordingly, the fundamental objective in establishingrecognize and share the understanding that the practices ofand implementing an appropriate corporate governancecorporate ethics and compliance support the organization’sframework is to further the interests of shareholders andsocial impartiality and are fundamental to living up to theother stakeholders on an ongoing basis through the creation

trust and expectations of all stakeholders; andof fair profits and the enhancement of corporate value.

•	To disclose corporate information to shareholders andConstructing and maintaining a corporate governance systemother stakeholders in an appropriate, fair, timely and clear

along the lines given below is indispensable for the Company

manner and to ensure accountability through the Board ofas a listed company.

Directors, the Audit & Supervisory Board and other bodies.

General Meeting of Shareholders
Appointment/Dismissal

Accounting
Auditors

ReportAudit & Supervisory Board(including three external
auditors/independent officers)

AdviseAudit

Management Principle

Board of Directors(including two outside directors/
independent officers)

Group Management
VisionBasic Policy on
Internal Control

LiaiseAudit & Supervisory Board

ReportAudit

Group EthicalStandards

ReportDirectReportInternal Reporting
SystemLiaiseConsult

Executive Officers Committee(Officers responsible
for business operations)(One executive responsiblefor internal control)

Accounting Audit
AdviseExecution
Company Departments(Responsible for Compliance)

Internal Audit

WEB

Subsidiaries(One officer responsible
for Compliance)(Internal Audit Committee)

Meeting of Heads of Group Bases(Risk Management Committee)

Representative Director

Internal Audit Department

Other Supervisory
Frameworks• Environmental
Management Committee(Audit of theEnvironmental
Management System)• CS Improvement
Committee(Audit of the Quality
Management System)• Design Reviews• Division of
Duties/Company Rules
and Regulations• Ringi System and Other
Regulations• (Subsidiaries) Regulations
on Powers of Approval

https://www.mabuchi-motor.com/investor/management/governance.html

12Board of Directors, Audit & Supervisory Board
Members, and Executive Officers(As of March 30, 2017)

Board of Directors

Hiroo Okoshi

Masato Itokawa

Representative Director
and President,
President & CEO

Representative Director,
Managing Executive Officer,
Chief Quality Officer andSenior General Manager- Quality Assurance
Headquarters

Tadashi Takahashi

Hirotaro Katayama

Tadahito Iyoda

Director, Managing
Executive Officer, Chief
Technology Officer andSenior General Manager- Manufacturing
Headquarters

Director, Managing
Executive Officer andChief Business Operation
Officer

Director, Executive Officer
and Senior General
Manager- Administration
Headquarters, in chargeof Internal Controls

Eiji Uenishi

Ichiro Hashimoto

Naoki Mitarai

Director, Executive Officer
and Senior General
Manager- Product Development
Headquarters

Outside Director

Outside Director

Kazuyuki Someya

Nobutaka Motohashi

Full-time Audit &Supervisory Board
MemberOutside Audit &Supervisory Board
MemberAudit & Supervisory
Board Members

Toru Masuda

Takashi Asai

Outside Audit &Supervisory Board
MemberOutside Audit &Supervisory Board
MemberExecutive Officers(excluding those also serving
as directors)

13

Tsuyoshi Nakamura

Toichi Koyata

Executive Officer, Senior
General Manager- Sales & Marketing
Headquarters

Executive Officer, Senior
General Manager- Business Platform
Innovation Headquarters

Kentaro Shirai

Katsuhiko Katayama

Executive Officer, Senior
General Manager- Purchasing
Headquarters

Managing Group
Executive Officer,
in charge of China andTaiwan Business

MABUCHI MOTOR CO., LTD.

WEB

https://www.mabuchi-motor.com/investor/management/executives/

Annual Report 2016

Corporate Social Responsibility
Contributing to Society through Motors
Making Environment-Friendly Products
At the Mabuchi Group, we are committed to safely providing betterand cheaper products in a more reliable way, while aiming to makeour products lighter, more compact and more energy-efficient forend users, and helping to save resources and energy to benefit
society as a whole.
Specifically, Mabuchi Motor’s most important mission as a
specialized motor manufacturer is to make the lives of our customers
safer, and more convenient and comfortable. Therefore, we are
striving to thoroughly develop the potential uses and benefits ofmotors and enhance their values.
Please refer to page 11 (Research and Development Activities)
for details on new products.

Teaching the fun aspects ofscience to children
In 2016, we continued our
engagement in social contribution activities, which included asummer vacation handicraftclass for parents and children, awooden craft event, a hands-on
experiment class, and a visitingclass (held at an elementary
school).

Handicraft classSocial Contribution Activities
We are actively engaging in social contribution activities as corporate citizens. We continue to support education through motors bytargeting young people and children who will become leaders of
the future. Their encounter with motors may give them an opportunity to develop interests in manufacturing, technology, and science.
We can expect wonderful growth for these children who are full ofenthusiasm and have sparkles in their eyes in the handicraft classes
and visiting classes, as well as for students who are striving to comeup with new inventions for robot contests.
Because the leading creators of society are the people themselves, developing the next generation of engineers, in particular, isextremely important for the international community.
We will continue striving to foster future leaders throughactivities that enable them to get a first-hand experience of ourmotors and its technologies, as well as manufacturing.

Craft event
Visiting classInternship program
We work to provide workexperience opportunities forstudents who are about tobecome members of society,enabling them to become
familiar with working andunderstand our Management
Principle. To this end, weoffer internships at ourheadquarters to vocational
high school students, graduate students, and college
students from the U.S.

Community Support Activities

Providing support for robot contests (robot contest and our provided motors)

Motor Support
Providing support for the National Technical College Robot
Contest and the College Robot Contest (around 22,000 motors
provided in total)

RS-555VC with gear head,
RS-385PH with gear head

The Mabuchi Group has been continuously providing educational support,such as providing scholarships, anddonating books and school supplies.
We also make visits and donations
to children’s homes and nursing homes
on an ongoing basis, to extend ahelping hand.

JC/LC-578VA
etc.

WEB

https://www.mabuchi-motor.com/csr/report/

14

Management’s
Discussion and Analysis
Analyses and studies of the Mabuchi Group’s performance and financial position are,in principle, based on the consolidated financial statements.
Analysis of Operating Results
Business Development and Results

promotion of manufacturing innovation, and establishment of
new production bases.
As a result, consolidated net sales for fiscal 2016 were140,699 million yen (a 1.7% decrease on a year-on-year basis).
Motor sales, which account for the majority of consolidated net
sales, were 140,674 million yen (a 1.7% decrease on a year-onyear basis).
Operating income for fiscal 2016 was 24,225 million yen (a5.5% increase on a year-on-year basis), as the impact of positive
factors, such as improvements in the product mix and a decline
in raw material costs, exceeded the negative impact of anincrease in selling, general and administrative expenses,
reflecting increased investment in personnel and information
technology in anticipation of future growth, and a stronger yen
compared with the previous fiscal year.
Income before income taxes was 26,539 million yen (a 0.2%
decrease on a year-on-year basis), and profit attributable toowners of parent was 20,598 million yen (an 11.1% increase on a
year-on-year basis) as a result of a decrease in the effective tax
rate resulting from a partial reversal of deferred tax liabilities thatare reserved for the retained earnings of overseas subsidiaries.

During the fiscal year ended December 31, 2016 (fiscal 2016), theworld economy as a whole showed underlying strength, despitea sense of uncertainty about the outlook for the future. In the
U.S. economy, the employment and income environments
improved, and strong consumer spending continued. Gradual
recovery continued in the European economy, driven by domestic
demand. In the Japanese economy, consumer spending wasweak, and business conditions were flat, despite improvement in
the employment environment. Although the economic
slowdown in China eased, overall growth remained low inemerging market economies.
In the markets in which the Mabuchi Group operates, healthy
demand in the Automotive Products Market continued overall,and demand in China increased due to a tax cut on small-engine
cars. Although demand in the Consumer and Industrial Products
Market remained stable, markets for some applications
continued to contract.
Under these business conditions, the Mabuchi Groupaddressed several issues: continued strengthening and expansionof the automotive products business and realization of newactivities in the consumer and industrial products business,

Analysis of Financial Position
Assets, Liabilities and Net Assets

deposits of 16,171 million yen, an increase in trade notes andaccounts receivable of 2,821 million yen, a decrease in short-term
investments of 10,514 million yen, a decrease in inventories of
4,311 million yen, and a decrease in investment securities of

Total assets as of December 31, 2016, stood at 258,387 million
yen, an increase of 2,191 million yen from the previous fiscal
year-end. Major changes include an increase in cash and bank

Net Sales/Gross Profit Margin(Millions of yen)

32.8
29.1

24.7

Profit Attributable to Owners of Parent/ROE

24.8(Millions of yen)

8.2

30.4
143,143

122,544

8.0

3.6

Capital Expenditures/Depreciation and Amortization(Millions of yen)
16,1875.4

140,699

8.8

20,59818,09018,546

108,401

11,236
9,597

85,254
10,519

6,825

6,385

2012

2013

2014

Gross profit margin (%)

15

MABUCHI MOTOR CO., LTD.

2015

2016

2012

3,410

2013

ROE (%)

2014

2015

2016

2012

5,755
4,301

4,771

2013

2014

Capital Expenditures

6,386

6,016

2015

2016

Depreciation and Amortization

Annual Report 2016

Net cash used in financing activities amounted to 11,860
million yen, a decrease in cash used of 1,451 million yen from theprevious fiscal year. This is a result of factors including a decreasein cash dividends paid of 1,168 million yen.
As a result, the balance of cash and cash equivalents
amounted to 122,302 million yen, an increase of 9,345 million
yen from the end of the previous fiscal year.

5,496 million yen.
Total liabilities stood at 25,470 million yen, an increase of
2,519 million yen compared with the previous fiscal year-end.
The most noticeable changes were an increase in trade notes andaccounts payable of 906 million yen, an increase in other current
liabilities of 1,696 million yen, and a decrease in deferred tax
liabilities (non-current) of 1,004 million yen.
Total net assets decreased 327 million yen from the previous
fiscal year-end, to 232,917 million yen. Retained earnings
increased 9,288 million yen, and foreign currency translation
adjustments decreased 8,553 million yen.

The following shows the trend of the Company’s cash flow
indicators:* The indicators have been calculated using the following
formulae, and are based on figures in the consolidated
financial statements.
• Shareholders’ equity ratio = Net assets / Total assets•	Shareholders’ equity ratio based on market value = Total
market value of shares / Total assets

Cash FlowsNet cash provided by operating activities amounted to 27,958
million yen, an increase of 7,842 million yen from the previous
fiscal year. Cash flows from operating activities increased as aresult of factors including a decrease in inventories, an increase intrade notes and accounts payable, and a decrease in income
taxes paid.
Net cash used in investing activities amounted to 3,440
million yen, an increase in cash used of 2,262 million yen fromthe previous fiscal year. This is a result of a decrease in purchasesof short-term investments and investment securities of 3,504
million yen and an increase in proceeds from sales of short-term
investments and investment securities of 344 million yen. In
addition, there were 2,019 million yen in expenditures as start-up
capital for Poland Mabuchi.

Total Assets* The total market value of shares has been calculated using
the following formula:
Closing stock price at the end of the period × Number ofshares outstanding at the end of the period (less treasury
stock)* Since the Company does not bear substantial interestbearing liabilities and the relevant interest paid, the ratio ofinterest-bearing liabilities to cash flows and interest
coverage ratio are omitted.

