Suzuki Motor | Annual Report 2014

Contents

Mission Statement__________________________________________________________ 1

A Message from the Management ____________________________________________ 2

Financial Highlights _________________________________________________________ 4

Year in Review______________________________________________________________ 5

Automobiles ____________________________________________________________ 6

Motorcycles_____________________________________________________________ 9

Marine Products ________________________________________________________ 12

Others_________________________________________________________________ 13

Topics ____________________________________________________________________ 14

Directors, Oﬃcers and Auditors _____________________________________________ 17

Management Policy ________________________________________________________ 18

Risks in Operations ________________________________________________________ 24

The Status of the Corporate Group___________________________________________ 26

Financial Section __________________________________________________________ 28

Company Outline __________________________________________________________ 64

Mission Statement

.Develop products of superior value by focusing on the customer

.Establish a refreshing and innovative company through teamwork

.Strive for individual excellence through continuous improvement

1

2

3

SUZUKI MOTOR CORPORATION 1

A Message from the Management

-

Product development and strengthening of research and devel-

Management results of this ﬁscal year

opment

The management environment of the Group for FY2013 in over-

seas economy mainly in developed countries is showing positive

trend toward recovery, despite inﬂuence by tapering of monetary

easing in the US, ﬁnancial problem in Europe and unpredictable

economic outlook for emerging countries such as India and Indo-

nesia. Japanese economy also continues to be on recovery trend.

On the other hand, there is a concern about the impact of recoil

reduction of last-minute demand due to increase in consumption

tax rate.

The Group will make eﬀort to strengthen its ability of research

and development such as environment technology, fuel eﬃcient

technology, weight reduction technology, safety technology, infor-

mation and communications technology and product designing

ability. Also, the Group will make eﬀort to manufacture cars with

lower cost by improving eﬃciency of development by integrating

engine, powertrain and platform, and cost reduction.

-Strengthening of manufacturing capability

Under these circumstances, the consolidated net sales of this

ﬁscal year (April 2013 to March 2014) increased by ¥360.0 billion

Based on the concept of “local production for local consump-

tion,” the Group will continue to strengthen manufacturing out-

side Japan. Especially in Asia, which has a growing demand for

automobiles, the Group will strive to increase the ratio of in-

house manufacturing, expand global procurement and enhance

production capability at respective local markets. Moreover, along

with the advancement of economic cooperation among diﬀerent

regions through FTA and the trend of the foreign currency market,

the Group will also work to optimize the balance of manufacturing

activities in and outside Japan.

(14.0%) to ¥2,938.3 billion compared to the previous ﬁscal year,

owing to increase in Japan, Asia, and Europe. The Japanese do-

mestic net sales increased by ¥91.8 billion (8.8%) to ¥1,132.7 bil-

lion year-on-year, by covering the decrease in OEM sales with the

sales of Suzuki brand vehicles. The overseas net sales increased

by ¥268.2 billion (17.4%) to ¥1,805.6 billion year-on-year.

In terms of the consolidated income, the operating income in-

creased by ¥43.1 billion (29.9%) to ¥187.7 billion year-on-year,

and the net income increased by ¥27.1 billion (33.7%) to ¥107.5

billion year-on-year. The operating income increased mainly ow-

ing to improvement in export proﬁt from Japan by the impact of

the exchange rate and increase in income in Asia.

The Company has decided to distribute year-end dividends

amounting to ¥14.00 per share for this fiscal year (¥10.00 per

share for the previous ﬁscal year). As a result, the annual divi-

dends including interim dividends were ¥24.00 per share and up

by ¥6.00 per share from the previous ﬁscal year.

-Reconstruction of motorcycle business

As for the Motorcycle business, although business as a whole

slightly turned into the black mainly owing to improvement in

income of large-displacement motorcycles, compact motorcycle

business mainly in Asia is still in the middle of reform. The Group

will continuously be aiming at recovering its presence in the

motorcycle market by uniting the planning, technology and sales

functions and by developing new products that suit the market

needs further. The Group will particularly be focusing on compact

motorcycle business in Asia where growth potential is high, and at

the same time, the Group will also be strengthening its lineup of

middle and large-sized motorcycles

Outstanding issues

The Group set a basic policy of “Think smarter, work harder and

unite as a Suzuki group; overcome our challenges and navigate

our way to a brighter future” and will tackle following issues amid

challenging condition.

-Commitment to global environmental problem

Concerning the environmental issues, the Group has been oﬀer-

ing minivehicles in Japan and many types of compact vehicles

that are highly fuel-eﬃcient in places like India and other Asian

countries. The Group believes that a spread of such compact ve-

hicles would be one of the best ways to contribute to solving the

environmental issues. In addition to enhancement of next genera-

tion environmental technology in “SUZUKI GREEN Technology”, the

Group will continue to tackle global environmental problem based

on “Suzuki Environmental Plan 2015” and “Suzuki Biodiversity

Protection Guideline”.

-Strengthening and expansion of sales network

To respond to intensifying competition at various regions and

products, the Group will be expanding and strengthening its sales

network both in Japan and overseas, and execute marketing ac-

tivities in a close contact with the market.

2

SUZUKI MOTOR CORPORATION

A Message from the Management

-

Disaster prevention

establishment with the motto "Develop products of superior value

by focusing on the customer" in the ﬁrst paragraph of its mission

statement. The Group will strive for manufacturing of really valu-

able products appreciated by customers, constantly paying atten-

tion to the movement of times.

The Group commits itself to make eﬀorts to promote the “produc-

tion of small and subcompact vehicles” and the “development of

environmentally benign products” needed by customers, and “to

be small, less, light, short and beautiful” on every side of organiza-

tion, facilities, parts, environment and so on as well as production,

with the slogan, "Small Cars for a Big Future", and has been work-

ing for the eﬃcient, well-knit and healthy management.

Our executive officers and employees will strictly adhere to all

statutes, social norms, and in-house rules, etc., act fairly and with

sincerity.

While the Group has been taking various measures to prevent an-

ticipated damage caused by Tokai and Tonankai Earthquake, after

experiencing the Great East Japan Earthquake, it has diversiﬁed

production and research sites including overseas. Firstly, it is relo-

cating plants and facilities in Ryuyo region in Iwata City, Shizuoka

Prefecture since massive tsunami damages are anticipated in the

region, to Miyakoda district in northern part of Hamamatsu City.

Also, the Group has diversiﬁed its production of engine for minivehicle,

which was concentrated to Sagara plant, to Kosai plant to mitigate

risk. Further, the Group is expanding its research facilities in India

partly in order to mitigate risk concerning product development

facility for automobile in Sagara test course. The Group will con-

tinue to enhance its preparedness against natural disasters.

The Group has carried out its operations on the basis of manufac-

turing of "value-packed products" to satisfy customers since its

We look forward to the continued support and encouragement of

our stockholders.

Osamu Suzuki, Chairman & CEO

Representative Director and

Executive Vice President

Representative Director and

Executive Vice President

Representative Director and

Executive Vice President

Representative Director and

Executive Vice President

Yasuhito Harayama

Osamu Honda

Minoru Tamura

Toshihiro Suzuki

SUZUKI MOTOR CORPORATION 3

Financial Highlights

Thousands of US

dollars (except per

share amounts)

Millions of yen

except per share amounts)

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

Years ended March 31, 2014 and 2013

(

2014

2013

2014

Net sales................................................................................

¥2,938,314

107,484

¥2,578,317

80,389

$28,549,496

1,044,346

Net income.............................................................................

Net income per share:

Primary ...............................................................................

Fully diluted........................................................................

Cash dividends per share.....................................................

Net assets..............................................................................

Total current assets................................................................

Total assets ............................................................................

Depreciation and amortization..............................................

191.60

191.57

143.31

131.67

1.86

24.00

18.00

0.23

1,494,357

1,790,832

2,874,074

117,188

1,298,553

1,560,218

2,487,635

93,680

$14,519,602

$17,400,238

$27,925,327

$1,138,639

Note: Yen amounts are translated into US dollars, for convenience only, at ¥102.92=US$1, the prevailing exchange rate on

March 31, 2014.

Net Sales

Net Income

Years ended March 31

(Millions of yen)

Net Income Per Share

Years ended March 31

(yen)

Years ended March 31

(Millions of yen)

107,484

191.60

2

,938,314

143.31

8

0,389

2,608,217

2

,512,186

,578,317

2

2,469,063

5

3,887

96.06

4

5,174

80.65

6

2.76

2

8,913

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

4

SUZUKI MOTOR CORPORATION

Year in Review

n Production

Overseas

Japan

Automobile Production

Years ended March 31

(Thousand units)

Total

2

010

011

1,586

1,884

1,782

959

2,545

2

994

1,020

2,878

2,802

2012

2013

2014

1,834

1,044

2,878

1,859

998

2,857

Overseas

Japan

Motorcycle Production

Years ended March 31

(Thousand units)

ATV included)

(

Total

2

010

011

2,743

2,550

2,400

2,100

1,882

162 2,904

2

185 2,735

174 2,574

169 2,269

180 2,063

2012

2013

2014

n 2014 Net Sales

2

014 Net Sales By Products

2014 Net Sales By Market

(

Year ended March 31, 2014 Millions of yen)

(Year ended March 31, 2014 Millions of yen)

Other

Marine & Power

Products, etc.

1

93,941

6.6%

56,046

1.9%

North

Europe

America

Motorcycle

Japan

394,714

6

4,890

266,602

13.4%

1,132,732

9.1%

2.2%

38.6%

Asia

1,152,034

39.2%

Automobile

2

,615,664

89.0%

SUZUKI MOTOR CORPORATION 5

Year in Review

Automobiles

Suzuki’s Worldwide Manufacturing and Sales

Total overseas automobile production for ﬁscal 2013 increased to 1,859,000 units, 101.3% compared to the previous ﬁscal year. Worldwide

production, including Japan, decreased to 2,857,000 units, 99.3% compared to the previous ﬁscal year.

Sales of automobiles in overseas market decreased to 1,983,000 units, 99.7% compared to the previous ﬁscal year, while total global sales,

including Japan, increased to 2,711,000 units, 101.9% compared to the previous ﬁscal year.

Operating Results by Segment

In the automobile business, the operating income marked the highest ever, which increased by ¥28.7 billion to ¥179.3 billion year-on-year,

mainly owing to improvement in export proﬁt from Japan by the impact of the exchange rate and increase in income in Asia.

The Japanese Market

1. Overview of the Japanese Automobile Market

Total domestic automobile sales volume in ﬁscal 2013 rose by 9% year-on-year to 5,692,000 units (an increase of 482,000 units). Sales declined in

the ﬁrst half but were boosted greatly in the second half by an economic recovery and by a rush to buy vehicles ahead of a hike in the rate of con-

sumption tax. Sales exceeded ﬁve million units for the second ﬁscal year in a row. Sales of minivehicles showed a marked increase of 15% year-

on-year to a record-high 2,262,000 units. Overall sales of registered vehicles rose by 6% year-on-year to 3,430,000 units. They were up on the year

for the third ﬁscal year in a row.

2. Suzuki Sales

Suzuki’s domestic automobile sales volume in ﬁscal 2013 surged by 8% year-on-year

to a record-high 728,000 units. One key factor supporting the sales growth was

a series of launches of new models throughout the ﬁscal year. Another was

the rush to buy vehicles ahead of the hike in the rate of consumption tax.

Suzuki’s sales of minivehicles grew by 10% year-on-year to 647,000 units.

The Spacia, Carry, Hustler and other new minivehicle models that each

represent a clear response to market needs contributed to the growth.

Suzuki’s sales of registered vehicles declined by 5% year-on-year to 81,000

units. They were down on the year for the ﬁrst time in four years.

Tall miniwagon Spacia Custom

3. Suzuki Topics in Fiscal 2013

•

In June 2013, Suzuki launched the Spacia Custom (a variant of the Spacia). In November 2013, the Spacia won the Car of the Year Japan

Small Mobility Award.

•

In July 2013, Suzuki made enhancements to the WagonR. The improved model has the best fuel economy (30km/L)* of any miniwagon (a mini-

car with an overall height of at least 1,550mm) and incorporates advanced safety technologies such as collision-mitigation braking system.

Also in July 2013, Suzuki enhanced the Swift compact car by adding a grade that includes the newly developed Dualjet engine (a unit that combines

great fuel economy with powerful performance) and the Ene-Charge energy regenerative system.

In September 2013, Suzuki launched the ﬁrst comprehensively enhanced version of the

Carry minitruck in 14 years. The newly improved Carry has a roomier, more comfortable

cabin together with the class-leading** load-bed length of its predecessor.

•

In January 2014, Suzuki launched the Hustler—a new-genre minivehicle

that represents a fusion of a miniwagon and a sport utility vehicle. The

Hustler has been a hit with customers across a wide range of ages. Or-

ders are accordingly strong.

*

Measured in the JC08 test cycle with a vehicle equipped with two-wheel drive and a

continuously variable transmission. Veriﬁed by Japan’s Ministry of Land, Infrastructure,

Transport and Tourism. Measurements made by Suzuki in July 2013 show that some

grades of the MR Wagon oﬀer the same level of fuel eﬃciency.

** Based on Suzuki’s research into the minitruck class in August 2013.

Minicar crossover Hustler

6

SUZUKI MOTOR CORPORATION

Year in Review

Overseas Markets

1. Overview of Suzuki’s Main Overseas Automobile Markets

Sales of automobiles (passenger cars and multi-utility vehicles) in India fell by 6% year-on-year to 2,504,000 units. One reason for the de-

crease was higher fuel prices brought about by a weaker rupee. Another was higher interest rates. Sales in the ﬁve key ASEAN countries

(Indonesia, Thailand, Vietnam, the Philippines, and Malaysia) fell by 8% year-on-year to 3,364,000 units. A key reason for the decrease was

that consumers in Thailand were reluctant to buy vehicles before the government launched a tax incentive scheme. Sales in Europe (the

European Union and the European Free Trade Association) rose by 3% year-on-year to 12,593,000 units owing to signs of economic recov-

ery. Sales in China rose by 16% year-on-year to 22,491,000 units.

2. Suzuki Sales

Suzuki’s overseas automobile sales volume in ﬁscal 2013 was roughly ﬂat on the year; it slipped by 0.3% to 1,983,000 units in the midst of

uncertain market conditions. Suzuki’s sales in India rose by 0.3% year-on-year to 1,054,000 units. Despite a slowdown in the Indian econ-

omy, the Company enjoyed ﬁrm demand for compact cars including the new Celerio and the Swift. Suzuki’s sales in China declined by 8%

year-on-year to 233,000 units. The Company launched the SX4 S-CROSS in China at the end of the ﬁscal year, but overall demand for com-

pact cars was down. Suzuki’s sales in the ﬁve key ASEAN countries (Indonesia, Thailand, Vietnam, the Philippines, and Malaysia) surged by

19% year-on-year to 225,000 units owing partly to strong sales of the Ertiga and partly to the launch in Indonesia of a model that meets the

government’s requirements for LCGC (Low-Cost Green Car) scheme. Suzuki’s sales in Europe (the European Union and the European Free

Trade Association) rose by 7% year-on-year to 160,000 units owing largely to the launch of the SX4 S-CROSS.

3. Suzuki Topics in Fiscal 2013

•

In September 2013, Suzuki conducted the Indonesian launch of the WagonR, which meets the government’s requirements for LCGC (Low-

Cost Green Car) scheme.

•

Also in September 2013, Suzuki launched the SX4 S-CROSS. The

ﬁrst market to receive this model was Europe.

Suzuki announced the establishment in India of the completely

Suzuki-owned automobile production subsidiary Suzuki Motor

Gujarat. The new subsidiary will enable Suzuki to accommodate

growth in the Indian automobile market and increase exports

from the country. Production is scheduled to start in 2017.

•

In February 2014, Suzuki unveiled a global model called the

Celerio. The Celerio for Thailand meets the government’s require-

ments for its eco-car project.

Maruti Suzuki’s sales volume in India exceeded one million units

for the fourth ﬁscal year in a row.

Iwata Plant

(

Multi-purpose vehicle and commercial vehicle assembling)

Kosai Plant

Passenger car and automobile engines assembling)

Sagara Plant

(Passenger car and automobile engines assembling,

foundry of engine components, machining)

(

SUZUKI MOTOR CORPORATION 7

Year in Review

Three-row compact car Ertiga

C-segment crossover SX4 S-CROSS

Global compact car Celerio

8

SUZUKI MOTOR CORPORATION

Year in Review

Motorcycles

Suzuki’s Worldwide Manufacturing and Sales

Total overseas motorcycle production (including ATVs) in ﬁscal 2013 decreased to 1,882,000

units, 89.6% compared to the previous ﬁscal year. Worldwide production, including production in

Japan, also decreased to 2,063,000 units, 90.9% compared to the previous ﬁscal year.

Sales of motorcycles (including ATVs) in overseas market decreased to 1,953,000 units, 87.4%

compared to the previous ﬁscal year, while total global sales, including Japan, also decreased to

2,027,000 units, 87.7% compared to the previous ﬁscal year.

Operating Results by Segment

In the motorcycle business, the operating loss of ¥11.9 billion in the previous fis-

cal year became an operating income of ¥100 million, slightly turning into the black

for the ﬁrst time in six ﬁscal years, mainly owing to improvement in income of large-

displacement motorcycles.

Half-faired GSR250S

The Japanese Market

1. Overview of Japanese Motorcycle Market

The total domestic motorcycle sales (factory shipments) of the four Japanese manufac-

turers in ﬁscal 2013 rose by 9% year-on-year to 438,000 units owing partly to a rush to

buy motorcycles ahead of a hike in the rate of consumption tax. Sales of models with

3

engine displacements of 126cm and higher were up 33% year-on-year at 90,000 units.

3

Sales of models with engine displacements up to 125cm were up 4% year-on-year at

3

48,000 units. The domestic motorcycle market began shrinking after the ﬁnancial crisis

3

of 2008, but sales of models with engine displacements of 126cm and higher are now

trending upward; they have grown for three years in a row.

2

. Suzuki Sales

Light, compact scooter BURGMAN 200

Suzuki’s domestic sales (factory shipments) of models with engine displacements of

3

1

26cm and higher surged by 35% year-on-year to 13,000 units owing partly to new

products including the GSR250S, the Burgman 200, and the Japan-speciﬁcation Hayabu-

3

sa. Sales of models with engine displacements up to 125cm declined by 6% year-on-

year to 59,000 units owing partly to inventory adjustments that involved a reduction in

shipments. Total sales were roughly ﬂat on the year; they were down 1% at 72,000 units.

3

Suzuki’s sales of models with engine displacements of 126cm and higher have reﬂected

the market trend by growing for three years in a row. The Company plans to treat these

highly proﬁtable models as the focus of its sales-promotion eﬀorts.

3. Suzuki Topics in Fiscal 2013

•

In January 2014, Suzuki launched the half-faired GSR250S to complement the

GSR250, an on-road sportbike that has been popular since its launch in July 2012

owing to its bold styling and rider-friendly engine.

