ANNUAL REPORT
Year Ended March 31, 2024

PROFILE

Makino Milling Machine Co., Ltd. is a manufacturer of advanced machine tools, founded in May 1937. Its corporate
mission is to contribute to the development of industry in Japan and around the world by quickly discerning andresponding to industrial trends with technological innovation.
Makino’s state-of-the-art machine tools and machining technologies are used in the manufacturing systems ofcompanies in a wide range of industries. Working with local partners possessing strong technical capabilities, Makino has
built an extensive sales network in the United States, Europe and Asia, capable of responding to changes in global
machine tool demand and structural changes in manufacturing operations.
Major products lines: Machining centers, Numerical control (NC) electrical discharge machines (EDM), Milling machines
and other products

FIVE-YEAR FINANCIAL SUMMARY
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
Years ended March 31
Thousands ofdollars

Millions of yen

Net sales
Net income attributableto owners of the parent
Net assets
Total assets

2020

2021

2022

2023

2024

2024

¥159,401¥116,737¥186,591¥227,985¥225,360$1,488,408

830
151,703258,889(2,703)
161,992
280,015

12,042
178,778
325,579

16,073
197,787
348,461

15,981
221,553362,335

105,547
1,463,265
2,393,071

Yen

Earnings per share attributableto owners of the parent
Basic
DilutedNumber of employees

Dollars¥33.97—¥ (110.82)—¥499.23—¥671.86—¥670.55
—

4,757

4,451

4,524

4,692

4,782

$     4.42—

Note: US dollar amounts have been translated from yen, for convenience only, at the rate of ¥151.41=US$1, the approximate Tokyo foreign exchange
market rate as of March 31, 2024.

CONTENTSTO OUR SHAREHOLDERS AND INVESTORS.................................. 1

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS.......... 11

CORPORATE GOVERNANCE........................................................ 4

CONSOLIDATED STATEMENTS OF CASH FLOWS......................... 12

BUSINESS RISKS.......................................................................... 6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.................. 13

CONSOLIDATED BALANCE SHEETS............................................. 7

INDEPENDENT AUDITOR'S REPORT.............................................. 31

CONSOLIDATED STATEMENTS OF INCOME................................. 9

BOARD OF DIRECTORS AND CORPORATE AUDITORS.................. 37

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME..... 10

CORPORATE DATA...................................................................... 37

TO OUR SHAREHOLDERS AND INVESTORS

1. Overview of Operating Results, etc.
(1) Operating Results for Fiscal 2024
During fiscal 2024, the Company posted net sales of¥225,360 million (down 1.2% year on year), operating
income of ¥16,372 million (down 6.4% year on year), andnet income attributable to owners of the parent of¥15,981 million on a consolidated basis (down 0.6% year
on year).
Orders received on a consolidated basis amounted to¥213,376 million (down 14.5% year on year). Orders fellcompared to the previous year, when orders were at ahigh level, due to customers increasingly refraining from
capital expenditure on account of concerns of an
economic slowdown and persistently high interest rates
overseas, and other factors.
The details of orders received by geographic region
are as follows:
Makino Milling Machine Co., Ltd. and Its
Consolidated Subsidiaries in Japan
Domestic orders received by Makino Milling Machine Co.,
Ltd. declined from the level of the previous year.
Orders decreased substantially for general machinery,
including semiconductor production equipment, and parts
machining for automobiles, etc. Orders for aircraft
increased.
MAKINO ASIA PTE LTD
Orders received in all regions of Asia were below the levelof the previous year.
In China, certain orders for automobiles including
new energy vehicles, etc., continued, although orders fordie and mold and parts machining both declined.
Orders received in India were on par with theprevious year, primarily for parts machining forautomobiles.
MAKINO INC.
Orders received in America were below the level of theprevious year. Customers continued to be cautious
regarding capital expenditure, primarily for automobiles
and semiconductor production equipment due to concerns
about high interest rate policies and economic slowdown.
Orders for aircraft and medical devices remained firm.
MAKINO Europe GmbH
Customers in Europe continued to take a cautious
approach to capital expenditure, and orders forsemiconductor production equipment, parts machining forautomobiles, and for aircraft all fell below levels of theprevious year.

(2) Financial Position
Total assets on a consolidated basis at the end of fiscal
2024 increased by ¥13,874 million from the end of fiscal
2023, to ¥362,335 million. The principal items were an
increase of ¥6,431 million in inventories, an increase of¥2,472 million in buildings and structures, net, and anincrease of ¥2,095 million in machinery, equipment andvehicles, net, and a decrease of ¥2,791 million in notes
and accounts receivable - trade, and contract assets.
Total liabilities decreased by ¥9,891 million from theend of fiscal 2023, to ¥140,782 million. This was primarily
attributable to a decrease of ¥5,479 million in notes andaccounts payable, trade, a decrease of ¥2,619 million in
long-term debt (including current portion of long-termdebt), and an increase of ¥2,277 million in short-termloans.
Net assets increased by ¥23,765 million from the endof fiscal 2023, to ¥221,553 million. The principal items
were an increase of ¥12,398 million in retained earnings
and an increase of ¥10,219 million in foreign currencytranslation adjustments.
(3) Cash FlowsAt the end of fiscal 2024, net cash provided by operating
activities was ¥12,910 million. The principal items wereincome before income taxes amounting to ¥19,629
million, a decrease of ¥11,972 million in notes andaccounts payable, trade, depreciation and amortization
amounting to ¥8,266 million, a decrease of ¥7,589 million
in notes and accounts receivable, trade, and income taxes
paid amounting to ¥3,690 million.
Net cash used in investing activities was ¥6,411
million. The principal items were purchases of property,
plant and equipment amounting to ¥9,577 million and adecrease in time deposits of ¥1,968 million.
Net cash used in financing activities was ¥6,390
million. The main items were repayment of long-term loans
payable of ¥5,250 million, proceeds from long-term loans
payable amounting to ¥4,000 million, and ¥3,577 million
in dividends paid.
As a result, cash and cash equivalents on aconsolidated basis at the end of fiscal 2024 increased by¥3,111 million from the end of fiscal 2023 to ¥72,578
million.

1

The table below shows trends in cash-flow indicators.
81st term 82nd term 83rd term 84th term 85th term
Term ended Term ended Term ended Term ended Term ended
March 2020 March 2021 March 2022 March 2023 March 2024
Shareholders’equity ratio (%)

58.3

57.6

54.6

56.6

61.0

Shareholders’equity ratio on
a market value
basis (%)

26.9

37.4

28.5

33.3

41.0

Ratio ofinterest-bearing
debt to cash
flows (%)

5.2

3.0

3.2

18.0

4.1

Interest
coverage ratio(times)

25.7

61.8

55.6

9.2

43.3

Shareholders’ equity ratio: Shareholders’ equity / Total assets
Shareholders’ equity ratio on a market value basis: Market
capitalization / Total assets
Ratio of interest-bearing debt to cash flows: Interest-bearing
debt / Cash flows
Interest coverage ratio: Cash flows / Interest payment* Each indicator is calculated from consolidated financial data.
* Market capitalization is computed based on the number ofshares issued, excluding treasury stock.
* Cash flows mean cash flows from operating activities.
* Interest-bearing debt includes all liabilities bearing interest
posted in the consolidated balance sheets. Interest payment
is interest paid recorded in the consolidated statements ofcash flows.

(4) Outlook (Fiscal 2025)
The Company forecasts that orders received in fiscal 2025
will be above the level of fiscal 2024. Although the firsthalf order environment is expected to be a continuationfrom the second half of the current fiscal year, orders areprojected to pick up toward the second half of the fiscal
year, mainly for semiconductor production equipment andautomobiles. The Company anticipates continued brisk
demand for aircraft and medical devices, as well as forautomation against the backdrop of labor shortages andsoaring labor costs.
The details of the forecast by geographic region are
as follows:
Makino Milling Machine Co., Ltd. and Its
Consolidated Subsidiaries in JapanThe Company expects domestic orders received by Makino
Milling Machine Co., Ltd. to be on par with the level offiscal 2024. Aerospace-related orders are expected toremain firm, and from the second half of the year, we
anticipate orders to increase, particularly for semiconductor

2

production equipment. In addition, at the 32nd Japan
International Machine Tool Fair (JIMTOF 2024) to be held in
November, the Company will make proposals to stimulate
further demand, focusing on the latest large-scalemachines and five-axis machines, striving to receive
numerous inquiries.
MAKINO ASIA PTE LTD
Orders received in Asia for fiscal 2025 are expected tosurpass the level of fiscal 2024.
In China, the Company anticipates that orders will
begin increasing from the second half for automobiles,
such as new energy vehicles, starting with plug-in hybrid
vehicles (PHV).
In India, in addition to working to boost orders forautomobiles, we are striving to expand sales in fields
where growth can be expected, such as various die andmold, and for aircraft.
In ASEAN, we anticipate an increase in orders for thesemiconductor production equipment toward the second
half of the fiscal year.
MAKINO INC.
The Company expects that orders received in the US for
fiscal 2025 will exceed the level of fiscal 2024. We projectorders to increase toward the second half, primarily forsemiconductor production equipment, and that orders foraircraft and related to medical devices will remain firm. We
also plan to exhibit at IMTS 2024 (International
Manufacturing Technology Show) to be held in the US in
September, focusing on new products and factory
automation (FA) software that can support the automationneeds of customers, which can lead to receiving evenmore orders.
MAKINO Europe GmbHThe Company expects that orders received in Europe forfiscal 2025 will be above the level of fiscal 2024. We
expect orders for aircraft will increase from the first half,
and from the second half, orders will increase for
automobiles and general machinery, including
semiconductor production equipment.

