MAKINO Report 2023
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Quality First

Corporate philosophy

Corporate tagline

1 Compliance with laws and regulations
2 Respect for human rights
3 Sensible corporate activities
4 Environmental protection
5 Internal control

Quality First
Makino pursues “Quality First” in all of its products andservices, as well as in its own organization and employees,with a strong belief in mutual trust among everyone
involved in building, selling, and using Makino products.

Code of Conduct

We measure our success by your success.
Our promise is rooted in relentless craftsmanship. Every day, we strive toget better and resolve to work harder. Doing our unconditional best is morethan a goal, it’s a responsibility we feel to our customers.
Today, our Promise of Performance drives everything we do for you.
Makino is more than our name. It’s our word.

https://ir.makino.co.jp/en/company/code_of_condect/pdf/
2022/code_2022.pdf

Quality FirstAll machines are made using machine tools. This is the reason machine tools are called mother machines.
These machines must be high quality and reliable.
Makino will continue realizing sustainable growth as a provider of machine tools andtechnologies which enhance production efficiency, consistently exceeding customer
expectations under our philosophy of Quality First.

CONTENTS
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11
13

01

15

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Editorial policy

Referenced guidelines

This report presents business activities and environmental, social andgovernance (ESG) efforts from a medium- to long-term perspective to aid
shareholder, investor, and other stakeholder understanding of how Makino
Milling Machine Co., Ltd., contributes to the resolution of social issues andthe realization of a sustainable society.
Detailed ESG information is available on the Makino corporate website.
We sincerely hope the information presented in this report will assist
readers in understanding Makino business activities.

• International Integrated Reporting Council (IIRC) Framework• Corporate Governance Code of Japan• Global Reporting Initiatives’ Sustainability Reporting Standards• Environmental Reporting Guidelines 2018, Japan Ministry of theEnvironment• ISO 26000 (International Social Responsibility Standard for
Organizations)

Information

ESG and sustainability information

Investor information• IR information

MAKINO Report 2023
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• IR library• SDG VISION

https://ir.makino.co.jp/en/library/https://ir.makino.co.jp/en/sdgs

For inquiries, contact

Corporate Planning Office, Corporate Service Division
3-19, Nakane 2-chome, Meguro-ku, Tokyo 152-8578, Japan
Phone: +81-3-3717-1151

Caution regarding forward-looking statements
Applicable Period
FY2022: April 1, 2022 to March 31, 2023
Note: Includes some information after April 2023 (FY2023)

35   

Scope

37

  

All business activities conducted by Makino Milling Machine Co., Ltd.

38

This report includes plans and strategies based on forward-looking
statements. They involve risks, uncertainties, and other factors that
may cause actual results and performance to differ materially fromthose described herein.

• Securities report• Sustainability website
https://ir.makino.co.jp/en/
sustainability/

https://ir.makino.co.jp/en/

www.makino.co.jp

https://ir.makino.co.jp/library/securiti
es-report/ (Japanese only)• Results briefing materials
https://ir.makino.co.jp/en/libra
ry/explanatory/

Financial• ESG activities
Quality First

Integrated reporthttps://ir.makino.co.jp/en/
library/integrated-report/

https://ir.makino.co.jp/en/esg• Corporate governancehttps://ir.makino.co.jp/library/
corporate-governance/(Japanese only)/Non-financial

MAKINO Report 2023

02

Messagefrom thePresident

The source of sustainable growth lies inlistening sincerely to customers, taking
on challenges, thinking carefully, andcontinuously creating.
Shotaro Miyazaki
President
Makino Milling Machine Co., Ltd.

We strive to accurately identify market trends and address current issues
with a sense of urgency.
It is one year since I assumed the position ofpresident and, although it has been a very difficult
time due to the pandemic, demand has recovered
rapidly as Japan has transited from a postpandemic to an endemic phase. While therecovery in demand provided a tailwind, a rapid
increase in orders in the past year also led
to higher order backlogs, resulting in longer
delivery times.
In fiscal 2022, ended March 31, 2023, wefaced the challenge of clearing the backlog oforders. In addition to making design changes
and revising the processes related to bottlenecked
products, relevant divisions and suppliers worked
together to address product development andmanufacturing issues with a sense of urgency.
This resulted in a second straight year of sales
and income growth, as well as a record-highnumber of orders.
While delivery times are improving for small
and medium-sized machines throughout thisfiscal year, those for large machines remain an

03

issue due to such factors as assembly space
limitations. As we continue our efforts to improvedelivery times, however, we will ensure that this is
not done to the detriment of the high quality andprecision that characterize our products.
Despite having achieved record high sales,
the operating margin ratio was lower than its
most recent peak in fiscal 2018.
The entire supply chain has been affected bysoaring raw material, energy, and transportation
costs reflecting the sharp depreciation of the yen.
Efforts to gradually pass on to prices our cost
increases continue, as we take steps to improve
internal costs.
In a bid to increase our margin ratio, throughservice enhancements and cost reductions, we
set up the cross-divisional Cost Improvement
Office. This has enabled us to implementchanges to improve our cost structure, andsimilar efforts are being made in each division.
This move will allow us to focus on creating asystem that generates a sustainable income.

MAKINO Report 2023

04

Messagefrom thePresident

Relentless pursuit of high quality and precision

Growth requires Quality First approach

Currently, our global demand is driven by semiconductor
manufacturing equipment in Japan, Europe, and the US,
as well as electric and electronic parts in China. Orders for
EVs are also increasing. In the US and Europe, orders for
medical-related products such as artificial bones, andaerospace-related products such as corporate jets, arealso strong.
At the same time, however, the global economy isslowing as a result of rapidly rising prices and energy
supply concerns stemming from the situation in Ukraine,with customers in various countries becoming morecautious about capital investment. Demand for machine
tools is easily affected by economic trends, which are likely
to change quickly.
However, many customers have needs in common,such as for labor saving, as well as for manpower
reduction, automation, and high quality and precision
machining. By meeting these needs, we are able torespond to economic developments and trends, and thus

With Quality First as our corporate philosophy, we provide
machine tools required by customers in a wide variety ofindustries. With the market changing ever faster, it isimportant not to pursue change but, rather, to support
customers in adapting to those changes and to keep up
with their demands.
I believe that returning to the basic policy of listening tocustomer complaints and problems, which has been ourpolicy since the Company’s founding in 1937, and helping
to resolve immediate customer issues will contribute to our
medium- to long-term corporate growth.

to establish a product development system that canquickly and flexibly respond to change.
Customers will continue to demand greater precisionin machining while, at the same time, demand will grow for
improved productivity, including process integration withinmanufacturing processes.
In response, we will provide high-quality, highprecision machinery and functions, such as five-axis
machines that realize enhanced efficiency. Specifically,
responding to recent demand for advanced automation at
production sites, we launched a new in-house project
aimed at upgrading existing automation systems. To meetcustomer needs in each region and accelerate productdevelopment, we are collaborating with overseas
subsidiaries to promote global product development.
We will continue responding to customer requests andpromptly provide the required machinery, functions, andservices which, in turn, will lead to further corporate growthfor Makino.

We have consistently maintained the importance offirst listening to customer issues and opinions, thenproviding the needed products at customer sites.
Our approach of listening to customers in order to
respond to their needs more quickly will remain unchanged.
Since the beginning of my tenure as president, I have told
our employees they should be scolded more by ourcustomers. That is because the harsh words of ourcustomers reveal their true feelings and concerns.
In order to continue being a partner that our customers
can talk to about their problems, we must think outside thebox and provide accurate solutions. I believe this is thedriving force behind our Company’s growth.

Proactive measures to enhance corporate value
Our Challenges

Production system captures domestic and foreign orders
Today, Makino products and functions are used in many
areas, including semiconductors, EVs, aircraft, andmedical care.
While we provide products, functions, and services
that customers currently need, in 20 or 30 years’ time wewill probably be manufacturing products for different
applications. At present, for example, parts for EVs andsemiconductor manufacturing equipment are becoming
increasingly larger, so there is a growing need for larger
machine tools to machine these parts.
We plan to build a new plant near one we already havein Yamanashi Prefecture, and construction is scheduled
for completion in 2026. We want this plant to use
a completely new production flow, in anticipationof manufacturing products that differ from those we
produce now.

05

It is essential that we have an environment that enables
us to provide the products and functions customers require
at all times. In Japan, we have been promoting in-houseproduction of sheet metal for several years to further
improve quality and shorten delivery times, with some ofthese products now being mass-produced. We willcontinue to engage in research aimed at setting up asystem that can flexibly respond to fluctuations in demand.
We plan to expand our production system throughout
Asia to help meet the needs and resolve the problems of all
our customers. To this end, we have been preparing ourbases in anticipation of market growth in China and other
Asian countries. In fiscal 2022, we commenced operationsat our Wuhan, China, plant and plan to expand it. We will
also develop our plant in Kunshan, so as to have a
production system in China that responds to changes inthe environment and meets customer needs.

Improved
profitability
Our Solutions• Increased productivity• Proactive investment
in rationalization• Launch of distinctive
products

Increased
asset efficiency• Shorter lead times• Improved asset
turnover ratio• Reduction of investment
securities

As I mention above, although we achieved all-time highsales and orders in fiscal 2022, the operating margin ratio
and ROE did not reach record highs. In future, we will
make every effort to improve profitability and enhance
corporate value.
Our initiatives will focus on four issues: improving
profitability, increasing asset efficiency, expanding
shareholder returns, and enhancing sustainability.

Greater shareholder
returns• Stable dividends• Flexible shareholder
returns

Enhancedsustainability• Better governance• Greater humancapital investments• Response to climatechange issues

We will take various steps to realize these improvements
and make an effort to meet the expectations of all ourshareholders. We aim for an operating margin ratio of
12.0%, ROE of 11.0%, and a shareholder return in therange of 35–45% over the next five years.

MAKINO Report 2023

06

Management and organization


Since our establishment in 1937, Makino has created a number of advanced products and technologies as a specialized manufacturerof machine tools.
In the world of machine tools, where demands for functions and levels change with the times, we must continue to evolve.
Makino has been able to do this by carrying on the pioneering spirit of our founder, Tsunezo Makino. He believed we should
never imitate others and should do what no one else is doing. His dedication to Quality First in pursuing the best in each machine we
make, was based on the idea that the manufacture of machine tools is an art.
Mindful of these enduring ideas, we will continue to take on the challenge of technological developments through continuous
innovation and creativity, always betting on machine tools without hesitation as a specialized manufacturer.
This is in Makino’s DNA, and will always be part of our identity.
1937 Tsunezo Makino establishes the
Manufacturing Division of Makino Shoten,
specializing in the manufacture of No. 1-type
vertical milling machines.
1942 The company name is changed to Makino
Vertical Milling Machine Works.

1961 The company name is changed to Makino
Milling Machine Co., Ltd.
1964 Makino is listed on the Second Section of theTokyo Stock Exchange.
1967 Atsugi Plant (Kanagawa Prefecture) is completed
and begins operation.
1971 Makino is listed on the First Section of the Tokyo
Stock Exchange (currently the Prime Market of
the Tokyo Stock Exchange).
1975 Establishes Makino U.S.A. INC.
1977 Establishes Makino Technical Service Co., Ltd.
1978 Acquires an equity interest in Heidenreich &Harbeck Werkzeugmaschinenfabrik GmbH(currently MAKINO Europe GmbH) in Germany.
1981 Purchases LeBlond Machine Tool Company in
the U.S., changes the name to LeBlond Makino
Machine Tool Company (currently MAKINO INC.).
1983 Adds flexible manufacturing system factory to
Atsugi Plant and starts operation.

FMS factory at the Atsugi Plant (1983)
Includes 10 machining centers, three automatedguided vehicles, an automated warehouse, and tool
stations.

Net sales

Consolidated domestic sales

Makino Inc.
(U.S.A)

Makino Europe GmbH
(Germany)

Makino Asia Pte Ltd(Singapore)

1987 Fuji Katsuyama Plant (Yamanashi Prefecture) iscompleted and begins operation.
Acquires ownership of LeBlond Makino Asia
(currently Makino Asia Pte Ltd).
1993 Establishes Makino J Co., Ltd.
2001 Establishes Makino India Pvt. Ltd.
2002 Establishes Makino (China) Co., Ltd.
2008 Adds assembly plant for large machines to
Fuji Katsuyama Plant and starts operation.
2010 Opens R&D center in Singapore.
2012 Fuji Yoshida Plant (Yamanashi Prefecture) iscompleted and begins operation.
2013 Establishes Atsugi factory No. 3 in Atsugi Plant
and starts operation.

Makino India Pvt. Ltd.
(India)Makino China Co., Ltd.
(Kunshan, China)

Makino J China Co., Ltd.
(Wuhan, China)

2017 Nagoya branch is relocated andbegins operation.
2018 Opens Kobe technical center.
2019 Establishes Makino J China Co., Ltd.
2022 Makino J China Co., Ltd. constructs
Wuhan Plant in China and starts
operation.

