(Summary English Translation of the Notice of the 108th Ordinary General Meeting of Shareholders Originally Issued inJapanese Language)

MAKITA CORPORATION(Stock code: 6586)
June 3, 2020
To the Shareholders of
MAKITA CORPORATIONNOTICE OF THE 108TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

You are respectfully requested to attend the 108th Ordinary General Meeting of Shareholders of MAKITA CORPORATION,
which is hereby announced.
To prevent the further spread of the novel coronavirus (COVID-19), we kindly ask you to decide whether or not to attend themeeting after checking your health condition.
Instead of attending the meeting, you may exercise your voting rights by mail or via the Internet in advance. Please review theaccompanying information and exercise the rights by 5 p.m., Wednesday, June 24, 2020.

Munetoshi Goto
President
MAKITA CORPORATION
3-11-8, Sumiyoshi-cho, Anjo City,
Aichi Prefecture, 446-8502, Japan

1.

Date and Time: 10 a.m., Thursday, June 25, 2020

2.

Place:

3.

Agenda:Items to be Reported:
1. The Business Report, Consolidated Financial Statements for the 108th period (from April 1, 2019 to March 31,2020) and the Audit Reports on such Consolidated Financial Statements by the Accounting Auditor and the
Audit & Supervisory Board
2. The Financial Statements for the 108th period

Head Office of MAKITA CORPORATION, 5th Floor
3-11-8, Sumiyoshi-cho, Anjo City,
Aichi Prefecture, 446-8502, Japan

Items to be Resolved:
No.1
Appropriation of Surplus
No.2
Election of 3 Audit & Supervisory Board Members
No.3
Payment of Bonus to Directors

NOTE:

The notes to the consolidated and non-consolidated financial statements are not included in the attachments since
they are posted on the Corporation’s website (https://www.makita.biz/ir/) as provided by laws and regulations andArticle 15 of the Corporation’s Articles of Incorporation. The consolidated and non-consolidated financial
statements audited by the Accounting Auditor and the Audit & Supervisory Board consist of the documents
included in the attachments and the notes to the consolidated and non-consolidated financial statements posted on
the Corporation’s website.

-1-

REFERENCE DOCUMENT
Propositions and Explanatory Information
Agenda Item No. 1: Appropriation of Surplus
The Corporation has its basic policy for profit distribution to propose the dividends with a target consolidated
dividend payout ratio of at least 30% of profit, with a minimum amount for annual total dividends at 10 yen per
share; provided, however, that if special circumstances arise, the amount of dividends will be determined based on
Profit attributable to owners of the parent after certain adjustments reflecting such circumstances.
In accordance with this basic policy for profit distribution, and based on our comprehensive review of theconsolidated business result for this period and forecasts and plans of our future businesses, we propose year-end
dividends to shareholders as follows.
As this dividend, the total dividends for the period under review shall amount to 53 yen per share that include
interim dividends in the amount of 10 yen per share, and the consolidated dividend payout ratio is 30.1 %.
1. Matters on allocation of dividends to shareholders and total amount of allocation
43 yen per share of common stock
Total amount: 11,675,230,570 yen
2. Effective date of dividend payment
June 26, 2020-2-

Agenda Item No. 2: Election of 3 Audit & Supervisory Board Members
The term of offices of all 3 Audit & Supervisory Board Members in office, Mr. Mitsuhiko Wakayama, Mr. Akira
Kodama, Mr. Shoji Inoue will have expired at the conclusion of this General Meeting of Shareholders.
We would like to request the election of 3 Audit & Supervisory Board Members.
The candidates are as follows:
Audit & Supervisory Board has agreed to this proposal.

Candidate
NumberName(Date of birth)

Brief personal background, title and position and Important concurrent posts

March
October
Reelection
Mitsuhiko Wakayama April
June(July 6,1956)
1

2

3

Number of the
Corporation's
shares held

1981
2007
2012
2016

Joined the Corporation
General Manager of America Sales Department
General Manager of Latin America Sales Department
Standing Audit & Supervisory Board Member of the
Corporation (present)[Reason for nomination as candidate for Audit & Supervisory Board Member]
Mr. Mitsuhiko Wakayama has a deep understanding of the business of the Corporation because he has
experience of working at overseas sales subsidiaries (in Canada and Spain) and has held important
positions mainly in international sales division. The Corporation proposes his appointment as Audit &Supervisory Board Member because we expect him to continue to utilize his wealth of experience andinsight to audit the Corporation.
April
1978 Joined the Bank of Japan
March
1987 Seconded to Ministry of Foreign Affairs of Japan
Reelection
November 1999 Senior Examiner of Examination Department of the Bankof Japan
OutsideIndependent
December 2003 Chief Representative in Hong Kong of the Bank of Japan
Akira Kodama
December 2005 Director of International Department of the Bank of(April 30,1954)
Japan (in charge of Center for Monetary Cooperation in
Asia)[Attendance rate of the July
2008 Joined the Hekikai Shinkin Bank Senior Manager ofBoard of Directors
Corporate Solution
meetings]
October
2008 General Manager of Corporate Solution of Hekikai
11/12
Shinkin Bank
(92%)
June
2009 Standing Director of Hekikai Shinkin Bank
[Attendance rate of the April
2011 Managing Director and Corporate Officer of Hekikai
Audit & Supervisory
Shinkin Bank
Board meetings]
June2014 Standing Corporate Auditor of Hekikai Shinkin Bank
13/14
June
2016 Standing and Outside Audit & Supervisory Board(93%)
Member of the Corporation (present)(Important Concurrent Posts)_[Reason for nomination as candidate for Audit & Supervisory Board Member]
Mr. Akira Kodama has many years of experience at financial institutions and his expertise inaccounting and so on, with which he currently provides useful opinions from the professional
perspective. The Corporation proposes his appointment as Outside Audit & Supervisory Board
Member because we expect him to continue to utilize his wealth of experience and to insight to audit
the Corporation.
April
1991 Attorney-at-law, admitted and belonging to the Nagoya
Reelection
Bar Association [ present; Aichi Bar Association]
OutsideApril
1991 Joined Katayama Kinji Law Firm
IndependentJuly
2009 Established Inoue Shoji Law Firm
Shoji Inoue
October2010 Appointed as a Civil Conciliator at Nagoya Summary(July 29,1957)
Court
2013 Established Sao & Inoue Law Firm [present; Inoue Shoji[Attendance rate of the October
Law Firm] (present)
Board of Directors
June
2015
Outside Director of Meitetsu Transport Co., Ltd.
meetings]
June
2016
Outside Audit & Supervisory Board Member of the
12/12
Corporation (present)(100%)[Attendance rate of the
Audit & Supervisory (Important Concurrent Posts)
Board meetings]
Attorney at Law (Inoue Shoji Law Firm)
14/14
Outside Director of Meitetsu Transport Co., Ltd.
(100%)[Reason for nomination as candidate for Audit & Supervisory Board Member]
Mr. Shoji Inoue has extensive knowledge and expertise gained through his practice as attorney at law,with which he currently provides useful opinions from the professional perspective. The Corporation
proposes his appointment as Outside Audit & Supervisory Board Member because we expect him tocontinue to utilize his wealth of experience and insight to audit the Corporation.
-3-

9,000

_

500

Notes: 1. There is no special interest between the above candidates and the Corporation.
2. The matters concerning Outside Audit & Supervisory Board Member candidate Mr. Akira Kodama are as
follows:(i) Mr. Akira Kodama had served as an executive officer of the Hekikai Shinkin Bank, which is one of thecounterparty financial institution of the Corporation, the Corporation has no material business relations
with the Hekikai Shinkin Bank, since the Corporation has only a deposit with the Hekikai Shinkin Bank.
(ii) Mr. Akira Kodama is currently an Outside Audit & Supervisory Board Member of the Corporation, and his
term of office will be four years at the conclusion of this General Meeting of Shareholders.
(iii) With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation hasentered into a liability limitation agreement with Mr. Akira Kodama which limits the maximum amount of
his liabilities to the total amount provided for in each of the items of Article 425, Paragraph 1 of theCompanies Act. If Mr. Akira Kodama is appointed to be an Outside Audit & Supervisory Board Member, theCorporation will extend such liability limitation agreement.
(iv) The Corporation has designated Mr. Akira Kodama as an “Independent Director / Audit & Supervisory
Board Member” as required by the regulations of the Tokyo Stock Exchange and the Nagoya Stock
Exchange and made required notification therefore to these stock exchanges. If Mr. Akira Kodama iselected, the Corporation intends to appoint him again as an Audit & Supervisory Board Member .
3. The matters concerning Outside Audit & Supervisory Board Member candidate Mr. Shoji Inoue are as follows:(i)

