Live Green & Grow Strong

Makita Report 2021
Year Ended March 31, 2021

About This Report
Editorial Policy
The “Makita Report” is published with the objective of presenting the Company’s initiatives for creating value over the medium- to long-term in a way that
integrates both financial and non-financial information. In preparing the report, information that is particularly important for the Company’s value creation wascompiled concisely, referencing international frameworks such as those of the International Integrated Reporting Council (IIRC). Please see the Company website(https://www.makita.biz/) for more information. In addition, financial information, environmental information, and governance information is presented in detail in
the Additional Information on the Company website, Environmental Report, and the Corporate Governance Report respectively.
This report covers 54 companies, including Makita Corporation and its 53 consolidated subsidiaries (as of March 31, 2021), but some of the information
reported only covers Makita Corporation.

Reporting Period FYE 2021 (April 1, 2020 to March 31, 2021)
However, information from outside of this period is reported when it is appropriate to present past circumstances and data, and recent examples.

Table of Contents
Makita’s Value Creation

To Be a Strong Company Supporting a Better Society

Table of Contents

1

Environment

23

Long-term Target/Management Policy/Quality Policy2

Human Rights/Human Resources/Supply Chain25

Chairman’s Message

3

Interview with the President

5

Systems to Support Enhancement of Corporate Value- Corporate Governance
27

Makita’s Value History

9

Makita’s Value Creation

11

Message from the Financial Officer

33

Sources of Strength (Business Model)

13

11-Year Summary

35

Contribution to Solving Social Challenges

15

Consolidated Financial Statements

37

Financial & Non-financial Highlights

17

Business Summary

19

Risks & Opportunities

21

Sustainability Management

22

1

Makita Corporation• Messages from Outside Directors

30• List of Directors

31• Consolidated Statements of Financial Position37• Consolidated Statements of Profit or Loss/
Consolidated Statements of Comprehensive Income38• Consolidated Statements of Changes in Equity

39• Consolidated Statements of Cash Flows40

Stock Information

41

Corporate Data

42

Long-term Target

Strong Company
Makita has set itself the goal of contributing to the creation of sustainable society andconsolidating a strong position in the industry worldwide as a global supplier of a comprehensive
range of tools for creating comfortable homes and living environments, including cordless power
tools, battery-operated outdoor power equipment and pneumatic tools.

Management Policy/Quality Policy

1.

Makita strives to exist in harmony with society(a company that observes laws and regulations, acts ethically and never allows intervention of
the anti-social organizations).

2.

Makita values its customers

3.

Makita is managed in a consistent and proactive manner

4.

(a market-driven company).

(a company that strives to exist in perpetuity by adhering to a sound profit structure).

Valuing a stalwart corporate culture, Makita encourages each individual
to perform to his or her highest level(a happy company).

Makita Report 2021

2

Makita’s Value Creation

Chairman’s Message

Striving to be a “Strong
without being satisfied with

Chairman, Representative Director

Masahiko Goto

Continuing to challenge ourselves without being satisfied with the status quo
Makita was founded in Nagoya in 1915 as a lighting
equipment, electric motor, and transformer sales andrepair company. Since then, we have charted a course
over 106 years while continuing to grow and overcome
repeated adversity. This accomplishment has been
largely due to the understanding and cooperation fromstakeholders, for which we are extremely grateful.
In 1958, we became the first company in Japan to
manufacture and sell portable electric planers. The following
year, we left the electric motor business and transformed
into a dedicated manufacturer of power tools. Not only
doing business in Japan, we established our first overseas
subsidiary in the U.S. in 1970 and proceeded to build aglobal business. As of April 2021, we operate 123 sales
and service bases in Japan, augmented by overseas bases
in approximately 50 countries, while selling products insome 170 countries around the world. Furthermore, we arecommitted to promoting cordless products utilizing lithium-3

Makita Corporation

ion batteries and, beyond power tools alone, continue toexpand globally as “a Supplier of a Comprehensive Rangeof Cordless Products” for outdoor power equipment andother fields. I believe that this is the result of continually
pursuing business with the mindset of not being satisfied
with the status quo.
We have been able to continually grow thanks to ouremployees who match Makita’s unaffected and sincere
corporate culture fostered over a long history, in addition
to a strong team spirit, who do their utmost to achieve
the Company’s goals and targets. I think one major
reason why we have been graced with such employees
is that they realize that Makita, as we refuse to besatisfied with the status quo, wants its growth to beshared growth. I believe that employees will not follow a
company that just tries to maintain the status quo andthat it is essential for a company to continue challenging
itself in order to remain a going interest.

Company” that continues to challenge itself
the status quo

Seizing new demand to become a “Strong Company”
Makita has stated our long-term goal of being a “Strong
Company” and we will strive to contribute to realizing asustainable society and secure a solid position in our
industry. The reason why we chose this “Strong
Company” long-term goal is because we believe that it isof utmost importance, alongside growing revenue andincreasing market share. In order to achieve this goal, weare building a dense network of bases in regions aroundthe world, enhancing our lineup of cordless products,
and driving efficiency and productivity gains forcustomers, which has won us market share by meetingneeds and being useful to society.
As the world changes at breathtaking speed and lastyear’s COVID-19 infections proliferated, Makita wasfortunate to benefit from stay-at-home demand. As DIY
projects in the U.S. and Europe being particularly
popular, we have no expectation that this demand willdiminish once COVID-19 is in the past. It is likely that wewill see increases in post-COVID-19 “new normal”
demand, as well as environment-related demand, andespecially climate change-related demand. As we seize
new demand accompanying market environmentchanges, we plan to continue being useful to society.
There are also overseas markets, such as Africa andelsewhere, with room for growth, so Makita will continue
adapting and evolving.

Contributing to a decarbonized society
Since Makita brought to market the world’s first
professional-use power tools using lithium-ion batteriesin 2005, we have aggressively expanded our lineup of
cordless products. Such products have myriad benefits
and play a role in solving many social issues. Amongthese, our present efforts include a focus on cordlessoutdoor power equipment that emits zero exhaust gas
during use. As awareness toward environmental issues—particularly climate change—grows, our emphasis is on
contributing to a decarbonized society. Resolutely

tackling the issue of a sustainable global environment isour duty as a company and a challenge that we mustsolve as we grow over the long term. Going forward, we
will continue to overcome increasingly intense businessenvironment changes, and, as a global supplier of acomprehensive range of tools for creating comfortable
homes and living environments, Makita will support thecreation of an affluent society on a global scale. As we
do so, we will aim for long-lasting growth as a company
by solving social issues.

Makita Report 2021

4

Makita’s Value Creation

Interview with the President

Leveraging Makita’s strength,
contribution to decarbonization

President, Representative Director

Munetoshi Goto

The Company achieved strong results despite the significant impact of

Q1 COVID-19 infections. What contributed to this success?
Business strategies and product lineups wellmatched to the circumstances
Makita’s businesses were recognized as essential
businesses (indispensable for supporting daily needs) inmany countries. Even if a virus is proliferating, there areconstruction projects building infrastructure for electricity,waterworks, and other utilities. Aside from infrastructure,
construction of temporary hospitals was necessitated by
the COVID-19 crisis. So one of the reasons for our
performance this year was the necessity of our products
to customers who are forced to continue their businessactivities amidst these circumstances.
In addition, having a dense network of sales andservice bases in regions around the world allowed us tosteadfastly deliver services in each country, even ifborders were closed due to lockdown and stay-at-home5

Makita Corporation

orders were in place. Makita has tended to keep fairly
large inventories in each country, which may be costly,
but is indispensable for being able to quickly deliverproducts and services and, during crises such as thisone, allows us to assuredly respond to customer needs.
In the turmoil surrounding COVID-19, we saw obvious
benefits from our long-standing efforts to enhance andexpand our sales and service network in order toimprove convenience for customers. Moreover, demand
from stay-at-home responses can be cited as anotherfactor contributing to our solid performance. When it
comes to stay-at-home behavior, Makita’s products arewell suited to home refurnishing, garden and yard
maintenance, and home cleaning projects. In somecountries, residents were not even able to go to gas
stations during lockdown. Makita’s cordless outdoor

we pursue solutions to social issues such as
as we continue to be an indispensable company

power equipment (OPE) has the advantage of notneeding gasoline and can be immediately used at home.
I believe that this led people to revise their views ofcordless OPE and we think that Makita’s lineup is
extremely well suited to times like these. Going forward,

as we enter a post-COVID-19 period, demand during the“new normal” is expected to increase, as is demand
related to environmental concerns. We are planning tolaunch many new products, and we hope to capture thisnew demand.

Q2 What is your analysis of the reasons for Makita’s strength around the globe?
Incorporating local input from each of ourbases and tailoring our services accordingly
We have local employees carry out sales activities at
each of our global bases. We place bases close to eachmarket and thoroughly serve customers through our
local staff who share the same way of thinking, culture,and customs as the people in each region. I think that
this approach, while also building a sales framework
closely aligned with customers and regions, helps
customers feel at ease. I believe that it is important tohave excellent repair and logistics services in order toincrease market share, so having bases close tocustomers is helpful in this regard.
A key point in making management decisions iswhether or not the decision will increase convenience forcustomers. Constantly investing in services is important
for winning the trust of customers and leads to growth asa result. Being able to continually invest in services evenwhen going through difficult periods comes from ourcommitment to avoiding waste and building up capitalover many years.

What do you recognize as the risks and business opportunities affecting

Q3 growth when viewed from medium- and long-term timelines?
Responding to environmental and socialchanges—simultaneously a risk and opportunity
In terms of medium- and long-term risks, it is vital tokeep the environment in mind. How manufacturing
should address environmental preservation is a challengethat not only Makita, but society as a whole must tackle.

In particular, reducing CO2 emissions is an environmental
issue that should be addressed by society as a whole.
Even if it costs the company, we believe that it is the
responsibility and duty of a company that operates
globally to bear this cost. Simultaneously, environmental
issues are opportunities. As environmental awareness

Makita Report 2021

6

Interview with the President

rises around the world and the number of companies
tackling decarbonization increases, customers arechoosing cordless products that contribute to a carbonfree society. Furthermore, people have become moreconcerned about engine noise and gasoline fumes
entering homes as ventilation needs to increase in orderto stop COVID-19 infections. More companies andprofessionals maintaining green spaces have come todemand cordless products. I think that ramping up our

technological development efforts to meet the needs ofprofessionals will lead us to higher revenue overall.
Additionally, since Makita’s products and services help
improve work efficiency and productivity, we believe thatthey can contribute to solving challenges as labor
shortages continue to be an issue in workplaces. In thisway, we see all of the currents pushing us in the directionof a new normal as business opportunities and we will
seize them accordingly.

What are your thoughts on acquiring and training the employees needed

Q4 for future growth?

Boosting productivity and addressing internal
labor shortages by investing in digitaltransformation
Going forward, Makita foresees stronger performanceand a larger scale for our organization. As we increase
our number of bases, and expand and reinforce plants,
we constantly face the issue of labor shortages. Whilehiring and training are essential, we are also aggressively
investing in digital transformation in order to boost
productivity. Through digital transformation, we would
like to expand our capacities by promoting greater work
efficiency internally. Our approach to digital transformation
is not only inside Makita, but also from the perspective of

Q5

What is your approach to ESG/CSV management in order to support future
value creation? Also, how would you like to contribute to society by evolving
into “a Supplier of a Comprehensive Range of Cordless Products”?

Solving diverse social issues through cordlessproducts and enhanced sales and service bases
Making any and all products cordless, and enhancing
our sales and service bases, are vital strategies. By
achieving these, we believe that we can solve diverse
social issues.
The first of which is decarbonization. With regard to
OPE, aggressively pursuing the conversion from exhaustemitting engines to clean running cordless electricmotors considerably increases our contribution toachieving a carbon-free society. We will strive to cut CO2
emissions not only from a product standpoint, but also in
our company operations. One link to this is our plan for
the gradual installation of photovoltaic panels and theusage of renewable energy at our sales bases we own in

7

product supply to customers. In order for us to address
labor shortages at Makita and also to improve
convenience for customers, it is vital to encourage digitaltransformation for our customers, as it became more
apparent during this COVID-19 crisis.
In terms of training human resources, we areproactively sending young Japanese employees to ouroverseas subsidiaries. Being placed in an environment
outside Japan, in which one must go about work withthe mindset of a manager, instills quite a bit of growth.
We would like to continue our pursuit of digitaltransformation and help foster the employees that will
carry the future of this company.

Makita Corporation

Japan. Initiatives to achieve a decarbonized society
contribute to meeting the SDG of “climate action,” while
also being one of Makita’s priority themes going forward.
Furthermore, with regard to the social issue of plastic
waste, we will continue efforts to remove plastics fromour product packaging. We will also continue
environmentally focused efforts that impact a wide rangeof stakeholders, including customers, suppliers,
employees, local communities, and residents, as we
steadily increase corporate value.
And, with Makita’s dense network of sales and service
bases in regions around the world, we will contribute tosolving social issues now and in the future. Makita
supplies products that are indispensable for
infrastructure projects. Maintaining robust productinventories at our bases in regions around the world, andquickly delivering those products, contributes to making
cities and places of residence safe, resilient, andsustainable, which is essential for achieving the SDG of“sustainable cities and communities.” Furthermore, if we
can improve efficiency and productivity by quickly
supplying products and services, in addition toconvenient cordless products, it will support efforts toalleviate labor shortages and have a major impact onquick recovery from prevalent natural disasters. Makita
has traditionally maintained a deep commitment to“always being on the support side in times of disaster,”which includes quickly addressing the needs ofcustomers when a disaster occurs. We believe thatassisting with recovery by supporting customers,
leveraging our network of bases, and quickly supplying
products and services that contribute to greater work
efficiency and productivity precisely when customers are
suffering after a disaster is a service to society and helps
lead to corporate growth. Going forward, we arecommitted to leveraging lithium-ion cordless products,
as well as our dense network of sales and services, tosolve social issues while also continuing to be acompany that is indispensable to society and that
constantly plays to its strengths. By doing so, we seek toachieve our long-term goal of being a “Strong Company”
that attains long-term growth.

