(Summary English Translation of the Notice of the 106th Ordinary General Meeting of Shareholders Originally Issued inJapanese Language)

MAKITA CORPORATION(Stock code: 6586)
June 5, 2018
To the Shareholders of
MAKITA CORPORATIONNOTICE OF THE 106TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

You are respectfully requested to attend the 106th Ordinary General Meeting of Shareholders of MAKITA CORPORATION,
which is hereby announced.
If you do not expect to attend the meeting, you may exercise your voting rights through the enclosed voting form. Please review
the accompanying information and send the enclosed voting form to us by return mail after indicating your vote for or against the
propositions.

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

1.

Date and Time: 10 a.m., Wednesday, June 27, 2018

2.

Place:

3.

Agenda:Items to be Reported:
1. The Business Report, Consolidated Financial Statements for the 106th period (from April 1, 2017 to March 31,2018) and the Audit Reports on such Consolidated Financial Statements by the Accounting Auditor and the Audit &Supervisory Board
2. The Financial Statements for the 106th period

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

Items to be Resolved:
No.1
Appropriation of Surplus
No.2
Payment of Bonus to Directors
NOTE:

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

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REFERENCE DOCUMENT
Propositions and Explanatory Information
Agenda Item No. 1: Appropriation of Surplus
The Corporation has its basic policy for profit distribution to propose the dividends with a target consolidated dividend
payout ratio of at least 30% of net income, with a minimum amount for annual total dividends at 10 yen per share;
provided, however, that if special circumstances arise, the amount of dividends will be determined based on Net
income attributable to Makita Corporation after certain adjustments reflecting such circumstances.
In accordance with this basic policy for profit distribution, and based on our comprehensive review of the consolidated
business result for this period and forecasts and plans of our future businesses, we propose year-end dividends toshareholders as follows.
As this dividend, the total dividends for the period under review shall amount to 61 yen per share that include interim
dividends in the amount of 10 yen per share, and the consolidated dividend payout ratio is 30.2%.
1. Matters on allocation of dividends to shareholders and total amount of allocation
51 yen per share of common stock
Total amount: 13,844,864,328 yen
2. Effective date of dividend payment
June 28, 2018

Agenda Item No. 2: Payment of Bonus to Directors
Bonus to Directors of the Corporation is, as with the basic policy for profit distributions, linked to consolidated
business result. Compensation to Outside Directors and Audit & Supervisory Board Members are fixed, and they are
not eligible to receive bonus payments.
At end of the period, the Corporation has 13 directors. In accordance with above policy, we would like to pay directors’
bonuses to 11 directors in the amount of 222 million yen considering performance during the period. This is with the
exception of Mr. Akiyoshi Morita and Mr. Masahiro Sugino.

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BUSINESS REPORT(From April 1, 2017 to March 31, 2018)
1. Matters on the Current Status of Makita(1) Progress and Results of Operations

