(Summary English Translation of the Materials disclosed via the Internet pursuant to Laws, Regulations, and the Articles
of Incorporaion regarding the Notice of the 107th Ordinary General Meeting of Shareholders Originally Issued inJapanese Language)

June 4, 2019

MATERIALS DISCLOSED VIA THE INTERNET PURSUANT TO LAWS, REGULATIONS,AND THE ARTICLES OF INCORPORATION REGARDING THE NOTICE OF THE 107TH
ORDINARY GENERAL MEETING OF SHAREHOLDERS

Notes to Consolidated Financial Statements
Notes to Non-consolidated Financial Statements

MAKITA CORPORATION

Pursuant to applicable laws and regulations and Article 15 of the Articles of Incorporation of the Corporation, thesecontents are deemed to be provided to shareholders by posting them on our website (http://www.makita.biz/ir/).

Notes to Consolidated Financial Statements
Notes to Important Basic Matters for Preparation of Consolidated Financial Statements
1. Basis of presentation
The consolidated financial statements are prepared in accordance with International Financial Reporting Standards(“IFRS”) pursuant to the provision of Article 120, paragraph 1 of the Ordinance on Accounting of Companies.
Provided that certain statements and notes required by IFRS are omitted in accordance with the second sentence of
said Article.
2. Scope of consolidation
Number of consolidated subsidiaries: 52
Major subsidiaries are as follows:
Makita U.S.A. Inc., Makita (U.K.) Ltd., Makita Werkzeug G.m.b.H. (Germany), Makita France SAS,
Makita Oy (Finland), Makita LLC (Russia), Makita (China) Co., Ltd., Makita (Kunshan) Co., Ltd., Makita(Australia) Pty. Ltd., Makita do Brasil Ferramentas Elétricas Ltda., etc.
3. Valuation of Financial Instruments(1) Non-derivative financial assets(i) Initial recognition and measurement
At initial recognition, Makita classifies financial assets as financial assets measured at amortized cost, financial
assets measured at fair value through other comprehensive income, or financial assets measured at fair value
through profit or loss. We initially recognize trade receivables and other receivables on the effective date, and otherfinancial assets on the transaction date in which we become a party to the contract of the financial instrument.
All of the financial assets, except financial assets measured at fair value through profit or loss, are initiallymeasured at the amount of fair value added to the transaction cost directly attributable to the financial asset.
However, trade receivables without a significant financial component are initially measured at the transaction
price.
(a) Financial assets measured at amortized cost
We classify financial assets that both of the following conditions are met as financial assets measured atamortized cost:
・ The financial asset is held within a business model whose objective is to hold financial assets in order tocollect contractual cash flows, and・ The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
(b) Financial assets measured at fair value through other comprehensive income
An entity may, at initial recognition, make an irrevocable election to present in other comprehensive income
subsequent changes in the fair value of a particular investment in an equity instrument not held for trading thatwould otherwise be measured at fair value and not classified as financial assets measured at amortized cost.
Makita determines the designation for each financial instrument.
(c) Financial assets measured at fair value through profit or loss
Financial assets, other than financial assets measured at amortized cost or at fair value through othercomprehensive income, are classified as financial assets measured at fair value through profit or loss.
(ii) Subsequent measurement(a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are, after initial recognition, measured at amortized cost based on
the effective interest method. Interest revenue calculated by using the effective interest method is recognized in
profit or loss.
(b) Financial assets measured at fair value through other comprehensive income
Equity instruments measured at fair value through other comprehensive income are, after initial recognition,measured at fair value, and its subsequent changes are recognized in other comprehensive income. The
cumulative amount that is recognized in other comprehensive income is transferred to retained earnings, when
the amount is derecognized or when the fair value decreases significantly. In addition, dividends from equity
instruments measured at fair value through other comprehensive income are recognized in profit or loss.
(c) Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through profit or loss are, after initial recognition, measured at fairvalue. Gain or loss of valuation arising from changes in fair value, dividends, and interest revenue are-1-