Japan-speciﬁcation Hayabusa

•

Suzuki launched the Burgman 200, a light, compact scooter with superior accelera-

tion, in February 2014. The Company had already launched this model overseas.

Suzuki launched the Japan-speciﬁcation Hayabusa in February 2014. This motorcycle

satisﬁes Japanese regulations while delivering the same maximum output and torque

as the European version. It is the ﬁrst motorcycle in Japan to have a transponder for

electronic toll collection as standard equipment*.

*

Based on Suzuki research in January 2014.

SUZUKI MOTOR CORPORATION 9

Year in Review

Overseas Markets

1. Overview of Suzuki’s Main Overseas Motorcycle Markets

Sales of motorcycles in Europe in ﬁscal 2013 were ﬂat on the year at

21,000 units. Sales of motorcycles (including ATVs) in North America

8

rose by 5% year-on-year to 801,000 units. Sales in the six key ASEAN

countries (Indonesia, Thailand, Vietnam, the Philippines, Malaysia, and

Cambodia) were ﬂat on the year at 13,863,000 units. Sales in China fell by

9% year-on-year to 11,313,000 units. Sales in India grew by 7% year-on-

year to 14,805,000 units.

Toyokawa Plant

Motorcycles and outboard motors assembling)

(

2. Suzuki Sales

Suzuki’s overseas motorcycle sales fell by 12% year-on-year to 1,953,000 units. Suzuki’s sales in Europe rose for the ﬁrst time in six ﬁs-

cal years; they were up 1% at 48,000 units. Suzuki’s sales in North America fell by 7% year-on-year to 41,000 units. Suzuki’s sales in the six

key ASEAN countries (Indonesia, Thailand, Vietnam, the Philippines, Malaysia, and Cambodia) fell by 6% year-on-year to 611,000 units owing

partly to prolonged political turmoil in Thailand. Suzuki’s sales fell by 23% year-on-year to 620,000 units in China and by 14% year-on-year to

356,000 units in India.

Sportbike GIXXER (India)

Sport Adventure Tourer V-Strom 1000 ABS

Light, compact scooter BURGMAN 200

Compact scooter Let’s (India)

1

0 SUZUKI MOTOR CORPORATION

Year in Review

3. Suzuki Topics in Fiscal 2013

•

Suzuki announced in Spain in June 2013 that it would be return-

ing to MotoGP in 2015. The Company unveiled the race machine

it was developing.

•

In September 2013, the Suzuki Endurance Racing Team won the

FIM Endurance World Championship for the fourth time in a row

and the 13th time in total.

•

Also in September 2013, Suzuki unveiled new models in Europe:

the V-Strom 1000 ABS and the Burgman 125/200.

Also in September 2013, Suzuki announced in Bangkok that it

planned to launch a number of large-displacement models in

the ASEAN market.

Endurance World Championship

MotoGP Prototype

Introduction of large-displacement models in Bangkok

SUZUKI MOTOR CORPORATION 11

Year in Review

Marine Products

Operating Results by Segment

In the marine and power products, etc. business, the net sales and

the operating income increased year-on-year owing to increase in

sales of outboard motors in Europe.

Overview of Marine Products

Suzuki’s domestic outboard motor sales volume in ﬁscal 2013 was

slightly down by 1% year-on-year. The net sales decreased by 5%

year-on-year due to a shift in demand toward smaller models. The

export sales volume also declined by 2% year-on-year. On the con-

trary, the net sales increased by 6% year-on-year due to a shift in

demand toward larger models.

Suzuki’s four-stroke outboard motors range from the DF2 (the

lowest-power model, which delivers 1.49kW/2PS) to the DF300 (the

highest-power model, which delivers 220.7kW/300PS). The Com-

pany produces small models in Thailand and larger models at the

Toyokawa Plant in Japan.

DF60AV

Suzuki Topic in Fiscal 2013

•

In September 2013, Suzuki agreed with the French boat builder

Bénéteau for an exclusive supply of Suzuki outboard motors to

their outboard powered boats sold in four countries in Europe.

DF150TG

DF175TG

DF50AV

DF30A

1

2 SUZUKI MOTOR CORPORATION

Year in Review

Others

Environmental Initiatives

As a manufacturer of automobiles, motorcycles, outboard motors, and other

items, Suzuki acts in consideration of the environment at all product stages

from development to disposal.

In product development, our environmental initiatives include improving fuel

economy, reducing exhaust emissions, developing clean-energy vehicles, and

reducing noise. In manufacturing, our eﬀorts include reducing environmental

risk, reducing energy requirements, and promoting the use of alternative energy

sources. In distribution, we focus on improving the operational eﬃciency and

energy eﬃciency of transportation and on promoting the three Rs (reducing,

reusing, and recycling). In marketing, we promote environmental management

among our dealers and strive to ensure proper disposal of end-of-life products.

We also pursue environmental initiatives that are not directly related to our

products. For instance, we promote energy savings and green purchasing in our

oﬃces, give our workers environmental education, and support social action

programmes in local communities.

SUZUKI ENVIRONMENTAL & SOCIAL REPORT 2013

Swift XS-DJE

Swift RS

Suzuki Topics in Fiscal 2013

•

Suzuki published “Suzuki Environmental and Social Report 2013”. The Com-

pany has published a report about its environmental initiatives every year

since ﬁscal 1999.

Alto Eco

•

In July 2013, Suzuki launched the Swift in a more eco-friendly form that in-

corporates fuel-saving technologies including the newly developed Dualjet

engine and the Ene-Charge energy regenerative system. This vehicle has

plenty of power for dynamic performance and oﬀers the best fuel economy

of any petrol-engine car with an engine displacement of at least 1.2L*.

In December 2013, Suzuki launched a more fuel-eﬃcient form of the Alto Eco

minicar. The enhanced Alto Eco became the most fuel-eﬃcient petrol-engine

car in Japan**; it delivers fuel economy of 35km/L*** (an improvement of

•

Auto Gear Shift

2

km/L) together with nimble performance. Suzuki increased fuel eﬃciency by complementing the Alto Eco’s existing fuel-saving technolo-

gies (for instance, the Ene-Charge energy regenerative system and an Engine Auto Stop Start System) with a higher compression ratio,

better fuel combustion, lower frictional resistance, and optimized powertrain control.

In January 2014, Suzuki announced that it had developed the Auto Gear Shift system, which combines the merits of manual and automatic

transmissions. The Auto Gear Shift system is based on a manual transmission, so it oﬀers manual-transmission fuel economy. Optimal

computer-controlled gearshifts also contribute to fuel savings.

*

Measured in the JC08 test cycle using the XG-DJE, XL-DJE, and XS-DJE variants (each equipped with two-wheel drive and a continuously variable transmission). Veriﬁed by

Japan’s Ministry of Land, Infrastructure and Transport. Comparison is based on Suzuki research in July 2013 and excludes hybrids.

**Measured in the JC08 test cycle and veriﬁed by Japan’s Ministry of Land, Infrastructure and Transport. Comparison is based on Suzuki research in November 2013 and excludes hybrids.

**Measured with a two-wheel-drive vehicle in the JC08 test cycle and veriﬁed by Japan’s Ministry of Land, Infrastructure and Transport.

*

Suzuki’s cooperation with other automobile manufacturers (as of July 2014)

Suzuki has been cooperating with other automobile manufacturers both in and outside Japan.

Suzuki and Nissan have been supplying each other with vehicles in Japan on an original-equipment-manufacturer (OEM) basis since 2002.

To Mazda, Suzuki has been supplying vehicles in Japan since 1989 and began supplying vehicles in Indonesia as well in 2013. Suzuki has

been also making vehicles’ OEM supply to Mitsubishi in Japan since 2011.

From Fiat, Suzuki has been sourcing its diesel engines for vehicles sold mainly in Europe since 2005. In India, Suzuki has been producing

diesel engines at its own factories since 2006 using technologies acquired from Fiat.

3

In 2013, Suzuki started supplying British manufacturer, Caterham with 660cm engines and some drive-train components designed for minivehicles

for the installation on its sport cars. The car is sold also in Japan as a British-made minivehicle.

Suzuki continues pursuing opportunities and areas of cooperation with other manufacturers where eﬀective use of companies’ business re-

sources and mutual beneﬁt can be expected.

Alliance with Volkswagen formed in December 2009 by entering into a framework agreement accompanied with a capital relationship did

not realize any projects. Suzuki terminated the said agreement for breach of contract by Volkswagen. Currently, Suzuki is engaged in pro-

ceedings at the International Court of Arbitration with a view to securing the return of its shares.

SUZUKI MOTOR CORPORATION 13

Topics

Selection of Recipients for Suzuki Education and Culture

Foundation Scholarships

April 2013

Donation for Construction of Sea Wall in Hamamatsu City

Suzuki founded the Suzuki Education and Culture Foundation (a juridical

foundation) in 2000 to mark its 80th anniversary. The foundation is funded

by donations from its chairman, Osamu Suzuki, and the Suzuki group. It

gives scholarships to students who would otherwise not be able to focus

on their studies for ﬁnancial reasons. Eligible students include those who

attend high schools in Shizuoka Prefec-

Suzuki announced plans to help Hamamatsu City fund the construction

of an anti-tsunami sea wall. The Hamamatsu Chamber of Commerce and

Industry made an appeal for ﬁve billion yen. Suzuki is contributing 500 mil-

lion yen over ﬁve years.

June 2013

ture and those who graduated from high

Launch of the Feminine Alto Lapin Chocolat

schools in Shizuoka Prefecture and are

now at university. In ﬁscal 2013, the foun-

dation decided to give 20,000 yen a month

each to 55 high-school students and

Suzuki launched the Alto Lapin Chocolat—a minicar designed specially for

young women. The Alto Lapin Chocolat has cute styling, jewellery-inspired

design details, and candy colouring. Plus, it

has ultraviolet- and infrared-cutting glass

whose functional beneﬁts reﬂect consider-

50,000 yen a month each to 13 university

students. The foundation held a certiﬁca-

tion ceremony for the recipients.

ation of female users. In December 2013,

the car won the interior and design awards

at the Japan Fashion Color Association’s

August 2013

2014 Auto Color Awards.

Announcement of Plans to Build Hamamatsu Plant

Suzuki announced plans to build a production, research, development, and

testing complex called the Hamamatsu Plant at the Hamamatsu City Miya-

koda Industrial Site. The Hamamatsu Plant will have a northern block and a

southern block. The northern block will consist of a factory producing pow-

ertrain parts for motorcycles, automobiles, and next-generation eco-cars.

The southern block will consist of (a) a factory

producing engines for motorcycles and (b) an

engineering centre handling research, develop-

ment, and testing for motorcycles and next-

generation eco-cars. Suzuki plans to complete

July 2013

Launch of WagonR in More Fuel-Eﬃcient and

0th-Anniversary Forms

Suzuki enhanced the WagonR and WagonR Stingray to achieve fuel economy

of 30km/L* (the best of any miniwagon in Japan**) and incorporated advanced

safety technologies that make these models even more appealing. Suzuki also

launched a special model to celebrate the WagonR’s 20th anniversary.

2

*

Measured in the JC08 test cycle using

a vehicle with two-wheel drive and a

continuously variable transmission.

Veriﬁed by Japan’s Ministry of Land, In-

frastructure, Transport and Tourism.

the parts plant at the end of 2016 and the

motorcycle engine factory in 2017. In January

*

*A miniwagon is a minicar with an overall

height of at least 1,550mm. Suzuki made

comparisons in July 2013 using mea-

surements taken in the JC08 test cycle

and veriﬁed by Japan’s Ministry of Land,

Infrastructure, Transport and Tourism.

2014 the Company held a ceremony for praying

safety of Hamamatsu Plant construction.

Unveiling of Comprehensively Enhanced Carry Minitruck

Suzuki unveiled the ﬁrst comprehensively enhanced version of the Carry

minitruck in 14 years. The newly improved Carry has proven popular with

customers owing to a roomy, comfortable cabin, a capacious load bed,

powerful performance, superior manoeuvrability and fuel economy, and

comprehensive anti-rust measures. Plus, it meets a wider range of needs

owing to the availability of discharge headlamps,

which brightly illuminate the road far ahead. In

October 2013, the Carry won a place in the Good

Design Best 100 at the 2013 Japan Good Design

Awards. The judges recognized it as representing

Launch of Swift with Dualjet Engine and Ene-Charge System

Suzuki oﬀered SUZUKI GREEN Technology environmental innovations in a compact

car for the ﬁrst time with the launch of the Swift in a form that incorporates the

newly developed Dualjet engine and the Ene-Charge energy regenerative system.

The Dualjet engine combines high fuel economy with powerful performance by

means of measures that include two fuel-injection systems for each cylinder,

cooled exhaust-gas recirculation, and a heightened compression ratio. The SUZUKI

GREEN Technology-equipped Swift oﬀers fuel economy of 26.4km/L* (the best of

any petrol-engine car with an engine displacement of at least 1.2L)** together

with an even higher level of the driving enjoyment for which the Swift is known.

excellence in manufacturing in a mature ﬁeld.

*

Measured in the JC08 test cycle using the

XG-DJE, XL-DJE, and XS-DJE variants (each

equipped with two-wheel drive and a con-

tinuously variable transmission). Verified

by Japan’s Ministry of Land, Infrastructure,

Transport and Tourism.

September 2013

Suzuki Wins 2013 Endurance World Championship Title

Suzuki Endurance Racing Team (SERT), a racing team supported by Suzuki’s French

subsidiary, Suzuki France S.A.S., won the World Endurance Championship title for

the fourth consecutive year, its 13th

all-time title. Suzuki proved the high

performance of the GSX-R1000 at the

production-based motorcycle endur-

ance race championship. Suzuki is

also developing MotoGP machine

*

*Suzuki made comparisons in July 2013 using

measurements (excluding those for hybrids)

taken in the JC08 test cycle and verified

by Japan’s Ministry of Land, Infrastructure,

Transport and Tourism.

toward its participation in 2015.

Suzuki Endurance Racing Team (SERT)

1

4 SUZUKI MOTOR CORPORATION

Topics

Domestic Sales of WagonR Reach Four Million Units

Strengthening Production Structure in Indonesia.

Introduction of the Eco-Car WagonR

Sales of the WagonR miniwagon in Japan reached four million units* in the

month that marked the 20th anniversary of the launch of the WagonR se-

ries. Ever since its market debut in ﬁrst-generation form on September 3,

Suzuki’s Indonesian subsidiary PT. Suzuki Indomobil Motor (SIM) revealed a 1.0L

fuel-eﬃcient ﬁve-seater passenger car Karimun WagonR, a model that meets

the government’s requirements for LCGC (Low-Cost Green Car) scheme.

Its production started in September at SIM’s Tambun Plant, and sales

started in November. In order to meet the growing automobile market in

Indonesia, Suzuki is constructing new

engine and transmission plant and new

automobile assembly plant within the

Greenland International Industrial Center.

1993, the WagonR has won fans among customers of both sexes across a

wide age range owing to its striking, distinctive styling, the ease with which

people can get in and out of its cabin, the ease with which people can drive

it, and its roominess. The WagonR created the miniwagon market. Suzuki

plans to continue satisfying customers’ desires and enhancing the product

in terms of safety, eco-friendliness, and other aspects of functionality and

performance in order to keep it relevant and popular over the long term.

Accumulated Domestic Sales Units of the WagonR

(Units)

Production ability in Indonesia is planned

to reach 250,000 units in FY2015.

4

3

million

November 2013

2

1

million

Resolution to Install Mega-Solar Power Facility at the

Nakazato Industrial Park Located in Makinohara

Suzuki resolved to install mega-solar power facility at 42 hectares of land

in the Nakazato Industrial Park located in Makinohara, Shizuoka Prefecture.

The generation capacity of the facility is 18 megawatt, which is scheduled

to start its generation in the autumn of 2015.

1

993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

(

Fiscal Year)

*

Conﬁrmed by Suzuki in September 2013 using data from the Japan Light Motor Vehicle and Motor-

cycle Association.

Suzuki will contribute to the local community through its power genera-

tion business, and strengthen its eﬀorts on environmental problems by

promoting local production of the energy for local consumption.

Suzuki SX4 S-CROSS Rolls Oﬀ the Line in Hungary

Suzuki held a ceremony for its ﬁrst C-segment crossover SX4 S-CROSS as it

rolled oﬀ the production line of Suzuki’s Hungarian subsidiary, Magyar Suzuki

Corporation Ltd. by welcoming Dr. Viktor Orbán, Prime Minister of Hungary.

With the initial production and sales volume planned to be 100,000 units

for the first year, the SX4 S-CROSS

will not only be supplied throughout

Europe including Hungary, but will also

be exported to markets including Oce-

ania, Asia, the Middle East and Latin

Unveiling of an Enhanced Alto Eco:

the Most Fuel-Eﬃcient Petrol Car in Japan

Suzuki unveiled a more fuel-eﬃcient form of the Alto Eco minicar. The

enhanced Alto Eco became the most fuel-eﬃcient petrol-engine car in

Japan*; it delivers fuel economy of 35km/L** (an improvement of 2km/

L) together with nimble performance. Suzuki increased fuel eﬃciency by

complementing the Alto Eco’s existing fuel-saving technologies with a

higher compression ratio, better fuel combustion, lower frictional resis-

tance, and optimized powertrain control. Also, Suzuki began oﬀering the

Alto Eco at a more aﬀordable price.

America as a world strategic model.

The SX4 S-CROSS also received maxi-

mum 5-star Euro NCAP overall safety

*

Suzuki made comparisons in November 2013 using

measurements (excluding those for hybrids) taken

in the JC08 test cycle and veriﬁed by Japan’s Minis-

try of Land, Infrastructure, Transport and Tourism.

*Measured with a two-wheel-drive vehicle in the

JC08 test cycle and veriﬁed by Japan’s Ministry of

Land, Infrastructure and Transport.

rating, and proved its high safety per-

formance.

Prime Minister Viktor Orbán and Suzuki

Chairman and CEO Osamu Suzuki

*

Exclusive Supply of Outboard Motors to the French Boat

Builder Bénéteau

Suzuki agreed with the French boat builder Bénéteau for an exclusive sup-

ply of Suzuki outboard motors to their outboard powered boats sold in

four countries in Europe.

Suzuki and Bénéteau plan to mutually support each other in marketing and

product development. Suzuki will

seek to strengthen its outboards

brand and increase the tech-

nology and product strength of

outboards while increasing the

Spacia and Spacia Custom Win Car of the Year Japan

Small Mobility Award

The Spacia and Spacia Custom won the 2013–2014 Car of the Year Japan

Small Mobility Award. The award was established in 2013 to honour the

year’s best minivehicle. The

judges praised the first re-

cipients, the Spacia and Spacia

Custom, for exemplifying a new

form of small mobility.

sales of large outboard motors.