Futamura Chemical Co., Ltd., for which Mr. Shoji Inoue currently serves as Outside Audit & Supervisory
Board Member, received a cease and desist order and a surcharge payment order from the Japan Fair Trade
Commission on November 22, 2019 for violating the provisions of Article 3 of the Act on Prohibition ofPrivate Monopolization and Maintenance of Fair Trade in connection with transactions for specific
Activated Carbon and specific Granular Activated Carbon. Mr. Inoue was not aware of the relevant facts inadvance; however, he had regularly called attention to legal compliance at Audit & Supervisory Board andother occasions. Moreover, since the relevant facts were identified, Mr. Inoue has been duly performing his
duties by making recommendations to strengthen the legal compliance system of the company and prevent
recurrences thoroughly, among other things.
(ii) Mr. Shoji Inoue is currently an Outside Audit & Supervisory Board Member of the Corporation, and his termof office will be four years at the conclusion of this General Meeting of Shareholders.
(iii) With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation hasentered into a liability limitation agreement with Mr. Shoji Inoue which limits the maximum amount of his
liabilities to the total amount provided for in each of the items of Article 425, Paragraph 1 of theCompanies Act. If Mr. Shoji Inoue is appointed to be an Outside Director, the Corporation will extend suchliability limitation agreement.
(iv) The Corporation has designated Mr. Shoji Inoue as an “Independent Director / Audit & Supervisory Board
Member” as required by the regulations of the Tokyo Stock Exchange and the Nagoya Stock Exchange andmade required notification therefore to these stock exchanges. If Mr. Shoji Inoue is elected, the Corporation
intends to appoint him again as an Audit & Supervisory Board Member .
4. The number of the Corporation's shares held by candidates for Audit & Supervisory Board Members represents
the actual number of shares each candidate holds, including those vested to him in Makita’s stock ownershipplan for the Executives.

Agenda Item No. 3: Payment of Bonus to Directors
Bonus to Directors of the Corporation is, as with the basic policy for profit distributions, linked to consolidated
business result. Compensation to Outside Directors and Audit & Supervisory Board Members are fixed, and they
are not eligible to receive bonus payments.
At end of the period, the Corporation has 13 Directors. In accordance with above policy, we would like to pay
Directors’ bonuses to 11 Directors in the amount of 195 million yen considering performance during the period.
This is with the exception of Mr. Akiyoshi Morita and Mr. Masahiro Sugino.

-4-

BUSINESS REPORT(From April 1, 2019 to March 31, 2020)
1. Matters on the Current Status of Makita(1) Progress and Results of Operations

Looking at the global economic situation for the year ended March 31, 2020, the spread of the novel coronavirus(COVID-19) had a serious impact on the world economy while business sentiment worsened due to rising
uncertainties, including the trade friction between the U.S. and China, developments over Brexit, and the tense
situation in the Middle East.
Under these circumstances, on the development side, Makita expanded lithium-ion battery product lines, suchas 40Vmax Series equipped with our original “Smart System” to maximize the power of tools and realize highpower and longer life of battery, cordless gardening equipment with power and performance equal toengine-powered products, and cordless televisions with radios useful for collecting information at the time ofdisaster.
On the production side, we continued to implement measures including the promotion of multi-polarized global
production, cost reduction through local procurement of components, and introduction of labor-saving or
unmanned facilities.
On the sales side, we focused on expanding the sales of lithium-ion battery products. Furthermore, we worked
hard to strengthen our community- and customer-based sales network by increasing sales and after-sales service
bases, and enhanced logistics system by making aggressive investments in warehouses and logistic facilities inJapan and overseas.
Our consolidated revenue for this period increased by 0.4% from the previous year to 492,617 million yen,record-high sales, due to robust sales primarily in East Europe and Japan, although the value of overseas
revenue translated into yen was eroded by the impact of the exchange rate and demand for tools decreased
because of the effects of the novel coronavirus (COVID-19).
Revenue by region are as follows:
Revenue in Japan increased by 9.3% to 100,697 million yen compared to the previous year. This was because
demand for highly efficient cordless power tools was solid due to the labor shortage in architecture andconstruction fields and sales of cordless gardening equipment were strong.
Revenue in Europe increased by a mere 1.4% to 216,230 million yen due to the market impacts of the novel
coronavirus (COVID-19), which started to spread towards from the end of the fourth quarter, although demand for
power tools in almost all areas was solid and sales growth of cordless products was steady up to the third
quarter despite a decrease in the value of revenue caused by the appreciation of the yen against the euro.
Revenue in North America decreased by 0.3% to 72,304 million yen. This was because of the value of revenue
decreased due to appreciation of the yen against the dollar and the market impacts of the novel coronavirus(COVID-19), which started to spread towards from the end of the fourth quarter, despite our efforts to expand salesof lithium-ion battery products including gardening equipment amid intensifying competition in the U.S.
Revenue in Asia decreased by 4.7% to 38,998 million yen. This was due to the market impacts of the novel
coronavirus (COVID-19), which started to spread towards from the middle of the fourth quarter, although sales inIndia and other countries were steady up to the third quarter despite the impact of an economic slowdown in
China.
Revenue in Central and South America decreased by 6.5% to 26,000 million yen since the economies of majorcountries slowed and the yen remained stronger against local currencies, despite our efforts to expand sales,
principally lithium-ion battery products.
Revenue in Oceania decreased by 6.0 % to 28,421 million yen. This was because the market impacts of the novel
coronavirus (COVID-19) started to spread towards from the end of the fourth quarter and the yen remained stronger
against local currencies, although we promoted cordless gardening equipment despite the impact of a sluggish
housing market in Australia.
Revenue in the Middle East and Africa decreased by 27.6% to 9,967 million yen. This was due to thecontinuing turmoil in the Middle East, resulting in poor sales.
Overall, overseas revenue accounted for 79.6% of total revenue.
Operating profit decreased by 18.2% to 64,046 million yen (operating profit ratio: 13.0%), owing to thedeterioration of the cost-of-sales ratio due to the increase in selling, general and administrative expenses and theimpact of the exchange rate and tariff between the U.S. and China, although revenue increased. And profit
before income taxes decreased by 17.4% to 66,008 million yen (profit before income taxes ratio: 13.4%) and-5-

profit attributable to owners of the parent decreased by 14.4% to 47,731 million yen (ratio of profit attributableto owners of the parent: 9.7%).
(2) Management Challenges

While the prospect for the global economy will continue to be uncertain, Makita believes that demand for tools,
which contribute to the solution of social problems, such as the labor shortage and environmental problem
including frequent natural disasters and global warming, help to achieve a high level of work efficiency and arefriendly to people and the global environment, will increase further in both developed countries and emerging
countries.
Under these circumstances, Makita is strengthening its R&D and product development capabilities, mainly charge anddischarge technologies of batteries and motors, to take the initiative in expanding the market for cordless products. In
addition, Makita is positioning cordless gardening tools as a future pillar of its business after power tools andfocusing its efforts on the development and sales expansion of new products. Makita implements measures tostrengthen and improve the efficiency of production, procurement, and distribution, while further upgrading global
production organizations. Further, Makita is striving to raise its brand power by promoting the establishment of a sales
and after-sales service network to offer community-based and fine-tuned responses to the needs of customers around theworld.
By taking these actions, Makita will strive to contribute to the realization of a sustainable society, and maintain asolid presence in the industry as a global supplier of a comprehensive range of tools for creating comfortable homes
and living environments.
In closing, we would like to thank you for your ongoing support and continuing assistance.
[Impacts of the Novel Coronavirus (COVID-19) on Makita]
Makita has a high overseas revenue ratio, therefore, the stagnation of economic activity due to the outbreak of the novel
coronavirus at a global level may reduce demand for tools, and thus its revenue and profit. The spread of the coronavirus
in Europe, Japan, and North America may have great impacts on the consolidated business results of Makita because it
has particularly high revenue ratios in these regions.
Moreover, in February 2020, when the outbreak started in China, the China Plant of Makita took countermeasures
including temporary production cuts and a suspension of operations. If China sees a renewed outbreak, it may have great
impacts on the production and operating activities of Makita because it has a high production ratio and many suppliers in
the country.
(3) Capital Expenditures
During the period, Makita allocated 44,409 million yen for its capital expenditures. These funds used by the
Corporation amounted to 19,406 million yen. This reflected mainly capital expenditures for distribution warehouse at
the Okazaki plant, and sites for logistics center in Okayama Prefecture and Saitama Prefecture. These funds also usedby the subsidiaries amounted to 25,003 million yen. This reflected mainly capital expenditures for buildings,
machinery equipment and metal molds for new products at the Romania plant and the China plant.