The Group’s consolidated performance forecasts for fiscal
2025 are as follows.
(Million yen)
Forecasts for the firstsix months(1st and 2nd quarters
combined)
Forecasts for the full
fiscal year

Net sales

OperatingincomeNet income
attributable toowners of theparent5,200
4,800
101,500
down 6.5% *1down 33.1% *1down 37.5%*1*2

222,000
down 1.5%*215,50013,500
down 5.3% *2down 15.5%

Compared with the same period of fiscal 2024

*1

Year on year*2

A full-fledged recovery in orders is projected in the second
half, and the Company expects net sales and income to
decline in the following fiscal year.
The Company expects labor and logistics costs torise, while it will strive to secure profits by improving its
product mix with large-scale machines and five-axis
machines, revising unit sales prices, and promoting
improvements to operational efficiency.
In addition, the Company will work to enhance asset
efficiency through inventory reductions and cutting crossshareholdings.

3

CORPORATE GOVERNANCE

1. Corporate governance
Basic corporate governance rationale
Makino Milling Machine Co., Ltd. regards strong
management oversight functions as a vital element in
the strengthening of competitiveness, swifter decisionmaking and greater transparency.
(1) Corporate governance status
1) Governing body
Makino Milling Machine Co., Ltd. is a company with
Board of Directors. As of June 21, 2024, theCompany’s Board of Directors consists of eight
directors. The Board of Directors meets once a monthand, in addition to carrying out the tasks specified bylaws and regulations and by the Articles ofIncorporation, makes decisions on important mattersand supervises operational duties. Whereas therepresentative director elected by the Board of
Directors engages in execution of operational duties as
the representative of the Company, specificoperational duties are allocated among nonrepresentative directors and executed by them. The
term of office of a director is one year and directors
are elected by vote of the annual general meeting ofshareholders.
Makino Milling Machine Co., Ltd. is also a company
with corporate auditors and with Board of Auditors.
As of June 21, 2024, the Company’s Board of Auditors
consists of three statutory auditors (one of whom are
full-time corporate auditor), of whom two are outside
corporate auditors. The statutory auditors attend
meetings of the Board of Directors and make remarks,
as necessary, in the course of deliberation on theagenda. Also, the Board of Auditors meets periodically
and, in addition to items specified by laws andregulations, deliberates and makes decisions on
matters necessary for statutory auditors’ activities, andaudits directors’ execution of operational duties froman independent standpoint.
2) Internal control systems and risk management systems
At its meeting held on May 1, 2006, the Company’s
Board of Directors passed a resolution concerning”the development of systems necessary to ensure thatthe execution of duties by directors complies with laws
and regulations and the articles of incorporation, andother systems prescribed by the applicable Ordinanceof the Ministry of Justice as systems necessary toensure the properness of operations of a Stock
Company (internal control systems)” provided for in
Article 348 Paragraph 4 and in Article 362 Paragraph
5 of the Corporation Law. The Company’s internal
control systems and risk management systems aredescribed below.
Positioning risk management as the basis of systems
4

ensuring properness of execution of duties, theCompany is putting in place risk management systems
not only for the purpose of managing risks that may
cause losses to the Company but also for preventing
deviation from laws and regulations and the Articles ofIncorporation and for ensuring efficient execution ofduties. Directors in charge of operations anddepartmental heads are responsible for managementof usual risks. Risks that the directors or the statutory
auditors consider material, and moreover, that they
consider should be examined by the Board of Directors
are examined, judged and dealt with by the Board of
Directors.
The Company has formulated internal rules, including
the Risk Management Rules in which deviation fromlaws and regulations and the Articles of Incorporation
is provided for as a type of risk, Employment Rules andthe Security Export Control Program. The Company isendeavoring to ensure compliance with laws andregulations, rules and norms by raising employee
awareness through the provision of training for new
employees and periodic and non-periodic training.
Regarding the recording of operational activities,
records are prepared and retained in accordance with
the Rules of the Board of Directors in the case of
information on execution of duties of directors and inaccordance with the Rules for Formal Approvals in thecase of decision-making for routine operations.
Subsidiaries are required to report to the Company on
their execution of duties and risk situations, asnecessary, and the Company’s directors or employees
are dispatched as directors of subsidiaries toparticipate in management and be responsible foroversight.
Regarding audit by auditors, as well as reporting onimportant matters at meetings of the Board of
Directors, based on the statutory auditors’ requests
directors make reports or hold a meeting withstatutory auditors, as necessary. Directors andemployees are required to report to statutory auditors
without delay concerning any eventuality that may
cause significant damage or that caused damage to
the Company. In the event that statutory auditors
request assistants, the Company selects such assistants
based on the discussion with statutory auditors about
the number of assistants, positions, affiliation, etc.,
and secures the consent of the Board of Auditors fortreatment of such assistants.
In addition, with respect to the system specified by a
Cabinet Office Ordinance as necessary for ensuring
appropriateness of statements on finance andaccounting and other information as set forth in
Article 24-4-4, Paragraph 1 of the Financial
Instruments and Exchange Law, the Company

maintains and manages such system in accordancewith the basic framework of internal control as
indicated in the” On the Setting of the Standards andPractice Standards for Management Assessment andAudit concerning Internal Control Over Financial
Reporting (Council Opinions)” published by theBusiness Accounting Council.
3) Internal audit and audit by corporate auditors
Necessary audits are performed at the Company on
the basis of close cooperation between the corporate
auditors, the accounting auditor and relevant staff at
the Finance Department, the General Affairs
Department and the Internal Audit Office.
Internal audit on maintenance and management ofinternal control over financial reporting is conductedby the Internal Audit Office (consists of two members),
which is established as an independent organizationand directly reports to the President, in cooperation
with relevant departments of the Company and its
consolidated subsidiaries.
Regarding audits by the accounting auditor, necessary
coordination such as scheduling is made internallythrough discussion between the corporate auditors,
the Finance Department, the General Affairs
Department and the Internal Audit Office. Corporate
auditors and the Finance Department periodicallyexchange views with the accounting auditor and thenecessary coordination is made. In addition, corporate
auditors witness the audit process, as deemednecessary, to monitor the accounting auditor’s audit
proceedings.
Regarding audits by auditors, the statutory auditors
gather necessary and sufficient information for
conducting audits, including the situation of theCompany and situations of its subsidiaries andaffiliates, on a routine basis through systematic
exchanges of views with directors, managerial
personnel, key employees, and the accounting auditorof the Company and its subsidiaries and affiliates.
Also, statutory auditors receive reports on theaccounting auditor’s audit results, and use suchinformation in conducting stringent audits.
4) Accounting audits
Certified public accountants engaged in the
Company’s accounting audits are Mr. Akira Mishima
and Mr. Nobufumi Yoshida, both of whom are with
Gyosei & Co. Assistants engaged in the accounting
audits comprise seven certified public accountants andsix other person.
5) Relations with outside corporate auditors
There are no personal, capital or transactional relations
between the Company and its three outside corporate
auditors.

(2) Compensation paid to directors and corporate
auditors
The compensation paid to directors and corporate auditors of the Company is as follows:
Number of persons
Directors excluding outside directors
Corporate auditors excluding
outside corporate
auditors
Outside directors
and corporate
auditors

Amount of compensation (Millions of yen)

4

193

1

24

7

74

5

BUSINESS RISKSThe Group operates around the world, and theoperations are influenced by a range of different factors,
the most important of which are as follows:- Changes in global economic conditions: The salesof the Company heavily depend on capital expendituresin the manufacturing industry in Japan, Asia andAmerica. Since the investment appetite of companies islikely to fall more sharply than the general economy,
there is the possibility that orders and sales of producer
goods will decline rapidly if the global economy slows.
- Trends in individual industries: Many of theCompany’s products are used in automotive companies.
Although trends in capital expenditure in the auto sector
are the most stable in the manufacturing industry, they
have a very substantial effect on sales of the Company
because the capital expenditure, which is large, has avery significant influence on supply and demand in themarket for machine tools. Sales in growth industries,
including IT and digital home appliances, change sharply
every fiscal year because of violent fluctuations in supply
and demand.
- Exchange rate fluctuations: More than half of theCompany’s products are sold overseas. Moreover, wehave developed a range of operations overseas.
Exchange rates consequently have a significant impact on
the sales and income of the Company.
- Changes in the supply-demand of parts and raw
materials: Machine tools contain many parts and raw
materials. If supply of parts and raw materials tightens,
prices may rise, and this in turn could influence income.
If the needed quality, quantity, and delivery dates are notsecured, it could influence production and sales.
- Country risk: The Company has made inroads into
countries that are modernizing their industries. If
unexpected changes occur in the political, economic, orsocial circumstances in these countries, or if legal
regulations are established or tightened, it could affectthe sales and income of the Company.