SUZUKI MOTOR CORPORATION 15

Topics

December 2013

February 2014

Unveiling of the New-Genre Hustler Minicar Crossover

Launch of More Conﬁdence-Inspiring Mobility Scooters:

Suzuki created a lifestyle-focused new genre—the minicar crossover—by

unveiling the Hustler, which represents a fusion of passenger miniwagon

and sport utility vehicle (SUV). The Hustler is packaged for spaciousness

and superior rough-terrain performance, has distinctive SUV-inspired looks,

and oﬀers outstandingly user-friendly equipment and functionality. SUZUKI

GREEN Technology gives it nimble, powerful performance and superior fuel

economy. The Hustler with four-wheel drive has functionality that is new

to minivehicles*. Plus, the Hustler incorporates advanced safety tech-

nologies such as the Radar Brake Support

the Seniorcar ET4D and ET4E

Suzuki enhanced the Seniorcar ET4D and Seniorcar ET4E by incorporat-

ing functions that give the user greater peace of mind by making driving

easier. New features include indicators and voice warnings that encour-

age caution when the vehicle encounters a

steep slope, when the vehicle is turning or

reversing, and when the battery runs low. The

Seniorcar ET4D oﬀers even greater comfort and

convenience by means of a big basket that is

collision-mitigation braking system**.

incorporated into a front design that conveys a

sense of freshness and stability.

*

The Hustler (except the A grade) with four-

wheel drive and a continuously variable trans-

mission has Hill Descent Control and Grip Con-

trol functions. Suzuki made comparisons with

other vehicles in December 2013.

Seniorcar ET4D

Suzuki Foundation announces funding of 27 scientiﬁc

researches for ﬁscal 2013

*

*The Hustler (except the A grade) with a contin-

uously variable transmission has the advanced

safety technologies.

Suzuki Foundation, which was established in March 1980 to mark the 60th

anniversary of Suzuki, selected 25 scientiﬁc research projects and two

proposed scientiﬁc research projects for ﬁscal 2013, and held a presenta-

tion ceremony. Thus far, the Foundation has made 1,316 supports includ-

ing research projects by universities and research institutes in Japan and

subsidizing programs in Japan for researchers

January 2014

Unveiling of Japan-Speciﬁcation Hayabusa Sportbike

Suzuki unveiled the Japanese version of its ﬂagship sportbike, the Hayabusa.

The company launched the Hayabusa in 1999 and has since sold it mainly

in Europe and North America. In the past few years, Suzuki has expanded

the Hayabusa’s availability to other areas including emerging nations such

as India; the bike has become popular worldwide. The Japan-speciﬁcation

Hayabusa satisfies Japanese regulations

from overseas. The Foundation does not limit

the usage of the funding to researches, but for

any other purposes as well including transporta-

tion fees. For this reason, the Foundation is val-

ued by many universities and research institutes

that the Foundation supported.

while delivering the same power as the

European version. It is the first motor-

cycle in Japan to have a transponder for

electronic toll collection (convenient for

Launch of fuel-eﬃcient new compact car Celerio in India.

Introduction to Thailand and Europe also announced.

Suzuki unveiled a new compact car Celerio at the India Auto Expo, which

was held in India in February. The Celerio adopts a design that surpasses

that of conventional A-segment cars, as well as roomy and elegant pack-

age. It is a global compact model which realizes low fuel consumption by

the combination of new transmission Auto Gear Shift (AGS) to a 1.0L en-

gine, in additon to its lightweight body. Approximately half of the bookings

for the ﬁrst two months are equipped with AGS, which is drawing attention

for its advantage in price and fuel-eﬃciency in India, where manual trans-

mission is the mainstream.

Subsequently in March, the Celerio was exhibited at the Geneva Motor

Show (Switzerland) and at the Bangkok International Motor Show (Thailand).

Production of the Celerio started in May at Suzuki’s Thai subsidiary, Suzuki

Motor (Thailand) Co., Ltd. as its second car that meets the eco-car project

promoted by the government. It is planned to be distributed in Thailand

and its neighboring countries as well as in Europe.

touring) as standard equipment*.

*Based on Suzuki research in January 2014.

Development of New Transmission Auto Gear Shift

Auto Gear Shift is an automated manual transmission

which makes operations of clutch pedal and gearshift

unnecessary. It features smooth shifting of gears and the

same creep function as in conventional automatic trans-

mission and continuously variable transmission, while

realizing low fuel consumption with its high transmission

eﬃciency. It is equipped on the new compact car Celerio

which was launched in February in India.

Resolution to establish automobile manufacturing subsidiary,

Suzuki Motor Gujarat in India

Suzuki resolved to establish an automobile manufacturing subsidiary,

Suzuki Motor Gujarat Private Limited (SMG) in India. SMG has the purpose

to expand production capacity in India for future development of Indian

automobile market and to expand exports from India.

SMG will build automobile manufacturing plant in Gujarat, located in west-

ern India. Start of production is set to be within 2017. In the initial stage,

annual production capacity is scheduled to be 100,000 units, and the

capacity will be increased gradually depending on market trend. Contract

manufacturing agreement between SMG and Maruti Suzuki India Limited

India Auto Expo

Geneva Motor Show

(MSIL) is planned, in which MSIL will become the distributor of vehicles

including exports.

1

6 SUZUKI MOTOR CORPORATION

Directors, Officers and Auditors

Directors, Oﬃcers and Auditors (as of June 27, 2014)

Representative Directors]

[

Representative

Director and

Osamu Suzuki

Chairman & CEO

Minoru Tamura

Osamu Honda

Toshihiro Suzuki

Supporting CEO / Domestic Marketing / Executive General Manager, Domestic Marketing

Representative

Director and

Executive

Supporting CEO / Automobile Engineering, R&D, and Quality / Executive General Manager, Automobile Engineering

Supporting CEO / Global Marketing

Vice President

Yasuhito Harayama Supporting CEO / Business Development / Executive General Manager, Business Development

[

Directors]

Director and

Senior Managing

Oﬃcer

Manufacturing / Chief Oﬃcer, Gujarat Project

Naoki Aizawa

Eiji Mochizuki

Executive General Manager, Motorcycle Operations

Masakazu Iguchi

Sakutaro Tanino

Director

*Mr. Masakazu Iguchi and Mr. Sakutaro Tanino are the outside directors as stipulated in Article 2, Item 15 of Companies Act of Japan.

[Auditors]

Kunio Nakamura

Shunji Matsumoto

Shin Ishizuka

Company Auditor

Masataka Osuka

Norio Tanaka

(non full-time)

*Mr. Shin Ishizuka, Mr. Masataka Osuka and Mr. Norio Tanaka are the outside company auditors as stipulated in Article 2, Item 16 of Companies Act of Japan.

[

Senior Managing Oﬃcers]

Executive General Manager, India/Africa Automobile Marketing / Managing Director & CEO, Maruti Suzuki India Ltd.

Executive General Manager, R&D/Global IT

Kenichi Ayukawa

Ichizo Aoyama

Senior Managing

Oﬃcer

[Managing Oﬃcers]

Toshiaki Hasuike

Deputy Executive General Manager, Automobile Engineering / Joint Managing Director, Maruti Suzuki India Ltd. (Engineering, Quality Control, Purchasing and Manufacturing)

Executive General Manger, Administration / Managing Oﬃcer, Human Resources Dept.

Executive General Manager, Global Marketing Administration & Planning

Executive General Manager, Purchasing

Hiroyasu Uchida

Takashi Iwatsuki

Kazuo Hakamata

Hiroaki Matsuura

Executive General Manager, Manufacturing Engineering / General Manager, Manufacturing Engineering Dept.IV

President, Suzuki Motor Sales Fukuoka Inc.

Seiichi Furusho

Tadashi Kondo

Associate Oﬃcer, Gujarat Project

Managing Oﬃcer Motoo Murakami

Deputy Executive General Manager, Motorycle Operations

Masato Kasai

Izumi Oishi

Deputy Executive General Manager, Automobile Engineering

Executive General Manager, Manufacturing

Taisuke Toyoda

Masahiko Nagao

Executive General Manager, Finance / Managing Oﬃcer, Finance Dept.

Executive General Manager, Corporate Planning Oﬃce

Tatsuyoshi Okusa

Tomoyoshi Aiso

Hirofumi Nagao

Keiichi Asai

President, Suzuki Motor Sales Hyogo Inc.

President, Suzuki Motor Sales Ibaraki Inc.

Managing Director, Pak Suzuki Motor Co., Ltd. (Pakistan)

Based in Chongqing Changan Suzuki Automobile Co., Ltd. (China)

SUZUKI MOTOR CORPORATION 17

Management Policy

1. Basic policies for proﬁt distribution

We determine the proﬁt distribution based on the performances, dividend payout ratio, strengthening of the corporate nature and full

internal reserve for future business developments from the medium- to long-term viewpoint, with the emphasis on the continuous and

stable distribution.

The Group has a structure in which proﬁts are highly dependent on overseas manufacturing plants. They are mainly located in develop-

ing countries, and are therefore subject to exchange rate ﬂuctuations. To achieve stable growth, we need to further enhance our corpo-

rate structure and prepare for unforeseen circumstances.

In future years, under the foregoing point of view, we will also determine the proﬁt distribution based on the performance of ﬁscal year.

2. Corporate governance issues

(

1) Basic concepts regarding corporate governance

Through fair and eﬃcient corporate activities, The Company always intends to be trusted by all our stakeholders including shareholders,

customers, partner companies, local communities and employees, and to be a continuously growing company, while making a further con-

tribution to the international community. In order to realize that intention, The Company considers that the enhancement of the corporate

governance is one of the most important issues for proper corporate management and is aggressively taking various kinds of measures.

Also, in order to be trusted further by society and stakeholders, we disclose information quickly in fair and accurate manner prescribed

in laws and regulations and aggressively disclose information that we concluded is beneﬁcial to understand The Company. We will fur-

ther enhance the transparency of The Company.

1

8 SUZUKI MOTOR CORPORATION

Management Policy

(2) Organization of The Company

General Meeting of Shareholders

Board of Company

Auditors

Independent

Auditor

5 Auditors

3 Outside Auditors)

Board of Directors

(

9

Directors (2 Outside Directors)

Corporate Planning Committee

Audit Department

Corporate Ethics Committee

Management

Council

Crisis Management

Task Force

Consultation

Service

Each Divisions of The Company / Subsidiaries and affiliates of The Company

(a) Execution of Operation

(Board of Directors)

In addition to the regular meetings of the Board of Directors composed of 9 Directors including 2 Outside Company Directors

held every month, Directors hold a special board meeting whenever necessary, and discuss the matters set forth in the Articles

of Incorporation and the laws and regulations, and important managerial agenda based on the deliberation criteria, and make

decisions on a suﬃcient discussion, including in terms of regulatory compliance and corporate ethics, and make oversight of

business execution.

In addition, all Directors, excluding Chairman & CEO and Outside Directors, also work as leaders for accomplishment of tasks

such as Executive General Manager of each division or other functional units to allow for discussion based on site information at

board meetings for making proper decisions in line with actual situations of each department.

For the purpose of enabling the agile corporate management and executing operations and clarifying the individual responsibili-

ties, The Company has introduced a Senior Managing Oﬃcer and Managing Oﬃcer system and reduced the number of Directors.

In order to clarify managerial accountability for individual Directors and ﬂexibly respond to the changing business environment,

the term of each Director is set to one year.

(Outside Directors)

By electing Outside Directors (2 Directors as of 148th Ordinary General Meeting of Shareholders held on June 27, 2014) who are

highly independent of The Company and have no possibility of causing conﬂict of interest between them and shareholders, The

Company enhanced supervision to management further, and is receiving helpful advice and indication based on large stock of

experience and professional knowledge regarding execution of operation.

(Corporate Planning Committee)

At the Corporate Planning Committee which is composed of 4 Executive Vice Presidents as a council-system organization, im-

portant missions for management at each department are cross-functionally and comprehensively reviewed and basic concepts

are adjusted and established. In order to embody the said basic concepts, The Company has the Corporate Planning Oﬃce.

(Various meeting on execution of operation)

The Company enhances eﬃciency of management by sharing important information on execution of operation. To achieve that,

The Company takes various measures such as holding management councils to discuss the strategic decision on execution of

important management issues. Members of the council include Directors, Executive General Managers and Deputy Executive

General Managers. Furthermore, they mutually exchange information through weekly meetings to identify administrative issues

early and execute operation appropriately.

SUZUKI MOTOR CORPORATION 19

Management Policy

(b) Audit and supervision

(Board of Company Auditors)

The Company adopts a Company Auditor system. The Board of Company Auditors composed of 5 members including 3 Outside

Company Auditors holds regular meetings every two months and holds a special board meeting whenever necessary.

Company Auditors execute audits on proper management of The Company, in accordance with the Rules of the Board of Com-

pany Auditors and audit policies of the corresponding ﬁscal year, by participating in important meetings such as that of the Board

of Directors and management councils, perusing approval documents and various minutes, and receiving reports and explanation

from Directors on execution of business, etc.

In addition, majority of Company Auditors are Outside Company Auditors who are highly independent of The Company and have no

possibility of causing conﬂict of interest between them and shareholders. Their wide experiences and knowledge in legal matters, man-

agement of enterprises, accounting and other areas enhance the audit function and oversight function from outside The Company.

2

Company Auditors and 1 Outside Company Auditor have large stock of knowledge in ﬁnance and accounting due to long ex-

perience of being in charge of accounting in The Group as to Company Auditors, and large stock of experience as certiﬁed public

accountant as to Outside Company Auditor respectively.

(Audit Department)

44 members in Audit department audit The Company and domestic and foreign subsidiaries and aﬃliates, and periodically check the

eﬀectiveness of their internal control system. Results of the checks are reported to management and Company Auditors together

with suggestions regarding improvement and correction of problems. The audit department also helps to make rules for enhance-

ment of management structures, conducts guidance and supports for compliance with the laws, regulations and rules and promotes

eﬃciency and standardization of their business.

Company Auditors adjust audit plans and auditing themes of the audit department, attend its audit and receive reports and explana-

tion on all its audits whenever necessary. Company Auditors also execute internal auditing and auditing on subsidiaries as Company

Auditors’ auditing in cooperation with the audit department.

The audit department and Company Auditors exchange information with organization specialized in internal audit, which consists of

legal, ﬁnance and IT system department.

(Independent Auditor)

Seimei Audit Corporation is assigned as an Independent Auditor for The Company. The Board of Company Auditors receives

explanation from Independent Auditor on audit plans for the corresponding ﬁscal year, reports on audit on the ﬁnance and ac-

counting statements of quarters and ﬁscal year end, and also reports on audit on subsidiaries. The Board of Company Auditors,

audit department and Independent Auditor create a closer connection by exchanging information whenever necessary.

CPA who engaged in the audit

Auditing company CPA belongs to

Seimei Audit Corporation

Designated and engagement partner Satoru Imamura

Designated and engagement partner Koji Sato

Seimei Audit Corporation

Note: The number of other assistant members for audit: 7 certiﬁed public accountants and 8 others.

Company Auditors, audit department and Independent Auditor cooperate appropriately and audit concerning compliance with

laws, internal control, and management eﬃciency from three diﬀerent angles.

(c) Function, role and status of Outside Director

In order to strengthen supervision and audit to management further, The Company adopted Outside Director system at General Meeting

of Shareholders held on June 28, 2012 and elected 2 Outside Directors at General Meeting of Shareholders held on June 27, 2014. As

to 3 Outside Company Auditors, The Company elected Outside Company Auditors who are more independent of The Company.

The Company elected Mr. Masakazu Iguchi as Outside Director to receive appropriate advice related to the management of The

Company in manufacturing industry based on a large stock of expertise as a doctor of engineering. He currently serves as Direc-

tor of Suzuki Foundation (part-time).

Suzuki Foundation has transactions with The Company and subsidiaries such as endowment which are less than 0.01% of con-

solidated net sales of The Company. There are no special interest between him and The Company. The Company believes that he

is suﬃciently independent of the management of The Company.

The Company elected Mr. Sakutaro Tanino as Outside Director to receive appropriate advice related to the management of The

Company from the international viewpoints based on a large stock of experience and knowledge as a diplomat. He served as Di-

rector of Toshiba Corporation until June 2007, and he has assumed as Director of it in June 2014.

2

0 SUZUKI MOTOR CORPORATION

Management Policy

Toshiba Corporation has transactions with The Company which are about 0.06% of consolidated net sales of The Company. There

are no special interest between him and The Company. The Company believes that he is suﬃciently independent of the manage-

ment of The Company.

The Company elected Mr. Shin Ishizuka as Outside Company Auditor to appropriately conduct audit of The Company based on his

experience and professional knowledge as an attorney-at-law. There are no interest between him and The Company. The Com-

pany believes that he is suﬃciently independent of the management of The Company.

The Company elected Mr. Masataka Osuka as Outside Company Auditor to appropriately conduct audit of The Company based on

a long term experiences and knowledge as a management of enterprises. He currently serves as Chairman of the Board of Ha-

makyorex Co., Ltd., Director of Kinbutsurex Co., Ltd., (Subsidiary of Hamakyorex Co., Ltd.) (part-time), Director of Suzuki Education

&

Culture Foundation (part-time), and president of Hamamatsu Chamber of Commerce and Industries. He also served as Director

of Chotokan (part-time) until June 2012.

Hamakyorex Co., Ltd. has transactions with subsidiaries of The Company which are less than 0.01% of consolidated net sales of The Company.

Kinbutsurex Co., Ltd. (subsidiary of Hamakyorex Co., Ltd.) has transactions with The Company which are less than 0.01% of con-

solidated net sales of The Company.

Subsidiaries of Hamakyorex Co., Ltd. have transactions with subsidiaries of The Company which are about 0.02% of consolidated

net sales of The Company.

Suzuki Education & Culture Foundation has transactions with The Company such as endowment and others which are less than

0

.01% of consolidated net sales of The Company.

Hamamatsu Chamber of Commerce and Industries has transactions with The Company and its subsidiaries which are less than

.01% of consolidated net sales of The Company.

0

Chotokan has transactions with The Company and its subsidiaries which are less than 0.01% of consolidated net sales of The Company.

There are no special interest between him and The Company. The Company believes that he is suﬃciently independent of the

management of The Company.

The Company elected Mr. Norio Tanaka as Outside Company Auditor to appropriately conduct audit of The Company based on a large

stock of the experiences and the professional knowledge as a certiﬁed public accountant. There are no interest between him and The

Company. The Company believes that he is suﬃciently independent of the management of The Company.

The Company concluded that all 5 members of Outside Director/Company Auditor have no possibility of causing conﬂict of interest

between them and shareholders, and ﬁled them as independent director/auditor under the rules of the Tokyo Stock Exchange, Inc.

As to independence from The Company with regard to the election of Outside Director/Company Auditor, The Company judges

their independence under “Standard of judgment” set by Tokyo Stock Exchange, Inc.

The Company makes decision on important issue regarding to management through discussion in meeting of board of Directors

and management council in which principally all Directors and auditors participate. The Company believes that corporate gover-

nance of The Company functions suﬃciently.