Q6 Lastly, please let us know about your enthusiasm for the future.
Vigorously promoting environmentally focused
initiatives
At present, the greatest business challenge for Makita isaddressing environmental issues. We are a company
with the role of being useful to society by, for example,
providing products and services that assist with disasterrecovery. I believe that we have a profound duty tocontribute to society and diligently mitigate the tragedy ofnatural disasters. In order to achieve that objective, wewill vigorously promote environmentally focused
initiatives, centering on climate change.
We sincerely look forward to the devoted support andongoing encouragement of stakeholders.

Makita Report 2021

8

Makita’s Value Creation

Makita’s Value History
1915
FoundedFoundation of Makita Electric
Works
Demand for electric power rose sharply
due to the wartime economy during WorldWar I. Makita’s origins lie in a sales andrepair company for lightning equipment,
electric motors, and transformers, started
with just four people, with the “age ofelectricity” serving as a tailwind.

1958

1970

First steps as a power tool
manufacturer

Becoming global Makita

Second stage of foundation

First local subsidiary in the U.S.

Development of original products became a key
issue. We launched Japan’s first portable electric
planer with the catchphrase “20 times better thanmanpower,” and it was well received by building
carpenters nationwide. Together with the electric
groove cutter we launched next, it helped in therestoration of houses damaged by the Ise Bay
Typhoon. The year following the launch of ourportable electric planer, we decided to withdraw
from the motor business and began our journey as a
power tool manufacturer.

We established Makita U.S.A. Inc., our first overseas
subsidiary with the objective of increasing our export ratio.
Although we initially struggled in a fiercely competitive area
where a large number of manufacturers, including major
power tool manufacturers, were competing with eachother, our cost performance and high quality after-sales
service were rated highly, and our products penetrated theNorth American market.

Development of global strategy

First exports
Makita’s first exports were electric
generators and motors for the Soviet
Union. Strict testing of exports wereconducted in the presence of Soviet
inspectors, but all of our products passedwith flying colors. The international
achievement boosted trust in our company
and our reputation.

Construction of domestic sales network
We established a succession of business bases inleading cities nationwide, including Osaka, Tokyo,
Fukuoka, Sapporo, and Sendai, building a finelytuned nationwide sales network. We worked to
expand sales and improve after-sales services.

After the U.S., we established a series of subsidiaries inFrance, the U.K., Australia, and other countries. Our finelytuned sales strategy closely aligned to the market in eachcountry steadily produced results.

Commencement of overseas production
In 1980, we commenced our first overseas production in
Canada. The following year, we commenced production in
Brazil as well. In 1984, we moved forward with ourglobalization, establishing a fully-fledged overseas
production subsidiary in the U.S. and commencing
production the following year.

Global Network

Makita Corporation Head Office
Sales and Production Subsidiaries
Production Subsidiaries
Sales Subsidiaries
Sales Subsidiary BranchesService Centers

9

Makita Corporation

1991

2005

2015

Changed the company name to
Makita Corporation

Launch of sales of lithium-ion
battery products

Moving forward with celebration of
the 100th anniversary

Becoming a new Makita withchange of company nameBecoming a sensation at
exhibitions

Celebration of the 100th anniversary

We updated our corporate image with theaim of moving forward as a comprehensive
supplier handling a full range of home-related
tools including outdoor power equipment(OPE) and woodworking machinery withpower tools as our mainstay category. We
also renewed our logo marks and thelogotype for our company name todemonstrate our resolve to move forward
toward creating the new Makita.

We launched a cordless impact driver thatused lithium-ion batteries. With a longer
battery life and a lighter weight, morecompact tool, our cordless impact driver
was rated as light and compact but
sufficiently powerful and gained support
from professional users.

Strengthening development
system for OPE
Growth as a global company
We commenced production of power tools in
the U.K. in 1991 and in China in 1995. We
further increased our overseas production
capacity and shifted production to overseas
plants in a transformation from an exporter
into a truly global company.

We established the OPE R&D Center in
the Nisshin Office in Aichi Prefecture toserve as the core base for OPE
development and to promotecollaboration with other bases.

We celebrated our 100th anniversary in 2015. To
become a company that lasts for the next 100
years, we will continue to be a company neededby society by identifying the needs of the times
and operating a business that is closely alignedwith customers.

Becoming “a Supplier of aComprehensive Range of Cordless
Products”
We are actively striving to expand our lineup of
products using lithium-ion batteries and will
move forward to become “a Supplier of aComprehensive Range of Cordless Products”,
including OPE and other categories in addition to
power tools. With our focus on cordless OPE,
we will proactively launch products that
contribute to realizing a decarbonized society.

Changes in Revenue (Consolidated)(billion yen)

600

500

400

300

200

100

0

1976

1980

1990

2000

2010

2020 2021 (fiscal year ended

February/March)

Note: Changed to fiscal year ending March 31 from 1990.

Makita Report 2021

10

Makita’s Value Creation

Makita’s Value Creation
As a global supplier of a comprehensive range of tools for creating comfortable homes and living
environments, Makita provides power tools, outdoor power equipment, and a wide range of similar
products to support the creation of an affluent society on a global scale. Through our business, we
contribute to achieving sustainability by helping resolve environmental and social issues.

Input

Social challenges

Business model

Financial capital• Equity attributable to owners of the parent

657.9 billion yen• Cash and cash equivalents

Environmental
issues, including
decarbonization

148.6 billion yenDevelopment

Human capital• Number of employees

18,624• Number of overseas employees

15,490• Number of female employees

6,098

Social-related capital
Labor
shortages

Japan 123 (as of April 2021)

Makita’s
Value Chain

Overseas Approx. 50 countries(our sources of strength)• No. of bases

Manufacturing• No. of countries where Makita sells products

Details

Approx. 170

Manufacturing capitalFrequent
naturaldisasters

49.9 billion yen• Capital expenditures

P13-14

Sales andservicesIntellectual capital• R&D costs

12.8 billion yen

Natural capital (non-consolidated)• CO2 emissions

11,672 t• Water usage

100,262 m

3(fiscal year ended March 31, 2021)

Platform supporting Makita

E

S

G

Promoting respect for human rights and CSR
procurement, while fostering the humanresources who will lead our future

Strengthening governance by transitioning
to a company with an Audit & Supervisory
Committee, and establishment ofNomination and Compensation Committee

Promoting environmentally conscious
corporate management as one of ourhighest management priorities
Details

11

Makita Corporation

P23-24

Details

P25-26

Details

P27-32

Supporting SDGs

OutputOutcomes

Social value
Boosting work efficiency and productivity• Improving safety, convenience, and comfort
through cordless products• Rapid repair and logistics services

Reducing environmental impacts• Contributing to a decarbonized society throughzero exhaust• Lower environmental burden through zero emissionsof atmospheric pollutants and lower noise

Early recovery from disasters• Products indispensable for building infrastructure• Support for early recovery from disasters througha robust network of bases

Peace of mind during times of disaster• Providing reassurance when disasters occur byoffering batteries as a power source available
during emergencies
Details

StrongCompany
Makita has set itself the goal ofcontributing to the creation ofsustainable society and consolidatinga strong position in the industry
worldwide as a global supplier of acomprehensive range of tools forcreating comfortable homes andliving environments, including
cordless power tools, batteryoperated outdoor power equipment
and pneumatic tools.

Details

P2

P14

Economic value

Sales mix by product category

Long-term Target(fiscal year ended
March 31, 2021)(fiscal year ended March 31, 2021)
Power Tools

Parts, Repairs andAccessories

58.6%

17.1%

Dividend payout ratio

Operating profit ratio

30.2%

14.5%

608.3

billion yen
Outdoor Power
Equipment,
Household andOther Products

24.3%

Details

P19-20EPSFree cash flow

228.41 yen

21.6 billion yen

Details

P33-34Makita Report 2021

12

Makita’s Value Creation

Sources of Strength (Business Model)
Makita has striven to deliver high-quality, appealing products and services that please ourcustomers. Through our core strength of an integrated framework covering development,
manufacturing, sales, and services across a network closely aligned with markets and customers
around the world, we will continue to evolve and aim to create social value.

Development

Utilizing battery charging/discharging technologies andmotor technologies
In 2005, Makita was a pioneer in utilizing lithium-ion
batteries to sell electric power tools for professionals.
Following that, we utilized our industry-leading battery
charging/discharging technologies and motor
technologies to launch many new cordless products.
Makita is meeting customers’ diverse needs with theindustry’s preeminent lineup of products that is theresult of proactively developing a broad range of
product categories, including promoting cordless andengine-free products by switching to cordlessproducts from corded AC products and enginepowered products. Although the products that can beused differ depending on the type of battery, onebattery can be used for many of our products making
high compatibility and a rich product lineup as ourmajor product strength.

Making all manner of products
cordless
Makita aims to make any and all products cordless.
We are proceeding to expand and enhance ourcordless products that, in recent years, extend aboveand beyond power tools to include outdoor power
equipment (OPE), cleaning equipment such as
cordless cleaners used for building maintenance, andcordless cooler and warmer boxes, radios, lighting
equipment, and so on that are useful on worksites aswell as during outdoor activities and times of disaster
when power sources are difficult to come by. We areaccelerating efforts to achieve a sustainable society bypromoting cordless solutions that leverage the merits
particular to cordless products—namely, work
efficiency and productivity improvements, and lower
environmental impacts, including decarbonization.

13

Makita Corporation

Manufacturing

Production bases in regions
around the world
On a product unit basis, approximately 90% of Makita
products are manufactured at overseas factories. We
have production bases and factories in eight countries,
including in Japan, China, Romania, Thailand, theU.K., Brazil, the U.S., and Germany. This is one of
Makita’s strengths. By having production bases inmajor regions around the world, we are not only able
to address currency, disaster, geopolitical, and otherrisks, but also quickly manufacture and supply
products that meet demand in each region. In recent
years, with our sights set on sales growth for cordless
OPE and the like, we are striving to strengthen andexpand our production capacity. In FYE 2020, we
expanded our factory in Romania by adding a newbuilding and, in FYE 2022, we plan to complete a newfactory in China. Furthermore, plans are also in place
to strengthen and expand other factories as well.

Improving quality andproductivity
In addition to relentless ingenuity by employees in ourfactories, we are adopting and utilizing cutting-edge
technology, such as the IoT and robots, thereby
allowing us to build a framework that can manufacture
consistently high-quality products anywhere in theworld, regardless of the individual experience or
intuition of each worker. As production expands,
pursuing efficiency in factories and ensuring stable
quality are unavoidable challenges. By pursuing
cutting-edge production technologies, developing
proprietary Makita robots tailored to our production
floors, and deploying and sharing mass production
techniques and know-how at each factory, we arecontinuing our efforts to tackle an even more advanced
level of craftsmanship.

The value Makita
delivers

Sales and services

A sales and service network
spanning the globe
Makita operates 123 sales and service bases in Japan(as of April 2021), in addition to directly managed sales
bases in some 50 countries overseas, allowing us tocarry out fine-tuned sales and services. Our industryleading sales and service network is a core strength
due to directly managed bases both in Japan andaround the world. By providing services in the form of
rapid repairs and logistics closely aligned with markets
and customers, we are able to contribute to efficiency
and productivity gains for customers, which helps us
build trusting relationships. In addition, by using thisnetwork to gather feedback on our products andservices from customers throughout the world, we canunderstand their needs and incorporate them intoplans for new products and services.

Further improving service
capabilities
One of Makita’s major strengths is maintaining, andbeing able to quickly ship, robust inventories of
products and spare parts and components at each of
our bases. However, as we increase worldwide unit
sales of cordless OPE, which is larger in size thanpower tools, we expect that it will become difficult toquickly deliver products with our existing logistics
capabilities. Consequently, we are aggressively
expanding and adding to our current logistics bases,
while also building bases that are close to regional
markets for cordless OPE, as we strive to provide
more finely tuned services and logistics. Furthermore,in order to accurately and quickly handle customer
inquiries, we aim to increase convenience and further
improve services by promoting a digital transformation
in how we serve customers, including running an
inquiry response system that uses AI.

Boosting work efficiency and productivity
In addition to the unique merits of cordlessproducts—which include improving safety,
convenience, and comfort for customers—
Makita contributes to efficiency andproductivity gains for customers by providing
quick repairs and logistics services leveraging
our robust network of bases.

Reducing environmental impacts
Cordless OPE emits zero exhaust during use
and contributes to achieving a decarbonizedsociety. Furthermore, while avoiding emissionsof exhaust gas and other atmosphericpollutants, they are quieter than enginepowered equipment and significantly
contribute to lower environmental impacts.

