Suzuki Motor | Annual Report 2015

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

Corporate Governance Issues _______________________________________________ 18

Risks in Operations ________________________________________________________ 26

The Status of the Corporate Group___________________________________________ 28

Financial Section __________________________________________________________ 30

Company Outline __________________________________________________________ 66

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

to ¥17.00 per share. As a result, the annual dividends including in-

terim dividends were ¥27.00 per share and up by ¥3.00 per share

from the previous ﬁscal year.

In future years, under the foregoing point of view, we will also deter-

mine the proﬁt distribution based on the performance of ﬁscal year.

Management results of this ﬁscal year

The management environment of the Group for ﬁscal 2014 in over-

seas economy is showing a moderate recovery trend, despite inﬂu-

ence by the trend of normalization of monetary policy in the US,

unpredictable economic outlook for emerging countries, downfall

in crude oil prices and geopolitical risk in some regions. Particularly

in India, it shows a steady recovery trend because of reformation by

the newly-elected government and low price of crude oil.

On the other hand, outlook for Japanese economy is unpredict-

able partly owing to the impact of the hike in the rate of con-

sumption tax.

Outstanding issues

The Group sets 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.

Under these circumstances, the consolidated net sales of this ﬁs-

cal year (April 2014 to March 2015) increased by ¥77.2 billion (2.6%)

to ¥3,015.5 billion compared to the previous ﬁscal year. The Com-

pany was able to recover the net sales to ¥3.0 trillion, which had

declined after the ﬁnancial crisis of 2008. The Japanese domestic

net sales decreased by ¥38.1 billion (3.4%) to ¥1,094.6 billion

year-on-year owing to the decrease in the automobile sales.

However, the overseas net sales increased by ¥115.3 billion (6.4%)

to ¥1,920.9 billion year-on-year mainly owing to the increase in

the automobile sales in India.

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

creased by ¥8.3 billion (4.4%) to ¥179.4 billion year-on-year.

Although the decrease in the income in Indonesia and Thailand

were covered by the increase in the income in India, the operating

income decreased mainly owing to the increase in the operating

expenses of Japan and overseas. The ordinary income decreased

by ¥3.5 billion (1.8%) to ¥194.3 billion year-on-year. The net in-

come decreased by ¥10.6 billion (9.9%) to ¥96.9 billion year-on-

year mainly owing to the increase in the adjustment of minority

interests in income.

-

Strengthening of quality management system

The Group takes the quality management seriously as a manage-

ment issue of utmost importance that needs to be addressed as

early as possible. The Group will review its quality management sys-

tem fundamentally for the purpose of preventing the recurrence.

-Product development and strengthening of research and devel-

opment

The Group will make eﬀort to strengthen research and develop-

ment such as environment technology, fuel eﬃcient technology,

weight reduction technology, safety technology, information and

communications technology and product designing ability to

enhance competitiveness of products. Also, the Group will make

eﬀort to reduce costs by improving eﬃciency of development by

integrating engine, powertrain and platform, standardization of

parts and others.

-Strengthening of manufacturing capability

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.

Basic policies for proﬁt distribution

The Group’s earnings heavily depend on the overseas production

sites located mainly at emerging countries and are susceptible

to the ﬂuctuations of foreign currencies. Furthermore, the Group

plans to invest actively on such overseas sites going forward. With

a view for the Group to achieve a sustainable growth in the future,

it is indispensable to strengthen the Company’s structure and pre-

pare for unexpected contingency.

The Company determines the proﬁt distribution with the dividend

payout ratio of approximately 15% based on the performances,

strengthening of the corporate nature and full internal reserve

for future business expansion and others from the medium to

long term viewpoint, with the emphasis on the continuous and

stable distribution.

-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.

As to this ﬁscal year, although the income decreased year–on-

year, with the consolidated dividend payout ratio, the year-end

dividends were up by ¥3.00 per share from the previous ﬁscal year

-Reconstruction of motorcycle business

As for the Motorcycle business, the Group will review its omni-

2

SUZUKI MOTOR CORPORATION

A Message from the Management

directional business strategy and take aggressive steps such as

selecting and concentrating the region, product and technology,

strengthening its marketing capability, shortening its development

period, introducing its products in timely manner and challenging

to state-of-the-art technology and design, among others, thereby

oﬀering value that exceeds customers’ expectations. By so doing,

The Group will be aiming at recovering its presence in the motor-

cycle market.

relocating plants and facilities in Ryuyo region in Iwata City, Shi-

zuoka Prefecture since massive tsunami damages are anticipated

in the region, to inland area 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. Fur-

ther, 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 continue to

enhance its preparedness against natural disasters.

-Commitment to global environmental problem

Concerning the environmental issues, the Group has been oﬀering

minivehicles in Japan and many types of compact vehicles that

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

tries. The Group believes that a spread of such compact vehicles

would be one of the best ways to contribute to solving the envi-

ronmental issues.

In addition to enhancement of next generation environmental

technology in “Suzuki Green Technology”, the Group will continue

to tackle global environmental problem based on “Suzuki Environ-

mental Plan 2015” and “Suzuki Biodiversity Protection Guideline”.

The Group has been carrying out the motto "Develop products of

superior value by focusing on the customer" in the ﬁrst paragraph

of its mission statement. The Group will continuously strive for

manufacturing of really valuable products appreciated by customers.

With the slogan, "Small Cars for a Big Future", the Group commits

itself in promoting “production of small and subcompact ve-

hicles” and “development of environmentally benign products”

needed by customers.

The Group makes eﬀorts to be “Smaller, Fewer, Lighter, Shorter,

and Cleaner” on every side and works for the eﬃcient, well-knit

and healthy management.

-

Disaster prevention

Our executive oﬃcers and employees will strictly adhere to all

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

with sincerity.

We look forward to the continued support and encouragement of

our stockholders.

While the Group has been taking various measures to prevent

anticipated damage caused by Tokai and Tonankai Earthquake,

after experiencing the Great East Japan Earthquake, it has diversi-

ﬁed production and research sites including overseas. Firstly, it is

Representative Director and Chairman (CEO)

Osamu Suzuki

Representative Director and

Executive Vice President

Representative Director and

Vice Chairman

President (COO)

Yasuhito Harayama

Osamu Honda

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 31 March, 2015 and 2014

(

2015

2014

2015

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

¥3,015,461

96,862

¥2,938,314

107,484

$25,093,298

806,044

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

Net income per share:

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

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

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

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

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

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

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

172.67

172.63

191.60

191.57

1.44

27.00

24.00

0.22

1,701,390

2,008,729

3,252,800

134,377

1,494,357

1,790,832

2,874,074

117,188

14,158,199

16,715,730

27,068,326

1,118,228

Note: Yen amounts are translated into US dollars, for convenience only, at ¥120.17=US$1, the prevailing exchange rate on

3

1 March, 2015.

Net Sales

Net Income

Years ended 31 March

(Millions of yen)

Net Income Per Share

Years ended 31 March

(yen)

Years ended 31 March

(

Millions of yen)

107,484

191.60

172.67

9

6,862

3

,938,314

,015,461

2

143.31

8

0,389

2

,608,217

2

,512,186

,578,317

5

3,887

96.06

8

0.65

4

5,174

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

4

SUZUKI MOTOR CORPORATION

Year in Review

n Production

Overseas

Japan

Automobile Production

Years ended 31 March

(Thousand units)

Total

2

011

1,884

1,782

994

1,020

2,878

2012

2013

2014

2015

2,802

1,834

1,859

1,044

998

2,878

2,857

1,988

1,055

3,043

Overseas

Japan

Motorcycle Production

Years ended 31 March

(Thousand units)

ATV included)

(

Total

2

011

2,550

2,400

2,100

1,852

1,645

185 2,735

174 2,574

169 2,269

180 2,033

154 1,799

2012

2013

2014

2015

n 2015 Net Sales

2

015 Net Sales By Products

2015 Net Sales By Market

(Year ended 31 March, 2015 Millions of yen)

(

Year ended 31 March, 2015 Millions of yen)

Marine & Power

Products, etc.

Others

268,325

8.9%

63,033

2.1%

North

Motorcycle

Europe

372,028

12.3%

America

Japan

1,094,611

36.3%

250,485

6

5,976

.2%

8.3%

2

Asia

1,214,519

40.3%

Automobile

2

,701,942

89.6%

SUZUKI MOTOR CORPORATION 5

Year in Review

Automobiles

Suzuki’s Worldwide Manufacturing and Sales

Total overseas automobile production for ﬁscal 2014 increased by 6.9% year-on-year to 1,988,000 units. Worldwide production, including

Japan, also increased by 6.5% year-on-year to 3,043,000 units.

Sales of automobiles in overseas market increased by 6.6% year-on-year to 2,111,000 units, while total global sales, including Japan, also

increased by 5.8% year-on-year to 2,867,000 units.

Operating Results by Segment

In the automobile business, the operating income decreased by ¥7.5 billion to ¥171.8 billion year-on-year mainly owing to the decrease in

the income in Japan, Indonesia, and Thailand, despite the increase in the income in India.

The Japanese Market

1. Overview of the Japanese Automobile Market

Total domestic automobile sales volume in ﬁscal 2014 declined by 7% year-on-year to 5,297,000 units. It fell year-on-year for the ﬁrst time

in four ﬁscal years because a consumption-tax hike in April 2014 dampened demand. Sales of registered vehicles fell by 9% year-on-year to

3,124,000 units. Sales of minivehicles fell by 4% year-on-year to 2,173,000 units. Still, sales of minivehicles exceeded 2,000,000 units for the

second ﬁscal year in a row. Minivehicles accounted for 41% of overall automobile sales. The proportion exceeded 40% for the ﬁrst time.

2. Suzuki Sales

Suzuki’s domestic automobile sales in ﬁscal 2014 grew year-on-year in volume terms for the

fourth ﬁscal year in a row. They rose by 4% year-on-year to a record-high 756,000 units.

Suzuki’s sales of minivehicles grew by 5% year-on-year to a record-high 679,000 units.

The key driver of that growth was steady demand for the Hustler. Suzuki’s sales

of registered vehicles fell year-on-year for the second ﬁscal year in a row. They

declined by 6% year-on-year to 76,000 units.

3. Suzuki Topics in Fiscal 2014

•

In August 2014, Suzuki enhanced the WagonR by launching versions

equipped with a newly developed fuel-saving system called S-ENE

CHARGE. The WagonR versions equipped with S-ENE CHARGE have the

1

Alto

best fuel economy of any miniwagon* (a minicar with an overall height of at least 1,550mm) in Japan.

•

The Hustler mini-crossover won acclaim for creating a new genre. It won numerous awards including 2014–2015 Japan Automobile Hall of

Fame Car of the Year and 2015 RJC Car of the Year.

In December 2014, Suzuki launched a comprehensively enhanced version of the Alto minicar. The new Alto has a simple, stylish exterior

2

design. Also, lower weight and higher powertrain eﬃciency give it the best fuel economy of any gasoline-engine vehicle in Japan* . In March

2015, Suzuki expanded the Alto range by adding the sporty Alto Turbo RS.

•

In February 2015, Suzuki launched the ﬁrst comprehensively enhanced versions of the Every (a one-box commercial

minivan) and Every Wagon (a one-box mini passenger vehicle) in nine and a half years. The

new versions oﬀer even greater roominess, fuel eﬃciency, and user-friendliness.

In February 2015, Suzuki launched the SX4 S-CROSS compact crossover. The

Company is having the SX4 S-CROSS built by its Hungarian subsidiary, Magyar

Suzuki, and is importing it into Japan.

*

1 Suzuki measured the fuel economy of the S-ENE CHARGE-equipped WagonR in the JC08

test cycle and had it veriﬁed by Japan’s Ministry of Land, Infrastructure, Transport and

Tourism. Suzuki’s claim to the best fuel economy of any miniwagon in Japan is based on

the Company’s research in August 2014.

*

2 Suzuki measured the fuel economy of the new Alto in the JC08 test cycle. Suzuki’s claim

to the best fuel economy of any gasoline-engine vehicle in Japan is based on the Com-

pany’s research in December 2014 and excludes hybrids.

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 grew in ﬁscal 2014 by 4% year-on-year to 2,601,000 units. One rea-

son for this growth was evidence of a moderate economic pickup following the change of government in May 2014. Sales in the ﬁve key

ASEAN countries (Indonesia, Thailand, Vietnam, the Philippines, and Malaysia) fell by 8% year-on-year to 3,088,000 units. The drop was par-

ticularly marked in Indonesia and Thailand. Sales fell in Indonesia because of an economic slump and a weak rupiah. Sales fell in Thailand

because the previous government’s policies had left households with greater debt and because less ﬁnancing was available for purchases.

Sales in Europe (the European Union and the European Free Trade Association) grew by 8% year-on-year owing to an economic recovery

that began the previous ﬁscal year. Sales in China grew by 5% year-on-year to 23,702,000 units.

2. Suzuki Sales

Suzuki’s overseas automobile sales volume in ﬁscal 2014 grew by 7% year-on-year to 2,111,000 units as economic conditions in the Com-

pany’s overseas markets showed moderate recovery. Suzuki’s sales in India rose by 11% year-on-year to 1,171,000 units owing to strong

demand for models including the new Celerio, Alto K10, and Ciaz. Suzuki’s sales in the ﬁve key ASEAN countries fell by 18% year-on-year to

184,000 units owing mainly to an economic slump. Suzuki’s sales in China grew by 11% year-on-year to 257,000 units owing mainly to the

launch of the SX4 S-CROSS. Suzuki’s sales in Europe (the European Union and the European Free Trade Association) grew by 1% year-on-

year to 161,000 units owing partly to the launch of the Celerio and Vitara and partly to sales of the SX4 S-CROSS throughout the ﬁscal year.

3. Suzuki Topics in Fiscal 2014

•

In April 2014, Suzuki launched a minivehicle-based WagonR in Pakistan.

•

In August 2014, cumulative worldwide sales of the Swift (a series

that Suzuki launched in 2004) reached four million units.

•

In October 2014, Suzuki began a series of launches for the Ciaz

by putting it on the market in India.

•

In November 2014, Suzuki launched a completely updated Alto K10.

In January 2015, Suzuki ceremonially laid the foundation stone for

a new plant in Gujarat.

•

In March 2015, Suzuki held a ceremony as the ﬁrst unit of the

Europe-speciﬁcation Vitara rolled oﬀ the production line.

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

units for the ﬁfth 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

Celerio

Ciaz

Vitara

8

SUZUKI MOTOR CORPORATION

Year in Review

Motorcycles

Suzuki’s Worldwide Manufacturing and Sales

Total overseas motorcycle production (including ATVs) in fiscal 2014 decreased by

11.2% year-on-year to 1,645,000 units. Worldwide production, including production in

Japan, also decreased by 11.5% year-on-year to 1,799,000 units.