(

3) Development status of internal control system and risk management system

In order to enhance corporate governance, The Company is making eﬀorts to keep everyone informed about compliance and to strength-

en internal control system. The basic policy for construction of internal control system and its development status are as follows:

(a) Compliance system for Directors

Directors respect the “Mission Statement” and the “Suzuki Activity Charter” and execute their duties in compliance with the “Rules

of the Board of Directors”, the “Approval Procedures” and other rules of The Company, and mutually supervise their execution

of duties through meetings of the Board of Directors, etc. And The Company established the "Suzuki Rules of Corporate Eth-

ics" which lays out a set of basic points for Directors and employees to act in a fair and faithful manner in compliance with the

laws, regulations, social rules and in-company rules. It is revised whenever necessary by “Corporate Ethics Committee” which

promotes corporate ethics in The Company. And Company Auditors audit the execution of duties of Directors in accordance with

the audit policies and work responsibilities set by the Board of Company Auditors.

SUZUKI MOTOR CORPORATION 21

Management Policy

(b) Compliance system for employees

In order to ensure that employees execute their duties in compliance with the law and the Articles of Incorporation of The Com-

pany, The Company is making eﬀort to keep everyone informed about the “Suzuki Employees’ Activity Charter” which lays out the

norms of action of employees, the “Approval Procedures” and the “Job Description” which set up the proceedings of execution

of their duties in details, and other rules of The Company. They are revised whenever necessary. Furthermore, in accordance with

the “Suzuki Rules of Corporate Ethics”, The Company has developed compliance system for employees including internal report

system, and has been educating them through various training and in-house seminars regarding compliance. And, in accordance

with the “Rule of Internal Auditing”, the audit department audits on the correctness of various control systems, organizations and

rules, and properness of function of internal control, etc.

(c) Crisis management system

“Crisis Management Procedures” are laid down within the “Suzuki Rules of Corporate Ethics” as a countermeasure to crisis that

may occur from illegalities and injustices inside/outside The Company, or natural disasters or terrorism, which are impossible for

The Company to prevent. When the “Corporate Ethics Committee” ﬁnds risks that may cause urgent and serious damages to the

corporate management and business operations, the committee immediately sets up a “Crisis Management Task Force” in line

with the “Crisis Management Procedures” in order to deal with the crisis. This organization swiftly disuccsses and decides on the

policies and measures to be taken against the risk occurred and gives instructions to the appropriate departments and divisions

which are then able to communicate each other to solve the problem.

(d) System to ensure proper business operation of the corporate group

To ensure a proper business operation of the corporate group which consists of The Company and its subsidiaries, The Company

has established the “Rules of Business Control Supervision”. It is revised whenever necessary. The subsidiaries report to The

Company on their business operation and consult with The Company on important matters in accordance with those rules, and

departments in charge give guidance and advice to them to enhance their management structure. And our audit department

helps to make rules for the subsidiaries, conducts guidance, supporting and auditing for their regulatory compliance. It also pro-

motes eﬃciency and standardization of their business.

(

4) Remuneration for Directors and Company Auditors for current ﬁscal year

(a) Remuneration paid to Directors and Company Auditors is as follows:

(Amount of remuneration: million yen, Number of payees: person)

Amount of each type of remuneration

Total amount of

remuneration

Classiﬁcation

Number of payees

Basic pay

Stock option

Bonus

Directors (excluding Outside Directors)

Company Auditors

576

305

85

185

10

2

57

40

-

16

7

(

excluding Outside Company Auditors)

Outside Directors/Company Auditors

29

22

5

Notes:

1. The amount of remuneration limit for Directors (¥80 million per month) was resolved at the 135th Ordinary General Meeting of Share-

holders held on June 28, 2001.

2. The amount of remuneration limit for Company Auditors (¥8 million per month) was resolved at the 123rd Ordinary General Meeting of

Shareholders held on June 29, 1989.

3. The maximum amount of remuneration for Directors for stock options as compensation (¥170 million per year) was resolved at the 146th

Ordinary General Meeting of Shareholders held on June 28, 2012 and 147th Ordinary General Meeting of Shareholders held on June 27, 2013.

4. The above-mentioned Stock option are recorded as stock options as compensation in current ﬁscal year as expenses.

5. The above-mentioned bonuses are recorded as provision for Directors' bonuses at the end of current ﬁscal year and treated as ex-

penses of current ﬁscal year.

6

. The above includes 3 Directors who retired at the end of the 147th Ordinary General Meeting of Shareholders held on June 27, 2013.

. In addition to the above, ¥47 million was paid to 2 retired Directors as retirement beneﬁts for Directors under the resolution at the

7

1

40th Ordinary General Meeting of Shareholders held on June 29, 2006.

. The following information is disclosed in 148th annual securities report

Total amount of consolidated remuneration paid to persons who received consolidated remuneration of ¥100 million or more each.

8

•

2

2 SUZUKI MOTOR CORPORATION

Management Policy

(b) Policy for determination of the amount of remuneration for Directors and Company Auditors

Remuneration for Directors/Company Auditors consists of basic remuneration, bonuses and stock options with respect to Direc-

tors, and basic remuneration and bonuses with respect to Company Auditors.

While The Company discontinued its retirement beneﬁts plan for Directors and Company Auditors at the 140th Ordinary General

Meeting of Shareholders, held on June 29, 2006, it has introduced the granting of stock options as compensation with a view to-

ward strengthening Directors’ connection to The Company’s performance and stock price and ensuring that Directors share with

shareholders not only the beneﬁts of any increases in the stock price, but also the risks of any declines, pursuant to the approval

granted at the 146th Ordinary General Meeting of Shareholders, held on June 28, 2012.

(Director)

As for basic remuneration, the amount of remuneration limit (monthly amount) for all Directors shall be determined by a resolution of

a General Meeting of Shareholders, and the amount of remuneration for each Director shall be determined by the representative Di-

rector who is authorized by the Board of Directors in consideration of the duties and responsibilities of each Director to enhance the

corporate value in each ﬁscal year and on a mid-and long-term basis.

As for bonuses, the Board of Directors will decide on a proposal regarding bonus payments to Directors/Company Auditors in consideration

of the management environment and The Company’s performance in each ﬁscal year, and the representative Director who is authorized

by the Board of Directors will decide, pursuant to the approval of a General Meeting of Shareholders concerning the total amount of the

bonus, the amount of the bonus for each Director that reﬂects each Director’s achievement of his or her duties and responsibilities.

As for granting stock options as compensation, the Board of Directors will decide, pursuant to the approval of a General Meeting of

Shareholders concerning the maximum amount of remuneration, etc. with respect to the stock acquisition rights in each ﬁscal year,

the allocation of stock acquisition rights to each Director (excluding Outside Directors).

(Company Auditor)

As for basic remuneration, the amount of remuneration limit (monthly amount) for all Company Auditors shall be determined by a

resolution of a General Meeting of Shareholders. As for bonuses, the total amount of bonuses shall be determined through the ap-

proval of a General Meeting of Shareholders in each ﬁscal year.

The amount of the basic remuneration and bonus for each Company Auditor shall be determined through consultations among Com-

pany Auditors in proportion to each Company Auditor’s duty and responsibility.

(

5) Remuneration for Independent Auditor for current ﬁscal year

(a) The remuneration amount to be paid by The Company to Independent Auditors is ¥84 million.

b) The remuneration amount to be paid by The Group to Independent Auditors is ¥87 million.

(

*The amounts shown in (a) and (b) were all paid for audit certiﬁcation.

Because the remuneration amount for the audit under Companies Act of Japan and for the audit under Financial Instrument and Exchange Act

of Japan is not divided in the Auditing Agreement between The Company and Independent Auditor and is not be able to be actually divided, the

amount described in the above speciﬁes the total of these remuneration amounts.

(Reference)

Internal Control Report System under the Financial Instruments and Exchange Act of Japan

Eﬀective from the ﬁscal year ended March 31, 2009, Internal Control Report System has been applied under the Financial Instruments

and Exchange Act of Japan. The Company has established a project team to enhance the system for assessment of the eﬀectiveness of

internal controls over the ﬁnancial reporting.

Our management executive assessed the eﬀectiveness of internal control over ﬁnancial reporting as of March 31, 2014 in accordance

with “On the Setting of the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over

Financial Reporting (Council Opinions) ” published by the Business Accounting Council of Financial Services Agency, The Japanese gov-

ernment. Based on that assessment, our management executive concluded that our Group’s internal control over ﬁnancial reporting was

eﬀective as of March 31, 2014.

Seimei Audit Corporation, The Company’s Independent Auditor, has audited the Internal Control Report made by our management executive,

and expressed an unqualiﬁed opinion regarding eﬀectiveness of The Group’s internal control over ﬁnancial reporting as of March 31, 2014.

SUZUKI MOTOR CORPORATION 23

Risks in Operations

Risks that may aﬀect the management results, stock price and ﬁnancial situation of The Group include the followings.

Forward-looking statements in this section are based on our conclusions as of March 31, 2014.

Risk relating to markets

(

1) Change in economic situations, demand ﬂuctuation in the markets

The long term economic slowdown, world economic deterioration and ﬁnancial crisis, and the reduced buying motivation of the consumers

may lead to a substantially reduced demand for the products of The Group including motorcycles, automobiles and outboard motors. They

may also aﬀect the performance and ﬁnancial conditions of The Group.

In addition, we conduct businesses around the world, and our dependency on the overseas manufacturing plants especially in the develop-

ing countries of the Asian regions has been increasing over the years. The unexpected situation in these markets such as the rapid change

in the economic situations may aﬀect the performance and ﬁnancial conditions of The Group. Further, unexpected change or new applica-

tion of tax systems in each country may also aﬀect the performance and ﬁnancial conditions of The Group.

(

2) Severer competitions with other companies

We are facing competitions with rival companies in every global market where we conduct our businesses. As the automobiles and mo-

torcycles industries in the world are globalized further, competitions may get harder. Competitions with other companies include various

aspects such as product quality, safety, price, environmental performance, as well as eﬃciency of product development and manufacturing

system, establishment of sales and service systems and sales ﬁnance.

We will make further eﬀorts for maintaining and improving our competitive edges, but there may be risks that impede our competitive advantages.

Risk relating to business

(

1) New product development and launching abilities

It is very important for an automobile and motorcycle manufacturer to correctly understand customer needs and to develop and launch to

the market new attractive products that satisfy the customers in a timely manner. It has become more important than ever to understand

customer needs that rapidly change, such as the reduced demands caused by domestic and overseas economic slowdown and the in-

creased interest in the environmental performance.

In addition, launching of new products will require speciﬁc product development abilities as well as abilities to continually manufacture

products in addition to appropriately understanding customer needs.

However, even if we are able to appropriately understand the customer needs, we may not be able to develop new products matching the

customer needs in a timely manner on account of technical abilities, procurement of parts, production capabilities and other factors. If we

are unable to launch products matching the customer needs to the market in a timely manner, the sales share and sales may be reduced,

which may adversely aﬀect the performance and ﬁnancial conditions of The Group.

(

2) Change in product prices and purchase prices, dependence on speciﬁc suppliers

Various factors including insuﬃcient supply or price rise of speciﬁc parts and raw materials, unstable economic conditions, revisions of

import regulations and harder price competition may rapidly change the product prices and purchase prices of The Group. There is no

guarantee that such rapid price change does not last long or such change does not occur in the markets where there have not been such

changes so far. Rapid changes in product prices and purchase prices may adversely aﬀect the performance and ﬁnancial positions of The

Group in any market where we conduct our businesses.

In addition, the procurement of some of the parts has been limited to speciﬁc suppliers on account of technical abilities, quality, and price

competitiveness. If we are unable to obtain the parts continuously and stably on account of unforeseeable accidents of the suppliers, it

may adversely aﬀect the performance and ﬁnancial conditions of The Group.

(

3) Business development in various countries in the world

We have been conducting our businesses in various countries in the world, and in some of the countries, we conduct joint ventures with

local companies in accordance with local laws or other requirements. These businesses are restricted by various legal and other regula-

tions in each country (including those related to tax, tariﬀ, overseas investment and fund transfer to the home country). Any changes to

such regulations, or management policies or management environment of the joint venture partners may adversely aﬀect the performance

and ﬁnancial conditions of The Group.

2

4 SUZUKI MOTOR CORPORATION

Risks in Operations

(

4) Fluctuations of exchange rates and interest rates

We export motorcycles, automobiles, outboard motors and related parts to various countries in the world from Japan. In addition, we export

those products and parts from the overseas manufacturing plants to multiple other countries. Fluctuations of exchange rates may adversely

aﬀect the performance and ﬁnancial conditions of The Group as well as our competitiveness.

Further, the exchange ﬂuctuations will aﬀect the price setting of the products sold by The Company in foreign currencies as well as the

price of the raw materials purchased. The ratio of the overseas sales has reached about 60 percent of consolidated sales for the current

consolidated ﬁscal year, and transactions in foreign currencies account for signiﬁcant part. We take hedging measures such as forward ex-

change contracts to reduce the risks of exchange-rates and interest-rates ﬂuctuations, but it is impossible to hedge every risk, and the yen

appreciation against other currencies may adversely aﬀect the performance and ﬁnancial conditions of The Group. On the contrary, the yen

depreciation may result in opportunity losses.

(

5) Government regulations

Various legal regulations are applied to the motorcycle, automobile and outboard motor industries in relation to the emission level of emis-

sion gas, mileage, noises, safety and contaminated material emission level from the manufacturing plants. These regulations may be re-

vised, in many cases strengthened. Expenses to comply with these regulations may largely aﬀect the performance of The Group.

In addition, many governments determine the imposition of tariﬀs, price control regulations and exchange control regulations. The Group

is paying expenses to comply with these regulations and will expect to continue bearing them. We may pay more expenses depending on

the establishment of new laws or changes of existing laws. Further, unexpected changes or new application of tax systems and economic

measures of each country may adversely aﬀect the performance and ﬁnancial conditions of The Group.

(

6) Quality assurance

We place the top priority on the product safety and make eﬀorts to establish the quality assurance system from development to sales. We

buy insurance for the product liability, but there are risks not covered by insurance. The occurrence of large expenses for a large-scale re-

call to ensure safety of the customers may adversely aﬀect the performance and ﬁnancial conditions of The Group.

(

7) Alliance with other companies

We conduct various alliance activities with automobile manufacturer around the world and other companies such as for research and de-

velopment, manufacturing, sales and ﬁnance, but factors that cannot be controlled by The Group such as situations inherent to the alliance

partners may adversely aﬀect the performance and ﬁnancial conditions of The Group.

(

8) Legal proceedings

We may become a party to lawsuits and other legal proceedings in the course of our business activities. In the case where any judgments

disadvantageous to us are made in such legal proceedings, they may adversely aﬀect the performance and ﬁnancial conditions of The Group.

(

9) Inﬂuences of natural disasters, wars, terrorism and strikes, etc.

The major manufacturing plants of The Group in Japan conduct manufacturing activities, located mainly in the Tokai region. In addition, the

head oﬃce and other facilities of The Company are also concentrated in the Tokai region. Any occurrences of Tokai and Tonankai Earth-

quake may adversely aﬀect the performance and ﬁnancial condition of The Group largely. We have taken various preventive measures such

as quake-resistant measures for buildings and facilities, ﬁre preventive measures, establishment of BCP (Business Continuity Plan), purchas-

es of earthquake insurances to minimize the inﬂuences of damage by such disasters.

We also conduct businesses around the world and are subject to number of risks relating to our overseas operations. Such risks include polit-

ical or social instability and diﬃculties, natural disasters, diseases, wars, terrorism and strikes. These unexpected events may delay or suspend

the purchase of raw materials and parts, manufacturing, sales of products, and provision of logistics and services. If such delay or suspension

caused by any of these factors occur or prolong, they may adversely aﬀect the performance and ﬁnancial conditions of The Group.

Further, there are various risks other than those mentioned above, and what have been stated in this section do not represent all the risks

of The Group.

SUZUKI MOTOR CORPORATION 25

The Status of the Corporate Group

The outline of the corporate group

The corporate group of the Company consists of subsidiaries of 134 companies and aﬃliates of 37. The

main businesses are manufacturing and marketing of motorcycles, automobiles, marine & power products,

motorized wheelchairs, electro senior vehicles and houses, further developing the businesses of logistics

and other services related to the respective operations.

The position of the group companies in relation to the segmentation is as follows.

Motorcycle

Marine and Power products, etc.

Motorcycles are manufactured by the Company as well as in over-

seas, by a subsidiary Thai Suzuki Motor Co., Ltd. and an aﬃliate,

Jinan Qingqi Suzuki Motorcycle Co., Ltd. and others. Some of parts

are manufactured by a subsidiary, Suzuki Auto Parts Mfg. Co., Ltd.

and others, and those parts are purchased by the Company.

The marketing of the motorcycles is conducted in the domestic

market by a subsidiary, Suzuki Motorcycle Sales Inc. and other

marketing companies, and in overseas markets through a subsid-

iary, Suzuki International Europe GmbH and other marketing com-

panies and manufacturing & marketing companies.

Outboard motors are manufactured mainly by the Company and

marketed by a subsidiary, Suzuki Marine Co., Ltd. and others.

In the domestic market, the marketing of motorized wheel-

chairs and electro senior vehicles are conducted by a subsid-

iary, Suzuki Motor Sales Kinki Inc. and others, and the market-

ing of houses is conducted by a subsidiary, Suzuki Business

Co., Ltd.

Automobile

Automobiles are manufactured by the Company as well as in over-

seas, by subsidiaries, Magyar Suzuki Corporation Ltd., Maruti Su-

zuki India Limited and by an aﬃliate, Chongqing Changan Suzuki

Automobile Co., Ltd. and others. Some of parts are manufactured

by Suzuki Auto Parts Mfg. Co., Ltd. and others, and they are pur-

chased by the Company.

The marketing of automobiles is carried out in the domestic mar-

ket by a subsidiary, Suzuki Motor Sales Kinki Inc. and other mar-

keting companies throughout the market, and in overseas mar-

kets, by a subsidiary, Suzuki International Europe GmbH and other

marketing companies and manufacturing & marketing companies.

The business of logistics services is conducted by a subsidiary,

Suzuki Transportation & Packing Co., Ltd.

2

6 SUZUKI MOTOR CORPORATION

The Status of the Corporate Group

Operation Flow Chart

Operation ﬂow chart is as follows (Major companies only)

No marks : Subsidiaries

:

Affiliates

Overseas Manufacturing &

M/C A/M M/P

Flow of products, parts

Flow of services

Marketing Companies

Magyar Suzuki Corporation Ltd.

PT Suzuki Indomobil Motor

Maruti Suzuki India Ltd.

○

M/C : Motorcycle

A/M : Automobile

M/P : Marine and Power products, etc.

Suzuki Motorcycle India Private Ltd.

Pak Suzuki Motor Co., Ltd.

Suzuki Motor (Thailand) Co., Ltd.

Thai Suzuki Motor Co., Ltd.

Suzuki Philippines Inc.

○

Suzuki Manufacturing of

America Corp.

○

Suzuki Motor de Colombia S.A.

☆

Chongqing Changan

Suzuki Automobile Co., Ltd.

○

Domestic Manufacturing Companies M/C A/M M/P

Suzuki Auto Parts Mfg. Co., Ltd.