Looking at the global economic situation for the year ended March 31, 2018, developed countries’ economies
gradually recovered due to steady improvement in employment and income situation, although there wereuncertainties regarding the international political situation and policies. In emerging countries, the economy ingeneral remained robust, since domestic demand and exports grew steadily in Southeast Asia.
Under these circumstance, on the development side, Makita launched new products, mainly lithium-ion battery
product lines, such as models with high power brushless motors featuring high power and speed equivalent to AC
powered ones, and the industry’s first ones that are wirelessly connected to vacuum cleaners. On the productionside, our overseas factories strove to reduce costs while raising local content ratios. To improve product quality
stability and enhance productivity, we continued to introduce facilities that require less manpower in each factory
worldwide. On the sales side, while working hard to strengthen our community-and customer-based sales network,
including the renovation of office buildings in New Zealand and Austria and the opening of sales and after-sales
service bases in Poland, Lithuania, and Vietnam, we focused on expanding the sales of cordless gardening andcleaning tools.
Our consolidated net sales for this period increased by 15.0% from the previous year to 477,298 million yen,record-high sales, due to steady sales at home and abroad and depreciation of the yen compared with the previous
year.
Net sales by region are as follows:
Net sales in Japan increased by 11.0% to 82,575 million yen compared to the previous year. This was due to robust
sales of power tools and gardening equipment, mainly lithium-ion battery products.
Net sales in Europe increased by 19.6% to 202,054 million yen. This was due to a rise in sales in Western andEastern Europe (almost in all regions).
Net sales in North America increased by 11.7% to 73,873 million yen, supported by solid housing demand.
Net sales in Asia increased by 10.0% to 44,094 million yen. This was due to recovery of sales in China.
Net sales in Central and South America increased by 20.8% to 27,922 million yen. This was because the Brazilian
economy showed signs of breaking out from stagnation.
Net sales in Oceania increased by 24.7% to 31,284 million yen due to steady sales, mainly of lithium-ion battery
products.
Net sales in the Middle East and Africa decreased by 9.9% to 15,496 million yen. This was because a fall in crude
oil prices affected the economy and political uncertainty continued.
Overall, overseas sales accounted for 82.7% of total sales.
Operating income increased by 27.5% to 79,762 million yen (operating income ratio: 16.7%), thanks to theimprovement in the cost-of-sales ratio due to the impact of the exchange rate and a rise in net sales.
Meanwhile, income before income taxes increased by 23.1% to 79,678 million yen (income before income taxes
ratio: 16.7%) and net income attributable to Makita Corporation increased by 22.3% to 54,755 million yen (ratio of
net income attributable to Makita Corporation: 11.5%).
(2) Management Challenges

In the future, Makita expects that the global economy will continue to recover gradually and demand will remainrobust in markets where it has presence. However, uncertainty about the prospects for the economy is expected toremain high due to concerns over the Fed’s interest rate policy and the Trump administration’s trade policies andheightened geopolitical risks in Russia and the Middle East.
Under these circumstances, Makita is strengthening its R&D and product development capabilities with the focus on
recharging and motor technologies. In addition, Makita is strengthening the development and sales expansion of new
products by positioning rechargeable gardening equipment as a future pillar of business after electric power tools, with theaim of pursuing the further expansion of cordless power tools and the development of the market for gardening equipment.
Besides, Makita is strengthening its global production organizations and enhancing the efficiency of its production,-3-

procurement, and distribution, thereby accommodating changes in demand status and exchange rates while achieving both
quality and cost competitiveness. Further, Makita is addressing customer needs more precisely and enhancing its
after-sale services, thereby strengthening its marketing in emerging countries that are expected to grow in the future, as
well as in developed countries.
By taking these actions, Makita will strive to build strong brand equity and achieve a “Strong Company”, a company thatcan obtain and maintain the significant share in the worldwide market as a global total supplier of power tools for
professional use, pneumatic tools, and gardening equipment.
Makita will maintain a solid financial position so that it can implement these measures, regardless of changes in the global
business environment. This, we believe, will lead to improve our corporate value through enhancing customer satisfaction
and improving the standing of Makita in our business field.
In closing, we would like to thank you for your ongoing support and continuing assistance.
(3) Capital Expenditures
During the period, Makita allocated 14,149 million yen for its capital expenditures. These funds used by the Corporation
amounted to 4,424 million yen. This reflected mainly capital expenditures for machinery equipment and metal molds for
new products at the Okazaki plant. These funds also used by subsidiaries amounted to 9,725 million yen. This reflected
mainly capital expenditures for machinery equipment and metal molds for new products at the China plant.
(4) Changes in Financial Position and Results of Operations
103rd period(ended March
31, 2015)

104th period(ended March
31, 2016)

105th period(ended March
31, 2017)

106th period(ended March
31, 2018)

Net sales (Millions of Yen)

414,718

423,623

414,999477,298

Operating income (Millions of Yen)
Income before income taxes(Millions of Yen)
Net income attributable to Makita
Corporation (Millions of Yen)
Earning per share (Basic) Net income
attributable to Makita Corporationcommon shareholders (Yen)
Earning per share (Diluted) Net income
attributable to Makita Corporationcommon shareholders (Yen)
Total assets (Millions of Yen)
Total Makita Corporation shareholders'equity (Millions of Yen)
Return on equity (ROE) (%)

