(Summary English Translation of the Notice of the 107th Ordinary General Meeting of Shareholders Originally Issued inJapanese Language)

MAKITA CORPORATION(Stock code: 6586)
June 4, 2019
To the Shareholders of
MAKITA CORPORATIONNOTICE OF THE 107TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

You are respectfully requested to attend the 107th Ordinary General Meeting of Shareholders of MAKITA CORPORATION,
which is hereby announced.
If you do not expect to attend the meeting, you may exercise your voting rights through the enclosed voting form. Please
review the accompanying information and send the enclosed voting form to us by return mail after indicating your vote for oragainst the propositions.

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

1.

Date and Time: 10 a.m., Wednesday, June 26, 20192.

Place:

3.

Agenda:Items to be Reported:
1. The Business Report, Consolidated Financial Statements for the 107th period (from April 1, 2018 to March 31,2019) and the Audit Reports on such Consolidated Financial Statements by the Accounting Auditor and the
Audit & Supervisory Board
2. The Financial Statements for the 107th 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 13 Directors
No.3
Payment of Bonus to Directors
No.4
Determination of Compensation for the Allotment of Restricted Shares to Directors (Excluding Outside
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 (http://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 62 yen per share that include
interim dividends in the amount of 10 yen per share, and the consolidated dividend payout ratio is 30.2%.
1. Matters on allocation of dividends to shareholders and total amount of allocation
52 yen per share of common stock
Total amount: 14,116,286,964 yen
2. Effective date of dividend payment
June 27, 2019-2-

Agenda Item No. 2: Election of 13 Directors
The term of offices of all 13 Directors will have expired at the conclusion of this General Meeting of Shareholders.
We would like to request the election of 13 Directors (including two Outside Directors).
The candidates are as follows:
Candidate
NumberName

Current positions and responsibilities at the Corporation

1

Masahiko Goto

Reelection

Chairman and Representative Director

2

Munetoshi Goto

Reelection

President and Representative Director

3

Tadayoshi Torii

Reelection

Director, Managing Corporate Officer
General Manager of Production Headquarters

4

Hisayoshi Niwa

Reelection

Director, Corporate Officer
General Manager of Quality Headquarters

5

Shinichiro Tomita

Reelection

Director, Corporate Officer
General Manager of Purchasing Headquarters

6

Tetsuhisa Kaneko

Reelection

Director, Corporate Officer
General Manager of Research and Development Headquarters

7

Tomoyuki Ota

Reelection

Director, Corporate Officer
Assistant General Manager of Research and Development
Headquarters

8

Takashi Tsuchiya

Reelection

Director, Corporate Officer
General Manager of Domestic Sales Headquarters

9

Masaki Yoshida

Reelection

Director, Corporate Officer
Assistant General Manager of Production Headquarters

10

Takashi Omote

Reelection

Director, Corporate Officer
General Manager of International Sales Headquarters

11

Yukihiro Otsu

Reelection

Director, Corporate Officer
General Manager of Administration Headquarters

Akiyoshi Morita

Reelection
OutsideIndependent

Outside Director

Masahiro Sugino

Reelection
OutsideIndependent

Outside Director

12

13

-3-

Candidate
NumberName(Date of birth)

Brief personal background, title and position and Important concurrent posts
March
May
July

1

2

3

Joined the Corporation
Director, Manager of Corporate Planning Department
Reelection
Managing Director, General Manager of Administration
Masahiko Goto
Headquarters(November 16, 1946)
May
1989 President and Representative DirectorJune2013 Chairman and Representative Director (present)[Reason for nomination as candidate for Director]
Mr. Masahiko Goto has been engaged in the management of the Corporation for many years servingas President as well as Chairman, and has contributed to the enhancement of corporate value. The
Corporation proposes his appointment as Director because we expect him to continue to utilize his
extensive experience and broad insight to enhance the corporate value of the Corporation.
April
1999 Joined the Corporation
April
2012 General Manager of International Sales Administration
Reelection
Department
Munetoshi Goto
June
2013 Director, Corporate Officer, General Manager of(April 26, 1975)
International Sales Headquarters
June
2017 President and Representative Director (present)[Reason for nomination as candidate for Director]
Mr. Munetoshi Goto has a deep understanding of the overall business and management of the
Corporation, with experience of serving as General Manager of International Sales Headquarters sinceJune 2013, as well as experience in domestic sales, development, and overseas sales subsidiaries. In
addition, he is leading the growth of the Corporation as President since June 2017. The Corporation
proposes his appointment as Director because we expect him to continue to utilize his great leadershipto enhance the corporate value of the Corporation.
March
1964 Joined the Corporation
April
1998 General Manager of Production Department (Assembly)
October
1998 General Manager of Production Department
June
2001 Director, General Manager of Quality Control
Headquarters
ReelectionJune2003 Director, General Manager of Production Headquarters
Tadayoshi Torii
2009 Director, Managing Corporate Officer, in charge of(December 10, 1946) June
Production and General Manager of Production
Headquarters
June
2015 Director, Managing Corporate Officer

Number of the
Corporation's
shares held

1971
1984
1987

2017

June

2009

458,490

52,000

Director, Managing Corporate Officer, General Manager
of Production Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Tadayoshi Torii has served as General Manager of Quality Control Headquarters, General
Manager of Production Headquarters, and Managing Corporate Officer of the Corporation. He has a
deep understanding of the overall business and management mainly in the areas of production andquality of the Corporation. The Corporation proposes his appointment as Director because we expect
him to continue to utilize his extensive experience and broad insight to enhance the corporate value of
the Corporation.
March
1972 Joined the Corporation
October
1991 Manager of E.D.P. System Department
October
1999 General Manager of Production Control Department
ReelectionJune2003 Director, General Manager of Quality Control
Headquarters
Hisayoshi Niwa
2005 Director, General Manager of Quality Headquarters(February 24, 1949) April
4

June

2,817,886

Director, Corporate Officer, General Manager of Quality
Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Hisayoshi Niwa has held important positions in the E.D.P. system division and the production
division, and currently serves as General Manager of Quality Headquarters of the Corporation. He hasa deep understanding of the business and management mainly in the areas of quality, systems, andproduction of the Corporation. The Corporation proposes his appointment as Director because we
expect him to continue to utilize his knowledge of the business and management to enhance thecorporate value of the Corporation.