Snic Co., Ltd.

○

☆ Jiangxi Changhe Suzuki

Automobile Co., Ltd.ꢀ

☆

Jinan Qingqi Suzuki

Motorcycle Co., Ltd.

Hamamatsu Pipe Co., Ltd.

Hamana Parts Industry Co., Ltd.

○

☆

○

Overseas Marketing Companies

Suzuki International Europe GmbH

Suzuki GB PLC

M/C A/M M/P

○

Suzuki France S.A.S.

Suzuki Italia S.p.A.

Suzuki Austria

Automobil Handels GmbH

○

Logistic Services

M/C A/M M/P

Suzuki Motor Iberica,S.A.U.

Suzuki Finance Europe B.V.

Suzuki Motor of America, Inc.

Suzuki Australia Pty. Ltd.

○

Suzuki Transportation

○

&

Packaging Co., Ltd.

○

Suzuki Motor de Mexico, S.A. de C.V.

Domestic Marketing Companies

Suzuki Motorcycle Sales Inc.

Suzuki Motor Sales Tokyo Inc.

Suzuki Motor Sales Hamamatsu Inc.

Suzuki Motor Sales Kinki Inc.

Suzuki Marine Co., Ltd.

M/C A/M M/P

○

Suzuki Finance Co., Ltd.

Other Domestic Companies

M/C A/M M/P

Suzuki Business Co., Ltd.

○

SUZUKI MOTOR CORPORATION 27

FINANCIAL SECTION

CONTENTS

Management discussion and analysis ......................................................... 29

Five-Year Summary...................................................................................... 31

Consolidated Financial Statements............................................................. 32

Consolidated Balance Sheets............................................................................. 32

Consolidated Statements of Income and

Consolidated Statements of Comprehensive Income .................................... 34

Consolidated Statements of Changes in Net Assets............................................ 36

Consolidated Statements of Cash Flows............................................................. 37

Notes to Consolidated Financial Statements...................................................... 38

Independent Auditor’s Report............................................................................. 63

2

8 SUZUKI MOTOR CORPORATION

Management discussion and analysis

1. Operating results

(1) The operating results by segment

(a) Motorcycle

The net sales increased by ¥36.3 billion (15.8%) to ¥266.6 billion year-on-year, mainly owing to the impact of the exchange

rate and launch of new large-displacement motorcycle V-Strom 1000 ABS in Europe. As for the operating income, the operat-

ing loss of ¥11.9 billion in the previous ﬁscal year became an operating income of ¥100 million, slightly turning into the black

for the ﬁrst time in six ﬁscal years, mainly owing to improvement in income of large displacement motorcycles.

(b) Automobile

The Japanese domestic net sales increased year-on-year as a result of expanding its sales and strengthening the products

such as by improvement in fuel efﬁciency of the Alto Eco and launch of new-genre mini passenger car Hustler, in addition

to great sales of the Spacia, as well as the impact of last-minute demand due to increase in consumption tax rate. As for the

overseas, the net sales increased year-on-year mainly owing to increase in Europe, India, and Indonesia. As a result, the

overall net sales of the automobile business increased by ¥317.9 billion (13.8%) to ¥2,615.7 billion year-on-year. The operat-

ing income increased by ¥28.7 billion (19.0%) to ¥179.3 billion year-on-year, mainly owing to improvement in export proﬁt from

Japan by the impact of the exchange rate and increase in income in Asia.

(c) Marine and Power products, etc.

The net sales increased by ¥5.8 billion (11.6%) to ¥56.0 billion year-on-year, mainly owing to increase in sales of outboard mo-

tors in Europe. The operating income increased by ¥2.4 billion (41.5%) to ¥8.3 billion year-on-year.

(2) The operating results by geographical areas

(a) Japan

The net sales increased by ¥149.6 billion (9.6%) to ¥1,701.7 billion year-on-year. The Company was able to increase sales by

covering decrease in OEM sales with increase in sales of Suzuki brand vehicles, impact of the exchange rate and others. The

operating income increased by ¥32.0 billion (31.2%) to ¥134.5 billion year-on-year because of improvement of export proﬁt

owing to the impact of the exchange rate and other causes.

(b) Europe

The net sales increased by ¥118.2 billion (45.8%) to ¥376.5 billion year-on-year owing to launch of C-segment crossover

model SX4 S-CROSS, new large displacement motorcycle and other causes. The operating loss of ¥1.1 billion in the previous

ﬁscal year became an operating income of ¥4.2 billion, turning into the black.

(c) Asia

The net sales increased by ¥194.4 billion (19.8%) to ¥1,175.4 billion year-on-year mainly owing to increased sales of automo-

biles in Indonesia and Thailand, impact of exchange rate and other causes. The operating income increased by ¥21.3 billion

(56.1%) to ¥59.4 billion year-on-year.

(d) Other areas

The net sales decreased by ¥18.1 billion (10.7%) to ¥151.0 billion year-on-year owing to winding down of automobile market-

ing business in the United States and other causes. The operating income decreased by ¥2.9 billion (92.1%) to ¥200 million

year-on-year.

(3) Selling, general and administrative expenses

In the current consolidated ﬁscal year, the amount of selling, general and administrative expenses increased by ¥93.3 billion (18.1%)

to ¥607.8 billion year-on-year because of increase of sales expenses such as advertising expenses.

(4) Other income and expenses

In the current consolidated ﬁscal year, the net amount of other income and expenses was a gain of ¥9.3 billion, which increased by ¥14.5

billion year-on-year. This was mainly due to decrease of loss on liquidation of subsidiaries and afﬁliates from the previous ﬁscal year.

SUZUKI MOTOR CORPORATION 29

Management discussion and analysis

(5)ꢀForecastsꢀforꢀtheꢀnextꢀﬁscalꢀyear

As for the next ﬁscal year, by closely looking at the impact of recoil reduction of last-minute demand due to increase in consump-

tion tax rate in Japan, and economic trends in emerging Asian markets such as India, Indonesia, and Thailand in overseas, The

Group will work as one to reform in every ﬁeld to accomplish more than the below forecasts for the consolidated operation by

developing the business activity.

(

Forecasts for the consolidated operating results-First Half)

Net Sales ¥1,400.0 billion (up 2.2% year-on-year)

¥91.0 billion (up 0.8% year-on-year)

¥55.0 billion (up 6.5% year-on-year)

Operating income

Net income

(

Forecasts for the consolidated operating results-Full Year)

Net Sales

¥3,000.0 billion

¥188.0 billion

¥115.0 billion

(up 2.1% year-on-year)

(up 0.1% year-on-year)

(up 7.0% year-on-year)

Operating income

Net income

Foreign exchange rates 100 yen/US$, 135yen/Euro, 1.65yen/Indian Rupee

.85yen/100Indonesian Rupiah, 3.10yen/Thai Baht

0

*

The forecasts for next ﬁscal year mentioned above are based on currently available information and assumptions, contain

risks and uncertainty, and do not constitute guarantees of future achievement. Please note that the actual results may greatly

vary by the changes of various factors. Those factors, which may inﬂuence the actual results, include economic conditions

and the trend of demand in major markets and the ﬂuctuation of foreign exchange rate (mainly US dollar/Yen rate, Euro/Yen

rate and Indian Rupee/Yen rate).

2. Liquidity and capital resources

(1)ꢀCashꢀﬂow

Cash ﬂow provided by operating activities for FY2013 amounted to ¥322.9 billion (¥190.1 billion was provided in the previous ﬁs-

cal year), and ¥286.6 billion was used for the acquisition of property, plant and equipment etc. in the investment activities (¥210.6

billion was used in the previous ﬁscal year). As a result, free cash ﬂow amounted to ¥36.3 billion of positive (¥20.5 billion of nega-

tive for the previous ﬁscal year). In ﬁnancing activities, ¥2.8 billion was provided by net increase of short term loan and others (¥33.6

billion was used in the previous ﬁscal year).

As a result, the balance of cash and cash equivalents at the end of FY2013 amounted to ¥710.6 billion and increased by ¥49.5

billion from the end of previous ﬁscal year.

(2) Demand for money

During the current consolidated ﬁscal year, The Company and consolidated subsidiaries invested a total ¥213.6 billion of capital

expenditures on various areas such as development of new model and research & development.

Capital expenditure project for the next ﬁscal year is ¥230.0 billion. The required fund will be covered mainly by our own funds.

3.ꢀSigniﬁcantꢀaccountingꢀpolicies

For information regarding signiﬁcant accounting policies, please refer to the Notes to Consolidated Financial Statements.

*

An amount less than 100 million yen has been rounded off in “Management discussion and analysis” section.

3

0 SUZUKI MOTOR CORPORATION

Five-Year Summary

SUZUKI MOTOR CORPORATION

CONSOLIDATED

Thousands of

US dollars

Millions of yen

(except per

(

except per share amounts)

share amounts)

Years ended March 31

2014

2013

2012

2011

2010

2014

Net sales......................................

¥2,938,314 ¥2,578,317 ¥2,512,186 ¥2,608,217 ¥2,469,063 $28,549,496

Net income...................................

Net income per share:

107,484

80,389

53,887

45,174

28,913

1,044,346

Primary .....................................

Fully diluted............................

Cash dividends per share...........

Net assets....................................

Total current assets......................

Total assets ..................................

Depreciation and amortization....

191.60

191.57

143.31

131.67

96.06

88.28

80.65

74.11

62.76

55.26

1.86

24.00

18.00

15.00

13.00

12.00

0.23

1,494,357

1,790,832

2,874,074

117,188

1,298,553

1,560,218

2,487,635

93,680

1,111,757

1,509,568

2,302,439

103,117

1,106,999

1,372,885

2,224,344

138,368

1,089,757

1,479,336

2,381,314

141,846

14,519,602

17,400,238

27,925,327

1,138,639

NON-CONSOLIDATED

Thousands of

US dollars

Millions of yen

(except per

(

except per share amounts)

share amounts)

Years ended March 31

2014

2013

2012

2011

2010

2014

Net sales......................................

Net income...................................

Net income per share:

¥1,498,853 ¥1,422,595 ¥1,383,269 ¥1,409,205 ¥1,286,633 $14,563,284

67,219

36,405

15,846

10,834

7,086

653,119

Primary .....................................

Fully diluted............................

Cash dividends per share...........

Net assets....................................

Total current assets......................

Total assets ..................................

Depreciation and amortization....

119.81

119.79

64.89

59.64

28.25

25.98

19.34

17.80

15.38

13.57

1.16

24.00

18.00

15.00

13.00

12.00

0.23

859,224

1,070,668

1,850,068

33,605

761,353

921,352

1,641,700

35,626

703,292

921,669

1,597,903

38,532

691,207

818,964

1,524,232

61,265

673,803

899,655

1,625,023

72,359

8,348,468

10,402,916

17,975,787

326,519

Note: Yen amounts are translated into US dollars for convenience only, at ¥102.92 = US$1, the prevailing exchange rate as of March 31, 2014.

SUZUKI MOTOR CORPORATION 31

Consolidated Financial Statements

Consolidated Balance Sheets

As of March 31, 2014 and 2013

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2

014

2013

2014

ASSETS

Current assets:

NOTE 4

Cash and cash equivalents *

Receivables:

....................................

¥ 710,611

¥ 661,102

$ 6,904,498

NOTE 4

Notes and accounts receivables-trade *

..............

310,694

(4,804)

253,237

(5,076)

3,018,792

(46,681)

Allowance for doubtful accounts...................................

Inventories..........................................................................

Deferred tax assets............................................................

Other...................................................................................

Total current assets............................................................

276,285

105,064

392,982

1,790,832

261,380

93,307

2,684,468

1,020,835

3,818,325

17,400,238

296,266

1,560,218

NOTE 5

Property, plant and equipment: *

Land ...................................................................................

Buildings and structures....................................................

Machinery, equipment, vehicles..........................................

Tools, furniture and ﬁxtures..................................................

Construction in progress ...................................................

238,532

385,797

1,120,381

378,011

96,560

211,512

368,706

2,317,650

3,748,513

10,885,946

3,672,866

938,212

1,067,477

338,607

79,075

2

,219,283

2,065,378

(1,456,918)

608,460

21,563,189

(14,816,000)

6,747,188

Accumulated depreciation ............................................

Total property, plant and equipment.................................

(1,524,862)

694,420

Investments and other assets:

NOTE 4

Investment securities *

..............................................

270,329

55,699

199,249

48,248

2,626,595

541,191

NOTE 4

Investments in afﬁliates *

...........................................

NOTE 7

Assets for retirement beneﬁts *

.................................

15,862

—

154,123

Deferred tax assets............................................................

Other...................................................................................

Total investments and other assets...............................

Total assets.........................................................................

20,924

36,179

203,309

26,005

35,277

252,680

388,821

¥2,874,074

318,956

¥2,487,635

3,777,900

$27,925,327

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

3

2 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

Thousands of

US dollars

Millions of yen

2014

2013

2014

LIABILITIES AND NET ASSETS

Current liabilities:

NOTE 4

Short-term loans payable *

.......................................

¥ 197,413

38,748

433,819

46,628

171,274

61,447

—

¥ 171,790

35,299

350,472

21,420

155,519

57,656

5,521

$ 1,918,122

376,487

4,215,115

453,055

1,664,151

597,040

—

NOTE 4 and 5

Current portion of long-term loans payable *

.....

NOTE 4

Accounts payable-trade *

.........................................

Income taxes payable.......................................................

NOTE 4

Accrued expenses *

..................................................

Provision for product warranties........................................

Provision for loss on liquidation of subsidiaries and afﬁliates....

Deferred tax liabilities............................................................

Other...................................................................................

Total current liabilities.........................................................

967

—

9,401

106,634

1,056,933

86,935

884,616

1,036,093

10,269,468

Noncurrent liabilities:

NOTE 4 and 5

Long-term loans payable *

.................................

209,166

—

220,392

37,903

—

2,032,319

—

NOTE 7

Provision for retirement beneﬁts *

Liabilities for retirement beneﬁts *

.............................

NOTE 7

36,918

16,596

29,179

30,923

322,783

1,379,717

358,712

161,251

283,515

300,458

3,136,257

13,405,725

Provision for disaster .........................................................

Deferred tax liabilities ........................................................

Other...................................................................................

Total noncurrent liabilities ..................................................

Total liabilities .....................................................................

17,214

111

28,843

304,464

1,189,081

Net assets:

Shareholders’ equity: *

Capital stock:

NOTE 11

Common stock: Authorized-1,500,000,000 shares Issued,

as of March 31, 2014 – 561,047,304.............................

as of March 31, 2013 – 561,047,304.............................

Capital surplus...................................................................

Retained earnings .............................................................

Treasury stock....................................................................

Total shareholders’ equity..................................................

138,014

—

138,014

144,364

912,304

(86)

1,340,990

—

144,364

1,008,555

(57)

1,402,689

9,799,411

(557)

1,290,877

1,194,597

12,542,533

Accumulated other comprehensive income:

Valuation difference on available-for-sale securities ........

Deferred gains or losses on hedges.................................

Foreign currency translation adjustment ..........................

Accumulated adjustment for retirement beneﬁts .............

Total accumulated other comprehensive income ............

104,745

131

58,888

1,687

1,017,739

1, 276

(72,898)

3,867

(108,218)

—

(708,306)

37,582

35,846

(47,642)

348,292

NOTE 14

Subscription rights to shares *

............................

168

167,464

84

151,513

1,641

1,627,134

Minority interests.............................................................

Total net assets

¥1,494,357

¥1,298,553

$14,519,602

NOTE 15

Commitments and contingent liabilities *

Total liabilities and net assets............................................

¥2,874,074

¥2,487,635

$27,925,327

SUZUKI MOTOR CORPORATION 33

Consolidated Financial Statements

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

(Consolidated Statements of Income)

Years ended March 31, 2014 and 2013

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2

014

2013

2014

Net sales ..............................................................................

Cost of sales .......................................................................

Gross proﬁt.........................................................................

¥2,938,314

2,142,754

795,559

¥2,578,317

1,919,218

659,098

$28,549,496

20,819,610

7,729,886

Selling, general and administrative expenses ...............

607,812

187,747

514,534

144,564

5,905,681

1,824,205

Operating income..............................................................

Other income (expenses):

Interest and dividend income............................................

Interest expense ................................................................

Equity in earnings (losses) of afﬁliates..............................

Other, net............................................................................

Income before income taxes.........................................

18,441

(6,158)

(115)

19,550

(5,510)

664

179,178

(59,839)

(1,119)

(2,823)

197,090

(19,864)

139,403

(27,437)

1,914,987

NOTE 8

Income taxes: *

Current................................................................................

67,212

2,387

40,405

7,971

653,058

23,200

Deferred .............................................................................

69,600

48,377

676,258

Income before minority interests.......................................

Minority interests in income...............................................

Net income ..........................................................................

127,489

20,005

91,026

10,636

1,238,728

194,381

¥ 107,484

¥

80,389

$ 1,044,346

Yen

US dollars

Net income per share:

Primary ...............................................................................

Fully diluted........................................................................

Cash dividends per share .................................................

¥

191.60

191.57

24.00

143.31

131.67

18.00

$

1.86

0.23

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

3

4 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(Consolidated Statements of Comprehensive Income)

Years ended March 31, 2014 and 2013

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2

014

2013

2014

Income before minority interests .....................................

¥127,489

¥91,026

$1,238,728

Other comprehensive income

Valuation difference on available-for-sale securities ........

Deferred gains or losses on hedges.................................

Foreign currency translation adjustment ..........................

47,596

(1,196)

27,555

29,494

1,884

462,459

(11,626)

267,739

51,812

Share of other comprehensive income of associates

accounted for using equity method..................................

7,504

—

3,672

6,595

72,915

—

Change in equity................................................................

NOTE 12

Total other comprehensive income *

........................

81,459

93,459

791,488

Comprehensive income ....................................................

Comprehensive income attributable to:

208,949

184,485

2,030,216

Comprehensive income attributable to owners of the parent

Comprehensive income attributable to minority interests

187,105

21,844

168,188

16,297

1,817,966

212,250

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

SUZUKI MOTOR CORPORATION 35

Consolidated Financial Statements

Consolidated Statements of Changes in Net Assets

Years ended March 31, 2014 and 2013

Millions of yen

SUZUKI MOTOR

Thousands

CORPORATION

of shares

Total other

comprehen-

sive income

Subscription

rights to

shares

AND CONSOLIDATED

SUBSIDIARIES

of common

stock

Capital

stock

Capital

surplus

Retained

earnings

Treasury

stock

Minority

interests

Balance as of

March 31, 2012

561,047 ¥138,014 ¥144,364

¥834,296

¥(81) ¥(128,845)

¥— ¥124,009

Dividends from surplus ..

Change in equity........

Net income.................

—

(8,976)

6,595

—

80,389

Purchase of treasury

stock...........................

—

(5)

—

Net changes of items

other than shareholders’

equity...........................

—

81,203

84

27,504

Balance as of

March 31, 2013

561,047 ¥138,014 ¥144,364

¥912,304

¥(86) ¥(47,642)

¥84 ¥151,513

Dividends from surplus ..