6

CONSOLIDATED BALANCE SHEETS
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
March 31, 2023 and 2024
US$1=¥151.41
Thousands ofdollars

Millions of yen

2023

2024

2024

Cash and time deposits (Notes 3 and 15)¥68,312¥69,565$459,447

Marketable securities (Notes 2.e, 3 and 4)

4,234

3,236

21,372

Notes and accounts receivable (Notes 2.k, 3 and 5)

50,63447,842315,976

Inventories (Notes 2.f and 6)

95,116

101,548

670,682

Other current assets

12,961

11,14473,601

Allowance for doubtful accounts (Notes 2.h and 3)(1,544)(1,760)(11,624)

229,713

231,576

1,529,463

27,10028,156

185,958

620

542

3,579

Deferred income taxes (Notes 2.j and 10)

4,867

5,647

37,296

Net defined benefit assets (Notes 2.i and 8)

970

2,333

15,408Other long-term assets

6,115

7,702

50,868

Allowance for doubtful accounts (Notes 2.h and 3)

(141)

(94)

(620)

39,53244,288292,503Land

19,08020,230133,610

Buildings and structures

86,82892,437

610,507

Machinery and equipment

50,08756,819375,265

Lease assets (Note 9)

9,091

10,96072,386

Construction in progress

1,950

2,226

14,701167,039

182,674

1,206,485

Accumulated depreciation(87,824)(96,203)(635,380)

Total property, plant and equipment

79,21586,470571,098¥348,461¥362,335$2,393,071

ASSETS
Current assets:

Total current assets

Investments and other assets:
Investment securities (Notes 2.e, 3 and 4)
Long-term loans receivable

Total investments and other assets

Property, plant and equipment (Note 2.g):

Total assets
The accompanying notes are an integral part of these statements.

7

US$1=¥151.41
Thousands ofdollars

Millions of yen

LIABILITIES AND NET ASSETS
Current liabilities:
Notes and accounts payable (Note 3):
Trade
Other
Electronically recorded obligations-operating (Note 3)
Short-term loans (Notes 3 and 7)
Current portion of long-term debt (Notes 2.k, 3, 5 and 7)
Short-term lease obligations (Note 7)
Accrued expenses
Income taxes payable
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Notes 2.k, 3, 5 and 7)
Long-term lease obligations (Note 7)
Net defined benefit liabilities (Notes 2.i and 8)
Allowance for directors' andcorporate auditors' retirement benefits (Note 2.i)
Deferred income taxes (Notes 2.j and 10)
Other long-term liabilities
Total long-term liabilities
Net assets:
Shareholders’ equity
Common stock, no par value
Authorized : 60,000,000 shares		 as of March 31, 2023 and 2024
Issued: 24,893,841 shares		 as of March 31, 2023 and 2024
Capital surplus
Retained earnings (Note 13)
Treasury stock
1,012,276 and 1,176,243 shares
as of March 31, 2023 and 2024 respectively
Total shareholders' equity
Accumulated other comprehensive income
Unrealized gains on available-for-sale securities (Note 2.e)Foreign currency translation adjustments
Remeasurements of defined benefit plans (Notes 2.i and 8)
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these statements.

8

2023

2024

2024

¥20,281
8,419
19,019—6,707
932
11,611
2,080
21,64590,698¥18,496
8,118
15,263
2,277
5,816
1,219
12,374
2,522
16,037
82,124$122,158
53,616
100,805
15,03838,412
8,050
81,725
16,656
105,917542,394

46,2283,210
1,357

44,5003,533
697

293,903
23,333
4,603

122
6,973
2,083
59,975

148
7,494
2,284
58,657977
49,49415,084387,405

21,142

21,142

139,634

37,056
114,714(4,233)37,092
127,113(5,199)244,977
839,528(34,337)

168,681180,149

1,189,809

15,16012,880565
28,606
499
197,787¥348,461

16,034
23,1001,883
41,018385
221,553¥362,335

105,897
152,565
12,436
270,906
2,542
1,463,265$2,393,071

CONSOLIDATED STATEMENTS OF INCOME
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2024
US$1=¥151.41
Thousands ofdollars

Millions of yen

2023

2024

2024

¥227,985¥225,360$1,488,408

161,596

157,354

1,039,257

66,38868,005449,144

48,89551,633341,014

17,492

16,372

108,130

Interest and dividend income

1,138

1,148

7,582

Interest expense

(316)

(308)

(2,034)

Subsidy income

661

289

1,908

Gain on sales of property, plant and equipment

66

246

1,624

Gain on sales of investment securities

—

542

3,579

(499)

(55)

(363)

—

(23)

(204)

Exchange gain (loss), net

(335)

577

3,810

Other, net

1,244

839

5,541

Income before income taxes

19,45019,629129,641

Income taxes (Notes 2.j and 10) - Current

4,283

4,223

27,891- Deferred

(922)

(589)

(3,890)16,08915,995

105,640

16

14

92

¥16,073¥15,981$105,547

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income (expenses):

Loss on disposal of property, plant and equipment
Loss on valuation of investment securities

Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

Yen

Dollars

Per share of common stock:
Net income attributable to owners of the parent
Cash dividends applicable to the period¥671.86¥670.55$4.42150.00150.00

0.99

The accompanying notes are an integral part of these statements.

9

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2024
US$1=¥151.41
Thousands ofdollars

Millions of yen

2023

2024

2024

¥16,089¥15,995$105,640

985

875

5,779

4,511

10,21967,492

934

1,319

8,711

Other comprehensive income

6,431

12,413

81,982

Total comprehensive income¥22,521¥ 28,409$187,629

22,50528,393

187,523

Net income
Other comprehensive income (Note 15):
Unrealized gains on available-for-sale securities (Note 2.e)Foreign currency translation adjustments (Note 2.d)Remeasurements of defined benefit plans (Notes 2.i and 8)

Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests

The accompanying notes are an integral part of these statements.

10

16

16

105

¥22,521¥28,409$187,629

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2024
US$1=¥151.41
Thousands ofdollars

Millions of yen

2023

2024

2024

Common stock:
Balance at beginning of year
Balance at end of year¥21,142
21,142¥21,142
21,142$139,634
139,634

Capital surplus:
Balance at beginning of year
Other
Disposal of treasury stock
Balance at end of year

37,074(18)
137,05637,05623
11
37,092

244,739151
72
244,977

Retained earnings (Note 13):
Balance at beginning of year
Net income attributable to owners of the parent
Cash dividends
Balance at end of year

101,513
16,073(2,872)
114,714

114,714
15,981(3,582)
127,113757,638
105,547(23,657)
839,528

Treasury stock:
Balance at beginning of year
Acquisition of treasury stock
Disposal of treasury stock
Balance at end of year

(4,014)(265)
46(4,233)(4,233)(1,002)36(5,199)(27,957)(6,617)237(34,337)

Unrealized gains on available-for-sale securities(Note 2.e):Balance at beginning of year
Net change during the year
Balance at end of year

14,174985
15,16015,160874
16,034

100,125
5,772
105,897

Foreign currency translation adjustments(Note 2.d):Balance at beginning of year
Net change during the year
Balance at end of year

8,369
4,511
12,88012,88010,21923,10085,06767,492
152,565

Remeasurements of defined benefit plans(Notes 2.i and 8):
Balance at beginning of year
Net change during the year
Balance at end of year

(369)
935
565

565
1,318
1,883

3,731
8,704
12,436

886
(387)
¥499

499
(113)
¥385

3,295
(746)
$2,542

Non-controlling interests:
Balance at beginning of year
Net change during the year
Balance at end of year
The accompanying notes are an integral part of these statements.