Sales of motorcycles (including ATVs) in overseas market decreased by 13% year-on-

year to 1,696,000 units, while total global sales, including Japan, also decreased by

12.8% year-on-year to 1,763,000 units.

Operating Results by Segment

In the motorcycle business, the operating income of ¥0.1 billion in the previous ﬁscal

year became an operating loss of ¥0.7 billion.

Let’s

The Japanese Market

1. Overview of Japanese Motorcycle Market

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

facturers in ﬁscal 2014 fell by 11% year-on-year to 391,000 units owing to a hike in the

3

rate of consumption tax. Sales of models with engine displacements of 126cm and

higher were down 7% year-on-year at 84,000 units. Sales of models with engine dis-

3

placements up to 125cm were down 12% year-on-year at 307,000 units.

Domestic motorcycle demand dropped sharply after the ﬁnancial crisis of 2008. That

decrease has since abated. Overall sales are expected to grow year-on-year in ﬁscal

3

2

015. Notably, demand for models with engine displacements of 126cm and higher

has been trending upward during the past few years and looks set to grow further in

ﬁscal 2015.

Address 110

2. Suzuki Sales

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

3

1

25cm fell by 6% year-on-year to 55,000 units in spite of new products including the

new Let’s and the Address 110. The Company’s sales of models with engine displace-

3

ments of 126cm and higher fell by 19% year-on-year to 10,000 units. Overall, Suzuki

maintained its market share of 16.8% in volume terms but recorded a 9% year-on-year

drop in sales (factory shipments) to 66,000 units.

Suzuki aims to achieve sales growth in ﬁscal 2015. The Company plans to increase fac-

3

tory shipments of models with engine displacements up to 125cm by launching more

3

products. As for models with engine displacements of 126cm and higher, which are

more proﬁtable, the Company plans to aggressively promote existing products.

GSR250F

3. Suzuki Topics in Fiscal 2014

•

In June 2014, Suzuki launched the V-Strom 1000 ABS, a sport adventure tourer that

enables comfortable riding in diverse conditions.

•

The GSR250 series is popular owing to its rider-friendly engine. Suzuki added the

fully faired GSR250F in September 2014.

The V-Strom 650 ABS is popular because it allows users to enjoy everything from ur-

ban rides to long-distance tours. In October 2014, Suzuki added the V-Strom 650XT

ABS, which has new, adventure-themed styling.

3

•

In December 2014, Suzuki launched the Let’s G, a 50cm scooter that’s light, fuel-

eﬃcient, and user-friendly. In March 2015, the Company launched the Let’s, a basic

model that oﬀers greater practicality.

In March 2015, Suzuki launched the Address 110 scooter. This model has low weight

for rider-friendliness around town and an engine that combines great performance

with superior fuel economy.

V-Strom 1000 ABS

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 2014 grew by 4% year-on-year

to 855,000 units. Sales of motorcycles (including ATVs) in North America

grew by 4% to 831,000 units. Sales in the six key ASEAN countries (In-

donesia, Thailand, Vietnam, the Philippines, Malaysia, and Cambodia) de-

clined by 3% year-on-year to 13,423,000 units. Sales in China fell by 9%

year-on-year to 10,347,000 units. Sales in India grew by 8% year-on-year

to 16,004,000 units.

Toyokawa Plant

Motorcycles and outboard motors assembling)

(

2. Suzuki Sales

Suzuki’s overseas motorcycle sales in ﬁscal 2014 declined by 13% year-on-year to 1,696,000 units. Sales in Europe fell by 5% year-on-year

to 45,000 units. Sales in North America rose for the ﬁrst time in eight years; they were up 4% year-on-year at 43,000 units. Sales in the six

key ASEAN countries fell by 29% year-on-year to 436,000 units owing mainly to a drop in sales in Indonesia. Sales in China fell by 9% year-

on-year to 564,000 units. Sales in India fell by 4% year-on-year to 341,000 units.

GSX-S1000 ABS

V-Strom 650XT ABS

Address

GIXXER

1

0 SUZUKI MOTOR CORPORATION

Year in Review

3

•

. Suzuki Topics in Fiscal 2014

Suzuki returned to MotoGP in March 2015 by running the 1,000cm

inline-four GSX-RR in the season-opening race in Qatar.

3

•

In September 2014, Suzuki unveiled the GSX-S1000/F, V-Strom

650XT, and Address in Europe.

In August 2014, Suzuki launched the GIXXER in India. This model

earned high praise for its styling and won bike-of-the-year

awards from many media organizations.

MotoGP First Round Qatar

2015 Intermot Motorcycle Show held in Cologne, Germany

GIXXER won many bike-of-the-year awards

SUZUKI MOTOR CORPORATION 11

Year in Review

Marine Products

Operating Results by Segment

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

increased year-on-year mainly owing to the increase in the sales

of the outboard motors in Europe and North America, while the

operating income was at the same level as the previous ﬁscal year.

Overview of Marine Products

Suzuki’s domestic outboard motor sales in ﬁscal 2014 fell by 5%

year-on-year in volume terms and by 7% year-on-year in net terms.

One reason was a hike in the rate of consumption tax. Another

was a shift in demand toward smaller models. The overall domestic

market shrank, so Suzuki’s share grew from 21% to 24%.

Suzuki’s export sales surged by 9% year-on-year in volume terms

and by 23% year-on-year in net terms. Sales in North America and

Europe made a signiﬁcant contribution. They were strong (especially

in the United States) owing partly to foreign-exchange eﬀects and

partly to a shift in demand toward larger models.

DF30A

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.

Suzuki Topics in Fiscal 2014

The year 2015 marks 50 years of Suzuki outboard motors. In ﬁs-

cal 2014, the Company celebrated this milestone by opening an

exhibition at the Suzuki Plaza, by holding a photo contest, and by

publishing a special magazine for worldwide consumption.

DF300AP

DF200AP

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 develop-

ment 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 require-

ments, 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.

SUZUKI ENVIRONMENTAL & SOCIAL REPORT 2014

We also pursue environmental initiatives that are not directly related to our products. For in-

stance, we promote energy savings and green purchasing in our oﬃces, give our workers en-

vironmental education, and support social action programs in local communities.

Solar Power Plant

Suzuki Topics in Fiscal 2014

•

Suzuki published “Suzuki Environmental and Social Report 2014”. The Company has pub-

lished a report about its environmental initiatives every year since ﬁscal 1999.

Lithium-ion Battery

ISG

•

In June 2014, Maruti Suzuki India switched on a one-megawatt solar power plant that it

had installed in line with an Indian government plan to boost adoption of solar power.

The solar power plant enabled the Company to reduce CO emissions by 1,200 tons per

2

year. Maruti Suzuki India plans to continue harnessing eco-friendly technologies that cut

CO emissions. The Company aims to use such technologies to tackle environmental

2

WagonR

Alto

problems and expand its environmental conservation initiatives.

•

In August 2014, Suzuki launched WagonR and WagonR Stingray versions equipped with a newly developed fuel-saving system called S-

ENE CHARGE. An integrated starter generator (ISG) works with a specially designed lithium-ion battery. The ISG generates electricity during

deceleration and stores it in the battery. The ISG uses that electricity to operate as a motor during acceleration, thereby reducing the load

imposed on the engine, so it suppresses fuel consumption without compromising acceleration performance. The S-ENE CHARGE system

1

2

combines with an enhanced R06A engine to realize fuel economy of 32.4km/L* (the best of any miniwagon in Japan)* .

In December 2014, Suzuki launched the eighth-generation Alto. A newly developed platform and comprehensive weight savings make this

3

model 60kg* lighter than its predecessor. The lightness combines with increased powertrain eﬃciency to realize fuel economy of 37km/

4

L* (the best of any gasoline-engine vehicle in Japan)* .

*1 Measured in the JC08 test cycle using the WagonR FZ grade and WagonR Stingray X grade (each with two-wheel drive). Veriﬁed by Japan’s Ministry of Land, Infrastructure,

and Transport.

*2 A miniwagon is a minicar with an overall height of at least 1,550mm. Suzuki made the fuel-economy comparison in August 2014 using measurements taken in the JC08

test cycle and veriﬁed by Japan’s Ministry of Land, Infrastructure, and Transport.

*

3 Suzuki compared the weight of the new Alto (equipped with a continuously variable transmission) with that of the previous-generation Alto Eco.

4 Suzuki measured the fuel economy in the JC08 test cycle. The comparison excludes hybrids and is based on Suzuki research in December 2014.

Suzuki’s cooperation with other automobile manufacturers

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 has been supplying vehicles in Indonesia since 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 2003. In India, Suzuki has been producing

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

3

Since 2013, Suzuki has been supplying a 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.

SUZUKI MOTOR CORPORATION 13

Topics

April 2014

Class-Topping Fuel Economy from WagonR with S-ENE CHARGE

Suzuki launched versions of the WagonR and WagonR Stingray with a newly

Launch of WagonR in Pakistan

developed fuel-saving system called S-ENE CHARGE, thereby oﬀering fuel

Pakistani subsidiary, Pak Suzuki Motor started production and sales of a min-

ivehicle-based WagonR. Although the overall length of the WagonR sold in

Pakistan is stretched 205mm in the engine room to install a 1.0L engine, all

of its other features are based on the Japanese minicar. Pakistan is the third

country to launch the WagonR at Suzuki’s

overseas production base after India and

Indonesia. Approximately half of Suzuki’s

global automobile sales in this fiscal

year were models based on Japanese

1

2

economy of 32.4km/L* (the best of any miniwagon in Japan)* . An inte-

grated starter generator (ISG) in the S-ENE CHARGE system works as a mo-

tor during acceleration, thereby reducing the load imposed on the engine,

so it suppresses fuel consumption without compromising acceleration

performance. The system works together with an idle-stop function. The ISG

promotes comfort by restarting the engine smoothly and quietly.

*1 Measured in the JC08 test cycle using the Wag-

onR FZ grade and WagonR Stingray X grade

(each with two-wheel drive). Verified by Ja-

pan’s Ministry of Land, Infrastructure, Transport

and Tourism.

minicars. Centered in Asia, the Japanese

minicar technologies are contributing to

the development of motorization and the

daily lives in each country.

*2 A miniwagon is a minicar with an overall height

of at least 1,550mm. Suzuki made compari-

sons in August 2014 using measurements

taken in the JC08 test cycle and veriﬁed by Ja-

pan’s Ministry of Land, Infrastructure, Transport

and Tourism.

WagonR sold by Pak Suzuki Motor.

July 2014

Achievement of Accumulated Global Production of Three

Million Units for Suzuki Outboard Motor

Suzuki held a ceremony for the achievement of accumulated global produc-

tion of three million units for the outboard motors at the Toyokawa Plant in

Aichi Prefecture, Japan. Development of outboard motors started in 1962

and the ﬁrst outboard motor D55 was launched in April 1965. Since then,

Suzuki has been developing a wide

variety of outboard motor lineup by

meeting the global market demands.

In addition to the Toyokawa Plant that

produces mid- and large-sized out-

October 2014

UT Concept on Display at International Home Care and

Rehabilitation Exhibition

Suzuki displayed a city-oriented electric wheelchair called the UT Con-

cept at the 41st International Home Care and Rehabilitation Exhibition

(

hosted by the Japan National Council of So-

cial Welfare and the Health and Welfare In-

formation Association). This concept model

has compactness and maneuverability that

make it ideal for urban pedestrian environ-

ments. It also has advanced active-safety

technologies that enable the user to avoid

obstacles and steps and bumps.

board motors, production of small-

and mid-sized outboard motors are

conducted at a Thai subsidiary, Thai

Suzuki Motor from July 1999.

Commemoration ceremony held at the

Toyokawa Plant on 24 July, 2014

Selection of Recipients for Suzuki Education and Culture

Foundation Scholarships

Suzuki Education and Culture Foundation gives scholarships to students who

would otherwise not be able to focus on their studies for ﬁnancial reasons. El-

igible students include those who attend high schools in Shizuoka Prefecture

and those who graduated from high

schools in Shizuoka Prefecture and

are now at university. Founded in 2000

to mark Suzuki’s 80th anniversary, in

its 14th year, the foundation decided

Launch of Mid-Size Sedan in Overseas Market

Suzuki launched mid-size sedan Ciaz in India from October 2014. It has

authentic sedan style with rich and elegant design, and is also exported

from India to areas including the Middle East, Latin America, and Africa.

Also in December 2014, a Chinese

joint venture, Chongqing Changan

Suzuki Automobile started its pro-

duction and launched it under the

name Alivio.

to give scholarships to 54 high school

students and 14 university students, a

total of 68 students for ﬁscal 2014.

Winning of NMMA’s Innovation Award for DF25A/30A

Outboards

August 2014

Suzuki’s new four-stroke outboard motors DF25A/30A received the 2014

IBEX Innovation Award for outboard motors from the National Marine Man-

ufacturers Association (NMMA) in the US at the International Boat Builder’s

Exhibition & Conference (IBEX) held in Tampa, Florida from 30 September

to 2 October, 2014. Suzuki’s high technol-

ogies were accredited by the best awards

in the marine technology, which are given

to those new products that demonstrate

consumer beneﬁts.

Worldwide Sales of Swift Reach Four Million Units

In August 2014, Swift reached cumulative worldwide sales of four million

units in nine years and nine months since the start of sales as a world stra-

tegic model in November 2004. First produced and

sold in Japan, Swift is currently produced in eight

countries including Hungary, India, and China hav-

ing been favored in more than 140 countries and

regions around the world. Of the four million units,

approximately half were sold in India, followed by

approximately 19% in Europe, and approximately

11% in Japan.

1

4 SUZUKI MOTOR CORPORATION

Topics

Announcement to Consolidate the Motorcycle Busi-

ness into the Hamamatsu Plant

Launch of the All-New Alto Minicar

The all-new Alto adopted a newly-developed platform and achieved a

1

Due to the countermeasure to the earthquake and the tsunami, and the

decrease in the domestic motorcycle production volume, Suzuki decided

to consolidate the motorcycle business, which is currently dispersed, into

the Hamamatsu Plant (located in Miyakoda district of Hamamatsu), and

relocate the motorcycle assembly of the Toyokawa Plant (located in Aichi

prefecture) as a part of the consolidation.

Currently, Suzuki’s motorcycle business is dispersed in three diﬀerent loca-

tions: the motorcycle technical center (located in in Iwata, Shizuoka); the

Takatsuka Plant (located in Hamamatsu); and the Toyokawa Plant (located

in Toyokawa). Suzuki decided to consolidate these three locations into the

Hamamatsu Plant, to consistently operate from engineering, development,

and testing, to production of the engines and the powertrain, and the as-

sembly. By doing so, Suzuki will put eﬀorts into the eﬃciency of product

development and production of the ever-diversifying motorcycles.

weight reduction of 60kg* by thoroughly reducing its weight. Along with

the enhanced eﬃciency of the powertrain, it realized fuel consumption

2

3

of 37.0km/L* , the lowest among any gasoline-engine vehicle in Japan* .