Early recovery from disasters
Makita products are indispensable for building
infrastructure and are also vital during times ofdisaster recovery. By using our robust networkof bases to quickly deliver cordless products
and services that contribute to efficiency andproductivity gains, we support early recovery
from disasters.

Peace of mind during times of disaster
During times of emergency, batteries used forcordless products can function as a backup
power source. The batteries used in cordlesscleaners and the like can also be used in
products such as radios and lighting
equipment. Also, with a special USB adapter,these batteries can charge smartphones andadd an extra degree of peace of mind if a
disaster occurs.

Makita Report 2021

14

Makita’s Value Creation

Contribution to Solving Social Challenges

Contribute to realizing a sustainable society byworking to solve social challenges such asenvironmental issues
We will continue contributing to the realization of a sustainable society by solving social
challenges such as environmental issues through our products and services. We will work to
evolve into “a Supplier of a Comprehensive Range of Cordless Products” by continuing to expand
our range of environmentally-friendly, convenient cordless products. At the same time, we will
strengthen systems for promptly providing services such as repair and distribution by building a
network of sales and service bases that is finely tuned to each location around the world and wewill as well work to realize a decarbonized society and reduce workloads in worksites worldwide.
Promoting the Elimination of Plastic

P24

Decarbonization

Environment
Plastic waste

Cordless products

Air pollution

Noise

Contribution tocommunities and daily lives

Network of finely tuned bases/
prompt repairs and distribution

Labor shortages

Frequent natural disasters/
disaster reconstruction

Occupational safety

Society
Comfortable outdoor work
15

Makita Corporation

Cordless products
Makita, which has grown as a manufacturer of power tools, is now working to evolve into “a Supplier of aComprehensive Range of Cordless Products”. Evolving into “a Supplier of a Comprehensive Range of
Cordless Products” means that we will leverage the battery charging/discharging as well as motor
technologies we developed through our power tools to promote the use of rechargeable batteries in a widearray of products, including outdoor power equipment in addition to power tools. Cordless products feature
improved safety, convenience, and comfort for customers as well as zero emissions during use, low noise,and low vibrations. They also help to solve social issues, such as labor shortages in the workplace. Amongthese products, cordless outdoor power equipment, which we are promoting as a replacement for enginepowered equipment, is a product which is very useful for realizing a decarbonized society amid mounting
awareness of climate change. It also contributes to “Climate Action,” which is one of the goals set by the
SDGs. Going forward, we will continue contributing to the transition to cordless products and elimination ofengine-powered equipment by expanding our range of cordless products.
Advantages of cordless products• Work efficiency and ease of use due to absence of power cords• Contribution to preventing onsite accidents, such as tripping over power cords• Contribution to increasing work efficiency in locations where it is difficult to secure a power source• Zero emissions*, low noise, and low vibrations due to switch from engine-powered equipment* During use

Network of finely tuned bases/prompt repairs and distribution
Makita has continued to expand its network of sales and service bases in locations around the world and is working
to reinforce the sales and service system. With bases in each country and region, our large inventories of products
and parts for repairs facilitate provision of services that include prompt repairs and distribution in addition to sales.
The development of a service system that includes prompt repairs and distribution is essential for improving
workplace productivity as the inability to use tools due to malfunction and the inability to supply products promptly
leads to work delays and reductions in efficiency for customers. In particular, faced with restrictions on cross-border
movement during the COVID-19 pandemic, Makita, which has bases in each country and region, has been able tohelp local communities by delivering products and services promptly. As we were permitted to continue ourbusiness activities in many regions as an essential business even under lockdown, our products and services,which are essential for affluent urban development and lifestyle development are also contributing to “sustainable
cities and communities”, one of the goals of the SDGs. The expansion of our network of bases that support
activities embedded in local communities will lead to the realization of a sustainable society right around the world.
Going forward, we will strive to further strengthen our service system, including the enhancement of distributionfunctions in anticipation of the handling of large products and an increase in the volume of goods to be distributed.

Makita Report 2021

16

Makita’s Value Creation

Financial & Non-financial Highlights
Financial* Figures through the fiscal year ended March 31, 2017 are based on U.S. GAAP and figures from the fiscal year ended March 31, 2018 are based on IFRS.

Revenue

Operating profit & operating profit ratio(Million yen)

(Million yen)

650,000

608,331

88,46490,000(%)

30.0

500,000
60,00020.0

350,000

14.5
30,00010.0

200,000

0

2017

2018

2019

2020

2021 (FYE)

0

2017

Although overseas revenue converted into yen was eroded by currency
exchange rates, sales of products and tools were robust due to demand
for tools on construction sites and strong stay-at-home demand. As aresult, we recorded our fourth consecutive year of record-breaking revenue,
up 23.5% year on year to ¥608,331 million.

■ Operating profit

Profit attributable to owners of the parent

ROE(Million yen)

62,01865,000

2018

2019

2020

2021 (FYE)

0● Operating profit ratio

Although the cost-of-sales ratio increased, operating profit rose 38.1% year
on year to ¥88,464 million due to revenue growth. The operating profit ratio
increased 1.5 percentage points year on year to 14.5%.

(%)

12.0

10.1
50,0008.0
35,000
4.0
20,000

0

2017

2018

2019

2020

2021 (FYE)

0

2017

2018

2019

2020

2021 (FYE)

Income tax expenses came to ¥24,515 million (an effective tax rate of
28.1%), and we achieved record-breaking profit attributable to owners of
the parent which increased 29.9% year on year to ¥62,018 million.

ROE increased 1.8 percentage points year on year to 10.1% due to theincrease in profit attributable to owners of the parent and other factors.

R&D costs

Capital expenditures(Million yen)

(Million yen)

15,00049,85550,00012,78340,00010,00030,00020,0005,000

10,000
0

2017

2018

2019

2020

2021 (FYE)

Makita focused on expanding our lineup of cordless products, including the
40Vmax series, in order to promote the transition to cordless products thatuse lithium-ion batteries. As a result, R&D costs increased 10.2% year on
year to ¥12,783 million.

17

Makita Corporation

0

2017

2018

2019

2020

2021 (FYE)

We expanded production capacity and newly established and expanded
distribution facilities inside and outside Japan with the aim of becoming “aSupplier of a Comprehensive Range of Cordless products”. This included
the construction of a new plant in China, a distribution building at our
Okazaki Plant, and a distribution center in Saitama Prefecture. As a result,capital expenditures rose 12.3% year on year to ¥49,855 million.

Non-financial
Production output

Number of employees(Million units)

39.59

40.00

35.00

16,00030.00

13,00025.00

10,000

0

2017

2018

2019

2020

18,62419,00002021 (FYE)

2017

2018

2019

2020

2021 (FYE)

As a result of efforts to increase production to meet demand in various
regions amid strong sales conditions, production volume increased 37.9%
year on year to a record breaking 39.59 million units.

Our number of employees rose 1,534 versus the previous fiscal year-end to
18,624 employees, reflecting our strong sales. Going forward, we will
actively hire and train diverse human resources as we expand our sales
channels in Japan and overseas.

Increasing presence of female employees

CO2 emissions (Scope1, Scope2)(t)(t/100 mil. yen)

75,000Female employees

30.0

64,470

6,098

50,00020.0

16.1

Female managers

25,000199

10.0

11,672
3.1
0Domestically, female employees have an average of approximately 17 yearsof service and have been active in a variety of departments over long
periods of time. Overseas, Makita has numerous female employees inmanagement positions who are demonstrating a wide range of abilities intheir respective fields.

Water usage

2017■■ CO2 emissions (Left axis)■■ CO2 emissions (Left axis)

2018

2019

2020

● Intensity per unit of net sales● Intensity per unit of net sales

2021 (FYE)(Makita Corporation)(Overseas production subsidiaries)

We are striving to reduce CO2 emissions through energy-saving activities suchas adopting LED lighting and high-efficiency equipment. Although CO2emissions rose on FYE 2021 given our strong sales, intensity per unit of net
sales for Makita Corporation fell 16.2% year on year to 3.1 tons/100 million yen
and for overseas production subsidiaries fell 14.4% to 16.1 tons/100 million yen.

Waste emissions(m )(m /100 mil. yen)33400,000

120.0

308,328300,000

90.0

76.8
200,000(t)

24,28925,000(t/100 mil. yen)

20,000

10.0
8.0

6.1

15,0006.0

60.0
10,000100,26226.5

100,000

0

0

2017

■■ Water usage (Left axis)■■ Water usage (Left axis)

2018

2019

2020

● Intensity per unit of net sales● Intensity per unit of net sales

2021 (FYE)

30.0

0

(Makita Corporation)(Overseas production subsidiaries)

We carry out monthly monitoring of water usage at business bases andstrive to reduce water usage. Although water usage at overseas production
subsidiaries on FYE 2021 increased given our strong sales, intensity perunit of net sales for Makita Corporation fell 23.6% year on year to26.5m3/100 million yen and for overseas production subsidiaries fell 19.3%
to 76.8m3/100 million yen.

4.0

5,022

5,000
0

1.3
2017

■■ Waste emissions (Left axis)■■ Waste emissions (Left axis)

2018

2019

2020

● Intensity per unit of net sales● Intensity per unit of net sales

2021 (FYE)

2.00(Makita Corporation*)(Overseas production subsidiaries)

We are striving to reduce our final disposal volume of waste by thoroughly
sorting waste in order to promote recycling. Although final disposal volume ofwaste on FYE 2021 increased given our strong sales, intensity per unit of net
sales for Makita Corporation* fell 18.8% year on year to 1.3 tons/100 million
yen and for overseas production subsidiaries fell 10.3% to 6.1 tons/100 million.
*A pplicable only to the Head Office, Okazaki Plant, and Nisshin Office.

Makita Report 2021

18

Makita’s Value Creation

Business Summary
As a global supplier of a comprehensive range of tools for creating comfortable homes and living
environments, Makita supports the creation of an affluent society. We will continue contributing to
the solution of social issues such as environmental problems and labor shortages and the realizationof a sustainable society by making all kinds of products cordless using lithium-ion batteries.
Breakdown of Revenue by Product Category

Breakdown of Revenue by Region

Parts, Repairs andAccessories

The Middle East and Africa

Power Tools

58.6%

17.1%

Outdoor Power
Equipment, Household
and Other Products(Share of revenue
by product category
in FYE 2021)

24.3%

1.9%
Oceania

Japan

6.8%

18.6%

Central and South America

4.8%
Asia (excluding Japan)

6.5%(Share of revenue
by region
in FYE 2021)

North America

Strengths of our Products
Our strengths lie in the development of new products
which provide high levels of satisfaction to professional
users and our extensive product lineup based on our
industry leading battery charging/discharging as well as
motor technologies. By leveraging our network of basesin Japan and overseas, and carefully listening to customer
needs, we have developed diverse product categories toachieve the best lineup of products in the industry.

Power Tools
Makita power tools are used in many settings, such as
residential and large-building construction sites andfactories. Since becoming the first company in Japan to
manufacture and sell portable electric planers in 1958, we
have dedicated ourselves to daily technological development
to enable better approaches to work that includes drilling,clamping, cutting, grinding, and more. We are responding to
the diverse needs of customers with a robust lineup of
products embodying our advanced technological expertise.

Outdoor Power Equipment, Household andOther Products
In the outdoor power equipment category, which includes
lawn mowers, grass trimmers, chainsaws, and blowers,
we are focusing on developing cordless products that arelightweight, low noise, and easy-to-handle even for womenand the elderly, as well as emitting zero exhaust, thereby
also contributing to the realization of a decarbonizedsociety. Makita’s household product line includes Cordless
Cooler and Warmer Box and other items that fulfill key
roles during outdoor activities or even at times of disaster.

Parts, Repairs and Accessories
Accessories (including consumable parts such as saw
blades and whetstones) have a significant impact onwork quality and efficiency. Makita provides a lineup of
long-life accessories optimized for work tasks.
Additionally, we have a network of businesses in eachpart of the world to allow for rapid repairs and parts
supply, which enables Makita to support our customers.
19

Makita Corporation

14.9%

Europe46.5%

International Business Strategy
Makita operates direct sales bases in approximately
50 countries. We sell products in some 170
countries, and the overseas sales ratio is around80%. Makita’s manufacturing extends beyond theborders of Japan. On a product unit basis,
approximately 90% of our goods are currently
manufactured at overseas factories, including in
China, Romania, Thailand, the U.K., Brazil, the U.S.,
and Germany. Going forward, we will further enhance
our global manufacturing system to strengthen andstreamline production, procurement, and distributionfunctions. We will also aim to maintain and gain
market share by further promoting the establishmentof a finely-tuned sales and service system.

Revenue During COVID-19
Pandemic
In 2020, the COVID-19 pandemic led to the impositionof restrictions on leaving the house and international
travel in many countries, and global economic activity
stagnated. Makita was affected by suspensions offactory operations from the end of the fiscal year
ended March 31, 2020 through the beginning of the
fiscal year ended March 31, 2021. However, we wereable to increase sales significantly in many countries byfirmly capturing stay-at-home demand stemming fromvoluntary restraint on going out and solid demand for
professional products on construction sites. We haveestablished sales and service bases in various
countries and regions, and were able to provide
products and services promptly even during the
COVID-19 pandemic travel restrictions by taking
advantage of the ample inventories held at thesebases. This prompt provision of products and services
was a major factor in our sales growth.