-4-

22,200Candidate
NumberName(Date of birth)

Brief personal background, title and position and Important concurrent posts
March
October5

6

7

Joined the Corporation
General Manager of Plant Engineering-maintenance
Department
October
2001 General Manager of Production Engineering Department
September 2003 President of Makita (China) Co., Ltd.
ReelectionJune2007 Director, Assistant General Manager of Production
Headquarters of the Corporation (in charge of China
Shinichiro Tomita
Plant)(January 11, 1951)
June
2009 Director, Corporate Officer, General Manager ofResearch and Development Headquarters (in charge of
Product Development)May
2010 Director, Corporate Officer, General Manager ofPurchasing Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Shinichiro Tomita has held important positions in the production division, and has served as thehead of the production subsidiary in China, a core facility of the production division, and General
Manager of Research and Development Headquarters of the Corporation. He currently serves as
General Manager of Purchasing Headquarters and has a deep understanding of the business andmanagement mainly in the areas of purchasing, production, and development of the Corporation. The
Corporation proposes his appointment as Director because we expect him to continue to utilize hisknowledge of the business and management to enhance the corporate value of the Corporation.
March
1981 Joined the Corporation
April
2004 General Manager of Technical Research Department
August2005 General Manager of Production Department 2
October
2006 General Manager of Production Department 1
June2007 Director, General Manager of Purchasing Headquarters
June
2009 Director, Corporate Officer, General Manager ofReelection
Purchasing Headquarters
Tetsuhisa Kaneko
May
2010 Director, Corporate Officer, General Manager of(April 6, 1955)
Production Headquarters (in charge of China Plant)June2015 Director, Corporate Officer, General Manager of
Production Headquarters
June
2017 Director, Corporate Officer, General Manager ofResearch and Development Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Tetsuhisa Kaneko has held important positions in the development division, and has served as thehead of the production subsidiary in China, a core facility of the production division, General Manager
of Purchasing Headquarters, and General Manager of Production Headquarters of the Corporation. He
currently serves as General Manager of Research and Development Headquarters and has a deep
understanding of the business and management mainly in the areas of development, purchasing, andproduction of the Corporation. The Corporation proposes his appointment as Director because we
expect him to continue to utilize his knowledge of the business and management to enhance thecorporate value of the Corporation.
March
1978 Joined the Corporation
October
2003 General Manager of Production Department 1
August2005 General Manager of Products & Engineering
Administration Department
Reelection
Tomoyuki Ota
July
2012 General Manager of Products & Engineering(March 22, 1956)
Administration Department and General Manager of
Product Design & Development Department 1
June2013 Director, Corporate Officer, Assistant General Manager
of Research and Development Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Tomoyuki Ota has experience of working at overseas production subsidiaries, and has held
important positions in the production division and the development division. He currently serves as
Assistant General Manager of Research and Development Headquarters and has a deep understandingof the business and management mainly in the areas of development and production of the
Corporation. The Corporation proposes his appointment as Director because we expect him tocontinue to utilize his knowledge of the business and management to enhance the corporate value of
the Corporation.

Number of the
Corporation's
shares held

1974
2000

-5-

14,40020,00013,000Candidate
NumberName(Date of birth)

Brief personal background, title and position and Important concurrent posts
March
April
October
April
June

8

9

10

11

Joined the Corporation
Manager of Shizuoka Branch Office
Manager of Tokyo Branch Office
Reelection
General Manager of Sales Administration Department
Takashi Tsuchiya
Corporate Officer, General Manager of Domestic Sales(September 1, 1957)
Headquarters (in charge of Tokyo Sales Department)June2015 Director, Corporate Officer, General Manager ofDomestic Sales Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Takashi Tsuchiya has held important positions mainly in the domestic sales operations of the
Corporation. He has served as General Manager of Domestic Sales Headquarters in charge of Tokyo
Sales Department as Corporate Officer since June 2013. He currently serves as General Manager ofDomestic Sales Headquarters as Director and Corporate Officer, and has a deep understanding of thebusiness and management mainly in the area of domestic sales of the Corporation. The Corporation
proposes his appointment as Director because we expect him to continue to utilize his knowledge ofthe business and management to enhance the corporate value of the Corporation.
March
1985 Joined the Corporation
October
2007 General Manager of Production Control Department
April
2010 General Manager of Production Department 2
April
2011 General Manager of Production Development
Department
Reelection
February
2012 Vice President of Makita (China) Co., Ltd
Masaki YoshidaJune2015 Director, Corporate Officer, Assistant General Manager(June 17, 1962)of Production Headquarters of the Corporation (in chargeof China Plant)
April2018 Director, Corporate Officer, Assistant General Manager
of Production Headquarters of the Corporation (present)

Number of the
Corporation's
shares held

1982
2001
2003
2010
2013

[Reason for nomination as candidate for Director]
Mr. Masaki Yoshida has engaged in duties mainly in the production division of the Corporation, andhas served as the head of the production subsidiary in China, a core facility of the production division,
since June 2015. He currently serves as Assistant General Manager of Production Headquarters andhas a deep understanding of the business and management mainly in the areas of domestic andoverseas production of the Corporation. The Corporation proposes his appointment as Director
because we expect him to continue to utilize his knowledge of the business and management toenhance the corporate value of the Corporation.
March
1982 Joined the Corporation
January
1995 President of Makita Mexico, S.A. de C.V.
March
2001 President of Makita do Brasil Ferramentas Elétricas
Reelection
Ltda.
Takashi OmoteJune2013 Corporate Officer of the Corporation (in charge of(February 10, 1959)
Central and South America Sales)
June
2017 Director, Corporate Officer, General Manager ofInternational Sales Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Takashi Omote has engaged in duties mainly in the international sales operations of the
Corporation, and has experience of working for many years at overseas sales subsidiaries. He wasplaced in charge of Central and South America Sales in June 2013, and serves as General Manager ofInternational Sales Headquarters since June 2017. As such, he has a deep understanding of thebusiness and management mainly in the areas of overseas sales of the Corporation. The Corporation
proposes his appointment as Director because we expect him to continue to utilize his knowledge ofthe business and management to enhance the corporate value of the Corporation.
March
1983 Joined the Corporation
April
2009 Assistant Manager of Finance Department
December 2009 Vice President of Makita (China) Co., Ltd
Reelection
Yukihiro Otsu
October
2013 General Manager of Accounting Department of the(August 27, 1960)
CorporationJune
2017 Director, Corporate Officer, General Manager of
Administration Headquarters (present)[Reason for nomination as candidate for Director]
Mr. Yukihiro Otsu has held important positions in the finance division of the Corporation, and has awealth of experience in the administration divisions of overseas subsidiaries including the production
subsidiary in China, a core facility of the production division. He serves as General Manager of
Administration Headquarters since June 2017 and has a deep understanding of the business andmanagement, mainly in the areas of administration, of the Corporation. The Corporation proposes his
appointment as Director because we expect him to continue to utilize his knowledge of the businessand management to enhance the corporate value of the Corporation.
-6-