recognized in profit or loss.
(iii) Derecognition
Financial assets are derecognized, when the contractual rights to the cash flows from the financial asset expire, or
when the contractual rights to receive the cash flows of the financial asset along with almost all of the risks related
to the contract and its economic value transferred.
(2) Impairment of financial assets
Makita recognizes allowance for doubtful receivables for expected credit losses related to financial assets measured
at amortized cost. Expected credit losses are measured based on discounted present value of the difference between
contractual cash flows to be received based on the contract and cash flows to be expected to be received.
If the credit risks related to the financial asset increase significantly after initial recognition, lifetime expected credit
losses are recognized in allowance for doubtful receivables. If the risk does not increase significantly after initialrecognition, 12-month expected credit losses are recognized in allowance for doubtful receivables. In addition, tradereceivables without a significant financial component are classified in accordance with the credit risk of the otherparty based on the past due information or the internal credit rating, and their allowance for doubtful receivables arenecessarily measured at an amount equal to lifetime expected credit losses, with the ratio of past credit losses
calculated by the classification multiplied the provision ratio in consideration of expected future economic
conditions.
We assess whether credit risks related to financial assets increase significantly after initial recognition or not bycomparing the risk of default at initial recognition and the risk of default at each reporting date, taking into
consideration the reasonable information with evidence as well as the past due information. If entire or part of afinancial asset is judged to be impossible or incredibly difficult to be collected, it is considered to be in default andtreated as credit-impaired financial assets.
We directly reduce the gross carrying amount of a financial asset when there is no reasonable expectations ofrecovering the financial asset in its entirety or a portion thereof.
Allowance for doubtful receivables and reversal of allowance for doubtful receivables of financial assets arerecognized in profit or loss.
(3) Non-derivative financial liabilities(i) Initial recognition and measurement
At initial recognition, Makita classifies financial liabilities as financial liabilities measured at amortized cost or
liabilities measured at fair value through profit or loss. A financial liability is initially recognized on the transaction
date in which we become a party to the contract of the financial liability.
All of the financial liabilities are measured at fair value at initial recognition. However, financial liabilities
measured at amortized cost are measured at the amount after deduction of the transaction cost directly attributable
to the financial liabilities from the fair value.
(ii) Subsequent measurement(a) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost are, after initial recognition, measured at amortized cost basedon the effective interest method.
(b) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss are, after initial recognition, measured at fairvalue. Gain or loss of valuation arising from changes in fair value are recognized in profit or loss.
(iii) Derecognition
A financial liability is derecognized, when it is extinguished, namely, when the obligation specified in the contract
is discharged, chancelled or expired.
(4) Derivatives
Makita uses derivatives including forward exchange contracts and currency swap transactions in order to hedge theforeign currency risk. Derivatives are initially recognized at fair value and remeasured at fair value after initialrecongnition. Changes in fair value of derivatives are recognized in profit or loss.
4. Valuation of Inventories
Inventories are measured at the lower of the acquisition cost and the net realizable value. Acquisition costs include allcosts of purchases, conversion and other costs incurred in bringing the inventories to their present location andcondition. Acquisition costs are calculated by using the weighted average cost formula. Costs of conversion include-2-