11

CONSOLIDATED STATEMENTS OF CASH FLOWS
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2023 and 2024
US$1=¥151.41
Thousands ofdollars

Millions of yen

2023

2024

2024

¥19,450¥19,629$129,641(4,859)7,903(3,690)8,266(24,370)
54,593

(7)
(94)
71
(66)
499
—
1,278
(12,107)(8,075)(1,045)
2,948

26
(141)
(23)
(246)
55
(542)
7,589
942
(11,972)(6,982)
12,910

171
(931)
(151)
(1,624)363(3,579)50,122
6,221(79,070)(46,113)85,265

Cash flows from investing activities:(Increase) decrease in time deposits
Proceeds from sales of investment securities
Purchases of investment securities
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Other, net
Net cash provided by (used in) investing activities(1,409)—(1,207)(6,423)237
9(8,793)

1,968
651
(115)
(9,577)536
125(6,411)

12,997
4,299(759)(63,252)
3,540
825(42,341)

Cash flows from financing activities:
Increase (decrease) in short-term loans, net
Repayment of lease obligations
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchases of treasury stock
Purchases of treasury stock of subsidiaries in consolidation
Dividends paid
Other, net
Net cash provided by (used in) financing activities—(1,040)9,000(4,650)(265)(50)(2,975)
(358)
(340)

619
(1,073)4,000(5,250)(1,002)(100)(3,583)—(6,390)

4,088(7,086)
26,418(34,674)(6,617)(660)(23,664)—(42,203)(59)(6,245)75,712¥69,467

3,002
3,111
69,467¥72,578

19,826
20,546458,800$479,347

Cash flows from operating activities:
Income before income taxes
Adjustments for:
Income taxes (paid) refund
Depreciation and amortization
Increase (decrease) in allowance for directors’
and corporate auditors' retirement benefits
Increase (decrease) in net defined benefit liabilities
Increase (decrease) in allowance for doubtful accounts(Gain) loss on sales of property, plant and equipment
Loss on disposal of property, plant and equipment(Gain) loss on sales of investment securities(Increase) decrease in notes and accounts receivable, trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable, trade
Other, net
Net cash provided by (used in) operating activities

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period (Notes 2.b and 15)
The accompanying notes are an integral part of these statements.

12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries

1. Basis of Presenting Financial Statements
The accompanying consolidated financial statements of Makino Milling Machine Co., Ltd. (the “Company”) have been
prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its
related accounting regulations, and in conformity with accounting principles and practices generally accepted andapplied in Japan, which are different in certain respects as to application and disclosure requirements of International
Financial Reporting Standards..
In preparing the consolidated financial statements, certain reclassifications and rearrangements have been made to
the financial statements issued domestically in Japan in order to present these statements in a form which is morefamiliar to the readers outside Japan.
In addition, the notes to the consolidated financial statements include information which is not required undergenerally accepted accounting principles and practices in Japan but is presented herein as additional information.
Amounts of less than one million yen have been omitted as permitted under generally accepted accounting
principles and practices in Japan. As a result, the totals shown in the accompanying consolidated financial statements(both in yen and dollars) do not necessarily agree with the sum of individual amounts.
The United States dollar amounts presented in the accompanying consolidated financial statements are included
solely for convenience and are stated, as a matter of arithmetical computation only, at the rate of ¥151.41 = US$1,
which was the prevailing exchange rate on March 31, 2024.

2. Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries (40 for
2023 and 2024). The significant subsidiaries, which are consolidated with the Company, are listed below:
Makino J Co., Ltd.
Makino Denso Co., Ltd.
Makino Technical Service Co., Ltd.
Kanto Bussan Co, Ltd.
Makino Giken Co., Ltd.
Makino Logistics Co., Ltd.
MAKINO ASIA PTE LTD
MAKINO INC.
MAKINO Europe GmbH
MAKINO RESOURCE DEVELOPMENT PTE LTD
Makino Korea Co., Ltd
The remaining subsidiaries (four for 2023 and six for 2024), whose assets, net sales, net income and the underlying
net equity of retained earnings in the aggregate are not significant in the consolidated totals, have not been consolidatedwith the Company.
The fiscal year of the consolidated subsidiaries is the same as the Company’s except for some of the subsidiaries(seven for 2023 and 2024): Makino do Brasil Ltda., Single Source Technologies S. de R.L. de C.V., MAKINO CHINA Co.,
LTD. and the others, whose fiscal years end on December 31. Significant transactions between January 1 and March 31
are reflected in the consolidated financial statements.
The equity method is not applied since the combined net profit and loss and the underlying net equity of retained
earnings in the aggregate in the unconsolidated subsidiaries and four affiliates are not significant in the consolidated
totals.
All significant intercompany accounts and transactions are eliminated in consolidation.
(b) Cash equivalents
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant
risk of changes in value. Cash equivalents include time deposits and certificate of deposits, all of which mature or
become due within three months of the date of acquisition.
(c) Foreign currency translations
All short-term and long-term monetary receivables and payables denominated in foreign currencies are translated into
Japanese yen at the exchange rates at the balance sheet date. The foreign exchange gains and losses from translation arerecognized in the consolidated statements of income unless they are hedged by forward exchange contracts.

13(d) Foreign currency financial statements
The balance sheet accounts of the overseas consolidated subsidiaries are translated into Japanese yen at the rates of
exchange at the balance sheet date except as to capital, which is translated at the historical rates of exchange at dates ofacquisition. The revenue and expense accounts of those subsidiaries are translated into Japanese yen at the average rates
of exchange in effect during each fiscal year. Differences arising from translation are shown as “Foreign currencytranslation adjustments” in the net assets in the accompanying consolidated balance sheets.
(e) Marketable securities and investment securities
Investments in the unconsolidated subsidiaries and the affiliate are stated at cost. Equity method is not applied as in Note2(a). Marketable securities and investment securities other than investment securities in the subsidiaries and the affiliate
are stated at market value. However, such securities without market value are stated at cost if they are not significantly
impaired. The Company credits or charges unrealized gains or losses, net of income taxes, on the above securities to net
assets as “Unrealized gains on available-for-sale securities”.
The cost of sold securities is calculated using the gross average method.
(f) Inventories
Finished products and work in process are principally valued at the lower of cost or net realized value, determined by the
specific identification method. Raw materials and supplies are principally stated at the moving average method.
(g) Property, plant, equipment and depreciation
Property, plant and equipment, including significant renewals and additions, are carried at cost. The cost of property,
plant and equipment retired or otherwise disposed of and accumulated depreciation in respect thereof are eliminatedfrom the related accounts, and the resulting gain or loss is reflected in income. Maintenance and repairs, including minor
renewals and improvements, are charged to income as incurred.
Depreciation of the Company and the domestic consolidated subsidiaries is mainly computed by the decliningbalance method using the rates based on estimated useful lives of the assets. Depreciation of the overseas consolidated
subsidiaries is computed by the straight-line method. The range of useful lives is principally from 5 to 50 years forbuildings and structures and from 3 to 12 years for machinery and equipment.
(h) Allowance for doubtful accounts
The Group provides for possible losses due to uncollectibility of notes, accounts, loans receivable, etc. based on the
Company’s past credit loss experience and management’s estimate.
(i) Allowance for employees’ retirement benefits and directors’ and corporate auditors’ retirement benefits
Employees, excluding directors and corporate auditors, of the Company and most of its domestic consolidated
subsidiaries are covered by a retirement plan whereby each employee, under most circumstances, upon mandatory
retirement at the age of 60 years or earlier termination of employment, is entitled to either a lump sum retirement
payment or pension payment based on compensation at the time of retirement and years of service. These employees’
retirement plans are funded.
The employees’ retirement benefits are accounted for as the liability for retirement benefits based on projected
benefit obligations and plan assets in conformity with the accounting standard for the employees’ retirement benefits.
Directors and corporate auditors are not covered by these plans. However, liabilities for directors’ and corporate
auditors’ retirement benefits include amounts equal to management’s estimate of the amounts which would be payable
to them if they retired at the balance sheet date. Amounts payable to directors and corporate auditors upon retirement
are subject to the approval of shareholders.
(j) Income taxes
Deferred income taxes are recognized applying the asset and liability method. Under this method, deferred tax assets andliabilities are determined based on the difference between the financial reporting and the tax basis of the assets andliabilities, and are measured using enacted tax rates and laws that will be in effect when the differences are expected toreverse.
The Company and some of its consolidated subsidiaries adopted the consolidated taxation system effective fromthe fiscal year ended March 31, 2013.
(k) Hedge accounting
The Group uses derivative financial instruments to manage exposures to fluctuations in foreign exchange and interest
rates and does not enter into the derivatives for trading or speculative purposes.