15,600

8,300

6,800

6,000

Candidate
NumberName(Date of birth)

Brief personal background, title and position and Important concurrent posts
April

1967

Number of the
Corporation's
shares held

Joined Toyota Motor Co., Ltd. (present; Toyota Motor
Corporation, “TOYOTA”)
September 1994 Director of TOYOTA
Reelection
June1998 Managing Director of TOYOTA
OutsideJune
1999 Senior Managing Director of TOYOTA
IndependentJune
2000 Director and Vice President of Aichi Steel Corporation
Akiyoshi Morita(“AICHI STEEL”)(August 23, 1941) June
2004 President and Representative Director of AICHI STEEL
June
2008 Chairman and Representative Director of AICHI STEEL[Attendance rate of the June
2011 Advisor of AICHI STEEL
Board of Directors] March2012 Outside Director of Showa Denko K.K.
12
10/12
June
2013 Outside Director of the Corporation (present)
(83%)
June
2015 Counselor of AICHI STEEL(Important Concurrent Posts)[Reason for nomination as candidate for Outside Director]
Mr. Akiyoshi Morita has participated in the management of TOYOTA and AICHI STEEL, a corecompany of Toyota Group, for many years, and has a thorough knowledge of corporate management,with which he currently provides useful opinions on the management of the Corporation from a broad
perspective. The Corporation proposes his appointment as Outside Director because we expect him tocontinue to utilize his wealth of experience and broad insight to enhance the corporate value of the
Corporation.
April
1967 Jointed Ina Seito Co., Ltd. (present; LIXIL Corporation )January
1992 Director of INAX Corporation (“INAX”, past; Ina Seito Co.,Ltd.)
January
1996 Managing Director of INAX
January
2000 Senior Managing Director of INAX
October
2001 President and Representative Director of INAX
ReelectionJune2007 Chairman and Representative Director of INAX
June
2007 President and Representative Director of JS Group
OutsideCorporation (present; LIXIL Group Corporation)
Independent
April
2011
President
and Representative Director of LIXIL
Masahiro Sugino
Corporation(November 18, 1944)
June
2011 Director and Advisor of LIXIL Corporation2013 Advisor of LIXIL Corporation[Attendance rate of the June2015 Outside Director of the Corporation (present)
Board of Directors] June13
June2017 Outside Director of MISAWA HOMES CO., LTD.
12/12
(present)(100%)
February2018 Outside Director of KITAKEI CO., LTD. (present)
July
2018 Special Advisor of LIXIL Corporation (present)(Important Concurrent Posts)
Special Advisor of LIXIL Corporation
Outside Director of MISAWA HOMES CO., LTD.
Outside Director of KITAKEI CO., LTD.
[Reason for nomination as candidate for Outside Director]
Mr. Masahiro Sugino has participated in the management of LIXIL Group Corporation, including
INAX, for many years and has a thorough knowledge of corporate management, with which hecurrently provides useful opinions on the management of the Corporation from a broad perspective.
The Corporation proposes his appointment as Outside Director because we expect him to continue toutilize his wealth of experience and broad insight to enhance the corporate value of the Corporation.
Notes: 1. There is no special interest between the above candidates and the Corporation.
2. The matters concerning Outside Director candidate Mr. Akiyoshi Morita are as follows:(i) Mr. Akiyoshi Morita served as an counselor of AICHI STEEL. Makita purchases components from AICHISTEEL and its corporate group. This year, such purchases amounted to 730 million yen, which constituted
only 0.28% of Aichi steel group’s consolidated sales.
(ii) Mr. Akiyoshi Morita is currently an Outside Director of the Corporation, and his term of office will be six
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. Akiyoshi Morita which limits the maximum amountof his liabilities to the total amount provided for in each of the items of Article 425, Paragraph 1 of theCompanies Act. If Mr. Akiyoshi Morita is appointed to be an Outside Director, the Corporation will extend
such liability limitation agreement.
(iv) The Corporation has designated Mr. Akiyoshi Morita 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. Akiyoshi Morita is-7-

elected, the Corporation intends to appoint him again as an Independent Director.
3. The matters concerning Outside Director candidate Mr. Masahiro Sugino are as follows:(i) Mr. Masahiro Sugino serves as a Special Advisor of LIXIL Corporation. Makita sells products to LIXIL
Corporation and its corporate group. This year, such sales amounted to 4 million yen, which constituted
less than 0.01% of our consolidated revenue.
(ii) Mr. Masahiro Sugino is currently an Outside Director of the Corporation, and his term of office will befour 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. Masahiro Sugino which limits the maximum amountof his liabilities to the total amount provided for in each of the items of Article 425, Paragraph 1 of theCompanies Act. If Mr. Masahiro Sugino is appointed to be an Outside Director, the Corporation will
extend such liability limitation agreement.
(iv) The Corporation has designated Mr. Masahiro Sugino 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. Masahiro Sugino iselected, the Corporation intends to appoint him again as an Independent Director.
4. The number of the Corporation's shares held by candidates for Directors represents the actual number ofshares each candidate holds, including those vested to him in Makita’s stock ownership plan for the
Executives or for the employees.