Liabilities(Millions of yen)

Net Assets(Millions of yen)

256,368

256,196(Millions of yen)

258,387

25,47023,055

227,253
196,702

22,950233,312233,245

232,917

2014

2015

2016

208,791

18,461

181,372

15,330

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

Outlook for Fiscal 2017
In the outlook for fiscal 2017, although the forecast is for boththe U.S. and European economies to remain strong, there arealso many uncertain factors, such as the policies of the new U.S.
administration, Brexit, and elections in European countries.
Business conditions are expected to continue to recover graduallyin Japan. Although the economic slowdown in China has
bottomed out, the low economic growth in emerging countries
overall is expected to continue.
Regarding the markets in which the Mabuchi Group
operates, gradual growth is expected in the Automotive Products
Market, with continued strong demand in Europe and North
America compensating for softening of growth in China andother emerging countries. In the Consumer and Industrial
Products Market, while demand for motors for home appliances,
power tools, and office equipment in the business-use market is
expected to be flat, contraction of demand for motors for office
Risk Informationequipment in the personal-use products market is forecast.
As a result, in fiscal 2017 we expect to record net sales of
144,000 million yen (a 2.3% increase on a year-on-year basis).
In terms of our business results, despite the continued
positive effect of growth in earnings through improvements inthe product mix, we expect to record operating income of
21,600 million yen (a 10.8% decrease on a year-on-year basis).
This is a result of the strong yen and higher prices ofcommodities such as copper and steel, coupled with an increase
in selling, general and administrative expenses reflecting
increased investment in personnel and information technology inanticipation of further growth. We anticipate profit attributableto owners of parent of 16,600 million yen (a 19.4% decrease ona year-on-year basis).

https://www.mabuchi-motor.com/investor/management/risks.html

16Consolidated Balance Sheet
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
December 31, 2015 and 2016

U.S. Dollars(Thousands)

Yen(Millions)(Note 1)

2015

2016

2016

¥106,305¥122,477$1,055,842

25,52728,348244,382

(113)

(102)

(881)

Short-term investments (Note 5)

11,014499

4,309

Merchandise and finished goods

21,417

18,631

160,620Work in process

1,271

1,296

11,177

Raw materials and supplies

8,316

6,765

58,326

Deferred tax assets – current (Note 9)

1,637

1,667

14,375

Other current assets

3,601

5,292

45,627

178,978

184,878

1,593,779

Land

6,238

6,197

53,430

Buildings and structures

47,221

46,131

397,689

Machinery and equipment

61,92765,669566,114

Construction in progress

4,694

4,966

42,817

120,081

122,966

1,060,052(61,317)(62,629)(539,913)

58,76360,336520,138

16,001

10,50490,554

407

488

4,215

2,045

2,179

18,79018,453

13,173

113,560¥256,196¥258,387$2,227,478

ASSETS
Current Assets:
Cash and bank deposits (Notes 4,5)Trade notes and accounts receivable (Note 5)Less – Allowance for doubtful accounts

Total current assets

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

Investments and Other Assets:
Investment securities (Note 5)
Deferred tax assets – non-current (Note 9)
Other investments and other assets
Total investments and other assets

Total Assets

17

MABUCHI MOTOR CO., LTD.

Annual Report 2016

U.S. Dollars(Thousands)

Yen(Millions)

LIABILITIES AND NET ASSETS(Note 1)

2015

2016

2016

¥  6,434
113
2,119
218
130
16
7,860
16,892¥  7,340
113
2,462
252
145
65
9,556
19,935$   63,279
979
21,224
2,178
1,250
561
82,384
171,857

170
–
2,080
15
3,481
311
6,058
22,950

56
77
2,620
13
2,476
289
5,534
25,470489
663
22,594116
21,3502,496
47,711
219,569

20,704
20,419183,853

20,704
20,579193,141

178,489
177,411
1,665,016(6,046)
218,932(6,633)
227,792(57,188)
1,963,729

2,441–
12,775(965)
14,251
61
233,245¥256,196

2,708
(472)
4,222
(1,443)5,014
110
232,917¥258,387

23,349(4,073)36,399(12,445)
43,229950
2,007,909$2,227,478

Current Liabilities:
Trade notes and accounts payable (Note 5)
Short-term loans payable
Accrued income taxes
Accrued bonuses due to employees
Accrued bonuses due to directors
Deferred tax liabilities – current (Note 9)
Other current liabilities
Total current liabilities
Long-term Liabilities:
Long-term loans payable
Accrued benefits for stock payment
Liability for retirement benefits (Note 8)
Asset retirement obligations
Deferred tax liabilities – non-current (Note 9)
Other long-term liabilities – non-current
Total long-term liabilities
Total liabilities
Net Assets (Note 3):
Shareholders’ Equity
Common stock, no par value:
Authorized: 200,000,000 shares
Issued: 70,927,562 shares in 2015
69,927,562 shares in 2016
Additional paid-in capital
Retained earnings
Treasury stock, at cost: 1,589,906 shares in 2015 and1,558,170 shares in 2016
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized holding gains on securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Retirement benefits liability adjustments (Note 8)
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total Liabilities and Net Assets
See notes to consolidated financial statements.

18

Consolidated Statement of Income
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2015 and 2016
U.S. Dollars(Thousands)

Yen(Millions)
Net Sales (Note 18)
Cost of Sales
Gross profit
Selling, General and Administrative Expenses (Notes 13,15)
Operating income
Other Income (Expenses):
Interest and dividend income
Exchange gain, net
Gain on sale of raw material scrap
Gain on disposal of fixed assets, net (Note 16)
Gain on sales of investment securities, net
Business structure improvement expenses
Impairment loss (Note 17)
Other, net
Profit before Income Taxes
Income Taxes (Note 9):
Current
DeferredProfitProfit attributable to owners of parent(Note 1)

2015
¥143,143
99,67343,47020,50822,961

2016¥140,699
94,51046,18821,96324,2252016$1,212,925
814,745
398,180
189,343
208,836

938
2,329
983
744
5
(355)
(906)
(108)
3,632
26,593

521
493
832
196
433
(133)
(90)
61
2,314
26,539

4,499
4,253
7,173
1,690
3,735
(1,154)(777)
529
19,951
228,787

6,883
1,164
8,047
18,546¥ 18,546

6,833
(893)
5,940
20,598¥ 20,598

58,912(7,698)51,213
177,573$  177,573

2015

2016

U.S. Dollars
2016¥ 266.98
266.90110.00¥ 300.70
300.59120.00$     2.59
2.59
1.03

Yen
Per Share Data (Note 12):
Profit attributable to owners of parent – Basic– Diluted
Dividends applicable to current year earnings
See notes to consolidated financial statements.

Consolidated Statement of Comprehensive Income
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2015 and 2016

ProfitOther Comprehensive Income (Note 10)
Net unrealized holding gains on securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Retirement benefits liability adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests
See notes to consolidated financial statements.

19

MABUCHI MOTOR CO., LTD.

U.S. Dollars(Thousands)

Yen(Millions)(Note 1)

2015
¥18,5462016¥20,598

2016$177,573

472–(5,536)(222)(5,286)¥13,259266(472)(8,553)(478)(9,236)¥11,361

2,300(4,073)(73,732)(4,122)(79,627)$ 97,945¥13,259¥     –

¥11,361¥     –

$ 97,945$      –

Annual Report 2016

Consolidated Statement of Changes in Net Assets
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2015 and 2016

Number of Shares(Thousands)
2015
2016

U.S. Dollars(Thousands)(Note 1)

2016

2016

¥ 20,704–¥ 20,704¥ 20,704–¥ 20,704$  178,489–$  178,489¥ 20,419–¥ 20,419¥ 20,419
159¥ 20,579$  176,033
1,378$  177,411¥192,606¥183,853$1,584,943

(190)

–

–

192,416

183,853

1,584,943

18,546

20,598

177,573(8,216)(7)(18,884)¥183,853(7,047)–(4,263)¥193,141(60,750)–(36,750)$1,665,016

Treasury Stock:
Beginning balance
Treasury stock acquisition
Treasury stock disposal
Treasury stock cancellation
Ending balance¥ (20,010)(5,011)91
18,884¥  (6,046)¥  (6,046)(5,442)591
4,263¥  (6,633)$   (52,121)(46,916)
5,098
36,750$   (57,188)

Net Unrealized Holding Gains on Securities:
Beginning balance
Net change during the year
Ending balance¥  1,968472¥  2,441¥  2,441
266¥  2,708$   21,048
2,300$   23,349

Deferred Gains or Losses on Hedges:
Beginning balance
Net change during the year
Ending balance¥       –
–¥       –

¥       –(472)¥    (472)$         –(4,073)$    (4,073)

Foreign Currency Translation Adjustments:
Beginning balance
Net change during the year
Ending balance¥ 18,311(5,536)¥ 12,775¥ 12,775(8,553)¥  4,222$  110,132(73,732)$   36,399

Retirement Benefit Liability Adjustments:
Beginning balance
Net change during the year
Ending balance¥    (742)(222)¥    (965)¥    (965)(478)¥  (1,443)$    (8,323)(4,122)$   (12,445)

Total Accumulated Other Comprehensive Income:
Beginning balance
Net change during the year
Ending balance¥ 19,537(5,286)¥ 14,251¥ 14,251(9,236)¥  5,014$  122,857(79,627)$   43,229

Subscription Rights to Shares:
Beginning balance
Net change during the year
Ending balance¥     547¥     61¥     6148
¥    110$      530419$      950

¥233,312¥233,245$2,010,733

(190)

–

–

233,122233,245

2,010,733

18,546

20,598

177,573(8,216)(5,011)
83(7,047)(5,442)751(60,750)(46,916)
6,477(5,278)(9,188)(79,208)¥233,245¥232,917$2,007,909

Common Stock:
Beginning balance
Treasury stock cancellation
Ending balance

75,751(4,824)70,927

Additional Paid-in Capital:
Beginning balance
Treasury stock disposal
Ending balance
Retained Earnings:
Beginning balance
Cumulative effect of change inaccounting principle
Restated balance
Profit attributable to owners ofparentDividends paid
Treasury stock disposal
Treasury stock cancellation
Ending balance

Total Net Assets:
Beginning balance
Cumulative effect of change inaccounting principle
Restated balance
Profit attributable to owners ofparentDividends paid
Treasury stock acquisition
Treasury stock disposal
Net changes in items other thanthose in shareholders’ equity
Ending balance
See notes to consolidated financial statements.