(Billions of yen)
200

150

Atsugi Plant
100

Fuji Katsuyama Plant

50

Consolidated overseas sales

Non-consolidated sales

0

Products and technologies

1937

07

1950

1960

1952 Develops the vertical milling machine, G.
1958 Develops the K-Series of verticalmilling machines.
Develops Japan’s first NC millingmachine, KNC.
1966 Develops Japan’s first machining
center, MCP-70.

1970

1980

1972 Develops a transfer line (FMS)
consisting of adaptive control
machining centers.
1975 Develops the Hi-PROGRAM I and II
automatic programming system.
1976 Develops the FNC Series of NC verticalmilling machines and the FNC-A Seriesof vertical machining centers.
1979 Develops the EC3025 NC wire EDM.

1990

1980 Develops the EDNC22 NC sinker
EDM.
1982 Develops the DMS Commercial
Automatic Die and Mold Machining
System.
1986 Develops the automatic systemmodule MMC (Makino Machining
Complex).
1987 Develops the RMC55 NC verticalmilling machine (LeBlond Makino) inAsia.
1989 Develops the A55 horizontal
machining center.
Develops control devices
Professional 1 and 2.

2000

2010

1990 Develops the FX650 verticalmachining center (LeBlond Makino) in
Asia.
Develops the Mold eye H series 3D
CAM system.
1991 Develops the GI Control and Super GI
Control technologies.
1994 Develops the J55 horizontal
machining center.
1999 Develops the V33 vertical machining
center.
2000 Develops the MAG series ofhorizontal machining centers foraerospace components.

2001 Develops the a51 horizontal
machining center.
Develops the SP43 and SP64 wire
EDMs in Asia.
2006 Develops the iGRINDER G5.
2008 Develops the D500 5-axis verticalmachining center.
2009 Develops the iQ300 precision
micromachining center.
Develops the T4 5-axis machining
center.
Develops the F3, F5, PS65, andPS95 vertical machining centers in
Asia.

2020

2023

2010 Develops the EDAF2 and EDAF3 sinker
EDMs in Asia.
2013 Develops the D800Z 5-axis vertical machining
center.
2017 Develops the V80S 5-axis vertical machining
center.
Develops the iAssist manufacturing support
mobile robots.
2018 Develops the BX3 EDM hole drilling machines.
2020 Develops the LB300/LB500 laser machine.
2021 Develops the JA6 horizontal machining
center in Asia.
2022 Develops the a900Z 5-axis horizontal
machining center.
2023 Develops the DA500 5-axis verticalmachining center.

1958

1966

1980

1989

1999

2000

2009

2017

2020

2022

Japan’s first NC milling machine,
KNC

Japan’s first machining center,
MCP-70NC sinker EDM,
EDNC22

Horizontal machining center,
A55

Vertical machining center,
V33

5-axis horizontal machining center,
MAG series

Vertical machining center,F55-axis vertical machining center,
V80S

Laser machine,
LB300

5-axis horizontal machining center,
a900Z
MAKINO Report 202308   

Main products

Global expansion

In addition to vertical, horizontal, and 5-axis machining centers, Makino develops, manufactures, andsells machine tools* that include electrical discharge machines (EDMs), laser machines, and millingmachines.
* Machines used to process workpieces by cutting or drilling holes.
OthersVertical machining centers¥48.6 billion
Wire EDMs¥8.4 billion
Sinker EDMs

¥56.6 billion

Fiscal 2022
Consolidated net sales
by productHorizontal machining centers¥227.9 billion¥92.9 billion¥21.2 billion

Note: Fractions less than the indicated unit are rounded down.

Makino has proactively expanded business globally since the 1970s.
To maximize the utilization of Makino machines, we have established local business offices.
Others¥1.7 billionJapan¥39.8 billion

Fiscal 2022
Consolidated net sales
by region

Europe¥18.7 billion¥227.9 billion

Americas¥64.0 billion

Asia¥103.6 billion

Note: Fractions less than the indicated unit have been rounded down.


Machining centers are machine tools that can automatically select andchange tools to perform multiple machining operations, such as drillingand facing, using a single machine.
Vertical machining centers have spindles for mounting and rotating
tools vertically, and horizontal machining centers have spindles for doing
so horizontally.

¥18.7
billionVertical machining center

Horizontal machining center

Mainly used to process dies and molds.

Widely used in the processing of parts used in theautomobile, aircraft, construction machinery,energy-related, semiconductor manufacturing
equipment, and other industries.


Sinker EDM

Wire EDM

Mainly used in the processing ofplastic and die-cast molds forautomobiles, IT products, electricalparts, and other items.

Mainly used in the processing of precisionpress molds for automobiles, IT products,
electrical products, and semiconductors, aswell as in the processing of precision partsfor medical equipment.



¥39.8

billionbillion¥64.0
billionEurope

Asia

Japan

United States

Makino Europe GmbH

Makino Asia Pte Ltd

Makino Milling Machine Co., Ltd.

Makino Inc.

European expansion

Southeast Asia, India,
and China expansion

1937 Establishes company
1967 Operation commences atAtsugi Plant

United States expansion

1937
1970

1975 Establishes US corporation

1978 Acquires an equity interest in

Heidenreich & Harbeck
Werkzeugmaschinenfabrik GmbH(currently Makino Europe GmbH) in
Germany

1981 LeBlond Makino Asia
(indirectly owned subsidiary)

1981 Acquires LeBlond Machine Tool
Company (currently Makino Inc.)

1980

Atsugi Plant

1987 LeBlond Makino Asia becomes a directly
owned subsidiary(currently Makino Asia Pte Ltd)EDMs use electrical discharge for processing. They
comprise of Sinker EDMs and Wire EDMs.

1987 Operation commences at
Fuji Katsuyama Plant
1990

2001 Establishes Makino India Pvt. Ltd. (Makino
Asia Pte Ltd subsidiary)Baseexpansion

Main European bases• Germany

Milling machines process flat surfaces, holes, and grooves using rotating tools.
There are two types: manual operated milling machines and NC millingmachine equipped with NC devices to enable automatic operation.

¥103.6

2002 Establishes Makino (China) Co., Ltd.
(Makino Asia Pte Ltd subsidiary/Kunshan)2019 Establishes Makino J China Co., Ltd.
(Makino Asia Pte Ltd subsidiary/Wuhan)• Italy• France• Spain

Fuji Katsuyama Plant

2008 Expands Fuji Katsuyama Plant
2012 Operation commences at
Fuji Yoshida Plant
2013 Operation commences atspindle head factory
2015 Fuji Yoshida Plant expanded

Base
expansion

2000

Main bases in the Americas• Unites States

2010• Canada• Mexico2020• Slovakia
Wuhan Plant

09

MAKINO Report 2023

10


We provide machine tools, peripheral equipment, and software, as well as engineering
services utilizing these tools to facilitate automation. All these products are customized
to meet the needs of the automobile, aircraft, medical care, and other industries.
Through these efforts, we provide customers with the latest know-how to maximize
use of their machines and help resolve issues in each industry.

Customer products createdusing Makino products

Personalcomputers
Artificial
satellites

Smartphones

Makino’s main products

Main Makino products andcustomer products createdusing Makino productsElectronics

RobotsSoftware and digital,
including CAD/CAM

Semiconductor manufacturing equipment
Semiconductors are used in products that are indispensable to our daily
lives, such as mobile phones, home appliances, and automobiles.
Semiconductor production requires vacuum environments, and the shape ofmachine parts used in the manufacturing process must be extremely precise.
Makino contributes to global semiconductor production through the provisionof machines meeting the demands of high precision.

Verticalmachining centers
5-axis verticalmachining centers

Conveyance systems

Semiconductors
manufacturing
equipment

Aircraft

Aircraft

Horizontal
machining
centers

Milling machines

Automobiles
Motors are the heart of EVs, PHEVs, and FCVs.
Motor cases that protect motors must have high cooling performance andbe lightweight, to meet the increasingly stringent quality requirements.
Makino machining centers facilitate the long-term production of
consistently high-quality motor cases.

Makinotechnologies

Laser
machines

5-axishorizontal
machining
centers

Medical equipment
Medicalequipment

Automobiles
Large machining centers(For aircraft)

EDM hole drillingmachines
Wire EDMs

Titanium is one of the materials used for artificial joints.
Although titanium is a lightweight, strong, and body-friendly metal compatible
with living organisms, it is also difficult to machine, as it causes severe tool wear
during processing. Makino meets customer needs with machines that provide
excellent rigidity suitable for machining difficult-to-cut materials.

NC EDMs

Home
appliances

Watches

Digital cameras

Construction
machinery

Agricultural
machinery11

Aircraft are indispensable for long-distance travel. In the manufacture of aircraft
parts, large quantities of light and strong aluminum alloy are machined into
complex shapes in order to achieve both light weight and high strength.
Our MAG series, which processes aluminum alloy at high speeds with highprecision, has become the standard for machining aircraft parts.

Generalmachinery

MAKINO Report 2023

12
The Makino R&D, Production, Sales and Service Divisions provide products and services
supporting customer efforts to overcome challenges including developing entirely new
products and enhancing production efficiency.
Identifying and solving customer issues drives industry advances and contributes tosociety, which leads to the enhancement of Makino’s corporate value.

Corporate philosophy
Industrial
development

Quality First
SocialissuesActivity themes

Input

OutputBusiness activitiesIntellectual capital

Carbonneutrality

P. 15• Technological capabilities cultivatedby assisting with the resolution ofcustomer issues

MAKINO’s SDGs VISION

Social capital

Applications

P. 17

Prosperous
society
Machine tools

Engineering• Long-term relationships oftrust with stakeholders

1 Bonds between people
What we can do to build better relationships
between people

2 Makino’s manufacturing
What we can do to create
sustainable machine tools

3 Connection with customers
What we can do for our customers’ manufacturing
MAKINO Production System

Manufactured
capital P. 19
Software• Master craftsman technologies that
achieve high precision• Global production bases

Financial capital

R&D andproduction

P. 21

Provision of products and services• Cash-generating capabilities
facilitating planned capital
investment

Natural capital

Maintenanceservices

Customers

Value creation

New challenges

Realization ofa sustainable
futureP. 25• Use of renewable energy• Development of products with superior
environmental performance

Human capital

P. 27

Fiscal 2022 results (consolidated)

Sales andservices
Net sales• Diversity of human resources¥227.9Japan
Overseas

Corporate value enhancement

13

Products createdby customers

Outcome(Society)billion¥39.8 billion¥188.1 billion

Scope 1 & 2 targets(consolidated)

CO2 emissions

7.7 %
8.6 %
22.3 %

Operating margin
ratio
ROE
Dividend
payout ratio

2030

42

(from fiscal 2022)% reduction

MAKINO Report 2023

14

Makino Core Competencies

Intellectual
CapitalMakino’s strength lies in technologicaldevelopment capabilities that incorporate thelatest trends and exceed customer expectations.

Pursuing products and services that exceed customer
expectations

Providing customers with products and services basedon perceived social issues

Makino products, which are used in automotive, semiconductor, medicalcare, aerospace, and a variety of other industrial fields, have taken shape andevolved through the process of listening to customer needs, then developing
and improving machinery that meets those needs. In addition to sales staff,
product development staff often visit customers to ascertain their issues andrequests. This approach enables us to accurately grasp customer needs andprovide them with the products and services they require.
Proposing and providing products and services that exceed customer
expectations is both what identifies us and our strength. Products andtechnologies born from issues and needs lead to the creation of new models
and services. The voices of each customer are the source of our technologicalinnovation.
Our product and development policy can be summed up as being highspeed and high precision, on which characteristics our founder, Tsunezo
Makino, placed great importance. This is the core concept that guides us in thecreation and improvement of machines, and which is instilled in every employee.

Although customers face a wide variety of issues, common needs at present
include labor saving and automation. In Japan, there is worker shortage,
mainly due to the declining birthrate and shift away from manufacturing. The
pandemic also restricted the movement of people overseas, causing labor
shortages at manufacturing sites in many countries and regions. In light ofthese social issues, there is a growing need for automation that can realize
productivity improvements.
Makino provides both high-speed, high-precision processing machines,
as well as one-stop automation equipment and operating software to savelabor and facilitate automation in the transportation of workpieces (parts
being processed) and other operations.
There is also growing interest in carbon neutrality. The eSTABILIZER
technology developed by Makino automatically controls machines according
to changes in factory environments, and has developed a strong reputation
for its ability to reduce power consumption for air conditioning while
maintaining high-accuracy machining. Further, as reducing the time required
to machine parts will also lead to higher production efficiency and reductions
in CO2 emissions per part, we will continue our efforts to increase the speed
and precision of our machines.

Digital Transformation (DX) in all
manufacturing activities

Haruyuki Shiraishi
Director, Executive Manager of R&D Division

We are also proactively engaged in DX. At present, we are moving forwardwith preparations for the introduction of Product Lifecycle Management(PLM), which we aim to begin implementing in December 2024. By
introducing this, we will share and visualize a variety of data related to
product research, as well as sales, production, after-sales service, and allother business activities in Japan and abroad, in order to achieve DX in all
manufacturing activities.
By promoting DX in manufacturing, we will provide value that exceeds
customer expectations by reducing costs, shortening lead times, andproviding prompt after-sales service.