production overheads based on the normal capacity of production. Net realizable value is the estimated selling price inthe ordinary course of business less the estimated cost of completion and the estimated cost necessary to make the sale.
5. Depreciation Method of Significant Depreciable Assets(1) Property, plant and equipment
Property, plant and equipment other than land and construction in progress are depreciated by using the straight-line
method, for its depreciable amount that is its acquisition cost less the residual value, over its estimated useful life
beginning from the point when the assets are available for use. The estimated useful lives of the major assets are as
follows.
Buildings and improvements:
3 to 60 years
Machinery and equipment:
3 to 15 years
Depreciation method, residual value and estimated useful lives are reviewed every year and revised if necessary.
(2) Intangible assets
Intangible assets with definite useful lives are amortized by using the straight-line method over each estimateduseful life. The estimated useful lives of the major intagible assets are as follows.
Development expenses:
5 years
Software:2 to 10 years
Industrial property rights:
4 to 14 years
Amortization method, residual value and estimated useful lives are reviewed every year and revised if necessary.
(3) Lease assets
Lease assets are depreciated by using the straight-line method over the fewer years of the estimated useful life andthe lease term.
6. Impariment of Non-financial Assets
We judge at the reporting date whether there are any indications that Makita’s non-financial assets except inventories
and deferred income taxes may be impaired.
If any of those indications is present, we conduct impairment tests to estimate recoverable amount of the assets.
Goodwill, intangible assets with no definite useful life, and intangible assets that are not yet available for use are notamortized, and the impairment tests are conducted every year and every time when indications of impairment arepresent.
Makita’s corporate assets do not generate independent cash inflow, therefore, if there is any indication that thecorporate assets may be impaired, the recoverable amount of cash-generating unit to which the corporate assets is
attributable is estimated.
A recoverable amount is the higher amount of the fair value less the cost of disposal and the value in use. In
culculating value in use, an estimate of the future cash flows is discounted to the present value by using the discountrate before tax that reflects the time value of money and the risk inherent in the asset.
If the carrying amount of each asset or cash-generating unit exceeds the recoverable amount, the impaiement loss isrecognized in profit or loss, and the carrying amount of the asset is reduced to a recoverable amount. Any impairment
loss recognized related to cash-generating units or groups of cash-generating units is allocated to reduce the carrying
amount of goodwill allocated to the unit, and then the carrying amount of other assets in the unit is reduced
proportionally.
Impairment losses of goodwill are not reversed. As for impairment losses of non-financial assets other than goodwill,
the recorvarable amount of the asset is estimated if there is no impairment losses or any indication of possibility thatthe impairment loss is reduced, and the impairment loss is reversed if the recoverable amount exceeds the carrying
amount after impairment. In addition, reversal of impairment losses are recognized in profit or loss, within the range
not exceeding the carrying amount when there was no impairment loss recognized in the asset in the past.
7. Provisions
Provisions are recognized when Makita has a present legal obligation or constructive obligation as a result of a past
event, and when it is probable that an outflow of resources embodying economic benefits will be required to settle theobligation and a reliable estimate can be made of the amount of the obligation.
When the effect of the time value of money is material, the provision is measured at the present value of theexpenditures that are expected to be required to settle the obligation. Present value is culculated by using the discountrate before tax that reflects the time value of money and the risks inherent in the liability. Rebate of the discounted
amount arising from the passage of time is recognized as financial cost.
-3-

Warranty provisions are provided to prepare for the expense of after-sales service for the products based on the pastactual cost, taking into consideration the defective rate of current products, the malfunction of specific products never
manufactured before, the effects of the costs of materials and shipping related to repair of defective products.
Warranty provisions are provided as provisions and cost of sales, when the revenue is recognized.
8. Post-emplyment Benefits
Makita has adopted defined benefit pension plans and defined contribution plans for post-employment benefits.
(i) Defined benefit pension plans
The present value of the defined benefit obligations and the related current service cost and past service cost arecalculated by using the projected unit credit method.
A discount rate is calculated based on the market yields of high quality corporate bonds at the reporting datecorresponding to a discount period which is determined based on the period until the expected date of future
benefit payment in each fiscal year.
Assets and liabilities related to defined benefit pension plans are calculated by the amount of the present value of
defined benefit obligations less the fair value of the plan assets. The current service cost and net interest on the
net defined benefit liability are recognized in profit or loss. Past service costs are recognized as expense during
the period in which they occur.
Remeasurements of the net defined benefit liability or asset are entirely recognized in other comprehensive
income in the period in which they occur, and immediately transferred to retained earnings.
(ii) Defined contribution plans
The contribution payable to defined contribution plans is recognized as expense during the period in which
employees render the related service.
9. Translation(1) Foreign Currency Transactions
Foreign currency transactions are conducted by translating into a functional currency of each company of Makita at
the exchange rate as of the tansaction date.
Monetary assets and liabilities denominated in foreign currencies as of the reporting date are translated intofunctional currencies at the exchange rate as of the reporting date.
As for non-monetary assets and liabilities denominated in foreign currencies, those measured at the acquisition cost
are translated by using the exchange rate as of the transaction date, and those measured at fair value are translated byusing the exchange rate as of the date of calculation of the fair value. The exchange differences arising from thetranslation or the settlement are recognized in profit or loss. However, the differences arising from the translation ofequity instruments measured at fair value whose changes are recognized in other comprehensive income arerecognized in other comprehensive income.
(2) Foreign operations
Assets and liabilities of a foreign operation are translated into Japanese yen at the exchange rate as of the reporting
date, and its revenue and expenses are translted at the average exchange rate for the period except the case that theexchage rate changes significantly. The exchange differences as a result of this are recognized in othercomprehensive income. The exchange differences of a foreign operation are recognized in profit or loss during theperiod in which the foreign operation is disposed.
10. Revenue Recognition
Makita recognizes revenue by applying the following five steps.
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
Makita is engaged mainly in production and sales of electric power tools and gardening equipment, etc. Regardingthese product, we have determined that a performance obligation is satisfied when a product is transferred to acustomer as the customer has control of the product. Therefore, revenue of these products is recognized at the pointof transferring these products. In addition, the revenue is measured at the amount of the promised consideration in acontract with a customer less the amount of a reduction, rebate and returned products.