-6-(4) Changes in Financial Position and Results of Operations

Description

105th period(ended March 31,
2017)

106th period(ended March 31, 2018)

U.S. GAAP

108h period
107th period(ended March 31, (ended March 31,
2020)
2019)
IFRS

Revenue
414,999477,298477,298
490,578492,617(Millions of Yen)
Operating profit
62,564
79,76280,23178,30564,046(Millions of Yen)
Profit before incometaxes
64,73879,67879,86579,91966,008(Millions of Yen)
Profit attributable toowners of the parent
44,78254,75554,94355,75047,731(Millions of Yen)
Profit attributable toowners of the parent per
164.96201.70202.39205.37175.80share(Basic) (Yen)Profit attributable toowners of the parent per
164.95201.68202.37205.34
share(Diluted) (Yen)
Total assets
597,249
651,031654,841
680,250
674,564(Millions of Yen)
Equity attributable toowners of the parent
502,170
551,939554,046
572,748571,275(Millions of Yen)
Ratio of profit
attributable to owners of
the parent to total equity
9.1
10.4
10.4
9.9
8.3
attributable to owners of
the parent (ROE) (%)
Notes: 1. From the 107th period, consolidated financial statements are prepared in accordance with International Financial
Reporting Standards (IFRS). Amounts for the 106th period based on IFRS are also stated for reference.
2. Changes in Financial Position and Results of Operations are stated under the terms of IFRS.
3. Profit attributable to owners of the parent per share (Basic), and profit attributable to owners of the parent per share(Diluted) in the 105th, 106th and 107th period are calculated based on the average number of outstanding shares ofcommon stock during the period.
4. The Corporation implemented a two-for-one common stock split of the Corporation, effective April 1, 2017. Profit
attributable to owners of the parent per share (Basic), and profit attributable to owners of the parent per share(Diluted) in the 105th, 106th and 107th period are calculated on the assumption that the relevant stock split had
been implemented at the beginning of the 105th period.
5. Information on profit attributable to owners of the parent per share after full dilution in the 108th period is omitted,
since there is no potential common stock.
6. Ratio of profit attributable to owners of the parent to total equity attributable to owners of the parent (ROE) =Profit attributable to owners of the parent / [(Equity attributable to owners of the parent at the beginning of theperiod + Equity attributable to owners of the parent at the end of the period) / 2]
7. Amounts of less than 1 million yen have been rounded.

-7-

(5) Significant Subsidiaries
Proportion of
Ownership andVoting interest(%)

Capital(Thousands)

Company Name

Principal Business

Makita U.S.A. Inc.

USD

161,400

100.0

Sales of power tools

Makita (U.K.) Ltd.

GBP

21,700100.0*

Sales of power tools

Makita Werkzeug G.m.b.H. (Germany) EUR

7,669

100.0*

Sales of power tools

Makita France SAS

EUR

12,436

55.0*

Sales of power tools

Makita Oy (Finland)

EUR

100

100.0*

Sales of power tools

Makita LLC (Russia)

RUB

83,207100.0*

Sales of power tools

Makita (China) Co., Ltd.

USD

80,000100.0

Production and sales of power tools

Makita (Kunshan) Co., Ltd.

USD

25,000100.0

Production of power tools

Makita (Australia) Pty. Ltd.

AUD

13,000

100.0

Sales of power tools

SC Makita EU S.R.L.

RON

732,907

100.0

Production of power tools

Makita do Brasil Ferramentas Elétricas
BRL
717,567
99.9
Production and sales of power tools
Ltda.
Note: * indicates that the Proportion of Ownership and Voting interest include the shares owned by the subsidiaries.
(6) Principal Operations
Makita is primarily involved in the production and sales of power tools such as cordless impact drivers, hammer drills,
circular saws and angle grinders, pneumatic tools such as air nailers and tackers, gardening equipment such as grass
trimmers, hedge trimmers, and household tools such as cordless cleaners.
(7) Principal Sales Offices and Plants
1. The Corporation
Name

Location

Head office

Anjo (Aichi)

Sales offices

Tokyo, Nagoya, Osaka

Plant

Okazaki (Aichi)-8-

2. Subsidiaries
Name
For Sales
Makita U.S.A. Inc.
Makita (U.K.) Ltd.
Makita Werkzeug G.m.b.H.
Makita France SAS
Makita Oy
Makita LLC
Makita (Australia) Pty. Ltd.

Location
Los Angeles (United States)
London (United Kingdom)
Ratingen (Germany)
Bussy Saint-Georges (France)
Helsinki (Finland)
Moscow (Russia)
Sydney (Australia)

For Production and Sales
Makita (China) Co., Ltd.
Makita do Brasil Ferramentas Elétricas Ltda.

Kunshan, Jiangsu (China)
Ponta Grossa (Brazil)

For Production
Makita (Kunshan) Co., Ltd.
SC Makita EU S.R.L.

Kunshan, Jiangsu (China)
Branesti (Romania)(8) Employees
1. Employees of Makita
Number of Employees

Increase / Decrease

17,0902. Employees of the Corporation
Number of Employees
2,958

666 (Increase)

Increase / Decrease

Average Age

Average Years of Service

52 (Increase)

41.2

17.8

-9-

2. Shareholding Status of the Corporation(1) Total Number of Shares Authorized to be Issued by the Corporation: 992,000,000 shares(2) Total Number of Outstanding Shares:

280,017,520 shares(including treasury stock of 8,500,530 shares)(3) Number of Shareholders:

10,836(4) Major Shareholders:Number of shares held(Thousands of Shares)

Name of Shareholders

Percentage(%)

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

21,623

7.96

Japan Trustee Services Bank, Ltd. (Trust account)

11,362

4.18

Maruwa, Ltd.

8,638

3.18

MUFG Bank, Ltd.

8,426

3.10

Japan Trustee Services Bank, Ltd. (Trust account 9)

7,217

2.65

The Bank of New York Mellon as Depositary Bank for DR Holders

6,549

2.41

Makita Cooperation Companies' Investment Association

6,442

2.37

Sumitomo Mitsui Banking Corporation

5,800

2.13

JPMorgan Chase Bank 385151

5,626

2.07

State Street Bank and Trust Company 505001

5,440

2.00

Note: The Percentage is calculated based on the total number of outstanding shares (excluding treasury stock) at the end of
the period.

- 10 -

3. Directors and Audit & Supervisory Board Members of the Corporation(1) Directors and Audit & Supervisory Board Members
Title
Name
Position at the Corporation and Important Concurrent Posts
Chairman*

Masahiko Goto

President*

Munetoshi Goto

Director
Managing Corporate Officer
Director
Corporate Officer
Director
Corporate Officer
Director
Corporate Officer
Director
Corporate Officer
Director
Corporate Officer
Director
Corporate Officer
Director
Corporate Officer
Director
Corporate Officer

Tadayoshi Torii

General Manager of Production Headquarters

Hisayoshi Niwa

General Manager of Quality Headquarters

Shinichiro Tomita

General Manager of Purchasing Headquarters

Tetsuhisa Kaneko

General Manager of Research and Development Headquarters

Tomoyuki Ota

Assistant General Manager of Research and Development Headquarters

Takashi Tsuchiya

General Manager of Domestic Sales Headquarters

Masaki Yoshida

Assistant General Manager of Production Headquarters

Takashi Omote

General Manager of International Sales Headquarters

Yukihiro Otsu

General Manager of Administration Headquarters

Director

Akiyoshi Morita

Director

Masahiro Sugino

Advisor of LIXIL Corporation
Outside Director of MISAWA HOMES CO., LTD.
Outside Director of KITAKEI CO., LTD.