Resolving customer issues enhances Makino’s
product development capabilities
In our growth as a machine tool manufacturer, it has been important toalways listen to customer needs. We rarely have a clear-cut solution tocustomer problems at the beginning, and instead have to slowly discover
information and problems through trial and error. This has enabled Makino toprovide products that satisfy customers.
Engaging in trial and error with customers leads to new products,
technologies, and solutions, and we believe that cultivating human resources
who can resolutely confront this process is key to enhancing our development
capabilities. We will continue to emphasize the product development of
human resources who can grow together with our customers.
15

Product
development


  



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 



 Contributing to customers and society through product development

Amid serious labor shortages in the manufacturing industry, there is a
growing need for labor saving and automation at manufacturing sites.
Makino facilitates automation of the entire manufacturing process.
In providing one-stop automation, we ascertain overall production line
conditions. This leads to the development and proposal of functions tailoredto conditions at each customer worksite. We have faced issues withcustomers in various fields, and incorporate knowledge gained from theseexperiences in product development.

There is a trend to using larger parts in new energy vehicles. Bychanging the process from machining multiple parts and assembling theminto a single unit, to machining them as a single part, man-hours can be
drastically reduced and products can be made lighter.
With each individual part being larger, the machines are larger, thus
requiring higher precision than before.
We have experience in addressing similar issues in aircraft. We willcontribute to society by resolving the conflicting themes of larger sizes, higher
speeds, and higher precision in machining with highly reliable products
leveraging technological capabilities cultivated in the field of aircraft.

Product lineup to meet the need for larger size, higher speed,
and greater precision
T1 5-axis horizontal
machining center

D2 5-axis verticalmachining center

MAG4 5-axis
horizontal machining center

SoftwareGlobal development of MAS-NX automation support software

Automation in manufacturing has evolved alongside software. Makino has
provided many automation systems since the early 1980s.
Our new MAS-NX software currently under development is equippedwith Makino’s proprietary Proactive Scheduling production schedulingfunction, based on overall operational simulations that include operators aswell as machines.
The function facilitates the advanced prediction of risks such as tool
shortages and tool life that may occur during the execution phase of production
planning, enabling countermeasures to be taken. It includes Insight, a functionthat supports further customer improvements using the latest digital

Topicstechnologies to analyze machine operating conditions and operator behavior.
We are making advances in software development methods, while
shortening development lead times by maximizing the use of overseas
subsidiary development resources, with Japan taking the lead. In addition toproviding attractive functions, the system incorporates a design that can beeasily customized by overseas subsidiaries to meet country-specific needs.
Makino will continue meeting demand for labor saving and automation
with software leveraging advanced technologies to support improved
productivity.

New technology OPTIMIZER born from customer problems

In 2023, we commercialized OPTIMIZER, a technology that automatically optimizes machining accuracy inresponse to changes in external temperature.
The proprietary technology was developed after a customer, who demanded high-precision machining,
complained that the accuracy of the machine was unstable.
The instability was caused by temperature fluctuations in the factory where the machine operated. Air
conditioning systems that stabilize machine temperatures are also important for maintaining high machining
accuracy, and in the past, we have recommended that customers upgrade their factory air conditioning
equipment to a system that can be precisely controlled.
However, cooling the factory by using air conditioning was not necessarily the correct answer, and wethought that machining accuracy should be optimized by the machine itself.
In conjunction with related departments and the customer, we carried out repeated measurements andverifications aimed at developing functions that would facilitate optimal machining accuracy even in thiscustomer’s environment. As a result, we were able to achieve a level of accuracy that satisfied the customer
without the need to upgrade their air conditioning system. This effort led to the commercialization of the
OPTIMIZER.
Sincere efforts to address as our issue what previously had been considered a customer issue, has led
to new innovations for Makino.

OPTIMIZEROPTIMIZER function
We added this function, which acquires and analyzes data on therelationship between temperature changes and displacement in customer
usage environments, and automatically calibrates optimal parameters tomaintain higher machining accuracy, to our eSTABILIZER technology,
which predicts and corrects temperature-related machine deformation bycomparing data on assumed machine deformation and data on measured
temperatures inside the customer’s machine.

MAKINO Report 2023

16

Makino Core Competencies

Social and
Relationship
CapitalMarket trends and customer
relationships



  

Orders received

Japan

250,000
200,000

Leveraging our capabilities to boost customer trust

56,60061,611

63,9180

Although the market began moving rapidly once the pandemic had started toease, it gradually slowed down during the second half of fiscal 2022.
However, we remain optimistic, and in fiscal 2023 (April 1, 2023 -March 31,
2024.) vigorous movements behind the scenes are leading to orders.
In China, there is ongoing demand for capital investment in some areas,
including those related to new-energy vehicles. Thus the Company will expand
its business there by investing further in its facilities in Kunshan and Wuhan.
Makino regards not only China, but also India and other Asian countries asimportant markets, where it plans to expand business to meet growing demand.
Aircraft markets are recovering in Europe and the US, and growing inIndia. Airframe and engine part demand is increasing among major aircraftcompanies, and for corporate jets in particular.
In Japan, due in part to government policies, we expect semiconductor
production equipment to become one of the pillars of our business. As market
trends differ by country, region, and industrial area, it will become increasingly
important that we accurately grasp trends in order to steadily promote sales
focused on the next step.

Yukihisa Takayama
Executive Officer
Executive Manager of Sales Division

Our sales strength lies in the fact that machining technology, after-sales service,and sales staff have worked closely together to serve customers since theCompany’s founding. As the machines delivered to customers are used forseveral decades, sales staff must maintain relationships of trust with customers.
Although the needs of customers change with the times, Makino has
become what it is today by supporting customers as a team, while addressing
the issues and requirements of the day.
Customer needs vary widely, from preventing machine breakdowns, toreducing processing time and environmental impacts. For this reason,
understanding our machines, as well as customer products and their entire
production process, are essential to meeting customer needs. Team effort
allows us to provide customers with a sense of our value as we continue
strengthening our efforts to create win-win relationships.

141,585
9,312

117,410
7,574
32,5792018

64,884

108,037

65,54355,1802021

2022

44,112

43,63433,1432019

2020

Topics

 



D2 machining sample caravan

The D2 machining sample caravan is a sales measure in which
we load machining samples made using our 5-axis verticalmachining center on a stage truck for first-hand inspection atcustomer factories.
A member of Customer
Application Centeraccompanies the caravan
to provide expert
explanations on products
and machining technologies.

21,49482,605

 249,596

63,20947,899

Europe17,602

40,73850,000

United States

228,960
201,963
19,832150,000

Accurately grasping global trends

Asia(Millions of yen)

100,000

17


(FY)

Note: Inter-segment transactions are offset and eliminated.

Field service engineer support

Putting ourselves in the customer’s place toquickly solve their problems
Tatsuji Omatsu

Koji Kimura

Director.
Executive Manager of Customer Support Division,
Makino Technical Service

Director.
Deputy Manager of Customer Support Division,
Makino Technical Service

Advancing physical and digital sales
Makino’s business begins with listening to customer issues. Face-to-facecommunication is crucial to ascertaining what is needed and strengthening
relationships of trust.
However, during the more than three years of the COVID-19 pandemic,
we were often unable to engage in our preferred style of in-person sales. But
we are now finally able to visit customers again, and they are able to go to
our plants.
Our products are not inexpensive, so when customers choose them, they
do so for specific reasons. These include high speeds, great precision, andadvanced functions. But ultimately, it comes down to the trust customers
have in our sales staff and Company. To continue building trust, we are now
once again proactively engaged in physical sales activities.
At the same time, digital transformation, or DX, in sales activities has
advanced, due to our pandemic-related inability to conduct face-to-facesales. We now hold online seminars on a variety of topics, including productfeatures and system programs, and are using digital technologies to develop
new customers and establish customer contact points.
While exhibitions were cancelled because of the pandemic, we thoughtthat if customers could not come to an exhibition, we would take theexhibition to them. So we organized the D2 machining sample caravan. This
resembled an exhibition, in which items can be seen, comments heard, andsamples held. Samples were machined using the 5-axis vertical machining
center D2—a new product at the time—loaded onto a stage truck, and taken
to customer factories for exhibition.
As a result, engineers working in the field provided us with valuablecomments that are usually hard to come by at regular exhibitions. And
the real time feedback lead to product orders. We have thus decided tocontinue building trust through hybrid efforts combining physical and digital
activities.

Customer product inquiries are collected and handled at three IoT Centers
located across Japan. Most of the inquiries are resolved over the phone, butwhen this is not possible, engineers are dispatched to the site to provide theneeded technical support.
Makino staff also support overseas customers in three shifts. Engineers
livestream site conditions, and IoT center staff provide diagnoses and support
in real time. The system enables us to respond quickly to any customer
problem.
We have also introduced a new mentoring system designed to pass onveteran personnel skills to future generations. In addition to knowledge andskills related to machinery and equipment, we also emphasize the importanceof being customer-focused.

Shift in maintenance from repairs to prevention
In fiscal 2022, we started to provide the Makino Machine Care Package, aservice that provides customized inspections of machinery for each customer.
As our products are used in various fields, the parts that are prone to fail vary,depending on how machines are used. Thus, maintenance and parts

replacement depend on how customers use the machinery and past data, andare conducted systematically.
Regular inspections can prevent sudden, unexpected failures. Rather thancarry out repairs when machines break down, we provide a service thatprevents problems from occurring. Customers who have made use of thisservice report that having fewer problems has resulted in stable machine
operation. This has allowed our customers and Makino to reduce the amount of
unplanned overtime and holiday work required when problems occur, which, I
believe, has created a win-win relationship.

Support system assists in disaster recovery
To respond to earthquakes, floods, and other natural disasters, which can occur
at any time, Makino has introduced a disaster monitoring system that registers
information on the location of products delivered to customers. When our
products are in operation in areas affected by a disaster, we confirm whether
customers have been impacted, and can soon have a support system in place
to quickly assist with the resumption of production.

Declaration of Partnership Building
Makino has registered its Declaration of Partnership
Building, a framework that requires companies to state
their business policies from the standpoint of the person
who places an order. The declaration focuses on theexcerpted items given in the box on the right.
We will build new partnerships by promoting
collaboration and coexistence with supply chain partners
and businesses that are looking to create value.

1 Coexistence and co-prosperity of the entire supply chain and new cooperationthat transcends business scale and affiliation.
2 Compliance with the Promotion Standard.

Makino Milling Machines Declaration of Partnership Building full text:(1) Pricing method(2) Mold management and other cost burdens(3) Terms of payment by draft, etc.
(4) Intellectual property and know-how(5) Consideration for work-style reforms at subcontractors

https://www.biz-partnership.jp/declaration/25844-05-18-kanagawa.pdf

MAKINO Report 2023

18

Makino Core Competencies

Manufactured
CapitalMakino has always used systems that enable us to meet customers’ desired delivery times.
Our products span a wide range of models and options and, because demand fluctuates
substantially, our basic policy is to manufacture products varying in type and quantity on abuild-to-order basis.
So as to meet requested product delivery dates, we make prospective arrangements
based on production plans, and are prepared to begin assembly as soon as an orderis received. Since order volume is greatly affected by market trends, our production
system must be able to flexibly respond to market changes if we are to meet customer
needs consistently.
For externally procured goods, it is important that we share information with suppliers,
to strengthen the supply chain and build cooperative relationships.
Makino has improved production efficiency and responded to increasing demand byrevising the production process through process dispersion. This is carried out in ourassembly line, where it is difficult to compensate for manhour excesses or shortages driven
by market trends in process-intensive workplaces.
To this end, we analyze the work skills required in each process and divide them into
work that requires special skills and work that does not. In this way we ensure that we havethe workers necessary for production.

Executive Vice President, Director
Executive Manager of Production Division19
 


We are also making efforts to reduce the scope of work requiring special skills. For
example, in work that requires advanced precision-adjustment skills, we are cutting back theadjustments required by consistently improving machining accuracy in earlier processes.
Sometimes, we develop dedicated machines to attain higher machining accuracy. In
order to meet customer expectations, we are constantly seeking ways to adjust work
processes to improve productivity.