70,927(1,000)69,9272015

Yen(Millions)20Consolidated Statement of Cash Flows
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
For the years ended December 31, 2015 and 2016

U.S. Dollars(Thousands)

Yen(Millions)2015
Cash Flows from Operating Activities:
Profit before income taxes
Depreciation and amortization
Impairment loss
Increase (decrease) in liability for retirement benefits
Interest and dividend income
Exchange (gain) loss
(Gain) loss on sales of short-term investments and investment
securities(Gain) loss on disposal of fixed assets
Decrease (increase) in trade notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in trade notes and accounts payable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities2016¥ 26,593 ¥ 26,539
6,580
6,359
906
90
427
610
(938)
(521)
(157)
131

$  228,787
54,826777
5,266(4,499)
1,132

(5)

(433)

(3,735)(744)(3,341)(3,683)(758)
2,150
27,029953(0)(7,866)
20,115(196)(4,082)
1,960
2,081
1,423
33,963519–(6,524)27,958(1,690)(35,197)
16,89917,947
12,274
292,787
4,478–(56,249)
241,017

Cash Flows from Investing Activities:
Increase in 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
Payments for establishment of subsidiary
Other, net
Net cash used in investing activities(9,978)17,237(5,500)8,400(15,592)
1,208
(4)
3,064
–
(14)
(1,178)(170)
326(2,000)6,000(11,352)
429
–
5,808
(2,019)(462)(3,440)(1,468)2,812(17,241)
51,724(97,867)
3,701–
50,073(17,411)(3,982)(29,659)

Cash Flows from Financing Activities:
Repayment of long-term loans payable
Cash dividends paid
Purchases of treasury stock
Proceeds from sales of treasury stock
Net cash used in financing activities(113)(8,214)(5,049)65(13,312)(113)(7,046)(5,451)751(11,860)(979)(60,745)(46,999)
6,477(102,247)(1,888)(3,311)
3,736
9,345
109,220
112,956¥112,956 ¥122,302(28,548)
80,562
973,765$1,054,328

Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and Cash Equivalents at the Beginning of Year
Cash and Cash Equivalents at the End of YearSee notes to consolidated financial statements.

21(Note 1)

2016

MABUCHI MOTOR CO., LTD.

Annual Report 2016

Notes to Consolidated Financial Statements
Mabuchi Motor Co., Ltd. and Consolidated Subsidiaries
December 31, 2015 and 2016

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 in accordance with accounting principles generally accepted in Japan, which are different in certain respects to theapplication and 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, 2016, have been translated into U.S. dollars at the rate of ¥116=U.S.$1, the approximate exchange rate
prevailing on December 31, 2016. Those U.S. dollar amounts presented in the consolidated financial statements and related notes areincluded solely for the convenience of 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
inter-company balances, transactions, and profits have been eliminated on consolidation. Investments in an unconsolidated subsidiary
are stated at cost.
c Foreign currency translation
Receivables and payables denominated in foreign currencies are translated into yen at the rates of exchange in effect at the balance
sheet date, and differences arising from the translation are included in the consolidated statement of income.
The balance sheet accounts of the foreign consolidated subsidiaries are translated into yen at the rates of exchange in effect at thebalance sheet date, except for the components of net assets which are translated at their historical exchange rates. Revenue andexpense accounts are translated at the average rate of exchange in effect during the year. Differences arising from the translation arepresented as foreign currency translation adjustments in the consolidated financial statements.
d Cash equivalents
For the purposes of the consolidated statement of cash flows, the Company considers all highly liquid debt instruments purchasedwith 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,” when they are held for the purpose of earning capital gains in the short-term,“held-to-maturity,” where management has the positive intent and ability to hold the securities to maturity, and “other securities,”
where those securities are not classified as either trading or held-to-maturity, which represent 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 the decline is considered tobe 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 a decline in the value of 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 ofrecognizing any impairment losses by assessing the potential of market values to recover taking into consideration declining pricetrends and other individually 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 using the declining-balance method for theCompany (except for certain buildings) and for overseas subsidiaries, principally using the straight-line method over their estimateduseful lives. Buildings acquired by the Company on or after April 1, 1998 and facilities attached to buildings and structures acquired on
or after April 1, 2016 are depreciated using the straight-line method. Maintenance and repairs, including minor repairs andimprovements, are charged to income as incurred.
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 with the assumption that there is no residual value.
i Allowance for doubtful accounts
Allowance to provide for potential loss on receivables is provided at the estimated amount of irrecoverable receivables. Allowance forordinary debt is computed based on the historical rate of default. For certain debts, such as those where recovery is doubtful, thelikelihood of recovery is considered on an individual basis.
The allowance for doubtful accounts is adjusted after offsetting receivables and payables between consolidated subsidiaries.
j Accrued bonuses due to employees
Accrued bonuses due to employees are provided at the estimated amount to be paid to employees for the services rendered by thebalance sheet date.
k Accrued bonuses due to directors
Accrued bonuses due to directors are provided at the estimated amount to be paid to directors for the services rendered by thebalance sheet date.
l Accrued benefits for stock payment
Accrued benefits for stock payment are provided at the amount of stocks to be paid to directors through the trust at December 31,
2016, based on the performance-linked stock compensation plan.
m Retirement benefitsa. Allocation of projected retirement benefit obligation
In calculating the retirement benefit obligation, the benefit formula basis is used to allocate the projected retirement benefit obligation
to the estimated years of service of eligible employees.

22b. Method for amortizing actuarial gain or loss and prior service cost
Actuarial gains and losses are amortized commencing from the year following the year in which the gains or losses arose, primarily
using 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 the straight-line method mainly over 10 years.
c. Application of simplified method at smaller-sized companies, etc.
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.
n Income taxes
Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases ofassets and liabilities and their reported amounts using current enacted tax rates.
o 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.
p Accounting standards issued but not yet effective“Implementation Guidance on Recoverability of Deferred Tax Assets” (Accounting Standards Board of Japan (ASBJ) Guidance No.26
revised on March 28, 2016)
1) Overview
Regarding the treatment of the recoverability of deferred tax assets, a review was conducted following the framework of the JapaneseInstitute of Certified Public Accountants Audit Committee Report No.66 “Audit Treatment on Determining the Recoverability ofDeferred Tax Assets,” whereby companies are categorized into five categories and deferred tax assets are calculated based on each ofthese categories.
① Treatment of companies that do not satisfy any of the category requirements for (Category 1)② Category requirements for (Category 2) and (Category 3)③ Treatment related to future deductible temporary differences which cannot be scheduled in companies that qualify as (Category 2)④ Treatment related to the reasonable estimable period of future pre-adjusted taxable income in companies that qualify as(Category 3)⑤ Treatment in cases where companies that satisfy the category requirements for (Category 4) but qualify as (Category 2) or(Category 3)2) Scheduled date of adoption
The Company expects to adopt the revised implementation guidance from the fiscal year beginning January 1, 2017.
3) Impact of adopting revised implementation guidance
The Company is currently evaluating the impact of adopting this revised implementation guidance on its consolidated financial
statements.
q Additional information(Accounting treatment for Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts)
1. Outline of transactions
The ESOP Trust is a trust-type employee incentive plan that uses the mechanism of an employee shareholding association, with the
purpose of attempting to expand the savings system that promotes the asset accumulation of employees who own the Company’s
shares (enhancement of the employee welfare programs). It is based on the Employee Stock Ownership Plan (ESOP) system in the
United States.
The major purpose of introducing the ESOP Trust is to improve welfare programs for employees who support the Company’s
growth. The introduction thereof also aims to enhance the Company’s corporate value over the medium to long term by granting an
incentive toward high stock prices and creating greater awareness of the Company’s business performance and stock value among its
employees.
The Company has established a trust with those employee members of Mabuchi Motor Employee Shareholding Association(hereinafter “Our Shareholding Association”) who meet certain requirements as its beneficiaries, and during a predetermined period
for acquisition, said trust, or the ESOP Trust, will acquire the number of the Company’s shares that Our Shareholding Association is
expected to acquire over the next several years. Afterward, the ESOP Trust sells off the Company’s shares to Our Shareholding
Association on a fixed day every month. The remaining funds will be distributed according to the contribution ratio of the employees
as beneficiaries when there are ESOP Trust earnings resulting from an upward swing in stock prices when the term of the ESOP Trustends. There is no additional burden on the employees as the Company will pay back the loan payable collectively to the bank based on
its guarantee clause in the loan agreement with the bank if a liability associated with the trust estate resulting from a loss is caused bya drop in stock prices.
The Company applied the “Revised Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees etc.
through Trusts” (ASBJ PITF No.30 revised on March 26, 2015).
2. Treasury shares remaining in the trust
Shares of the Company remaining in the trust are recorded as treasury shares under net assets through the carrying value (net of
associated costs) in the trust. The carrying value was ¥333 million at December 31, 2015, and ¥251 million ($2,169 thousand) at
December 31, 2016.
Per share amounts are computed based on the number of shares outstanding less treasury stock including shares of the ESOP trust
account. The number at year end and weighted average number of such treasury shares were 130,700 and 145,780 shares,
respectively, during the fiscal year ended December 31, 2015, and 98,700 and 116,973 shares, respectively, during the fiscal year
ended December 31, 2016.
3. Carrying value of loans recorded through application of the gross price method
As of December 31, 2015: ¥283 million; as of December 31, 2016: ¥170 million ($1,468 thousand)(Accounting treatment for Performance-based Stock Compensation Plan for Directors and Executive Officers)
1. Outline of transactions
The Company has introduced the Executive Compensation BIP (Board Incentive Plan) Trust Plan, the executive remuneration systemclosely linked to the achievement of performance targets as set out in the medium-term management plan, with the purpose ofenhancing the motivation of Directors to contribute to improved business performance and increased corporate value over the medium
term.
Under the Plan, the Company’s shares acquired through the BIP Trust and money equivalent to the amount obtained by converting
the Company’s shares into cash (collectively, the “Company Shares, etc.”) will be delivered and paid (the “Delivery, etc.” or “delivered,etc.”) to those serving as Directors, etc., during the target period based on factors such as the status and level of attainment of
performance targets throughout the trust term. Directors, etc., will receive the Delivery, etc., of Company Shares, etc., during a certain
timeframe following the end of the target period. At first, the target period is over the three-year period from the fiscal year ending
December 31, 2016, to the fiscal year ending December 31, 2018.
The Company applied the “Revised Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees etc.

23

MABUCHI MOTOR CO., LTD.

Annual Report 2016

through Trusts” (ASBJ PITF No.30 revised on March 26, 2015).
2. Treasury shares remaining in the trust
Shares of the Company remaining in the trust are recorded as treasury shares under net assets through the carrying value (net of
associated costs) in the trust. The carrying value was ¥669 million ($5,773 thousand) at December 31, 2016.
Per share amounts are computed based on the number of shares outstanding less treasury stock including shares of the BIP trust
account. The number of such treasury shares at December 31, 2016 was 119,600 shares, and the number of such treasury shares
during the fiscal year ended December 31, 2016 was 67,643 shares.

2. Accounting Changes(Application of Accounting Standard for Business Combinations)
The Company has applied the “Revised Accounting Standard for Business Combinations” (ASBJ Statement No.21, revised on
September 13, 2013), “Revised Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No.22, revised on
September 13, 2013), “Revised Accounting Standard for Business Divestitures” (ASBJ Statement No.7, revised on September 13, 2013),
and other standards from the fiscal year ended December 31, 2016.
The Company changed its presentation of net income and related items, and renamed “minority interests” as “non-controllinginterests.” The consolidated financial statements for the year ended December 31, 2015, have been reclassified to reflect this change.
(Application of Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016)
Following revisions to the Corporation Tax Act of Japan, the Company applied the “Practical Solution on a Change in Depreciation
Method Due to Tax Reform 2016” (Practical Issues Task Force No.32 issued on June 17, 2016), and changed its depreciation method
for facilities attached to buildings and structures acquired on or after April 1, 2016, from the declining-balance method to the straightline method.
The impact of this change on the consolidated financial statements for the fiscal year ended December 31, 2016, was immaterial.