14Forward exchange contracts are used for accounts receivable and payable denominated in foreign currencies. If thecontracts meet certain hedging criteria, the hedged items are translated at the contracted rates, and the Group defers
recognition of gains and losses resulting from changes in the fair value of the derivatives for future transactions until the
related losses and gains on the hedged transactions are recognized.
The Group enters into interest rate swap contracts for long-term loans. The swaps which qualify for hedge
accounting are not re-measured at market value, but the differential to be paid or received under the swap contracts are
accrued and included in interest expense or income (the special hedge accounting short-cut method for interest rate
swaps).
The Company assesses the effectiveness of the forward exchange contracts by comparing the contracted rate andspot rate at the balance sheet date and expiration date. The effectiveness assessment of the interest rate swaps,
however, is not undertaken as they meet the hedging criteria for the special hedge accounting short-cut method.
(l) Appropriations of retained earnings
Appropriations of retained earnings are accounted for and reflected in the accompanying consolidated financial
statements basically when they are approved by the shareholders or resolved by the Board of Directors.
(m) Reclassifications
Certain reclassifications have been made to the prior years’ consolidated financial statements to conform to the current
year’s presentation.
(n) Recognition standards for significant revenue and expenses
The Group engages mainly in manufacturing and sales of machine tools. Revenue from sales of products is recognizedwhen control of products is considered to have transferred to a customer at the point of dispatch or shipment.
Meanwhile, in certain engineering services, performance obligations are deemed to be fulfilled over a period of time,
where revenue is recognized over a period of time based on the estimated degree of progress in fulfilling performanceobligations.

3. Financial Instruments(1) Management policy
In consideration of plans for capital expenditure, the Group raises funds through loans and bonds. Temporary cash
surpluses are invested in low-risk financial assets, and short-term capital is raised through loans. The Group uses
derivatives for the purpose of reducing risk and does not enter into derivatives for speculative or trading purposes.
(2) Financial instruments and risk management
Notes and accounts receivable are exposed to customer credit risk. The Group identifies and reduces risk of bad debt byreviewing the financial positions of major customers and outstanding balances.
Notes and accounts receivable denominated in foreign currencies are also exposed to foreign exchange risk. To
reduce the risk, the Group enters into forward exchange contracts.
The Group holds marketable securities and investment securities, most of which are shares of other companies withwhich the Group has business relationships, the subsidiaries and the affiliate. Those securities are exposed to market risk,
and the Group regularly reviews the fair values of the securities and the financial positions of the issuers.
The purpose of loans and bonds is mainly to finance capital expenditure. Interest rate swaps are used to avoid
interest rate risk from loans with floating interest rates.
The Group manages liquidity risk by preparing and updating cash flow plans and maintaining sufficient funds.

15

The amount of financial instruments on the consolidated balance sheets and the fair value are as follows:
As of March 31,
Millions of yen

2023
Amount onbalance sheet

Assets
Held-to-maturity securities
Other marketable securities and investment securities
Total Assets
Liabilities
Bonds
Long-term loans
Total liabilities
Derivatives

Fair value

Difference¥2,398
28,67731,076¥2,373
28,67731,051¥(25)—(25)

20,00032,93552,935¥(8)20,02232,901
52,924
¥(8)

22
(33)
(11)
—

As of March 31,
Millions of yen

2024
Amount onbalance sheet

Assets
Held-to-maturity securities
Other marketable securities and investment securities
Total Assets
Liabilities
Bonds
Long-term loans
Total liabilities
Derivatives

Fair value

Difference¥1,299
29,61030,909¥1,282
29,61030,892¥(17)—(17)

20,00030,31650,316¥(8)20,02230,15550,178
¥(8)

22
(160)
(137)
—

As of March 31,
Thousands of dollars

2024
Amount onbalance sheet

Assets
Held-to-maturity securities
Other marketable securities and investment securities
Total Assets
Liabilities
Bonds
Long-term loans
Total liabilities
Derivatives

Fair value

Difference$8,579
195,561
204,141$8,467
195,561
204,028$(112)—(112)

132,091
200,224
332,316$(52)

132,236
199,161
331,404$(52)

145(1,056)(904)—(3) Fair value information of financial instruments by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to the observability andmateriality of inputs used to measure fair value.
Level 1 fair value: Fair value measured using quoted prices (unadjusted) in active markets for identical assets or
liabilities
Level 2 fair value: Fair value measured using directly or indirectly observable inputs other than those included within
Level 1
Level 3 fair value: Fair values measured by material but unobservable inputs
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.

16

(a) Financial assets and financial liabilities measured at fair value in the consolidated balance sheets
As of March 31,
Millions of yen

2023
Securities and investment securities
Available-for-sale-securities
Total assets
Derivative transactions
Currency-related
Total liabilities

Level 1

Level 2

Level 3Total

¥25,677
25,677

¥—
—

¥—
—

¥25,677
25,677

—
¥—

(8)
¥(8)

—
¥—

(8)
¥(8)

As of March 31,
Millions of yen

2024
Securities and investment securities
Available-for-sale-securities
Total assets
Derivative transactions
Currency-related
Total liabilities

Total

Level 1

Level 2

Level 3

¥26,610
26,610

¥—
—

¥—
—

¥26,610
26,610

—
¥—

(8)
¥(8)

—
¥—

(8)
¥(8)

As of March 31,
Thousands of dollars

2024
Securities and investment securities
Available-for-sale-securities
Total assets
Derivative transactions
Currency-related
Total liabilities

Total

Level 1

Level 2

Level 3

$175,747
175,747

$—
—

$—
—

$175,747
175,747

—
$—

(52)
$(52)—$—(52)$(52)(b) Financial instruments other than those measured at fair value in the consolidated balance sheets
As of March 31,
Millions of yen

2023
Level 1

Level 2

Level 3

Securities and investment securities
Held-to-maturity bonds
Available-for-sale-securities
Total assets

Total

¥—
—
—

¥2,373
3,000
5,373

¥—
—
—

¥2,373
3,000
5,373

Bonds
Long-term loans payable
Total liabilities

—
—
¥—

20,02232,901¥52,924——¥—

20,02232,901¥52,924

As of March 31,
Millions of yen

2024
Total

Level 1

Level 2

Level 3

Securities and investment securities
Held-to-maturity bonds
Available-for-sale-securities
Total assets

¥—
—
—

¥1,282
3,000
4,282

¥—
—
—

¥1,282
3,000
4,282

Bonds
Long-term loans payable
Total liabilities

—
—
¥—

20,02230,155¥50,178——¥—

20,02230,155¥50,17817

As of March 31,
Thousands of dollars

2024
Total

Level 1

Level 2

Level 3

Securities and investment securities
Held-to-maturity bonds
Available-for-sale-securities
Total assets

$—
—
—

$8,467
19,81328,280$———$8,467
19,81328,280

Bonds
Long-term loans payable
Total liabilities

—
—
$—

132,236
199,161$331,404——$—132,236
199,161$331,404* Explanation regarding the valuation methods and inputs used in fair value measurement
Securities and investment securities
Shares are evaluated based on quoted prices. As shares are traded in active markets, their fair value is classified
as Level 1. Bonds are evaluated based on the price quoted on the exchange or provided by financial institutions.
Bonds are classified as Level 2 because they are not traded frequently in the public market and not considered tohave quoted prices in active markets. Certificates of deposit are classified as Level 2 because they are notconsidered to have quoted prices in active markets. Due to their short-term maturity, their carrying amount isquoted as fair value because it approximates their fair value.
Derivative transactions
The fair value of forward exchange contracts is measured using the discounted cash flow method based on
observable inputs, such as exchange rates, and is classified as Level 2. Forward exchange contracts under hedge
accounting are treated as one combined with hedged monetary claims, hence their fair value is included in thefair value of such monetary claims. Interest rate swaps qualifying for special accounting treatment are treated as
one combined with hedged long-term loans payable, hence their fair value is included in the fair value of suchlong-term loans payable.
Bonds
Fair value of bonds issued by the Company is measured by discounting the sum of principal and interest by using
the interest rate assumed to be applicable to new bond issuance on similar conditions. While market prices forfair value of corporate bonds are available, their fair value is classified as Level 2 because they are not traded inan active market.
Long-term loans payable
Fair value of long-term loans payable is measured by discounting the sum of principal and interest by using theinterest rate assumed to be applicable to new borrowings on similar conditions, and is classified into Level 2.