Standing Audit &Mitsuhiko Wakayama
Supervisory Board Member
Standing Audit &Akira Kodama
Supervisory Board Member
Audit & Supervisory Board
MemberFusahiro Yamamoto

Representative of Yamamoto Accounting OfficeOutside Audit & Supervisory Board Member of SHIROKI Corporation
Representative of Yamamoto Fusahiro Tax Accountant Office
Attorney at Law (Inoue Shoji Law Firm)
Outside Director of Meitetsu Transport Co., Ltd.

Audit & Supervisory Board
Shoji Inoue
MemberNotes: 1. * denotes Representative Director.
2. In order to promote swift execution of group strategies and strengthen the business affairs of Makita, theCorporation has introduced the Corporate Officer System. Corporate officers consist of 18 members including
Directors.
3. Mr. Akiyoshi Morita and Mr. Masahiro Sugino are Outside Directors.
4. Mr. Akira Kodama, Mr. Fusahiro Yamamoto, and Mr. Shoji Inoue are Outside Audit & Supervisory Board
Members.
5. Mr. Akira Kodama, a Standing Audit & Supervisory Board Member, has a substantial amount of expertise infinance and accounting, through experience working at financial institution for many years.
6. Mr. Fusahiro Yamamoto, an Audit & Supervisory Board Member, is a certified public accountant both of Japanand U.S.A., and has a substantial amount of expertise in finance and accounting.
7. The Corporation has designated Mr. Akiyoshi Morita and Mr. Masahiro Sugino each a Director, and Mr. Akira
Kodama, Mr. Fusahiro Yamamoto and Mr. Shoji Inoue each an Audit & Supervisory Board Member, as the“Independent Director(s) / Audit & Supervisory Board Member(s)” as required by the regulations of the Tokyo
Stock Exchange and the Nagoya Stock Exchange and made required notification therefore to these stock
exchanges.

- 11 -

(2) Total Amounts of Compensation and Bonus to Directors and Audit & Supervisory Board Members
Total amounts of each type of Compensation and Number of payment recipients

Classification

Total amountsofCompensation(Millions of
Yen)

Base
Compensation(Millions ofYen)

Numberofpayment
recipients

Bonuses(Millionsof Yen)Numberofpayment
recipients

Stock
Option(Millionsof Yen)Numberofpayment
recipients

Restricted
SharesCompensation(Millions ofYen)

Number of
payment
recipients

Directors

359

122

13

195

11

10

11

32

11

Audit &
Supervisory
Board
Members

41

41

4

-

-

-

-

-

-

Total

400

163

17

195

11

10

11

32

11

Notes: 1. The aggregate amount of base compensation includes the amount of 36 million yen paid to Outside Executives(2 Outside Directors and 3 Outside Audit & Supervisory Board Members).
2. Other than the above, the amount of 145 million yen was paid to 8 Directors who concurrently serve as
employees as employee salaries (including bonuses).
3. The Corporation terminated the retirement allowance plan for Directors and Audit & Supervisory Board
Members as of the conclusion of the Ordinary General Meeting of Shareholders held in June, 2006. At such
Ordinary General Meeting of Shareholders, it was resolved that retirement allowance for Directors and Audit &Supervisory Board Members were to be paid at the time of each retirement, and it was further resolved that thedetermination of the specific amount, payment method and other related matters are left to resolutions of theBoard of Directors with respect to the Directors and discussion of the Audit & Supervisory Board Memberswith respect to the Audit & Supervisory Board Members. The amount recorded in the retirement allowance for
Directors and Audit & Supervisory Board Members as of March 31, 2020 is 326 million yen, which will be paid
to 3 Directors.
4. The maximum amounts of annual compensation for all Directors and Audit & Supervisory Board Members,
each of which was approved by a resolution passed at the Ordinary General Meeting of Shareholders held in
May 1989, is 240 million yen (excluding bonuses and the amounts paid to Directors who concurrently serve as
employees as employee salaries) and 60 million yen, respectively.
5. The maximum amount of annual compensation relating to stock-compensation-type stock options allocated to
Directors, which was approved by a resolution passed at the Ordinary General Meeting of Shareholders held in
June 2015, is 100 million yen, in addition to the amount of compensation set forth in Note 4 above.
6. The Corporation passed a resolution introducing compensation system by the allotment of restricted shares on
the Ordinary General Meeting of Shareholders held in June, 2019.
Specifically, it was resolved that the maximum total annual amount of monetary compensation receivables to be
paid to Eligible Directors as compensation relating to the restricted shares was set at 100 million yen, separatelyfrom the compensation set forth in Note 4 above. At a time, the Corporation abolished the provisions for theamounts of compensation relating to the stock acquisition rights for the purpose of granting the stockcompensation type stock options, set forth in Note 5 above, and Eligible Directors waived all these stockacquisition rights for the purpose of granting stock options that have not been exercised.
In addition, as transitional measures related to allotting restricted shares instead of the stock acquisition rights
for the purpose of granting stock options, the Corporation alloted restricted shares in the same number as thenumber of shares of the Corporation’s common stock (38,360 shares) which was subject to stock acquisitionrights for the purpose of granting stock options waived as provided for above, to Eligible Directors, separatelyfrom the allotment of restricted shares based on the above-mentioned amounts of compensation related to therestricted shares by a resolution passed at the Meeting. And, only in the 108th period, the maximum total annual
amount of monetary compensation receivables to be granted as compensation to make such allotment to Eligible
Directors was set at 300 million yen by the resolution.
7. The above stock option and restricted shares compensation represent the expenses recorded for the 108th period.

- 12 -

(3) Decision-Making Policy on Compensation for Directors and Audit & Supervisory Board Members
The Corporation pays monthly compensation to Directors based on their positions and other factors within the
maximum total amount of monthly compensation, which was approved by a resolution passed at the General Meetingof Shareholders.
The bonuses are to be paid to Directors (excluding Outside Directors), and are linked to consolidated business resultswith the aim of enhancing their motivation for improvement of business results of Makita.
The restricted shares compensation are introduced to Directors (excluding Outside Directors) with the aim of sharing
the risks and benefits of stock price fluctuations with shareholders to a greater extent and further enhancing theirmotivation to contribute to improving the stock price and the corporate value of the Corporation.
Full amount of the compensation to Audit & Supervisory Board Members is fixed so that the independence of the
Audit & Supervisory Board Members from the management can be secured and the specific amount for each Audit &Supervisory Board Member is decided through discussions among Audit & Supervisory Board Members.
(4) Outside Directors and Audit & Supervisory Board Members
1. Relation between important organization of concurrent post and the Corporation
There is no special interest between important organization of concurrent post and the Corporation.
2. Major activities during the period

Classification

Name

Attendance rate of
the Board of
Directors meetings(total attended/ total held)

Attendance rate of
the Audit &Supervisory Board
meetings(total attended/ total held)

Director

Akiyoshi Morita

83%(10/12)-

Director

Masahiro Sugino

92%(11/12)-

Audit & Supervisory
Board Member

Akira Kodama

92%(11/12)93%(13/14)

Audit & Supervisory
Board Member

Fusahiro Yamamoto100%(12/12)100%(14/14)

Audit & Supervisory
Board Member

Shoji Inoue100%(12/12)100%(14/14)

Major activities

He expressed his opinions asnecessary based on the great
perspective and management
experience in the Toyota
Group companies which area world’s leading corporategroup.
He expressed his opinions asnecessary based on the great
perspective and management
experience in the LIXILGroup companies which area world’s leading corporategroup.
He expressed his opinionsfrom his independent
position as necessary.
He expressed his opinionsfrom the professional
perspective of certified
public accountant.
He expressed his opinionsfrom the professional
perspective of attorney atlaw.

3. Outline of Liability Limitation Agreement
With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation has entered intoa liability limitation agreement with each of the Directors and each of the Audit & Supervisory Board Members
which limits the maximum amount of their liabilities to the total amount provided for in each of the items of Article
425, Paragraph 1 of the Companies Act.