3. Changes in Net Assets
Information regarding changes in net assets for the years ended December 31, 2015 and 2016, is as follows:a Shares issued and outstanding/Treasury stock2015
Shares Issued (Thousands)
Common stock
37,87537,875
4,824
70,927

Type of shares
Number of shares as of December 31, 2014
Increase in number of shares
Decrease in number of shares
Number of shares as of December 31, 2015

Treasury Stock (Thousands)
Common stock
2,809
3,636
4,856
1,589

Notes: 1. The Company carried out a 2-for-1 stock split of its common stock effective January 1, 2015. The increase of 37,875 thousand
shares during the fiscal year was due to the common stock split.
2. T he increase in the number of treasury stock was due to the common stock split of 2,809 thousand shares, purchase of thetreasury stock of 824 thousand shares and purchase of shares of less than one unit of 2 thousand shares.
3. The decrease in the number of shares issued and the number of shares of treasury stock were due to the cancellation of
4,824 thousand shares.
4. The decrease in the number of shares of treasury stock was, other than that above, due to the exercise of stock options of 6
thousand shares and sales of 25 thousand shares to Our Shareholding Association by the ESOP Trust.
5. T here were 78 thousand shares and 130 thousand shares of treasury stock held by the ESOP Trust included in the number ofshares of treasury stock as of January 1, 2015 and December 31, 2015, respectively.
2016
Shares Issued (Thousands)
Common stock
70,927–1,000
69,927

Type of shares
Number of shares as of December 31, 2015
Increase in number of shares
Decrease in number of shares
Number of shares as of December 31, 2016

Treasury Stock (Thousands)
Common stock
1,589
1,119
1,151
1,558

Notes: 1. The decrease in the number of shares issued and the number of shares of treasury stock were due to the cancellation of
1,000 thousand shares.
2. T he increase in the number of shares of treasury stock was due to the purchase of 1,000 thousand shares of treasury stock,
the purchase of 119 thousand shares by the BIP Trust and the purchase of 0 thousand shares of less than one unit.
3. The decrease in the number of shares of treasury stock was, other than Note 1, due to sales of 119 thousand shares to the
BIP Trust and sales of 32 thousand shares to Our Shareholding Association by the ESOP Trust.
4. There were 130 thousand shares and 98 thousand shares of treasury stock held by the ESOP Trust included in the number ofshares of treasury stock as of January 1, 2016 and December 31, 2016, respectively, and there were 0 shares and 119
thousand shares of treasury stock held by the BIP Trust included in the number of shares of treasury stock as of January 1,
2016 and December 31, 2016, respectively.
b Share subscription rights
2015
Number of shares issued
Company
Parent company

Description
Subscription rights
as stock options
Total

Type of sharesissuedNumber ofshares at
January 1,
2015

Increase

Decrease

Number ofshares at
December 31,
2015

Balance at
December 31,
2015
Yen (Millions)

–

–

–

–

–

¥61

–

–

–

–

–

¥61

24

2016
Number of shares issued
Company

Description

Type of sharesissuedNumber ofshares at
January 1,
2016

Increase

Decrease

Number ofshares at
December 31,
2016

Balance at
December 31,
2016
Yen (Millions)

U.S. Dollars(Thousands)

–

–

–

–

–

¥110

$950

–

–

–

–

–

¥110

$950

Subscription
rights as stock
options
Total

Parent companyc Dividends
Dividends paid during the fiscal year ended December 31, 2015
2015
Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Shareholders’ Meeting
March 27, 2015
¥4,603 million¥131
December 31, 2014
March 30, 2015

Board of Directors’ Meeting
August 12, 2015
¥3,612 million¥52
June 30, 2015
September 18, 2015

Note: Dividends approved at the shareholders’ meeting on March 27, 2015 paid to the ESOP Trust in the amount of ¥10 million havebeen included in the total amount of dividends. Dividends approved at the Board of Directors’ meeting on August 12, 2015 paid
to the ESOP Trust in the amount of ¥7 million have been included in the total amount of dividends.
Dividends whose record date was in the fiscal year ended December 31, 2015, but whose effective date was in the following fiscal year
2015
Shareholders’ Meeting
March 30, 2016
¥4,029 million¥58
December 31, 2015
March 31, 2016

Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Note: Dividends paid to the ESOP Trust in the amount of ¥7 million have been included in the total amount of dividends.
Dividends paid during the fiscal year ended December 31, 20162016
Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Shareholders’ Meeting
March 30, 2016
¥4,029 million($34,734 thousand)¥58($0.50)December 31, 2015
March 31, 2016

Board of Directors’ Meeting
August 12, 2016
¥3,017 million($26,016 thousand)¥44($0.37)
June 30, 2016
September 20, 2016

Note: Dividends approved at the shareholders’ meeting on March 30, 2016 paid to the ESOP Trust in the amount of ¥7 million ($65
thousand) have been included in the total amount of dividends. Dividends approved at the Board of Directors’ meeting on
August 12, 2016 paid to the ESOP Trust and BIP Trust in the amount of ¥10 million ($88 thousand) have been included in the
total amount of dividends.
Dividends whose record date was in the fiscal year ended December 31, 2016, but whose effective date was in the following fiscal year
2016
Shareholders’ Meeting
March 30, 2017
¥5,212 million($44,936 thousand)¥76($0.65)
December 31, 2016
March 31, 2017

Resolution by
Total amount of dividends
Dividends per share
Record date
Effective date

Note: Dividends paid to the ESOP Trust and BIP Trust in the amount of ¥16 million ($143 thousand) have been included in the total
amount of dividends.
d Stock options
The Company issued the following share subscription rights for the purchase of new shares of common stock in accordance with the
Corporation Law of Japan.
For the years ended December 31, 2015 and 2016, the Company recognized and allocated share-based compensation costs asfollows:
Yen (Millions)
Selling, general and administrative expenses
Total

25

MABUCHI MOTOR CO., LTD.

2015
¥25
¥25

2016
¥48
¥48

U.S. Dollars (Thousands)
2016
$419
$419

Annual Report 2016

A description of the 2013, 2014, 2015 and 2016 Stock Option Plans as of December 31, 2015 and 2016, respectively, are summarized
as follows:

Grantee categories and number of grantees
Number of shares
Grant date
Vesting conditions
Service period
Exercisable period

2013 Stock
Option Plan
6 directors of theCompany
11,940 shares ofcommon stock
May 20, 2013
None
None
May 21, 2013 to
May 20, 2033

2014 Stock
Option Plan
6 directors of theCompany
7,980 shares ofcommon stock
April 21, 2014
None
None
April 22, 2014 toApril 21, 2034

2015 Stock
Option Plan
6 directors of theCompany
4,650 shares ofcommon stock
April 20, 2015
None
None
April 21, 2015 toApril 20, 2035

2016 Stock
Option Plan
6 directors of the Company
5 executive officers of the Company
10,360 shares ofcommon stock
April 20, 2016
None
None
April 21, 2016 toApril 20, 2036

Note: The Company conducted a 2-for-1 stock split of its common stock on January 1, 2015. The number of shares for fiscal 2013 and2014 reflect the stock split.
The following table summarizes the option activity under the stock option plans referred to above.
2013 Stock
Option Plan

2014 Stock
Option Plan

Number of shares2015 Stock
Option Plan

2016 Stock
Option Plan

Non-vested:
Outstanding as of December 31, 2015
GrantedForfeited
VestedOutstanding as of December 31, 2016

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

–
10,360–10,360–

Vested:Outstanding as of December 31, 2015
VestedExercised
Forfeited
Outstanding as of December 31, 2016

7,960
–
–
–
7,960

5,320
–
–
–
5,320

4,650
–
–
–
4,650

–
10,360––10,360Note: Number of stock options is listed after conversion to share numbers.
Price information of stock options for the 2013, 2014, 2015 and 2016 Stock Option Plans are summarized as follows:

Exercise price
Average price on exercise
Fair value on grant date2013 Stock
Option Plan
Yen¥    1–
4,967

2014 Stock
Option Plan
Yen¥    1–
6,158

2015 Stock
Option Plan
Yen¥    1–
5,465

2016 Stock
Option Plan
Yen¥    1–
4,699

2016 Stock
Option Plan
U.S. Dollars
$ 0
–
40

Fair value as of the grant date for the stock options issued during the year ended December 31, 2016, was estimated using theBlack-Scholes option pricing model with the following assumptions:
Expected volatility*1
Expected remaining period*2
Expected dividend yield*3
Risk-free interest rate*4

2016 Stock Option Plan
28.5%
5.6 years¥110 per share($0.94 per share)-0.27%The expected volatility is estimated based on a period of 5 years and 7 months (September 6, 2010 to April 11, 2016).
The expected remaining period is based on the estimated term of incumbency of directors.
*3
The expected dividend yield is based on the actual dividend amount for interim and year-end dividend of 2015.
*4	Risk-free interest rate represents the interest rate of Japanese government bonds whose remaining period corresponds to the
expected remaining period of the stock options.
		 Since it is fundamentally difficult to reasonably estimate the forfeited number of stock options for future periods, an estimation of
the vested number is based upon actual forfeitures in prior periods.
*1

*2

26

4. Cash and Cash Equivalents
Cash and cash equivalents at the end of the year in the accompanying consolidated statement of cash flows are reconciled to cash andbank deposits reported in the accompanying consolidated balance sheets as of December 31, 2015 and 2016, as follows:
Yen (Millions)
Cash and bank deposits
Time deposits with maturities over three months at the time of purchase
Short-term investments
Securities exposed to price risk
Cash and cash equivalents

2015¥106,305(363)
11,014(4,000)¥112,956

U.S. Dollars (Thousands)
2016$1,055,842(1,513)
4,309(4,309)$1,054,328

2016¥122,477
(175)
499
(499)
¥122,302

Significant non-cash transactions for the years ended December 31, 2015 and 2016, were as follows:
Yen (Millions)
Treasury stock cancellation2015¥18,884

U.S. Dollars (Thousands)
2016$36,750

2016¥4,263

5. 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 the management of surplus funds to short-term deposits and other highly secure financial
assets. The Company uses derivatives to mitigate risks as described below, and does not engage in speculative transactions.
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 securities and investments in stocks of trading partners, are exposed to
the risk of fluctuations in market prices.
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 and forecasted transactions 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 and forecasted transactions, using foreign exchange forward contracts on a monthly andindividual currency basis. The Company enters into exchange contracts based on the decision of the Board of Directors and these aremonitored regularly by the head 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 7. Derivative Financial Instruments below and are not indicative of themarket risk associated with derivatives transactions.
(2) Fair value of financial instruments
The carrying value, fair value and variance for financial instruments as of December 31, 2015 and 2016, were as follows. Fair values
that are not readily determinable are not included in the following table.

Assets:(1) Cash and bank deposits(2) Trade notes and accounts receivable(3) Short-term investments and investment securities
Total assets
Liabilities(1) Trade notes and accounts payable
Total liabilities

27

MABUCHI MOTOR CO., LTD.