-4-11. Consumption tax is accounted for by allocation separately from related sales and purchase accounts.

Notes to Consolidated Statement of Financial Position
1.

2.

Allowance for doubtful receivables directly deducted from assets
Trade receivables and other receivables:
Accumulated depreciation of property, plant and equipment:
Accumulated depreciation includes accumulated impairment losses.

1,061

million yen

132,777

million yen

Notes to Consolidated Statement of Changes in Equity
1. Matter regarding shares issued
Kind of shares
Common stock

Beginning of the period
280,017,520 shares

Increase

Decrease--

End of the period
280,017,520 shares

2. Matter regarding dividend distribution(1) Amount of dividend distribution
Resolution

Type of shares

Total amount ofdividends

Record date(Millions of Yen)

Dividend
per share(Yen)

Effective dateOrdinary General Meeting of
Shareholders held on June 27, 2018

Common stock

13,84551

March 31, 2018

June 28, 2018

Board of Directors’ meeting held on
October 30, 2018

Common stock

2,715

10

September 30, 2018

November 28, 2018

(2) Dividends that becomes effective during the following period, whose record date falls during the period under review
Scheduled resolution
Ordinary General
Meeting of Shareholders
to be held on June 26,
2019Type of shares

Common stock

Dividend resource

Retained earnings

Total amount ofdividends(Millions of Yen)

Dividend
per share(Yen)

14,11652

Record date

Effective date

March 31, 2019

June 27, 2019

Notes to Financial Instruments
1. Matter regarding status of financial instruments
In the course of business activities, Makita is exposed to financial risks, such as foreign exchange rate risks, market
price fluctuation risks, interest rate risks, credit risks, and liquidity risks. We perform risk management activities toreduce such financial risks.
(1) Market risk(i) Foreign exchange rate risk management
Makita operates business activities globally and is exposed to risks related to foreign exchange rate fluctuation inpurchase and sales transactions denominated in foreign currencies. We hedge against the foreign exchange rate
fluctuation risk through derivative transactions such as settlement and forward exchange contract in a bank accountabroad to reduce the impact of the exchange rate fluctuation risk. Although we do not apply hedge accounting tothese derivative transactions, we have judged that the transactions effectively offset the impact of the exchange rate
fluctuation.
(ii) Stock price risk management
Makita holds listed stock and is exposed to market price fluctuation risks. To manage the risks, we periodicallymonitor the market prices and financial conditions of issuing entities and revise our stock holding statusappropriately.
(2) Interest rate risk
Makita’s liabilities with interest include borrowings and lease obligations, which are financed principally at fixedinterest rates. Accordingly, the matter of interest rate risks is immaterial for Makita.
(3) Credit risk
Makita is exposed to credit risks causing financial losses due to default by the other party of our financial assets.
In order to reduce the risks, we established a credit limit for each partner in accordance with the credit management
rules, and our sales management department manages a fixed date and balance of each partner, periodically-5-monitoring the conditions of the major partners to identify doubtful accounts due to worsening financial conditions
as soon as possible. In addition, we do not have over-concentration risks of a partner or of a group that the partner
belongs to.
The fund management of Makita is exposed to credit risks of depositees or issuers of receivables. We hold cash andcash equivalents and other financial assets of only high-ranked financial institutions in accordance with theguidelines for fund managemet. Therefore, we believe that credit risks are low.
(4) Liquidity risk
The liquidity risk is a risk that Makita may be unable to repay the obligation related to a financial liability to besettled by cash or other financial assets on the due date.
Although trade payables and other payables, borrowings, and other financial liablities are exposed to liquidity risks,
we manage the risks by maintaining borrowing limits of financial institutions as well as developing and renewing acash plan in a timely manner.
2.