71,90564,67662,564

79,762

68,394

61,49264,73879,67845,307

41,61544,78254,755166.89153.30164.96201.70-153.29164.95201.68575,328

558,024597,249

651,031

486,021479,752

502,170

551,939

9.8

8.6

9.1

10.4

Description

Notes: 1. Consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles.
2. Earning per share (Basic) Net income attributable to Makita Corporation common shareholders and Earning per share(Diluted) Net income attributable to Makita Corporation common shareholders are calculated based on the average
number of outstanding shares during the period.
3. The Corporation implemented a two-for-one common stock split of the Corporation, effective April 1, 2017. Earningper share (Basic) Net income attributable to Makita Corporation common shareholders and earning per share(Diluted) Net income attributable to Makita Corporation common shareholders are calculated on the assumption thatthe relevant stock split had been implemented at the beginning of the 103rd period.
4. Earning per share (Diluted) Net income attributable to Makita Corporation common shareholders for the 103rd
period are not stated because dilutive potential shares do not exist.
5. Return on equity (ROE) = Net income attributable to Makita Corporation / [(Makita Corporation shareholders' equity
at the beginning of the period + Makita Corporation shareholders' equity at the end of the period) / 2]
6. Amounts of less than 1 million yen have been rounded.

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

Capital(Thousands)

Company Name

Principal Business

Makita U.S.A. Inc.

USD

161,400

100.0

Sales of power tools

Makita (U.K.) Ltd.

GBP

21,700100.0*

Sales of power tools

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

7,669

100.0*

Sales of power tools

Makita France SAS

EUR

12,436

55.0*

Sales of power tools

Makita Oy (Finland)

EUR

100

100.0*

Sales of power tools

Makita LLC (Russia)

RUB

83,207100.0*

Sales of power tools

Makita Gulf FZE (U.A.E.)

AED

22,391

100.0

Sales of power tools

Makita (China) Co., Ltd.

USD

80,000100.0

Production and sales of power tools

Makita (Kunshan) Co., Ltd.

USD

25,000100.0

Production of power tools

Makita (Australia) Pty. Ltd.

AUD

13,000

100.0

Sales of power tools

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

-5-(7) Principal Sales Offices and Plants
1. The Corporation
Name
Head office
Sales offices
Plant

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

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

Location
Los Angeles (United States)
London (United Kingdom)
Ratingen (Germany)
Bussy Saint-Georges (France)
Helsinki (Finland)
Moscow (Russia)
Dubai (U.A.E.)

Sydney (Australia)

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

Kunshan, Jiangsu (China)
Ponta Grossa (Brazil)

For Production
Makita (Kunshan) Co., Ltd.

Kunshan, Jiangsu (China)(8) Employees
1. Employees of Makita
Number of Employees
16,137
2. Employees of the Corporation
Number of Employees
2,877

Increase / Decrease793 (Increase)

Increase / Decrease
24 (Increase)

Average Age
41.6

-6-

Average Years of Service
18.5

2. Shareholding Status of the Corporation(1) Total Number of Shares Authorized to be Issued by the Corporation:

992,000,000 shares(2) Total Number of Outstanding Shares:

280,017,520 shares(including treasury stock of 8,549,592 shares)(3) Number of Shareholders:

9,165(4) Major Shareholders:Number of shares held(Thousands of Shares)

Name of Shareholders

Percentage(%)

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

18,272

6.73

Japan Trustee Services Bank, Ltd. (Trust account)

12,149

4.47

Maruwa, Ltd.