Carrying value

Yen (Millions)
2015
Fair value

Variance¥106,305
25,527
26,903¥158,736¥106,305
25,527
27,527¥159,360

¥  –
–
623
¥623

¥  6,434¥  6,434¥  6,434¥  6,434

¥  –
¥  –

Annual Report 2016

Assets:(1) Cash and bank deposits(2) Trade notes and accounts receivable(3) Short-term investments and investment
securities
Total assets
Liabilities(1) Trade notes and accounts payable
Total liabilities

Carrying value

Yen (Millions)
2016
Fair value

U.S. Dollars (Thousands)
2016
Carrying value
Fair value

Variance¥122,477¥122,477¥–$1,055,842$1,055,842$–

28,34828,348–244,382

244,382–

Variance

10,892

10,892–

93,902

93,902–¥161,718¥161,718¥–$1,394,127$1,394,127$–¥  7,340¥  7,340¥  7,340¥  7,340¥–¥–$   63,279$   63,279$   63,279$   63,279$–$–

1: Method for calculating the fair values of financial instruments, short-term investments and derivative transactions
Assets:(1) Cash and bank deposits and (2) Trade notes and accounts receivable
The carrying value is used for the fair value of these short-term items because these amounts are approximately the same.
(3) Short-term investments and investment securities
Market prices on securities 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
The carrying value is used for the fair value of these short-term items because these amounts are approximately the same.
Derivative instruments:
Please refer to Note 7. Derivative Financial Instruments.
2: Carrying value of financial instruments for which fair values were extremely difficult to determine
Yen (Millions)
2015
¥111

Unlisted stocks

U.S. Dollars (Thousands)
2016
$961

2016
¥111

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, 2015 and 2016

Cash and bank deposits
Trade notes and accounts receivable
Short-term investments and investment securities
Held-to-maturity securities
Corporate bonds
Commercial paper
Other securities
Corporate bonds
Certificates of deposit
Investment trust
Total

Cash and bank deposits
Trade notes and accounts
receivable
Short-term investments andinvestment securities
Held-to-maturity securities
Corporate bonds
Commercial paper
Other securities
Corporate bonds
Certificates of deposit
Investment trust
Total

Within 1 year
¥106,305
25,527

Yen (Millions)2015
1–5 years¥    ––

5–10 years¥    –
–

–
2,000

3,375
–

3,000
–

2,000
2,000
2,500
¥140,333

500––¥3,875–––¥3,000Within 1 year
¥122,477

Yen (Millions)2016
1–5 years¥    –

U.S. Dollars (Thousands)
2016
1–5 years$    –

5–10 years¥–

Within 1 year
$1,055,842

28,348––244,382

–

–

–
–

–
–

–
–

–
–

–
–

–
–

500
–
–
¥151,326

1,000––¥1,000

–
–
–
–

4,310
–
–
$1,304,535

8,620
–
–
$8,620––––

5–10 years$–28

6. Investment Securities
The carrying value, fair value and variance for held-to-maturity securities as of December 31, 2015 and 2016, were as follows:(1) Held-to-maturity securities

Carrying value

Yen (Millions)
2015
Fair value¥5,375
5,375¥6,079
6,079

¥703
703

2,999
2,999
¥8,374

2,919
2,919¥8,998

(80)
(80)
¥623

Securities whose fair value exceeds their carrying value
Corporate bonds
Subtotal
Securities whose carrying value exceeds their fair value
Corporate bonds
Subtotal
Total

Variance

There were no applicable transactions to be disclosed for the fiscal year ended December 31, 2016.
Note: Corporate bonds include compound financial instruments.
The acquisition cost, carrying value and variance for other securities as of December 31, 2015 and 2016, were as follows:(2) Other securities
Carrying value

Yen (Millions)2015
Acquisition cost

Variance¥ 7,070500¥ 7,570¥ 3,529500¥ 4,029¥3,5400¥3,540

866
1,999
8,092
10,958¥18,528

999
2,000
8,140
11,139¥15,169

(132)
(0)
(48)
(181)
¥3,359Securities whose carrying value exceeds their acquisition cost
Stock
Corporate bonds
Subtotal
Securities whose acquisition cost exceeds their carrying value
Stock
Corporate bonds
Other
Subtotal
Total

Securities whose carrying value
exceeds their acquisition cost
Stock
Corporate bonds
Subtotal
Securities whose acquisition costexceeds their carrying value
Stock
Corporate bonds
Other
Subtotal
Total

Carrying value

Yen (Millions)2016
Acquisition cost

U.S. Dollars (Thousands)
2016
Carrying value
Acquisition cost

Variance¥7,499–7,499¥3,529–3,529¥3,969–3,969$64,647–
64,647$30,427–
30,427$34,220–
34,220

883
1,444
1,065
3,393
¥10,892

999
1,500
1,126
3,625
¥7,154

(116)
(55)
(60)
(231)
¥3,737

7,612
12,453
9,188
29,254$93,902

8,613
12,931
9,707
31,252$61,679(1,000)(477)(519)(1,997)$32,223

Variance

Notes: 1. Corporate bonds include compound financial instruments.
2. Unlisted stocks (¥41 thousand) are not included in “Other securities” because their market prices do not exist and their fairvalues are not readily determinable.
(3) Other securities soldYen (Millions)

Stock
Total

Sold amount
¥64
¥64

2015
Total gain
¥15
¥15

Total loss
¥9¥9

Sold amount
¥–
¥–

2016
Total gain¥–¥–

Total loss¥–¥–

U.S. Dollars (Thousands)
2016
Sold amount Total gain
Total loss
$–
$–
$–
$–
$–
$–

Total gain
¥433
¥433

U.S. Dollars (Thousands)
2016
Acquisition cost Sold amount Total gain
$29,096$32,831$3,735$29,096$32,831$3,735(4) Held-to-maturity securities soldYen (Millions)

Bonds (Corporate bonds)
Total

2015
Acquisition cost Sold amount
¥–
¥–
¥–
¥–

Total gain
¥–
¥–

2016
Acquisition cost Sold amount¥3,375¥3,808¥3,375¥3,808(5) Reclassified securities
For increasing asset efficiency, the Company has reclassified held-to-maturity security (carrying value ¥1,000 million ($8,620
thousand)) to other securities.
As a result, investment securities and net unrealized holding gains on securities decreased by ¥55 million ($474 thousand).

29

MABUCHI MOTOR CO., LTD.

Annual Report 2016

7. 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, and derivatives are not used for speculative trading purposes. As aresult, the Company is exposed to risk of currency rate fluctuations 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 thepurchase of precious metals as raw materials for motor products. These contracts are long-term purchase contracts of raw materials,
and are also not in the scope of the accounting standards of financial instruments.
The fair value of derivative transactions for which hedge accounting is not applied is the forward foreign exchange quotation or the
price provided by correspondent financial institutions.
(1) Derivative transactions for which hedge accounting is not applied
1. Forward exchange contracts and currency option transactions
There were no applicable transactions to be disclosed for the fiscal year ended December 31, 2015.

Contract amountNon-market transactions
Forward exchange contracts
Sell US$
Total¥15,852¥15,852

Contract amountNon-market transactions
Forward exchange contracts
Sell US$
Total$136,657$136,657

Yen (Millions)2016
Maturity over 1 year
Fair value

¥–
¥–

¥(11)
¥(11)

U.S. Dollars (Thousands)
2016
Maturity over 1 year
Fair value

$–
$–

$(96)
$(96)

Revaluation gain/loss

¥(11)
¥(11)

Revaluation gain/loss

$(96)
$(96)

2. Forward precious metal contracts

Contract amountNon-market transactions
Buy
Total

¥22,126¥22,126

Contract amountNon-market transactions
Buy
Total

¥17,853¥17,853

Contract amountNon-market transactions
Buy
Total

$153,905$153,905

Yen (Millions)2015
Maturity over 1 year
Fair value¥17,514¥17,514¥17,387¥17,387

Yen (Millions)2016
Maturity over 1 year
Fair value¥13,817¥13,817¥16,971¥16,971

U.S. Dollars (Thousands)
2016
Maturity over 1 year
Fair value$119,115$119,115$146,303$146,303

Revaluation gain/loss¥(4,739)¥(4,739)

Revaluation gain/loss¥(881)¥(881)

Revaluation gain/loss$(7,602)$(7,602)30

(2) Derivative transactions for which hedge accounting is applied
Dividends receivable from foreign subsidiaries
There were no applicable transactions to be disclosed for the fiscal year ended December 31, 2015.

Hedge accounting method
Principle-based accounting

Hedging instrument
Forward exchange
contracts
Sell US$

Total

Hedge accounting method
Principle-based accounting

Hedging instrument
Forward exchange
contracts
Sell US$

Total

Yen (Millions)
2016
Hedged item
Contract amount
Dividends

Maturity over 1 year

Fair value¥–¥–¥(681)¥(681)

Maturity over 1 year

Fair value$–$–$(5,876)$(5,876)¥6,234¥6,234

U.S. Dollars (Thousands)
2016
Hedged item
Contract amount
Dividends$53,743$53,743

8. Retirement Benefit Plans
The table below sets forth the plans’ statuses and amounts recognized in the consolidated balance sheets at December 31, 2015 and2016.
1. Movement in retirement benefit obligations
Yen (Millions)
Beginning balance
Cumulative effect of change in accounting principle
Restated balance
Service cost
Interest cost
Actuarial loss (gain)
Benefit paid
Other
Ending balance

2015

2016

U.S. Dollars (Thousands)
2016¥11,482289
11,772
437
118
391
(934)
(105)
¥11,679¥11,679–
11,679
438
99
600
(624)
(68)
¥12,123$100,682–
100,682
3,780
859
5,173
(5,386)(593)$104,516

2015

2016

U.S. Dollars (Thousands)
2016¥10,378
137
92
441
(934)
(96)
¥10,017¥10,017
107
21
449
(624)
(54)
¥ 9,916$86,361
923
188
3,871
(5,386)(471)$85,486

2015

2016

U.S. Dollars (Thousands)
2016

¥342
110
(13)
(19)
¥419

¥419
30
(16)
(19)
¥413

$3,612
258
(141)
(165)
$3,564

2. Movement in plan assets
Yen (Millions)
Beginning balance
Expected return on plan assets
Actuarial gain (loss)
Contributions paid by the employer
Benefit paid
Other
Ending balance

3. Movement in retirement benefit obligations calculated using the simplified method
Yen (Millions)
Beginning balance
Retirement benefit cost
Benefit paid
Other
Ending balance

4. Reconciliation from retirement benefit obligations and plan assets to liability (asset) for retirement benefits
2015

Yen (Millions)
2016

U.S. Dollars (Thousands)
2016

Unfunded retirement benefit obligations
Total net liability for retirement benefits at December 31¥ 11,679(10,017)1,661
419¥   2,080¥12,123(9,916)2,207413¥ 2,620$104,516(85,486)
19,0293,564$ 22,594

Liability for retirement benefits
Total net liability for retirement benefits at December 31

2015¥2,080¥2,0802016¥2,620¥2,620U.S. Dollars (Thousands)
2016$22,594$22,594

Funded retirement benefit obligations
Plan assets

Yen (Millions)

31

MABUCHI MOTOR CO., LTD.