Maximizing production efficiency
At present, we are trying to expand production volumes by expanding sub-assemblies andunit assemblies of all models, based on a dispersed-process modular production system.
To be able to respond to the rapid increase in orders, we have thoroughly subdivided
work processes into simple work units, and improved work manuals and quality checklists.
This has allowed us to expand the scope of assemblies that can be performed by non-veteranworkers and to develop a system facilitating flexible staffing.
Moreover, in order to further enhance our ability to respond to future hikes in production
volumes due to market changes, we are drawing on our accumulated experience to develop
a system that enables us to outsource sub-assembly and unit assembly work forsubcontractors who only process and manufacture individual parts.
When it comes to in-house assembly, we plan to enhance production planning by better
visualizing employee work plans, performance, and skills. At the same time, we aim toincrease assembly efficiency by providing systematic training and creating an environmentthat encourages improvement and skill enhancement.
Besides more efficient assembly, it is important to improve logistics to enhance
productivity. The modular production system we use to handle unexpectedly high production
volumes has resulted in more efficient assemblies.
However, the greater movement of sub-assemblies and units among processes has
affected logistics; existing plants are no longer able to utilize spaces and traffic flow as
envisioned when the plants were designed. As a result, a substantial amount of manpower
is required for general operations. This has created a challenge in terms of efficiency ifparts, sub-assemblies, and units necessary are to be delivered to the main assembly site
in a timely manner.
For new domestic and overseas plants in which we plan to incorporate dispersedprocess production systems, we are considering layouts that maximize productivity byadjusting the production balance among processes, while promoting automated logistics
among processes to achieve efficiency in logistics and main unit assemblies.
The new plant planned for Yamanashi Prefecture will have new sheet metal and powder
coating shops, and realize seamless and efficient logistics among processes. This will beachieved by optimally arranging, according to process flows, the parts warehouse, as well as
the paint, sub-assembly, and final assembly shops. On completion, the plant will dramaticallyincrease our capacity to produce large machines, for which demand is growing.
However, rather than being exclusively focused on large machines, the plant will be
multi-purpose based on different utilization and needs. It will be able to flexibly accommodate
the manufacture of small and medium-sized machines, to reflect changing market trends andcustomer needs. The plant will be a next-generation model for domestic and overseas
manufacturing bases.
In order to optimize production processes, including supply chains, it is necessary tobuild and maintain an information processing system that centrally manages essential
information and facilitates prompt decision-making. We are now working on the creation of asystem that can integrate and analyze various types of information to improve operational
efficiency and further enhance our ability to respond to diversifying customer needs.



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

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

Manufacturing sites and main products

Manufacturing efficiency based ondispersed production

Creating a system quickly responsive to market needs

Tatsuaki Aiba

1 Wuhan Plant

2 Kunshan Plant

MCs

EDMs

5
1



6

7



2

5 Fuji Katsuyama Plant
5-axis MCs

6 Fuji Yoshida Plant

7 Atsugi Plant
5-axis MCs

Units

MCs

3

MCs

EDMs

4

5-axis MCs ··· 5-axis machining centers

8

3 Bangalore Plant

4 Coimbatore Plant

8 Singapore Plant

MCs

Fixtures for automation

MCs

MCs

··· Machining centers

EDMs··· Electric discharge machines

Note: Overseas plants manufacture MCs developed
independently by subsidiaries in Asia.

EDMs

Efforts to increase productivity
Dedicated machine development
To manufacture high-precision machines, the surfaces where key
components meet must be machined into extremely flat planes. But there
are limits to the accuracy that machine processing can achieve. For thisreason, the contact surfaces are finished by hand using highly skilledworkers. The process requires the skills of a master craftsman and can only
be performed by veteran workers. This means that the number of skilledworkers available to carry out finishing has an impact on overall productivity.
Makino has developed dedicated machines in-house for parts
processing that can achieve the high-precision surfaces required to
manufacture our machines. This has helped boost productivity byminimizing the need for the work to be done by hand.

Surface finishing requires accuracy on theorder of 1μm.

Dedicated machines are developed to process parts
used in Makino equipment that efficiently manufactureshigh-precision machinery.

Unit subdivision
Makino products comprise several units, including
spindle heads, tables, automatic tool changers (ATCs),
and splash guards. We simplify each step of theassembly process by dividing the units into subassemblies comprising several parts. This allows for theassembly of different parts to proceed in parallel, shorter
overall assembly time, and greater worker proficiency,
resulting in a production system that ensures quality.
In unit assembly plants, simplified assembly operations
are being automated in stages, in the interests ofimproving efficiency and stabilizing quality.

Final assembly
Inspection

Shipment

Base unit

Splash guard

ATC

Frame
Sub assembly parts

Automation using robots is advancing for subassembly work that involves a small number ofparts and simple structures.

Digital manuals for work procedures ensure
uniform sub-assembly work, even with different
operators.

Exterior parts and other components areorganized into units for efficient production in
dedicated assembly plants.

Units are consolidated at the main assemblyplant and used to assemble finished products.

MAKINO Report 2023

20

Makino Core Competencies

Financial Capital

Fiscal 2022 income up; sales at all-time highConsolidated net sales in fiscal 2022 (ended March 31, 2023) amounted to¥227,985 million (up 22.2% year on year), reaching an all-time high. Operating
income was ¥17,492 million (up 54.8% year on year), ordinary income was¥19,906 million (up 39.5% year on year), while net income attributableto owners of the parent was ¥16,073 million (up 33.5% year on year).
Orders received so far for fiscal 2023 have surpassed those for fiscal
2022, reaching ¥249,596 million on a consolidated basis (up 9.0% year onyear). Amid the rapid resumption of economic activity after the pandemic had
subsided, capital investment related to semiconductor manufacturing
equipment was strong worldwide, and investment related to new-energy
vehicles was brisk, especially in China.
Exchange rates impacted by the depreciating yen were one factor thatdrove sales and orders higher. At the same time, factors leading to sluggish
profit growth include rising parts procurement costs, conditions in Ukraine,and soaring energy prices associated with the weaker yen.
Labor costs are also rising due to global inflationary trends, and althoughorders and sales grew, cost reductions aimed at securing profits could not
keep up with inflation. During fiscal 2022 and 2023, in response to a rise invarious costs, we implemented three price increases, the benefits of which
we expect to realize during fiscal 2024.

Toshiyuki Nagano
Executive Vice President, Director
Executive Manager of Corporate Service Division

Stakeholders to benefit from greater disclosures,
profits derived from strategic investments
Demand in the machine tool industry fluctuates wildly, with customer machining
operations changing in line with trends in each industry sector. As a result,customer capital investment plans also change. For these reasons, Makino’s
medium-term management strategies must be flexible and responsive.
Accordingly, we do not disclose medium-term management plans, which canchange from day to day.
However, in order to deepen understanding of our efforts to enhance
corporate value, we have decided to disclose new management indicators,
including targets for sales, profit, and ROE.
First, we are targeting an operating margin ratio of 12% for fiscal 2027. As
our main priority is to expand sales, we have set a consolidated sales target of¥270.0 billion for fiscal 2027. The machine tool market is expected to grow at
an annual rate of about 3%, and we aim to increase production capacity andimprove productivity to keep pace with this growth.
Second, regarding new plants. In Japan, we will build a new plant near our
existing one in Yamanashi Prefecture to increase our production capacity forlarge machines.
Overseas, we will expand our plant in China, and build a unit assemblyplant in Vietnam for those products targeted for Asian markets. We will work to
improve asset efficiency by shortening the cash conversion cycle (CCC) with atarget ROE of 11%.
Third, we plan to use cash generated by these initiatives for capital
investment and the development of high-value-added products with the aim offurther improving productivity. We will also continue to invest in DX, including
the creation of a platform for the management and sharing of information on all
product parts, as well as the development of a system that expands
maintenance and inspection services.
Fourth, with regard to employees, in addition to adjusting salary levels, wewill proactively invest in upskilling and reskilling, providing more advanced
learning opportunities, supporting language training and proficiency
examinations, and developing human resources that can perform data utilization.
Fifth, we also plan to continue investing in environment-related measures.
This entails ongoing related investments of around ¥300 million per year, andincludes the introduction of solar power and eco-air conditioning at all plants,
as well as conversion to LED lighting. Further, by fiscal 2030, we aim to reduce
CO2 emissions 42% (from the fiscal 2022 amount) and hope to achieve carbon
neutrality by fiscal 2050.
Sixth, we consider the return of profits to shareholders through stable,
regular dividends to be one of our most important management issues. We thus
have also disclosed shareholder return indicators.
In fiscal 2022, the dividend was ¥150 per share of common stock. The
total payout ratio five-year average from fiscal 2018 to fiscal 2022 was 33%.
But, starting in fiscal 2024, we aim for returns of between 35% and 45%, on
average. This will apply to the five-year period from fiscal 2023 to fiscal 2027,
taking into account investment plans and earnings outlooks.





  

Taking steps to boost asset efficiency
with a better price-to-book ratio

  

Fiscal 2027 targets

Capital efficiency

Fiscal 2021

Fiscal 2022

(April 1, 2021–March 31, 2022)(April 1, 2022–March 31, 2023)

227,985

270,000

Operating margin ratio

6.1%

7.7%

12.0%

ROE1

7.1%

8.6%

11.0%

163

171

155

20%

23%

35–45% on average overthe five-year period fromfiscal 2023 to fiscal 2027

(Millions of yen)

CCC2 (cash conversion cycle)(days)

Total payout ratio

Shareholder returns

Fiscal 2027 targets

186,591

Sales

Profit and loss

21


Notes:
1. ROE: net income attributable to owners of the parent ÷ shareholders’ equity.
2. Cash conversion cycle: Notes and accounts receivable, trade turnover days + inventory turnover days - notes and accounts payable, trade turnover days.

Financial policy
Increasing asset efficiency

Cash flows(Billions of yen)
30

From operating activities

29.5

From investing activities
From financing activities

25
20
15

2023–2027
Cumulative plan

Cash flow fromoperating activities

18.0
15.3

Cumulative total¥105.0 billion

14.9

10

8.8

7.4

5

Cash flow frominvesting activities

6.0

Cumulative total-¥85.0 billion

0

-0.3
-5
-10

(FY)

-8.7

-7.6

2018

-8.3

2019

-6.5
-9.5

2020

-8.1

2021

We are making an effort to shorten the CCC, so as to increase
asset efficiency. The CCC indicator represents the number ofdays between the payment of notes and accounts payable,
trade, and the collection of notes and accounts payable, trade.
Shortening the CCC frees up working capital and improves
asset efficiency, but the resultant shorter inventory turnover
period is an issue. To solve this, we plan to implement thefollowing measures to shorten the turnover periods for parts,
works in process, and product inventories.
• Strengthen collaboration with suppliers and shorten lead times
for procured parts to improve parts inventory turnover• Implement initiatives to improve productivity for better
process turnover• Understand regional market trends and optimize overseas
subsidiaries’ product inventories to improve productinventory turnover

Free cash flow

Cumulative total¥20.0 billion
-8.8

2022

2023–2027

Makino will proactively invest in DX and human resources
as necessary to implement the above initiatives, while making a
Company-wide effort to improve asset efficiency.

Shareholder returns
Makino’s basic policy is to return profits to shareholders
through stable, regular dividends. In fiscal 2022, theCompany paid a dividend of ¥150 per ordinary share.
Looking back over the past five years, this represents a total
payout ratio of around 33%. We plan to continue providing
regular, stable shareholder returns for the foreseeable
future.

Dividend/total payout ratio

Dividend per share (left-hand scale)
Consolidated/total payout ratio (right-hand scale)

(Yen)
150

235

120
90
60

230

105
27

30

80

20

23
60

30

20
10

20

0

0

(FY)

(%)
240

150

2018

2019

2020

2021

2022

MAKINO Report 2023

22

Sustainability

Building Growth on Sustainability

Nobuhito Kusaba

Executive Officer, Deputy Executive Manager ofCorporate Service Division,
Chief of Sustainability Promotion Office

Tomofumi Nagatomo

Deputy Chief of Sustainability Promotion OfficeNobuhito Kusaba: In fiscal 2022, we established an in-house project teamto promote carbon neutrality. Around this time, we were already receiving an
increasing number of inquiries from investors and customers regarding ourefforts to address the environment and other sustainability-related issues.
In order to respond to these and other disclosure requests fromstakeholders, on October 1, 2022, we expanded the project team to create a
new organization, the Sustainability Promotion Office, which advocatescarbon neutrality and other environmental measures, and responds toinquiries from outside parties.
The Sustainability Promotion Office has begun calculating domestic
non-consolidated Company greenhouse gas emissions. Further, it is setting
reduction targets for disclosure items and indicators, as set forth in the
Company’s Corporate Governance Code, and recommended by the Task
Force on Climate-related Financial Disclosure or TCFD and otherorganizations. We have completed the calculation of Scope 1 and 2 on aconsolidated basis, and are now working on Scope 3 calculations.

Driving global activities, targeting carbon neutrality
Tomofumi Nagatomo: Although there are various external organizations
that evaluate environmental and climate change issues, such as the [Carbon
Disclosure Project or] CDP and TCFD, we started by formulating internal
standards and establishing an organizational foundation for the disclosure of
information to our stakeholders. We encourage communication among all
global subsidiaries as we move steadily forward with relevant calculations,
including at overseas subsidiaries.
We are promoting initiatives aimed at reducing greenhouse gas [GHG]
emissions at all business sites in Japan, including by the introduction of solar
power and other forms of renewable energy, as well as conversion to LED
lighting.