8,438

3.10

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

8,426

3.10

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

8,166

3.00

Makita Cooperation Companies' Investment Association

6,917

2.54

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

6,191

2.28

State Street Bank and Trust Company 505001

6,003

2.21

Sumitomo Mitsui Banking Corporation

5,800

2.13

Nippon Life Insurance Company

5,115

1.88

Notes: 1. The Percentage is calculated based on the total number of outstanding shares (excluding treasury stock) at the end of
the period.
2. The Bank of Tokyo-Mitsubishi UFJ, Ltd. changed its trade name to MUFG Bank, Ltd., effective April 1, 2018.
3. The Corporation owns treasury stock of 8,549,592 shares, but this is excluded from the major shareholders listed
above.
(5) Other significant matter regarding Shareholding Status:
The Corporation implemented a two-for-one common stock split of the Corporation, effective April 1, 2017. As a result, thetotal number of shares authorized to be issued and the total number of outstanding shares increased by 496,000,000 shares and
140,008,760 shares, respectively.

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

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

Exercise Period of Stock
Acquisition Rights

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

Common Stock
9,600(2) Description of the terms of stock acquisition rights held by Directors
Kind of shares and numberof shares to be acquired
Classification
Round of Issuanceupon exercise of Stock
Acquisition Rights
First Stock
Common Stock480
Acquisition Rights
9,600
Second Stock
Common Stock
Director
468
Acquisition Rights
9,360
Third Stock
Common Stock
511
Acquisition Rights
10,220Note: Stock acquisition rights are not allotted to Outside Directors and Directors who work overseas.
Number of Stock
Acquisition Rights-8-

Number of
Holders
88
10

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

Masahiko Goto

President*

Munetoshi Goto

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

Tadayoshi Torii

General Manager of Production Headquarters

Hisayoshi Niwa

General Manager of Quality Headquarters

Shinichiro Tomita

General Manager of Purchasing Headquarters

Tetsuhisa Kaneko

General Manager of Research and Development Headquarters

Tomoyuki Ota

Assistant General Manager of Research and Development Headquarters

Takashi Tsuchiya

General Manager of Domestic Sales Headquarters

Masaki Yoshida

Assistant General Manager of Production Headquarters (in charge ofChina plant)

Takashi Omote

General Manager of International Sales Headquarters

Yukihiro Otsu

General Manager of Administration Headquarters

Director

Akiyoshi Morita

Counselor of Aichi Steel Corporation

Director

Masahiro Sugino

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

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

Representative of Yamamoto Accounting OfficeOutside Audit & Supervisory Board Member of SHIROKI Corporation
Outside Audit & Supervisory Board Member of Daihatsu Motor Co., Ltd.
Attorney at Law (Sao & Inoue Law Firm)
Outside Director of Meitetsu Transport Co., Ltd.

Audit & Supervisory Board
Shoji Inoue
MemberNotes: 1. * denotes Representative Director.
2. In order to promote swift execution of group strategies and strengthen the business affairs of Makita, the Corporation
has introduced the Corporate Officer System. Corporate officers consist of 18 members including directors.
3. Mr. Akiyoshi Morita and Mr. Masahiro Sugino are Outside Directors.
4. Mr. Akira Kodama, Mr. Fusahiro Yamamoto, and Mr. Shoji Inoue are Outside Audit & Supervisory Board Members.
5. Mr. Akira Kodama, a Standing Audit & Supervisory Board Member, has a substantial amount of expertise in financeand accounting, through experience working at financial institution for many years.
6. Mr. Fusahiro Yamamoto, an Audit & Supervisory Board Member, is a certified public accountant both of Japan and
U.S.A., and has a substantial amount of expertise in finance and accounting.
7. Changes of Directors during the period1) At the conclusion of the 105th Ordinary General Meeting of Shareholders held on June 28, 2017, the following
Directors retired from its office.
Director
Shiro Hori
Director
Tomoyasu Kato
Director
Yoji Aoki
2) At the 105th Ordinary General Meeting of Shareholders held on June 28, 2017, the following Directors newly
elected and assumed offices.
Director
Takashi Omote
Director
Yukihiro Otsu
3) At the Board of Directors of the Corporation held on June 28, 2017, the following Representative Director newly
appointed and assumed the office.
Representative Director
Munetoshi Goto
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Also, Mr. Munetoshi Goto assumed the office of President on the same day.
4) Changes of Directors positions during the period
On June 28, 2017, the following changes of Directors positions were made.
Name
Tadayoshi Torii