Net income.................

—

(11,220)

107,484

—

Purchase of treasury

stock...........................

—

(13)

13

—

(5)

35

—

Disposal of treasury

stock...........................

Transfer of loss on dis-

posal of treasury stock

(13)

Net changes of items

other than shareholders’

equity .............................

—

83,488

83

15,950

Balance as of

March 31, 2014

561,047 ¥138,014 ¥144,364 ¥1,008,555

¥(57) ¥35,846

¥168 ¥167,464

Thousands of US dollars

Thousands

of shares

of common

stock

Total other

comprehen-

sive income

Subscription

rights to

shares

Capital

stock

Capital

surplus

Retained

earnings

Treasury

stock

Minority

interests

Balance as of

March 31, 2013

561,047 $1,340,990 $1,402,689 $8,864,214

$(843) $(462,908

)

$825 $1,472,150

Dividends from surplus ..

Net income.................

—

(109,022

)

—

1,044,346

Purchase of treasury

stock...........................

—

(128

128

—

(54

341

—

)

—

Disposal of treasury

stock...........................

)

Transfer of loss on dis-

posal of treasury stock

(128

)

Net changes of items

other than shareholders’

equity .............................

—

811,201

815

154,984

Balance as of

March 31, 2014

561,047 $1,340,990 $1,402,689 $9,799,411

$(557

)

$348,292

$1,641 $1,627,134

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

3

6 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

Consolidated Statements of Cash Flows

Years ended March 31, 2014 and 2013

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2014

2013

2014

Cashꢀﬂowsꢀfromꢀoperatingꢀactivities

Income before income taxes.............................................

¥197,090

117,188

1,029

¥139,403

93,680

458

$1,914,987

1,138,639

10,000

Depreciation and amortization..........................................

Impairment loss .................................................................

Increase (decrease) in provision for loss on liquidation of

subsidiaries and afﬁliates..................................................

Increase (decrease) in allowance for doubtful accounts

Interest and dividends income..........................................

Interest expenses ..............................................................

Foreign exchange losses (gains)......................................

Equity in (earnings) losses of afﬁliates..............................

Loss (gain) on valuation of securities ...............................

Loss (gain) on sales of investment securities...................

Loss (gain) on sales of property, plant and equipment ...

Decrease (increase) in notes and accounts receivable-trade

Decrease (increase) in inventories ...................................

Increase (decrease) in notes and accounts payable-trade

Increase (decrease) in accrued expenses ......................

Other, net............................................................................

Subtotal

(5,521)

(699)

(18,441)

6,158

6,718

115

44

(17)

(290)

(49,559)

(10)

72,664

12,680

12,621

351,772

18,999

(5,646)

(42,209)

322,915

5,521

44

(19,550)

5,510

670

(664)

3,849

(53,648)

(6,798)

(179,178)

59,839

65,278

1,119

428

(167)

(2,823)

(481,530)

(101)

706,030

123,207

122,633

3,417,917

184,601

(54,861)

(410,119)

3,137,537

—

200

10,247

(3,029)

(8,142)

11,608

(30,049)

209,759

19,466

(5,211)

(33,957)

190,057

Interest and dividends income received ..........................

Interest expenses paid......................................................

Income taxes paid.............................................................

Net cash provided by (used in) operating activities

Cashꢀﬂowsꢀfromꢀinvestingꢀactivities

Payments into time deposits .............................................

Proceeds from withdrawal of time deposits......................

Purchases of short-term investment securities ................

Proceeds from sales of short-term investment securities

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 of loans receivable ...........................................

Collection of loans receivable ...........................................

Other, net............................................................................

Net cash provided by (used in) investing activities

Cashꢀﬂowsꢀfromꢀﬁnancingꢀactivities

(77,477)

38,842

(209,912)

165,156

(204,739)

4,421

(2,712)

623

(1,086)

555

(32,908)

41,603

(113,726)

64,127

(163,929)

3,505

(4,002)

—

(436)

(752,797)

377,409

(2,039,567)

1,604,705

(1,989,302)

42,956

(26,356)

6,059

(10,556)

5,392

673

(5,465)

(210,559)

(230)

(286,559)

(2,235)

(2,784,292)

Net increase (decrease) in short-term loans payable......

Proceeds from long-term loans payable ..........................

Repayment of long-term loans payable ...........................

Redemption of bonds........................................................

Purchase of treasury stock................................................

Cash dividends paid .........................................................

Cash dividends paid to minority shareholders.................

Other, net............................................................................

Net cash provided by (used in) ﬁnancing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

24,691

30,000

(38,488)

—

(8,603)

190,482

(54,708)

(149,975)

(5)

(8,975)

(1,814)

(32)

(33,632)

4,706

(49,427)

710,530

¥661,102

239,907

291,488

(373,966)

—

(5)

(54)

(11,219)

(2,133)

(35)

(109,012)

(20,727)

(340)

2,809

27,295

10,342

49,508

661,102

¥710,611

100,495

481,035

6,423,463

$6,904,498

NOTE 10

Cash and cash equivalents at end of period *

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

SUZUKI MOTOR CORPORATION 37

Consolidated Financial Statements

Notes to Consolidated Financial Statements

NOTE 1:ꢀBasisꢀofꢀpresentingꢀconsolidatedꢀﬁnancialꢀstatements

The accompanying consolidated ﬁnancial statements of Suzuki Motor Corporation (The Company), consolidated Subsidiaries,

and Afﬁlites (The Group) have been prepared on the basis of generally accepted accounting principles and practices in Japan,

and the consolidated ﬁnancial statements were ﬁled with the Financial Services Agency as required by the Financial Instruments

and Exchange Act of Japan.

The preparation of the consolidated ﬁnancial statements requires the management to select and adopt accounting standards and

make estimates and assumptions that affect the reported amount of assets and liabilities, revenue and expenses, and the cor-

responding methods of disclosure.

As such, the management’s estimates are made reasonably based on historical results. But due to the inherent uncertainty in-

volved in making estimates, actual results could differ from these estimates.

For the convenience of readers outside Japan, certain reclassiﬁcations and modiﬁcations have been made to the original consoli-

dated ﬁnancial statements.

As permitted, an amount of less than one million yen has been omitted. For the convenience of readers, the consolidated ﬁnancial

statements, including the opening balance of shareholders’ equity, have been presented in US dollars by translating all Japanese yen

amounts on the basis of 102.92 to US$1, the rate of exchange prevailing as of March 31, 2014. Consequently, the totals shown in the

consolidated ﬁnancial statements (both in yen and in US dollars) do not necessarily agree with the sum of the individual amounts.

NOTE 2:ꢀSummaryꢀofꢀsigniﬁcantꢀaccountingꢀpolicies

(a) Principles of consolidation

The consolidated ﬁnancial statements for the years ended March 31, 2014 and 2013, include the accounts of The Group. And

the numbers of consolidated subsidiaries are 133 and 135 respectively. All signiﬁcant inter-company accounts and transac-

tions are eliminated in consolidation. Investments in afﬁliated companies are accounted for by the equity method.

The difference at the time of acquisition between the cost and underlying net equity of investments in consolidated subsidiar-

ies (goodwill) and in afﬁliated companies accounted for under the equity method is, as a rule, amortized on a straight-line

basis over a period of ﬁve years after appropriate adjustments.

The account settlement date of 28 consolidated subsidiaries is December 31, but Magyar Suzuki Corporation Ltd. and 4 oth-

ers are consolidated based on the ﬁnancial statements of provisional account settlement as of March 31. Other 23 subsidiar-

ies are consolidated with the ﬁnancial statements based on their respective account settlement date.

The account settlement date of other consolidated subsidiaries is the same as the consolidated account settlement date.

(b) Allowance for doubtful accounts

In order to allow for loss from bad debts, estimated uncollectible amount based on actual ratio of bad debt is appropriated as

to general receivable. As for speciﬁc receivable with higher default possibility, recoverable amount is estimated respectively

and uncollectible amount is appropriated.

(c) Allowance for investment loss

The differences between the book value and the fair value of securities and investment not quoted at an exchange are deter-

mined and appropriated as reserve in order to allow for losses from these investments.

(d) Provision for product warranties

The provision is appropriated into this account based on the warranty agreement and past experience in order to allow for

expenses related to the maintenance service of products sold.

(e) Provision for directors’ bonuses

In order to defray bonuses for directors and company auditors, estimated amount of such bonuses is appropriated.

(f)ꢀ Provisionꢀforꢀlossꢀonꢀliquidationꢀofꢀsubsidiariesꢀandꢀafﬁliates

Reasonably estimated amount is appropriated for anticipated loss caused by liquidation and restructuring of businesses oper-

ated by subsidiaries and afﬁliates.

(g)ꢀ Provisionꢀforꢀdirectors’ꢀretirementꢀbeneﬁts

The amount to be paid at the end of ﬁscal year had been posted pursuant to The Company’s regulations on the retirement

allowance of Directors and Company Auditors. However, The Company’s retirement beneﬁt system for them was abolished

at the closure of the Ordinary General Meeting of Shareholders held on June 2006. And it was approved at Ordinary General

Meeting of Shareholders that reappointed Directors and Company Auditors were paid their retirement beneﬁt at the time of

their retirement, based on their years of service. Estimated amount of such retirement beneﬁts is appropriated at the end of the

current consolidated ﬁscal year. Furthermore, for the Directors and Company Auditors of some consolidated subsidiaries, the

amount to be paid at the end of the year was posted pursuant to their regulation on the retirement allowance of Directors and

Company Auditors.

3

8 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(h) Provision for disaster

Reasonably estimated amount is appropriated for anticipated loss mainly caused by relocation of plants and facilities located

in the Ryuyo Region in Iwata City, Shizuoka Prefecture where massive tsunami damages caused by Tokai and Tonankai Earth-

quake are anticipated.

(i) Provision for product liabilities

With regards to the products exported to North American market, to prepare for the payment of compensation, not covered

by “Product Liability Insurance” the anticipated amount to be borne by The Group is computed and provided on the basis of

actual results in the past.

(j) Provision for recycling expenses

The provision is appropriated for an estimated expense related to the recycle of products of The Company based on actual

sales.

(k) Short-term investment securities and Investment securities

The Company and its subsidiaries hold securities of listed companies, which have a risk of price ﬂuctuations, and non-listed

companies whose stock prices are difﬁcult to be evaluated.

If we judge the decline in investment value is not temporary, we recognize revaluation loss based on the reasonable standard.

If the stock market falls, we may incur signiﬁcant loss on valuation of securities.

Securities have to be classiﬁed into four categories: trading securities; held-to-maturity debt securities; investments of The

Company in equity securities issued by consolidated subsidiaries and afﬁliates; and available-for-sale securities.

According to this classiﬁcation, securities held by The Company and its subsidiaries are available-for-sale securities. Avail-

able-for-sale securities for which market quotations are available are stated at market value method based on the market

values as of the consolidated account settlement date (The evaluation differences shall be reported as other comprehensive

income, and sales costs shall be calculated mainly by the moving average method).

Available-for-sale securities for which market quotations are unavailable are stated at cost by a moving average method.

(l) Hedge accounting

Gains or losses arising from changes in fair value of the derivatives designated as “hedging instruments” are deferred

until the gains and losses on the hedged items or transactions are recognized.

If foreign currency forward contracts meet certain criteria, exceptional hedge accounting is applied and these contracts

are handled together with hedged items.

The derivatives designated as hedging instruments by The Company and its subsidiaries are principally forward ex-

change contracts, interest swaps and cross currency interest rate swaps. The related hedged items are foreign currency

denominated transaction and borrowings.

The Company and its subsidiaries have a policy to utilize the above hedging instruments in order to reduce our expo-

sure to the risk of interest rate and foreign exchange ﬂuctuation. Thus, our purchases of the hedging instruments are

limited to, at maximum, the amounts of the hedged items. The Company and its subsidiaries evaluate effectiveness of its

hedging activities by reference to the accumulated gains or losses on the hedging instruments and the related hedged

items from the commencement of the hedges.

(m)Foreign currency translation

All monetary assets and liabilities denominated in foreign currencies, whether long-term or short-term are translated into Japanese yen

at the exchange rates prevailing at the balance sheet date. Resulting gains and losses are included in net income or loss for the period.

Assets and liabilities of the foreign subsidiaries and afﬁliates are translated into Japanese yen at the exchange rates prevailing at the

balance sheet date.

The components of net assets are translated into Japanese yen at their historical rates. Proﬁt and loss accounts for the ﬁscal year are

translated into Japanese yen using the average exchange rate during the ﬁscal year. Differences in yen amounts arising from the use of

different rates are presented as “foreign currency translation adjustments” and “minority interests” in the net assets.

(n) Inventories

Stated at cost mainly determined by the gross average method (Figures on the consolidated balance sheet are measured by

the method of book devaluation based on the reduction of proﬁtability).

SUZUKI MOTOR CORPORATION 39

Consolidated Financial Statements

(

o)ꢀ Methodꢀofꢀdepreciationꢀandꢀamortizationꢀofꢀsigniﬁcantꢀdepreciableꢀassets

a. Property, plant and equipment (excluding lease assets)

................ Mainly declining balance method for The Company and domestic subsidiaries and mainly straight-line

.

method for foreign subsidiaries.

Main durable years are as follows:

Buildings and structures

3 to 75 years

Machinery, equipment and vehicles 3 to 15 years

b. Intangible assets (excluding lease assets)

................. Straight-line method

c. Lease assets

Finance lease which transfer ownership

................ Straight-line method with the lease period as the durable years. As to lease assets with guaranteed residual

.

value under lease agreement, remaining value is the guaranteed residual value. And as to other lease as-

sets, remaining value would be zero.

(p) Income taxes

The provision for income taxes is computed based on the income before income taxes included in the consolidated state-

ments of income. The assets and liability approach is adopted to recognize deferred tax assets and liabilities for the expected

future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.

In making a valuation for the possibility of collection of deferred tax assets, The Company and its subsidiaries estimate their fu-

ture taxable income reasonably. If the estimated amount of future taxable income decrease, deferred tax assets may decrease

and income taxes expenses may be posted.

Consolidated tax payment has been applied to The Company and its domestic wholly owned subsidiaries since the year

ended March 31, 2012.

(q)ꢀ Retirementꢀbeneﬁts

With regard to calculation of retirement beneﬁt obligations, straight-line basis method was used to attribute expected beneﬁt to

period up to the end of this ﬁscal year. With regard to past service costs, they are treated as expense on a straight-line basis

over the certain years within the period of average length of employees’ remaining service years at the time when it occurs.

As for the actuarial gain or loss, the amounts, prorated on a straight-line basis over the certain years within the period of aver-

age length of employees’ remaining service years in each year in which the differences occur, are respectively treated as

expenses from the next term of the year in which they arise.

Retirement beneﬁt cost and retirement beneﬁt obligation are calculated based on the actuarial assumptions, which include

discount rate, assumed return of investment ratio, revaluation ratio, salary rise ratio, retirement ratio and mortality ratio. Dis-

count rate is decided on the basis of yield on low-risk, long-term bonds, and assumed return of investment ratio is decided

based on the investment policies of pension assets of each pension system etc.

Decreased yield on long-term bond leads to a decrease in discount rate and has an adverse inﬂuence on the calculation of

retirement beneﬁt cost. However, the pension system adopted by The Company has a cash balance type plan, and thus the

revaluation ratio, which is one of the base ratios, can reduce adverse effects caused by a decrease in the discount rate.

If the investment yield of pension assets is less than the assumed return of investment ratio, it will have an adverse effect on

the calculation of retirement beneﬁt cost. But by focusing on low-risk investments, this inﬂuence should be minimal in the case

of the pension fund systems of The Company and its subsidiaries.

(r) Net income per share

Primary net income per share is computed based on the weighted average number of shares issued during the respective

years. Fully diluted net income per share is computed assuming that all stock options are exercised. Cash dividends per

share are the amounts applicable to the respective periods including dividends to be paid after the end of the period.

(s) Cash and cash equivalents

All highly liquid investments with original maturities of three months or less when purchased are considered cash equivalents.

(t)ꢀ Reclassiﬁcation

Certain reclassiﬁcations of previously reported amounts are made to conform to current classiﬁcations.

4

0 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

NOTE 3: Changes in accounting principles and accounting estimates

(a)ꢀApplicationꢀofꢀaccountingꢀstandardꢀforꢀretirementꢀbeneﬁts

Accounting Standard for Retirement Beneﬁts (Accounting Standards Board of Japan (ASBJ) Statement No.26 of 17 May 2012)

and Guidance on Accounting Standard for Retirement Beneﬁts (ASBJ Guidance No.25 of 17 May 2012) has been applied

since the end of this ﬁscal year. (Except body text stipulated in article 35 of the Accounting Standard for Retirement Beneﬁts

and article 67 of Guidance on Accounting Standard for Retirement Beneﬁts) Pension assets are deducted from retirement

beneﬁt obligation and the net amount is recognized as liability for retirement beneﬁts, and previously unrecognized actuarial

gains or losses and past service costs are recognized as liabilities for retirement beneﬁts.

In accordance with transitional accounting as stipulated in article 37 of the Accounting Standard for Retirement Beneﬁts, the

effect of the change in accounting policies arising from initial application is recognized in accumulated adjustments for retire-

ment beneﬁt within the accumulated other comprehensive income.

As a result, ¥15,862 million of assets for retirement beneﬁts and ¥36,918 million of liabilities for retirement beneﬁts were recognized,

and Accumulated Other Comprehensive Income increased by ¥3,867 million, and minority interests decreased by ¥6 million.

(b) New accounting standards not yet applied

Accounting Standard for Retirement Beneﬁts (Accounting Standards Board of Japan (ASBJ) Statement No.26 of 17 May 2012)

and Guidance on Accounting Standard for Retirement Beneﬁts (ASBJ Guidance No.25 of 17 May 2012)

a. Overview

The accounting methods for unrecognized actuarial gains or losses and past service costs as well as the calculation

method for retirement beneﬁt obligations and service costs and the enhancement of disclosure have been revised.

b. Application date

The revision of the calculation method for retirement beneﬁt obligations and service costs will be applied from the beginning

of the consolidated ﬁscal year on or after April 1, 2014. Since transitional handling has been speciﬁed in mentioned above ac-

counting standard, the standard will not be applied retrospectively to the consolidated ﬁnancial statements of prior periods.

c. Effect of applying accounting standard

The effect on the consolidated ﬁnancial statements is being reviewed as of March 31, 2014.

NOTE 4: Financial Instruments

(a)ꢀ Mattersꢀforꢀconditionsꢀofꢀﬁnancialꢀinstruments

a.ꢀPolicyꢀforꢀﬁnancialꢀinstruments

As for the fund management, The Group uses short-term deposits and short-term investment securities, and as for the

fund-raising, The Group uses borrowings from ﬁnancial institutions such as banks and issuance of bonds. The Group uses

derivatives to hedge and manage the risks of interest-rates and exchange-rates ﬂuctuations, and does not use derivatives

for speculation purposes.

b.ꢀTypeꢀofꢀﬁnancialꢀinstruments,ꢀrisksꢀandꢀriskꢀmanagement

With respect to customers’ credit risks from operating receivables such as notes and accounts receivables-trade, in order

to mitigate the risks, The Group identiﬁes credit standing of major counterparties and manages due date and receivable

balance of each counterparty in line with our rules and regulations for credit control. The Group hedges risks of exchange-

rate ﬂuctuations from operating receivables denominated in foreign currency by forward exchange contract in principle.