It evolved in fuel eﬃciency, driving performance, design, and safety per-

formance, while brushing up basic performances including the ease of

maneuverability and handling as a utility minicar by returning to the ori-

gin of minicar.

Plus, in March 2015, Alto Turbo RS was added to the lineup. The mod-

el’s body rigidity is increased, and installed with the enhanced turbo

engine that realizes strong acceleration, coupled with Auto Gear Shift

equipped with paddle shift.

*

1 Comparison between the all-new Alto

equipped with continuously variable

transmission and conventional Alto Eco.

2 2WD equipped with continuously variable

transmission.

*

3 Suzuki measured the fuel economy of the

new Alto in the JC08 test cycle. Suzuki’s

claim to the best fuel economy of any

gasoline-engine vehicle in Japan is based

on the Company’s research in December

November 2014

Winning of RJC Car of the Year and Japan Automotive Hall

of Fame Car of the Year awards for the Hustler minicar

2014 and excludes hybrids.

Hustler minicar won the 2015 RJC (Automotive Researchers’ and Journalists’

Conference of Japan) Car of the Year and the 2014-2015 Japan Automo-

tive Hall of Fame Car of the Year awards, highly valued for pioneer of a new

genre, adoption of fuel-eﬃcient technologies, sportiness that exceeds its

class, excellent user-friendliness, design, etc. It became a hit with the accu-

mulated sales for its ﬁrst year exceeding 10,000 units.

Also, as an RJC Special Achievement Award, Nippon (Japanese) Minicar (re-

cipient: Japan Automobile Manufacturers Association, Inc. Mini-Vehicle Com-

mittee) was chosen, valued for the brilliant evolution that the minicar has

achieved up to this date, and the role it plays in the Japanese motorization.

January 2015

Holding of the Foundation Stone Ceremony of a New

Plant in Gujarat, India

Foundation stone ceremony of new vehicle manufacturing facilities in

Gujarat was held. The purpose of the new plant is to secure production

capacity for future development of the Indian automobile market and

expansion of exports from India. The new plant is aimed to start produc-

tion from mid-2017, with the annual

production capacity planned to be

2

50,000 units. Vehicles and parts

produced at new plant in Gujarat will

be supplied only to Maruti Suzuki

India (MSIL), and distributed through

MSIL’s sales network.

December 2014

February 2015

3

Launch of New Let’s 50cm Scooter Series

Announcement to Fund 35 Scientiﬁc Researches for Fis-

cal 2014 by the Suzuki Foundation

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

anniversary of Suzuki, selected 33 scientiﬁc research projects and two pro-

posed scientiﬁc research projects for

3

Suzuki comprehensively updated the Let’s 50cm scooter series and ad-

opted a newly designed engine that oﬀers outstanding fuel economy of

4.8km/L*. The Company oﬀers two versions: the basic Let’s (launched in

March 2015) and the higher-grade Let’s G (launched in December 2014).

Each version is aﬀordably priced and meets daily mobility needs for men

and women across a wide

5

ﬁscal 2014. Thus far, the Foundation

has made 1,379 supports including

age range.

research projects by universities and

research institutes in Japan and subsi-

dizing programs in Japan for research-

*

Measured by Suzuki in the World-

wide Motorcycle Test Cycle.

ers from overseas.

Let’s (left) and Let’s G (right)

SUZUKI MOTOR CORPORATION 15

Topics

February 2015

Winning of 13 Bike-of-the-Year Awards in India by GIXXER

Bike-of-the-year awards in 13 categories that are presented by maga-

zines and TV stations in India went to the sportbike GIXXER, which is be-

ing produced and distributed by an Indian subsidiary, Suzuki Motorcycle

India. GIXXER has been earning high appraisal in India for its cutting-edge

sporty design, superior fuel

eﬃciency, and strong accel-

eration. Suzuki will continue

its eﬀort to expand the sales

of sportbikes in the growing

Comprehensively Enhanced Versions of the Every and

Every Wagon

Suzuki launched comprehensively enhanced versions of the Every (a one-

box commercial minivan) and Every Wagon (a one-box mini passenger ve-

hicle). These models each oﬀer even greater roominess, fuel eﬃciency, and

user-friendliness. The Every is valuable for work owing to abundant storage

space and outstanding ease of loading and unloading. The Every Wagon ad-

ditionally incorporates a comprehensive range of comfort-enhancing items

that help users enjoy leisure activities. Plus, each model has advanced safety

technologies including the ﬁrst collision-mitigating brakes in its class*.

Indian motorcycle market.

*Every : one-box minivan class; Every Wagon: one-box miniwagon class

Launch of Address 110 Scooter

Suzuki launched the Address 110 scooter, which combines a light, rider-

friendly frame with superior performance and fuel economy. An Indo-

nesian subsidiary named PT. Suzuki Indomobil Motor is producing the

Address 110 as a global small scooter, marketing it in Indonesia and ex-

porting it to Japan, ASEAN coun-

Note: The Every Wagon in the photo contains props for illustrative purposes.

tries, Europe, and Oceania. Suzuki

is promoting this model as an

Launch of SX4 S-CROSS in Japan

SX4 S-CROSS is a model produced by a Hungarian subsidiary, Magyar

Suzuki, and imported to Japan by Suzuki. It realizes excellent drivability

and stability in various driving scenes through the adoption of new 4WD

system ALLGRIP, and can be used

in a wide range of usage from daily

use to outdoors. Production of the

aﬀordable new choice for riders

3

who want to step up from 50cm

scooters and for those who al-

ready ride scooters with displace-

3

ments of 51cm to 125cm .

SX4 S-CROSS started from August

2013 by Magyar Suzuki and they are

exported throughout Europe, as well

as to areas including Latin America,

Oceania, and Africa. Its production

also began in China from December

VITARA Rolls Oﬀ the Line in Hungary

Ceremony for the all-new SUV VITARA was held as it rolled oﬀ the produc-

tion line of a Hungarian subsidiary, Magyar Suzuki. The ceremony wel-

comed guests including Dr. Viktor Orbán, Prime Minister of Hungary, and

Junicihi Kosuge, Ambassador Extraordinary and Plenipotentiary to Hungary.

Osamu Suzuki, Chairman and CEO of Suzuki Motor Corporation attended

the ceremony. The all-new SUV VITARA will be delivered from Magyar Su-

zuki as a world strategic compact SUV, not only to European countries but

also several new markets, and is planned to be produced 70,000 units in

its ﬁrst year of manufacturing.

2

013 by a joint venture, Chongqing

Changan Suzuki Automobile.

March 2015

World Premiere of Concept Models iK-2 and iM-4 at the

Geneva Motor Show

World premiere was made for two concept models, the iK-2 compact

hatchback and the iM-4 mini 4x4 at the 85th Geneva International Motor

Show held in Switzerland. New environmental technologies from Suzuki

were introduced, these are a new-generation platform; the BOOSTERJET, a

new downsized direct-injection turbo gasoline engine; and the SHVS mild

hybrid system. Suzuki plans to launch production model based on the iK-2

in Europe early 2016. Work is underway on developing a production model

of the iM-4 as well.

Dr. Viktor Orbán, Prime Minister of Hungary (right) and Osamu Suzuki, Chairman and CEO of Suzuki

Motor Corporation (left)

iK-2

iM-4

1

6 SUZUKI MOTOR CORPORATION

Directors, Officers and Auditors

Directors, Oﬃcers and Auditors (as of 30 June, 2015)

Representative Directors]

[

Representative

Director and

Osamu Suzuki

Chairman (CEO)

Representative

Director and

Yasuhito Harayama

Toshihiro Suzuki

Supporting CEO

Vice Chairman

Representative

Director and

President (COO)

Representative

Director and

Executive Vice

President

Osamu Honda

Chief Technology Oﬃcer

[

Directors]

Director and

Senior Managing

Oﬃcer

Eiji Mochizuki

Executive General Manager, Motorcycle Operations

Director and

Managing

Oﬃcer

Takashi Iwatsuki

Masahiko Nagao

Executive General Manager, Global Business Administration & Planning

Executive General Manager, Corporate Planning Oﬃce

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

Masataka Osuka

Norio Tanaka

Company Auditor

Outside Company

Auditor

*

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 Operations / Managing Director and CEO,

Maruti Suzuki India Ltd.

Senior Managing

Oﬃcer

Kenichi Ayukawa

Ichizo Aoyama

Executive General Manager, R&D/Global IT

[

Managing Oﬃcers]

Deputy Executive General Manager, Automobile Engineering /

Joint Managing Director, Maruti Suzuki India Ltd.

Toshiaki Hasuike

Kazuo Hakamata

Hiroaki Matsuura

Masato Kasai

Executive General Manager, Purchasing

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

Executive General Manager, Automobile Engineering

Izumi Oishi

Manufacturing / Executive General Manager, Manufacturing

Taisuke Toyoda

Hirofumi Nagao

Managing Oﬃcer Keiichi Asai

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

Division General Manager, Pakistan Automobile Division / Managing Director, Pak Suzuki Motor Co., Ltd. (Pakistan)

President, Chongqing Changan Suzuki Automobile Co., Ltd .（ China)

Division General Manager, Indonesia Automobile Division / President, PT. Suzuki Indomobil Motor (Indonesia)

President, Suzuki Motor Sales Kinki Inc.

Shuji Oishi

Kazuki Yamaguchi

Shigeyuki Yamamura Executive General Manager, Administration / Managing Oﬃcer, Human Resources Dept.

Toshiaki Suzuki

Executive General Manager, Domestic Marketing / Managing Oﬃcer, Domestic Sales Force Promotion Dept.

Deputy Executive General Manager, Manufacturing (Production Quality Assurance & Overseas Manufacturing) /

Managing Oﬃcer, Overseas Manufacturing Dept.

Hidenori Yamashita

Kinji Saito

Ichiro Onishi

Executive General Manager, Global Automobile Operations / Divisional General Manager, Asia Automobile Division

Executive General Manager, Customer Quality Assurance

SUZUKI MOTOR CORPORATION 17

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 sharehold-

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

further contribution 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 pre-

scribed in laws and regulations and aggressively disclose information that we concluded is beneﬁcial to understand The Company.

We will further enhance the transparency of The Company.

2. Corporate Governance Structure

Corporate governance structure of The Company is as follows.

General Meeting of Shareholders

Appoint/Dismiss

Board of Company

Cooperate

Auditors

5 Auditors

Independent

Auditor

Board of Directors

Directors (2 Outside Directors)

Audit

9

(3 Outside Auditors)

Advisory Committee on Personnel

and Remuneration, etc.

Accounting

Audit

Cooperate

Audit Department

Corporate Ethics Committee

Cooperate

Corporate Strategy Committee

Report

Various meeting

on management

and execution of

operation

Crisis

Management

Task Force

Report

Internal Audit

Consultation

Service

Report

Communicate Policy

Supervise

Communicate Policy

Supervise

Consult

Notify

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 Incor-

poration 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 eﬀorts to strengthen oversight of

business execution.

Also, for the purpose of enabling the agile corporate management, speeding up decision making and executing operations, and clarify-

ing the individual responsibilities, The Company has introduced a Senior Managing Oﬃcer and Managing Oﬃcer system.

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 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 for the

growth of The Company based on large stock of experience and professional knowledge.

(Corporate Strategy Committee)

At the Corporate Strategy Committee (Chairman: Representative Director and President) which is composed of few executives as a

council-system organization, important missions and strategies for management are cross-functionally and comprehensively dis-

cussed, while pre-reviewing matters to be discussed at the Board of Directors.

1

8 SUZUKI MOTOR CORPORATION

Corporate Governance Issues

(Various meeting on management and execution of operation)

The Company enhances eﬃciency of management by enabling appropriate execution of operation through closely exchanging im-

portant information and identifying administrative issues. To achieve that, The Company holds various councils to discuss counter-

measures on execution of management issues weekly, monthly, extraordinarily, or biannually, depending on the content. Members of

the council include Directors, Executive General Managers and Deputy Executive General Managers.

(Advisory Committee on Personnel and Remuneration, etc.)

Aimed to enhance clarity and objectivity upon electing candidates for Directors and Auditors, as well as deciding remuneration of

Directors, as an advisory committee for the Board of Directors, The Company establishes “Advisory Committee on Personnel and Re-

muneration, etc.”

The majority of the committee is composed of Outside Directors, and an observer participates each from Full-Time Company Auditors

and Outside Company Auditors.

The committee discusses issues such as election standards and adequacy of candidates for Directors and Auditors, as well as ad-

equacy of system and level of Director’s remuneration. The Board of Directors decides based on their results.

Decision for election and remuneration of candidates for Senior Managing Oﬃcers and Managing Oﬃcers who do not concurrently

serve as Directors are also based on results of the committee’s discussion.

(b) Auditor’s Audit, Internal Auditing, and Independent Auditor

(Auditor’s Audit)

The Company’s Board of Company Auditors is composed of 5 members including 3 Outside Company Auditors, and they hold regular

meetings every two months and special board meetings whenever necessary.

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

Auditors and audit policies of the corresponding ﬁscal year, by participating in the Board of Directors and various meeting on man-

agement and execution of operation, perusing approval documents and various minutes, and receiving reports and explanation from

Directors on execution of business, etc.

2

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

experience of being in charge of accounting in The Group as to Full-Time Company Auditors, and large stock of experience as certi-

ﬁed public accountant as to Outside Company Auditor respectively.

(Internal Auditing)

The Company establishes Audit Department as an organization to conduct internal auditing. They audit The Company and domestic

and foreign subsidiaries and aﬃliates, and periodically check the situation of compliances to laws and regulations, and 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 enhancement of management structures, conducts guidance and supports for

compliance with the laws, regulations and rules and promotes eﬃciency and standardization of their business.

(

2

Independent Auditor)

certiﬁed public accountants who engaged in the audit for ﬁscal 2014 are Satoru Imamura and Koji Sato, who belong to Seimei Audit

Corporation. The numbers of other assistant members for audit are 7 certiﬁed public accountants and 10 others.

Mutual cooperation of Auditor’s Audit, Internal Auditing, and Independent Auditor, and their relationship with departments of

(

internal control)

Company Auditors, Audit Department and Independent Auditor cooperate appropriately and audit concerning compliance with laws, in-

ternal control, and management eﬃciency from three diﬀerent angles.

Company Auditors receive periodical reports from Independent Auditor such as on audit plans and results of quarter reviews, as well as

on situation of conducting ﬁscal auditing. Company Auditors trade comments and share information as necessary to strengthen coop-

eration, such as by conducting observation of Independent Auditor’s audit to comprehend situation of conducting auditing, while also

receiving reports on the eﬀorts for quality management of auditing as an audit corporation.

Also, Company Auditors adjust audit plans and auditing themes with the Audit Department, attend its audit whenever necessary, and re-

ceive reports and explanation on all its audits.

The Audit Department and Company Auditors exchange information with organization specialized in internal audit, which consists of le-

gal, ﬁnance and IT system departments.