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 226 million yen considering performance during the period.
This is with the exception of Mr. Akiyoshi Morita and Mr. Masahiro Sugino.

-8-Agenda Item No. 4: Determination of Compensation for the Allotment of Restricted Shares to Directors (Excluding
Outside Directors)
The maximum amount of annual compensation for the Corporation’s Directors was set at 240 million yen by aresolution passed at the 76th Ordinary General Meeting of Shareholders held on May 16, 1989. In addition, themaximum amount of annual compensation relating to the stock acquisition rights for the purpose of granting stock
options to the Directors (excluding the Outside Directors) was set at 100 million yen, separately from this amountof compensation, by a resolution passed at the 103rd Ordinary General Meeting of Shareholders held on June 25,
2015.
This time, we propose to allot shares of common stock subject to provisions including restrictions on transfer for acertain period and reasons for gratis acquisition by the Corporation (hereinafter, the “restricted shares”), as follows,in place of existing stock acquisition rights as stock options to the Corporation’s Directors (excluding Outside
Directors; hereinafter referred to as the “Eligible Directors”) in order to allow Eligible Directors to share the risks
and benefits of stock price fluctuations with shareholders to a greater extent and further enhance their motivation tocontribute to improving the stock price and the corporate value of the Corporation.
Accordingly, after comprehensively taking into consideration various factors, such as the degree of contribution of
Eligible Directors to the Corporation, we propose to set the maximum total annual amount of monetarycompensation receivables to be paid to Eligible Directors as compensation relating to the restricted shares at 100
million yen, separately from the amount of the above-mentioned compensation for Directors. Furthermore, theCorporation believes the details of the allotment of restricted stock are appropriate, as they have been determined
after comprehensively taking into consideration various factors, such as the degree of contribution of Eligible
Directors to the Corporation. Subject to the approval of this proposal, the Corporation will abolish theabove-mentioned provisions for the amounts of compensation relating to the stock acquisition rights for the
purpose of granting stock options to the Directors and not allot new stock acquisition rights for the purpose of
granting stock options based on said provisions for the amounts of compensation. Additionally, subject to theapproval of this proposal, Eligible Directors will waive all their rights regarding stock acquisition rights for the
purpose of granting stock options that have already been allotted to them in accordance with the said provisions on
the amounts of compensation, but have not been exercised.
As transitional measures related to allotting restricted shares instead of the current stock acquisition rights for the
purpose of granting stock options, only in the 108th fiscal year (from April 1, 2019 to March 31, 2020; hereinafterreferred to as “this fiscal year”), the Corporation proposes to allot restricted shares in the same number as thenumber of shares of the Corporation’s common stock (38,360 shares) that have already been allotted and are
subject to the stock acquisition rights to be waived as provided for above, separately from the allotment of
restricted shares based on the above-mentioned amounts of compensation related to the restricted shares.
Accordingly, we propose to set the maximum total annual amount of monetary compensation receivables to be
granted as compensation to make such allotment to Eligible Directors at 300 million yen, separately from theamounts of compensation for Directors which were approved at the 76th Ordinary General Meeting of
Shareholders held on May 16, 1989 and the above-mentioned amounts of compensation relating to the restricted
shares. Such allotment will be made only upon the waiver of stock acquisition rights for the purpose of stock
options which were allotted to Eligible Directors in previous fiscal years, and thus will not be substantially granted
as additional compensation.
Additionally, the Corporation currently has 13 Directors (including 2 Outside Directors), and the number of
Directors will remain the same if Agenda Item No. 2 is approved.
Specific Details and Maximum Number of Restricted Shares for Eligible Directors
1. Allotment and Payment of the Restricted Shares
The Corporation, based on a resolution of the Board of Directors, will grant monetary compensation receivables to
Eligible Directors within the limit of the above-mentioned annual amount as compensation related to the restricted
shares, and each Eligible Director will receive an allotment of the restricted shares by making an in-kind
contribution of all said monetary compensation receivables.
The amount to be paid for the restricted shares shall be based on the closing price of the Corporation’s common
stock on the Tokyo Stock Exchange on the business day prior to the resolution of the Board of Directors on theissue or disposition thereof (or at the closing price on the immediately preceding trading day, if no trading occurredon that day), and shall be determined by the Board of Directors within a range that is not particularly advantageous
to Eligible Directors subscribing to the said restricted shares.
The above-mentioned monetary compensation receivables will be provided on the condition that Eligible Directorsof the Corporation have agreed to the above-mentioned in-kind contribution and have entered into a restricted
share allotment agreement as specified in 3. below.