- 13 -

4. Accounting Auditor(1) Name of Accounting Auditor: KPMG AZSA LLC(2) Compensation and Other Amounts
Amount of payment(Millions of Yen)
1. Compensation and other amounts to the Accounting Auditor for the period130

2. Total amount of cash and other financial benefits payable by the Corporation and its
subsidiaries to the Accounting Auditor

130

Notes: 1. As the audit agreement between the Corporation and its accounting auditors does not differentiatecompensation for audit under the Companies Act from the one for audit under Financial Instruments andExchange Law, the amount shown in 1. above represents total compensation and other amounts for bothaudits.
2. The Audit & Supervisory Board agreed to compensation to Accounting Auditors as stipulated in Article
399, Paragraph 1 of the Companies Act, after examination of their performance of accounting audit
services and basis for the calculation of the estimated amount of their compensation in the prior years,
which examination was made in line with the “Practical Guidelines for Cooperation with Accounting
Auditors” released by the Japan Audit & Supervisory Board Members Association.
3. KPMG AZSA LLC is a member firm in Japan of KPMG International and the accounting audits of all
principal subsidiaries of the Corporation are conducted by member firms of KPMG International.
(3) Contents of Non-Audit Services
None.
(4) Decision-Making Policy on Dismissal or Non-Reappointment of Accounting Auditor
If the accounting auditor falls under any of the events prescribed in each of the items of Article 340, Paragraph 1 of theCompanies Act, the Audit & Supervisory Board shall dismiss such accounting auditor with the consent of all the Audit& Supervisory Board Members. In the case of such dismissal, such dismissal and reasons therefor shall be reported to
the first General Meeting of Shareholders to be held after such dismissal.
In addition, if it is identified as difficult for the accounting auditor to properly conduct audits as a result of any reason
that may harm the independence of the accounting auditor, the Audit & Supervisory Board will decide the details of theagenda concerning the non-reappointment of such accounting auditor that is to be submitted to a General Meeting of
Shareholders, and pursuant to such decision, the Board of Directors will submit the agenda concerning the
non-reappointment of such accounting auditor to the General Meeting of Shareholders.

- 14 -

5. Systems and Policies of the Corporation(1) Systems to ensure that Corporation’s operation will be conducted appropriately
1. Systems to ensure that the duties of Directors and employees are executed in compliance with laws and regulations
and the Articles of Incorporation(i) The Board of Directors establishes the “Code of Ethics” and the “Guideline to the Code of Ethics for Makita”
as the principles for all Executives, and employees of Makita and each of the Directors shall keep all
Corporate Officers and employees informed of and in compliance with such ethics.
(ii) In order to ensure corporate ethics and compliance, Makita establishes the “Regulations Regarding Corporate
Ethics Help Line (Internal Reporting),” sets contact points both internally and outside Makita, and builds asystem to discover internal problems. In addition, an inquiry point shall be established on the Makita’s
website, to receive opinions and suggestions from outside Makita concerning accounting, internal controls
and auditing.
(iii) An Internal Audit Division conducts internal audit as deemed necessary.
2. Systems concerning the retention and management of information regarding the execution of duties by Directors
Information regarding the execution of duties by Directors shall be appropriately kept and managed in accordancewith internal regulations such as the Regulations of the Board of Directors and the Regulations on Corporate
Approval. Directors and Audit & Supervisory Board Members shall have access to such information.
3. Rules and other systems for risk management(i) Each Director has the power and responsibility to build a risk management system in Makita in the businessareas of which they are in charge, and in the case where a significant event affecting the management of
Makita arises, the Director shall report such event to the Board of Directors and Audit & Supervisory Board.
(ii) Rules and guidelines on risk management regarding quality control, accident prevention, cash management
and others, shall be established as necessary and operated by each department.
4. Systems to ensure the efficient execution of Director’s duties(i) A regular meeting of the Board of Directors shall be held once a month and extraordinary meetings shall beheld whenever necessary. In addition, pursuant to management policy decided by the Board of Directors,
priority targets shall be established for each department in each period. Each Director shall execute his duty toaccomplish relevant target and the Board of Directors shall oversight the progress and performance thereof.
(ii) The Board of Directors establishes standards concerning management structure and organization, positions,divisions of functions and duties and powers, which constitutes the basis for implementing management
policy, and operates business systematically and efficiently.
(iii) The Board of Directors introduces the Corporate Officer System in order to promptly implement Makita
strategy and strengthen the operational organization, and thereby make the business operation flexible andefficient.
(iv) Makita assigns respective liaison departments to all subsidiaries within the Corporation, and makes efforts toenhance group-wide management efficiency through discussions and consultations, information exchanges
with the objective of efficiently operating subsidiaries.
5. Systems to ensure the adequacy of business operations within Makita(i) Each of all subsidiaries is under control of Directors who are in charge of such subsidiary and importantmanagement matters and matters concerning misconduct shall be reported appropriately to such Director inaccordance with the Reporting Policy. The Director who is in charge of such subsidiary, upon receipt of suchreport, shall inform the Board of Directors of the status of supervision when necessary.
(ii) To ensure the credibility of financial reporting, the Board of Directors establishes policies on documentation
and assessment of internal controls of financial reporting of Makita and evaluates the effectiveness of said
policies.
(iii) For supervision and review of internal control systems of Makita by Audit & Supervisory Board Members, asystem shall be established for Audit & Supervisory Board Members to cooperate with the Internal Audit
Division and other related division and to receive report from Accounting Auditors.
6. Matters concerning employees posted to assist the duties of the Audit & Supervisory Board Members when the
Audit & Supervisory Board Members so require
As employees assisting the duties of the Audit & Supervisory Board Members, necessary personnel shall be
posted to assist the duties of the Audit & Supervisory Board Members.
7. Matters to ensure the independence of employees from Directors, as stated in the preceding item, and the- 15 -

effectiveness of directions given by Audit & Supervisory Board Members to those employees(i) Employees assisting the duties of Audit & Supervisory Board Members shall not work concurrently at otherdivisions, but shall exclusively follow directions from Audit & Supervisory Board Members.
(ii) In order to ensure the independence of such employees from Directors, the consent of the Audit &Supervisory Board is required for matters concering the appointment and change of such employees.
8. Systems in accordance with which the Directors and employees report to the Audit & Supervisory Board Members,
other systems concerning reports to the Audit & Supervisory Board Members and systems to ensure that Directors
and employees who make a report are not treated unfairly because of the report(i) Directors, Corporate Officers and employees of Makita shall report to the Audit & Supervisory Board
Members with respect to matters that may cause significant damage to Makita, important management matters,
matters concerning misconduct, status of structures and operation of the internal control system, and theoperation of internal reporting system and the results of reports received under such system.
(ii) The Corporation shall prepare a system that enables the Audit & Supervisory Board Members to request
reports from Directors, Corporate Officers and employees of Makita when necessary and that the Audit &Supervisory Board to exchange opinions with the Directors and Accounting Auditors of Makita.
(iii) The Corporation prohibits any unfair treatment of Directors, Corporate Officers, and employees of Makita
who make a report to the Audit & Supervisory Board Members as a result of such report, and ensures all
Directors, Corporate Officers, and employees of Makita are informed to that effect.
9. Other systems to ensure that audits by the Audit & Supervisory Board Members will be conducted effectively(i) In order to enhance the supervisory function of the Audit & Supervisory Board over Accounting Auditors,“Policies and Procedures concerning Prior Approval of Auditing and Non-Auditing Services” shall beestablished. In addition, to ensure that audits by the Audit & Supervisory Board Members will be conductedeffectively, audit shall be conducted in accordance with Standards for audit by Audit & Supervisory Board.
(ii) Full amount of the compensation to Audit & Supervisory Board Members shall be fixed so that theindependence of the Audit & Supervisory Board Members can be secured.
(iii) Expenses related to executing the duties of Audit & Supervisory Board Members are securely budgeted eachfiscal year and borne by the Corporation.
10. Systems to ensure elimination of antisocial forces(i) From the viewpoint of corporate social responsibility, Makita will consistently take a resolute stance against
involvement in, and have absolutely no relationship with, the activities of antisocial forces that may threaten
the order and the security of civil society.
(ii) Makita’s policy of “no intervention by antisocial forces has been permitted” is publicly announced, bothinternally and outside the Corporation, by expressly stipulating such in the management policy/quality policy
and by displaying such on the Corporation’s website.
(iii) Ban on transactions with antisocial forces is expressly stated in the “Guidelines to the Code of Ethics for
Makita” which prescribes the standards for officer and employee conduct applicable in the execution of theirtasks. Each Director shall keep all Corporate Officers and employees informed of and in compliance withsuch prohibition.
(iv) The Corporation has been liaising closely with the police and external related organizations, including the
Public Interest Incorporated Foundation for Aichi Residents’ Conference for Violence, and endeavors toprevent any involvement in activities of antisocial forces, any damage caused thereby, and others.
(v) In addition to collecting information relevant to activities of antisocial forces from the police and external
related organizations, the Corporation voluntarily participates in seminars. Also, the Corporation endeavors toshare information within the Corporation and related departments of Makita.
(2) Implementation status of systems necessary for ensuring that the Corporation’s operations are conducted
appropriately
1. Compliance(i) The Corporation kept all officers and employees of Makita informed and provided training on the “Code of
Ethics,” “Guidelines to the Code of Ethics for Makita,” and “Regulations Regarding Corporate Ethics Help
Line (Internal Reporting),” on a continual basis.
(ii) The Corporation conducted a questionnaire survey of all employees to raise awareness about the importanceof compliance and have them better understand the “Code of Ethics.”
2. Risk management
The Disclosure Committee meetings were held three times during the period, at which Representative Directors,
Directors in charge, Standing Audit & Supervisory Board Members, and General Managers of Internal Audit- 16 -