(c) Function, role and status of Outside Director and Outside Company Auditor

The Company elected 2 Outside Directors and 3 Outside Company Auditors.

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

pany in manufacturing industry based on a large stock of expertise as a doctor of engineering.

SUZUKI MOTOR CORPORATION 19

Corporate Governance Issues

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

of The Company. He is also in charge of a member of “Advisory Committee on Personnel and Remuneration, etc.”

The Company elected Mr. Sakutaro Tanino as Outside Director to receive appropriate supervision and advice related to the manage-

ment of The Company from the international viewpoints based on a large stock of experience and knowledge as a diplomat. There

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

of The Company. He is also in charge of a member of “Advisory Committee on Personnel and Remuneration, etc.”

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 Company

believes that he is suﬃciently independent of the management of The Company. He is also in charge of an observer of “Advisory

Committee on Personnel and Remuneration, etc.”

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. There are no special interest between him and The Com-

pany. 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 special 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 the below “Standard for Independence of Outside Directors and Outside Company Auditors” based on “Standard

of judgment” set by Tokyo Stock Exchange, Inc.

(Reference)

The Standard for Independence of Outside Directors and Outside Company Auditors

The Company never elects any person who falls under any of the followings as a candidate for the Outside Director or Outside Company

Auditor in order to ensure the independence:

1. Persons concerned with the Company and its subsidiaries (“The Group”)

(

1) With regard to Outside Directors, any person who is or was a person executing business (Note 1) of the Group at present or in the past,

2) With regard to Outside Company Auditors, any person who is or was a Director, Managing Officer, executive officer or

employee of the Group at present or in the past, or

(

3) A spouse or a relative within the second degree of kinship of the present Director, Managing Oﬃcer or executive oﬃcer of

the Group.

. Persons concerned such as business partners or major shareholders, etc.

1) Any person who is a person executing business of any of the followings:

2

(

1

2

3

4

) A company of which major business partner is the Group (Note 2)

) A major business partner of the Group (Note 3)

) A major shareholder having 10% or more of total voting rights of the Company

) A company for which the Group has 10% or more of total voting rights

(

2) A person who is or was a representative partner or a partner of the Group’s Accounting Auditor at present or in the past ﬁve years

3) A person who receives a large amount of remuneration from the Group other than remuneration for Director/Company Auditor (Note 4)

4) A person who receives a large amount of donation from the Group (Note 5)

5) A spouse or a relative within the second degree of kinship of the person who falls under category from (1) through (4) above

Notes 1. A person executing business:

A director executing business, a managing oﬃcer, an executive oﬃcer or an employee

2. A company of which major business partner is the Group:

A company which belongs to the group of the business partner who receives 2% or more of its consolidated net sales in the

latest business year ended of the group from our Group in any of the business year in past three years

. A major business partner of the Group:

3

A company which belongs to the group of the business partner who makes payment 2% or more of our Group’s

consolidated net sales or provides the Group with 2% or more of loans of its consolidated total assets in the latest

business year ended of the Group in any of the business year in past three years

4. A person who receives a large amount of remuneration:

A consultant or legal or accounting expert who receives annual compensation of 10 million yen or more (for the

organization, 2% or more of its annual total revenues) in any of the business year in past three years

2

0 SUZUKI MOTOR CORPORATION

Corporate Governance Issues

5. A person who receives a large amount of donation:

A person who receives annual donation of 10 million yen or more (for the organization, a person directly involved

in activities which is the purpose of the donation) in any of the business year in past three years

(

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

strengthen internal control system. The basic policy of internal control system is as follows:

(a) Systems to ensure that Directors’ execution of their duties complies with laws and regulations and the Articles of Incorporation

1

) Directors shall respect the “Mission Statement” and the “Suzuki Action 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.

2

) The Company established the “Suzuki Corporate Ethics Rules” witch lays out a set of basic points for Directors and

employees to act in a fair and faithful manner in compliance with the laws, the norms of the society and company rules

and observe the same. It is revised whenever necessary by “Corporate Ethics Committee” which promotes corporate

ethics in The Company.

3) Company Auditors shall audit the execution of duties of Directors in accordance with the audit policies and work

responsibilities set by the Board of Company Auditors.

(b) Systems relating to the storage and administration of the information in relation to Directors’ execution of their duties

Information relating to Directors’ decision-making and execution of duties shall be managed and stored in accordance with laws and

regulations and the rules of The Company, and be kept available whenever necessary.

(c) Rules and other systems relating to management of the risk of loss

1) The Company has set up the “Risk Management Procedure” as part of the “Suzuki Corporate Ethics Rules” to establish the risk

management system, and shall manage and cope with risks of losses in accordance with the same.

2) Decision shall be made, while important management matters are sufficiently deliberated, including risk evaluation, in the

meetings of the Board of Directors and through the approval system in accordance with the deliberation standard.

3) Risk that is expected to arise with regard to the execution of operation of departments such as engineering, production or

sales shall be handled by each department in accordance with the rules of or manuals on the prevention or handling of

such risk.

4) To prepare for the occurrence of disasters, The Company shall develop behavior manual and Business Continuity Plan (BCP),

take out insurance or provide training, or other suitable measures.

(d) Systems to ensure that Directors’ execution of their duties is made eﬃciently

1

) As the basic system to ensure that Directors’ execution of their duties is made eﬃciently, the meetings of the Board of Directors

shall be held in principle every month and at any time whenever necessary. And management councils shall be held when

ever necessary to discuss the strategic decision on execution of important management issues.

2) The operational organization shall be revised from time to time in order to clarify the responsibility, strengthen the cooperation

among the concerned sections and establish eﬃcient business operational systems.

3) Business shall be eﬃciently operated by developing the business plan, periodically conﬁrming the progress of the plan, taking

measures and making revisions from time to time.

(e) Systems to ensure that employees’ execution of their duties complies with laws and regulations and the Articles of Incorporation

1

) In addition to (a) 2) above, The Company shall keep every employee informed about the “Suzuki Employees’ Action Charter”

which lays out the norms of action of employees to ensure that employees’ execution of their duties complies with laws

and regulations and the Articles of Incorporation, and revises the same whenever necessary.

2) The Company shall keep every employee informed about the “Action Procedures” and the “Division of Duties” which set up

the proceedings of execution of their duties in details, and other rules of the Company, and revise the same whenever necessary.

3) In accordance with the “Suzuki Corporate Ethics Rules” mentioned in (a) 2) above, the Company shall develop the compliance

system for employees, and educate them through various training and in-house seminars regarding compliance.

4) The Company shall make its employees report the fact of violation or suspected violation of laws or regulations, and establish

the consultation oﬃce with which employees can consult on such fact, etc. or which they can notify in order to promptly

detect it and take corrective measures or actions to prevent the reoccurrence.

5) In accordance with the “Rules of Internal Auditing”, the Audit Department shall audit on the integrity and eﬃciency of various

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

SUZUKI MOTOR CORPORATION 21

Corporate Governance Issues

(f) Systems to ensure proper business operation of the Corporate Group consisting of our Company and subsidiaries

A) The system regarding the reporting of matters relating to execution of duties of Directors, etc. of subsidiaries to The Company

Matters relating to decision making and execution of duties of Directors, etc. of affiliated companies are promptly or periodically

reported by aﬃliated companies to The Company in accordance with the “Rules of Business Control Supervision for Aﬃliated Companies”.

B) Rules and other systems regarding the management of the risk of losses in subsidiaries

The Company shall manage the risk of losses in affiliated companies in accordance with “Risk Management Procedure” set up in

“Suzuki Corporate Ethics Rules”. If the risk of losses arises, The Company shall appropriately take actions jointly with aﬃliated companies.

C) Systems to ensure that the execution of duties of Directors, etc. of subsidiaries is made eﬃciently

1) To ensure an eﬃcient business operation of the Corporate Group, The Company shall conduct the followings in accordance with

the “Rules of Business Control Supervision for Aﬃliated Companies”.

(a) The Company’s departments in charge stipulated in the Rules at any time shall give guidance and advice to the aﬃliated

companies on their business operations and managements, and cooperate with them.

(b) The Company’s Audit Department shall make rules for the aﬃliated companies in order to reinforce their management

practices. It shall also promote eﬃciency and standardization of their business.

2

) The Company shall periodically conﬁrm the progress of the business plan developed by aﬃliated companies and provide

guidance, supports and auditing in order to urge aﬃliated companies to take actions or make revisions appropriately.

) The Company and its aﬃliated companies shall share the management policies or information in The Company’s monthly

meetings to report the status of performance for each section and group meetings held as needed in order to eﬃciently and

properly conduct business through mutual cooperation.

3

D) Systems to ensure that the execution of the duties of Directors, etc. and employees of subsidiaries complies with laws and

regulations and the Articles of Incorporation

The Company shall keep every Director, etc. and employee of aﬃliated companies informed about the importance of the compliance

with laws and regulations, the norm of the society and internal rules, etc. and fair and sincere behaviors. It shall also provide

guidance, supports and auditing in order to make appropriate rules in accordance with laws and regulations or legal environment

of the country where aﬃliated companies locate.

(g) Matters for employees to support the business of the Company Auditors when the Company Auditor seeks appointment of

the employees

1

2

) The secretariat of the Board of Company Auditors shall be established in the Audit Department.

) The assistants of the business of the Company Auditors shall be placed as required.

(h) Matters for independence of the employees mentioned in (g) above from the Directors and for ensuring the eﬃciency of

instructions given the employees

1

2

3

4

) The hiring, transfer and discipline of the assistants of the Company Auditors shall be consulted with the Company Auditor previously

appointed by the Board of Company Auditors.

) The Company Auditor appointed by the Board of Company Auditors may request the change of the assistant at any time. The Directors

shall not deny the request without reasonable reasons.

) The personal evaluation of the assistant of the Company Auditors shall be consulted with the Company Auditor appointed

by the Board of Company Auditors.

) The Audit Department shall clearly state that the assistant work for the Company Auditor conducted under the instruction and

control of the Company Auditor shall not be subject to the instruction and control of any other persons than the Company Auditor

in the Division of Duties, and carry out it thoroughly.

(i) System for Directors and employees to report to the Company Auditors and system for the Directors, the Company

Auditors and employees of subsidiaries to report or any recipient of such reporting to report to The Company’s

Company Auditor, and other systems for reporting to the Company Auditors

1

2

3

) If Directors, etc. of The Company and its aﬃliated companies ﬁnd any fact that could cause tremendous loss on The Company,

they shall immediately report it to the Company Auditors.

) Approval Procedures, Affiliated Company Consultation Documents and minutes of the management councils shall be

circulated to the Company Auditors, and any other references requested by the Company Auditors shall be provided.

) The Company Auditors shall conduct the followings as required when implementing internal auditing and auditing of aﬃliated companies.

(

a) Adjust the audit themes with the General Manager of the Audit Department

b) Present at the auditing and attend the brieﬁng of the audit results

c) Receive the circulation of the audit report or the report of the audit results

4) The Group’s department in charge of consultation shall periodically report to the Company Auditors about the status of

consultation from the Group’s employees.

2

2 SUZUKI MOTOR CORPORATION

Corporate Governance Issues

(j) Systems to ensure that any person reporting to Company Auditors will not be unfairly treated on the ground of making

such reporting

In accordance with “Suzuki Corporate Ethics Rules”, the Company shall not make any disadvantageous treatment such as dismissal

on the basis of having reported to Company Auditors mentioned in (i) above. It shall also take suitable measures to prevent the

worsening of oﬃce environment surrounding the reporter.

(k) Matters regarding procedures for prepayment or redemption of expenses arising from the execution of duties of Company

Auditors and processing of other expenses or liabilities arising from the execution of such duties

1) The Company shall allocate a certain amount of budget every year to pay expenses arising from the execution of duties of

Company Auditors.

2

) If the Company Auditors require the Company to make prepayment, etc. of expenses in accordance with Article 388 of the

Companies Act, the Company shall quickly process that expenses or liabilities, except where it is considered that the expenses or

liabilities relating such request are not necessary for the performance of duties of Company Auditors.

) The Company Auditors may use the external advisers including attorneys, certiﬁed public accountants and others in implementing

audit as required.

3

(

l) Other System to ensure eﬀecting auditing by the Company Auditors

) The Company Auditors shall attend the meetings of the Board of Directors and other important meetings.

) The Company Auditors shall hold periodic meetings with Accounting Auditors, exchange information or opinions and ask Accounting

Auditors to make reports, when necessary.

1

2

(

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)

(

Total amount of

remuneration

Amount of each type of remuneration

Stock option

Classiﬁcation

Number of payees

Basic pay

Bonus

Directors

527

273

79

174

7

(

excluding Outside Directors)

Company Auditors

excluding Outside Company Auditors)

Outside Directors/Company Auditors

4

7

47

27

―

3

(

27

5

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

Meeting of Shareholders held on 28 June, 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 29 June, 1989.

3

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

at the 147th Ordinary General Meeting of Shareholders held on 27 June, 2013 and 148th Ordinary General Meeting

of Shareholders held on 27 June, 2014.

The above-mentioned “stock options” is the amount recorded as expenses of current ﬁscal year, among the amount of

remuneration for stock acquisition rights granted for stock options.

As for stock options as compensation, due to decision of new policy for amount of Director’s remuneration as stated in

(4)(b), the Company has decided not to newly grant options after granting them in July 2014.

4. The above-mentioned “bonuses” are recorded as provision for Directors' bonuses at the end of current ﬁscal year and

treated as expenses of current ﬁscal year.

Please notice that bonus for Outside Directors and Company Auditors were abolished for the following years of ﬁscal 2013

and basic remuneration is solely maintained.

5. Remuneration of Company Auditors includes one Company Auditor who retired at the closure of the 148th Ordinary

General Meeting of Shareholders held on 27 June, 2014.

6

. In addition to the above, ¥7 million was paid to 1 retired Director and ¥5 million was paid to 1 retired Company Auditor

as retirement beneﬁts for Directors and Company Auditors under the resolution at the 140th Ordinary General Meeting

of Shareholders held on 29 June, 2006.

7. The following information is disclosed in 149th annual securities report

･

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

more each.

SUZUKI MOTOR CORPORATION 23

Corporate Governance Issues

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

In April 2015, The Company established “Advisory Committee on Personnel and Remuneration, etc.” with Outside Directors constituting

half or more of its members, as an advisory committee to the Board of Directors, in order to enhance the objectivity and transparency of

remuneration of Directors, etc.

(Remuneration of Directors)

Remuneration of Directors (excluding Outside Directors) shall consist of basic remuneration consisting of basic pay for each position

and evaluation of individual performance, bonus linked to the Company’s performance of each ﬁscal year and stock-based remunera-

tion linked to the Company’s mid- and long-term performance or stock price. Remuneration of Outside Directors shall be solely basic

remuneration (at the ﬁxed amount).