Sales Trends by Region (FYE 2021)
Country/Region

Change (%)

Japan+12.3%

Europe+30.8%(+30.8%)

North America+25.8%(+28.8%)

Asia+0.9%(+2.4%)

Central and South America+13.1%(+38.9%)

Oceania+45.3%(+41.7%)

The Middle East and Africa+16.1%(+18.3%)* Figures in parentheses show percentage change in local currencies.

Focus Category: Cordless
Outdoor Power Equipment (OPE)
In the past, most OPE, which includes lawn mowers,
grass trimmers, chainsaws, and blowers, werepowered by conventional engines. However, in light ofrising global awareness of the environment and theincreasing need for highly convenient cordlessproducts, Makita has been focusing on cordless OPE
in recent years. Although the power and running timeof cordless products were issues in the past, Makita
has introduced a series of products in which
rechargeable batteries replace engines, such as thelaunch of cordless OPE offering usability comparable
to engine-powered equipment. In FYE 2021, in orderto further promote the shift away from engine-powered
equipment, we launched products that use 40Vmax
batteries to realize high-power tools, and products thatuse a large-capacity, Portable Power Pack (PDC1200)
to increase working time.

Investment in Expanding
Capacity
We need to expand capacity as it is anticipated that
our current system will be unable to keep up as wemove forward as “a Supplier of a Comprehensive
Range of Cordless Products” and our sales increase.
One of our efforts in this area is strengthening ourdistribution functions. As sales of cordless OPE,
which is larger than power tools, increase around theworld, it is expected that we will be unable to holdadequate inventory with our existing distributionfunctions. Makita is newly establishing and expanding
its distribution centers to enable prompt delivery of
products and parts for repairs to customers in order
to contribute improving customer work efficiency andproductivity. In FYE 2021, we newly established theWestern office equipped with a large-scale
distribution warehouse in Reno, which is located innorth-west Nevada, U.S., in addition to completing a
new logistics building at our Okazaki Plant in Japan.
We have also been working to increase capacity at
our plants in China and others in anticipation ofhandling large-scale products in production as well.
Going forward, we plan to continue to increase our
production capacity and to build and expand ourwarehouse and distribution facilities inside andoutside Japan to refine the prompt and precise
services closely aligned with markets and customers
which are our strength and to maintain and increase
our global competitive advantage.

Exterior view of Western office, Makita U.S.A. Inc.

Large-capacity, Portable Power Pack (PDC1200)

In FYE 2021, we succeeded in significantly
increasing sales of cordless OPE, which was due inpart to rising environmental awareness and stay-athome demand during the COVID-19 pandemic inaddition to the effect of our efforts to expand our
lineup of products. In particular, the advantages ofgasoline-free cordless products, which do not use
gasoline, were further reevaluated in countries andregions where people were not even able to visit gas
stations due to strict restrictions on leaving the house.
Going forward, Makita will continue to promote theshift away from engine-powered equipment tocontribute to the realization of a decarbonized society.

New distribution building, Okazaki Plant

Makita Report 2021

20

Makita’s Value Creation

Risks & Opportunities
Risk Management
Makita strives to identify and manage risks with amaterial impact on business activities, while also
pursuing our commitment to being a company that isresilient to crises.
Makita’s Disclosure Committee, which identifies andinvestigates risks in the Group’s business activities,
holds annual meetings. These meetings are attended
by representative Directors, Directors in charge,
Standing Audit & Supervisory Committee Members,
and General Managers of the Internal Audit Divisionand respective departments of the Company.
Each Director exercises authority and takes
responsibility for implementing the Group-wide risk
management framework in his or her own division, andalso reports to the Board of Directors when a situation
occurs that is material to business management. Alsoin each division, regulations and guidelines are

stipulated and followed in order to carry out risk
management necessary for quality control, disasterprevention, capital utilization, and the like.
Amidst concern in recent years over the occurrenceof major earthquakes and other natural disasters,
Makita recognizes that being able to respond todisasters is a critical issue. Makita has formed a Fire &Disaster Management Committee comprised of
directors and the heads of relevant divisions and has
formulated disaster prevention regulations with thiscommittee at the center. These disaster prevention
regulations and other measures, which are reviewed
regularly, define steps for disaster prevention,
emergency response measures, and disaster recovery
efforts. Similarly, these regulations and measures
outline a business continuity plan (BCP) for times ofdisaster. The target organizations and scope of thisplan are also reviewed as necessary.

Risks & opportunities relevant to Makita
Relevant risks & opportunities
Changes to the social
climate/market environment

Details
Risk• Deterioration of the market environment due to worsening economic conditions, social disorder,
enactment or changes to laws and regulations, and the like

Opportunity • New demand accompanying environmental changes such as labor shortages and the post-

COVID-19 “new normal”
Global competition

Risk• Loss of competitive strength

Opportunity • Improved profitability from consolidating competitive superiority

Natural disasters

Risk• Performance deteriorates due to large-scale natural disasters, such as earthquakes, floods, fires,and so on• Performance drastically deteriorates due to natural disasters in Japan and/or China, where our corebusiness operations are concentrated

Opportunity • Increased demand for products and services that contribute to early recovery from natural disasters

and peace of mind in times of disasterTechnology & products

Risk• Decline in new product development able to meet changing market needs• Delays in product development attuned to market prices• Large-scale recall(s) due to unforeseen product defects; damage liability lawsuit(s); major decline inbrand trustworthiness

Opportunity • Improved brand strength due to delivering customer satisfaction• Demand creation and acquisition of growth opportunities through new products
Procurement

Risk• Production shortages and rises in production material costs• Delayed launch of new product sales due to component suppliers not meeting Makita’s
requirements, or due to taking too long to meet those requirements

Opportunity • Improved competitive strength and profits due to stronger relationships with suppliers and/or

discovering new suppliers
Relationships with major
customers

Risk•L oss of major customer(s) and a corresponding loss of opportunities to unlock sales channels•D eterioration of the financial position of customer(s)Opportunity • Increased sales due to stronger relationships with major customer(s)Environment (incl. climatechange)21

Makita Corporation

Risk

•S
 trengthening/adoption of regulations related to global warming, climate change, and so on

Opportunity • Increased demand for environmentally friendly products that contribute to decarbonization

Makita’s Value Creation

Sustainability Management
The constantly changing global society is confronting myriad challenges accompanying climatechange and other phenomena. By striving to solve social issues through our business, Makita
delivers new value and contributes to the sustainable development of society.

Promoting Sustainability
Makita has set itself the long-term goal of being a“Strong Company,” which is to contribute to thecreation of sustainable society and consolidating astrong position in the industry world wide as a global
supplier of a comprehensive range of tools for creating
comfortable homes and living environments, including
cordless power tools, battery-operated outdoor power
equipment, and pneumatic tools.
Our greatest initiative toward achieving a sustainable
society is evolving into “a Supplier of a Comprehensive
Range of Cordless Products”, and promoting cordlessproducts that utilize lithium-ion batteries. This
promotion of all types of cordless products extends
above and beyond power tools to include outdoor
power equipment (OPE) and other products that utilize
our battery charging/discharging technologies, as well
as motor technologies, amassed in our power tools
business. At the same time, by building a robust sales
and service network closely aligned with regions
around the world, we are devoted to lowering global
environmental impacts and raising efficiency andproductivity on work-sites worldwide.
Furthermore, among the many social issues that exist,
Makita has had a long-lasting dedication to addressing
environmental issues. At the United Nations Conference
on Environment and Development (also known as the“Earth Summit”) held in Brazil in June 1992,
representatives from countries around the world reached
an agreement on global environmental protection. As
the world began moving forward on initiatives to addressenvironmental issues, we established the Makita
Environmental Committee in July of 1993. Ever since,
we have devoted effort to environmental protection
activities. Currently, we have the Environmental
Management Committee as a body for deliberating anddeciding on environmental protection activities. The
committee addresses Company-wide environmental
targets and handles tasks ranging from policy andaction discussions to recognition of activity outcomes.
We have also established other committees under theumbrella of this committee, including the Environmental
Education Committee and Global Warming Prevention
Subcommittee, which promote specific environmental
activities. In recent years, since climate change andplastic waste have become acute concerns among
various environmental problems, we are addressingthese as priority issues. In response to climate change,
we are directing effort toward cordless OPE that does
not emit exhaust gas during use, while also working to
improve the energy efficiency of equipment in our
offices, which includes installing LED lighting and high-efficiency equipment. In addition to this, we willcontinue to contribute to decarbonization by measures
such as using renewable energy in our offices. With
regard to plastic waste, we are energetically pursuingenvironmental protection activities that include reducing
the single-use plastic used in our product packaging.
Environmental Management Promotion Framework
Board of Directors(Executive Management Committee)
Environmental Management Director
Environmental Management Committee
Internal Environmental
Auditors
Environmental Education
Committee

Head Office (Environment& Facility Control Division)
Global Warming Prevention
Subcommittee, and others

Makita’s Corporate Philosophy
and Initiatives Toward SDGs
As a company, Makita seeks to meet the expectationsof society and achieve sustainable growth while being
useful to society. We have expressed our commitment
to “striving to exist in harmony with society” as ourManagement Policy / Quality Policy. In order to achievethese objectives, we see the Sustainable Development
Goals (SDGs) as high-priority targets and believe in theimportance of pursuing ESG initiatives from diverse
perspectives. Through these initiatives, we aim to
unlock sustainable growth and boost medium- andlong-term corporate value.

Makita Report 2021

22

To Be a Strong Company Supporting a Better Society

Environment
Recognizing environmental protection activities as a high-priority management challenge, Makita
established an Environmental Policy in 1998. Based on the principles and aims stated in theEnvironmental Policy, we have built an environmental management promotion framework and are
pursuing corporate activities that take the environment into consideration. In recent years, ourenvironmental protection activities are striving to address climate change and the reduction of
single-use plastics as priority concerns among environmental problems.

Environmental Vision
The “Go Green” slogan symbolizes
Makita’s commitment to continuallyproviding new value as acomprehensive international
supplier of tools. We hope toalways remain as a company that maintains a
steady eye on society, challenging ourselves tocreate a “sustainable recycling-oriented society”
that harmonizes the environment with the economy.

Environmental Policy
Basic Principles
As a global supplier of power tools used inbuilding homes and in everyday life, Makita isaiming to conduct a wide range of environmental
protection activities, in order to contribute tohaving sustainable society and conservation of
biodiversity.

Policies
1. Enforcement of environmental administrative structure
2. Continuous improvement and pollution prevention
3. Compliance with applicable laws and regulations
4. Establishment and review of objectives and aims
5. Reduction of environmental burden
6. Disclosure
Please see the Company website for the full text of our policies.

Environmental Management
Makita has established and run its own environmental
management system since 1998. For the purpose ofleveraging that system as a tool for mitigating
environmental burdens, our Head Office and Okazaki
Plant first received ISO 14001 certification in 2007. In
later years, our Nisshin Office and all of our overseas
production bases received the certification and are
now operating environmental management systems.
We promote the protection of the environment at all ofour business bases mentioned above and carry out
activities, such as Internal Environmental Audits andenvironmental education, based on the requirementsof the certification.

23

Makita Corporation

Responding to Climate Change
Initiatives in our Business Activities
Our efforts toward reducing CO2 emissions include
pursuing efficiency gains for energy-consuming equipmentin our offices by, for example, installing LED lighting andhigh-efficiency equipment (AC units, compressors,
manufacturing machinery, etc.). In FYE 2021, our Head
Office and Okazaki Plant collectively saved 47,719 kwh ofelectricity by switching to LED tubes. Additionally,
photovoltaic panels will be installed gradually at our sales
bases we own in Japan. We are also promoting the use ofrenewable energy overseas, where some subsidiaries
have adopted a heating and cooling system using
geothermal heat. In order to raise employees’ awarenessof the environment, we also carry out awareness activities.
These include distributing energy-saving promotional
material to employees and making regular inspections
checking energy-saving responses in offices and plants.
Changes in CO2 Emissions (Scope1, Scope2)(t)(t/100 mil. yen)

75,00030.064,47050,00020.0

16.1
25,00010.0

11,672
3.1
0

2017

2018

2019

2020

2021 (FYE)

0● Intensity per unit of net sales■■ CO2 emissions (left axis)(non-consolidated)● Intensity per unit of net sales■■ CO2 emissions (left axis)(overseas production subsidiaries)

Initiatives With our Products
Outdoor power equipment has conventionally been engine
powered, which had a major impact in environmental
terms due to exhaust gas. In October 2020, the Japanese
government made a proclamation to “achieve net-zero
CO2 emissions by 2050,” which is basically a commitment
to achieve a decarbonized society. This, coupled with the
U.S.’ decision to rejoin the Paris Agreement, comes
amidst raising awareness on environmental issues. Within
this context, Makita is contributing to achieving adecarbonized society by putting effort into our cordlessoutdoor power equipment with zero exhaust gas
emissions during use. Also, in light of these circumstances,
Makita has decided to stop manufacturing engine-powered products on March 31, 2022.
Going forward, Makita will further focus operating
resources on developing, manufacturing, and selling
cordless products that effectively feel as if they areengine-powered. In this way, we will accelerate theshift from exhaust-emitting engines to clean-running
cordless electric motors and will contribute toachieving a zero-emission society in the future.