Division and respective departments of the Corporation met to detect and extract and examine risks involved in
the business activities of Makita.
3. Internal audits(i) The Internal Audit Division carried out internal audits of Makita, and reported their results to the Audit &Supervisory Board and the management.
(ii) The Corporation has established a framework under which any deficiency in internal controls found during aninternal control audit is appropriately corrected or redressed in a timely manner.
4. Systems to ensure the efficient execution of Directors’ duties(i) The Board of Directors approved annual targets set by each department and oversaw their progress towardachievement.
(ii) Corporate Officers in charge of operation (18 officers as of March 31, 2020, including 5 officers overseas)
were assigned to major departments in order to operate business systematically and efficiently.
5. Duties of Audit & Supervisory Board Members(i) Audit & Supervisory Board Members met Accounting Auditors and exchanged information every quarter.
(ii) Audit & Supervisory Board Members had individual interviews with all Directors to exchange information.
(iii) Expenses necessary for executing the Audit & Supervisory Board Members’ duties were handled promptly at
the request of Audit & Supervisory Board Members.

- 17 -

CONSOLIDATED BALANCE SHEET(As of March 31, 2020)(Millions of Yen)
(Assets)
Current assets(Liabilities)
460,466

79,376

Current liabilities

Cash and cash equivalents

143,439

Trade payables and other payables

34,959Trade receivables and other receivables

69,599Borrowings

7,997

Inventories

214,560

Other financial liabilities

2,468

Other financial assets

25,235

Income taxes payable

3,757

Other current assets

7,633

Provisions

2,931

Other current liabilities

27,264Non-current assets

214,098

Property, plant and equipment

146,649

Goodwill and intangible assets

8,749

Retirement benefit liabilities

3,138

Other financial assets

38,551Other financial liabilities

9,894

Retirement benefit asset

9,511

Provisions

1,248

Deferred income taxes

6,932

Deferred tax liabilities

4,952

Other non-current assets

3,706

Other non-current liabilities

Non-current liabilities

19,440208
98,816

Total liabilities(Equity)Common stock

23,805Additional paid-in capital

45,531Retained earnings

540,063

Treasury stock, at cost

(11,554)

Other components of equity
Total equity attributable to owners of theparentNon-controlling interest
Total equity
Total assets

674,564

Note: Amounts less than 1 million yen have been rounded.

- 18 -

Total liabilities and equity(26,570)
571,275
4,473
575,748674,564

CONSOLIDATED STATEMENT OF INCOME(From April 1, 2019 to March 31, 2020)(Millions of Yen)

REVENUE

492,617

Cost of sales(323,776)

GROSS PROFIT

168,841

Selling, general, administrative and others, net(104,795)

OPERATING PROFIT

64,046

Financial income

2,558

Financial expenses(596)

PROFIT BEFORE INCOME TAXES

66,008

Income tax expenses(17,957)

PROFIT

48,051

Profit attributable to:
Owners of the parent

47,731

Non-controlling interests

320

Note: Amounts less than 1 million yen have been rounded.

- 19 -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(From April 1, 2019 to March 31, 2020)(Millions of Yen)
Equity attributable to owners of the parent

Balance at April 1, 2019

Retainedearnings

Common stock

Additional
paid-in capital

23,80545,571

508,622

Treasury stock

Other
components ofequity(11,681)

6,431

47,731

Profit for the period-(32,460)

15,271

(2)

(2)

(13)

61

48

(27)

68

41
(541)

-

-

(40)

(16,290)

127

(541)

(16,744)

23,80545,531

540,063(11,554)(26,570)

571,275

Total equity

Balance at April 1, 2019

4,474

577,222

Profit for the period

320

48,051Other comprehensive
income(176)(32,636)

Comprehensive income

144

15,415(145)(16,976)

Purchase of treasury
stock
Disposal of treasury
stock
Share-based paymenttransaction
Transfer from othercomponents of equity
to retained earnings
Total amounts oftransactions withownersBalance at March 31,
2020(32,460)(16,831)541

Non-controllinginterest

Dividends paid-

(32,460)(16,831)

Dividends paid
Purchase of treasury
stock
Disposal of treasury
stock
Share-based paymenttransaction
Transfer from othercomponents of equity
to retained earnings
Total amounts oftransactions withownersBalance at March 31,
2020

47,731-

572,748
47,731Other comprehensive
incomeComprehensive income

Total

(2)
48
41
(145)

(16,889)

4,473

575,748

Note: Amounts less than 1 million yen have been rounded.

- 20 -

BALANCE SHEET(As of March 31, 2020)(Millions of Yen)
(Assets)
Current assets(Liabilities)
145,571

Cash and time deposits

58,441

Trade notes receivable

172

Trade accounts receivable

Current liabilities

38,366

Trade accounts payable

23,965

Other payable

3,402

43,708

Accrued expenses

6,139

Marketable securities

2,123

Income taxes payable

2,693

Finished goods and merchandise

24,764

Allowance for directors’ bonuses

194

Work-in-process

1,458

Allowance for product warranties

508

Raw materials and supplies

4,380

Other

Short-term loans receivable

6,852

Other

3,679

Allowance for doubtful accounts
Fixed assets
Tangible fixed assets
Buildings
Structures
Machinery and equipment

Vehicles and transportation equipment

Long term liabilities
Retirement and termination allowance
Retirement allowance for directors and audit &(6)
292,400
56,702
16,817
1,969
3,498

1,465

supervisory board members
Long-term deposits payable
Other

Total liabilities

1,247
253
326
184
484
39,613(Net assets)

112

Shareholders' equity

392,481

Tools, furniture and fixtures

5,367

Common stock

24,206

Land

17,991

Capital surplus

47,648Construction in progress

10,948Intangible fixed assets

2,709

Additional paid-in capital
Other capital surplus
Retained earnings

47,525
123

Software973

Industrial property rights

741

Legal reserve

Other

995

Other retained earnings

326,512Investment and other assets

232,989

Reserve for dividend

750

Investment securities

30,347

Reserve for technical research

1,500

Stocks of affiliates

93,679Reserve for advanced depreciation

2,447

Investment in affiliates

89,413General reserves

85,000Retained earnings carried forward

236,815

Long-term loans receivable

174

332,181
5,669

Lease deposits

6,826

Prepaid pension cost

10,572

Valuation and translation adjustments

5,877

Deferred income tax assets

1,861

Net unrealized gains on securities

5,877

Other

Total assets

Treasury stock(11,554)117

437,971

Total net assets

398,358

Total liabilities and net assets

437,971

Note: Amounts less than 1 million yen have been rounded.

- 21 -STATEMENT OF INCOME(From April 1, 2019 to March 31, 2020)(Millions of Yen)
Net sales

295,161

Cost of sales

233,795

Gross profit

61,366

Selling, general and administrative expenses

39,627

Operating income

21,739Non-operating income
Interest and dividend income

39,198Other non-operating income

420

39,618Non-operating expense
Loss on sales of securities

3

Exchange losses on foreign currency transactions

1,009

Other non-operating expense

1

Ordinary income

1,013
60,344Extraordinary gain
Gain on sales of fixed assets

1,063

Gain on sales of investment securities

524

1,587

Extraordinary loss
Loss on sale and disposal of fixed assets

123

Loss on valuation of investment securities

76

199

Income before income taxes

61,732

Income taxes - current

8,881

Income taxes - deferred

480

Net income

52,371

Note: Amounts less than 1 million yen have been rounded.