Investment securities are mainly stocks of companies with which The Group has business relationship, and as for listed

stocks, The Group quarterly identiﬁes those fair values and reports them to the Board of Directors.

Most of accounts payable-trade are due within one year.

Applications of borrowings are fund for operating capital (mainly short-term) and capital expenditures (long-term), and The Group

uses interest-rate swaps for the interest rate risks of some long-term borrowings to ﬁx interest expenses. Also, The Group uses

cross currency interest rate swaps for ﬂuctuation of exchange rate in repayment of principle and interest rate risk to ﬁx cash ﬂow.

Objectives of derivative transactions are foreign currency forward contracts to hedge the risks of exchange-rate ﬂuctuations

related to receivables denominated in foreign currencies, interest rate swaps to hedge the risks of ﬂuctuations in interest rate

related to borrowings, and cross currency interest rate swaps to hedge the risk of ﬂuctuation in exchange rate and interest rate

related to borrowings. The Group executes and manages derivatives within the actual demand in line with our rules and regu-

lations which set out the authority to trade. In addition, in using derivatives, The Group deals with ﬁnancial institutions which

have high credit grade in order to reduce credit risks. With respect to hedge accounting, also please see Note 2 (l).

In addition, each of The Group company manages liquidity risk related to accounts payable and borrowings by making a

ﬁnancial plan.

c.ꢀSupplementꢀtoꢀfairꢀvaluesꢀofꢀﬁnancialꢀinstruments

Fair values of ﬁnancial instruments include values based on quoted prices in active markets and values assessed by ratio-

nal valuation techniques in case quoted prices are not available. Because the rational valuation techniques include variable

factors, the results of valuation may differ when different assumption is applied.

SUZUKI MOTOR CORPORATION 41

Consolidated Financial Statements

(b)ꢀ Mattersꢀforꢀfairꢀvaluesꢀofꢀtheꢀﬁnancialꢀinstruments

Carrying amounts in the consolidated balance sheet, fair values and difference as of March 31, 2014 and 2013 were as fol-

lows. Financial instruments whose fair value cannot be reliably determined are not included in the below table.

Millions of yen

2014

2013

Carrying

amount

Carrying

amount

Fair value

Difference

Fair value

Difference

Cash and deposits

¥358,851

310,694

¥358,851

311,221

¥

—

527

¥279,009

253,237

¥279,009

253,225

¥

—

(12)

Notes and accounts receivables-trade

Short-term investment securities and

Investment securities

Available-for-sale securities

Investments in afﬁliates

Total of assets

863,514

513

1,533,573

433,819

197,413

38,748

171,274

209,166

1,050,421

863,514

252

1,533,838

433,819

197,413

38,779

171,274

207,874

1,049,160

—

(261)

265

—

(31)

—

738,687

513

1,271,448

350,472

171,790

35,299

155,519

220,392

933,474

738,687

357

1,271,279

350,472

171,790

35,313

155,519

218,067

931,164

—

(155)

(168)

—

(14)

—

Accounts payable-trade

Short-term loans payable

Current portion of long-term loans payable

Accrued expenses

Long-term loans payable

Total of liabilities

1,291

1,260

2,324

2,310

Derivatives

Hedge accounting is applied

Hedge accounting is not applied

51

1,160

51

1,160

—

2,596

(1,845)

2,596

(1,845)

—

Thousands of US dollars

014

Fair value

2

Carrying

amount

Difference

Cash and deposits

$3,486,699 $3,486,699

$

—

Notes and accounts receivables-trade

Short-term investment securities and

Investment securities

3,018,792

3,023,913

5,121

Available-for-sale securities

Investments in afﬁliates

Total of assets

8,390,152

4,989

14,900,634 14,903,215

4,215,115

1,918,122

376,487

1,664,151

2,032,319

8,390,152

2,448

—

(2,541)

2,580

—

(304)

—

Accounts payable-trade

Short-term loans payable

Current portion of long-term loans payable

Accrued expenses

Long-term loans payable

Total of liabilities

4,215,115

1,918,122

376,791

1,664,151

2,019,765

12,553

12,249

10,206,195 10,193,946

Derivatives

Hedge accounting is applied

Hedge accounting is not applied

504

11,280

504

11,280

—

(*): Assets or liabilities derived from derivatives are shown on a net basis and net liabilities are shown as ( ).

4

2 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

*1.ꢀMattersꢀforꢀmethodsꢀusedꢀtoꢀmeasureꢀfairꢀvaluesꢀofꢀﬁnancialꢀinstruments

Assets:

a. Cash and deposits

Because fair values of deposits are approximately equal to the book values, book values are used as fair values.

b. Notes and accounts receivables-trade

Fair values of sales ﬁnance receivables are calculated on the discount method by the expected rate applied to new

loan contract, on each receivable classiﬁed into a certain term.

Notes and accounts receivables-trade except sales ﬁnance are settled in short term and those fair values are ap-

proximately equal to the book values. So book values are used as fair values.

c. Short-term investment securities and Investment securities

As to these fair values, fair values of stock are prices of exchanges. As to negotiable certiﬁcate of deposit and other

types of securities, book values are used as fair values because they are settled in short term and those fair values

are approximately equal to the book values.

Liabilities:

a. Accounts payable-trade, Short-term loans payable and Accrued expenses

Because these are settled in short term and those fair values are approximately equal to the book values, such book

values are used.

b. Current portion of long-term loans payable and Long-term loans payable

These fair values are measured by discounting based on the estimated interest rates at which similar new loans with

same amount of principal and interest could have been borrowed.

Derivatives:

Please refer to Note 4 (d) Derivative transactions.

*2. Financial instruments whose fair value cannot be reliably determined as of March 31, 2014 and 2013

Thousands of

US dollars

Millions of yen

2014

2013

2014

Available-for-sale securities

Unlisted stock other than stocks of afﬁliates

Unlisted stock of afﬁliates .............................

Others ............................................................

¥18,747

17,077

557

¥18,876

16,569

1,295

¥182,151

165,928

5,416

Those fair values cannot be reliably measured because market values are unavailable and future cash ﬂows cannot be

estimated. So they are not included in “short-term investment securities and investment securities”.

SUZUKI MOTOR CORPORATION 43

Consolidated Financial Statements

*3. The amounts to be redeemed after the account settlement date of monetary receivables and available-for-sale securities

Millions of yen

2014

2013

Over 1 year,

Over 5 years,

Within

10 years

Over 1 year,

Over 5 years,

Within

10 years

Within

year

Within

1 year

Within

1

5

years

5 years

Cash and deposits

Notes and

accounts receivables- trade

Securities and investment

securities with maturities

Total

¥ 358,851

49,336

¥

—

¥ —

¥ 279,009

203,859

¥

—

¥ —

2

60,831

526

48,822

555

612,489

¥1,220,677

—

¥526

559,609

¥1,042,478

—

¥555

¥60,831

¥48,822

Thousands of US dollars

014

2

Over 1 year,

Over 5 years,

Within

1

year

5

years

10 years

Cash and deposits

Notes and

accounts receivables- trade

Securities and i nvestment

securities with maturities

Total

$ 3,486,699

2,422,623

$

—

$

—

5,116

—

519,052

—

5,951,125

$11,860,449

$519,052

$5,116

4

4 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(c) Securities

a. Available-for-sale securities with market value as of March 31, 2014 and 2013

Millions of yen

2014

2013

Acquisition

cost

Carrying

Amount

Acquisition

Carrying

Amount

Difference

cost

Difference

Securities for which the carrying amount exceeds the acquisition costs

Stocks....................................................

Bonds....................................................

Others....................................................

Sub-Total

¥ 91,865

—

¥250,014 ¥ 158,148

¥ 86,883

—

¥176,008

—

¥ 89,124

—

175,441

¥267,307

181,767

6,325

144,648

¥231,531

147,424

¥323,432

2,776

¥431,782 ¥ 164,474

¥ 91,901

Securities for which the carrying amount does not exceed the acquisition costs

Stocks....................................................

Bonds....................................................

Others....................................................

Sub-Total

¥

1,928

5,000

¥

1,567

5,000

¥

(361)

—

¥

5,158

—

¥

4,356

—

¥

(801)

—

425,164

¥432,093

¥699,401

425,164

¥431,732

¥863,514

—

410,898

¥415,255

¥738,687

—

¥

(361) ¥416,056

¥647,588

¥

(801)

Total

¥164,113

¥91,099

Thousands of US dollars

2014

Acquisition

cost

Carrying

Amount

Difference

Securities for which the carrying amount exceeds the acquisition costs

Stocks.................................................... $ 892,593 $2,429,211 $1,536,618

Bonds....................................................

Others....................................................

Sub-Total

—

1,704,643

1,766,106

61,462

$2,597,237 $4,195,318 $1,598,080

Securities for which the carrying amount does not exceed the acquisition costs

Stocks....................................................

Bonds....................................................

Others....................................................

Sub-Total

$

18,739

48,581

$

15,231

48,581

$

(3,507)

—

4,131,021

—

$4,198,342 $4,194,834

$

(3,507)

Total

$ 6,795,579 $ 8,390,152 $1,594,573

b. Available-for-sale securities sold during 2014 and 2013

Thousands of

US dollars

Millions of yen

2014

2013

2014

Amounts sold.....................................................................

Gains on sales of available-for-sale securities .................

Loss on sales of available-for-sale securities ..................

¥165,779

¥64,127

—

$1,610,764

17

0

167

0

—

SUZUKI MOTOR CORPORATION 45

Consolidated Financial Statements

(d) Derivative transactions

The contract/notional amounts of derivatives which are shown in the below table do not represent The Group’s exposure to

market risk. As to fair values of derivatives which are shown in the below tables, commodity transactions are valued based on

market price. Other transactions are valued based on the price offered by ﬁnancial institutions.

a. Derivative transactions to which hedge accounting is not applied as of March 31, 2014 and 2013

Currency related transactions (non-market transactions)

014

Millions of yen

2

2013

Contract/

notional

amount

Amount

due after

one year

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Gain

(loss)

Fair value

(

Foreign currency

forward contracts

Selling

USD

¥ —

—

¥

—

¥

—

¥ 2,323

—

¥

73

¥

73

Buying

USD

JPY

Total

17,687

11,405

¥29,093

—

(142)

(262)

¥(404)

(142)

(262)

¥(404)

17,356

38,808

¥58,488

—

(6)

(2,772)

¥(2,705)

(6)

(2,772)

¥(2,705)

Thousands of US dollars

014

2

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Fair value

(

Foreign currency

forward contracts

Buying

USD

JPY

Total

$171,861

110,819

$282,681

—

$(1,384)

(2,547)

$(3,932)

$(1,384)

(2,547)

$(3,932)

Cross currency interest rate swap transactions (non-market transactions)

014

Millions of yen

2

2013

Contract/

notional

amount

Amount

due after

one year

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Gain

(loss)

Fair value

(

Pay ﬁxed

receive ﬂoating

Pay PHP

receive USD

Pay ﬂoating

receive ﬂoating

Pay INR

¥1,200

¥

—

¥

84

¥

84

¥

—

¥

—

¥ —

receive USD

7,153

¥8,353

4,769

¥4,769

1,536

¥1,620

1,536

¥1,620

6,537

¥6,537

6,537

¥6,537

762

¥762

762

¥762

Total

Thousands of US dollars

014

2

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Fair value

(

Pay ﬁxed

receive ﬂoating

Pay PHP

receive USD

Pay ﬂoating

receive ﬂoating

Pay INR

$11,659

$

—

$

822

$

822

receive USD

69,510

$81,169

46,340

$46,340

14,927

$15,750

14,927

$15,750

Total

4

6 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

Commodity-related transactions (market transactions)

014

Millions of yen

2

2013

Contract/

notional

amount

Amount

due after

one year

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Gain

(loss)

Fair value

(

Commodity

Futures contract

Buying

¥4,545

—

¥(55)

¥7,592

—

¥97

Total

Thousands of US dollars

014

2

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Fair value

(

Commodity

Futures contract

Buying

$44,164

—

$(537)

Total

Earthquake-related transactions

Fair values for derivative contract relating to earthquakes were not measured due to characteristic of instruments. So they are

not accounted for at fair values.

b. Derivative transactions to which hedge accounting is applied as of March 31, 2014 and 2013

Currency related transactions

Principle hedged item: Account receivable-trade, account payable-trade and long-term debt

014

Amount due

notional amount after one year

Millions of yen

2

2013

Amount due

notional amount after one year

Type

Contract/

Fair value

Foreign currency forward contracts (Principle hedge accounting)

Selling

USD

EUR

CAD

AUD

NZD

GBP

MXN

¥ 3,847

1,367

80

3,265

1,256

221

—

¥ (35)

(7)

¥22,369

18,902

1,583

2,941

515

—

¥

745

(130)

(30)

(151)

(14)

0

(95)

(40)

(1)

522

832

(49)

(25)

827

(6)

Buying

USD

EUR

JPY

70

7,225

—

2

(3)

—

1,498

2,304

7,200

—

(46)

(19)

(1,158)

Currency option transactions (Principle hedge accounting)

Buying

JPY

—

2,578

—

(356)

Foreign currency forward contracts (Exceptional hedge accounting)

Selling

USD

EUR

CAD

AUD

NZD

GBP

MXN

CNY

616

8,947

15

2,039

350

301

691

56

—

*

5,654

6,831

1,279

3,455

563

1,173

1,149

295

—

*

Buying

USD

EUR

JPY

—

679

—

*

383

477

412

—

*

Total

¥31,862

¥(188)

¥82,925

¥(1,237)

SUZUKI MOTOR CORPORATION 47

Consolidated Financial Statements

Thousands of US dollars

014

Amount due

notional amount after one year

2

Type

Contract/

Fair value

Foreign currency forward contracts (Principal hedge accounting)

Selling

USD

EUR

CAD

AUD

NZD

GBP

MXN

$ 37,378

13,285

786

31,732

12,207

2,152

—

$

(348)

(75)

4

(927)

(396)

(10)

(63)

8,043

Buying

USD

EUR

689

70,203

—

27

(37)

Foreign currency forward contracts (Exceptional hedge accounting)

Selling

USD

EUR

CAD

AUD

NZD

GBP

MXN

CNY

5,985

86,940

154

19,817

3,406

2,932

6,722

545

—

*

Buying

EUR

Total

6,604

$309,588

—

*

$(1,827)

*

Because these foreign currency forward contracts are handled together with hedged items, their fair values are included in that of hedged items.

4

8 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

Cross currency interest rate swap transactions

Principal hedged item: long-term debt

Millions of yen

2

014

2013

Amount due

notional amount after one year

Type

Contract/

Amount due

notional amount after one year

Contract/

Fair value

Principle hedge accounting

Pay ﬁxed

receive ﬂoating

Pay JPY

receive USD

Pay ﬁxed

receive ﬂoating

Pay IDR

¥121,243

2,319

¥ (73)

¥121,000

1,896

¥121,000

675

¥3,910

(35)

receive USD

3,782

2

Pay ﬁxed

receive ﬂoating

Pay THB

receive USD

12,940

311

—

Total

¥137,965

¥136,502

¥240

¥122,896

¥121,675

¥3,875

Thousands of US dollars

2014

Type

Contract/

notional amount after one year

Amount due

Fair value

Principle hedge accounting

Pay ﬁxed

receive ﬂoating

Pay JPY

receive USD

Pay ﬁxed

receive ﬂoating

Pay IDR

$

1,178,031

$1,178,031

22,535

$ (718)

36,753

26

receive USD

Pay ﬁxed

receive ﬂoating

Pay THB

125,730

3,024

receive USD

Total

$1,340,515

$1,326,298

$2,332

Commodity transactions

Principal hedged item: raw materials and supplies

Millions of yen

Fair value

2

014

Amount due

notional amount after one year

2013

Amount due

notional amount after one year

Type

Contract/

Fair value

Commodity futures contract (Principle hedge accounting)

Buying

Total

¥ —

—

¥ —

¥536

—

¥(41)

SUZUKI MOTOR CORPORATION 49

Consolidated Financial Statements

NOTE 5:ꢀShort-termꢀborrowingsꢀandꢀlong-termꢀdebt

Short-term borrowings as of March 31, 2014 and 2013 were as follows. The annual interest rates of short-term borrowings as of March 31, 2014

were from 0.24 percent to 12.25 percent.

Thousands of

US dollars

Millions of yen

2014

2013

2014

Short-term loans payable and current portion of Long-term

loans payable

Secured..............................................................................

Unsecured .........................................................................

Lease obligations due within one year.................................

¥

—

¥

—

$

—

236,161

46

207,090

27

2,294,609

452

¥236,207

¥207,118

$2,295,061

Long-term debt as of March 31, 2014 and 2013 were as follows:

Thousands of

US dollars

Millions of yen

2014

2013

2014

Long-term loans payable maturing through 2019

Secured..............................................................................

Unsecured .........................................................................

Lease obligations due more than one year..........................

Other interest-bearing debts (Long-term guarantee deposited)

¥

236

¥

307

$

2,293

2,030,025

702

208,930

72

220,084

21

13,655

222,894

12,716

¥233,130

132,683

¥

$2,165,705

As is customary in Japan, both short-term and long-term bank loans are subject to general agreements which provide that the banks

may, under certain circumstances, request additional security for those loans, and may treat any security furnished to the banks, as well

as cash deposited with them, as security for all present and future indebtedness.

5

0 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

The aggregate annual maturities of long-term debt, excluding other interest-bearing debt, outstanding as of March 31, 2014 were as follows:

Thousands of

Year ending March 31

Millions of yen

¥ 95,383

36,375

77,475

3

US dollars

$ 926,775

353,431

752,777

33

2016 .......................................................................................

2017 .......................................................................................

2018 .......................................................................................

2019 .......................................................................................

Thereafter...............................................................................

0

2

¥209,238

$2,033,021

Assets pledged as collateral as of March 31, 2014:

Thousands of

US dollars

Millions of yen

¥ 793

319

Property, plant and equipment .............................................

$ 7,712

3,107

Other intangible assets .........................................................

¥1,113

$10,820

Secured liabilities as of March 31, 2014:

Thousands of

US dollars

Millions of yen

¥236

Long-term loans payable......................................................

Others (noncurrent liabilities)................................................

$2,293

5,144

529

¥765

$7,438

NOTE 6: Loan commitment

The Company has the commitment line contract with ﬁve banks for effective ﬁnancing. The outstanding balance of this contract as of

March 31, 2014 and 2013 were as follows:

Thousands of

US dollars

Millions of yen

2014

2013

2014

Commitment line contract total.............................................

Actual loan balance...............................................................