4. Marketable Securities and Investment Securities
Marketable securities and investment securities quoted at an exchange as of March 31, 2023 and 2024.
(1) Held-to-maturity securities
As of March 31,
Millions of yen

2023
Securities whose market value exceeds amount on balance sheet
Securities whose market value does not exceed amount on balance sheet
Total

Amount onbalance sheet

Market value

Difference¥—¥2,398¥2,398¥—¥2,373¥2,373¥—¥(25)¥(25)

As of March 31,
Millions of yen

2024
Securities whose market value exceeds amount on balance sheet
Securities whose market value does not exceed amount on balance sheet
Total

18

Amount onbalance sheet

Market value

Difference¥—¥1,299¥1,299¥—¥1,282¥1,282¥—¥(17)¥(17)

As of March 31,
Thousands of dollars

2024
Securities whose market value exceeds amount on balance sheet
Securities whose market value does not exceed amount on balance sheet
Total

Amount onbalance sheet

Market value

Difference$—$8,579$8,579$—$8,467$8,467$—$(112)$(112)(2) Other marketable securities and investment securities
As of March 31,
Millions of yen

2023
Available-for-sale securities whose amount on balance sheet
exceeds acquisition cost(1) Stocks(2) Other
Subtotal
Available-for-sale securities whose amount on balance sheet
does not exceed acquisition cost(1) Stocks(2) Other
Subtotal
Total

Amount onbalance sheet

Acquisition cost¥25,643
11¥25,655¥4,1309¥4,139¥21,513
2¥21,515¥—3,022¥3,022¥28,677¥—
3,030¥3,030¥7,170

¥—
(8)
¥(8)
¥21,507

Difference

As of March 31,
Millions of yen

2024
Available-for-sale securities whose amount on balance sheet
exceeds acquisition cost(1) Stocks(2) Other
Subtotal
Available-for-sale securities whose amount on balance sheet
does not exceed acquisition cost(1) Stocks(2) Other
Subtotal
Total

Amount onbalance sheet

Acquisition cost¥26,573
12¥26,586¥4,0279¥4,036¥22,5462¥22,549¥—3,024¥3,024¥29,610¥—3,030¥3,030¥7,067

¥—
(6)
¥(6)
¥22,542

Difference

As of March 31,
Thousands of dollars

2024
Available-for-sale securities whose amount on balance sheet
exceeds acquisition cost(1) Stocks(2) Other
Subtotal
Available-for-sale securities whose amount on balance sheet
does not exceed acquisition cost(1) Stocks(2) Other
Subtotal
Total

Amount onbalance sheet

Acquisition cost$175,503
79$175,589$26,596
59$26,656$148,906
13$148,926$—19,972$19,972$195,561$—20,011$20,011$46,674$—(39)$(39)$148,880

Difference195. Derivative Financial Instruments(1) Derivatives to which hedge accounting is not applied(a) Currency related
As of March 31,
Millions of yen

2023
Forward exchange contracts
Sales contracts
USD
EUR
Purchase contracts
JPY
Total

Contracted amountContracted amountover one year

¥400
262

—
—

¥1
(3)

¥1
(3)

¥290
¥953

—
—

¥(5)
¥(8)

¥(5)
¥(8)

Fair value

Unrealized gain (loss)

As of March 31,
Millions of yen

2024
Forward exchange contracts
Sales contracts
USD
EUR
Purchase contracts
JPY
Total

Contracted amountContracted amountover one year

¥757
130

—
—

¥(4)
0

¥(4)
0

¥149
¥1,037

—
—

¥(4)
¥(8)

¥(4)
¥(8)

Fair value

Unrealized gain (loss)

As of March 31,
Thousands of dollars

2024
Forward exchange contracts
Sales contracts
USD
EUR
Purchase contracts
JPY
Total

20

Contracted amountContracted amountover one year$4,999858——$(26)
0$(26)
0$984$6,848——$(26)$(52)$(26)$(52)

Fair value

Unrealized gain (loss)

(2) Derivatives to which hedge accounting is applied(a) Currency related
As of March 31,
Millions of yen

2023
Hedge accounting
methodNature oftransaction

Method where
hedged items
are translated atcontracted rates

Forward exchange
contracts
Sales contracts
USD
EUR
Total

Hedged item

Contracted amountContracted amountover one year¥9,228

—

¥44

2,485

—

(66)

¥11,713—¥(22)

Account
receivable
Account
receivable

Fair value

As of March 31,
Millions of yen

2024
Hedge accounting
methodNature oftransaction

Method where
hedged items
are translated atcontracted rates

Forward exchange
contracts
Sales contracts
USD
EUR
Total

Hedged item

Contracted amountContracted amountover one year¥ 8,942—¥ (232)

3,297

—

(83)

¥12,239—¥ (315)

Account
receivable
Account
receivable

Fair value

As of March 31,
Thousands of dollars

2024
Hedge accounting
methodNature oftransaction

Method where
hedged items
are translated atcontracted rates

Forward exchange
contracts
Sales contracts
USD
EUR
Total

Hedged item

Contracted amountContracted amountover one year$ 59,058—$ (1,532)

21,775—(548)$ 80,833—$ (2,080)

Account
receivable
Account
receivable

Fair value

6. Inventories
Inventories as of March 31, 2023 and 2024 comprise the following:
As of March 31,
Thousands ofdollars

Millions of yen

Finished products
Work in process
Raw material and supplies
Total

2023
¥28,276
21,14045,699¥95,1162024¥34,618
18,85948,069¥101,548

2024$228,637
124,555
317,475$670,682

21

7. Short-Term and Long-Term Debts and Lease Obligations
The table below shows information on short-term and long-term debts and lease obligations:
As of March 31,

Interest rate

Short-term loans
Current portion of long-term loans

5.22*
0.37*

Long-term loans less current portion

0.42*

Yen unsecured bonds
Yen unsecured bonds
Yen unsecured bonds
Yen unsecured bonds

0.50
0.47
0.41
0.55

Short-term lease obligations—

Long-term lease obligations—

Thousands ofdollars

Millions of yen

Date of maturity asof March 31, 2024——
from August 21, 2025
to September 30, 2028
September 1, 2026
July 23, 2025
March 2, 2027
March 1, 2030—
from April 30, 2025
to December 31, 2040

2023
¥—
6,707

2024
¥2,2775,816

2024$15,038
38,412¥26,228¥24,500$161,812

5,000
5,000
5,000
5,000

5,000
5,000
5,000
5,000

33,022
33,022
33,022
33,022¥932¥1,219$8,050

3,210

3,533

23,333* The weighted average interest rate as of March 31, 2024

The aggregate annual maturities of long-term debt and lease obligations subsequent to March 31, 2024 are as
follows:
Year ending March 31,

2025
2026
2027
2028
2029

Long-term debt
Thousands ofdollars

Lease obligations
Thousands ofdollars

Millions of yen¥5,816
16,50019,000—4,000

Millions of yen$38,412
108,975
125,487—
26,418¥1,219
805
616
404
203

$8,050
5,316
4,068
2,668
1,340

8. Employees’ Retirement Benefits
The Company and its domestic consolidated subsidiaries have defined benefit pension plans, which consist of a benefit
plan provided under the Welfare Pension Insurance Law of Japan, a corporate pension plan and a lump-sum payment
plan as well as defined contribution pension plans.
Some of the overseas consolidated subsidiaries have defined contribution plans as well as defined benefit plans.
(1) Reconciliation of changes in benefit obligations
Year ended March 31,
Thousands ofdollars

Millions of yen

Balance at beginning of year
Service cost
Interest cost
Actuarial loss
Benefits paid
Other
Balance at end of year

22

2023
¥23,437777
297(2,202)(1,032)578¥21,855

2024¥21,855
685
477
(234)
(1,035)739¥22,488

2024$144,343
4,524
3,150
(1,545)(6,835)4,880$148,523

(2) Reconciliation of changes in pension assets
Year ended March 31,
Thousands ofdollars

Millions of yen

Balance at beginning of year
Expected return on pension assets
Actuarial loss
Contributions by employer
Benefits paid
Other
Balance at end of year2024
¥21,533
710
1,656
489
(1,010)813¥24,193

2023¥21,939
662(1,094)
464
(989)
551
¥21,533

2024$142,216
4,689
10,937
3,229(6,670)5,369$159,784(3) Reconciliation of changes in retirement benefit liabilities using a simplified method
Year ended March 31,
Thousands ofdollars

Millions of yen

Balance at beginning of year
Periodic benefit cost
Benefits paid
Balance at end of year

2024
¥64
11
(8)
¥68

2023
¥77
10
(23)
¥64

2024
$422
72
(52)
$449

(4) Reconciliation of benefit obligations and pension assets to net defined benefit liabilities and assets on the
consolidated balance sheet
As of March 31,
Thousands ofdollars

Millions of yen

Unfunded benefit obligations
Net amount of liabilities and assets on consolidated balance sheet2023¥21,410(21,533)
(123)
510
386

2024
¥21,993(24,193)(2,200)563(1,636)2024$145,254(159,784)(14,530)
3,718(10,805)

Net defined benefit liabilities
Net defined benefit assets
Net amount of liabilities and assets on consolidated balance sheet

1,357
(970)
¥386

697
(2,333)¥(1,636)

4,603(15,408)$(10,805)

Funded benefit obligations
Pension assets(5) Components of net periodic benefit costs
Year ended March 31,
Thousands ofdollars