-9-2. Total Number of the Restricted Shares
The total number of the restricted shares to be allotted to Eligible Directors of 100,000 shares shall be themaximum number of the restricted shares to be allotted in each fiscal year. Separately from the above, a total of
38,360 shares of the restricted shares will be set as the maximum limit for this fiscal year as a transitional measure
related to allotting restricted shares instead of the current stock acquisition rights for the purpose of granting stock
options.
However, if the Corporation’s common stock is subjected to a stock split (including a gratis allotment of theshares) or stock consolidation after the date of the resolution regarding this agenda item, or if any other similar
circumstances arise requiring an adjustment in the total number of the restricted shares, the total number of said
restricted shares may be adjusted to a reasonable extent.
3. Details of the Restricted Share Allotment Agreement
The content of the restricted share allotment agreement to be concluded between the Corporation and Eligible
Directors based on a resolution of the Board of Directors upon the allotment of the restricted shares shall be as
follows.
(1) Details regarding transfer restrictions
Eligible Directors to whom the restricted shares have been allotted shall not transfer such allotted shares(hereinafter referred to as the “Allotted Shares”) to third parties, establish a pledge or a security interest on theshares, use them as an inter vivos gift, bequest them to another party, or otherwise dispose of the Allotted Shares(hereinafter referred to as “Transfer Restrictions”) for a period of 50 years (hereinafter referred to as the “Transfer
Restrictions Period”).
(2) Gratis acquisition of the restricted shares
The Corporation shall acquire the restricted shares without compensation if an Eligible Director who has beenallotted the Allotted Shares retires as a Director of the Corporation anytime between the initial day of the Transfer
Restrictions Period until the day preceding the first subsequent Ordinary General Meeting of Shareholders, except
when there are reasons deemed legitimate by the Board of Directors.
In addition, the Corporation shall rightly acquire any of the Allotted Shares without compensation for which theTransfer Restrictions have not been removed in accordance with the reasons set forth in (3) below at the expirationof the Transfer Restrictions Period in (1) above.
(3) Removal of Transfer Restrictions
The Corporation will remove Transfer Restrictions on all the Allotted Shares upon expiration of the Transfer
Restrictions Period if an Eligible Director who has been allotted the restricted shares continues to hold the positionof a Director of the Corporation from the initial day of the Transfer Restrictions Period until the day of the first
subsequent Ordinary General Meeting of Shareholders.
However, if said Eligible Director has continued to hold the position of a Director of the Corporation upon
expiration of the Transfer Restrictions Period, the Transfer Restrictions will not be removed on all the Allotted
Shares held by said Eligible Transfer upon said expiration.
If said Eligible Director retires as a Director of the Corporation before the expiration of the Transfer Restrictions
Period for reasons deemed legitimate by the Board of Directors, the number of the Allotted Shares for which theTransfer Restrictions will be removed and the timing of the removal of Transfer Restrictions shall be reasonably
adjusted as needed.
(4) Treatment upon organizational restructuring
During the Transfer Restrictions Period, if an agenda item regarding a merger agreement under which the
Corporation becomes the dissolving company, or a share exchange agreement, or a share transfer plan under which
the Corporation becomes a wholly-owned subsidiary, or any other organizational restructuring is approved at a
General Meeting of Shareholders of the Corporation (or, if approval at a General Meeting of Shareholders of the
Corporation is not required regarding the above-mentioned organizational restructuring then approval of the Boardof Directors of the Corporation) (only if the effective date of the said organizational restructuring comes before theexpiry of the Transfer Restriction Period; hereinafter referred to as “at the time of approval of organizational
restructuring”), and if an Eligible Director who has been allotted the restricted shares leaves the Corporation due tosaid organizational restructuring, the Corporation, by a resolution of the Board of Directors, will remove theTransfer Restrictions on a reasonable number of the Allotted Shares prior to the effective date of saidorganizational restructuring, taking into consideration the period between the start of the Transfer Restrictions
Period and the date of approval of said organizational restructuring.
At the time of approval of organizational restructuring, the Corporation shall rightly acquire without compensation
any of the Allotted Shares for which the Transfer Restrictions have not been removed as of the day immediately
preceding the effective date of said organizational restructuring.
- 10 -

BUSINESS REPORT(From April 1, 2018 to March 31, 2019)
1. Matters on the Current Status of Makita(1) Progress and Results of Operations

We have adopted International Financial Reporting Standards (hereinafter “IFRS”) instead of accounting
principles generally accepted in the United States of America (hereinafter “U.S. GAAP”) from the beginning of
the fiscal year ended March 31, 2019. In addition, financial figures for the year ended March 31, 2018, which
was prepared in accordance with U.S. GAAP in the reporting of those previous periods, are also reclassified inaccordance with IFRS and used in the comparative analysis.
Looking at the global economic situation for the year ended March 31, 2019, the economy gradually expanded,supported by a strong employment and income situation and robust business performance in developed
countries, principally the U.S. However, there were growing concerns over the slowing global economy anduncertainties about the future because of escalating tensions between the U.S. and China over trade and a
decline in emerging-country currencies.
Under these circumstances, on the development side, Makita concentrated its efforts on expanding lithium-ion
battery product lines, such as cordless power tools with equal or better work efficiency than AC-powered ones,
and cordless gardening equipment, such as grass cutters or steel deck-type lawnmowers with performance equal
to engine-powered products. Moreover, we established a technology development base in South Korea toenhance our capability to develop electrical technologies and accelerate development speed.
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, such as cordless gardening
equipment. Furthermore, we worked hard to strengthen our community- and customer-based sales network by
increasing sales and after-sales service bases.
Our consolidated revenue for this period increased by 2.8% from the previous year to 490,578 million yen,record-high sales, due to robust sales primarily in Japan, although the value of overseas revenue translated into
yen was eroded by a fall in emerging-country currencies.
Consolidated revenue by region are as follows:
Consolidated revenue in Japan increased by 11.6% to 92,129 million yen compared to the previous year. Thiswas because sales of power tools and gardening equipment, particularly lithium-ion battery products, continued
to be strong.
Consolidated revenue in Europe increased by 5.5% to 213,238 million yen, supported by solid demand for
power tools in almost all areas and steady sales growth of cordless products, although sales of gardening
equipment stagnated due to an extremely hot summer and droughts.
Consolidated revenue in North America decreased by 1.8% to 72,508 million yen, although we tried to expand
sales, mainly lithium-ion battery products, amid intensifying competition.
Consolidated revenue in Asia decreased by 7.2% to 40,909 million yen. This was due to sluggish sales incountries other than China and India where the sales were robust.
Consolidated revenue in Central and South America decreased by 0.4% to 27,801 million yen. This was due toa sharp depreciation in each country’s currency against the yen compared to the same period of the previous
year, although sales in almost all countries remained robust.
In Oceania, sales continued growing at a level as high as the previous year, although the housing market, which
had been overheated, showed signs of slowing down. However, consolidated revenue declined by 3.4% to30,222 million yen due to the yen’s appreciation against local currencies.
Consolidated Revenue in the Middle East and Africa decreased by 11.1% to 13,771 million yen. This was due
to poor sales amid political and economic turmoil in the Middle East.
Overall, overseas revenue accounted for 81.2% of total revenue.
Operating profit decreased by 2.4% to 78,305 million yen (operating profit ratio: 16.0%), owing to thedeterioration of the cost-of-sales ratio due to the impact of the exchange rate, although revenue increased.
Meanwhile, profit before income taxes increased by 0.1% to 79,919 million yen (profit before income taxes
ratio: 16.3%) and profit attributable to owners of the parent increased by 1.5% to 55,750 million yen (ratio of
profit attributable to owners of the parent: 11.4%).
- 11 -