Annual Report 2016

5. Retirement benefit costs
Yen (Millions)
Service cost
Interest cost
Expected return on plan assets
Amortization of unrecognized actuarial gain
Amortization of prior service cost
Retirement benefit costs applying a simplified method
Other
Total retirement benefit costs for the fiscal year ended December 31

2015

2016

U.S. Dollars (Thousands)
2016¥  437
118
(137)
71
20
110
452
¥1,072

¥ 438
99
(107)
100
20
30
158
¥ 741

$3,780
859
(923)
868
180
258
1,366
$6,391

2015

2016

U.S. Dollars (Thousands)2016¥   20(253)¥(232)¥   20(621)¥(600)$    180(5,360)$(5,179)

6. Retirement benefits liability adjustments before tax effect in other comprehensive income
Yen (Millions)
Prior service cost
Actuarial loss
Total balance amount for the year

7. Retirement benefits liability adjustments before tax effect in accumulated other comprehensive income
Yen (Millions)
Unrecognized prior service cost
Unrecognized actuarial loss
Total balance amount for the year

2015

2016

U.S. Dollars (Thousands)
2016¥   43
1,221¥1,265¥   22
1,834¥1,865$   195
15,890$16,085

8. Plan assets
The fair values of plan assets, by major category, as a percentage of total plan assets were as follows:① Plan assets at December 31, 2015 and 2016, comprise:
General accounts
Bonds
Cash and deposits
Other
Total

2015
71.9%
17.5%
5.0%
5.6%
100.0%

2016
73.6%
14.5%
5.3%
6.6%
100.0%② Long-term expected rates of return
The expected rates of return on plan assets have been estimated based on the anticipated allocation to each asset class and the
expected long-term returns on assets held in each category.
The assumptions used in accounting for the above plans were as follows:
Discount rates
Expected rates of return on plan assets
Expected rates of salary increase2015
Mainly 0.7%
Mainly 1.0%
Mainly 2.8%

2016
Mainly 0.4%
Mainly 1.0%
Mainly 2.8%

9. Income Taxes
1. Income taxes in Japan applicable to the Company consist of corporation tax, inhabitants’ tax and enterprise tax, which in theaggregate, resulted in a statutory rate of approximately 35.4% and 32.8% for the years ended December 31, 2015 and 2016,
respectively. Income taxes of foreign consolidated subsidiaries are based generally on the tax rates applicable in their countries ofincorporation. The reconciliation between the effective tax rates reflected in the consolidated statement of income and the effective
statutory tax rates for the years ended December 31, 2015 and 2016 was as follows:

Effective statutory tax rates
Tax credits on dividend income
Different tax rates applied to foreign subsidiaries
Undistributed earnings in foreign subsidiaries
Valuation allowance
Tax deduction
Other, net
Effective tax rates

2015
Percentage
35.4
0.3
(9.6)
5.1
0.5
(1.7)
0.3
30.3

2016
Percentage
32.8
0.8
(8.0)
(3.9)
0.4
(0.5)
0.8
22.4

32

2. The significant components of deferred tax assets and liabilities at December 31, 2015 and 2016, were as follows:
Yen (Millions)Deferred tax assets:
Evaluation losses on investment securities and other assets
Depreciation
Allowance for retirement benefits
Liability for retirement benefits
Impairment loss
Unrealized profits on inventories and fixed assets
Deferred gains or losses on hedges
Net operating loss carry forwards
Other
Valuation allowance
Total
Deferred tax liabilities:
Tax on undistributed earnings in foreign subsidiaries
Unrealized holding gains on securities
Other
Total
As reported in the consolidated balance sheet:
Deferred tax assets – Current
Deferred tax assets – Non-current
Deferred tax liabilities – Current
Deferred tax liabilities – Non-current

2015

2016

U.S. Dollars (Thousands)
2016¥    538
143
22
519
638
1,409
–
169
538
(1,319)¥ 2,659¥    319
165
21
598
476
1,475
209
368
542
(1,353)¥ 2,823$   2,750
1,429
181
5,159
4,110
12,720
1,803
3,176
4,673
(11,666)$ 24,337¥ 3,041917
152¥ 4,112¥ 2,0091,029
169¥ 3,208$ 17,321
8,874
1,464
$ 27,659¥ 1,637407(16)(3,481)¥ 1,667488(65)(2,476)$ 14,375
4,215
(561)
(21,350)

3. The effect of changes in the effective statutory tax rate
The “Act to partially revise the Income Tax Act and Others” (Act No.15 of 2016) and the “Act to partially revise the Local Tax Act andOthers” (Act No.13 of 2016) were enacted by the Japanese Diet on March 29, 2016. As a result, the effective statutory tax rate used tomeasure the Company’s deferred tax assets and liabilities was changed from 32.1% to 30.7% for the temporary differences expected
to be realized or settled in the years beginning January 1, 2017 and 2018, and to 30.5% for the temporary differences expected to berealized or settled from the year beginning January 1, 2019.
As a result of this change in the effective statutory tax rate, deferred tax liabilities (net of deferred tax assets) decreased by ¥50
million ($438 thousand), deferred income taxes decreased by ¥13 million ($112 thousand), retirement benefits liability adjustments
decreased by ¥3 million ($27 thousand), deferred gains or losses on hedges decreased by ¥9 million ($80 thousand), and net
unrealized holding gains on securities increased by ¥50 million ($434 thousand) as of and for the year ended December 31, 2016.

10. Consolidated Statement of Comprehensive Income
The following table presents reclassification adjustments and tax effects for each component of other comprehensive income for theyears ended December 31, 2015 and 2016.
Yen (Millions)
Unrealized holding gains (losses) on securities:
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effectUnrealized holding gains (losses) on securities
Deferred gains or losses on hedges
Amount arising during the year
Tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustments
Amount arising during the year
Retirement benefits liability adjustments:
Amount arising during the year
Reclassification adjustments for gains and losses included in net income
Amount before tax effectTax effect
Retirement benefits liability adjustments
Total other comprehensive income

33

MABUCHI MOTOR CO., LTD.

2015

2016

U.S. Dollars (Thousands)
2016¥    675
(5)
670
(197)
472

¥    378
–
378
(111)
266

$   3,261
–
3,261
(961)
2,300

–
–
–

(681)
209
(472)

(5,876)
1,803(4,073)(5,536)(8,553)(73,732)

(298)
66
(232)
9
(222)
¥(5,286)

(722)
121
(600)
122
(478)
¥(9,236)(6,228)
1,049(5,179)1,057(4,122)$(79,627)

Annual Report 201611. Shareholders’ Equity
Under the Japanese Corporation 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 ofthe 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 the legal earnings reserve must be set aside as additional
paid-in capital or as part of the legal earnings reserve. The legal earnings reserve is included in retained earnings in the accompanying
consolidated balance sheets.
As of December 31, 2016, the total amount of additional paid-in capital and the legal earnings reserve exceeded 25% of thecommon stock; therefore, no additional transfer is required.
Additional paid-in capital and the legal earnings reserve may not be distributed as dividends. However, by a resolution at ashareholders’ meeting, additional paid-in capital and the legal earnings reserve may be transferred to other retained earnings andcapital 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 statementsof 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 20, 2016, interim dividends (¥44 or $0.37 per share) totaling ¥3,017 million ($26,016 thousand) were paid toshareholders based on the shareholders’ record at June 30, 2016. On March 30, 2017, the shareholders approved the declaration ofdividends (¥76 or $0.65 per share) totaling ¥5,212 million ($44,936 thousand).

12. Amounts Per Share
Yen
2015

2016

Profit attributable to owners of parent
Basic
Diluted¥  266.98¥  266.90¥  300.70¥  300.59

Net assets

2015¥3,363.01

Yen
2016¥3,405.14

U.S. Dollars
2016$ 2.59$ 2.59U.S. Dollars
2016$29.35

Notes:	1. Per share amounts are computed based on the number of shares outstanding less treasury stock including shares of the ESOP
trust account and BIP trust account.
2. T he number at year end of such treasury shares were 130,700 and 0 shares respectively, during the fiscal year ended
December 31, 2015, and 98,700 and 119,600 shares, respectively, during the fiscal year ended December 31, 2016.
3. The weighted average number of such treasury shares were 145,780 and 0 shares respectively, during the fiscal year ended
December 31, 2015, and 116,973 and 67,643 shares, respectively, during the fiscal year ended December 31, 2016.
The bases for calculation (net assets per share) are as follows:
Yen (Millions)
Total net assets
Amounts deducted from total net assets:
Share subscription rights
Net assets attributable to shares of common stock
Number of common stock on December 31 (Shares)

2015

2016

U.S. Dollars (Thousands)
2016¥   233,245
61
61¥   233,183
69,337,656¥   232,917
110
110¥   232,807
68,369,392$2,007,909
950
950$2,006,959–

The bases for calculation (basic and diluted profit attributable to owners of parent per share) are as follows:
Yen (Millions)
Profit attributable to owners of parent per share
Profit attributable to owners of parent
Amounts not attributable to ordinary shareholders
Profit attributable to owners of parent in relation to common stock
Average number of common stock (Shares)
Diluted profit attributable to owners of parent per share
Profit attributable to owners of parent adjustments
Increase in number of shares of common stock (Shares)
Share subscription rights (Shares)

2015

2016

U.S. Dollars (Thousands)
2016¥    18,546–
18,546
69,466,567¥    20,598–
20,59868,501,074$177,573–
177,573––
21,541
21,541–
25,172
25,172–––34

13. Selling, General and Administrative Expenses
The main components of “Selling, General and Administrative Expenses” for the years ended December 31, 2015 and 2016, were as
follows:
Yen (Millions)
Packing and freightage expenses
Salaries and wages
Provision for bonuses due to employees
Provision for bonuses due to directors
Retirement benefit expenses
Employee benefit costs
Depreciation
Provision of allowance for doubtful debts
Research expenses

2015

2016

U.S. Dollars (Thousands)
2016¥1,300
8,536
212
130
581
1,561
1,572
49
1,325

¥1,167
8,701
247
141
477
1,630
1,532
199
1,242

$10,067
75,011
2,130
1,215
4,114
14,053
13,214
1,720
10,713

14. Contingent Liabilities
As of December 31, 2015 and 2016, the Company is contingently liable principally for forward precious metal contracts in the amountsof ¥22,126 million and ¥17,853 million ($153,905 thousand), respectively.

15. Research and Development Expenses
Expenditures relating to research and development activities are charged to income as incurred and amounted to ¥5,164 million and¥5,024 million ($43,318 thousand) for the years ended December 31, 2015 and 2016, respectively.

16. Other Income (Expenses)
A gain of ¥412 million ($3,558 thousand) on the sale of buildings and structures was recognized for the year ended December 31,
2016, and included in gain on disposal of fixed assets, net.

17. Impairment of Fixed Assets
Impairment losses relating to a fixed asset group in a subsidiary in China of ¥906 million were incurred due to the decline in demand
for motors in the consumer and industrial products market during the year ended December 31, 2015. The recoverable amount of the
fixed asset group was calculated by value in use. As expected future cash flows were negative, these assets were written down to
zero. There were no impairment losses relating to fixed assets to be disclosed for the fiscal year ended December 31, 2016.