Matter regarding such as fair value of financial instruments
The carrying amount and fair value of the fincancial instruments as of March 31, 2019 are as follows.
(Millions of Yen)
Carrying amountFinancial assets measured at amortized cost
Debt instruments

Fair value
2,311

2,307

(Notes) 1. The table above does not include financial instruments measured at fair value in the consolidated statement offinancial position and financial instruments whose carrying amounts are reasonable approximations to the fairvalue.
2. Debt instruments of financial assets measured at amortized cost are included in “Other financial assets” in the
consolidated statement of financial position.
3. Measurement of fair value(Cash and cash equivalents, trade receivables and other receivables, and trade payables and other payables)
Since they are settled in a short period, the carrying amounts are reasonable approximations to the fair value.
(Borrowings)
Since all of them are settled within one year, the carrying amounts are reasonable approximations to the fairvalue.
(Other financial assets and other financial liabilities)
Since time deposits due over three months of the other financial assets are settled in a short period, the carrying
amounts are reasonable approximations to the fair value. Listed stock is determined by exchange market prices
as financial assets measured at fair value through other comprehensive income. Debt securities are calculated at
an exchange market price or a price presented by a financial institution as financial assets measured at fair value
through profit or loss.
Derivatives are calculated as financial assets or financial liabilites measured at fair value through profit or loss,
based on such basic conditions observable at the market as exchage rate, interest rate, and volatility.

Notes to Revenue Recognition
The content and time of revenue recognition of the performance obligations based on the contract with a customer in
Makita’s major business is stated in “10. Revenue Recognition” of Notes to Important Basic Matters for Preparationof Consolidated Financial Statements.

-6-Notes to Information Per Share
Equity attributable to owners of the parent per share

2,109.83 yen

Profit attributable to owners of the parent per share(Basic)205.37 yen(Diluted)

205.34 yen

Notes to Significant Subsequent Events:
None.
*Amounts less than 1 million yen have been rounded.

-7-

Notes to Non-consolidated Financial Statements
Notes to Significant Accounting Policies
1. Valuation of securities
Held-to-maturity securities:
Stocks of subsidiaries:
Other securitiesThose having fair market value:

Amortized cost (straight-line method)At moving-average costThose having no fair market value:

Fair market value as of the end of the period(Valuation differences are presented as valuation and translation
adjustments in net assets.
The cost of securities sold is calculated based on the moving-averagemethod.)At moving-average cost

2. Valuation of net assets and liabilities accrued from derivative transactions:
Fair market value as of the end of the period
3. Valuation of inventories
Inventories are valued at the lower of cost based (the balance sheet amount is computed using the method ofdevaluing the book price to reflect declines in profitability).
Finished goods, merchandise, work in process, and raw materials:
At average cost
Supplies:
At latest purchase cost
4. Depreciation method of fixed assets
Tangible fixed assets:(Excluding lease assets)

Straight-line method
Useful life:
Buildings:
Machinery and equipment:

38 to 50 years
5 to 10 years

Intangible fixed assets:(Excluding lease assets)

Straight-line method
Software for internal use is depreciated on the straight-line method over its
estimated useful life (5 years).
Industrial property rights are depreciated on the straight-line method over 4 to
14 year period.