Izumi Nakashima
General Manager,
Human Resource Department

We are considering, in our current plans for new plants, the introductionof zero energy buildings as one option, with the aim of achieving a zerobalance between annual energy conservation and creation.
Overseas, there are wide disparities in terms of environmental
awareness and the initiatives subsequently being undertaken. So, first of all,we want to align the Group through information sharing and education, inorder that we might all face issues with the same degree of awareness.
With regard to reducing GHG emissions and conserving energy, the firststep is to introduce, and convert to, renewable energy sources. We also
believe it necessary to prepare for the introduction of carbon taxes. Overall,there are many initiatives that need to be promoted, and we want to moveahead steadily, one issue at a time.
Our R&D department receives inquiries from customers who want
information related to machine power consumption. We are now in an age
when customers can choose products on the basis of environmental impact
if all other specs are the same.
In conjunction with our R&D department, we want to help reduce
customers’ environmental impact through their use of our products, as wellas contribute to the realization of carbon neutrality.
The Sustainability Promotion Office is also responsible for internal
environment-related promotions and employee education. My sense is that
there is not a single Company department, division, or operation that is not
related to sustainability, the SDGs, or carbon neutrality. About one year has
passed since the Sustainability Promotion Office was established, and weplan to increase our visibility as a consultative organization within the
Company. We will tackle the question of what, specifically, we should do
while, at the same time, driving environmental activities on a global scale.

We can facilitate a better
understanding of Makino
through proactive information
disclosure and dialogue.
Nobuhito Kusaba

Makino culture and systems allow all staff togrow and play active roles, regardless of nationality
or gender

We want to reduce customers’
environmental impact throughour products, and contributeto the realization of carbon
neutrality.

Izumi Nakashima: Makino seeks human resources who can think and act
autonomously. As a Company that has been expanding overseas since the1970s, we have a culture of providing employees with opportunities,
regardless of nationality or gender, as long as they think independently anddemonstrate motivation.
In fact, we have appointed local, non-Japanese personnel to thepositions of CEO and CFO at our overseas subsidiaries in Asia, the Americas,
and Europe. In the area of governance, employees in domestic management
serve as directors on the Boards of overseas subsidiaries and, while theparent company supervises and audits subsidiaries, day-to-day operations
are entrusted to local staff.
By 2026, our goal is to increase the ratio of female managers from thecurrent 2% to 5%, and to 15% over the long term. Then we will increase thepercentage of female assistant managers, who are candidates for
managerial positions, from the current 8% to 10%, and again to 15% overthe long term.
In recent years, women who have chosen to work at Makino have done
so after having carefully considered the possibilities offered by a career at
our Company. It would seem the notion that machine tool manufacturers areunpopular with women is an old way of thinking. We have women working invarious fields, both in Japan and overseas, and will continue to proactively
recruit women in order to achieve our goals.
We also recruit foreign nationals, and accept interns. One young
employee from abroad in their 20s who had an internship with us was thenhired as a full-time employee, and put in charge of designing the exterior andconcept of a new product that won the Grand Prize—the Minister of Economy,
Trade and Industry Award—at the Industrial Machine Design Awards,
sponsored by the Nikkan Kogyo Shimbun, Ltd., Japanese newspaper
company providing comprehensive coverage of industrial matters.
Employees such as this find it rewarding to work in a culture that provides
them with opportunities and entrusts them with tasks, regardless of theirnationality or age.
I believe it will become important to develop human resources who canbe engaged in management and cooperate with overseas Group companies.
We will work to create a system for the development of human resources
with global perspectives and sensibilities, concerning local cultures andbusiness customs overseas.

Makino provides all employees with opportunities and educational programsfor self-improvement and skills development. We set up the Makino BusinessAcademy, a learning platform for our employees, and offer a wide range ofeducational opportunities and support for doctoral and MBA programs, aswell as courses and programs for basic and new technology at universities or
research institutes.
We support the career development of individuals by providing
opportunities for motivation at all levels, from new hires to senior employees,
in order to enhance corporate value.

Dialogue with stakeholders is valued
Kusaba: In recent years, I have frequently heard the term “stakeholder
engagement.” It seems to be used in a variety of ways, but putting strict
definitions aside, I believe that everything starts with sincere dialogues withstakeholders.
Makino listens carefully to customers, realizing their needs. In order tomeet our customers’ various needs, it is important to ensure diversity among
our employees, and to listen carefully to the voices of our increasingly diverse
workforce.
In addition, given the rapid changes in markets and technologies, it isdifficult for Makino to manufacture products on its own, so it is important that
we maintain good relationships with our suppliers. Of course, we also needto meet the expectations of our investors and local communities.
Sustainable corporate management is not possible without the supportof these stakeholders, but it is also true that it is difficult to respond in waysthat completely satisfy everyone.
Under these circumstances, it is important for us to facilitate a better
understanding of Makino through proactive information disclosure anddialogue. We should do our utmost to achieve results, so that people have asense of security and trust in our management, as well as a sense of our
growth potential.
This type of virtuous cycle is the expectation implicit in the word“sustainability.” Moreover, we plan to continue our efforts to enhance
corporate value through sustainability activities.

It is important to create ahuman resource development
system, based on global
perspectives and sensibilities.
Izumi Nakashima

Tomofumi Nagatomo

23

MAKINO Report 2023

24

Makino Core Competencies
Global Group-wide pursuit ofcarbon neutrality

Natural Capital

1 are direct emissions, from owned or controlled sources;

Makino will always consider the environmental impact of all processes inwhich our products are produced and used by customers to build
societal trust.

Scope 2 emissions are indirect emissions, from the generationof purchased energy.
To this end, we have established a system to monitor
and are promoting the understanding of CO2 emissions on a

1. Press ahead with energy andresource conservation.
2. Continue waste reduction.
3. Offer products with low
environmental impact.
4. Comply with laws, regulations, andvoluntary controls.

global basis.
In addition, we are promoting the reduction of emissions
and waste at our plants, energy-saving activities and the useof renewable energy resources such as solar power. We arealso developing greater energy-saving products which
contribute to customers’ daily production floors.

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The Board of Directors approves major investment plans aimed at reducing environmental impacts, receiving reports, and deliberating the implementation statusof these plans as appropriate. In the event serious environmental risks materialize or are very likely to occur, the Board receives reports on each risk and discusses
the status of responses. Makino selects a General Manager of Environmental Management from management ranks with the authority to formulate and review
environmental policies, prepare and provide management resources necessary for the establishment, maintenance, implementation, and management of theEnvironmental Management System, and appoints a person in charge of steadily implementing the system.

Makino identified climate-related risks and opportunities with the potential of impacting business, strategies, and financial plans in the short, medium, andlong-term based on multiple scenarios, with one assuming a 4˚C temperature increase relative to pre-industrial times and the other assuming a limited
temperature increase of 1.5˚C. The following are risks Makino believes have the potential to significantly impact business.

Strategy

In accordance with this environmental policy, we will carry out the following activities.

energy consumption, including that of overseas subsidiaries,

Makino is engaged in efforts to reduce GHG emissions with the goal of achieving carbon neutrality by 2050. It
should be noted that we support the Task Force on Climate-related Financial Disclosures.

Environmental policy

greenhouse gas (GHG) Scope 1 and Scope 2 emissions. Scope 

GHG reduction efforts

Governance
We have set a goal of reducing, by 2030, our consolidated
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5. Prevent environmental pollution.
6. Continue to enhance ourenvironmental management system.
7. Build awareness concerning
environmental conservation.

Transition risks• Ongoing GHG emissions pricing, stricter energy conservation policies, mandates and regulations on existing products and services, andrising raw material costs in response to GHG emission reductions

Physical risks• Increased severity and frequency of cyclones, floods, and other extreme weather events

Opportunities• R&D and expansion of low-carbon products and services

Risk
management

The Risk Management Promotion Office compiles and prioritizes manifested risks. The Board of Directors focuses on legal reform trends, the results ofmanagement reviews, and other information as risks that must be addressed from a Company-wide perspective, then presents them to each division.
Executive managers in each division select major risks to be addressed, taking into consideration risks prioritized from a Company-wide perspective and risks
identified in their division. They establish response policies and conduct risk mitigation, which includes monitoring and measurement activities. A portion of
the results of these efforts are disclosed on the Makino website. The Environmental General Manager summarizes environmental activities conducted during
the year and conducts management reviews. In addition to sharing findings with each division, the Risk Management Promotion Office reflects findings
related to key risks from a Company-wide perspective and reports them to the Risk Management Committee. In the event of a particularly important risk issue,
the details are reported to the Risk Management Committee for discussion as necessary.

Metrics andtargets

To achieve carbon neutrality (virtually zero greenhouse gas emissions) by 2050, we set a target for CO2 emissions reductions (Consolidated, Scope 1 and
2) of 42% compared to 2022 by 2030 and are engaged in initiatives to achieve this goal.

Greenhouse gas emissions (Consolidated, Scope 1 & 2)
Scope 1

Scope 2(t-CO2)

49,13550,00045,41142% reduction
from fiscal 2022

40,00028,49830,00020,00040,244Long-term goal

43,3362030
42% reduction

2050

Global solar power generation equipment

Carbon neutral

Makino continues to install solar power generationequipment at domestic and overseas plants andfacilities. As a result, 7,313 MWh of power weregenerated in fiscal 2022, an amount that is steadily
increasing globally. We will continue to promote theuse of sources of renewable energy, while striving tocontinue reducing GHG emissions.

from fiscal 2022

10,000

0
(FY)

5,167

5,799

2021

2022

2030

Data on our website is updated as necessary.
https://ir.makino.co.jp/en/esg/environment/

China
34%

India
3%

China
10%
Total power
generatedin fiscal 2021

4,403 MWh

Singapore45%

Total power generated
in fiscal 2022

7,313 MWh

Japan
42%

25

Japan
36%

Singapore
24%

Environment-friendly products and technologies
Given our goal of achieving carbon neutrality by 2050, since April 2023 we have been selling
products that leverage those Makino technologies which allow high productivity using low power
consumption.
eSTABILIZER (machine stabilization control technology) utilizes data from temperature
sensors installed in machines to maintain high-precision machining by predicting andautomatically controlling minute mechanical deformations caused by ambient temperatures.
This control also ensures stable, highly accurate processing even when factory temperatureschange, thus helping reduce the amount of factory power consumed by air conditioning.
Other functions that result in energy saving and high productivity include Makino’s
proprietary GI control and Super GI.5 control technologies. These reduce machining time andincrease machining accuracy through smooth and efficient feed motion. In addition to this, we
also provide energy saving functions that optimize auxiliary equipment operation, which accounts
for a substantial portion of processing power consumption.

India
6%

Power consumption reduction rate

Overseas

12%

1, 2

GI control andSuper GI.5 control

February 2019
Makino Asia Pte Ltd(Singapore)

9%

1, 3

2018

Energy-saving features

30% (standby mode)

4

Notes:
1: Compared with 2013.
2: R eduction rates differ depending on machine installation
environment and size.
3: Reduction rates differ depending on processing program.
4: Reduction rates differ depending on machine type and usage
conditions.

July 2021
Makino India Pvt. Ltd.
(Bangalore, India)

2021
February 2018
Atsugi Plant factory No.3
(Kanagawa Prefecture)

July 2018
Kobe Technical Center(Hyogo Prefecture)

July 2022
Makino J China Co., Ltd.
(Wuhan, China)

October 2021
Makino (China) Co., Ltd.
(Kunshan, China)

2022
March 2021
Atsugi Plant B & C wings(Kanagawa Prefecture)

November 2021
Ota Sales Office(Gunma Prefecture)

December 2021
Fuji Katsuyama Plant(Yamanashi Prefecture)

April 2023
Makino Korea Co., Ltd.
IoT Center(Yongin, South Korea)

2023
December 2022
Atsugi Plant D & E wings(Kanagawa Prefecture)

January 2023
Fuji Yoshida Plant D wing
(Yamanashi Prefecture)

July 2023
Fukuoka Sales Office(Fukuoka Prefecture)Japan

MAKINO Report 2023

26

Makino Core Competencies

Human Capital

Diverse, Free-thinking Staff
Drive Growth

If we are to continue as a partner in resolving issues forcustomers in various countries, regions, and industries, it
proposals who shall drive Company growth.
We will continue providing top-quality, high-1

To realize a virtuous cycle in which employee growth leads to Company growth andgrowth of the Company further promotes employee growth, Makino provides various
opportunities for career development and skill enhancements.

2

Makino will endeavor to provide a working environment that embraces different
values to continue creating innovative products and services that can respondto challenges faced by our customers.

precision machine tools, while creating an organizationin which diverse human resources can play an activerole in product development, production, sales, service,and other areas, so that we can accurately respond toChildcare leave utilization rate (%)Women

Providinglevel-based training

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





Female employee ratio (%)(Fiscal 2022)
Men

Makino regularly conducts surveys to ascertain employee satisfaction ordissatisfaction with their work. After analyzing the results obtained from eachdivision, measures that might be taken to improve matters are considered.
In evaluating human resources, we conduct interviews and leveragecommunication between supervisors and subordinates. In this way
we ensure that evaluations are satisfactory and are used for futureskills development.

Overall(As of March 31, 2023)

Manager

Section chief

Regular employee

All employees

Non-consolidated

100

47.8

58.6

Non-consolidated

3.1

5.6

10.8

11.7

Domestic consolidated

100

40.5

54.6

Domestic consolidated

2.1

7.7

11.8

14.6

TopicsTo promote education and skills development in line with human resource
development policies, Makino provides learning opportunities through levelbased training, in addition to self-development based on comprehensive
training and development systems.
In 2021, we set up the Makino Business Academy, an in-house
university that serves as a platform for employee educational opportunities.
Further, employees may study independently, doing joint research with
universities, enrolling in doctoral or master’s degree programs in specialized
fields. Supervisors provide staff with medium-term career support, use thein-house open recruitment system to assist those voluntarily making careerchanges, and provide opportunities for staff to interact with employees atother companies and overseas subsidiaries.