Variance

¥200,000

—

¥200,000

—

$1,943,256

—

¥200,000

$1,943,256

SUZUKI MOTOR CORPORATION 51

Consolidated Financial Statements

NOTE 7:ꢀRetirementꢀandꢀseveranceꢀbeneﬁt

(Year ended March 31, 2013)

(a)ꢀ Outlineꢀofꢀadoptedꢀretirementꢀbeneﬁtꢀsystems

As for The Company, cash balance corporate pension plan and lump-sum retirement beneﬁt plan are established. And as for some

of consolidated subsidiaries, deﬁned beneﬁt corporate pension plan and lump-sum retirement beneﬁt plan are established.

Millions of yen

(b)ꢀ ComponentꢀofꢀretirementꢀbeneﬁtꢀobligationꢀasꢀofꢀMarchꢀ31,ꢀ2013

a. Retirement beneﬁt obligation

¥(108,739)

83,842

b. Pension assets

c. Unfunded retirement beneﬁt obligation (a+b)

d. Unrecognized difference by an actuarial calculation

e. Unrecognized past service cost (decrease of liabilities)

f. Net amount in consolidated balance sheet (c+d+e)

g Prepaid pension cost

¥ (24,897)

(810)

(4,063)

(29,771)

8,131

h. Provision for retirement beneﬁts (f-g)

¥ (37,903)

Remarks: 1) The premium retirement allowance paid on a temporary basis is not included.

) Some of subsidiaries adopt simplified methods for the calculation of retirement benefits.

2

(

c)ꢀ ComponentꢀofꢀretirementꢀbeneﬁtꢀcostꢀforꢀyearꢀendedꢀMarchꢀ31,ꢀ2013

Millions of yen

¥5,214

2,101

a. Service cost

b. Interest cost

c. Assumed return on investment

d. Amortized amount of actuarial difference

e. Amortized amount of past service cost

f. Retirement beneﬁt cost (a+b+c+d+e)

(699)

1,497

(734)

¥7,379

Remarks: “a. Service cost” includes retirement beneﬁts cost of some of subsidiaries caluculated by simpliﬁed methods.

(d)ꢀ Itemsꢀrelatedꢀtoꢀtheꢀcalculationꢀstandardꢀforꢀtheꢀretirementꢀbeneﬁtꢀobligation

a. Allocation method of the estimated

amount of retirement benefits

: Straight-line basis

b. Discount rate

: Mainly 2.00%

: 1.50%

c. Reassessment rate

d. Assumed return of investment ratio

: Mainly 0.77%

e. Number of years for amortization

of past service cost

: Mainly 15 years

To be amortized by straight-line method with

certain term within the employees’ average remaining

service years at the time when the difference was caused.

f. Number of years for amortization

of actuarial difference

: Mainly 15 years

To be amortized from the next fiscal year

by straight-line method with certain term within the

employees’ average remaining service years at the time

when the difference was caused.

5

2 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(Year ended March 31, 2014)

1.ꢀOutlineꢀofꢀadoptedꢀretirementꢀbeneﬁtꢀsystems

As for The Company, cash balance corporate pension plan and lump-sum retirement beneﬁt plan are established. And as for

some of consolidated subsidiaries, deﬁned beneﬁt corporate pension plan and lump-sum retirement beneﬁt plan are estab-

lished. As for some foreign consolidated subsidiaries, deﬁned contribution plan are established.

Some consolidated subsidiaries adopt simpliﬁed methods for the calculation of retirement beneﬁts.

2.ꢀDeﬁnedꢀbeneﬁtꢀplan

(a)ꢀReconciliationꢀofꢀretirementꢀbeneﬁtꢀobligationꢀfromꢀtheꢀopeningꢀbalanceꢀtoꢀtheꢀclosingꢀbalance

Thousands of

US dollars

Millions of yen

¥108,739

6,024

Opening balance of retirement beneﬁt obligation

Service cost

$1,056,548

58,538

Interest cost

2,199

21,373

Actuarial differences arised in current ﬁscal year

Retirement allowance paid

(611)

(5,940)

(4,940)

159

(48,003)

1,551

Past service cost arised in current ﬁscal year

Others

(475)

(4,623)

Closing balance of retirement beneﬁt obligation

¥111,096

$1,079,445

(b) Reconciliation of pension assets from the opening balance to the closing balance

Thousands of

US dollars

Millions of yen

¥83,842

825

Opening balance of pension assets

Expected return on pension assets

Actuarial differences arised in current ﬁscal year

Contribution from employers

Retirement allowance paid

$814,639

8,022

808

7,851

8,028

78,002

(34,127)

468

(3,512)

48

Others

Closing balance of pension assets

¥90,040

$874,856

(

c)ꢀReconciliationꢀbetweenꢀclosingꢀbalanceꢀofꢀretirementꢀbeneﬁtꢀobligationꢀandꢀpensionꢀassetsꢀandꢀnetꢀamountꢀofꢀliability/assetꢀ

forꢀretirementꢀbeneﬁtsꢀrecognizedꢀinꢀconsolidatedꢀbalanceꢀsheet

Thousands of

US dollars

Millions of yen

¥82,668

Deﬁned beneﬁt obligation of funded severance plan

Plan asset

$803,232

(874,856)

(71,623)

276,212

(90,040)

(7,371)

Deﬁned beneﬁt obligation of unfunded severance plan

28,427

Net amount of liability and asset for retirement beneﬁts

recognized in consolidated balance sheet

¥21,056

$204,589

Liability for retirement beneﬁts

Asset for retirement beneﬁts

¥36,918

(15,862)

$358,712

(154,123)

Net amount of liability and asset for retirement beneﬁts

recognized in consolidated balance sheet

¥21,056

$204,589

SUZUKI MOTOR CORPORATION 53

Consolidated Financial Statements

(d)ꢀBreakdownꢀofꢀretirementꢀbeneﬁtꢀexpenses

Thousands of

US dollars

Millions of yen

¥6,024

2,199

Service cost

$58,538

21,373

(8,022)

5,122

Interest cost

Expected return on plan assets

Recognition of actuarial gain and losses

Amortization of past service cost

Others

(825)

527

(636)

(6,182)

(6,382)

(656)

Total amount of retirement beneﬁt expenses for deﬁned

beneﬁt plans

¥6,633

$64,448

(

e)ꢀAccumulatedꢀadjustmentꢀforꢀretirementꢀbeneﬁt

Breakdown of accumulated adjustment for retirement beneﬁt recognized were as follows:

Thousands of

US dollars

Millions of yen

¥3,276

Unrecognized past service cost

Unrecognized actuarial gain and losses

Total

$31,837

2,742

26,642

¥6,018

$58,480

(f) Plan assets

a. Major breakdown of pension assets

Portion of major components to total pension assets were as follows:

Debt securities

51.1%

38.0%

10.9%

100.0%

General account of life insurance companies

Others

Total

b. Method to determine long-term expected return on plan assets

Expected return on pension assets were determined by considering the current and anticipated future portfolio of pension

assets and current and anticipated future long-term performance of various asset classes that comprise pension assets.

(g) Actuarial assumptions

Discount rate

2.00%

0.82%

Expected long-term return on pension assets

3

.ꢀDeﬁnedꢀcontributionꢀplan

Contribution to deﬁned contribution plan by The Company and consolidated subsidiaries is 216 million yen

(2,104 thousand US dollars).

5

4 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

NOTE 8: Income taxes

Breakdown of deferred tax assets and deferred tax liabilities by their main occurrence causes were as follows:

Thousands of

US dollars

Millions of yen

2014

2013

2014

Deferred tax assets

Excess-depreciation and Impairment loss.......................

Various reserves.................................................................

Unrealized proﬁts elimination............................................

Loss on valuation of securities..........................................

Deferred assets and others...............................................

Others.................................................................................

Gross deferred tax assets total.......................................

Valuation allowance...........................................................

Deferred tax assets total .................................................

¥ 59,105

39,548

¥ 68,083

41,433

$ 574,283

384,268

20,876

18,725

202,839

12,254

12,648

119,071

3,367

3,154

32,723

82,757

76,845

804,095

217,910

(54,930)

¥162,980

220,892

(48,183)

¥172,708

2,117,283

(533,715)

$1,583,567

Deferred tax liabilities

Valuation difference on available-for-sale securities ........

¥(56,219)

¥ (30,468)

$(546,247)

Variance from the complete market value method of

consolidated subsidiaries .................................................

(5,243)

(3,603)

(5,167)

(3,555)

(50,948)

(35,012)

Reserve for advanced depreciation of noncurrent assets ...

Others.................................................................................

Deferred tax liabilities total..............................................

Net amounts of deferred tax assets..................................

(2,071)

(4,140)

(20,131)

(67,138)

¥ 95,841

(43,332)

¥129,376

(652,340)

$ 931,226

The differences between the statutory tax rate and the effective tax rate were summarized as follows:

2014

2013

Statutory tax rate....................................................................

Effect of change of tax rate ...............................................

Tax credit............................................................................

Tax rate difference (consolidated overseas subsidiaries)

Others.................................................................................

Effective tax rate....................................................................

37.2%

3.1%

37.2%

2.7%

(5.9%)

—%

(3.3%)

(2.0%)

0.3%

0.7%

34.7%

35.3%

SUZUKI MOTOR CORPORATION 55

Consolidated Financial Statements

NOTE 9: Research and development costs

Research and development costs included in selling, general and administrative expenses, for the years ended March 31, 2014 and

2013 were as follows:

Thousands of

US dollars

Millions of yen

2014

2013

2014

Research and development costs........................................

¥127,090

¥119,269

$1,234,843

NOTE 10: Cash and cash equivalents

Cash and cash equivalents as of March 31, 2014 and 2013 were as follows:

Thousands of

US dollars

Millions of yen

2014

2013

2014

Cash and deposits ............................................................

Short-term investment securities.......................................

Time deposits with maturities of over three months.........

Bonds etc. with redemption period of over three months

¥358,851

612,489

(73,370)

(187,359)

¥279,009

559,609

$3,486,699

5,951,125

(712,886)

(34,845)

(142,670)

¥661,102

(1,820,440)

$6,904,498

¥

710,611

NOTE 11: Net assets

The Companies Act of Japan requires that at least 50% of the contribution of new shares be included in capital stock. The portion to be

recorded as capital stock is determined by resolution of the meeting of the Board of Directors. Proceeds in excess of the capital stock

should be credited to “legal capital surplus”.

The Companies Act provides that an amount equivalent to 10% of cash dividends should be appropriated as a legal capital surplus or

legal retained earnings until total amount of them reaches a certain limit, deﬁned as 25% of the capital stock.

The Companies Act allows both legal capital surplus and legal retained earnings to be transferred to the capital stock following the ap-

proval at an Ordinary General Meeting of Shareholders.

The legal retained earnings of The Company and its subsidiaries are included in “retained earnings” on the consolidated balance sheet

and are not shown separately.

According to the Companies Act, the articles of incorporation allow to repurchase treasury stock and dispose of such treasury stock by

resolution of meeting of the Board of Directors.

5

6 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

NOTE 12: Other comprehensive income

Other comprehensive income in the current consolidated ﬁscal year comprised were as follows:

Thousands of

US dollars

Millions of yen

2

014

2013

¥48,141

(3,305)

2014

Valuation difference on available-for-sale securities

Unrealized loss (gain) arising during the period..............

¥73,280

$ 712,011

Reclassiﬁcation adjustment of unrealized gain (loss)

through proﬁt or loss..........................................................

40

73,320

392

712,404

Before tax effect.................................................................

Tax effect............................................................................

Balance at the end of the period.......................................

Deferred gains or losses on hedges

44,835

(15,340)

¥29,494

(25,724)

¥47,596

(249,944)

$ 462,459

Unrealized loss (gain) arising during the period..............

¥ (4,119)

¥ 3,126

$ (40,024)

Reclassiﬁcation adjustment of unrealized gain (loss)

through proﬁt or loss..........................................................

1,785

(2,333)

1,136

447

3,573

17,353

(22,671)

11,044

Before tax effect.................................................................

Tax effect............................................................................

Balance at the end of the period.......................................

Foreign currency translation adjustment

(1,689)

¥ 1,884

¥ (1,196)

$ (11,626)

Unrealized loss (gain) arising during the period..............

¥27,748

¥45,254

$ 269,610

Reclassification adjustment of unrealized gain (loss)

through proﬁt or loss..........................................................

(192)

6,557

(1,871)

Balance at the end of the period

¥27,555

¥51,812

$ 267,739

Share of other comprehensive income of associates

accounted for using equity method

Unrealized loss (gain) arising during the period

Change in equity

¥ 7,504

¥ 3,672

$ 72,915

The amount arising during the period ..............................

Total other comprehensive income ...............................

¥

—

¥ 6,595

¥93,459

$

—

¥81,459

$ 791,488

NOTE 13: Cash dividends

Resolution

Ordinary General

Meeting of Shareholders

held on June 27, 2013

Meeting of the

Board of Directors

held on November 1, 2013

Total amount of cash dividends

Cash dividends per share

Record date

¥5,610 million

¥10.00

$54,510 thousand

$0.097

¥5,610 million

¥10.00

September 30, 2013

November 29, 2013

$54,511 thousand

$0.097

March 31, 2013

June 28, 2013

Effective date

Dividends which record date was in the current consolidated ﬁscal year and effective date was in the next ﬁscal year

Resolution

Ordinary General

Meeting of Shareholders

held on June 27, 2014

Total amount of cash dividends

Cash dividends per share

Record date

¥7,854 million

¥14.00

$76,317 thousand

$0.136

March 31, 2014

June 30, 2014

Effective date

SUZUKI MOTOR CORPORATION 57

Consolidated Financial Statements

NOTE 14: Stock option plan

The Company adopts stock option plan by using subscription rights to shares.

The plan was adopted at the Ordinary General Meeting of Shareholders and meeting of the Board of Directors held on June 28, 2012,

June 27, 2013 and June 27, 2014 based on The Company Act of Japan.

The details of the plan were as follows:

1. Resolution date

June 28, 2012

2. Category and number of people to whom stock options are granted

1

6

0 Directors of The Company (excluding Outside Directors)

Managing Ofﬁcers who do not concurrently serve as Directors

3

4

5

6

7

. Class of shares that are the subject of subscription rights to shares

Common stock of The Company

. Number of shares

7

4,000 shares

. Amount to be paid for subscription rights to shares

yen per 1 share

1

. Period during which subscription rights to shares can be exercised

From July 21, 2012 to July 20, 2042

. Terms of exercise of subscription rights to shares

(

1) A person who is allocated subscription rights to shares shall be able to exercise share subscription rights only up until

10th day (the next business day if the 10th day falls on a non-business day) from the day immediately following the date

of resignation as The Company’s Director as well as the Senior Managing Ofﬁcer or Managing Ofﬁcer without the role of

Director being served concurrently.

2) If a person who is allocated subscription rights to shares was dead, heir may exercise the rights.

(

8. Matters relating to assignment of subscription rights to shares

The acquisition of subscription rights to shares by assignment shall require the approval of the Board of Directors of The

Company.

9. Matters relating to subrogation payment

None

1. Resolution date

June 27, 2013

2. Category and number of people to whom stock options are granted

7

Directors of The Company (excluding Outside Director)

10 Senior Managing Ofﬁcers and Managing Ofﬁcers who do not concurrently serve as Directors

3

4

5

6

7

8

9

. Class of shares that are the subject of subscription rights to shares

Same to the plan adopted at June 28, 2012

. Number of shares

46,200 shares

. Amount to be paid for subscription rights to shares

Same to the plan adopted at June 28, 2012.

. Period during which subscription rights to shares can be exercised

From July 20, 2013 to July 19, 2043

. Terms of exercise of subscription rights to shares

Same to the plan adopted at June 28, 2012

. Matters relating to assignment of subscription rights to shares

Same to the plan adopted at June 28, 2012

. Matters relating to subrogation payment

Same to the plan adopted at June 28, 2012

5

8 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

1. Resolution date

June 27, 2014

2. Category and number of people to whom stock options are granted

7

6

Directors of The Company (excluding Outside Director)

Managing Ofﬁcers who do not concurrently serve as Directors

3

4

5

6

7

8

9

. Class of shares that are the subject of subscription rights to shares

Same to the plan adopted at June 28, 2012

. Number of shares

37,700 shares

. Amount to be paid for subscription rights to shares

Same to the plan adopted at June 28, 2012.

. Period during which subscription rights to shares can be exercised

From July 23, 2014 to July 22, 2044

. Terms of exercise of subscription rights to shares

Same to the plan adopted at June 28, 2012

. Matters relating to assignment of subscription rights to shares

Same to the plan adopted at June 28, 2012

. Matters relating to subrogation payment

Same to the plan adopted at June 28, 2012

NOTE 15: Contingent liabilities

As of March 31, 2014 and 2013, The Company and some of consolidated subsidiaries had the contingent liabilities as follows:

Thousands of

US dollars

Millions of yen

2

014

2013

¥8,159

2014

Guarantee of indebtedness of afﬁliates and others.........

¥8,277

—

$80,427

—

Trade notes discounted.....................................................

51

¥8,277

¥8,210

$80,427

NOTE 16: Segment Information

1. Outline of reportable segments

The reportable segments of The Company are the components of The Company business for which discrete ﬁnancial informa-

tion is available, and whose operating results are regularly reviewed by our decision-making body such as Board of Directors

to make decisions about resources to be allocated to the segment and to assess its performance.

The Group has three reportable segments of “Motorcycle”, “Automobile” and “Marine and Power products, etc.” based on the

form of management organization and nature of products and services.

Main products and services of each segment are as follows:

Segment

Main products and services

Motorcycles, All-terrain vehicles

Minivehicles, Sub-compact vehicles, Standard-sized vehicles

Motorcycle

Automobile

Marine and Power products, etc. Outboard motors, Engines for snowmobiles, etc., Electro senior vehicles, Houses

2.ꢀMethodsꢀofꢀmeasurementꢀforꢀtheꢀamountsꢀofꢀnetꢀsales,ꢀproﬁtꢀorꢀloss,ꢀassetsꢀandꢀotherꢀitemsꢀforꢀeachꢀreportableꢀsegment

The accounting policies of the reportable segments are consistent to the description of the “Summary of signiﬁcant accounting

policies” (Note2).

SUZUKI MOTOR CORPORATION 59

Consolidated Financial Statements

3.ꢀInformationꢀaboutꢀtheꢀamountsꢀofꢀnetꢀsales,ꢀproﬁtꢀorꢀloss,ꢀassetsꢀandꢀotherꢀitemsꢀbyꢀreportableꢀsegmentꢀ(YearsꢀendedꢀMarchꢀ31)

Millions of yen

2014

Marine & Power

products, etc.

Motorcycle

Automobile

Adjustment

Consolidated

Net Sales:

Net sales to external customers ...

Segment proﬁt .......................

Segment assets.....................

¥266,602 ¥2,615,664

¥56,046

8,346

¥

—

¥2,938,314

187,747

105

179,296

222,413

1,649,071

42,668

959,921

2,874,074