Millions of yen

Service cost
Interest cost
Expected return on plan assets
Actuarial loss recognized in the year
Periodic benefit cost in simplified method
Other
Net periodic benefit costs of retirement benefit plan

2024
¥685
477
(710)
(65)
11
7
¥405

2023
¥777
297
(662)
(47)
10
38
¥413

2024
$4,524
3,150(4,689)(429)
72
46$2,674(6) Re-measurements of defined benefit plans before related tax effects on the consolidated statements ofcomprehensive income
Year ended March 31,
Thousands ofdollars

Millions of yen

Actuarial loss
Total

2023
¥(1,060)¥(1,060)2024¥(1,825)¥(1,825)2024$(12,053)$(12,053)

23

(7) Re-measurements of defined benefit plans before related tax effects on the consolidated balance sheets
As of March 31,
Thousands ofdollars

Millions of yen

2024¥(2,978)¥(2,978)2023¥(1,153)¥(1,153)

Unrecognized actuarial loss
Total

2024
$(19,668)$(19,668)(8) Breakdown of pension assets
As of March 31,

2024
34.4%
30.7%
9.4%
25.5%
100.0%

2023
27.8%
30.6%
10.5%
31.1%
100.0%

Stocks
Bonds
Insurance assets
Other
Total

(9) Assumptions used in accounting for the plans
Year ended March 31,

2024
Mainly 1.1%
Mainly 2.0%2023
Mainly 1.1%
Mainly 1.5%

Discount rateLong-term expected rate of return on plan assets(10) Contributions to defined contribution pension plans by the Company and its consolidated subsidiaries
Year ended March 31,
Thousands ofdollars

Millions of yen

2023¥1,6192024¥1,7902024$11,822

9. Leases
Lease assets accounted for as finance leases are depreciated using the same methods applied to the tangible fixed assets
which the Company owns, except for those not accompanying the transfer of ownership, which are depreciated toresidual value of zero by the straight-line method over the lease terms.
Future lease payments, including interest portion, subsequent to March 31, 2023 and 2024 for non-cancelable
operating leases are as follows:
Thousands ofdollars

Millions of yen

Due within one year
Due after one year
Total

24

2023
¥
477
382
860
¥

2024
¥382
—
¥382

2024
$2,522—$2,52210. Income Taxes
Breakdown of deferred tax assets and liabilities is as follows:Year ended March 31,
Thousands ofdollars

Millions of yen

2023

2024

2024

Deferred tax assets:
Tax loss carry forward
Accrued expenses
Directors' and corporate auditors' retirement benefits
Net defined benefit liabilities
Long-term accounts payable
Valuation loss on investment securities
Reseach and development costs
Other
Subtotal
Valuation allowance for tax loss carryforwards
Valuation allowance for temporary differences
Deferred tax assets¥1,684
1,606
40
555
4
524
570
4,398
9,385
(1,078)(1,559)¥6,747

¥585
1,593
49
371
4
505
1,180
5,027
9,318
—
(1,345)¥7,973$3,863
10,521
323
2,450
26
3,335
7,793
33,20161,541—(8,883)$52,658

Deferred tax liabilities:
Unrealized gains on available-for-sale securities
Net defined benefit assets
Tax depreciation over book
Other
Deferred tax liabilities
Net deferred tax assets (liabilities)¥(6,341)(371)(1,200)(940)(8,854)¥(2,106)¥(6,501)(740)(1,261)(1,316)(9,820)¥(1,846)$(42,936)(4,887)(8,328)(8,691)(64,857)$(12,192)

Reconciliation between the statutory and effective tax rates is as follows:Year ended March 31,

2023
30.6%
(0.2)
(3.6)
0.2
(8.0)
(2.1)
0.3
17.3%

Statutory tax rate
Income not deductible for income tax purposes
Valuation allowance
Per capita inhabitant tax
Difference in statutory tax rates for subsidiaries
Tax credits
Other
Effective tax rate

2024
30.6%
(0.2)
(6.7)
0.2
(6.1)
(1.1)
1.8
18.5%

11. Revenue recognition(1) Disaggregation of revenue from contracts with customers
Year ended March 31, 2023
Goods or services transferred at a point in time
Goods or services transferred over time
Revenue from contracts with customers(Millions of yen)I¥53,785—¥53,785II¥91,449
1,254¥92,704

III¥54,302
9,520¥63,823IV¥17,671—¥17,671

Year ended March 31, 2024
Goods or services transferred at a point in time
Goods or services transferred over time
Revenue from contracts with customers

Total¥217,209
10,775¥227,985(Millions of yen)I¥53,673—¥53,673II¥86,777
2,797¥89,575

III¥50,720
9,726¥60,447IV¥21,665—¥21,665

Total¥212,837
12,523¥225,360

25

Year ended March 31, 2024

(Thousands of dollars)

I
II
III
IV
$354,487 $573,125 $334,984 $143,088
18,47364,236——$354,487 $591,605 $399,227 $143,088

Goods or services transferred at a point in time
Goods or services transferred over time
Revenue from contracts with customers

Total$1,405,699
82,709$1,488,408(2) Basic information in understanding revenue
Basic information in understanding revenue is as stated in “2. Summary of Significant Accounting Policies (n) Recognition
standards for significant revenue and expenses”(3) Relationship between the satisfaction of performance obligations based on the contracts with customers and cash
flows arising from such contracts, and the amount and timing of revenue arising from contracts with customers existingat the end of the current fiscal year expected to be recognized in and after the following fiscal year(a) Contract asset and contract liability balancesYear ended March 31,
Thousands ofdollars

Millions of yen

Receivables from contracts with customers (beginning balance)
Receivables from contracts with customers (ending balance)
Contract assets (beginning balance)
Contract assets (ending balance)
Contract liabilities (beginning balance)
Contract liabilities (ending balance)2023¥46,695
48,5701,737
2,063
20,062¥21,596

2024¥48,570
47,2382,063
604
21,596¥15,633

2024$320,784
311,987
13,625
3,989
142,632$103,249(b) Transaction price allocated to the remaining performance obligations
The performance obligations that are unsatisfied (or partially unsatisfied) amounted to 97,702 million yen at the endof the current fiscal year. Such performance obligation relates primarily to manufacturing and sales of machine tools,of which approximately 95% are expected to be recognized as revenue within one year after the end of the current
fiscal year, while the remaining approximately 5% are more than one year after the end of the current fiscal year.

12. Research and Development Costs
Research and development costs are as follows:Year ended March 31,
Thousands ofdollars

Millions of yen

Research and development costs2023¥9,2472024¥9,2572024$61,138

13. Retained Earnings and per Share Data
In accordance with the Japanese Corporation Law, dividends and the related appropriations of retained earnings may beapproved by the shareholders or resolved by the Board of Directors after the end of each fiscal year. The dividends andthe related appropriations of retained earnings are not reflected in the financial statements at the end of such fiscal years
but recorded at the time they are approved or become effective. However, dividends per share shown in theaccompanying consolidated statements of income are included in the periods to which they are applicable.
Earnings per share are based on the weighted average number of shares of common stock outstanding during eachperiod.
Cash dividends per share are based on cash dividends declared as applicable to the respective periods.
A summary of information regarding dividends is as follows:26

(1) Dividends paid in the year ended March 31, 2023
Resolution

Class ofsharesGeneral shareholders’ meeting(June 23, 2022)
Board of Directors(October 31, 2022)

Commonstock
Commonstock

Amount of dividends

Dividend
per share¥

1,196 million¥ 50.00¥

1,675 million¥ 70.00

Funds fordividends

Record date

Effective date

Retained
March 31, 2022
June 24, 2022
earnings
Retained
September 30, 2022 December 2, 2022
earnings(2) Dividends in respect of the year ended March 31, 2023 which become payable after the balance sheet date
Resolution

Class ofsharesGeneral shareholders’ meeting(June 22, 2023)

Commonstock

Amount of dividends¥

1,910 million

Dividend
per shareFunds fordividends

Record date

Effective date

¥ 80.00

Retainedearnings

March 31, 2023

June 23, 2023

Record date

Effective date(3) Dividends paid in the year ended March 31, 2024
Resolution

Class ofsharesAmount of dividends

Dividend
per shareFunds fordividends

General shareholders’ meeting(June 22, 2023)
Board of Directors(October 31, 2023)

Commonstock
Commonstock¥
1,910 million$12,614 thousand¥
1,672 million$11,042 thousand¥80.00$0.52¥70.00$ 0.46

Retained
March 31, 2023
June 23, 2023
earnings
Retained
September 30, 2023 December 4, 2023
earnings(4) Dividends in respect of the year ended March 31, 2024 which become payable after the balance sheet date
Resolution

Class ofsharesAmount of dividends

Dividend
per shareFunds fordividends

Record date

Effective date

General shareholders’ meeting(June 20, 2024)