Lease assets:

Lease assets relating to finance lease transactions, excluding those whose
ownership is transferred to the lessee upon lease expiration, are depreciated by
the straight-line method over the lease term with no residual value, the leaseterm being regarded as the useful life.

-8-5. Allowances
Allowance for doubtful accounts:

The allowance for doubtful accounts is reserved based on the historical
write-off ratio for accounts receivable. For accounts receivable that are
difficult to collect, individually estimated write-off amounts arereserved.
Allowance for directors’ bonuses:
In preparation for the anticipated payment of directors’ bonuses, weappropriate the amount estimated to pay for the period.
Allowance for product warranties:
In preparation for the payment of product after-service and free
post-sale repair services, we appropriate the projected amount based on
actual payment in the past.
Retirement and termination
To be prepared for employee retirement, retirement and termination
allowance:
allowance and prepaid pension cost are reserved based on projected
benefit obligations and plan assets at the balance sheet date. In
calculating the projected benefit obligations, the Corporation adopted
the benefit formula basis as the method for attributing the expected
benefit to the period up to the end of the period. Past service costs areamortized by the straight-line method over the average remaining
employment period. Actuarial differences are amortized starting
immediately after the year of accruement by the straight-line method
over the average remaining employment period.
Retirement allowance for Directors and Audit & Supervisory Board Members:
The Corporation terminated the retirement allowance plan for Directors
and Audit & Supervisory Board Members as of the conclusion of theordinary general meeting of shareholders held on June 29, 2006. Thebalance of the period end is the amount of the reserve for the period of
office served until abolition of the plan by those current directors(excluding outside directors) who served until June 29, 2006.

6. Income and Expense
The Corporation has adopted “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on
March 30, 2018) and “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance
No. 30 issued on March 30, 2018), and recognizes revenue when promised goods or services are transferred tocustomers, in an amount that reflects the consideration to which the Corporation expects to be entitled in exchange
for those goods or services.
7. Consumption tax is accounted for by allocation separately from related sales and purchase accounts.

-9-Notes to Changes in Accounting Policies
Application of Accounting Standard for Revenue Recognition“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on March 30, 2018) and“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on
March 30, 2018) may be applied to the beginning of a fiscal year commencing on and after April 1, 2018.
Thereafter, the Corporation has adopted the standard and guidance from the beginning of this fiscal year torecognize revenue when promised goods or services are transferred to customers, in an amount that reflects theconsideration to which the Corporation expects to be entitled in exchange for those goods or services. In
accordance with the provisional treatment as stipulated in the supplementary provision of Paragraph 84 of the
Accounting Standard for Revenue Recognition, we have applied the new accounting policy from the beginning of
this fiscal year. The effect of this change to the non-consolidated financial statements is minor.

Notes to Changes in Presentations
Partial Amendments to Accounting Standard for Tax Effect Accounting
From the beginning of this fiscal year, the Corporation has applied “Order of Partial Revision of the Ordinance on
Accounting of Companies and the Regulation for Enforcement of the Companies Act” (Ministry of Justice OrderNo. 5 issued on March 26, 2018) which follows “Partial Amendments to Accounting Standard for Tax EffectAccounting” (ASBJ Statement No. 28 issued on February 16, 2018). Accordingly, deferred income tax assets ispresented under Investment and other assets and deferred income tax liabilities is presented under Long term
liabilities.