18. Segment Information
1. Overview of reporting segments
The reporting segments of the Company and its consolidated subsidiaries are regularly reviewed by the Board of Directors using thesegregated financial information available within each segment of the Company and its consolidated subsidiaries, to determine theallocation of management resources and evaluate business results.
The Company and its consolidated subsidiaries specialize in small motors manufacturing and sales as a single line of business. The
Company is in charge of the business activities in Japan. Meanwhile, subsidiaries located overseas are in charge of operations in Asia,
North and Latin America, Europe, etc. Subsidiaries located overseas are independent management units and propose comprehensive
product strategies while pursuing business expansion.
Since the Company and its consolidated subsidiaries are composed of regional segments based on a manufacturing and sellingsystem, the Company and its consolidated subsidiaries have designated “Japan,” “Asia,” “North and Latin America” and “Europe” astheir reporting segments.
2. Methods for calculating net sales, income or loss, assets, liabilities and other items by reporting segment
The accounting policies and methods for the Group’s reporting segments are the same as described in “1. Summary of Significant
Accounting Policies.”
As described in 2. Accounting Changes, following revisions to the Corporation Tax Act of Japan, the Company applied the “Practical
Solution on a Change in Depreciation Method Due to Tax Reform 2016” (Practical Issues Task Force No.32 issued on June 17, 2016),
and changed its depreciation method for facilities attached to buildings and structures acquired on or after April 1, 2016, from thedeclining-balance method to the straight-line method.
The impact of this change on segment income for the fiscal year ended December 31, 2016, was immaterial.
Intersegment net sales are based on prevailing market prices.

35

MABUCHI MOTOR CO., LTD.

Annual Report 2016

3. Information concerning net sales, income or loss, assets, liabilities and other items by reporting segment
Yen (Millions)
Net sales:Japan
External customers
Intersegment
Total
Asia
External customers
Intersegment
Total
North and Latin America
External customers
Intersegment
Total
EuropeExternal customers
Intersegment
Total
Corporate and elimination
Consolidated
Segment income:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated
Segment assets:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated
Others:Depreciation and amortization:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated
Increase in tangible and intangible fixed assets:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Consolidated

2015

2016

U.S. Dollars (Thousands)2016¥   11,305
93,729105,035¥   11,851
87,996
99,847$    102,169
758,586
860,756

85,37083,725
169,095

81,37075,201
156,572

701,467
648,290
1,349,758

17,204–
17,204

17,360017,360149,655
0
149,655

29,262–
29,262(177,454)¥ 143,143

30,117–30,117(163,197)¥ 140,699

259,631–259,631(1,406,877)$ 1,212,925¥   7,881
13,509
446
1,520
(396)
¥   22,961¥8,703
14,546
228
1,112
(366)
¥   24,225$    75,029
125,400
1,970
9,591(3,155)$    208,836¥   88,903
156,105
12,23814,454(15,506)¥ 256,196¥   95,262
157,238
13,745
15,784(23,644)¥ 258,387$    821,231
1,355,506
118,499
136,076(203,834)$ 2,227,478¥     998
5,784
70
7
(280)
¥   6,580¥   1,124
5,406
125
6
(303)
¥   6,359$     9,693
46,6051,080
59(2,612)$    54,826¥   1,840
10,5302,829
11(1,092)¥   14,119¥     904
8,740
1,652
10
(105)
¥   11,202$7,79975,351
14,24686(910)$    96,574

Notes: 1. (1) The segment income eliminations of ¥(396) million in fiscal 2015 and ¥(366) million ($(3,155) thousand) in fiscal 2016
represent intersegment transaction eliminations.
		 (2) The segment assets eliminations include: corporate assets of ¥78,966 million in fiscal 2015 and ¥75,026 million ($646,779
thousand) in fiscal 2016, not allocated to each segment; intersegment debt and credit eliminations of ¥(94,472) million in
fiscal 2015 and ¥(98,671) million ($(850,614) thousand) in fiscal 2016. Corporate assets primarily include the parent
company’s surplus funds for investment (e.g., cash and bank deposits and short-term investments) and long-term
investment funds (e.g., investment securities).
		 (3) The depreciation and amortization eliminations of ¥(280) million in fiscal 2015 and ¥(303) million ($(2,612) thousand) in
fiscal 2016 represent intersegment transaction eliminations.
		 (4) Increase in tangible and intangible fixed assets eliminations of ¥(1,092) million in fiscal 2015 and ¥(105) million ($(910)
thousand) in fiscal 2016 represent intersegment transaction eliminations.
2.	Segment income is adjusted for operating income reported in the consolidated statement of income.

36

Related information
Information on net sales, tangible fixed assets and impairment losses by geographic area is summarized as follows. For the fiscal year
ended December 31, 2015, there were no sales to a specific major customer that accounted for 10% or more of consolidated net
sales. For the fiscal year ended December 31, 2016, sales to one specific major customer in the amount of ¥14,154 million ($122,020
thousand) accounted for 10% or more of consolidated net sales.
Geographical Information
Yen (Millions)
Net sales:
Japan
Asia
North and Latin America
Europe
Total

2015

2016

U.S. Dollars (Thousands)
2016¥ 11,618
85,057
17,20429,262¥143,143¥ 12,018
81,20317,36030,117¥140,699$  103,610
700,026
149,655
259,631$1,212,925

2015

2016

U.S. Dollars (Thousands)
2016¥15,861
39,7083,164
29¥58,763¥16,123
40,2273,955
30¥60,336$138,992
346,789
34,096260$520,138

2016

U.S. Dollars (Thousands)
2016

Yen (Millions)Tangible fixed assets:
Japan
Asia
North and Latin America
EuropeTotal

Yen (Millions)2015
Impairment loss:
Japan
Asia
North and Latin America
EuropeCorporate and elimination
Total

¥  –
906
–
–
–
¥906

¥ –
90
–
–
–
¥90

$  –
777
–
–
–
$777

19. Subsequent Events
Purchase and cancellation of treasury stock
On February 14, 2017, the Company resolved, at the Board of Directors’ meeting, to purchase treasury stock pursuant to the provisionsof Article 156 of the Companies Act, applied by replacing terms pursuant to the provisions of Article 165, paragraph 3 of said Act, andresolved to cancel treasury stock pursuant to the provisions of Article 178 of the Companies Act, as described below.
1. Reasons for the purchase and cancellation of treasury stock
The Company will purchase and cancel treasury stock in order to implement a flexible capital policy to respond to changes in thebusiness environment and to improve shareholder returns and capital efficiency.
2. Details of matters pertaining to the purchase of treasury stock(1) Class of shares to be purchased: Common stock of the Company(2) Total number of shares to be purchased: 1,200,000 shares (maximum)(1.75% of the total number of shares issued [excluding treasury stock])(3) Total amount of purchase cost: ¥5.0 billion (maximum)(4) Purchase period: February 16, 2017 to March 24, 2017(5) Purchase method: Purchase in the open market through discretionary trading(6) As a result, the Company purchased 801,600 shares of common stock (total amount ¥4,999 million).
3. Details of matters pertaining to the cancellation of treasury stock(1) Class of shares to be cancelled: Common stock of the Company(2) Number of shares to be cancelled: All shares of treasury stock purchased as stated in item 2 above(3) Scheduled date of cancellation: April 14, 2017(4) The Company will cancel 801,600 shares of common stock, pursuant to the above-mentioned Board of Directors’ resolution.
Establishment of New Production Plant in Poland
On November 4, 2016, the Company resolved, at the Board of Directors’ meeting, to establish a Mabuchi Motor production plant in
Poland, and on January 4, 2017, the Company established the following subsidiary.
1. Purpose of establishment of subsidiary
The Company will open its first production plant in Europe in order to ensure sufficient production capacity to keep up with demand,due to expanding sales of motors for automotive applications and the subsequent need to build a global production and supply chain
system.
2. Outline of new plant(1) Company name: MABUCHI MOTOR POLAND sp. z o.o. (abbreviation: Poland Mabuchi)(2) Location: Lesser Poland Voivodeship (in Polish, województwo małopolskie), Poland(3) President: Hirotaro Katayama (Director of the Company)(4) Shareholder: The Company: 100%
(5) Capital: PLN 75 million (approx. ¥2 billion)(6) Business description: Manufacturing and sales of small electric motors and motor parts(7) Planned start of operation: Winter of 201937

MABUCHI MOTOR CO., LTD.

Annual Report 2016

Issue of subscription rights to shares
On March 30, 2017, the Company resolved, at the Board of Directors’ meeting, to issue subscription rights to shares for directors
based on Articles 236, 238 and 240 of the Law, for the purpose of increasing their willingness to serve and motivation toward
improved corporate value and raised share prices.
Details
Resolution date
Classification and number of grantees
Type of shares to be issued under the subscription rights to shares
Number of shares
Amount to be paid at the time of exercise of the subscription rights to shares
Period during which the subscription rights to shares may be exercised
Conditions for the exercise of the subscription rights to shares
Matters relating to restriction on transfer of the subscription rights to shares
Matters relating to the distribution of the subscription rights to shares following a reorganization

March 30, 2017
6 directors of the Company (excluding outside directors)
4 executive officers of the Company
Common stock
Directors of the Company: 6,550 shares
Executive officers of the Company: 1,630 shares¥1 per share
Note 8Note 9Note 11
Note 13

Notes:(1) Designation of the subscription rights to shares
Mabuchi Motor Co., Ltd. 5th Subscription Rights to Shares (Stock-compensation Type)(2) Eligible persons to whom the subscription rights to shares are allotted and the number thereofSix (6) directors of the Company : 655 units
Four (4) executive officers of the Company : 163 units(3) Total number of the subscription rights to shares: 818 units
The above figure is the planned number to be allotted and therefore if the total number of the subscription rights to shares allotteddecreases, for example, in the case where applications for the subscription are not made, the total number of the subscription rights toshares to be allotted shall be the total number of the subscription rights to shares issued.
(4) Type and number of shares underlying the subscription rights to shares
The type of shares underlying the subscription rights to shares shall be the Company’s common stock, and the number of shares
underlying for each subscription right to shares (hereinafter the “Number of Granted Shares”) shall be ten (10).
In cases where the Company conducts stock splits or reverse stock splits for the Company’s common stock, the Number of Granted
Shares shall be adjusted according to the following formula, and the resulting fractions of less than one (1) share, if any, shall be
rounded down.
Number of Granted Shares after adjustment = Number of Granted Shares before adjustment × Ratio of the stock split or reverse
stock split
In cases where the Company conducts a merger, a demerger or a gratis allotment of shares after the allotment date or any
adjustment to the Number of Granted Shares is necessary mutatis mutandis to these cases, the Number of Granted Shares shall beappropriately adjusted within a reasonable range.
(5) Subscription amount for the subscription rights to shares
The subscription amount for the subscription rights to shares shall be the value based on the fair value, which is calculated using theBlack-Scholes option pricing model as of the allotment date of the subscription rights to shares. Persons to whom the subscription
rights to shares have been allotted (hereinafter the “Subscription Right Holders”) shall offset the claim for compensation held thereby
toward the Company instead of payment of said subscription amount.
(6) Allotment date of the subscription rights to shares
April 20, 2017
(7) Amount to be paid at the time of exercise of the subscription rights to shares
Amount to be paid per share when exercising the subscription rights to shares shall be one (1) yen, and total amount to be paid is
calculated by multiplying one (1) yen by the number of shares to be issued.
(8) Period during which the subscription rights to shares may be exercised
The period during which the subscription rights to shares may be exercised shall be from April 21, 2017 to April 20, 2037.
Provided, however, that if the last day of such exercise period falls on a holiday of the Company, the business day preceding said
date shall be the last exercisable day.
(9) Conditions for the exercise of the subscription rights to shares
1) A Subscription Right Holder shall be allowed to exercise the subscription rights to shares, solely in a lump sum, only within a periodof ten (10) days after he/she forfeits the director’s position of the Company.
2) In cases where a Subscription Right Holder dies, his/her heir may exercise the subscription rights to shares. Provided, however, thatany person who has inherited the subscription rights to shares from the heir of an allotted person is not allowed to exercise thesubscription rights to shares.
(10) Matters relating to acquisition of the subscription rights to shares
1) In cases where a Subscription Right Holder forfeits his/her subscription rights to shares before the exercise thereof pursuant to eitherof the clauses in Item (9) above or any provision(s) of the Subscription Rights to Shares Allotment Agreement, the Company may
acquire said subscription rights to shares without charge as of a date separately specified by the Board of Directors of the Company.
2) In cases where a General Meeting of Shareholders of the Company (the Board of Directors if such a General Meeting of
Shareholders is unnecessary) approves a proposal for (i) a merger agreement by which the Company becomes extinct; (ii) an
absorption-type company split agreement or an incorporation-type company split plan by which the Company becomes a splitting
company; or (iii) a share exchange agreement or a share transfer plan by which the Company becomes a wholly owned subsidiary of
another company or companies, the Company may acquire the subscription rights to shares that have not been exercised as of a dateseparately specified by the Board of Directors of the Company without charge as of such a date.
(11) Restriction on transfer of the subscription rights to shares
Approval of the Board of Directors of the Company via resolution thereat shall be required for the transfer of the subscription rights toshares.
(12) Matters relating to common stock and additional paid-in capital that will be increased in the case of stock issuance asa result of the exercise of subscription rights to shares
1) The amount of common stock that will be increased in the case of stock issuance as a result of the exercise of the subscription rights
to shares shall be one-half (1/2) of the maximum limit of common stock, etc., which is calculated in accordance with Article 17,
Paragraph 1, of the Ordinance on Company Accounting, and the resulting fractions of less than one (1) yen, if any, shall be rounded up.