Promoting the Elimination of
Plastic
Due to concern over global environmental pollution
from plastic waste entering oceans, the EU passed alaw in June 2019 prohibiting the use of certain singleuse plastic products.
In Japan as well, social initiatives are making progress
to reduce single-use plastic, including the July 2020
regulation to charge for plastic shopping bags. In orderto achieve a sustainable society and contribute topreserving biodiversity, Makita is also striving to reduce
single-use plastic used in our product packaging. In
addition to efforts to simplify our standard packaging,
we have, since FYE 2021, tried to reduce plastic bags
and the like used in product packaging, and have beenproceeding to replace them with paper and otherenvironmentally friendly materials. In March, 2021 (thelast month of the first fiscal year of this new initiative), we
achieved the equivalent of a nearly 40-ton yearly
reduction in plastic usage. Going forward, we willcontinue efforts to eliminate the use of plastic.
Example of avoiding plastics

Conventional approach: plasticbag (polyethylene) packaging

Current approach: packaging
without plastic bags

Zero Emission of Waste Products
In light of the pressing social issues of depleted energy
resources and availability of waste disposal sites in the
future, Makita has been making progress in reducing our
final disposal volume of waste products. On a nonconsolidated basis (applicable to the Head Office, Okazaki
Plant, and Nisshin Office), we have been able to hold our
final disposal volume of waste products to 1% or lower
since FYE 2007. From FYE 2015, we have continuously
achieved what we define as “zero emission of waste
products” (a final disposal volume of 0.5% or lower).

Battery Recycling
As “a Supplier of a Comprehensive Range of Cordless
Products”, and as a company that supplies a large volume

of batteries, we believe that, for the sake of environmental
protection and the effective utilization of resources,
collecting used batteries is a crucial task. Inside Japan, weare a member of the Japan Portable Rechargeable
Battery Recycling Center (JBRC). Based on the Act on the
Promotion of Effective Utilization of Resources, we are
striving to voluntarily collect used batteries and reuse themas resources. In line with government laws and regulatory
frameworks in countries outside Japan, Makita is
cooperating with retail stores and dedicated organizations
to collect used batteries. By building and implementing
collection systems in a host of countries and regions, we
are working to promote resource recycling.
Example Inside Japan

Users
Brings batteries

Makitacollection
point

Recycler
JBRC collects batteries

RetailsellerReduced Use of Chemical
Substances
With regard to the EU’s REACH (Registration, Evaluation,
Authorization and Restriction of Chemical Substances)
regulations, since FYE 2010 we have promoted
investigating, managing, and supplying information
regarding carcinogenic and other substances of very highconcern (SVHC) contained in our products. SVHC are
added regularly, so Makita continuously surveys business
partners about the content of their products.
As we pursue the reduction and control of chemical
substances, we also continually engage in component
procurement in compliance with the RoHS Directive(directive on the restriction of the use of certain
hazardous substances in electrical and electronicequipment) adopted by EU member states.

Environmentally Conscious
DesignMakita’s concepts for environmentally conscious
products began with a product assessment in 1992
and was followed by the codification of Makita’s Global
Environment Charter in 1993, the year that we kicked
off our full-fledged development of products that takethe environment into consideration.
At the design stage, we have endeavored to improvethe energy efficiency, weight, and longevity of new
products, while also using materials that areconsiderate to the environment, as we continue
developing tools that can be recycled.

Makita Report 2021

24

To Be a Strong Company Supporting a Better Society

Human Rights/Human Resources/Supply Chain
Makita’s aim is to pursue growth alongside society. While proactively fostering the humanresources who will lead our future, we are committed to fulfilling our duty as a responsible global
corporation, including ensuring respect for human rights and CSR procurement.

Respect for Human Rights

Education bylevel

Education byjob category

CommonEnvironmental and safety & health education

Education concerning the Code of Ethics and compliance

Factory training

Sales training

Overseas operation training

Training for new employees

Grading exam

Correspondence education (self-development courses related to languages, business skills, specialized
fields, etc.)

Career plan training

Education for trainers/promotion
exam evaluators

Cross-industrial
exchange training

Training for newly appointed
supervisors

Coaching
training
Training for management
leaders

Exam for promotion

2nd year of employment
1st year of employment

Makita Corporation

Exam forgrading/promotion

All

25

Basic Support

What supports our growth is nothing other than thetalents of the people working at Makita. “Don’t beangry, arrogant, panic, mope, or give up.” These are
the words of Jujiro Goto, who along with founderMosaburo Makita built this company and transformed
it into “a power tools corporation.” Grounded in thispersonal philosophy of Mr. Goto, we strive to provide
each and every Makita employee with the opportunity
to exercise his or her talents.
Inside Japan, we carry out stratified training (tailored tomatch each employee’s career stage) for new employees
all the way through mid-career management candidates.
Similarly, we have programs for carrying out other formsof training, including on-site factory training, as well as
correspondence training. Furthermore, since having
human resources capable of being active on a global stage
is key for Makita as a company doing business around theworld, we have overseas job training actively offered toyoung employees to help them experience local
workplaces through on-the-job training in order to allow
our workers to build up professional skills outside Japan. In
addition, employees regularly set targets at the beginningof each fiscal year and meet with their supervisors at least
twice a year to discuss the targets and results. Appropriate
feedback given by supervisors in interviews helps with thedevelopment of our human resources.
We are also striving to cultivate human resources
overseas, which includes carrying out problem-solving

Job
type

General

Policy on Fostering Human
Resources & Training Programs

Education System Diagram

ManageGuidelines to the Code of Ethics for Makita, which
outline the conduct expected of all Group Directors
and employees, clearly recognize “respect for humanrights” and stipulate the importance of respecting all
fundamental human rights and prohibiting discriminationand conduct that harms individual dignity. All employees,
including part-time employees, are provided withinformation and training about the Guidelines to theCode of Ethics once a year without fail. This also covers
overseas subsidiaries and we thoroughly emphasize
respect for human rights across the entire Group.
Furthermore, since we believe that it is important tofulfill our social responsibility for recognizing humanrights not just ourselves but alongside all of thebusinesses in our supply chain, the Guidelines to theCode of Ethics for Makita also stipulate that fulfillmentof social responsibility and respect for human rights(including working to eliminate child labor and forcedlabor) are selection criteria for business partners.

training and manager training to boost leadership skills
at the China plant, which is our core production base.

Ensuring Employee-friendly
Workplaces
In order to allow diverse employees to pursue their workwith a sense of purpose, we offer a work environmentthat includes a childcare leave program, a childcare
reduced-working-hours system, as well as otherprograms as part of our active efforts to create work-lifebalance. There has been steady utilization of the childcare
leave program which we introduced in 1990, even
including a good number of employees utilizing the
program twice or more. In FYE 2021, 43 employees (4male employees) took part in the program and the returnto-work rate after childcare leave was 100% (21 of 21
employees). In 1992, we introduced a childcare reducedworking-hours system, which has now become wellestablished among employees. 50 employees (2 male
employees) utilized the system in FYE 2021.
Utilization of the Childcare Leave Program(No. of employees)

50

43

40
30
20
10
0

2017

2018

2019

2020

2021 (FYE)

Utilization of the Childcare Reduced Working Hours System(No. of employees)

50

50
40
30
20
10

0

2017

2018

2019

2020

longevity for female employees was 16.8 years, whilethat number was 17.2 years for male employees.
At present, the Makita Group has more than 190
women in management positions actively supporting
our global business in many divisions. We will continue
creating workplaces and environments conducive tothe peace of mind of our female employees.

2021 (FYE)

Securing the Safety and
Health of Employees
Makita’s Safety and Health Committee members carryout regular patrols at each of our business bases inJapan. The Safety and Health Committee reports theresults of those patrols and supports improvement
measures for safer and healthier worksites. Additionally,following plans from the Safety and Health Committee,
each worksite engages in activities to preemptively
prevent occupational accidents. Furthermore, in termsof employee health, we provide influenza shots in house,
while the Okazaki Plant has distributed Makita cordlessfan jackets and also set up water coolers to help deal
with hot weather. Through these and other efforts, weare striving to improve the work environment andensure the health of employees Company-wide.
As preventative countermeasures against COVID-19,
we are encouraging all employees to check theirtemperature every morning and wash their hands, while
also wearing a mask from the time they leave home in
the morning to when they return in the evening, andavoiding unessential business trips and meetings. If an
employee develops a fever, cough, or other signs offeeling unwell, we ask that they refrain from coming towork and we increase ventilation and sanitize sharedspaces. We will continue trying to ensure the safety
and health of customers, employees, and their families
as we maintain our business activities and take ample
measures to prevent the spread of infections.

Diversity Promotion
Increasing Presence of Female Employees
At Makita, we believe that it is essential to be acompany that allows all employees to actively workand exercise their talents to the maximum degree,
regardless of gender. As such, in our hiring, placement,
promotions and other personnel practices, we do notdiscriminate based on gender and we strive for
equitable treatment of employees. Additionally, we arededicated to establishing a work environment in whichfemale employees can actively participate with peace ofmind, which includes creating a childcare leave programand childcare reduced-working-hours system. As aresult, Makita female employees in Japan now have an
average employment longevity that is roughly the sameas male employees. In FYE 2021, average employment

Hiring of Foreign Employees
Approximately 80% of Makita Group employees are hired
overseas and international students are also hired in Japan.
Additionally, as a company that emphasizes a local, on-sitebusiness philosophy, we have, for many years, placed
weight on diverse employees who can localize our businesspractices. Evidence of this is in the active contributions of
employees with foreign nationality, including employees ofoverseas subsidiaries having been promoted to corporate
officer positions at Makita Corporation.

CSR Procurement
Makita is striving Company-wide to deliver safe, highquality products to our customers to ensure that theycan enjoy peace-of-mind when using our tools.
In working to achieve this objective, we consider it
important not just to comply with relevant laws andregulations but to conduct transactions with business
partners fairly, equitably, transparently, and honestly,and strive to build relationships with them as partners,
as well as promote procurement activities focusing onsocial aspects, including environmental concerns, respectfor human rights, prevention of corruption, and respect for
proper hiring practices, etc. We stipulate this in our MasterTransaction Agreement and Basic Policy on Procurement.
One pillar of this effort is our pursuit of responsible
procurement activities, including annual surveys of theenvironmental protection activities of our business partners.

Policies
1. Compliance with laws and regulations and social codes
2. Consideration to reducing environmental impacts
3. Provision of fair and equitable transaction opportunities
4. Coexistence and co-prosperity based on mutual trust
Please see the Company website for details.

Makita Report 2021

26

To Be a Strong Company Supporting a Better Society

Systems to Support Enhancement of Corporate Value– Corporate Governance
Makita strives to strengthen and enhance corporate governance in order to increase corporate
value and earn the trust of shareholders and other stakeholders.

Basic Philosophy on
Corporate Governance
Makita believes that the most important issue is toachieve unending development together with its
various stakeholders. In order to achieve this, we haveestablished a Management Policy / Quality Policy andare working to strengthen and enhance our corporate
governance. From this perspective, we will work tomaintain and improve the fairness and transparency of
our management by striving to enhance managementtransparency and management checking functions, aswell as proactively and promptly disclosing information.

Overview of the Corporate
Governance Structure
Board of Directors
A regular meeting of the Board of Directors shall be held
once a month and extraordinary meetings shall be held
whenever necessary. The Board of Directors, as thedecision-making body for management, decides onimportant management matters, including decisions on
management policies and business plans, the conclusionof important agreements, and the establishment ofsubsidiaries in accordance with the Regulations of theBoard of Directors, in addition to matters stipulated bylaws and regulations and the Articles of Incorporation,and supervises the execution of operations. As of July
2021, the Board of Directors is composed of 15
Directors, five of whom are Outside Directors with a highdegree of independence. Outside Directors are appointed
from among those who have a wealth of experience andbroad insight in corporate management and those whohave a wealth of experience and insight in various fields,
including finance, accounting and legal affairs, and are
responsible for strengthening corporate governance by
providing opinions as appropriate from an independent
perspective with no risk of conflict of interest with generalshareholders. Additionally, Makita has hired several
Directors with abundant business experience at overseas
bases, which adds diversity to the Company.

Nomination and Compensation Committee
Makita established the Nomination and Compensation
Committee on December 18, 2020 to ensure objectivity,transparency, and fairness in procedures related to thenomination and compensation of Directors, etc.
(excluding Directors who are Audit & Supervisory
Committee Members). See page 28 for details.

Audit & Supervisory Committee
The Audit & Supervisory Committee meets once a monthand also holds extraordinary meetings as necessary. The
Audit & Supervisory Committee audits and supervises the27

Makita Corporation

execution of duties by the Directors, and investigates thestatus of business and assets by attending important
meetings and hearing reports in accordance with its
stipulated audit policies and division of duties. The Audit &Supervisory Committee also appropriately exercises its
right to express opinions on the nomination andcompensation of Directors (excluding Directors who are
Audit & Supervisory Committee Members). As of July
2021, the Audit & Supervisory Committee is composed offour Directors who are Audit & Supervisory Committee
Members, who include three Independent Outside
Directors, making it independent from the Board of
Directors. In order to strengthen the effectiveness of audit
and supervisory functions, two standing Audit &Supervisory Committee Members have been appointed.
The Outside Director who is a standing Audit &Supervisory Committee Member has many years ofexperience in financial institutions and expert knowledge offinance. The two Outside Directors who are non-standing
Audit & Supervisory Committee Members have many
years of experience and expert knowledge as an attorneyat-law and a certified public accountant respectively.
Makita considers they are capable of performing highly
specialized audits from an independent perspective. The
Audit & Supervisory Committee also works together with
the Accounting Auditor and the Internal Audit Division byreceiving, as needed, audit reports and other reports fromthem. With the objective of helping audits by the Audit &Supervisory Committee to proceed smoothly, Makita
established the Audit & Supervisory Committee Staff
Office, where dedicated personnel support the work of the
Audit & Supervisory Committee.