- 10 -

Notes to Balance Sheet
1. Accumulated depreciation on tangible fixed assets:
Buildings

28,734

million yen

Structures

2,454

million yen

Machinery and equipment

12,609million yen

244

million yen

Tools, furniture and fixtures

27,004

million yen

Total

71,045

million yen

5,550

million yen

Short-term receivables

47,797

million yen

Short-term payables

34,511

million yen

Sales

212,294

million yen

Purchases, etc.
Amount of non-operating transactions

196,965

million yen

45,187

million yen

Vehicles and transportation equipment

2. Guarantee:
Guarantee for borrowing from financial institution
Maximum amount of guarantee for Makita U.S.A. Inc.
(50 million U.S. dollars)
3. Receivables and payables for affiliates:

Notes to Statement of Income
Transactions with affiliates
Amount of operating transactions

Notes to Statement of Changes in Net Assets
1. Matter regarding treasury stock
Beginning of theKind of sharesperiodCommon stock
8,549,592 shares(Reasons for the change)

Increase

Decrease

891 shares

20 shares

End of the period
8,550,463 shares

The reason for the increase is as follows:
Purchase of shares constituting less than a full unit:

891

shares20

shares

The reason for the decrease is as follows:
Sales of shares constituting less than a full unit:

2. Matter regarding stock acquisition rights
Type and number of shares to be issued or transferred upon the exercise of Stock Acquisition Rights(excluding Stock Acquisition Rights that are not exercisable) at the end of the period
Common stock
38,360 shares- 11 -

Notes to Tax Effect Accounting
1. The main reasons for deferred income tax assets and liabilities are as follows:
Deferred income tax assets
Accrued expenses
1,605
Inventories
577
Accrued enterprise taxes
352
Loss on valuation of investment securities
2,228
Excess in depreciation
3,079
Retirement allowance for directors and audit &98
supervisory board members
Loss on impairment of fixed assets
84
Other
136
Subtotal
Valuation allowance

million yen
million yen
million yen
million yen
million yen
million yen
million yen
million yen

8,159 million yen(381) million yen

Total

7,778

million yen(2,875)(2,956)
(622)
(250)

million yen
million yen
million yen
million yen

Deferred income tax liabilities
Prepaid pension cost

Net unrealized gains on securities
Reserve for advanced depreciation of fixed assets
Other
Total

(6,703) million yen

Net amount of deferred income tax assets

1,075 million yen

2. Major items causing the significant difference between the statutory income tax rates applicable to the Corporation andthe effective income tax rates after the adoption of tax effect accounting are as follows:
Statutory income tax rate

30.2%

(Reconciliations)
Dividend income and other permanently
non-taxable income
Withholding tax on foreign dividends(16.5%)
2.8%

Tax credit for R&D expenses
Other
Effective income tax rate after the adoption of tax effectaccounting- 12 -(1.0%)
0.5%
16.0%

Notes to Fixed Assets Used through Leases
Operating leases
Lease commitments under non-cancelable operating leases
Within 1 year
Over 1 year

193
887

million yen
million yen

Notes to Transactions with Related Parties
1. Directors and primary individual shareholders
Attribute
Corporate namePrincipal business or
position

Companies which directors and their relatives own the majority of voting rights (including thesubsidiaries of such companies)
TOA Co., Ltd. (Note 1)

Maruwa, Ltd. (Note 2)

Design, production and distribution of automatic
regulators

Real estate business

Owning and owned
ratio of voting rights

Direct owned ratio: 0.0

Direct owned ratio: 3.2

Purchase of production equipment

AdvertisingInterlocking Directors(Number of directors: 2)

Interlocking Directors (Number of directors: 2)

Purchase of production equipment (Note 3)Advertising (Note 3)

97

2

Other payable

-

6

-

(%)
RelationshipPrincipaltransactions
Transaction amount(Millions of Yen)
(Note 4)
Account title
Balance at end of
the period (Millions
of Yen) (Note 4)

Terms of transactions and the policy to decide the terms(Note 1) Masahiko Goto, Chairman and Representative Director of the Corporation, Munetoshi Goto, President
and Representative Director of the Corporation, and their relatives own 100% of voting rights of TOA
Co., Ltd.
(Note 2) Masahiko Goto, Chairman and Representative Director of the Corporation, Munetoshi Goto, President
and Representative Director of the Corporation, and their relatives own 68.1% of voting rights of
Maruwa, Ltd.
(Note 3) The prices of the transactions with TOA Co., Ltd. and Maruwa, Ltd. are determined upon negotiation,
considering the prevailing market prices.
(Note 4) The above stated transaction amount does not include consumption tax, and that balance at the end of
the period includes consumption tax.