382) The amount of additional paid-in capital that will be increased in the case of stock issuance as a result of the exercise of thesubscription rights to shares shall be the amount of the maximum limit of common stock, etc., stated in 1) above after deducting theamount of common stock to increase, which is set forth in 1) above.
(13) Treatment of the subscription rights to shares in conducting organizational restructuring
In cases where the Company conducts mergers (limited to cases where the Company is to become extinct as a result of the merger),absorption-type company splits, incorporation-type company splits, share exchanges or share transfers (hereinafter collectively an“Organizational Restructuring Action”), the subscription rights to shares of any of the joint-stock corporations (hereinafter the“Reorganized Company”), which are listed in sub-items (a) through (e) of Article 236, Paragraph 1, Item 8, of the Law, shall be newly
issued pursuant to the following conditions with regard to the subscription rights to shares that remain as of the effective date of theOrganizational Restructuring Action (hereinafter the “Residual Subscription Rights to Shares”). In such cases, the Residual Subscription
Rights to Shares shall be extinguished and the subscription rights to shares of the Reorganized Company shall be newly issued.
Provided, however, that the aforementioned clause shall apply only to cases where such issuance of subscription rights to shares of
the Reorganized Company pursuant to the following conditions has been stipulated in the statement to that effect in the relevant
merger agreement, the absorption-type company split agreement, the incorporation-type company split plan, the share exchange
agreement or the share transfer plan.
1) Number of the subscription rights to shares of the Reorganized Company to be issued
The subscription rights to shares of the Reorganized Company shall be issued in the same number as the Residual Subscription Rights
to Shares held by the Subscription Right Holders.
2) Type and number of the Reorganized Company’s shares underlying the subscription rights to shares
The type of shares underlying the subscription rights to shares shall be the Reorganized Company’s common stock, and the number ofsuch Reorganized Company’s common stock to be issued as a result of the exercise of the subscription rights to shares shall be
determined mutatis mutandis to Item (4) above by taking into account the conditions for the Organizational Restructuring Action andthe like.
3) Amount to be paid at the time of exercise of the subscription rights to shares
The exercise price after the restructuring shall be one (1) yen per share of the Reorganized Company’s shares that could be issued as aresult of the exercise of the subscription rights to shares issued. Amount to be paid at the time of exercise of the subscription rights toshares is calculated by multiplying the exercise price after the restructuring by the number of shares underlying each subscription rights
to shares.
4) Period during which the subscription rights to shares may be exercised
Period during which the subscription rights to shares may be exercised shall be from the later date of either the start date of the period
during which the subscription rights to shares may be exercised, which is set forth in the aforementioned Item (8), or the effective dateof the Organizational Restructuring Action, until the expiration date of the period during which the subscription rights to shares may
be exercised, which is set forth in the aforementioned Item (8).
5) Matters relating to acquisition of the subscription rights to shares
Acquisition of the subscription rights to shares shall be determined mutatis mutandis to Item (10) above.
6) Restriction on transfer of the subscription rights to shares
Approval of the Board of Directors of the Reorganized Company shall be required for the transfer of the subscription rights to shares.
7) Matters relating to common stock and additional paid-in capital that will be increased in the case of stock issuance as a result of theexercise of subscription rights to shares
Common stock and additional paid-in capital to be increased in the case of stock issuance as a result of the exercise of subscription
rights to shares shall be determined mutatis mutandis to Item (12) above.
(14) Treatment of fractions of less than one (1) share
In cases where there are fractions of less than one (1) share in the number of shares to be issued to a Subscription Right Holder when
the subscription rights to shares are exercised by said Subscription Right Holder, the resulting fractions shall be rounded down.
(15) Non-issuance of certificates for subscription rights to shares
The Company shall not issue certificates for the subscription rights to shares.
(16) Place for payment in exercising the subscription rights to shares
Asakusabashi Branch, The Bank of Tokyo-Mitsubishi UFJ, Ltd.
23-6, Yanagibashi 1-chome, Taito-ku, Tokyo

39

MABUCHI MOTOR CO., LTD.

Annual Report 2016

Independent Auditor’s Report40Investor Information(As of December 31, 2016)

Stock Data

Composition of Shareholders

Number of Shares Authorized...................... 200,000,000
Number of Shares Issued.................................. 69,927,562
Number of Shareholders......................................... 13,106

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

Major Shareholders
Takaichi Mabuchi
Japan Trustee Services Bank, Ltd.
(Trust Account)
The Master Trust Bank of Japan, Ltd.
(Trust Account)
Mabuchi International ScholarshipFoundation
Premiere Corporation
Takashi Mabuchi
Tamotsu Mabuchi
Taka Corporation Co., Ltd.
TEXAS Inc.
BBH FOR MATTHEWS JAPAN FUND

5,000

7.3

3,817

5.6

3,198

4.7

3,000

4.4

2,068
2,060
2,060
2,056
1,856
1,281

3.0
3.0
3.0
3.0
2.7
1.9

Treasury Stock

Financial Institutions
25.5%

1.9%
Individuals andOthers23.1%

Other Companies
15.5%

Foreign Companies
32.7%

100-499 2.6%

Less than 100 0.0%500-999 1.0%
1,000-9,999 4.6%
10,000-99,999 9.3%
More than 1,000,000
34.0%

By number ofshares held

Notes: 1. In addition to the above, Mabuchi Motor Co., Ltd. retains
1,339,870 shares of treasury stock.
2. The number of shares of treasury stock is excluded from “Ratio of
Shareholders.” The percentages are rounded to one decimal place.
3. 98,700 shares held by the ESOP Trust Utilizing Employee
Shareholding Association and 119,600 shares held by the
Board Incentive Plan Trust are included in the calculation of“Percentage of shares held.”

Cash Dividends per Share/Payout Ratio

100,000-999,999 48.6%

Share RepurchaseTransaction period

Number of shares
repurchased

Amount(Millions of yen)Mar. 1, 2017 - Mar. 24, 2017

474,800¥2,978Feb. 16, 2017 - Feb. 28, 2017

326,800¥2,021

(%)
54.9

46.6

(Yen)

41.5

41.2

39.9

Feb. 16, 2016 - Feb. 25, 2016

1,000,000¥4,771

110.0

120.0

Mar. 13, 2015 - Mar. 23, 2015

219,200¥1,39358.0

76.0

Feb. 17, 2015 - Mar. 12, 2015

605,000¥3,605

214.0
100.0
50.0
50.0

2012
Interim

140.0

131.0

87.0
53.0

83.0

52.0

44.0

2013

2014

2015

2016

Year-end

Payout RatioChanges in Standards for Calculating Dividends
YearOrdinary Dividendper Share2015

30 yen*1

Financial Instruments
Firms
1.2%

By type ofshareholders

Trend of Stock Price and Related Indicators

Standard Value for Calculating
Special Dividend

2012

2013

2014

2015

2016

30% of consolidated net income

High (Yen)

3,930

6,380

10,540

8,230

6,740

2014

60 yen30% of consolidated net income

Low (Yen)

2,931

3,675

5,430

4,385

3,810

2007 *2

60 yen20% of consolidated net income

At year-end (Yen)

3,655

6,250

9,620

6,640

6,100

2005

60 yen20% of consolidated net income

PER

20.1

20.8

18.6

24.9

20.3

2003

50 yen20% of consolidated net income

PBR

0.7

1.0

1.4

2.0

1.8

1999

50 yen5% of consolidated net income*1 The Company conducted a 2-for-1 stock split of its common stock on
January 1, 2015.
*2 The 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 a significant
profit warning is issued.

41

MABUCHI MOTOR CO., LTD.

WEB

https://www.mabuchi-motor.com/investor/stock/info.html

Annual Report 2016

Corporate Data
(As of December 31, 2016)

Company Name

Number of Employees

Shareholders’ Register Custodian

MABUCHI MOTOR CO., LTD.

781 (Non-consolidated)

Mitsubishi UFJ Trust and Banking Corporation

23,768 (Consolidated)

Corporate Agency Department
10-11, Higashi-suna 7-chome, Koto-ku,

Corporate Headquarters

Tokyo 137-8081, Japan Ordinary General Meeting of
Shareholders

430 Matsuhidai, Matsudo City,
Chiba 270-2280, Japan
Tel: +81-47-710-1111

Tel: +81-120-232-711

The Ordinary General Meeting of Shareholders

Establishedwill be held every March at Corporate

Stock Listing

Headquarters.

Japanese Stock Exchange Listing
Tokyo Stock Exchange

January 18, 1954

Independent Accountants
Ernst & Young ShinNihon LLC

Paid-in CapitalTokyo, Japan¥20,704 million

Corporate
Directory

SHANGHAI MABUCHIEUROPE MABUCHIJIANGSU MABUCHI *1

SHENZHEN MABUCHIDONGGUAN MABUCHI *2

DALIAN MABUCHIAMERICA MABUCHIWAFANGDIAN MABUCHI
KOREA MABUCHIMEXICO MABUCHI

Corporate Headquarters
LUDONG MABUCHI
HONG KONG MABUCHIDANANG MABUCHI *1
VIETNAM MABUCHI
SINGAPORE MABUCHIJIANGXI MABUCHITAIWAN MABUCHI *1
KAOHSIUNG MABUCHIDAOJIAO MABUCHI

Sales offices
Production bases*1 Includes sales functions*2 Includes R&D functions

Nonconsolidated
SubsidiaryWEB

MABUCHI REAL ESTATE CO., LTD.

https://www.mabuchi-motor.com/company/profile.html

42