Also, remuneration of Directors shall be decided by the Board of Directors based on the deliberation results of “Advisory Committee on

Personnel and Remuneration, etc.” on the policy regarding the decision of Director’s remuneration, standards, remuneration system and

adequacy of the remuneration level.

The basic remuneration shall be within the range of the amount of remuneration limit (monthly amount) approved at a General Meeting

of Shareholders, and the amount of remuneration for each Director shall be determined and paid in consideration of the duties and re-

sponsibilities of each Director.

As for bonuses, a proposal based on the calculation method linked with the Company’s performance shall be submitted to an Ordinary

General Meeting of Shareholders for approval and then paid.

Bonuses for Outside Directors were abolished for the following years of ﬁscal 2013.

The stock-based remuneration shall be paid within the range of amount of remuneration limit (monthly amount) approved at the Gen-

eral Meeting of Shareholders, as the remuneration that is linked to mid-and long-term Company’s performance and stock price. Direc-

tors shall contribute such type of remuneration to the oﬃcer stockholding association every month, acquire the Company’s shares and

continuously hold them during their term of oﬃce.

(Remuneration of Company Auditors)

Remuneration of Company Auditors shall be solely basic remuneration (at ﬁxed amount), and the amount shall be decided and paid in

the discussion among Company Auditors within the range of the amount of remuneration limit (monthly amount) approved at a General

Meeting of Shareholders.

Bonuses for Company Auditors were abolished for the following years of ﬁscal 2013.

While the Company discontinued its retirement beneﬁts plan for oﬃcers at the 140th Ordinary General Meeting of Shareholders, held on

29 June, 2006, it has introduced the granting of stock options as compensation (stock acquisition rights) with a view toward strength-

ening 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 28 June, 2012.

However, the Company has decided not to newly grant options after granting them in July 2014.

(Reference)

Remuneration of Directors are calculated using a method based on points set for each position of Directors as per below.

As for the calculation method, The Company received a document that states that all Company Auditors agreed on appropriateness of the method.

1

. Calculation method

Paid amount = Consolidated net income × 0.18% × Each Director’s point ÷ Total of Director’s point

Notes: 1. “Indexes on proﬁts for such accounting period” stated in Article 34(1)(iii)(a) of Corporation Tax Act of Japan is “Consolidated

net income”.

2

. As of April 2015, amount of above-mentioned “Consolidated net income” used in the method is amount shown as “Net

income attributable to owners of the parent”, which is an amount before accounting loss of such paid remuneration amount.

. Amount of consolidated net income multiplied by 0.18% is rounded down to the nearest million.

3

2

. Number and point of Directors by position

Point

Number of Directors

Total Point

Chairman

Vice Chairman

President

30

18

22

18

13

―

1

3

7

30

18

22

18

39

Executive Vice President

Directors

Total

127

Note: Above number is based on number of Directors as of 30 June, 2015.

2

4 SUZUKI MOTOR CORPORATION

Corporate Governance Issues

3. Eligible person

Only Directors that apply to “Managing members” as stated in Article 34(1)(iii) of Corporation Tax Act of Japan, and excludes Out-

side Directors.

4

. Fixed amount

“Fixed amount” as stated in Article 34(1)(iii)(a)[1] of Corporation Tax Act of Japan is limited up to ¥300 million. If amount of consoli-

dated net income multiplied by 0.18% exceeds ¥300 million, ¥300 million divided by each Director’s point would become remunera-

tion of each Director.

5

. Others

Remuneration of Director retiring during the ﬁscal year would be decided by calculating amount of remuneration that would have

been paid if expiring the full ﬁscal year, and dividing it by the actual service months (rounded down to the nearest 10,000).

(

5)Remuneration for Independent Auditor for current ﬁscal year

(a) The remuneration amount to be paid by The Company to Independent Auditors is ¥85 million.

b) The remuneration amount to be paid by The Group to Independent Auditors is ¥88 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 31 March, 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 31 March, 2015 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 31 March, 2015.

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

31 March, 2015.

SUZUKI MOTOR CORPORATION 25

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 31 March, 2015.

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 con-

sumers 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 de-

veloping 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 application 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

motorcycles 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 competi-

tive 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 under-

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

the increased 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 fac-

tors. 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 sup-

pliers, 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

regulations 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

6 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

exchange 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 con-

trary, 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

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

be revised, 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 de-

pending 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 recall 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

development, 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 judg-

ments 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

Earthquake may adversely aﬀect the performance and ﬁnancial condition of The Group largely. We have taken various preventive mea-

sures such as quake-resistant measures for buildings and facilities, ﬁre preventive measures, establishment of BCP (Business Continuity

Plan), purchases 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

political 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 condi-

tions 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 27

The Status of the Corporate Group

The outline of the corporate group

The corporate group of the Company consists of subsidiaries of 133 companies and aﬃliates of 35. 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

overseas, 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 sub-

sidiary, Suzuki Deutschland GmbH and other marketing compa-

nies 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 overseas, by subsidiaries, Magyar Suzuki Corporation Ltd.,

Maruti Suzuki 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 oth-

ers, and they are purchased by the Company.

The marketing of automobiles is carried out in the domestic

market by a subsidiary, Suzuki Motor Sales Kinki Inc. and other

marketing companies throughout the market, and in overseas

markets, by a subsidiary, Suzuki Deutschland GmbH and other

marketing companies and manufacturing & marketing compa-

nies. The business of logistics services is conducted by a sub-

sidiary, Suzuki Transportation & Packing Co., Ltd.

2

8 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.

Maruti Suzuki India Ltd.

○

Suzuki Motorcycle India Private Ltd.

PT Suzuki Indomobil Motor

Pak Suzuki Motor Co., Ltd.

Suzuki Motor (Thailand) Co., Ltd.

Thai Suzuki Motor Co., Ltd.

Suzuki Philippines Inc.

○

M/C : Motorcycle

A/M : Automobile

M/P : Marine and Power products, etc.

○

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.

Suzuki Toyama Auto Parts Mfg Co., Ltd.

Hamana Parts Industry Co., Ltd.

○

☆

○

Overseas Marketing Companies

Suzuki Deutschland GmbH

Suzuki GB PLC

M/C A/M M/P

○

Suzuki France S.A.S.

Suzuki Italia S.p.A.

Suzuki Motor Iberica, S.A.U.

Suzuki Austria Automobil Handels GmbH

Suzuki Finance Europe B.V.

Suzuki Motor of America, Inc.

Suzuki Australia Pty. Ltd.

Logistic Services

M/C A/M M/P

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 29

FINANCIAL SECTION

CONTENTS

Management Discussion and Analysis........................................................ 31

Five-Year Summary...................................................................................... 33

Consolidated Financial Statements............................................................. 34

Consolidated Balance Sheets............................................................................. 34

Consolidated Statements of Income and

Consolidated Statements of Comprehensive Income .................................... 36

Consolidated Statements of Changes in Net Assets............................................ 38

Consolidated Statements of Cash Flows............................................................. 39

Notes to Consolidated Financial Statements...................................................... 40

Independent Auditor’s Report............................................................................. 65

3

0 SUZUKI MOTOR CORPORATION

Management Discussion and Analysis

1. Operating results

(1) The operating results by segment

(a) Motorcycle

The net sales decreased by ¥16.1 billion (6.0%) to ¥250.5 billion year-on-year mainly owing to the decrease in the sales in

Asia. The operating income of ¥0.1 billion in the previous ﬁscal year became an operating loss of ¥0.7 billion.

(b) Automobile

The Company made efforts to expand its sales and strengthen the products such as by winning numbers of awards includ-

ing the 2015 RJC Car of the Year award for the much-favored Hustler minicar, launching the all-new Alto minicar, which has

achieved the top level of fuel efﬁciency among non-hybrid gasoline vehicles in Japan, and launching the Every and Every

Wagon one-box minicars which have pursued roominess, fuel efﬁciency, and user-friendliness. However, partly owing to the

impact of the recoil reduction from the hike in the rate of the consumption tax in Japan, the Japanese domestic net sales de-

creased year-on-year. The overseas net sales increased year-on-year mainly owing to the increase in India. Consequently, the

net sales of the automobile business increased by ¥86.3 billion (3.3%) to ¥2,702.0 billion year-on-year. The operating income

decreased by ¥7.5 billion (4.2%) to ¥171.8 billion year-on-year mainly owing to the decrease in the income in Japan, Indone-

sia, and Thailand, despite the increase in the income in India.

(c) Marine and Power products, etc.

The net sales increased by ¥7.0 billion (12.5%) to ¥63.0 billion year-on-year mainly owing to the increase in the sales of the

outboard motors in Europe and North America. The operating income was at the same level as the previous ﬁscal year at ¥8.3

billion.

(2) The operating results by geographical areas

(a) Japan

The net sales increased by ¥63.3 billion (3.7%) to ¥1,765.0 billion year-on-year due to expansion of triangle trade via Japan

and other causes. The operating income decreased by ¥43.8 billion (32.6%) to ¥90.7 billion year-on-year mainly owing to the

strengthening of sales promotion of Japan and overseas and the increase in the quality expenses.

(b) Europe

The net sales increased by ¥59.6 billion (15.9%) to ¥436.1 billion year-on-year owing to launch of all-new compact SUV Vitara,

expansion of triangle trade via Japan, and other causes. The operating income increased by ¥0.9 billion (23.2%) to ¥5.1 bil-

lion year-on-year.

(c) Asia

The net sales increased by ¥130.8 billion (11.1%) to ¥1,306.2 billion year-on-year due to increase of sales in India, Pakistan

and others though decrease of sales in Indonesia and Thailand. The operating income increased by ¥22.2 billion (37.3%) to

¥81.6 billion year-on-year, by covering the decrease in the income in Indonesia and Thailand with the Indian automobile busi-

ness.

(d) Other areas

The net sales increased by ¥8.2 billion (5.4%) to ¥159.2 billion year-on-year owing to increase of sales of outboard motors

in the United States, increase of sales of motorcycles and automobiles in Latin America, and other causes. The operating

income increased by ¥2.4 billion to ¥2.6 billion 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 ¥37.9 billion (6.2%)

to ¥645.7 billion year-on-year because of increase of sales expenses such as sales promotion expenses.

(4) Other income and expenses

In the current consolidated ﬁscal year, the net amount of other income and expenses was a gain of ¥13.8 billion, which increased by ¥4.5

billion year-on-year. This was mainly due to increase of Interest income and dividends income from the previous ﬁscal year.

SUZUKI MOTOR CORPORATION 31

Management Discussion and Analysis

(5)ꢀForecastsꢀforꢀtheꢀnextꢀﬁscalꢀyear

As for the next ﬁscal year, although the decrease in the demand of minicars in Japan is expected, the Company forecasts in-

crease in sales and income compared to this ﬁscal year mainly owing to the increase in the overseas sales including India. The

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

business activity.

(

Forecasts for the consolidated operating results-First Half)

Net sales ¥1,500.0 billion (up 4.8% year-on-year)

¥91.0 billion (up 0.5% year-on-year)

¥55.0 billion (up 2.0% year-on-year)

Operating income

Net income attributable to

owners of the parent

(

Forecasts for the consolidated operating results-Full Year)

Net sales

¥3,100.0 billion

¥190.0 billion

¥110.0 billion

(up 2.8% year-on-year)

(up 5.9% year-on-year)

(up 13.6% year-on-year)

Operating income

Net income attributable to

owners of the parent

Foreign exchange rates 115yen/US$, 125yen/Euro, 1.85yen/Indian Rupee

.90yen/100Indonesian Rupiah, 3.50yen/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 FY2014 amounted to ¥255.0 billion (¥322.9 billion was provided in the previous

ﬁscal year), and ¥120.9 billion was used for the acquisition of property, plant and equipment etc. and others in the investment

activities (¥286.6 billion was used in the previous ﬁscal year). As a result, free cash ﬂow amounted to ¥134.1 billion of positive (¥36.3

billion of positive for the previous ﬁscal year). In ﬁnancing activities, ¥84.5 billion was provided by net increase of long term loan

and others (¥2.8 billion was provided in the previous ﬁscal year).

As a result, the balance of cash and cash equivalents at the end of FY2014 amounted to ¥932.3 billion and increased by ¥221.7

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 ¥194.5 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 ¥180.0 billion. The required fund will be covered mainly by our own funds

and external ﬁnancing if necessary.

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

2 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 31 March

2015

2014

2013

2012

2011

2015

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

¥3,015,461 ¥2,938,314 ¥2,578,317 ¥2,512,186 ¥2,608,217 $25,093,298

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

Net income per share:

96,862

107,484

80,389

53,887

45,174

806,044

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

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

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

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

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

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

Depreciation and amortization....

172.67

172.63

191.60

191.57

143.31

131.67

96.06

88.28

80.65

74.11

1.44

27.00

24.00

18.00

15.00

13.00

0.22

1,701,390

2,008,729

3,252,800

134,377

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

14,158,199

16,715,730

27,068,326

1,118,228

NON-CONSOLIDATED

Thousands of

US dollars

Millions of yen

(except per

(

except per share amounts)

share amounts)

Years ended 31 March

2015

2014

2013

2012

2011

2015

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

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

Net income per share:

¥1,663,147 ¥1,498,853 ¥1,422,595 ¥1,383,269 ¥1,409,205 $13,839,954

51,248

67,219

36,405

15,846

10,834

426,463

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

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

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

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

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

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

Depreciation and amortization....

91.34

91.32

119.81

119.79

64.89

59.64

28.25

25.98

19.34

17.80

0.76

27.00

24.00

18.00

15.00

13.00

0.22

937,767

1,191,614

2,096,545

37,421

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

7,803,677

9,916,069

17,446,495

311,407

Note: Yen amounts are translated into US dollars for convenience only, at ¥120.17 = US$1, the prevailing exchange rate as of 31 March 2015.

SUZUKI MOTOR CORPORATION 33

Consolidated Financial Statements

Consolidated Balance Sheets

As of 31 March 2015 and 2014

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2015

2014

2015

ASSETS

Current assets:

NOTE 4

Cash and cash equivalents *

Receivables:

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

¥ 932,261

¥ 710,611

$ 7,757,854

NOTE 4

Notes and accounts receivables-trade *

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

316,826

(4,156)

310,694

(4,804)

2,636,483

(34,590)

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

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

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

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

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

314,391

115,015

334,391

2,008,729

276,285

105,064

392,982

1,790,832

2,616,222

957,109

2,782,651

16,715,730

Property, plant and equipment:

Land *^N^O^T^E⁵..........................................................................

Buildings and structures *^N^O^T^E⁵..........................................