- 22 -STATEMENT OF CHANGES IN NET ASSETS(From April 1, 2019 to March 31, 2020)(Millions of Yen)
Shareholders’ equity
Capital surplus
Common stock
Balance at April 1, 2019
Changes during the period
Provision of reserve foradvanced depreciation
Reversal of reserve foradvanced depreciation
Dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Net change of items otherthan shareholders’ equity
Total changes during the period
Balance at March 31, 2020

Additional paid-in capital

Other capital surplus

Total capital surplus

47,52519

47,544

104

104

104
123

104
47,64824,20624,20647,525
Shareholders’ equity
Retained earnings
Other retained earnings

Balance at April 1, 2019
Changes during the period
Provision of reserve foradvanced depreciation
Reversal of reserve foradvanced depreciation
Dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Net change of items otherthan shareholders’ equity
Total changes during the period
Balance at March 31, 2020

Balance at April 1, 2019
Changes during the period
Provision of reserve foradvanced depreciation
Reversal of reserve foradvanced depreciation
Dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Net change of items otherthan shareholders’ equity
Total changes during the period
Balance at March 31, 2020

5,669

750

1,500

Total
Treasuryshareholders’stockequityRetainedearnings
carriedforward202,285

Total
retainedearnings

1,051(1,051)

-

-

(41)

41

-

-

(16,831)52,371(16,831)52,371(2)
69(16,831)52,371(2)
173

67(11,554)

35,711
392,481

Legal Reserve Reserve Reserve forfor
reserveadvancedfortechnical depreciation
dividend
research
5,669
750
1,500
1,437

1,010
2,447

Generalreserves
85,00085,00034,530236,815

Valuation and translation adjustments
Net unrealized gains on
Total valuation and translation
securities
adjustments
8,807
8,807

296,641

35,540332,181Stockacquisitionrights132(11,621)356,770

Total net assets
365,709(16,831)52,371(2)
173(2,930)(2,930)(132)(3,062)(2,930)5,877(2,930)
5,877

(132)
-

32,649398,358

Note: Amounts less than 1 million yen have been rounded.

- 23 -

(English Translation of the Independent Auditor’s Report Originally Issued in the Japanese Language)
Accounting Audit Report of Accounting Auditor on Consolidated Financial Statements
Independent Auditor’s Report
May 19, 2020
The Board of Directors
Makita Corporation

KPMG AZSA LLC
Nagoya Office
Yasuyuki Morimoto (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Masaki Kawaguchi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

Audit Opinion
We have audited the consolidated financial statements, comprising the consolidated balance sheet, the consolidated
statement of income, the consolidated statement of changes in equity and the notes to consolidated financial statements ofMakita Corporation as at and for the year ended March 31, 2020 in accordance with Paragraph 4 of Article 444 of theCompanies Act.
In our opinion, the consolidated financial statements referred to above, which were prepared in accordance with the second
sentence of Paragraph 1 of Article 120 of the Regulation on Corporate Accounting that prescribes the omission of certain
disclosure items required under International Financial Reporting Standards (“IFRS”), present fairly, in all material respects,
the financial position and the results of operations of Makita Corporation and its consolidated subsidiaries as at the date andfor the period, for which the consolidated financial statements were prepared.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility inaccordance with auditing standards is stated in “Auditor’s Responsibility in Auditing Consolidated Financial Statements”. In
accordance with the provisions on occupational ethics in Japan, we are independent from the Company and its consolidated
subsidiaries. Further, we have fulfilled other ethical responsibilities required of accounting auditors. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Management’s Responsibility and Audit & Supervisory Board Member’s and the Audit & Supervisory Board’s
Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation in accordance with the second sentence of Paragraph 1
of Article 120 of the Regulation on Corporate Accounting that allows the omission of certain disclosure items required under
IFRS. This includes the development and operation of such internal control as management determines is necessary to enable
the preparation and fair presentation of consolidated financial statements that are free from material misstatements whether
due to fraud or error.
In preparing the consolidated financial statements, management is responsible for evaluating the appropriateness of- 24 -

preparing the consolidated financial statements based on the going concern assumptions, and disclosing matters related togoing concern if it is necessary to disclose matters related to going concern pursuant to the second sentence of Paragraph 1 of
Article 120 of the Regulation on Corporate Accounting that allows the omission of certain disclosure items required under
IFRS.
The responsibility of Audit & Supervisory Board Members and the Audit & Supervisory Board is to supervise theexecution of duties by the Directors in the development and operation of financial reporting processes.

Auditor’s Responsibility in Auditing Consolidated Financial Statements

The auditor is responsible for expressing an independent opinion on the consolidated financial statements in the audit reportbased on an audit performed by the auditor by obtaining reasonable assurance that the consolidated financial statements as awhole are free of material misstatement whether due to fraud or error. A misstatement may be due to fraud or error and isdeemed material, individually or in the aggregate, to the extent that it is reasonably expected to affect the decision-making ofusers of the consolidated financial statements.
In accordance with auditing standards generally accepted in Japan, auditors shall make professional judgments throughout
the course of their audits, and perform the following with an attitude of profession skepticism.
・

Identify and evaluate the risk of material misstatement due to fraud or error. Design and perform audit procedures toaddress the risk of material misstatement. The selection of audit procedures is based on the judgment of the auditor. In
addition, obtain sufficient and appropriate audit evidence to provide a basis for expressing our opinion.

・In making risk assessments, consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, although the objective of the consolidated financial statement audit is not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.

・

Evaluate the appropriateness of accounting policies used, the reasonableness of accounting estimates made bymanagement and the relevance of the related notes.

・Conclude whether it is appropriate for management to prepare the consolidated financial statements based on thegoing concern assumption, and whether, based on the audit evidence obtained, significant uncertainty is recognizedwith respect to the event or status that raises significant doubt about the going concern assumption. If there issignificant uncertainty regarding the going concern assumption, in the audit report alert to the notes to consolidated
financial statements, or if the notes to consolidated financial statements regarding significant uncertainty are notappropriate, the auditor must express a limited audit opinion. The auditor’s conclusion is based on the audit evidence
obtained prior to the date of the audit report, however, future events and status may make the survival of an entity
unfeasible.

・

Evaluate whether the presentation of the consolidated financial statements and the notes thereto conform to thesecond sentence of Paragraph 1 of Article 120 of the Regulation on Corporate Accounting that allows the omission ofcertain disclosure items required under IFRS and evaluate the presentation, structure and content of the consolidated
financial statements, including the related notes, and whether the consolidated financial statements represent theunderlying transactions and accounting events in a manner that achieves fair presentation.

・Obtain sufficient and appropriate audit evidence regarding the financial information of the entity and its consolidated
subsidiaries to express an opinion on the consolidated financial statements. The auditor is responsible for the direction,
supervision, and performance of its audit of the consolidated financial statements. The auditor has sole responsibility
for its audit opinion expressed.

The auditors shall report to Audit & Supervisory Board Members and the Audit & Supervisory Board the scope and timingof implementation of the planned audit, material findings in the audit, including material deficiencies in the internal controls
identified in the course of the audit, and other matters required under auditing standards.
The auditors shall report to Audit & Supervisory Board Members and the Audit & Supervisory Board the fact that they
have complied with the rules of professional ethics in Japan regarding auditor independence, matters which may be reasonably
considered to affect the independency of the auditors and, if they are applying safeguards to eliminate or reduce possible
threats, the content thereof.

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Interest
Our firm and engagement partners have no interest in the Company or its consolidated subsidiaries which must be disclosed
pursuant to the provisions of the Certified Public Accountants Act.

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(English Translation of the Independent Auditor’s Report Originally Issued in the Japanese Language)
Accounting Audit Report of Accounting Auditor on Non-Consolidated Financial Statements

Independent Auditor’s Report
May 19, 2020
The Board of Directors
Makita Corporation

KPMG AZSA LLC
Nagoya Office
Yasuyuki Morimoto (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Masaki Kawaguchi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant

Audit Opinion
We have audited the financial statements (“Financial Statements”), comprising the balance sheet, the statement of income,the statement of changes in net assets and the notes to non-consolidated financial statements, and the supplementary schedulesof Makita Corporation as at and for the year from April 1, 2019 to March 31, 2020 in accordance with Article 436-2-1 of theCompanies Act.
In our opinion, the Financial Statements referred to above present fairly, in all material respects, the financial position andthe results of operations of Makita Corporation for the period, for which the Financial Statements were prepared, in
accordance with accounting principles generally accepted in Japan.
Basis for Audit Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibility inaccordance with auditing standards is stated in “Auditor’s Responsibility in Auditing Financial Statements”. In accordancewith the provisions on occupational ethics in Japan, we are independent from the Company. Further, we have fulfilled otherethical responsibilities required of accounting auditors. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
Management’s Responsibility and Audit & Supervisory Board Member’s and the Audit & Supervisory Board’s
Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of the Financial Statements in accordance withaccounting principles generally accepted in Japan. This includes the development and operation of such internal control as
management determines is necessary to enable the preparation and fair presentation of the Financial Statements that are freefrom material misstatements whether due to fraud or error.
In preparing the Financial Statements, management is responsible for evaluating the appropriateness of preparing the
Financial Statements based on the going concern assumptions, and disclosing matters related to going concern if it isnecessary to disclose matters related to going concern pursuant to accounting principles generally accepted in Japan.