(2) Management Challenges

In the future, Makita expects that the prospect for the global economy, including markets where it has presence,
will continue to be uncertain, as the international political situation is likely to remain deadlocked. Meanwhile,
Makita believes that demand for products and services that contribute to the solution of social problems, suchas the labor shortage and environment conservation, will increase further.
Under these circumstances, Makita is strengthening its R&D and product development capabilities, mainly rechargeable
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 and focusing its efforts on
the development and sales expansion of new products. Makita implements measures to strengthen and improve theefficiency 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 the world.
By taking these actions, Makita will strive to achieve a “Strong Company,” a company that contributes to asustainable society, and maintain a solid presence in the industry as a global supplier of a comprehensive range oftools for creating comfortable homes and living environments.
In closing, we would like to thank you for your ongoing support and continuing assistance.
(3) Capital Expenditures
During the period, Makita allocated 23,867 million yen for its capital expenditures. These funds used by the
Corporation amounted to 8,326 million yen. This reflected mainly capital expenditures for machinery equipment andmetal molds for new products at the Okazaki plant. These funds also used by subsidiaries amounted to 15,541 million
yen. This reflected mainly capital expenditures for machinery equipment and metal molds for new products at the
China plant.
(4) Changes in Financial Position and Results of Operations

Description

104th period
105th period(ended March 31, (ended March 31,
2016)
2017)

106th period(ended March 31, 2018)

U.S. GAAP
Revenue (Millions of Yen)

423,623

414,999

107th period(ended March 31,
2019)
IFRS

477,298477,298

490,578

Operating profit (Millions of
64,67662,564
79,76280,23178,305
Yen)
Profit before income taxes
61,49264,73879,67879,86579,919(Millions of Yen)
Profit attributable to owners of
41,61544,78254,75554,94355,750the parent (Millions of Yen)
Profit attributable to owners of
the parent per share
153.30164.96201.70202.39205.37(Basic) (Yen)Profit attributable to owners of
the parent per share
153.29164.95201.68202.37205.34(Diluted) (Yen)
Total assets (Millions of Yen)
558,024597,249
651,031654,841
680,250
Equity attributable to owners of
479,752
502,170
551,939554,046
572,748
the parent (Millions of Yen)
Ratio of profit attributable toowners of the parent to total
8.6
9.1
10.4
10.4
9.9
equity 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) are calculated based on the average number of outstanding shares of common 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) are calculated on the assumption that the relevant stock split had been implemented at the beginning of
the 104th period.
5. Ratio of profit attributable to owners of the parent to total equity attributable to owners of the parent (ROE) =- 12 -

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]
6. Amounts of less than 1 million yen have been rounded.
(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

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 electric power tools such as cordless impact drivers, rotary
hammers, circular saws and angle grinders, pneumatic tools such as air nailers and tackers, gardening equipment suchas brushcutter, hedge trimmers, and household tools such as cordless cleaners.

- 13 -

(7) Principal Sales Offices and Plants
1. The Corporation
Name
Head office
Sales offices
Plant

Location
Anjo (Aichi)
Tokyo, Nagoya, Osaka
Okazaki (Aichi)

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.

Kunshan, Jiangsu (China)(8) Employees
1. Employees of Makita
Number of Employees
16,424
2. Employees of the Corporation
Number of Employees
2,906

Increase / Decrease287 (Increase)

Increase / Decrease
29 (Increase)- 14 -

Average Age
41.5

Average Years of Service
18.3

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 8,550,463 shares)(3) Number of Shareholders:

11,665(4) Major Shareholders:Number of shares held(Thousands of Shares)

Name of Shareholders

Percentage(%)

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

18,824

6.93

Japan Trustee Services Bank, Ltd. (Trust account)

12,849

4.73

Maruwa, Ltd.

8,638

3.18

MUFG Bank, Ltd.

8,426

3.10

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

7,714

2.84

Makita Cooperation Companies' Investment Association

6,515

2.40

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

6,442

2.37

Sumitomo Mitsui Banking Corporation

5,800

2.13

JPMorgan Chase Bank 385151

5,634

2.07

State Street Bank and Trust Company 505001

5,592

2.06

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

- 15 -

3. Status of Stock Acquisition Rights, etc. of the Corporation(1) Description of the terms of stock acquisition rights
Amount to be
Round of Issuance
Kind of shares andpaid forNumber of
number of shares(Date of
Stock
Resolution ofStock
to be acquired
Acquisition
Issuance at
Acquisition
upon exercise of
RightsRightsStock Acquisition
the Board of(per share)
Directors)
Rights(Yen)

Amount to be paid
upon exercise of
Stock Acquisition
Rights (per share)(Yen)

Exercise Period of Stock
Acquisition Rights

From
August 19, 2015
3,316
1
480
To
August 18, 2065
From
Second Stock
Common Stock
August 19, 2016
3,284
1
Acquisition Rights
468
9,360
To
(July 28, 2016)
August 18, 2066
From
Third Stock
Common Stock
August 19, 2017
3,892
1
Acquisition Rights
511
10,220To(July 31, 2017)
August 18, 2067
From
Fourth Stock
Common Stock
August 18, 2018
Acquisition Rights
459
4,407
1
9,180
To
(July 31, 2018)
August 17, 2068
Note: “Kind of shares and number of shares to be acquired upon exercise of Stock Acquisition Rights” and “Amount to be
paid for Stock Acquisition Rights (per share)” for the First Stock Acquisition Rights and the Second Stock
Acquisition Rights were adjusted due to a two-for-one common stock split of the Corporation implemented effective
April 1, 2017.
First Stock
Acquisition Rights(July 31, 2015)

Common Stock
9,600(2) Description of the terms of stock acquisition rights held by Directors
Kind of shares and numberof shares to be acquired
Classification
Round of Issuanceupon exercise of Stock
Acquisition Rights
First Stock
Common Stock480
Acquisition Rights
9,600
Second Stock
Common Stock468
Acquisition Rights
9,360
Director
Third Stock
Common Stock
511
Acquisition Rights
10,220Fourth Stock
Common Stock459
Acquisition Rights
9,180
Note: Stock acquisition rights are not allotted to Outside Directors and Directors who work overseas.
Number of Stock
Acquisition Rights- 16 -

Number of
Holders
88
10
11

4. 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

Special 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
Outside Audit & Supervisory Board Member of Daihatsu Motor Co., Ltd.
Attorney at Law (Sao & Inoue 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.