- 13 -

2. Subsidiaries
Attribute

Subsidiaries
Makita U.S.A. Inc.

Corporate name

(United States)

Owning and owned
ratio of voting

Direct owning ratio: 100.0

rights (%)
Debt guarantee

Sales, etc. of merchandise and finished goods

RelationshipPrincipaltransactions

Interlocking Directors (Number of directors:2)

Sales, etc. of merchandise and finished goods

Debt guarantee (Note 1)(Note 2)

Transaction amount(Millions of Yen)

5,550

40,510-Trade accounts receivable

-

6,123

(Note 4)
Account title
Balance at end of
the period (Millions
of Yen) (Note 4)
Attribute

Subsidiaries

Corporate nameMakita Werkzeug G.m.b.H.
(Germany)

Owning and owned
ratio of voting
rights (%)
RelationshipPrincipaltransactions

Direct owning ratio : 1.0
Indirect owning ratio: 99.0

Sales, etc. of merchandise and finished goods
Interlocking Directors (Number of directors:1)

Sales, etc. of merchandise and finished goods (Note 2)

Transaction amount(Millions of Yen)

27,737(Note 4)
Account title

Trade accounts receivable

Balance at end of
the period (Millions

4,582

of Yen) (Note 4)- 14 -

Attribute

Subsidiaries
SC Makita EU SRL

Corporate name(Romania)

Owning and owned
ratio of voting

Direct owning ratio : 100.0

rights (%)
Subscription of additional increase of capital

Relationship

Interlocking Directors (Number of directors: 1)

Principal

Capital increase (Note 3)transactions
Transaction amount(Millions of Yen)

6,771

(Note 4)
Account title-

Balance at end of
the period (Millions-

of Yen) (Note 4)

Attribute

Subsidiaries
Makita Herramientas Eléctricas de Argentina S.A.

Corporate name(Argentina)

Owning and owned
ratio of voting

Direct owning ratio : 100.0

rights (%)
Subscription of additional increase of capital

RelationshipPrincipaltransactions

Interlocking Directors (Number of directors: 1)

Capital increase (Note 3)

Collection of loans receivable

2,241

637

-

Loans receivable--

Transaction amount(Millions of Yen)
(Note 4)
Account title
Balance at end of
the period (Millions
of Yen) (Note 4)- 15 -

Attribute

Subsidiaries

Corporate nameMakita (China) Co., Ltd.

Makita (Kunshan) Co., Ltd.

(China)(China)Direct owning ratio: 100.0

Direct owning ratio: 100.0

Owning and owned
ratio of voting
rights (%)
RelationshipPrincipal

Purchase of merchandise and finished goods, etc. Purchase of merchandise and finished goods, etc.
Interlocking Directors (Number of directors: 3)

Interlocking Directors (Number of directors: 3)

Purchase of merchandise and finished goods, etc. Purchase of merchandise and finished goods, etc.

transactions(Note 2)

(Note 2)

42,571

148,795

Trade accounts payable

Trade accounts payable

7,383

25,234

Transaction amount(Millions of Yen)
(Note 4)
Account title
Balance at end of
the period (Millions
of Yen) (Note 4)

Terms of transactions and the policy to decide the terms(Note 1) For Makita U.S.A. Inc., the Corporation has guaranteed its debt, and the amount shown in “Transaction
amount” represents the maximum amount of guarantee (50 million U.S. dollars with no payment
deadline).
(Note 2) The price of goods and other terms of transactions are determined upon negotiation, considering theprevailing market prices.
(Note 3) Investment by way of capital increase was made.
(Note 4) Consumption tax is not included in the transaction amount and the balance at the end of the period.

Notes to Revenue Recognition
It is omitted as described in “Notes to Revenue Recognition” of the Notes to the Consolidated Financial Statements.

Notes to Information Per Share
Net assets per share

1,347.16

yen

Net income per share

241.65yen

Notes to Significant Subsequent Events:
None.
*Amounts less than 1 million yen have been rounded.

- 16 -