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

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

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

259,540

403,922

1,280,563

391,797

70,456

238,532

385,797

2,159,774

3,361,255

10,656,269

3,260,357

586,310

1,120,381

378,011

96,560

2

,406,280

2,219,283

(1,524,862)

694,420

20,023,967

(13,400,915)

6,623,051

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

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

(1,610,388)

795,892

Investments and other assets:

NOTE 4

Investment securities *

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

341,325

59,544

270,329

55,699

2,840,355

495,501

NOTE 4

Investments in afﬁliates *

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

NOTE 7

Assets for retirement beneﬁts *

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

1,860

15,862

15,484

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

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

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

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

19,985

20,924

166,311

25,462

26,005

211,889

448,179

¥3,252,800

388,821

¥2,874,074

3,729,543

$27,068,326

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

3

4 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

Thousands of

US dollars

Millions of yen

2015

2014

2015

LIABILITIES AND NET ASSETS

Current liabilities:

NOTE 4 and 5

Short-term loans payable *

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

¥ 177,805

104,145

479,950

21,797

¥ 197,413

38,748

$ 1,479,615

866,650

NOTE 4 and 5

Current portion of long-term loans payable *

.....

NOTE 4

Accounts payable-trade *

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

433,819

46,628

3,993,925

181,392

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

NOTE 4

Accrued expenses *

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

181,217

60,305

171,274

61,447

1,508,005

501,835

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

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

6,190

967

51,517

NOTE 5

Other *

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

121,188

1,152,601

106,634

1,056,933

1,008,479

9,591,423

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

Noncurrent liabilities:

NOTE 4 and 5

Long-term loans payable *

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

272,717

40,791

209,166

36,918

2,269,426

339,450

NOTE 7

Liabilities for retirement beneﬁts *

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

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

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

Other *^N^O^T^E⁵.........................................................................

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

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

8,923

16,596

74,260

43,766

29,179

364,208

32,609

30,923

271,357

398,808

1,551,409

322,783

1,379,717

3,318,703

12,910,126

Net assets:

Shareholders’ equity: *

Capital stock:

NOTE 11

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

as of 31 March 2015 – 561,047,304..............................

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

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

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

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

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

138,014

—

138,014

144,364

1,008,555

(57)

1,148,495

—

144,364

1,082,440

(62)

1,201,337

9,007,576

(517)

1,364,757

1,290,877

11,356,893

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

158,788

679

104,745

131

1,321,361

5, 654

(42,997)

864

(72,898)

3,867

(357,806)

7,190

117,333

35,846

976,399

NOTE 14

Subscription rights to shares *

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

250

219,048

168

167,464

2,088

1,822,818

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

Total net assets

¥1,701,390

¥1,494,357

$14,158,199

NOTE 15

Commitments and contingent liabilities *

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

¥3,252,800

¥2,874,074

$27,068,326

SUZUKI MOTOR CORPORATION 35

Consolidated Financial Statements

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

(Consolidated Statements of Income)

Years ended 31 March 2015 and 2014

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2015

2014

2015

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

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

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

¥3,015,461

2,190,309

825,152

¥2,938,314

2,142,754

795,559

$25,093,298

18,226,758

6,866,540

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

645,727

179,424

607,812

187,747

5,373,449

1,493,091

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

Other income (expenses):

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

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

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

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

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

25,259

(9,433)

(1,454)

(549)

18,441

(6,158)

(115)

210,200

(78,505)

(12,105)

(4,569)

(2,823)

197,090

193,246

1,608,111

NOTE 8

Income taxes: *

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

70,589

(4,970)

67,212

2,387

587,415

(41,362)

546,052

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

65,619

69,600

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

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

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

127,627

30,765

96,862

127,489

20,005

1,062,058

256,014

¥

¥ 107,484

$

806,044

Yen

US dollars

Net income per share:

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

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

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

172.67

172.63

27.00

¥

191.60

191.57

24.00

$

1.44

0.22

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 Comprehensive Income)

Years ended 31 March 2015 and 2014

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2015

2014

2015

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

¥127,627

¥127,489

$1,062,058

NOTE 12

Other comprehensive income *

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

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

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

Adjustment for retirement beneﬁts....................................

57,734

587

47,596

(1,196)

27,555

—

480,437

4,884

46,774

(3,005)

389,233

(25,012)

Share of other comprehensive income of associates

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

3,489

7,504

29,038

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

105,579

81,459

878,581

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

Comprehensive income attributable to:

233,206

208,949

1,940,639

Comprehensive income attributable to owners of the parent

Comprehensive income attributable to minority interests

178,312

54,894

187,105

21,844

1,483,833

456,806

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

SUZUKI MOTOR CORPORATION 37

Consolidated Financial Statements

Consolidated Statements of Changes in Net Assets

Years ended 31 March 2015 and 2014

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

561,047 ¥138,014 ¥144,364

¥912,304

¥(86) ¥(47,642)

¥84 ¥151,513

31 March 2013

Dividends from surplus ..

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

—

(11,220)

107,484

—

(5)

35

—

Purchase of treasury stock

.

—

Disposal of treasury stock..

Transfer of loss on

(13)

—

disposal of treasury stock

.

—

13

—

(13)

—

83

—

Net changes of items other

than shareholders’ equity ....

—

83,488

15,950

Balance as of

561,047 ¥138,014 ¥144,364 ¥1,008,555

¥(57)

¥35,846

¥168 ¥167,464

3

1 March 2014

Cumulative effects of

changes in accounting

policies...........................

—

(8,118)

—

Balance as of 31 March

014ꢀreﬂectedꢀchangesꢀ

2

561,047 ¥138,014 ¥144,364 ¥1,000,437

¥(57)

¥35,846

¥168 ¥167,464

in accounting policies

Dividends from surplus ..

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

—

(13,464)

—

96,862

Effects of changes of

ﬁscal year...................

—

(9)

(1,384)

—

(30)

25

—

Purchase of treasury stock

.

Disposal of treasury stock..

Transfer of loss on

—

disposal of treasury stock

.

—

9

(9)

—

81

—

Net changes of items other

than shareholders’ equity ..

—

81,487

51,583

Balance as of

561,047 ¥138,014 ¥144,364 ¥1,082,440

¥(62) ¥117,333

¥250 ¥219,048

3

1 March 2015

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

561,047 $1,148,495 $1,201,337 $8,392,738

$(477) $298,296

$1,405 $1,393,565

3

1 March 2014

Cumulative effects of

changes in accounting

policies...........................

—

(67,557

)

—

Balance as of 31 March

014ꢀreﬂectedꢀchangesꢀ

2

561,047 $1,148,495 $1,201,337 $8,325,181

$(477) $298,296

$1,405 $1,393,565

in accounting policies

Dividends from surplus ..

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

Effects of changes of

ﬁscal year...................

Purchase of treasury stock..

Disposal of treasury stock..

—

(112,049

)

—

806,044

—

(11,521

—

(252

212

—

)

(77

)

—

Transfer of loss on disposal

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

—

77

(77

)

—

678,102

—

Net changes of items other

than shareholders’ equity ...

—

682

429,253

Balance as of

3

1 March 2015

561,047 $1,148,495 $1,201,337 $9,007,576

$(517

)

$976,399

$2,088 $1,822,818

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

8 SUZUKI MOTOR CORPORATION

3

Consolidated Financial Statements

Consolidated Statements of Cash Flows

Years ended 31 March 2015 and 2014

Thousands of

US dollars

Millions of yen

SUZUKI MOTOR CORPORATION

AND CONSOLIDATED SUBSIDIARIES

2015

2014

2015

Cashꢀﬂowsꢀfromꢀoperatingꢀactivities

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

¥193,246

134,377

969

(867)

(25,259)

9,433

¥197,090

117,188

1,029

(699)

(18,441)

6,158

6,718

115

(290)

(49,559)

(10)

72,664

12,680

7,126

351,772

18,999

(5,646)

(42,209)

322,915

$1,608,111

1,118,228

8,067

(7,216)

(210,200)

78,505

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

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

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

Sub-total

4,804

1,454

102

39,981

12,105

850

(9,242)

(37,179)

44,390

2,542

15,838

334,611

25,347

(8,108)

(96,813)

255,037

(76,914)

(309,392)

369,398

21,155

131,804

2,784,485

210,933

(67,475)

(805,640)

2,122,302

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

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

Net cash provided by (used in) investing activities

Cashꢀﬂowsꢀfromꢀﬁnancingꢀactivities

(79,661)

136,236

(193,152)

206,239

(192,694)

2,123

(77,477)

38,842

(209,912)

165,156

(204,739)

1,570

(662,905)

1,133,695

(1,607,325)

1,716,227

(1,603,516)

17,674

(120,909)

(286,559)

(1,006,149)

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

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

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

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

Increase (decrease) in cash and cash equivalents

resultingꢀfromꢀchangeꢀofꢀﬁscalꢀyearꢀofꢀsubsidiaries

Increase (decrease) in cash and cash equivalents

resulting from change of scope of consolidation

(26,353)

173,000

(45,191)

(30)

(13,466)

(3,456)

(28)

84,472

5,042

223,643

710,611

24,691

30,000

(38,488)

(5)

(11,219)

(2,133)

(35)

(219,297)

1,439,627

(376,066)

(252)

(112,062)

(28,765)

(236)

702,945

41,962

1,861,060

5,913,381

2,809

10,342

49,508

661,102

(2,039)

—

(16,969)

45

¥932,261

—

382

$7,757,854

NOTE 10

Cash and cash equivalents at end of period *

¥710,611

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

SUZUKI MOTOR CORPORATION 39

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 Afﬁliates (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 120.17 to US$1, the rate of exchange prevailing as of 31 March 2015. 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 31 March 2015 and 2014, include the accounts of The Group. And

the numbers of consolidated subsidiaries are both 133. All signiﬁcant inter-company accounts and transactions 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.

Consolidated subsidiaries that settled the account in 31 December without provisional account settlement as of consolidated

account settlement date were consolidated with the ﬁnancial statements based on their ﬁnancial statements as of 31 Decem-

ber and made necessary adjustments for consolidation regarding important transactions that occurred between 31 December

and consolidated account settlement date.

From this consolidated ﬁscal year, Suzuki Motor Iberica, S.A.U. and other 5 subsidiaries have changed the settlement date

from 31 December to 31 March and Suzuki Motor (Thailand) Co., Ltd. and other 16 subsidiaries have been consolidated

based on the ﬁnancial statements of provisional account as of consolidated account settlement date. As a result, subsidiary

which has been consolidated based on the ﬁnancial statements as of 31 December is 1 subsidiary.

With regard to these changing mentioned above, the net income (loss) of three months from 1 January to 31 March 2014 has

been recognized in retained earnings.

As a result, retained earnings decreased by ¥1,384 million from the beginning of this consolidated ﬁscal year.

The account settlement date of Magyar Suzuki Corporation Ltd. and other 4 subsidiaries is 31 December, but they are con-

tinuously consolidated based on the ﬁnancial statements of provisional account settlement as of 31 March.

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)ꢀ 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 29 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.

4

0 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(g) 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.

(h) 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.

(

i) 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.

j) 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.

(k) 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. If interest rate swap contracts meet certain criteria, special exceptional hedge account-

ing is applied and these contracts are handled together with hedged items. If cross currency interest rate swap contracts

meet certain criteria, integration method (special exceptional method and exceptional method) 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 exchange

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 exposure 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 com-

mencement of the hedges.

(

l) 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 pre-

vailing 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.

(m)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).

(n) 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

SUZUKI MOTOR CORPORATION 41

Consolidated Financial Statements

b. Intangible assets (excluding lease assets)

................ Straight-line method

.

c. Lease assets

Finance lease which transfer ownership

................ The same method as depreciation and amortization of self-owned noncurrent assets.

Finance lease which do not 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.

(o) 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 ﬁscal

year ended 31 March 2012.

(p)ꢀ Retirementꢀbeneﬁts

With regard to calculation of retirement beneﬁt obligations, beneﬁt formula 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 average 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.

(q) 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.

(

r) Cash and cash equivalents

All highly liquid investments with original maturities of three months or less when purchased are considered cash equivalents.

(s)ꢀ Reclassiﬁcation

Certain reclassiﬁcations of previously reported amounts are made to conform to current classiﬁcations.

NOTE 3: Changes in accounting policies

(

a)ꢀ Applicationꢀofꢀaccountingꢀstandardꢀforꢀretirementꢀbeneﬁts

Body text stipulated in article 35 of the Accounting Standard for Retirement Beneﬁts (Accounting Standards Board of Japan

ASBJ) Statement No.26 of 17 May 2012) and article 67 of the Guidance on Accounting Standard for Retirement Beneﬁts (ASBJ

(

Guidance No.25 of 26 March 2015) have been applied from this consolidated ﬁscal year.

The revision of the calculation method for retirement beneﬁt obligations and service costs, with the changing method of attrib-

uting beneﬁts to accounting periods from the straight-line basis method to the beneﬁt formula basis, and the changing method

of determination of the discount rate from the method of determination the bonds period by using the approximate number of

years of the average remaining service period of employees which is based on determination of the discount rate to a single

weighted average discount rate reﬂecting the estimated timing and amount of beneﬁt payment, have been applied from this

consolidated ﬁscal year.

In accordance with transitional accounting as stipulated in article 37 of the Accounting Standard for Retirement Beneﬁts, the

effect of the changes in accounting policies arising from initial application is recognized in retained earnings from the begin-

ning of this consolidated ﬁscal year.

4

2 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

As a result, assets for retirement beneﬁts decreased by ¥10,357 million, liabilities for retirement beneﬁts increased by ¥1,885

million and retained earnings decreased by ¥8,118 million from the beginning of this consolidated ﬁscal year. Inﬂuences by

the above-mentioned on operating income and income before income taxes for this consolidated ﬁscal year are insigniﬁcant.

(b) New accounting standards not yet applied

•

Accounting Standard for Business Combinations (ASBJ Statement No.21 of 13 September 2013)

Accounting Standard for Consolidated Financial Statements (ASBJ Statement No.22 of 13 September 2013)

Accounting Standard for Business Divestitures (ASBJ Statement No.7 of 13 September 2013)

Accounting Standard for Earnings Per Share (ASBJ Statement No.2 of 13 September 2013)

Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures (ASBJ

Guidance No.10 of 13 September 2013)

•

Guidance on Accounting Standard for Earnings Per Share (ASBJ Guidance No.4 of 13 September 2013)

a. Overview

The accounting methods for difference arising from a change in ownership interest in a subsidiary when the Company con-

tinues to have control because of additional acquisition of shares of the subsidiary, treatment of acquisition-related costs,

expression of net income, etc. and expression of minority interests to non-controlling interests, provisional accounting treat-

ments and others have been revised.

b. Application date

These accounting standards will be applied from the beginning of the consolidated ﬁscal year on and after 1 April 2015. Provi-

sional accounting treatments will be applied to business combinations to be performed on and after 1 April 2015.

c. Effect of applying accounting standard

The effect in the consolidated ﬁnancial statements as a result of the adoption of these accounting standards is currently

unconﬁrmed.

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.

Basically, accounts payable-trade is 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 or cross currency interest rate swaps for the risks of ﬂuctuation in interest rate and ex-

change rate of some long-term borrowings.