We encourage our
employees to grow by:

Employee engagement

Makino business activities are global, and the amount of overseas
business it handles far surpasses the Company’s domestic business. With
respect for diversity deeply rooted in our Company, we believe a diverse
workforce is critical for achieving our business goals.
At present, approximately 2.0% of management positions (section
chief or higher) at Makino and its domestic Group companies are occupied
by women. We aim to increase this ratio to 5% by 2026, then to some 15%
over the long term.
To this end, we intend to increase the ratio of female section chiefs(candidates for managerial positions), which currently stands atapproximately 8%, to around 10% by 2026, then to some 15% over the
longer term.

changing needs.

Human resource development 

Promoting diversity

Human resource development and internal environmental improvement policies

is free-thinking employees able to make customer
 

Human resources for the future

Education programs

Makino jointly conducts research with universities and graduate schools athome and abroad, with a view to having access to human resources in the
future. To date, some students involved in such activities have become
Makino employees after having developed an interest in machine tools.
Overseas, we are conducting a joint research program with the Technical
University of Aachen, Germany, which is known as a machine tool
powerhouse on a par with Japan. After graduation, students who haveparticipated in the program receive our help to continue basic research onmachine tools at research institutes.

Helping them acquire
a doctorate or other degree

Supporting their personalacademic development

Enabling them to study at theMakino Business Academy

As part of our efforts to develop human resources who can think
and act autonomously, we plan to strengthen in-house education,
including level-based training.
We provide growth opportunities for all levels of employees
and encourage the drawing up of personalized career plans.
We also offer a variety of benefit programs to ensure that
staff have an appropriate work–life balance. Rather than taking a
one-size-fits-all approach, we have in place measures that
respond to changes in each individual’s life stage. These include
childcare and nursing care support programs.
Education available
Type of training

General positions

Level-based

Human rights initiatives

New employee training

Line leaders

Leaders (Section chiefs)

Specialists

Managers

General Managers

One-on-one training

One-on-one training

Evaluator training

Evaluator training
New manager training
Level-based training

The Makino Group is a multinational corporation that employs more nonJapanese than Japanese nationals. Overseas branches manage employees
in accordance with the laws, systems, and practices in the countries in which
they operate.
Many people from abroad also work for Makino in Japan. Here, theCompany’s internal rules and regulations, including its internal approvalsystems, are translated into English. Moreover, Japanese and overseas
nationals are treated the same in terms of wages, promotion, and wage
increases.
We have a team that specializes in hiring foreign nationals. Thus, forexample, if an overseas national prefers European-style terms of employment
rather than a lifetime position, we are flexible and do not make them follow
Japanese practices.

27

Mid-career and senior employee training
In-house examinations
Career development

Japan

2,196
(Includes domestic affiliates)

Employees(consolidated)

Bachelor's degrees for working professionals

Overseas

4,692

2,496

(As of March 31, 2023)(Overseas affiliates)

Doctoral degrees for working professionals
Master of Business Administration (MBA)Engineering training
New employee

Craftsmanship training
Cross-functional training
MAKINO Business Academy

Company-wide

Harassment training
Language training
IT training

MAKINO Report 2023

28

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Corporate governance structure

In line with its corporate philosophy and basic management policies, Makino considers corporate

Basic approachto corporate
governancegovernance to be one of the measures that enhances its corporate value in the medium to longterm, while giving due consideration to various stakeholders.
We aim to establish effective and efficient corporate governance given the extremely volatilenature of earnings in the machine tool industry.

Corporate governance structure

General Meeting of Shareholders↓Appointment / dismissal
Consultation→←Recommendation

Report↑Nomination and Remuneration Committee↑ReportReport→Accounting Auditors

Audit and Supervisory Board

Board of Directors←Audit↓AuditAppointment /↓dismissal

Appointment→
Agreement↓Report↑ReportReport→Management

Report↑↓Request andSupervise

Subsidiaries

Internal Audit Office
Trade Security Control Office←ReportCompliance Committee
Safety and Health Committee
Report↑Departments←ReportBoard of Directors

Audit andSupervisory
Board Members

Management

Budget Planning Committee
Grievance Committee

29

General Meeting of Shareholders

Risk Management Committee

Departments

Makino has adopted a company structure with an audit and supervisory board from the institutional
designs stipulated in the Companies Act and related laws. In addition, for the sake of transparency andmore active discussion, four of the Company’s eight directors are external directors (including one
woman), and two of the three Audit and Supervisory Board members are external members. In an
industry where earnings fluctuate widely from year to year, we have established the aforementioned
structure to ensure that we can make decisions promptly, respond quickly to changes in theenvironment, and make sound management decisions.
Makino’s policy is to appoint external directors and external corporate auditors based on theirexperience working for other organizations and their ability to appropriately fulfill the role from an
independent standpoint of supervising or auditing the execution of duties by Makino’s directors
entrusted by shareholders. We also believe the appointment of external directors allows for the inclusionof a wide range of management expertise and ensures a more thorough role for the Board of Directors.
Director nomination and remuneration are decided by the Board of Directors after consultation andreviewing the recommendation of the Nomination and Remuneration Committee, a voluntary advisorycommittee to the Board of Directors chaired by an external director and comprising of a majority of
external directors.

Overview of corporate governance structure

Appointment and dismissal of senior management,
nomination of candidates for post of director and member of Audit
and Supervisory Board

Evaluating the efficacy of theBoard of Directors

It is Makino’s policy to select candidates who are qualified for the duties to be entrusted to them andwho excel in character, experience, and ability. The representative director prepares candidate
proposals.
Management executives are discussed and approved by the Board of Directors after deliberationby the Nomination and Remuneration Committee. The Board of Directors approves the candidates for
Audit and Supervisory Board membership in a proposal presented to the General Meeting of
Shareholders with the consent of the Audit and Supervisory Board.
In accordance with the regulations of the Board of Directors, the dismissal of senior executives isbased on the policy of dismissal or non-reappointment in the event of misconduct or serious breach oflaws, regulations, or the Articles of Incorporation in the performance of their duties, or in the event thatthey are unable or unwilling to perform their duties due to physical or mental disability.
Moreover, Makino believes that maintaining an appropriate balance, diversity, and size of the Boardof Directors in aggregate, in terms of knowledge, experience, and skills is important for the effectivenessof the Board of Directors and considers these factors when selecting board candidates. Please refer topage 32 for the skill matrix and other attributes of Makino’s directors.

Executive remuneration
Remuneration for directors is determined by the Board of Directors inconsideration of shareholder value so that it functions as an incentive toimprove the Company’s corporate performance and the resultant
corporate value, as well as in consideration of the individual
responsibilities of each director. Specifically, directors’ remunerationconsists of basic remuneration as monthly fixed remuneration inaccordance with their responsibilities, performance-linked remuneration
based on evaluations of the Company’s business performance andindividual directors, and stock-based remuneration in the form of
restricted stock. External directors, meanwhile, receive only baseremuneration as fixed remuneration.
At the Board of Directors meeting held on May 16, 2022, a
resolution was passed to introduce a restricted stock compensation planwith the aim of providing incentives to sustainably increase the Group’s
corporate value and to further promote value sharing with shareholders.

Organizational format

Company with an Audit andSupervisory Board

Directors

8 (including 4 external directors)

Audit and Supervisory Board
members

3 (including 2 external audit andsupervisory board members)

Term of office of directors under
the articles of incorporation

1 yearExecutive officer system

AdoptedVoluntary advisory committee tothe Board of Directors

Nomination and Remuneration
Committee

Accounting auditor

Gyosei & Co.

Corporate governance reporthttps://ir.makino.co.jp/library/corporategovernance/

We conduct an annual survey of Board of Directors participants inrecognition that improving the efficacy of the Board of Directors is oneof the issues we face. The following is a summary of the most recent
results. While we believe that our Board of Directors is performing
effectively, we will work to further improve its efficacy in the future.
Regular monthly reports and regular resolutions, as well as

1 business plans, investments, and other necessary agenda
items are deliberated.

Directors and Audit and Supervisory Board members can2 engage in an active and constructive exchange of opinions andcomment as appropriate.

The activities of the Board of Directors including the number of

3 meetings and the time spent on them are rated at a certain levelby the directors and Audit and Supervisory Board members.

Policy on cross-shareholdings
Makino holds shares in operating companies for the purpose of maintaining relationships with its
business partners and ensuring that transactions are smooth over the long term.
The Board of Directors annually reviews the appropriateness of each individual shareholding
from a holistic standpoint, scrutinizing the degree of benefit commensurate with the cost of capitalin terms of economic rationality and qualitatively considering the potential for contributing to theenhancement of Makino’s medium-term corporate value through activities such as joint researchand development.
As a result of this review, Makino will sell shares that are deemed to have minimal value as
cross-shareholdings.

Succession planning
Makino’s basic policy is to select its chief executive officers, including the president, from amongindividuals who are well versed in the machine tool industry and the attributes of Makino’s
business, and who have leadership qualities. To contribute to Makino’s sustainable growth andmedium- to long-term enhancement of corporate value, we provide educational opportunities tocandidates for the next generation of executives who have the necessary attributes to servethrough our executive officer system. We have also established the Makino Business Academy as
an internal institution to provide employees with opportunities for education on a wide range ofmanagement-related topics.
The Nomination and Remuneration Committee will continue to consider the optimal state of
Makino’s succession planning.
MAKINO Report 2023

30



11

5

7

6

2

8

9

1

10

3

4

Directors
President and Representative Director

Shotaro Miyazaki

Apr. 1986 Joined the Company
Jan. 1999 Director of Heidenreich & Harbeck WerkzeugmaschinenfabrikGmbH
June 2000 Representative Director of Makino Formenbautechnologie
GmbH
Mar. 2011 General Manager, Asia Sales Department, Sales Division of
the Company
Sept. 2016 General Manager, Overseas Sales Department, Sales Division
Sept. 2021 Executive Officer; Deputy Executive Manager, Sales Division;
General Manager of Sales & Application, Makino Europe
GmbH
June 2022 President and Representative Director (to present)

4

Director, Executive Manager of R&D Division

Haruyuki Shiraishi

Apr. 1985 Joined the Company
Jan. 2008 Deputy Executive Manager, Development DivisionFeb. 2013 Deputy Executive Manager, Production Division
Jan. 2016 Director, Makino Asia Pte Ltd
June 2020 Executive Officer; Executive Manager, Production Division;
Executive Manager, Company’s Fuji Katsuyama Plant
June 2022 Director, Executive Manager, R&D Division (to present)
Feb. 2023 Director; Executive Manager, R&D Division; Manager of
Design/Production Data Utilization Promotion Office(to present)31 

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Skill Matrix

Board ofDirectors

1
 Management

International
Experience

R&D / Production

Sales / Marketing

Finance /Accounting●●

Legal / Risk
Management

1

Shotaro Miyazaki

President and Representative
Director●●

2

Toshiyuki Nagano

Executive Vice President andRepresentative Director

●

●

3

Tatsuaki Aiba

Executive Vice President andRepresentative Director●

4

Haruyuki Shiraishi

Director●

5

Naofumi Masuda

Director, External andIndependent●

6

Kodo Yamazaki

Director, External andIndependent

●

●

●

7

Kazumi Nishino

Director, External andIndependent

●

●

●

8

Kazuo Takahashi

Director, External andIndependent

●

●

●

9

Akio Koumura

Full-time Audit andSupervisory Board member●

10

Jinei Yamaguchi

Full-time Audit andSupervisory Board member

●

●

●

11

Jiro Nakashima

Audit andSupervisory Board member

●

●

●

●
●

●

●

●

●
●

●

●
●

●

●

Directors
2

Executive Vice President and Representative Director,
Executive Manager of Corporate Service Division; Office
Manager of Trade Security Control Office

Toshiyuki Nagano

May 2004 Joined the Company
June 2006 Director of Makino J Co., Ltd.
Nov. 2008 General Manager of Finance Department of the Company
June 2009 Director; General Manager of Finance Department; Manager, Energy Control Office
Apr. 2011 Director; Executive Manager, Corporate Service Division; Manager, Trade Security
Control Office; Manager of Energy Control Office
June 2014 Vice President, Director; Executive Manager, Corporate Service Division; Manager, Trade
Security Control Office; Manager, Energy Control Office
June 2016 Executive Vice President, Director; Executive Manager, Corporate Service Division;
Manager, Trade Security Control Office; Manager, Energy Control Office
Apr. 2017 Executive Vice President, Director; Executive Manager, Corporate Service Division;
Manager of Corporate Planning Office; Manager of Trade Security Control Office;
Office Manager of Energy Control OfficeFeb. 2021 Executive Vice President, Director; Executive Manager of Corporate Service Division;
Office Manager of Trade Security Control Office; Office Manager of Energy Control Office
June 2021 Executive Vice President, Representative Director; Executive Manager of Corporate
Service Division; Office Manager of Energy Control Office; Office Manager of Trade
Security Control Office, Risk Management Promotion Division
June 2022 Executive Vice President, Representative Director; Executive Manager of Corporate
Service Division; Office Manager of Trade Security Control Office; Office Manager
of Energy Control Office
Oct. 2022 Executive Vice President, Representative Director; Executive Manager of Corporate
Service Division; Office Manager of Trade Security Control Office (to present)