Corporate Officers
Makita has introduced a Corporate Officer system tofacilitate proper implementation of the Group’s strategy andstrengthen our business execution structure, and we are
striving to engage in flexible and efficient business operations.
As of July 2021, Makita has 19 Corporate Officers, and fourof these Corporate Officers are non-Japanese.

Accounting Audits
Accounting audits are carried out by KPMG AZSA
LLC. KPMG AZSA LLC and engagement partners
have no interest in the Company which must be
disclosed pursuant to the provisions of the JapaneseCertified Public Accountants Act.

Policy and Decision-making Process
for the Appointment of Directors
We believe that it is necessary to appoint as Internal
Directors* those who have the ability to formulate andexecute management strategies based on their own
experience and insight, including a wealth of experience in
the Company's operations, and as Outside Directors*

Transition to a Company with an Audit & Supervisory Committee
Previously, Makita has worked to strengthen the supervisory function of the Board of Directors through theappointment of multiple Independent Outside Directors. However, on June 25, 2021, we transitioned to a
Company with an Audit & Supervisory Committee with the objective of further enhancing the corporate
governance structure. The transition to a Company with an Audit & Supervisory Committee is expected tohave the effect of further strengthening the supervisory function of the Board of Directors by allowing Audit &Supervisory Committee Members, who are responsible for auditing the execution of duties by the Directors, toexercise their voting rights at meetings of the Board of Directors, and giving the Audit & Supervisory
Committee the right to express opinions on the nomination and compensation of Directors (excluding
Directors who are Audit & Supervisory Committee Members).

Establishment of the Nomination and Compensation Committee
Objective
Makita established the Nomination and Compensation Committee on December 18, 2020 with the objectiveof ensuring objectivity, transparency, and fairness in procedures related to the nomination and compensationof Directors* by obtaining the appropriate involvement and advice of Independent Outside Directors.
Role and Composition
In consultation with the Board of Directors, the Nomination and Compensation Committee deliberates andreports on policies concerning the nomination of Representative Directors and Directors*, matters concerning
the appointment of Representative Directors and Directors*, matters concerning the succession plan for the
President, policies concerning decisions on the details of individual compensation for the Directors*, and,based on delegation from the Board of Directors, makes decisions on the details of individual compensation
for the Directors*.
The Nomination and Compensation Committee is composed of at least three Directors, with the majority ofthe members being Independent Outside Directors. The members are selected from among the Directors
through a resolution of the Board of Directors, and the chairperson of the committee is selected from among
the Independent Outside Directors through a resolution of the Nomination and Compensation Committee.
* Excluding Directors who are Audit & Supervisory Committee Members

Schematic Diagram of Makita’s Corporate Governance Structure (as of June 25, 2021)

General Meeting of Shareholders
Appointment/Dismissal

Nomination andCompensation
Committee

Consultation
Delegation

ReportAppointment/Dismissal

Appointment
Dismissal

Board of Directors
Directors

Audit
Supervision(Excluding Directors who are Audit &Supervisory Committee Members)

Appointment
Dismissal
Supervision

Audit & Supervisory
Committee

Collaboration

Accounting Auditor

Directors who are Audit & Supervisory
Committee Members
Support

Audit

Audit & Supervisory Committee
Staff Office
ReportChairmanPresident

Disclosure Committee
ReportCorporate
Officer

Corporate Officer,
General Manager
of Administration
Headquarters

Internal Audit Division

Audit

Corporate Divisions
Group Companies

Accounting Audit
Internal Control Audit

Makita Report 2021

28

Systems to Support Enhancement of Corporate Value – Corporate Governancethose who have a wealth of experience and broad insightin corporate management. We also believe that it isnecessary for Directors who are Audit & Supervisory
Committee Members to be appointed from among those
who have internal and external work experience and awealth of experience and insight in various fields, including
finance, accounting and legal affairs, and that at least oneof them is required to have a wealth of experience andinsight in finance, accounting and other fields.
Makita established the Nomination and Compensation
Committee with the objectives of ensuring objectivity,transparency, and fairness in procedures related to thenomination and compensation of Directors* and further
improving the corporate governance structure. The Boardof Directors consults with the Nomination andCompensation Committee regarding the policy fornomination of Directors* and matters concerning theappointment of Directors* and determines candidates
based on the reports of the Nomination and Compensation
Committees. The candidates for Directors who are Audit &Supervision Committee Members are also determinedthrough a resolution of the Board of Directors after obtaining
the consent of the Audit & Supervisory Committee.
* Excluding Directors who are Audit & Supervisory Committee Members

Evaluation of Effectiveness of
the Board of Directors
Makita conducts an annual self-evaluation questionnaire foreach Director on the effectiveness of the Board of Directors.
The results of analyzing the FYE 2021 effectivenessevaluation indicated that the Board of Directors generally
functions appropriately from the perspective of its
composition, operation, supervisory function, and response
to shareholders and stakeholders, and that theeffectiveness of Makita’s Board of Directors is ensured.

Compensation for Directors
The Board of Directors determines the policy for decisions
on the details of individual compensation, etc. for
Directors* following consultation with and reporting fromthe Nomination and Compensation Committee.
Compensation for Directors* consists of monthly
compensation, bonus, and restricted shares compensation
with the ratio of monthly compensation, bonuses, andrestricted shares compensation determined appropriately
to provide a sound incentive to improve corporate value
over the medium- to long-term. The specific method of
calculation for each type of compensation is as follows.
1. Monthly Compensation
The Nomination and Compensation Committee isdelegated through a resolution of the Board of Directors todetermine the amount of monthly compensation for each
Director* within the limit on compensation resolved by theGeneral Meeting of Shareholders based on business results,
position, employee salary increases and other factors.
2. Bonuses
Bonuses are paid to Directors other than Directors who
29

Makita Corporation

are Audit & Supervisory Committee Members andOutside Directors, and are linked to consolidated businessresults with the aim of enhancing their motivation forimprovement of business results of Makita. As is the casefor dividend from surplus, the yardstick is profit attributableto owners of the parent per share (basic) adjusted forspecial factors in order to conduct management with anawareness of shareholders. The Board of Directors
determines the total amount of bonuses based on acertain formula following consultation with and reportingfrom the Nomination and Compensation Committee andsubmits the amount for resolution at the General Meetingof Shareholders. The Nomination and Compensation
Committee is delegated through a resolution of the Boardof Directors to determine the allocation of bonus for each
Director based on business results, position, and otherfactors. Bonuses are paid annually at a certain time.
3. Restricted Shares Compensation
Makita introduced restricted shares compensation for
Directors other than Directors who are Audit & Supervisory
Committee Members and Outside Directors with the aimof sharing the risks and benefits of stock price fluctuations
with shareholders to a greater extent and further
enhancing their motivation to contribute to improving thestock price and the corporate value of the Company. The
allocation of restricted shares to each Director isdetermined by the Board of Directors based on positionand other factors following consultation and reporting fromthe Nomination and Compensation Committee. Restricted
shares are granted annually at a certain time.
*E xcluding Directors who are Audit & Supervisory Committee Members

Compensation for Directors who are Audit &Supervisory Committee Members
The full amount of compensation for Directors who are Audit& Supervisory Committee Members is fixed compensation
so that their independence from management can beensured. The specific amount for each Director who is an
Audit & Supervisory Committee Member is decided throughdiscussion among the Directors who are Audit &Supervisory Committee Members.
Details of Officer Compensation(fiscal year ended March 31, 2021)
Category of officer(Unit: Million yen)

Total amounts of each type of
Number ofcompensation
Total
eligibleamounts ofRestricted Directors
Base
compensation
Bonusesshares(persons)
compensationcompensation

Director

407

114

250

43

11

Audit & Supervisory
Board Member

15

15

—

—

1

Outside Officers

36

36

—

—

5

(excluding Outside Directors)(excluding Outside Audit &Supervisory Board Members)

Compliance
Makita holds a philosophy of “striving to exist in harmony
with society,” which is a uniform approach affecting ourManagement Policy / Quality Policy. As such wethoroughly ensure that Directors and employees comply
with legal, regulatory, and ethical principles. Makita’s Code

point of contact on the Company website for receiving
external feedback and suggestions related to accounting,internal control, and audits. Thorough measures aretaken in the regulations to protect whistleblowers so thatthey do not incur any disadvantage for reporting to the
Corporate Ethics Helpline. If necessary, the content of thereports is also shared within the Company, and steps aretaken in order to remedy and prevent recurrence of thematter in question.

of Ethics and Guidelines to the Code of Ethics for Makita,
which outline the conduct expected of Group Directors
and employees, stipulate the importance of ethicalconduct, avoiding conflicts of interest, complying with
relevant laws and social standards, properly disclosing
information, respecting human rights, restricting gifts andincentives, prohibiting bribes, and prohibiting unfair
business transactions. Employees are provided withregular information and on-going training about Makita’s
Code of Ethics and Guidelines to the Code of Ethics for
Makita. In order to instill an awareness of the importanceof compliance, employees are given an EthicalCompliance Survey, while new hires and newly appointed
managers are provided with compliance training.
In order to minimize, pre-empt, quickly discover andresolve conduct in violation of the Code of Ethics, Makita
has established regulations regarding a Corporate Ethics
Helpline (Internal Reporting), and we have established aninternal hotline as well as an external contact for
employees making reports. We have also established a

Status of Internal Audits
As an independent organization in charge of the Group’s
internal audits, the Internal Audit Division is staffed bymore than 10 personnel and conducts the internal audits
necessary to maintain the soundness of Makita’s
management. Results of audits are reported to the Audit& Supervisory Committee and to management personnel.
Furthermore, we have built a framework for making timely
and appropriate revisions when inadequacies in the internal
control system are discovered through internal audits.

Messages from Outside Directors
I will fulfill my duties as an Outside Director inorder to help boost long-term corporate value.
Outside Director

Masahiro Sugino
Brief profile
Appointed to the position of Makita Outside Director in June 2015. Outside
Director Sugino has an intimate knowledge on corporate management
through many years of involvement running LIXIL Group, including INAX
Corporation.

Last year, Makita established a Nomination and Compensation Committee, while FYE 2021 included major developments in
our transition to a company with an Audit & Supervisory Committee. In addition to improving the transparency ofmanagement, we are confident that this has further enhanced our corporate governance framework. The Makita Board of
Directors receives detailed reports from personnel responsible for each division, maintains an atmosphere conducive to freeinquiry, and is able to gain an accurate understanding of the status of company operations. Accordingly, I evaluate that theBoard is functioning effectively. In addition, immediate action was taken to incorporate my suggestion that it would befavorable to clarify the intentions of our product development and have comparative reports that continually give a visual
impression of how the prices, performance, quality, and so on of our development products stack up against competitors.
From my standpoint as an Outside Director, this is evidence that suggestions and inquiries to the Board of Directors are
more than merely formal and are serving a real function.
Being committed to awareness of the global environment and stating a clear corporate attitude to strive fordecarbonization, Makita made the decision to shift products from fossil fuel-powered exhaust-emitting engines to cleanrunning cordless electric motors. This is part of top management’s strong conviction that, even if it generates temporary
losses, Makita must respond to market needs as swiftly as possible. The decision contributed to consolidating market
superiority and customer acquisition. I would like to offer hearty praise for top management’s early intuition of market needs,
commitment to corporate social responsibility, robust decision making, and strong leadership.
As the industry leader, and as a global company with bases in Japan and around the world, Makita’s social responsibility
will surely increase going forward. In order to continue fulfilling that responsibility and earning praise from all our
stakeholders, it would be ideal for the Company to pursue solutions to social issues and expand its business activities
under ESG-focused strategies. Additionally, an important challenge going forward will be clearly communicating this as our
corporate attitude inside and outside the Company. I am confident that business development through initiatives to mitigate
environmental impacts will soundly contribute to improving Makita’s long-term corporate value. I would like to proactively
offer advice in order to achieve this objective as I fulfill my duties as an Outside Director.

Makita Report 2021

30

Systems to Support Enhancement of Corporate Value – Corporate Governance

Messages from Outside Directors

Utilizing a wealth of experience in corporate
management and supporting sustainable growth
Outside Director (newly appointed)

Takahiro Iwase
Brief profile
Appointed to the position of Makita Outside Director in June 2021. Outside
Director Iwase has an intimate knowledge on corporate management
through many years of involvement in the Toyota Group, including TOYOTA
MOTOR CORPORATION.

In June of this year, I was newly appointed as a Makita Outside Director. In recent years, voices calling for more stringent
corporate governance have gotten stronger and, accompanying this, the role expected of Outside Directors continues togrow in importance. I have many years of management experience with the Toyota Group and would like to fulfill my
responsibility as an Outside Director by using this experience to proactively offer oversight and advice from the viewpoint of
stakeholders, including shareholders.
As a global company, Makita has sales and service bases around the world and has expressed a commitment tomanagement practices that value its customers. Despite the COVID-19 pandemic that broke out last year and heightened
the degree of uncertainty going forward, Makita significantly grew sales and was able to take its management policy of
being closely aligned with markets and customers and leverage this as a true strength. I will do my utmost to help Makita,
as “a Supplier of a Comprehensive Range of Cordless Products”, achieve sustainable growth and contribute to a
decarbonized society.