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The responsibility of Audit & Supervisory Board Members and the Audit & Supervisory Board is to supervise theexecution of duties by the Directors in the development and operation of financial reporting processes.

Auditor’s Responsibility in Auditing the Financial Statements

The auditor is responsible for expressing an independent opinion on the Financial Statements in the audit report based on an
audit performed by the auditor by obtaining reasonable assurance that the Financial Statements as a whole are free of material
misstatement whether due to fraud or error. A misstatement may be due to fraud or error and is deemed material, individuallyor in the aggregate, to the extent that it is reasonably expected to affect the decision-making of users of the Financial
Statements.
In accordance with auditing standards generally accepted in Japan, auditors shall make professional judgments throughout
the course of their audits, and perform the following with an attitude of profession skepticism.
・

Identify and evaluate the risk of material misstatement due to fraud or error. Design and perform audit procedures toaddress the risk of material misstatement. The selection of audit procedures is based on the judgment of the auditor. In
addition, obtain sufficient and appropriate audit evidence to provide a basis for expressing our opinion.

・In making risk assessments, consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, although the objective of the Financial Statement audit is not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control.

・

Evaluate the appropriateness of accounting policies used, the reasonableness of accounting estimates made bymanagement and the relevance of the related notes.

・Conclude whether it is appropriate for management to prepare the Financial Statements based on the going concern
assumption, and whether, based on the audit evidence obtained, significant uncertainty is recognized with respect tothe event or status that raises significant doubt about the going concern assumption. If there is significant uncertainty
regarding the going concern assumption, in the audit report alert to the notes to the Financial Statements, or if thenotes to the Financial Statements regarding significant uncertainty are not appropriate, the auditor must express alimited audit opinion. The auditor’s conclusion is based on the audit evidence obtained prior to the date of the audit
report, however, future events and status may make the survival of an entity unfeasible.

・

Evaluate whether the presentation of the Financial Statements and the notes thereto conform to t accounting principles
generally accepted in Japan and evaluate the presentation, structure and content of the Financial Statements, including
the related notes, and whether the Financial Statements represent the underlying transactions and accounting events ina manner that achieves fair presentation.

The auditors shall report to Audit & Supervisory Board Members and the Audit & Supervisory Board the scope and timingof implementation of the planned audit, material findings in the audit, including material deficiencies in the internal controls
identified in the course of the audit, and other matters required under auditing standards.
The auditors shall report to Audit & Supervisory Board Members and the Audit & Supervisory Board the fact that they havecomplied with the rules of professional ethics in Japan regarding auditor independence, matters which may be reasonably
considered to affect the independency of the auditors and, if they are applying safeguards to eliminate or reduce possible
threats, the content thereof.

Interest
Our firm and engagement partners have no interest in the Company which must be disclosed pursuant to the provisions of
the Certified Public Accountants Act.

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(English Translation of the Audit Report of Audit & Supervisory Board Originally Issued in Japanese Language)

AUDIT REPORTThe Audit & Supervisory Board, having discussed with each other based on the audit reports prepared by each Audit &Supervisory Board Member regarding the performance of duties of Directors during the 108th period, from April 1, 2019 toMarch 31, 2020, does hereby report the results of their audit as follows:
1. Auditing Method Employed by Audit & Supervisory Board Members and Audit & Supervisory Board and Details Thereof(1) The Audit & Supervisory Board established the audit policy and duties of each Audit & Supervisory Board Member,received reports from each Audit & Supervisory Board Member on the execution of audits and results thereof andreceived reports from Directors and other related persons and Accounting Auditors on the performance of their duties,
and, when necessary, requested explanations.
(2) In conformity with the auditing standards for the Audit & Supervisory Board Members established by the Audit &Supervisory Board and in accordance with the audit policy and the duties assigned to each Audit & Supervisory Board
Member by the Audit & Supervisory Board, each Audit & Supervisory Board Member has had communication with
Directors, employees such as a staff of Internal Audit Division and other related persons and endeavored to gather
information and create an improved environment for auditing, and conducted the audits in the following methods:(i) Each Audit & Supervisory Board Member also attended meetings of the Board of Directors and other important
meetings, received from Directors, employees and other related persons reports on the performance of theirduties, and, when necessary, requested explanations. Each Audit & Supervisory Board Member also inspected
the important documents and examined the status of operations and properties at the head office and the principal
offices of the Corporation. As for the subsidiaries of the Corporation, the Audit & Supervisory Board Members,
having communication with the directors and Audit & Supervisory Board Members and other related persons of
the subsidiaries and sharing information among them, received reports from such subsidiaries as necessary.
(ii) Audit & Supervisory Board Members regularly received from Directors, employees and other related persons
reports and, when necessary, requested explanations and expressed their opinions in connection with theresolution of the Board of Directors concerning the internal control systems necessary to ensure that theexecution of duties by directors complies with laws and regulations and the Articles of Incorporation, and othersystems necessary to ensure the properness of operations of a corporate group composed of a company and its
subsidiary, prescribed in Article 100, Paragraphs 1 and 3 of the Ordinance for Enforcement of the Companies Act,and the status of framework construction and operations of such internal control systems, developed based on thesaid resolution.
(iii) The Audit & Supervisory Board Members also monitored and examined whether the Accounting Auditor
maintains its independence and conducts its audits in an appropriate manner. The Audit & Supervisory Board
Members received reports from the Accounting Auditor on the performance of its duties and, when necessary,requested its explanations. The Audit & Supervisory Board Members also received notification from the
Accounting Auditor that it has taken steps to improve the “system for ensuring appropriate execution of theduties of an accounting auditor” (as set forth in Items of Article 131 of the Ordinance on Corporate Accounting)in compliance with the “Quality Control Standard for Auditing” (adopted by the Business Accounting Council on
October 28, 2005). The Audit & Supervisory Board Members requested explanations on such notifications whennecessary.
According to the foregoing method, the Audit & Supervisory Board Members reviewed the business report, the accompanying
supplemental schedules and the financial statements for this period (balance sheet, statement of income, statement of changes
in net assets and notes to non-consolidated financial statements) and the accompanying supplemental schedules and theconsolidated financial statements (consolidated balance sheet, consolidated statement of income, consolidated statement ofchanges in equity and notes to consolidated financial statements).
2. Results of Audit(1) Results of Audit of the Business Report and Others(i) We confirm that the business report and the accompanying supplemental schedules present fairly the status of the
Corporation in conformity with the applicable laws and regulations of Japan as well as the Articles ofIncorporation of the Corporation.
(ii) We confirm that there are no fraudulent acts or material facts that violated the applicable laws and regulations ofJapan or the Articles of Incorporation of the Corporation in the course of the performance of the duties of the
Directors.
(iii) We confirm that the substance of the resolutions by the Board of Directors regarding establishment of Internal
Control System is appropriate. We do not see anything to be pointed out on the description of the business report,
and the performance of the Directors regarding the Internal Control System.

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(2) Results of Audit of the Financial Statements and the Accompanying Supplemental Schedules
We confirm that the method and the results of the audit conducted by KPMG AZSA LLC, the Accounting Auditor, areappropriate.
(3) Results of Audit of the Consolidated Financial Statements
We confirm that the method and the results of the audit conducted by KPMG AZSA LLC, the Accounting Auditor, areappropriate.
May 21, 2020
Audit & Supervisory Board
Makita Corporation
Mitsuhiko Wakayama (Seal)
Standing Audit & Supervisory Board Member
Akira Kodama (Seal)
Standing Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)
Fusahiro Yamamoto (Seal)
Outside Audit & Supervisory Board Member
Shoji Inoue (Seal)
Outside Audit & Supervisory Board Member- 30 -