5

Director, External and Independent

Naofumi Masuda

3

Executive Vice President and Representative Director;
Executive Manager of Production Division

Tatsuaki Aiba

Apr. 1980 Joined the Company
Nov. 2002 General Manager, Fuji Katsuyama Production Department
Dec. 2004 General Manager, Fuji Katsuyama Production Department;
General Manager, Procurement Department
June 2005 Director; Executive Manager, Production Division
Oct. 2012 Director; Executive Manager, Production Division; Executive
Manager, Fuji Katsuyama Plant
June 2014 Vice President, Director; Executive Manager, Production
Division; Executive Manager, Fuji Katsuyama Plant
June 2020 Vice President, Director
Sept. 2021 Vice President, Director; Executive Manager, Quality/
Procurement Division
June 2022 Executive Vice President, Representative Director; Executive
Manager, Production Division (to present)

7

Director, External and Independent

Kazumi Nishino

Apr. 1992 Joined Fuji Photo Film Co., Ltd.
Apr. 2006 Associate Professor, Department of Management of Scienceand Technology, Graduate School of Management of Scienceand Technology of Tokyo University of Science
Apr. 2017 Associate Professor, Graduate School of Commerce andManagement, Hitotsubashi University
June 2019 Outside Director, Orient Corporation (to present)
Outside Independent Director of FURUKAWA CO., LTD.
(to present)
Dec. 2019 External Board Director of MiRTeL Co., Ltd.
Apr. 2022 Professor of Business Administration, Graduate School ofBusiness Administration, Hitotsubashi University (to present)
June 2022 Director of the Company (to present)
Significant concurrent positions
Professor of Business Administration, Graduate School of Business
Administration, Hitotsubashi University
Outside Director, Orient Corporation
Outside Independent Director, FURUKAWA CO., LTD.

8

Director, External and Independent

Kazuo Takahashi

2007 Executive Officer, Daiwa Securities SMBC Co. Ltd.
2010 Executive Officer, Daiwa Securities Capital Markets Co. Ltd.
2010 Executive Managing Director, Daiwa Securities Capital Markets Co. Ltd.
2012 Executive Managing Director, Member of the Board, Daiwa Securities Co. Ltd.
2013 Senior Executive Managing Director, Member of the Board, Daiwa Securities Co. Ltd.
2015 Senior Executive Managing Director, Member of the Board, Head ofCorporate Institution of Daiwa Securities Co. Ltd.
Apr. 2017 Deputy President, Daiwa Securities Group Inc.
Deputy President, member of the Board, Daiwa Securities Co. Ltd.
June 2017 Director, Deputy President, Daiwa Securities Group Inc.
Deputy President, member of the Board, Daiwa Securities Co. Ltd.
June 2020 Deputy President, Daiwa Securities Group Inc.
Deputy President, Member of the Board, Daiwa Securities Co. Ltd.
Apr. 2022 Adviser, Daiwa Securities Co. Ltd.
June 2023 Director of the Company (to present)
Apr.
Jan.
Apr.
Apr.
Apr.
Apr.

Significant concurrent positions
Outside Director and Audit and Supervisory Committee Member,
Paramount Bed Holdings Co., Ltd.

Audit and Supervisory Board Members
6

Director, External and Independent

Kodo Yamazaki

June 2008 Managing Officer, TOYOTA MOTOR CORPORATION (Kinuura
Plant General Manger, Myochi Plant General Manager)
June 2010 Senior Managing Director, ADVICS CO., LTD.
June 2014 Executive Vice President, ADVICS CO., LTD.
June 2017 Advisor & Chief Engineer, ADVICS CO., LTD.
June 2018 Executive Advisor, ADVICS CO., LTD.
June 2019 External Director & Member of the Audit & Supervisory
Committee, YASUNAGA CORPORATION (to present)
June 2020 Director of the Company (to present)

Apr. 1989 Assistant Professor of Takayama Junior College
Apr. 1994 Professor of Takayama Junior College
Apr. 2001 Professor, Faculty of Law, Kumamoto University
June 2003 Managing Director, Japan Tax Jurisprudence Association
Apr. 2007 Dean, Faculty of Law, Kumamoto University
Apr. 2015 Trustee and Deputy President, Kumamoto University
Apr. 2020 Professor, Graduate School, Kumamoto Gakuen University(to present)
June 2020 Director of the Company (to present)

Significant concurrent positions
External Director & Member of the Audit & Supervisory Committee of
YASUNAGA CORPORATION

Significant concurrent positions
Professor of Graduate School, Kumamoto Gakuen University

9

Full-time Audit and Supervisory Board Member

Akio Koumura

Apr. 1975 Joined the Company
July 1999 Office Manager, UG/EYE Development Office
Dec. 2004 Office Manager, UG/EYE Development Office; General
Manager, DM System Development Department
June 2005 Director; Office Manager, UG/EYE Development Office;General Manager of DM System Development Department
Feb. 2006 Director; Executive Manager, Mold Software Division
June 2008 Director, Executive Manager of Sales Division
Aug. 2009 Director, Executive Manager of Sales Division; Domestic
Sales Controler
Feb. 2010 Director; Executive Manager of Sales Division; Executive
Manager, Mold Software Division
May 2010 Director; Executive Manager, Sales Division; Executive
Manager, Production Software Division
June 2011 President & Representative Director, Makino Technical
Service Co., Ltd.
June 2020 Advisor to Makino Technical Service Co., Ltd.
June 2021 Full-time Audit and Supervisory Board Member of theCompany (to present)

10

Full-time Audit and Supervisory Board Member,
External and Independent

Jinei Yamaguchi

Apr. 1984 Joined Mitsubishi Bank, Ltd. (currently MUFG Bank, Ltd.)
Apr. 2006 Deputy Branch Manager, Singapore Branch, Mitsubishi Bank,
Ltd.
July 2009 General Manager, International Business Department,
Mitsubishi Bank, Ltd.
July 2011 Branch Manager of London Branch, Mitsubishi Bank, Ltd.
July 2013 Seconded to Chiyoda Corporation
Acting General Manager, Planning Administration Division
Apr. 2014 Transferred to Chiyoda Corporation
Executive and Acting General Manager, Planning
Administration Division, Chiyoda Corporation
Apr. 2015 Executive Officer and Acting General Manager, ProjectProcurement & Logistics Division, Chiyoda Corporation
Apr. 2018 Executive Officer and Acting General Manager of Corporate
Planning Division, Chiyoda Corporation
July 2019 Executive Officer and Assistant General Manager, Finance &Accounting Division, Chiyoda Corporation
June 2020 Full-time Audit and Supervisory Board member of theCompany (to present)

11

Audit and Supervisory Board Member,
External and Independent

Jiro Nakashima

Aug. 1983 Registered as a Certified Public Accountant
Opened Nakashima Jiro Certified Public Accountant Office(to present)
Nov. 1984 Member of Serisawa Accountant Office (currently GYOSEI &CO.)July 2005 Representative member of Serisawa Accountant Office(currently GYOSEI & CO.)
June 2011 Retired from GYOSEI & CO.
June 2012 Audit and Supervisory Board member of the Company(to present)
Significant concurrent positions
Nakashima Jiro Certified Public Accountant Office

MAKINO Report 2023

32

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





Message from external directors

Naofumi Masuda

Director, External and Independent

Management seen committing to goals basedon shared values
With the addition of new Board members, including a director in charge oftechnological development and an external director specializing in businessadministration, I feel the Board of Directors has become more diverse.
While it has always maintained an environment in which opinions can be
freely and openly exchanged, we now have a structure adapted to current
conditions that invigorates discussion of issues and measures related to the coreof Makino’s business, from development and production, to sales, while
responding to major changes in global markets. I expect management to respect
the autonomy of its overseas operations, while committing to goals based on theshared value of remaining close to customers and resolving the issues they face.
I appreciate the comprehensive and multifaceted approach Makino takeswith regard to sustainability-related measures. In particular, as Makino has along history of overseas expansion, my impression is that the Company has adiverse global pool of talent.
In the future, when developing global business, having human resources
with diverse perspectives will become a major strength for the Company. With
regard to environmental issues, I expect Makino’s efforts to be recognized bothfor Company contributions to the environment, including the installation of solar
panels among other efforts, as well as for customer contributions to theenvironment realized through their use of Makino products.

Kodo Yamazaki

Kazumi Nishino

Director, External and Independent

Kazuo Takahashi

Director, External and Independent

Boosting corporate value by targeting social issues

Human resource development based on feedback

Developing products resilient to market changes

In fiscal 2022, we overcame parts procurement difficulties as the economy
recovered, following the sharp decline in orders during the pandemic. As aresult, Makino achieved record-high sales.
The Company’s Quality First corporate philosophy and its approach tosolving customer problems have enabled it to formulate and execute capital
investment plans, including the construction of futuristic plants.
In addition to regular agenda items, the Board of Directors discusses reports
related to the business plans of all the Company’s divisions: business divisions
and subsidiaries.
We proactively engage in deliberations incorporating diverse opinions basedon the expertise of each director. Further, site inspections are conducted atplants, sales offices, and service centers to facilitate a better understanding ofworkplaces before decisions are made.
In order to contribute to the realization of a sustainable society, I expect
Makino to take proactive steps to reduce its environmental impact in response to
global environment-related issues. The Company should develop products withlow power consumption, introduce and update energy-efficient factory equipment,
work to green factories and surrounding areas, and install solar panels.

The Board of Directors meetings are characterized by a lively exchange ofquestions and opinions among both directors and Audit and Supervisory Board
members. I feel that diversity and expertise in governance are evident in thequestions posed, opinions given, and discussions held in accordance with eachmembers’ area of responsibility and background.
Although the Board often reviews and decides on proposals of a highly
specialized nature, the divisions in charge provide reference materials as
needed, which facilitates a common understanding of issues and enables
external directors to make proposals based on their professional perspectives.
I find that this level of consideration and the proactive approach provide asense of the Company’s transparent governance and fair, decisive decisionmaking process.
In addition to my role on the Board, I have visited various business sites inJapan in my capacity as an external director in an efforts to reflect frontline
feedback in management.
As someone who specializes in business administration, communicatingwith employees who engage in work with an awareness of the issues was
valuable for my future activities. At present, when efforts to manage humancapital are being called into question, it is essential that Makino enhance its
systems to maintain high levels of employee motivation and skill. These aremeasures I would like to continue discussing in the future.

Having spent many years working in securities companies, I provide
recommendations and advice based on my professional expertise with regard tomeasures for realizing management conscious of capital costs and stock prices,
as is required of listed companies by the Tokyo Stock Exchange.
Specifically, I proactively propose measures, from an IR perspective, toimprove the price-to-book ratio to above 1x.
Since its founding in 1937, Makino has created many advanced products
and technologies as a machine tool manufacturer. The Company’s pioneering
spirit and Quality First philosophy are evident in reports to the Board of Directors,
as well as in the exchange of opinions and deliberations, which I believe areimportant and should be maintained.
Even bigger changes are expected in future in the internal and external
environments. Thus, it is especially important for Makino to differentiate itself
from competitors in Asia, which is the Company’s most important market.
I expect Makino to proceed with investments in the market with a sense of
speed while bearing in mind the risks, and to develop and manufacture new
products as quickly as possible that live up to its pioneering spirit.
At the same time, I believe Makino must promptly address human resource
developement, and promote the active participation of a new generation of
women, selecting executive candidates and promoting mid-career recruitment.

Compliance

Risk management

Makino has established and implemented the following systems as measures to ensurecompliance.

The Company’s policy is not only to manage the risk of loss but also toprevent deviation from laws and regulations and the Articles ofIncorporation and thus ensure efficient business execution. This isaccomplished by establishing a risk management framework, which is thebasis of the structure to ensure the appropriateness of operations. As partof the risk management framework, the Company has positioned thepresident as the officer in charge of risk management and established the
Risk Management Committee to serve as an advisory body to thepresident. In principle, the Risk Management Committee meets twice ayear to report on risks and the status of initiatives. In the event that a risk
with a high degree of damage materializes, meetings are held as needed
to report and deliberate on the status of the response, and matters thatare particularly material are reported to the Board of Directors fornecessary deliberation.