List of Directors
Position

Name

Attendance atBoard of Directors’ meetings(Audit & Supervisory Board meetings)

Number of theCompany's shares held

Chairman, Director*

Masahiko Goto

100% (12 of 12 meetings)

2,522,474 Shares

President, Director*

Munetoshi Goto

100% (12 of 12 meetings)

469,140 Shares

Director, Corporate Officer, General Manager
of Purchasing Headquarters

Shinichiro Tomita

100% (12 of 12 meetings)

18,431 Shares

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

Tetsuhisa Kaneko

100% (12 of 12 meetings)

24,031 Shares

Director, Corporate Officer, General Manager
of Quality Headquarters

Tomoyuki Ota

100% (12 of 12 meetings)

17,931 Shares

Director, Corporate Officer, General Manager
of Domestic Sales Headquarters

Takashi Tsuchiya

100% (12 of 12 meetings)

19,631 Shares

Director, Corporate Officer, General Manager
of Production Headquarters

Masaki Yoshida

100% (12 of 12 meetings)

10,951 Shares

Director, Corporate Officer, General Manager
of International Sales Headquarters

Takashi Omote

100% (12 of 12 meetings)

9,471 Shares

31

Makita Corporation

Position

Name

Attendance atBoard of Directors’ meetings(Audit & Supervisory Board meetings)

Number of theCompany's shares held

Director, Corporate Officer, General Manager
of Administration Headquarters

Yukihiro Otsu

100% (12 of 12 meetings)

8,771 Shares

Outside Director

Masahiro Sugino

100% (12 of 12 meetings)—

Outside Director

Takahiro Iwase——

Director (Standing Audit & Supervisory
Committee Member)

Mitsuhiko Wakayama

100% (12 of 12 meetings)(100% (15 of 15 meetings))

9,300 Shares

Outside Director (Standing Audit &Supervisory Committee Member)

Akira Kodama

100% (12 of 12 meetings)(100% (15 of 15 meetings))—

Outside Director (Audit & Supervisory
Committee Member)

Shoji Inoue

100% (12 of 12 meetings)(100% (15 of 15 meetings))

500 Shares

Outside Director (Audit & Supervisory
Committee Member)

Koji Nishikawa——

Note: * indicates Representative Directors
The Company provided notice on Mr. Masahiro Sugino, Mr. Takahiro Iwase, Mr. Akira Kodama, Mr. Shoji Inoue, and Mr. Koji Nishikawa to the Tokyo Stock Exchange and Nagoya
Stock Exchange as being independent directors appointed by the Company, in accordance with the rules and regulations of each exchange.
Attendance at Board of Directors’ meetings and Audit & Supervisory Board meetings is shown for meetings held between April 1, 2020 and March 31, 2021. The attendance by Mr.
Mitsuhiko Wakayama, Mr. Akira Kodama, and Mr. Shoji Inoue on page 32 is for Board of Directors’ meetings and Audit & Supervisory Board meetings attended as Audit &Supervisory Board Members.
The information on the number of the Company's shares held is as of March 31, 2021.

Skill Matrix
Production/
Development procurement/
quality

Corporate
management

Overseas
experience

Sales/
marketingMasahiko Goto

●

●

●

●

Munetoshi Goto

●

●

●

●

Shinichiro Tomita

●

●

●

●

Tetsuhisa Kaneko

●

●

●

●

Tomoyuki Ota

●

●

●

●

Takashi Tsuchiya●

Masaki Yoshida●●

Takashi Omote●●

Yukihiro Otsu●●

Masahiro Sugino●

Takahiro Iwase

●

Name

IT

Finance &accounting

Legal affairs

●

●

●

●
●
●

●
●

Mitsuhiko Wakayama●

Akira Kodama

●

●
●

●

●
●

Shoji Inoue
Koji Nishikawa●●

Makita Report 2021

32

To Be a Strong Company Supporting a Better Society

Message from the Financial Officer

Working for sustainablegrowth while maintaining arobust financial structure
Director, Corporate Officer
General Manager of Administration Headquarters

Yukihiro Otsu

Review of Financial Results

percentage points year on year to 14.5% owing to theincrease in revenue. Profit attributable to owners of theparent rose 29.9% year on year to 62,018 million yen,
and ROE was up 1.8 percentage points year on year
to 10.1%. Free cash flows fell 5,180 million yen year
on year to 21,624 million yen.
As a company with global operations, Makita’sbusiness performance can be greatly impacted byexchange rates, but we continue aspiring to maintainhigh profitability.
Total assets as of March 31, 2021 stood at 812,878
million yen and the ratio of equity attributable toowners of the parent to total assets was 80.9%,
maintaining an adequate level of financial soundness.

During the fiscal year ended March 31, 2021, Makita
achieved better business results than initially expectedwith strong demand, particularly stay-at-home demandagainst the backdrop of the COVID-19 pandemic. Our
initiatives to date have produced great results. In
addition to our mainstay power tools, cordless outdoor
power equipment, which we are growing into a second
business pillar, performed extremely well. Also, theeffects of the expansion of our network of sales andservice bases in which we have continued to invest forsome time became more apparent during the COVID19 pandemic. On the profit front, although the cost-ofsales ratio increased, the operating profit ratio rose 1.5

Equity attributable to owners of the parent per share
(Yen)

2,423

2,500
2,000

2,041

2,110

Ratio of equity attributable to owners of the parent tototal assets and debt/equity (D/E) ratio
(%)

(%)

90

5.00

2,104
88

1,500

86

2.50

85
2.09

1,000

84

500

82

0

2018

2019

2020

2021 (FYE)

80

4.00

3.45

85

3.00
2.00

84

1.00
0.64
2018

81
2019

2020

2021 (FYE)

0

Ratio of equity attributable to owners of the parent to total assets (left axis)   
D/E ratio

33

Makita Corporation

Basic Approachshareholders and other stakeholders. In addition to ourrecent investments in logistics bases, investments inthe environment and digital transformation (DX) are
important areas that need to be addressed, and we
expect to increase the amount we invest in these areas
going forward.
Although Makita is currently incurring up-front costs
of investment aimed at becoming “a Supplier of aComprehensive Range of Cordless Products”, we willcontinue making investments to establish a new
business foundation. At the same time, we will strive tomaintain profitability over the long term bystrengthening initiatives that include streamlining
business processes, which will translate into theimprovement of corporate value.

Makita’s basic financial policy is to maintain a robust
financial structure able to withstand unexpectedchanges in the business environment, including foreign
currency risks and geopolitical risks. Improving
convenience for customers is an important source ofour competitiveness, and we believe maintaining arobust financial structure is important for us tocontinue carrying out necessary investments
appropriately timed to increase customer convenience,
particularly the expansion of our base network, even intimes of adversity. At the same time, another pillar of
our financial strategy is ensuring that cash generated isused for sustainable growth while striking a positivebalance between investments and returns to our

(FYE)

2018

2019

2020

2021

Profit attributable to owners of the parent (millions of yen)Items

54,94355,75047,73162,018

Profit attributable to owners of the parent per share (basic) (yen)202.39205.37175.80228.41

10.4

9.9

8.3

10.1

Net cash provided by operating activities (millions of yen)

34,191

23,15557,31064,537

Net cash used in investing activities (millions of yen)

(15,708)(15,329)(30,506)(42,913)

Free cash flows (millions of yen)

18,483

7,826

26,804

21,624

Net cash used in financing activities (millions of yen)

(17,743)(8,231)(22,931)(23,036)

30.1

30.2

30.1

30.2

654,841

680,250

674,564

812,878

84.6

84.2

84.7

80.9

ROE (%)

Dividend payout ratio (%)
Total assets (millions of yen)
Ratio of equity attributable to owners of the parent to total assets (%)

Returns to Shareholders

fiscal year with a lower limit on annual cash dividendsof 10 yen per share and a consolidated dividend
payout ratio of 30% or greater. We paid a 69-yen
annual dividend in the period, an increase of 16 yenfrom the previous fiscal year, reflecting the strong
business performance.

Makita’s basic policy is to distribute profits inaccordance with business performance, taking into
consideration the balance between investment forsustainable growth and enhancing corporate value andfinancial soundness in preparation for a variety of risks.
We determine the amount of dividends to be paid eachCash Flow Trends

TSR (10-year, including cash dividends)(Millions of yen)(%)

75,00057,31064,537300.0

50,00018,48326,804
21,6247,826

0-25,000

23,155-15,708

100.0
0.0-15,329-30,506-50,000-42,9132018

Operating cash flows
Investment cash flows
Free cash flows

2019

200.0

2020

2021 (FYE)

Ma
rch
20
11
Ma
rch
20
12
Ma
rch
20
13
Ma
rch
20
14
Ma
rch
20
15
Ma
rch
20
16
Ma
rch
20
17
Ma
rch
20
18
Ma
rch
20
19
Ma
rch
20
20
Ma
rch
20
21

34,191
25,000400.0

Makita    TOPIX*T otal Shareholder Return (TSR): Total investment returns, including cash dividends andcapital gain
*T SR is calculated based on cumulative cash dividends and change in share price for
Makita, and the share price index including cash dividends for TOPIX*G raph data represents market prices indexed by TSR with closing price data as ofMarch 31, 2011 as a base of 100 (holding period: until March 31, 2021)

Makita Report 2021

34

To Be a Strong Company Supporting a Better Society

11-Year Summary(For the years ended March 31)

U.S. GAAP

2011

2012

2013

2014

2015

2016

¥ 272,630¥ 295,711¥ 309,630¥ 383,207¥ 414,718¥ 423,623

Domestic

46,06553,17556,55566,01967,74068,445

Overseas226,565

242,536

253,075

317,188346,978

355,178

Operating income

41,90948,51645,36654,914

71,90564,676

Income before income taxes

42,73046,96345,691

56,974

68,394

61,492

Net income attributable to Makita Corporation

29,90532,49731,07638,45345,307

41,615

Net cash provided by operating activities¥ 19,617¥   8,622¥ 38,364¥ 41,686¥ 35,894¥ 34,188(19,334)(4,500)(15,414)(20,084)(20,096)(6,573)

Net sales

Net cash used in investing activities

283

4,122

22,95021,602

15,79827,615(7,355)(12,707)(10,650)(7,365)(12,017)(18,719)¥   9,742¥ 13,481¥ 11,481¥ 11,417¥ 12,124¥ 11,769

Depreciation and amortization

7,557

7,237

7,542

8,622

8,619

9,284

R&D costs

7,283

7,603

8,396

8,720

9,117

9,593

Total assets

Free cash flows
Net cash used in financing activities
Capital expenditures¥ 372,507¥ 383,256¥ 440,974¥ 519,121¥ 575,328¥ 558,024

Net working capital

219,270

223,045

266,950

310,750

358,245362,675

Total Makita Corporation shareholders’ equity

307,149

321,253

373,543435,934

486,021479,752

887

2,363

1,703

4,163

5,030

2,225

¥ 108.54¥ 118.39¥ 114.46¥ 141.65¥ 166.89¥ 153.30

Total Makita Corporation shareholders’equity per share

1,114.82

1,183.25

1,375.89

1,605.80

1,790.33

1,767.26

Cash dividends applicable to the year per
share

66.00

72.00

69.00

91.00

118.00101.00

Ratio of operating income to net sales

15.4%

16.4%

14.7%

14.3%

17.3%

15.3%

ROE

9.9%

10.3%

8.9%

9.5%

9.8%

8.6%

ROA

8.3%

8.6%

7.5%

8.0%

8.3%

7.3%

Total Makita Corporation shareholders’equity ratio to total assets

82.5%

83.8%

84.7%

84.0%

84.5%

86.0%

Average number of shares outstanding
during the term

275,518,548

274,489,367

271,496,178

271,481,657

271,472,428

271,468,232

Number of shares issued excluding treasury
275,515,398
stock

271,501,036

271,491,854

271,475,252

271,469,736

271,466,522

12,054

12,563

12,68012,804

13,835

14,784

Interest-bearing debt

Per share amounts
Earnings per share (basic)
net income attributable to Makita Corporationcommon shareholders

Other data

Employees

Notes: 1. E arnings per share (basic) net income attributable to Makita Corporation common shareholders and profit attributable to owners of the parent per share (basic) are computed
based on the average number of shares outstanding during the term.
2. F
 igures are rounded up/down to the nearest million yen.
3. O
 n April 1, 2017, Makita conducted a 1 for 2 stock split of its common shares. Earnings per share (basic) net income attributable to Makita Corporation common shareholders,
total Makita Corporation shareholders’ equity per share, average number of shares outstanding during the term, and number of shares issued excluding treasury stock were
calculated assuming that the stock split was also conducted in prior years. Cash dividends applicable to the year per share show the actual amount of the dividend before the stock split.
4. ROA=profit attributable to owners of the parent/((total assets at the beginning of the term+total assets at the end of the term)/2)×100

35

Makita Corporation

(Yen in millions)(Yen in millions)