- 17 -

(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

Directors

386

120

13

226

11

40

11

Audit &
Supervisory
Board
Members

41

41

4

-

-

-

-

Total

427

161

17

226

11

40

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 140 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 on June 29, 2006. At suchordinary 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, 2019 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.
(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 stock-compensation-type stock options are allocated to Directors (excluding Outside Directors) with the aim ofstrengthening the morale and preparedness of Directors to contribute to enhancing the corporate value of the
Corporation over the medium and long term as well as enabling them to share the advantages and risks of share pricefluctuations with our shareholders.
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.

- 18 -

(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(total attended/ total held)

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

Director

Akiyoshi Morita

83%(10/12)-

Director

Masahiro Sugino

100%(12/12)-

Audit & Supervisory
Board Member

Akira Kodama

100%(12/12)100%(14/14)

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.

- 19 -

5. 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 period148

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

148

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.

- 20 -

6. 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- 21 -

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
Division and respective departments of the Corporation met to detect and extract and examine risks involved in- 22 -

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, 2019, 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.

- 23 -

CONSOLIDATED STATEMENT OF FINANCIAL POSITION(As of March 31, 2019)(Millions of Yen)
(Assets)
Current assets(Liabilities)
493,129

90,794Current liabilities

Cash and cash equivalents

146,512Trade payables and other payables

38,904

Trade receivables and other receivables

79,450Borrowings

11,799Inventories

219,938

Other financial liabilities

Other financial assets

37,828

Income taxes payable

7,153

Prepaid expenses and other current assets

9,401

Provisions

3,040

Other current liabilities

29,678Non-current assets

187,121220

12,234

Property, plant and equipment

112,441

Goodwill and intangible assets

8,039

Retirement benefit liabilities

Other financial assets

43,566

Other financial liabilities

Retirement benefit asset

9,541

Provisions

1,293

Deferred income taxes

9,342

Deferred tax liabilities

7,236

Other non-current assets

4,192

Other non-current liabilities

Non-current liabilities

3,231
256

218
103,028

Total liabilities(Equity)Common stock

23,805Additional paid-in capital

45,571Retained earnings

508,622

Treasury stock, at cost

(11,681)

Other components of equity
Total equity attributable to owners of the parent
Non-controlling interest
Total equity
Total assets

680,250

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

- 24 -

Total liabilities and equity

6,431
572,748
4,474
577,222680,250

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
(From April 1, 2018 to March 31, 2019)(Millions of Yen)

REVENUE

490,578

Cost of sales(313,356)

GROSS PROFIT

177,222

Selling, general, administrative and others, net(98,917)

OPERATING PROFIT

78,305

Financial income

2,680

Financial expenses(1,066)

PROFIT BEFORE INCOME TAXES

79,919

Income tax expenses(23,728)

PROFIT56,191

Profit attributable to:55,750Owners of the parent

441

Non-controlling interests
Note: Amounts less than 1 million yen have been rounded.

- 25 -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(From April 1, 2018 to March 31, 2019)(Millions of Yen)
Equity attributable to owners of the parent

Balance at April 1, 2018

Retainedearnings

Common stock

Additional
paid-in capital

23,80545,531

469,232

Treasury stock

Other
components ofequity(11,617)

27,09555,750

Profit for the period-

035,286

(4)

(4)

0

0
40
(200)

(60)

(60)

-

40

(16,360)

(64)

(200)

(16,584)

23,80545,571

508,622(11,681)

6,431

572,748

Total equity

4,393

558,439

Profit for the period

441

56,191Other comprehensive
income(135)(20,599)

Purchase of treasury
stock
Disposal of treasury
stock
Share-based paymenttransaction
Transfer from othercomponents of equity
to retained earnings
Other increase or
decrease
Total amounts oftransactions withownersBalance at March 31,
2019(20,464)(16,560)

200

Balance at April 1, 2018

Dividends paid

(20,464)40

Non-controllinginterest

Comprehensive income-(20,464)(16,560)

Dividends paid
Purchase of treasury
stock
Disposal of treasury
stock
Share-based paymenttransaction
Transfer from othercomponents of equity
to retained earnings
Other increase or
decrease
Total amounts oftransactions withownersBalance at March 31,
201955,750-554,046
55,750

Other comprehensive
incomeComprehensive income

Total

306

35,592(225)(16,785)
(4)
0
40
(60)

(225)

(16,809)

4,474

577,222

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

- 26 -

BALANCE SHEET(As of March 31, 2019)(Millions of Yen)
(Assets)
Current assets(Liabilities)
155,599

Cash and time deposits

60,676

Trade notes receivable

205

Trade accounts receivable

Current liabilities

54,751

Trade accounts payable

38,380

Other payable

3,793

58,776

Accrued expenses

6,215

Marketable securities

2,061

Income taxes payable

4,548

Finished goods and merchandise

20,003

Allowance for directors’ bonuses

226

Work-in-process

1,343

Allowance for product warranties

519

Raw materials and supplies

4,055

Other

Short-term loans receivable

5,351

Other

3,136

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 &(7)
265,788
43,764
16,935
2,074
2,620

1,070

supervisory board members
Long-term deposits payable
Other

Total liabilities

927
253
326
187
161
55,678(Net assets)

79

Shareholders' equity

356,770

Tools, furniture and fixtures

4,681

Common stock

24,206

Land

14,858

Capital surplus

47,544

Construction in progress

2,517

Intangible fixed assets

2,954

Software900

Industrial property rights

951

Other

Additional paid-in capital
Other capital surplus
Retained earnings
Legal reserve

47,525
19296,641
5,669

1,103

Other retained earnings

290,972

Investment and other assets

219,070

Reserve for dividend

750

Investment securities

34,043

Reserve for technical research

1,500

Stocks of affiliates

87,402

Reserve for advanced depreciation

1,437

Investment in affiliates

78,343General reserves

85,000Retained earnings carried forward

202,285

Long-term loans receivable

274

Lease deposits

8,137

Prepaid pension cost

9,774

Valuation and translation adjustments

8,807

Deferred income tax assets

1,075

Net unrealized gains on securities

8,807

Other
Total assets

22
421,387

Treasury stock

Stock acquisition rights(11,621)132

Total net assets

365,709

Total liabilities and net assets

421,387

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

- 27 -STATEMENT OF INCOME(From April 1, 2018 to March 31, 2019)(Millions of Yen)
Net sales