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 regulations 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 (k).

In addition, each company of The Group 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 43

Consolidated Financial Statements

(b)ꢀ Mattersꢀforꢀfairꢀvaluesꢀofꢀtheꢀﬁnancialꢀinstruments

Carrying amounts in the consolidated balance sheet, fair values and difference as of 31 March 2015 and 2014 were as fol-

lows. Financial instruments whose fair value cannot be reliably determined are not included in the below table.

Millions of yen

2015

2014

Carrying

amount

Carrying

amount

Fair value

Difference

Fair value

Difference

Cash and deposits

¥457,513

316,826

¥457,513

318,567

¥

—

1,741

¥358,851

310,694

¥358,851

311,221

¥

—

527

Notes and accounts receivables-trade

Short-term investment securities and

Investment securities

Available-for-sale securities

Investments in afﬁliates

Total of assets

1,007,347

616

1,007,347

669

—

52

1,794

—

377

—

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)

—

1,782,304

479,950

177,805

104,145

181,217

272,717

1,215,834

1,784,098

479,950

177,805

103,768

181,217

268,346

1,211,087

Accounts payable-trade

Short-term loans payable

Current portion of long-term loans payable

Accrued expenses

Long-term loans payable

Total of liabilities

4,370

4,747

1,291

1,260

Derivatives

Hedge accounting is applied

Hedge accounting is not applied

1,072

1,603

1,072

1,603

—

51

1,160

51

1,160

—

Thousands of US dollars

015

Fair value

2

Carrying

amount

Difference

Cash and deposits

$3,807,223 $3,807,223

$

—

Notes and accounts receivables-trade

Short-term investment securities and

Investment securities

2,636,483

2,650,976

14,492

Available-for-sale securities

Investments in afﬁliates

Total of assets

8,382,687

5,131

14,831,524 14,846,458

3,993,925

1,479,615

866,650

1,508,005

2,269,426

8,382,687

5,572

—

440

14,933

—

3,139

—

Accounts payable-trade

Short-term loans payable

Current portion of long-term loans payable

Accrued expenses

Long-term loans payable

Total of liabilities

3,993,925

1,479,615

863,511

1,508,005

2,233,061

36,365

39,504

10,117,623 10,078,119

Derivatives

Hedge accounting is applied

Hedge accounting is not applied

8,922

13,339

8,922

13,339

—

*

Assets or liabilities derived from derivatives are shown on a net basis and net liabilities are shown as ( ).

4

4 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 31 March 2015 and 2014

Thousands of

US dollars

Millions of yen

2015

2014

2015

Available-for-sale securities

Unlisted stock other than stocks of afﬁliates

Unlisted stock of afﬁliates .............................

Others ............................................................

¥18,748

23,084

119

¥18,747

17,077

557

$156,013

192,098

997

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 45

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

2015

2014

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

¥ 457,513

41,373

¥

—

¥ —

¥ 358,851

¥

—

¥ —

2

75,017

435

249,336

60,831

526

685,647

¥1,384,534

—

¥435

612,489

¥1,220,677

—

¥526

¥75,017

¥60,831

Thousands of US dollars

015

2

Over 1 year,

Over 5 years,

Within

1

year

5

years

10 years

Cash and deposits

Notes and

accounts receivables- trade

Securities and investment

securities with maturities

Total

$ 3,807,223

2,008,598

$

—

$

—

3,619

—

624,264

—

5,705,647

$11,521,469

$624,264

$3,619

4

6 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(c) Securities

a. Available-for-sale securities with market value as of 31 March 2015 and 2014

Millions of yen

2015

2014

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

¥ 93,769 ¥ 320,628 ¥ 226,859

¥ 91,865

—

¥250,014

—

¥158,148

—

249,238

263,329

14,090

175,441

¥267,307

181,767

¥431,782

6,325

¥343,008 ¥ 583,957 ¥ 240,949

¥164,474

Securities for which the carrying amount does not exceed the acquisition costs

Stocks....................................................

Bonds....................................................

Others....................................................

Sub-Total

¥

1,549

—

¥

1,191

—

¥

(358)

—

¥

1,928

¥

1,567

¥

(361)

—

5,000

422,198

—

425,164

¥431,732

¥863,514

—

¥423,748 ¥ 423,389

¥

(358) ¥432,093

¥

(361)

Total

¥766,756 ¥1,007,347 ¥ 240,591

¥699,401

¥164,113

Thousands of US dollars

2015

Acquisition

cost

Carrying

Amount

Difference

Securities for which the carrying amount exceeds the acquisition costs

Stocks.................................................... $ 780,304 $ 2,668,124 $1,887,819

Bonds....................................................

Others....................................................

Sub-Total

—

2,074,052

2,191,308

117,255

$ 2,854,357 $ 4,859,432 $2,005,075

Securities for which the carrying amount does not exceed the acquisition costs

Stocks....................................................

Bonds....................................................

Others....................................................

Sub-Total

$

12,898

—

$

9,913

—

$

(2,984)

—

3,513,341

—

$ 3,526,239 $3,523,254

$

(2,984)

Total

$ 6,380,596 $ 8,382,687 $2,002,090

b. Available-for-sale securities sold during 2015 and 2014

Thousands of

US dollars

Millions of yen

2015

2014

2015

Amounts sold.....................................................................

Gains on sales of available-for-sale securities .................

Loss on sales of available-for-sale securities ..................

¥206,255

¥165,779

$1,716,364

—

17

—

0

SUZUKI MOTOR CORPORATION 47

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 31 March 2015 and 2014

Currency related transactions (non-market transactions)

015

Millions of yen

2

2014

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

Buying

USD

EUR

JPY

¥ 3,746

1,694

14,550

¥19,990

—

¥394

(16)

(43)

¥394

(16)

(43)

¥17,687

—

11,405

¥29,093

—

¥(142)

—

(262)

¥(404)

¥(142)

—

(262)

¥(404)

Total

¥333

Thousands of US dollars

015

2

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Fair value

(

Foreign currency

forward contracts

Buying

USD

EUR

JPY

$31,175

14,098

121,079

$166,352

—

$3,279

(138)

(362)

$3,279

(138)

(362)

Total

$2,778

Interest and currency related transactions (non-market transactions)

015

Millions of yen

2

2014

Contract/

notional

amount

Amount

due after

one year

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Gain

(loss)

Fair value

(

Interest rate swap

Pay ﬁxed

receive ﬂoating

Pay PHP

receive USD

Cross currency

interest rate swap

Pay ﬂoating

receive ﬂoating

Pay INR

receive USD

Pay ﬁxed

receive ﬂoating

Pay IDR

receive USD

¥

—

¥

—

¥

—

¥

—

¥1,200

¥

—

¥

84

¥

84

5,568

2,784

1,323

0

1,323

7,153

4,769

1,536

—

1,536

—

12,017

0

—

Pay ﬁxed

receive ﬂoating

Pay IDR

receive JPY

10,000

¥27,585

10,000

¥24,801

(0)

¥1,323

(0)

¥1,323

—

¥8,353

—

¥4,769

—

¥1,620

—

¥1,620

Total

4

8 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

Thousands of US dollars

015

2

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Fair value

(

Cross currency

interest rate swap

Pay ﬂoating

receive ﬂoating

Pay INR

receive USD

Pay ﬁxed

receive ﬂoating

Pay IDR

receive USD

$ 46,340

100,000

$ 23,170

100,000

$11,012

0

$11,012

0

Pay ﬁxed

receive ﬂoating

Pay IDR

receive JPY

83,215

$229,555

83,215

$206,385

(0)

$11,012

(0)

$11,012

Total

Commodity-related transactions (market transactions)

015

Millions of yen

2

2014

Contract/

notional

amount

Amount

due after

one year

Contract/

notional

amount

Amount

due after

one year

Type

Gain

(loss)

Fair value

(loss)

Commodity

Futures contract

Buying

¥1,304

—

¥(54)

¥4,545

—

¥(55)

Total

Thousands of US dollars

015

2

Contract/

notional

amount

Amount

due after

one year

Type

Gain

loss)

Fair value

(

Commodity

Futures contract

Buying

$10,854

—

$(450)

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.

SUZUKI MOTOR CORPORATION 49

Consolidated Financial Statements

b. Derivative transactions to which hedge accounting is applied as of 31 March 2015 and 2014

Currency related transactions

Type

Contract/

Millions of yen

Fair value

2

015

2014

Amount due

Contract/ Amount due

notional amount after one year

Fair value

notional amount after one year

Foreign currency forward contracts (Principle hedge accounting)

Selling (Principal hedged item: Account receivable-trade)

USD

EUR

CAD

AUD

NZD

GBP

MXN

¥ 8,034

21,695

414

4,528

1,236

40

—

¥

42

¥ 3,847

1,367

80

3,265

1,256

221

—

¥ (35)

(7)

1,012

11

0

141

3

1

(95)

(40)

(1)

1,518

14

827

(6)

Buying (Principal hedged item: Account payable-trade)

USD

EUR

—

11,083

—

(88)

70

7,225

—

2

(3)

Foreign currency forward contracts (Exceptional hedge accounting)

Selling (Principal hedged item: Account receivable-trade)

USD

EUR

CAD

AUD

NZD

GBP

MXN

CNY

—

19,354

51

2,883

375

—

*

616

8,947

15

2,039

350

301

691

56

—

*

40

492

720

Buying (Principal hedged item: Account payable-trade)

USD

EUR

JPY

3,649

2,726

895

¥79,742

—

*

—

679

—

*

Total

¥1,139

¥31,862

¥(188)

Thousands of US dollars

015

Amount due

notional amount after one year

2

Type

Contract/

Fair value

Foreign currency forward contracts (Principle hedge accounting)

Selling (Principal hedged item: Account receivable-trade)

USD

EUR

CAD

AUD

NZD

GBP

MXN

$ 66,856

180,537

3,447

37,687

10,292

334

—

$

354

8,424

95

1,180

25

10

124

12,635

Buying (Principal hedged item: Account payable-trade)

EUR 92,235

—

(734)

Foreign currency forward contracts (Exceptional hedge accounting)

Selling (Principal hedged item: Account receivable-trade)

EUR

CAD

AUD

NZD

161,061

—

*

426

23,995

3,126

5

0 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

GBP

MXN

CNY

336

4,101

5,993

—

*

Buying (Principal hedged item: Account payable-trade)

USD

EUR

JPY

30,370

22,688

7,454

$663,581

—

*

Total

$9,481

*

Because these foreign currency forward contracts are handled together with hedged items, their fair values are included in that of hedged items.

Interest and currency related transactions

Principal

Millions of yen

2014

Amount due

notional amount after one year

2

015

Type

Contract/

Amount due

Contract/

hedged item

Fair value

¥ —

notional amount after one year

Interest rate swap (Principle hedge accounting)

Pay ﬁxed Long-term

receive ﬂoating debt

¥ 63,500

¥(32)

¥

—

¥

—

Cross currency interest rate swap (Principle hedge accounting)

Pay ﬁxed

receive ﬂoating

Pay JPY

receive USD

Pay ﬁxed

receive ﬂoating Long-term

Pay IDR

receive USD

Pay ﬁxed

receive ﬂoating

Pay THB

—

8,919

—

4,026

—

121,243

3,782

121,243

2,319

(73)

2

debt

(18)

(16)

receive USD

14,962

12,940

311

Cross currency interest rate swap (Integration hedge accounting)

Pay ﬁxed

receive ﬂoating Long-term

Pay JPY

receive USD

Pay ﬁxed

receive ﬂoating

Pay CNY

receive JPY

Pay ﬁxed

receive ﬂoating

Pay INR

debt

98,000

243

98,000

243

*

—

Long-term

debt

receivable

receive USD

2,913

*

—

Total

¥188,538

¥183,645

¥(67)

¥137,965

¥136,502

¥240

Thousands of US dollars

015

Amount due

notional amount after one year

2

Principal

hedged item

Type

Contract/

Fair value

Interest rate swap (Principle hedge accounting)

Pay ﬁxed Long-term

receive ﬂoating debt

$

528,418

$528,418

$ (274)

Cross currency interest rate swap (Principle hedge accounting)

Pay ﬁxed

receive ﬂoating Long-term

74,225

33,506

(149)

Pay IDR

debt

receive USD

SUZUKI MOTOR CORPORATION 51

Consolidated Financial Statements

Pay ﬁxed

receive ﬂoating Long-term

124,507

(135)

Pay THB

debt

receive USD

Cross currency interest rate swap (Integration hedge accounting)

Pay ﬁxed

receive ﬂoating Long-term

8

15,511

815,511

*

Pay JPY

debt

receive USD

Pay ﬁxed

receive ﬂoating

Pay CNY

receive JPY

Pay ﬁxed

receive ﬂoating

Pay INR

2,022

Long-term

debt

receivable

2

4,248

24,248

*

receive USD

Total

$1,568,932

$1,528,214

$(559)

*

Because these cross currency interest rate swap transactions are handled together with hedged items, their fair values are included in that of

hedged items.

NOTE 5: Short-term debt and long-term debt

Short-term debt as of 31 March 2015 and 2014 were as follows. The annual interest rates of short-term debt as of 31 March 2015 were from 0.15

percent to 10.5 percent.

Thousands of

US dollars

Millions of yen

2015

2014

2015

Short-term loans payable and current portion of Long-term

loans payable

Unsecured .........................................................................

Lease obligations due within one year.................................

¥281,950

43

¥236,161

46

$2,346,265

365

¥281,994

¥236,207

$2,346,631

Long-term debt as of 31 March 2015 and 2014 were as follows:

Thousands of

US dollars

Millions of yen

2015

2014

2015

Long-term loans payable maturing through 2020

Secured..............................................................................

Unsecured .........................................................................

Lease obligations due more than one year..........................

Other interest-bearing debts (Long-term guarantee deposited)

¥

—

¥

236

$

—

272,717

49

208,930

72

2,269,426

408

13,731

286,497

13,655

¥222,894

114,270

$2,384,104

¥

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

2 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

The aggregate annual maturities of long-term debt, excluding other interest-bearing debt, outstanding as of 31 March 2015 were as follows:

Thousands of

Year ending 31 March

Millions of yen

¥ 46,879

90,725

US dollars

$ 390,108

754,975

2017 .......................................................................................

2018 .......................................................................................

2019 .......................................................................................

2020 .......................................................................................

50,160

417,413

8,000

66,577

Thereafter...............................................................................

77,000

640,758

¥272,766

$2,269,834

Assets pledged as collateral as of 31 March 2015:

Thousands of

Millions of yen

¥643

US dollars

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

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

$5,352

807

97

¥740

$6,160

Secured liabilities as of 31 March 2015:

Thousands of

US dollars

Millions of yen

Others (noncurrent liabilities)................................................

¥448

$3,734

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 31

March 2015 and 2014 were as follows:

Thousands of

US dollars

Millions of yen

2015

2014

2015

Commitment line contract total.............................................

Actual loan balance...............................................................