2018

2019

2020

2021

¥ 477,298¥ 490,578¥ 492,617¥ 608,331

82,575

92,129100,697

113,048

Overseas394,723

398,449

391,920495,283

79,762

Operating profit

80,23178,30564,046

88,46464,73879,678

Profit before income taxes

79,86579,91966,00887,19944,78254,755

Profit attributable to owners of the parent

54,94355,75047,73162,018¥ 63,351¥ 33,294

Net cash provided by operating activities¥ 34,191¥ 23,155¥ 57,310¥ 64,537(5,015)(14,811)

Net cash used in investing activities(15,708)(15,329)(30,506)(42,913)58,33618,483

Free cash flows

18,483

7,826

26,804

21,624(9,495)(17,743)

Net cash used in financing activities(17,743)(8,231)(22,931)(23,036)¥ 13,222¥ 14,149¥ 15,045¥ 23,867¥ 44,409¥ 49,855

8,943

9,917

Depreciation and amortization

10,783

11,271

12,05813,881

10,13910,894R&D costs

10,924

11,258

11,601

12,783¥ 597,249¥ 651,031

Total assets¥ 654,841¥ 680,250¥ 674,564¥ 812,878

374,297

415,979

Net working capital

398,355

402,335

381,090

418,530

502,170

551,939

Equity attributable to owners of the parent

554,046

572,748571,275

657,855

6,597

3,544

3,544

11,96019,737

16,45520172018¥ 414,999¥ 477,298

74,381

82,575

Domestic

340,618

394,723

62,564(Yen)¥ 164.96¥ 201.70

1,849.88

2,033.16

100.0061.00

IFRS
Revenue

Capital expenditures

Interest-bearing debt

Per share amounts
Profit attributable to owners of theparent per share (basic)(Yen)¥ 202.39¥ 205.37¥ 175.80¥ 228.41

Equity attributable to owners of theparent per share

2,040.93

2,109.83

2,104.01

2,422.80

Cash dividends applicable to the year
per share

61.00

62.00

53.00

69.00

Other data
15.1%

16.7%

Ratio of operating profit to revenue

16.8%

16.0%

13.0%

14.5%

9.1%

10.4%

ROE

10.4%

9.9%

8.3%

10.1%

7.8%

8.8%

ROA

8.8%

8.4%

7.0%

8.3%

84.1%

84.8%

Ratio of equity attributable to owners of
the parent to total assets

84.6%

84.2%

84.7%

80.9%

271,463,676

271,465,951

Average number of shares outstanding
271,465,951 271,467,574 271,502,528
during the term

271,524,393

271,460,572

271,467,928

Number of shares issued excluding
treasury stock

271,527,124

15,344

16,137

Employees

271,467,928 271,467,057 271,516,990
16,137

16,42417,09018,624Makita Report 2021

36

To Be a Strong Company Supporting a Better Society

Consolidated Financial Statements
Makita Corporation and consolidated subsidiaries
as of March 31, 2020 and March 31, 2021

Consolidated Statements of Financial Position
Assets(Millions of yen)

2020

2021

¥ 143,439
69,599214,560
25,235
7,633
460,466¥ 148,640
95,691
267,547
18,227
10,223
540,328¥ 146,649
8,749
38,551
9,511
6,932
3,706
214,098¥ 189,366
9,364
51,011
10,685
8,860
3,264
272,550

Total assets¥ 674,564¥ 812,878

Liabilities and equity

2020

2021

¥ 34,959
7,997
2,468
3,757
2,931
27,264
79,376¥ 59,792
2,612
4,080
11,2183,665
40,431
121,798¥   3,138
9,894
1,248
4,952
208
19,440¥   3,406
11,764
1,421
10,954209
27,754¥ 98,816¥ 149,552

Non-controlling interest¥ 23,805
45,531
540,063(11,554)(26,570)
571,275
4,473¥ 23,805
45,559588,644(11,543)
11,390657,855
5,471

Total equity¥ 575,748¥ 663,326¥ 674,564¥ 812,878

Current assets
Cash and cash equivalents
Trade receivables and other receivables
Inventories
Other financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment, at cost
Goodwill and intangible assets
Other financial assets
Net defined retirement benefit assets
Deferred tax assets
Other non-current assets
Total non-current assets

Liabilities
Current liabilities
Trade payables and other payables
Borrowings
Other financial liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Retirement benefit liabilities
Other financial liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EquityCommon stock
Additional paid-in capital
Retained earnings
Treasury stock, at cost
Other components of equity
Total equity attributable to owners of the parent

Total liabilities and equity

37

Makita Corporation

Consolidated Financial Statements
Makita Corporation and consolidated subsidiaries
for the years ended March 31,2020 and March 31, 2021

Consolidated Statements of Profit or Loss
Revenue
Cost of sales
Gross profit
Selling, general, administrative and others, net
Operating profit
Financial income
Financial expenses
Profit before income taxes
Income tax expenses
Profit(Millions of yen)

2020

2021

¥ 492,617¥ 608,331(323,776)
168,841(104,795)
64,0462,558(596)
66,008(17,957)
48,051(405,282)
203,049(114,585)
88,464
1,813(3,078)87,199(24,515)
62,684¥ 47,731
320¥ 62,018
666

Profit attributable to:
Owners of the parent
Non-controlling interests
Profit attributable to owners of the parent per share
Profit attributable to owners of the parent per share (basic)
Profit attributable to owners of the parent per share (diluted)(yen)¥ 175.80—¥ 228.41—

Note: Profit attributable to owners of the parent per share (diluted) not shown as there are no potential shares.

Consolidated Statements of Comprehensive Income(Millions of yen)

2020

2021

¥ 48,051¥ 62,684201

953(2,509)9,072(2,308)10,025(30,328)

29,220Total of items that may be reclassified to profit (loss)(30,328)

29,220Total of other comprehensive income (loss), net of tax(32,636)

39,245¥ 15,415¥ 101,929¥ 15,271
144¥ 100,931
998

ProfitOther comprehensive income (loss), net of tax
Items that will not be reclassified to profit (loss)
Remeasurement of defined benefit plans
Equity financial goods measured at fair value through other comprehensive
income (loss)
Total of items that will not be reclassified to profit (loss)
Items that may be reclassified to profit (loss)
Exchange differences on translating foreign operations

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

Makita Report 2021

38

Consolidated Financial Statements
Makita Corporation and consolidated subsidiaries
for the years ended March 31,2020 and March 31, 2021

Consolidated Statements of Changes in Equity(Millions of yen)

Equity attributable to owners of the parent
Common stock

Balance at April 1, 2019

¥ 23,805

Additional paid-in
Retained earnings
capital¥ 45,571¥ 508,622

Profit for the period——

47,731

Balance at March 31, 2020

¥ 577,222

47,731

320

48,051(32,460)(32,460)(176)(32,636)(32,460)

15,271

144

15,415(16,831)(145)(16,976)¥ 6,431

—

(2)

(2)

(2)

(13)

61

48

48

(27)

68

41

41

(541)

—

—

Transfer from othercomponents of equity toretained earnings
Total amounts oftransactions with owners¥ 4,474¥ (11,681)(16,831)

Purchase of treasury stock

Share-based paymenttransaction¥ 572,748

Total

47,731Dividends paid

Disposal of treasury stock

Total equity

Other componentsof equity

Other comprehensive
incomeComprehensive income

Non-controllinginterest

Treasury stock

541
—

(40)

(16,290)

127

(541)

(16,744)(145)(16,889)¥ 23,805¥ 45,531¥ 540,063¥ (11,554)¥ (26,570)¥ 571,275¥ 4,473¥ 575,748(Millions of yen)
Equity attributable to owners of the parent
Common stock

Balance at April 1, 2020

¥ 23,805

Additional paid-in
Retained earnings
capital¥ 45,531

Profit for the period¥ 540,063——

62,018

Share-based paymenttransaction

28

Transfer from othercomponents of equity toretained earnings

39

Makita Corporation¥ 4,473¥ 575,748

62,018666

62,68438,91338,913332

39,24538,913

100,931998

101,929¥ (11,554)¥ (26,570)—(14,390)(14,390)

(4)

(4)

(4)

15

43

43

(953)

—

—

(14,390)

Purchase of treasury stock

Balance at March 31, 2021

¥ 571,275

Total

62,018Dividends paid

Total amounts oftransactions with owners

Total equity

Other componentsof equity

Other comprehensive
incomeComprehensive income

Non-controllinginterest

Treasury stock

953
—

28

(13,437)

11

(953)

(14,351)—(14,351)¥ 23,805¥ 45,559¥ 588,644¥ (11,543)¥ 11,390¥ 657,855¥ 5,471¥ 663,326

Consolidated Statements of Cash Flows(Millions of yen)

2020

2021

Other

¥ 48,051
14,34917,957(1,962)(808)
4,396(9,148)(1,499)
586
741
3,538

¥ 62,684
16,491
24,515
1,265
817(21,481)(35,990)
21,868
(152)
1,633
8,178

Subtotal

76,201

79,828Dividends received

712
1,488
(431)
(20,660)
57,310

688
730
(356)
(16,353)
64,537(44,409)
2,574(4,000)7,641(33,534)
40,960262(30,506)(49,855)
136(3,740)8,157(46,829)
48,792426(42,913)(3,461)
46(16,831)(2,537)(148)(22,931)(5,666)(4)(14,390)(2,998)22(23,036)

Effect of exchange rate changes on cash and cash equivalents(6,946)

6,613

Net increase (decrease) in cash and cash equivalents(3,073)5,201

146,512

143,439¥ 143,439¥ 148,640

Cash flows from operating activities
ProfitDepreciation and amortization
Income tax expenses
Financial expenses (income)Loss (gain) on sales and retirement of property, plant and equipment
Decrease (increase) in trade receivables and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables and other payables
Increase (decrease) in retirement benefit assets and liabilities
Decrease (increase) in guarantee deposits

Interest received
Interest paid
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of investments
Proceeds from sales and redemption of investments
Payments into time deposits
Proceeds from withdrawal of time deposits
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Purchase and sales of treasury stock, net
Cash dividends paid
Repayment of lease liabilities
Other
Cash flows from financing activities

Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

Makita Report 2021

40

To Be a Strong Company Supporting a Better Society

Stock Information(As of March 31, 2021)

Breakdown of Shareholders
Securities code:
6586

Treasury stock
8,490 (3.0%)

Financial institutions
and securities firms
103,513 (37.0%)

Other domestic companies
30,920 (11.0%)

Stock market listings: Tokyo Stock Exchange (First Section)
Nagoya Stock Exchange (First Section)

Number of shares(1,000 shares)

Total number of shares outstanding: Common shares 280,017,520

280,018

Foreign institutions andindividuals
107,711 (38.5%)(including treasury stock of 8,490,396 shares)

Individuals and others
29,384 (10.5%)

The number of shareholders:
12,180Major Shareholders (Top Ten)
Number ofshares held

Ratio ofshareholding(1,000 shares)(%)

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

25,744

9.48

Custody Bank of Japan, Ltd. (Trust Account)

12,168

4.48

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

6,774

2.49

Makita Cooperation Companies’ Investment Association

6,485

2.38

Sumitomo Mitsui Banking Corporation

5,800

2.13

Nippon Life Insurance Company

5,353

1.97

Custody Bank of Japan, Ltd. (Trust account 9)

4,694

1.72

State Street Bank and Trust Company 505001

4,553

1.67

Name

Note: The ratio of shareholding is calculated based on the total number of outstanding shares (excluding treasury stock) as of the end of the fiscal period.

Share Price Trend(Yen)(Million shares)

6,000

30

5,000

25

4,000

20

3,000

15

2,000

10

1,000

5

0

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

0

Share price (left axis) ■ Trading volume (right axis)
Notes: 1
 . On April 1, 2017, Makita conducted a 1 for 2 stock split of its common shares. For ease of comparison, the share price is the value after taking the stock split into account.
2. The share price is the closing price at the end of each month.

41

Makita Corporation

To Be a Strong Company Supporting a Better Society

Corporate Data
(As of March 31, 2021)

Corporate Name

Makita Corporation

Head Office

3-11-8, Sumiyoshi-cho, Anjo, Aichi 446-8502, Japan
Telephone: +81 566 98 1711

URL

https://www.makita.biz/

Date of Founding

March 21, 1915

Date of Incorporation

December 10, 1938

Paid-in Capital

24,205,610 thousand yen

Description of Business

Production and sales of electric power tools, outdoor power equipment, pneumatic tools andhousehold equipment

Financial year-end

March 31

Representative Directors

Chairman Masahiko Goto
President Munetoshi Goto

Accounting Auditor

KPMG AZSA LLC

Consolidated Revenue

608,331 million yen (fiscal year ended March 31, 2021)

Number of Employees(consolidated basis)

18,624

Consolidated Subsidiaries

53

Principal Consolidated
Subsidiaries

Sales subsidiaries

Sales and production subsidiaries

Makita U.S.A. Inc.

Makita (China) Co., Ltd.

Makita (U.K.) Ltd.

Makita do Brasil Ferramentas Elétricas Ltda.

Makita Werkzeug GmbH (Germany)

Production subsidiaries

Makita France SAS

Makita (Kunshan) Co., Ltd.

Makita Oy (Finland)

SC Makita EU S.R.L. (Romania)

Makita LLC (Russia)
Makita (Australia) Pty. Ltd.

Makita Report 202142

www.makita.biz