326,390

Cost of sales

256,631
69,759Gross profit

37,584

Selling, general and administrative expenses

32,175

Operating income
Non-operating income
Interest and dividend income

45,645

Other non-operating income

462

46,107

Non-operating expense
Exchange losses on foreign currency transactions

445

Other non-operating expense

11456
77,826

Ordinary income
Extraordinary gain
Gain on sales of fixed assets

135

Gain on sales of investment securities

468

603

Extraordinary loss
Loss on sale and disposal of fixed assets

284

Loss on sales of investment securities

1

Loss on valuation of investment securities

55

340

Income before income taxes

78,089

Income taxes - current

11,922

Income taxes - deferred

566
65,601

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

- 28 -STATEMENT OF CHANGES IN NET ASSETS(From April 1, 2018 to March 31, 2019)(Millions of Yen)
Shareholders’ equity
Capital surplus
Common stock
Balance at April 1, 2018
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, 2019

Additional paid-in capital

Other capital surplus

Total capital surplus

47,52519

47,544

0

0

0
19

0
47,54424,20624,20647,525
Shareholders’ equity
Retained earnings
Other retained earnings

Balance at April 1, 2018
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, 2019

Balance at April 1, 2018
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, 2019

5,669

750

1,500

Total
Treasuryshareholders’stockequityRetainedearnings
carriedforward153,311

Total
retainedearnings

112

(112)

-

-

(45)

45

-

-

(16,560)
65,601(16,560)
65,601(4)
0(16,560)
65,601(4)
0(4)(11,621)49,037356,770

Legal Reserve Reserve Reserve forfor
reserveadvancedfortechnical depreciation
dividend
research
5,669
750
1,500
1,370

67
1,437

Generalreserves
85,00085,00048,974202,285

Valuation and translation adjustments
Net unrealized gains on
Total valuation and translation
securities
adjustments
16,93016,930247,600

49,041
296,641
Stockacquisitionrights92(11,617)

307,733

Total net assets
324,755(16,560)
65,601(4)
0(8,123)(8,123)40(8,083)(8,123)
8,807(8,123)
8,807

40
132

40,954
365,709

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

- 29 -

(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 17, 2019
The Board of Directors
Makita Corporation

KPMG AZSA LLC
Yasuyuki Morimoto (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Masaki Kawaguchi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated statement of financial position, theconsolidated statements of profit or loss, the consolidated statement of changes in equity and the notes to consolidated
financial statements of Makita Corporation as at March 31, 2019 and for the year from April 1, 2018 to March 31, 2019 inaccordance with Article 444-4 of the Companies Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordancewith the second sentence of Article 120-1 of the Ordinance of Companies Accounting that prescribes some omissions of
disclosure items required under IFRS, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit as independent auditor.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, weconsider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements inorder to design audit procedures that are appropriate in the circumstances, while 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. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements referred to above, which were prepared in accordance with the second
sentence of Article 120-1 of the Ordinance of Companies Accounting that prescribes some omissions of disclosure items- 30 -

required under IFRS, present fairly, in all material respects, the financial position and the results of operations of Makita
Corporation and its subsidiaries for the period, for which the consolidated financial statements were prepared.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of
the Certified Public Accountants Law of Japan.

Note to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as required by theCompanies Act.

- 31 -

(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 17, 2019
The Board of Directors
Makita Corporation

KPMG AZSA LLC
Yasuyuki Morimoto (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Masaki Kawaguchi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the 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 schedules of Makita Corporation as at
March 31, 2019 and for the year from April 1, 2018 to March 31, 2019 in accordance with Article 436-2-1 of the Companies
Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the supplementaryschedules in accordance with accounting principles generally accepted in Japan, and for such internal control as management
determines is necessary to enable the preparation of financial statements and the supplementary schedules that are free frommaterial misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementary schedules based on our audit as
independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements andthe supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements and the supplementary schedules. The procedures selected depend on our judgement, including the assessment of
the risks of material misstatement of the financial statements and the supplementary schedules, whether due to fraud or error.
In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of thefinancial statements and the supplementary schedules in order to design audit procedures that are appropriate in thecircumstances, while the objective of the financial statement audit is not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of thefinancial statements and the supplementary schedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

- 32 -

Opinion
In our opinion, the financial statements and the supplementary schedules referred to above present fairly, in all material
respects, the financial position and the results of operations of Makita Corporation for the period, for which the financial
statements and the supplementary schedules were prepared, in accordance with accounting principles generally accepted inJapan.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of
the Certified Public Accountants Law of Japan.

Note to the Reader of Independent Auditor’s Report:
The Independent Auditor’s Report herein is the English translation of the Independent Auditor’s Report as required by theCompanies Act.

- 33 -

(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 107th period, from April 1, 2018 toMarch 31, 2019, 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 statement of financial position, consolidated statements of profit or loss,
consolidated statement of changes 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.
(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, are- 34 -

appropriate.
(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, 2019
Audit & Supervisory Board
Makita Corporation
Mitsuhiko Wakayama (Seal)
Standing Audit & Supervisory Board Member
Fusahiro Yamamoto (Seal)
Outside Audit & Supervisory Board Member
Shoji Inoue (Seal)
Outside Audit & Supervisory Board Member
Note: Mr. Akira Kodama, an Audit & Supervisory Board Member, was absent from the meeting of the Audit & Supervisory
Board held on May 21, 2019 when this Audit Report was prepared, and has therefore not placed his signature or seal on
this Audit Report. However, an audit report has been received from him in advance, and the methods and results of said
audit are the same as that described above.

- 35 -