Variance

¥200,000

—

¥200,000

—

$1,664,308

—

¥200,000

$1,664,308

SUZUKI MOTOR CORPORATION 53

Consolidated Financial Statements

NOTE 7:ꢀRetirementꢀandꢀseveranceꢀbeneﬁt

(Year ended 31 March 2014)

1ꢀ 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. As for

some foreign consolidated subsidiaries, deﬁned contribution plan are established.

Some consolidated subsidiaries adopt simpliﬁed methods for the calculation of retirement beneﬁts.

2ꢀ Deﬁnedꢀbeneﬁtꢀplan

(a)ꢀ Reconciliationꢀofꢀretirementꢀbeneﬁtꢀobligationꢀfromꢀtheꢀopeningꢀbalanceꢀtoꢀtheꢀclosingꢀbalance

Millions of yen

¥108,739

6,024

Opening balance of retirement beneﬁt obligation

Service cost

Interest cost

2,199

Actuarial differences arised in current ﬁscal year

Retirement allowance paid

(611)

(4,940)

159

Past service cost arised in current ﬁscal year

Others

(475)

Closing balance of retirement beneﬁt obligation

¥111,096

(b) Reconciliation of pension assets from the opening balance to the closing balance

Millions of yen

Opening balance of pension assets

Expected return on pension assets

Actuarial differences arised in current ﬁscal year

Contribution from employers

Retirement allowance paid

¥83,842

825

808

8,028

(3,512)

48

Others

Closing balance of pension assets

¥90,040

(

c)ꢀ Reconciliationꢀbetweenꢀclosingꢀbalanceꢀofꢀretirementꢀbeneﬁtꢀobligationꢀandꢀpensionꢀassetsꢀandꢀnetꢀamountꢀofꢀliability/assetꢀforꢀ

retirementꢀbeneﬁtsꢀrecognizedꢀinꢀconsolidatedꢀbalanceꢀsheet

Millions of yen

¥82,668

Deﬁned beneﬁt obligation of funded severance plan

Plan asset

(90,040)

(

7,371)

Deﬁned beneﬁt obligation of unfunded severance plan

Net amount of liability and asset for retirement beneﬁts

recognized in consolidated balance sheet

28,427

¥21,056

Liability for retirement beneﬁts

Asset for retirement beneﬁts

¥36,918

(15,862)

¥21,056

Net amount of liability and asset for retirement beneﬁts

recognized in consolidated balance sheet

(d)ꢀ Breakdownꢀofꢀretirementꢀbeneﬁtꢀexpenses

Millions of yen

¥6,024

2,199

Service cost

Interest cost

Expected return on plan assets

Recognition of actuarial gains and losses

Amortization of past service cost

Others

(825)

527

(636)

(656)

Total amount of retirement beneﬁt expenses for deﬁned

beneﬁt plans

¥

6,633

5

4 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(e)ꢀ Accumulatedꢀadjustmentꢀforꢀretirementꢀbeneﬁt

Breakdown of accumulated adjustment for retirement beneﬁt recognized were as follows:

Millions of yen

Unrecognized past service cost

Unrecognized actuarial gains and losses

Total

¥3,276

2,742

¥6,018

(

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

3ꢀ Deﬁnedꢀcontributionꢀplan

Contribution to deﬁned contribution plan by The Company and consolidated subsidiaries was 216 million yen.

(Year ended 31 March 2015)

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

Millions of yen

¥111,096

12,243

¥123,339

6,638

US dollars

Opening balance of retirement beneﬁt obligation

Cumulative effects of changes in accounting

Opening balance reﬂected changes in accounting

Service cost

$ 924,494

101,882

$1,026,377

55,245

Interest cost

1,681

13,994

Actuarial differences arised in current ﬁscal year

Retirement allowance paid

886

7,378

(4,751)

5,322

(39,542)

44,294

Past service cost arised in current ﬁscal year

Others

301

2,505

Closing balance of retirement beneﬁt obligation

¥133,418

$1,110,251

SUZUKI MOTOR CORPORATION 55

Consolidated Financial Statements

(b) Reconciliation of pension assets from the opening balance to the closing balance

Thousands of

Millions of yen

¥90,040

1,000

US dollars

Opening balance of pension assets

Expected return on pension assets

Actuarial differences arised in current ﬁscal year

Contribution from employers

Retirement allowance paid

$749,273

8,322

454

3,785

5,905

49,142

(27,993)

3,755

(3,364)

451

Others

Closing balance of pension assets

¥94,487

$786,285

(

c)ꢀReconciliationꢀbetweenꢀclosingꢀbalanceꢀofꢀretirementꢀbeneﬁtꢀobligationꢀandꢀpensionꢀassetsꢀandꢀnetꢀamountꢀofꢀliability/assetꢀ

forꢀretirementꢀbeneﬁtsꢀrecognizedꢀinꢀconsolidatedꢀbalanceꢀsheet

Thousands of

Millions of yen

¥95,065

US dollars

Deﬁned beneﬁt obligation of funded severance plan

$791,090

(786,285)

4,804

Plan asset

(94,487)

577

Deﬁned beneﬁt obligation of unfunded severance plan

38,353

319,161

Net amount of liability and asset for retirement beneﬁts

recognized in consolidated balance sheet

¥38,930

$323,965

Liability for retirement beneﬁts

Asset for retirement beneﬁts

¥40,791

(1,860)

$339,450

(15,484)

Net amount of liability and asset for retirement beneﬁts

recognized in consolidated balance sheet

¥38,930

$323,965

(d)ꢀBreakdownꢀofꢀretirementꢀbeneﬁtꢀexpenses

Thousands of

Millions of yen

¥6,638

1,681

(1,000)

992

US dollars

Service cost

$55,245

13,994

(8,322)

8,262

981

Interest cost

Expected return on plan assets

Recognition of actuarial gain and losses

Amortization of past service cost

Others

117

46

384

Total amount of retirement beneﬁt expenses for deﬁned

beneﬁt plans

¥8,477

$70,546

(

e)ꢀAdjustmentꢀforꢀretirementꢀbeneﬁt

Breakdown of adjustment for retirement beneﬁt recognized were as follows:

Thousands of

US dollars

Millions of yen

Past service cost

Actuarial gains and losses

Total

¥(5,140)

$(42,780)

5,129

616

¥(4,524)

$(37,650)

(

f)ꢀAccumulatedꢀadjustmentꢀforꢀretirementꢀbeneﬁt

Breakdown of accumulated adjustment for retirement beneﬁt recognized were as follows:

Thousands of

US dollars

Millions of yen

Unrecognized past service cost

Unrecognized actuarial gains and losses

Total

¥(1,864)

$(15,513)

3,344

27,828

¥1,479

$12,314

5

6 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

(g) Plan assets

a. Major breakdown of pension assets

Portion of major components to total pension assets were as follows:

Debt securities

49.0%

37.9%

13.1%

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.

(h) Actuarial assumptions

Discount rate

1.12%

0.88%

Expected long-term return on pension assets

3

.ꢀDeﬁnedꢀcontributionꢀplan

Contribution to deﬁned contribution plan by The Company and consolidated subsidiaries was 231 million yen

(1,926 thousand US dollars).

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

2015

2014

2015

Deferred tax assets

Impairment loss and Excess-depreciation.......................

Various reserves.................................................................

Unrealized proﬁts elimination............................................

Loss on valuation of securities..........................................

Deferred assets .................................................................

Others.................................................................................

Deferred tax assets sub-total..........................................

Valuation allowance...........................................................

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

¥ 57,418

37,254

¥ 59,105

39,548

$ 477,811

310,017

24,197

20,876

201,359

14,265

12,254

118,713

3,579

3,367

29,787

75,362

82,757

627,134

212,078

(39,996)

¥172,082

217,910

(54,930)

¥162,980

1,764,824

(332,832)

$1,431,991

Deferred tax liabilities

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

¥(76,700)

¥ (56,219)

$(638,265)

Variance from the complete market value method of

consolidated subsidiaries .................................................

(5,811)

(3,450)

(5,243)

(3,603)

(48,357)

(28,713)

(8,959)

Reserve for advanced depreciation of noncurrent assets ...

Others.................................................................................

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

Net amounts of deferred tax assets..................................

(1,076)

(2,071)

(87,038)

¥ 85,043

(67,138)

¥ 95,841

(724,296)

$ 707,695

The differences between the statutory tax rate and the effective tax rate were summarized as follows:

2015

2014

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%

(3.3%)

(2.0%)

0.3%

35.3%

*

For the year ended 31 March 2015, notes have been omitted as the difference between the statutory tax rate and the effective tax rate

after adoption of tax effect accounting was less than 5% of the statutory tax rate.

SUZUKI MOTOR CORPORATION 57

Consolidated Financial Statements

NOTE 9: Research and development costs

Research and development costs included in selling, general and administrative expenses, for the years ended 31 March 2015 and 2014

were as follows:

Thousands of

US dollars

Millions of yen

2015

2014

2015

Research and development costs........................................

¥125,896

¥127,090

$1,047,655

NOTE 10: Cash and cash equivalents

Cash and cash equivalents as of 31 March 2015 and 2014 were as follows:

Thousands of

US dollars

Millions of yen

2015

2014

2015

Cash and deposits ............................................................

Short-term investment securities.......................................

Time deposits with maturities of over three months.........

Bonds etc. with redemption period of over three months

¥457,513

685,647

(18,012)

(192,888)

¥358,851

612,489

$3,807,223

5,705,647

(149,888)

(73,370)

(187,359)

¥710,611

(1,605,126)

$7,757,854

¥

932,261

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 approval 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.

NOTE 12: Other comprehensive income

Other comprehensive income as of 31 March 2015 and 2014 were as follows:

Thousands of

US dollars

Millions of yen

2015

2014

2015

Valuation difference on available-for-sale securities

Unrealized loss (gain) arising during the period..............

¥77,327

¥73,280

$ 643,480

Reclassiﬁcation adjustment of unrealized gain (loss)

through proﬁt or loss..........................................................

—

77,327

40

73,320

—

643,480

Before tax effect.................................................................

Tax effect............................................................................

Balance at the end of the period.......................................

Deferred gains or losses on hedges

(19,592)

¥57,734

(25,724)

¥47,596

(163,043)

$ 480,437

Unrealized loss (gain) arising during the period..............

¥ 965

¥ (4,119)

$

8,034

Reclassiﬁcation adjustment of unrealized gain (loss)

through proﬁt or loss..........................................................

75

1,041

(453)

1,785

(2,333)

1,136

628

8,662

Before tax effect.................................................................

Tax effect............................................................................

(3,777)

5

8 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

Balance at the end of the period.......................................

Foreign currency translation adjustment

¥

587

¥ (1,196)

$ 4,884

Unrealized loss (gain) arising during the period..............

¥ 46,774

¥27,748

$389,233

Reclassification adjustment of unrealized gain (loss)

through proﬁt or loss..........................................................

—

(192)

—

Balance at the end of the period

¥ 46,774

¥27,555

$ 389,233

Adjustment for retirement beneﬁt

Unrealized loss (gain) arising during the period..............

¥ (5,176)

¥

—

$ (43,072)

5,422

Reclassification adjustment of unrealized gain (loss)

through proﬁt or loss..........................................................

651

Before tax effect.................................................................

Tax effect............................................................................

Balance at the end of the period.......................................

(4,524)

1,518

—

(37,650)

12,637

¥ (3,005)

¥

$ (25,012)

Share of other comprehensive income of associates

accounted for using equity method

Unrealized loss (gain) arising during the period

¥

3,489

¥ 7,504

¥81,459

$ 29,038

$ 878,581

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

¥105,579

NOTE 13: Cash dividends

Resolution

Ordinary General

Meeting of Shareholders

held on 27 June 2014

Meeting of the

Board of Directors

held on 6 November 2014

Total amount of cash dividends

¥7,854 million

¥14.00

$65,362 thousand

$0.12

¥5,610 million

¥10.00

$46,687 thousand

Cash dividends per share

Record date

$0.08

31 March 2014

30 June 2014

30 September 2014

8 November 2014

2

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 26 June 2015

Total amount of cash dividends

Cash dividends per share

Record date

¥9,537 million

¥17.00

$79,368 thousand

$0.14

31 March 2015

29 June 2015

Effective date

SUZUKI MOTOR CORPORATION 59

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 28 June 2012, 27

June 2013 and 27 June 2014 based on The Company Act of Japan.

The details of the plan were as follows:

1

. Resolution date

8 June 2012

. Category and number of people to whom stock options are granted

2

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

6

7,000 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 21 July 2012 to 20 July 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

27 June 2013

2. Category and number of people to whom stock options are granted

7

1

Directors of The Company (excluding Outside Director)

0 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 28 June 2012

. Number of shares

42,000 shares

. Amount to be paid for subscription rights to shares

Same to the plan adopted at 28 June 2012

. Period during which subscription rights to shares can be exercised

From 20 July 2013 to 19 July 2043

. Terms of exercise of subscription rights to shares

Same to the plan adopted at 28 June 2012

. Matters relating to assignment of subscription rights to shares

Same to the plan adopted at 28 June 2012

. Matters relating to subrogation payment

Same to the plan adopted at 28 June 2012

6

0 SUZUKI MOTOR CORPORATION

Consolidated Financial Statements

1

. Resolution date

7 June 2014

. Category and number of people to whom stock options are granted

2

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 28 June 2012

. Number of shares

32,400 shares

. Amount to be paid for subscription rights to shares

Same to the plan adopted at 28 June 2012

. Period during which subscription rights to shares can be exercised

From 23 July 2014 to 22 July 2044

. Terms of exercise of subscription rights to shares

Same to the plan adopted at 28 June 2012

. Matters relating to assignment of subscription rights to shares

Same to the plan adopted at 28 June 2012

. Matters relating to subrogation payment

Same to the plan adopted at 28 June 2012

NOTE 15: Contingent liabilities

As of 31 March 2015 and 2014, The Company and some of consolidated subsidiaries had the contingent liabilities as follows:

Thousands of

US dollars

Millions of yen

2

015

2014

¥8,277

2015

Guarantee of indebtedness of afﬁliates and others.........

¥10,425

$86,756

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 61

Consolidated Financial Statements

3.ꢀInformationꢀaboutꢀtheꢀamountsꢀofꢀnetꢀsales,ꢀproﬁtꢀorꢀloss,ꢀassetsꢀandꢀotherꢀitemsꢀbyꢀreportableꢀsegmentꢀ(Yearsꢀendedꢀ31ꢀMarch)

Millions of yen

2015

Marine & Power

products, etc.

Motorcycle

Automobile

Adjustment

Consolidated

Net Sales:

Net sales to external customers ...

Segment proﬁt (loss) .............

Segment assets.....................

¥250,485 ¥2,701,942

¥63,033

8,272

¥

—

¥3,015,461

179,424

(675)

171,827

203,256

1,893,036

45,159

1,111,348

3,252,800