Commonstock¥
1,897 million$12,528 thousand¥80.00$ 0.52

Retainedearnings

March 31, 2024

June 21, 2024

14. Comprehensive Income
Reclassification adjustments and tax effects relating to components of other comprehensive income are as follows:Year ended March 31,
Thousands ofdollars

Millions of yen

2023

2024

2024

Unrealized gains on available-for-sale securities:
Gains arising during the period
Reclassification adjustment
Tax effectUnrealized gains on available-for-sale securities¥1,345
—
(359)
¥985

¥1,460
(425)
(160)
¥875

$9,642(2,806)(1,056)$5,779

Foreign currency translation adjustments:
Adjustments arising during the period¥ 4,511¥10,219$67,492

Remeasurements of defined benefit plans:Remeasurements arising during the period
Reclassification adjustment
Tax effectRemeasurements of defined benefit plans

1,108
(47)
(125)
¥
934

1,891
(65)
(506)
¥1,319

12,489(429)(3,341)$8,711¥ 6,431¥12,413$81,982

Other comprehensive income

2715. Cash and Cash Equivalents
Reconciliation of cash and time deposits on the consolidated balance sheets to cash and cash equivalents on the
consolidated statements of cash flows is as follows:
As of March 31,
Thousands ofdollars

Millions of yen

2024¥69,565
3,236
72,802(223)¥72,578

2023¥68,312
4,234
72,546(3,079)¥69,467

Cash and time deposits
Marketable securities
SubtotalTime deposits with maturities over three months
Cash and cash equivalents2024$459,447
21,372
480,826(1,472)$479,347

16. Segment Information(1) Reportable segment information
The Group’s reportable segments are defined as individual units where independent financial information is available andwhich are subject to regular review by the Board of Directors to evaluate their results and decide the allocation ofmanagement resources. The reportable segments are summarized as follows:
Reportable segment I is a segment for which Makino Milling Machine Co., Ltd. is responsible. Its main areas are
Japan, the Republic of Korea, China, Oceania, Russia, Norway, the United Kingdom, and all other areas not included inreportable segments II, III or IV.
Reportable segment II is a segment for which MAKINO ASIA PTE LTD (Singapore) is responsible. Its main areas are
China, ASEAN and India.
Reportable segment III is a segment for which MAKINO INC. (The United States of America) is responsible. It covers
all countries in North and South America.
Reportable segment IV is a segment for which MAKINO Europe GmbH (Germany) is responsible. It covers all
countries in the European continent except Norway.
The accounting policies on the reportable segments are consistent with those presented in Note 2. Income for eachreportable segment denotes operating income, and intersegments are based on market prices in general.
Year ended March 31, 2023
Net sales:
External customers
Intersegment
Total
Segment income
Segment assets
Depreciation and amortization
Amortization of goodwill
Capital expenditure(Millions of yen)

I

II

III

IV

Total

¥53,785
87,472
141,258
7,644
226,7444,656—¥3,997¥92,704
13,436106,141
7,569
97,9492,262—¥3,108¥63,823
437
64,261
4,051
58,455
852
65
¥614

¥17,671
28
17,699113
22,366389—¥101¥227,985
101,374
329,360
19,379405,516
8,161
65¥7,822

I

II

III

IV

Total

¥53,673
84,372138,0459,447
229,3544,481—¥ 5,716¥89,575
11,037
100,612
4,816
110,0052,591—¥ 4,547¥60,447
667
61,114
2,158
59,405952
69¥ 1,565¥21,665
12
21,677535
21,981
342
—
¥
323

¥225,360
96,089321,450
16,957420,7468,367
69¥12,153

Year ended March 31, 2024
Net sales:
External customers
Intersegment
Total
Segment income
Segment assets
Depreciation and amortization
Amortization of goodwill
Capital expenditure

28(Millions of yen)Year ended March 31, 2024

(Thousands of dollars)

I
Net sales:
External customers
Intersegment
Total
Segment income
Segment assets
Depreciation and amortization
Amortization of goodwill
Capital expenditure

II

III

IV

$354,487 $591,605 $399,227 $143,088
557,241
72,894
4,405
79
911,729664,500
403,632
143,167
62,39331,807
14,252
3,533
1,514,787
726,537
392,345
145,175
6,287
2,258
29,595
17,112——455—$ 37,751 $ 30,031 $ 10,336 $
2,133

Total
$1,488,408
634,627
2,123,043
111,9932,778,852
55,260455$80,265

Reconciliation of reportable segment information to consolidated financial statements
Year ended March 31,
Millions of yen

Net sales
Elimination
Consolidated net sales2023¥329,360(101,374)¥227,985

2024¥321,450(96,089)¥225,360

Thousands ofdollars2024$2,123,043(634,627)$1,488,408

Year ended March 31,
Millions of yen

Segment income
Elimination
Consolidated operating income2023¥19,379(1,886)¥17,492

2024¥16,957(584)¥16,372

Thousands ofdollars2024$111,993(3,857)$108,130

Year ended March 31,
Millions of yen

Segment assets
Elimination
Consolidated total assets2023¥ 405,516(57,055)¥ 348,461

2024¥420,746(58,410)¥362,335

Thousands ofdollars2024$2,778,852(385,773)$2,393,071

Year ended March 31,
Millions of yen

Depreciation and amortization
Elimination
Amount on consolidated financial statements

2023
8,161
(258)
¥
7,903

¥

2024
¥8,367(101)¥8,266

Thousands ofdollars2024$55,260(667)$54,593

Year ended March 31,
Millions of yen

Capital expenditure
Elimination
Amount on consolidated financial statements

2023
7,822
(143)
¥
7,678

¥

2024
¥12,153(117)¥12,036

Thousands ofdollars2024$80,265(772)$79,49229

(2) Geographical information
Year ended March 31,
Thousands ofdollars

Millions of yen

Sales by destination
Japan
USA
Americas, excluding USA
China
Asia, excluding China
Europe
Other
Total

2023

2024

2024

39,80756,444
7,577
76,907
26,697
18,7651,785¥ 227,985¥41,533
53,963
7,622
68,60230,53420,5032,601¥225,360$274,308
356,403
50,340453,087
201,664
135,413
17,178$1,488,408¥Year ended March 31,
Thousands ofdollars

Millions of yen

2023
Property, plant and equipment
Japan
Americas
Asia
Europe
Total

¥

¥

43,1653,544
30,0082,497
79,2152024

2024¥44,585
4,365
34,7362,783¥86,470$294,465
28,829229,416
18,380$571,098

2024¥192.41
128.98150.75
198.622024$1.27
0.85
0.99
1.31

17. Quarterly Earnings per Share
Quarterly earnings per share attributable to owners of the parent are as follows:
Yen

Three months ended
June 30
September 30
December 31
March 312023
¥99.77
123.36218.63230.13

Dollars

18. Subsequent Events
Repurchase of the Company’s common stock
On April 30, 2024, the Board of Directors resolved to repurchase up to 180 thousand shares of the Company’s common
stock. The shares will be repurchased for a maximum of ¥1,000 million ($6,604 thousand) from May 1, 2024 to August
31, 2024.

30

31

32

33

34

35

36

BOARD OF DIRECTORS AND CORPORATE AUDITORS
President
Executive Vice President, Director
Executive Vice President, Director
Director
Director
Director
Director
Director
Corporate Auditor
Corporate Auditor
Corporate Auditor

Shotaro Miyazaki
Toshiyuki Nagano
Tatsuaki Aiba
Haruyuki Shiraishi
Naofumi Masuda
Kodo Yamazaki
Kazuo Takahashi
Ayako Takai
Akio Komura
Jinei Yamaguchi
Naoko Takatsuka

CORPORATE DATA
Makino Milling Machine Co., Ltd.
Date of Foundation May 1, 1937
Paid-in Capital¥21,142 million

Activities

Manufacture, sale and export of machine tools

Head Office

3-19, Nakane 2-chome, Meguro-ku, Tokyo 152-8578, Japan
Phone : +81-3-3717-1151
Fax: +81-3-3725-2105

Research Laboratory Atsugi (Kanagawa)Domestic Works

Atsugi (Kanagawa), Fuji-Katsuyama (Yamanashi)

Overseas Works

MAKINO ASIA PTE LTD (Singapore)
MAKINO CHINA CO., LTD (China)
MAKINO INDIA PRIVATE LIMITED (India)

Sales & Service Offices Tokyo, Osaka, Nagoya and 13 other offices
Overseas Sales & Service Offices
USA, Germany, Singapore, Korea, China, India and others
Consolidated Subsidiaries
See page 13.
As of June 21, 202437

3-19, Nakane 2-chome, Meguro-ku, Tokyo 152-8578, Japan
Phone : +81-3-3717-1151
Fax: +81-3-3725-2105
URL : http://www.makino.co.jp/

Printed in Japan