• Code of Conduct: We have established the “Makino Milling Machine Employee Code of Conduct,” whichsummarizes the behavior to be observed by our officers and employees and have notified all employees of thecode.
• Compliance Committee: The Compliance Committee is chaired by the executive manager of the Corporate
Service Division and reports and deliberates on measures and activities necessary to promote compliance,
including the status of compliance, details of new and revised laws and regulations and response to them, as
well as reportable items and material compliance breaches.
	In addition, the committee’s activities are reported to the Board of Directors on a regular basis and on an
ad hoc basis for major issues.
• Whistleblowing system: The Company has established a whistleblowing system, with internal and external
contact points, and has formulated “Rules for Public Interest Reporting System Operation,” which stipulate
protective measures for whistleblowers. Reporting and suggestion boxes were installed in 2022 at eachbusiness location to facilitate whistleblowing.
• Relationship with suppliers: We have established and distributed a code of conduct for suppliers that we expect
our suppliers to comply with in terms of human rights, health and safety, labor environment, environment, fairtrade, and related issues. We have also established “Guidelines for Green Procurement” for the use of chemical
substances, and promote the procurement of materials, etc. with low environmental impact.

33

Director, External and Independent

Trade security
Machine tools are essential equipment for the production of
nuclear weapons and arms, and are subject to export
controls if they deliver a certain level of performance.
Because many of our products meet high precision
requirements, many of them are subject to export
regulations.
We have established regulations for security aspects ofexport control to ensure full compliance with export control
regulations. A special department reports directly to thepresident. It is headed by a director and independent of thesales division. It examines export cases, provides training,
conducts internal audits, and ensures rigorous compliancewith all regulations.

Risk management framework
Director in charge of risk management (president)

Risk Management Committee

Risk Management
Promotion Office

Departments

MAKINO Report 2023

34Financial Highlights
Consolidated net sales

Consolidated operating income (loss)/
Operating margin ratio(Billions of yen)
250

(Billions of yen)
25

227.9
200

16

186.5

17.4
10.1

10

116.7

100

12

15

159.4

150

20.6

20

204.7

50

18

19

20

21

22

(FY)

18

-3.1

19

Operating income (loss)

20

Dividend/total payout ratio(Billions of yen)
10

(Yen)
150

8.2

27

0.6

4.7

0

0.4

0.4
-0.5

0.5

0.2

-1.7

-3

18
ROE

(%)
240

230

19

20

0

21

22

(FY)

(Yen)
10,000

600

400

23

20

200

19

20

21

22

54.6

56.6

21

22

Shareholder’s equity ratio

(Yen)
800

30

18

Ratio of ordinary income to total assets

671.9
8,261

7,433
6,172

6,550

(%)
60

59.4

58.3
57.6

8,000

6,663
6,000

80
20

0.6

0.6

1.6

40

499.2
4,000
20

60
30

2

5.9

0.8
0.7

6

689.3

60

0.8

Net income per share/Net assets per share

90

4

8.6
7.1

105

6.3

6

9

(FY)

235

120

7.7

22

150

9.1

8.4

8

10.9

Operating margin ratio (Right axis)

Consolidated capital expenditures

9.4

(%)
1.0

3

-4

21

(%)
12

4
0

-3.6

-5

Consolidated total asset turnover

8

6.1

3.5
2.2

0

0

11.3
7.7

5

(FY)

(%)
20

ROE/Ratio of ordinary income to total assets(consolidated)

10

34.0

0

2,000

20
0

0

18

(FY)

19

20

21

22

0

(FY)

18

19

Dividend per share (left axis)

20

21

22

-110.8

-200

18

(FY)

Consolidated/total payout ratio (right axis)

19

0

20

22

21

0
(FY)

18

19

20

Net assets per share (right axis)

Net income per share (left axis)

Non-financial Highlights
Employees/
ratio of overseas employees (consolidated)

Average employee age/years worked (non-consolidated)
(%)
60

6,000

53

5,000

52
4,757

4,805

50

52

53

4,692
4,451 4,524

(Age)
60

45

4,000

40

3,000

30

2,000

20

(Years)
20

16.7

50

41.7

17.0
42.2

17.1
41.6

17.6
42.3

Energy consumption in Atsugi andFuji Katsuyama Plant (basic unit)

Patent-related achievements

17.7
42.8

30

(kl/millions of yen)*
0.3

600
500

15
400
10

449

438

536

490

519
0.2

0.16

300

0.17

0.12
200
15
10

1,000
0
(FY)

5

0

18

Employees (left axis)

19

20

21

22

Ratio of overseas employees (right axis)

100
0

0

(FY)

18

19

Average employee age (left axis)

20

21

22

Average years worked (right axis)

0
(FY)

166

141
34

28
18

Patent applications

135
11

14
19
Patents held

94

20

21

0.10

64
12

0

22

(FY)

18

19

20

21

22

Patents pending

Note:
The number of patent applications is the number of filed during the fiscal year; the number of patents held
and the number of patents pending are figures as of the end of the fiscal year.

35

0.12

0.1

* The figures are calculated by converting the amount of energy consumed (electricity, kerosene, and gas)
into crude oil volume (kl) and dividing the figure by the production value.
Basic unit (kl/millions of yen) = crude oil equivalent of energy consumption (kl) / production value(millions of yen).

MAKINO Report 2023

36 (As of March 31, 2023)

Consolidated balance sheet (at March 31)(Unit: millions of yen)2022

(Unit: millions of yen)

2023

Assets2022

2023

Liabilities and net assets

90,698Net sales

Notes and accounts payable

25,31320,068

Cost of sales

50,634

Electronically recorded obligations—operating

18,30419,019Gross profit

3,542

4,234

Current portion of long-term debt

4,650

6,707

Selling, general and administrative expenses

22,33528,276591

932

Income taxes payable

2,544

2,080

Other current liabilities

38,492

41,890Non-current liabilities

56,90559,975

Rental income

Bonds payable

20,00020,000Subsidy incomeLong-term borrowings

23,80026,228Foreign exchange gains
Other revenue

229,713

Cash and time deposits

73,10068,312

Notes and accounts receivable – trade, and contract assets

48,432Marketable securities
Merchandise and finished goods

Current liabilities:

Lease liabilities

Work in process

20,342

21,140Raw materials and supplies

35,83145,699Other current assets

9,999

12,961

Allowance for doubtful accounts(1,326)(1,544)

113,322

118,747

Long-term lease obligations

2,510

3,210

75,315

79,215

Defined benefit liabilities

6,127

6,973

Non-current assets
Property, plant and equipment
Buildings and structures

32,69737,565

Allowance for directors’ and corporate auditors’ retirement benefits

129

122

Machinery, equipment, and vehicles

8,947

9,570

Retirement benefit liability

2,304

1,357

Tools, furniture, and fixtures

4,738

5,034

Other non-current liabilities

2,033

2,083

Land

18,94019,080146,801

150,674

Total liabilities

4,289

6,012

Construction in progress

5,701

1,950

3,611

2,952

3,611

2,952

34,39536,58025,827

27,100

704

620

3,378

4,867

729

970

Other investments

3,939

3,163

Non-controlling interests

Allowance for doubtful accounts

(183)

(141)

325,579

348,461

OthersInvestments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Retirement benefit asset

Total assets

Consolidated statements of cash flows (for the years ended March 31)(Unit: millions of yen)2022

14,943

2,948

Cash flow from investing activities(9,517)(8,793)

Cash flow from financing activities(8,172)(340)

Effect of exchange rate changes on cash and cash
equivalents

3,813

(59)

Net increase (decrease) in cash and cash equivalents

1,067(6,245)

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

74,64475,71275,712

69,467

Non-operating income
Interest income
Dividend income

Non-operating expenses
Interest expense
Interest expenses on bonds
Foreign exchange losses
Other expenses
Ordinary profit
Extraordinary income

Shareholders’ equity
Share capital

155,716

168,681

21,142

21,142Gain on sales of property, plant, and equipment
Gain on sales of investment securities
Subsidies for employment adjustment

Capital surplus

37,07437,056

Retained earnings

101,513

114,714

Treasury stock(4,014)(4,233)

22,17428,606

Accumulated other comprehensive income

Extraordinary losses
Loss on disposal of property, plant, and equipment
Loss on sales of investment securities
Loss on valuation of shares of subsidiaries and associates
Income before income taxes

Unrealized gains on available-for-sale securities

14,174

15,160Foreign currency translation adjustments

8,369

12,880Remeasurements of defined benefit plans

(369)

565

886

499

Total net assets

178,778

197,787

Net income attributable to non-controlling interests

Total liabilities and net assets

325,579

348,461

Net income attributable to owners of the parent

Income taxes
Income taxes – current
Income taxes – deferred
Net income

Shareholders’ equity

2023

186,591
135,973
50,61739,317
11,300
3,247
303
461
234
605
1,051
591
273
174
96
—
2
14,274
80
54
20
6
50
49
1
—
14,304
2,179
3,408(1,229)12,12481
12,042

227,985
161,596
66,38848,895
17,492
3,130
595
542
216
661
—
1,114
716
220
96
335
63
19,906
66
66
—
—
522
499
—
22
19,450
3,360
4,283
(922)
16,08916
16,073

Balance at beginning of period
Restated balance
Changes during period

Makino Milling Machine Co., Ltd.

Head Office
Established3-19, Nakane 2-chome, Meguro-ku, Tokyo
152-8578, Japan
Phone: +81-3-3717-1151
May 1937

Paid-in capital¥21,142 million

Number of employees 4,692 (consolidated basis)
Major businesses

Directors and Audit andSupervisory Board
Members(As of June 22, 2023)

Manufacture, sale, and maintenance of machine
tools, including machining centers, NC EDMs, NC
milling machines, milling machines, FMSs, CAD/
CAM and other products
President and Representative Director Shotaro Miyazaki
Executive Vice President andRepresentative Director
Executive Vice President andRepresentative Director
Director

Toshiyuki Nagano
Tatsuaki Aiba
Haruyuki Shiraishi

Director, External and Independent

Naofumi Masuda

Director, External and Independent

Kodo Yamazaki

Director, External and Independent

Kazumi Nishino

Director, External and Independent

Kazuo Takahashi

Full-time Audit and Supervisory Board
MemberAkio Koumura
External and Full-time Audit andSupervisory Board Member
Jinei Yamaguchi
External and Audit and Supervisory
Board Member
Jiro Nakashima

Shareholder returns
Total number ofshares issued
24,893,841(including treasury stock of
1,012,276 shares)

Composition of shareholders
Securities companies
5.46%

Individuals and others
23.08%

Foreigncorporations
and others
35.22%

Number of shareholders
6,728

Accumulated other comprehensive income
NonForeign
Remeasure- Accumulated
controllingments ofcurrency
otherdefinedtranslation
comprehen- interests
adjustment benefit plans sive income

Total net
assetsFinancial institutions
27.67%

Other corporations
8.57%

37,074 101,513(4,014) 155,716

14,174

8,369

(369)

22,174

21,142

37,074 101,513(4,014) 155,716

14,174

8,369

(369)

22,174886 178,778

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

3,246

13.59

985

4,511

935

6,432

(387)

Custody Bank of Japan, Ltd. (Trust account)

1,533

6.42

Machine Tool Engineering Foundation

893

3.74

Nomura Securities Co., Ltd.

818

3.43

OASIS JAPAN STRATEGIC FUND LTD.

750

3.14

GOLDMAN,SACHS&CO.REG

741

3.10

DEUTSCHE BANK AG FRANKFURT CC CLTOMNI 5000000

646

2.71

SSBTC CLIENT OMNIBUS ACCOUNT

547

2.29

CACEIS BANK S.A., GERMANY BRANCH-CUSTOMERACCOUNT

521

2.18

The Nomura Trust and Banking Co., Ltd.

500

2.09

(17)

13,200

Treasurystock

Valuationdifference
Totalonshareholders’availableequity
for-salesecurities

21,142

Change in ownership interest ofparent due to transactions with
non-controlling interests

(219)

(18)

Purchase of treasury shares

1

37,056 114,714(2,872)

16,073

16,073

(265)

(265)

(265)

46

47

47

Net changes in items other thanshareholders' equity

21,142

19,009(18)(2,872)

16,073

Disposal of treasury shares

12,964(4,233) 168,681

Major shareholders (Top 10)
Name

886 178,778(18)(2,872)

Profit (loss) attributable to owners of parent

Balance at end of period

Company Name

Capitalsurplus—Retainedearnings(Unit: millions of yen)

Corporate data

SharecapitalDividends of surplus

37

2022

Consolidated statements of changes in net assets (For the year ended March 31, 2023)

2023

Cash flow from operating activities

Operating income

Net assets:

Lease assets

Intangible assets

Consolidated statements of income (For the years ended March 31)
Makino Milling Machine Co., Ltd. and Consolidated Subsidiaries
For the years ended March 31, 2022 and 2023
(Unit: millions of yen)

89,895212,257

Current assets:  (As of March 31, 2023)

985

4,511

935

6,432

(387)

6,044

15,16012,880565

28,606499 197,787

Ownership
Number of shares
percentage of total
owned (Thousands)
shares issued (%)

Note: The ownership percentage of total shares issued has been calculated after the
deduction of treasury stock. (Rounded down less than 1,000 shares)

MAKINO Report 2023

38

For inquiries, contact

Corporate Planning Office, Corporate Service Division
3-19, Nakane 2-chome, Meguro-ku, Tokyo 152-8578, Japan
Phone: +81-3-3717-1151

www.makino.co.jp