Tetsuhisa Kaneko

After
Director, Managing Corporate Officer
GeneralManagerof
Production
Headquarters
Director, Corporate Officer
General Manager of Research andDevelopment Headquarters

BeforeDirector, Managing Corporate Officer

Director, Corporate Officer
GeneralManagerof
Headquarters

Production

8. Change in important concurrent post after the term
On April 1, 2018, the following change of Director position was made.
Name
Masaki Yoshida

After
Director, Corporate Officer
AssistantGeneralManager
Production HeadquartersofBeforeDirector, Corporate Officer
Assistant General Manager of Production
Headquarters (in charge of China plant)

9. The Corporation has designated Mr. Akiyoshi Morita and Mr. Masahiro Sugino each a Director, and Mr. Akira
Kodama, Mr. Fusahiro Yamamoto and Mr. Shoji Inoue each an Audit & Supervisory Board Member, as the“Independent Director(s) / Audit & Supervisory Board Member(s)” as required by the regulations of the Tokyo Stock
Exchange and the Nagoya Stock Exchange and made required notification therefore to these stock exchanges.
(2) Total Amounts of Compensation and Bonus to Directors and Audit & Supervisory Board Members
Total amounts of each type of Compensation and Number of payment recipients

Classification

Total amountsof Compensation(Millions of Yen)

Base
Compensation(Millions of Yen)

Number of
payment
recipients

Bonuses(Millions ofYen)

Number of
payment
recipients

Stock
Option(Millions ofYen)

Number of
payment
recipients

Directors

395

132

16

222

11

41

13

Audit &
Supervisory
Board Members

41

41

4

-

-

-

-

Total

436

173

20

222

11

41

13

Notes: 1. The aggregate amount of base compensation includes the amount of 36 million yen paid to Outside Executives(2 Outside Directors and 3 Outside Audit & Supervisory Board Members).
2. The aggregate amount of base compensation includes compensation for the 3 Directors retired on June 28, 2017
during those term of office.
3. Other than the above, the amount of 135 million yen was paid to 11 Directors who concurrently serve as employees as
employee salaries (including bonuses).
4. In addition to the above, the amount of 23 million yen was paid to 2 Directors who retired during the period as aretirement allowance for Directors. The Corporation terminated the retirement allowance plan for Directors and Audit& Supervisory Board Members as of the conclusion of the ordinary general meeting of shareholders held on June 29,
2006. At such ordinary general meeting of shareholders, it was resolved that retirement allowance for Directors andAudit & Supervisory Board Members were to be paid at the time of each retirement, and it was further resolved thatthe determination of the specific amount, payment method and other related matters are left to resolutions of theBoard of Directors with respect to the Directors and discussion of the Audit & Supervisory Board Members withrespect to the Audit & Supervisory Board Members. The amount recorded in the retirement allowance for Directors
and Audit & Supervisory Board Members as of March 31, 2018 is 326 million yen, which will be paid to 3 Directors.
5. The maximum amounts of annual compensation for all Directors and Audit & Supervisory Board Members, each ofwhich was approved by a resolution passed at the Ordinary General Meeting of Shareholders held in May 1989, is 240
million yen (excluding bonuses and the amounts paid to Directors who concurrently serve as employees as employee
salaries) and 60 million yen, respectively.
- 10 -

6. The maximum amount of annual compensation relating to stock-compensation-type stock options allocated to
Directors, which was approved by a resolution passed at the Ordinary General Meeting of Shareholders held in June
2015, is 100 million yen, in addition to the amount of compensation set forth in Note 5 above.
(3) Decision-Making Policy on Compensation for Directors and Audit & Supervisory Board Members
The Corporation pays monthly compensation to Directors based on their positions and other factors within the maximum
total amount of monthly compensation, which was approved by a resolution passed at the General Meeting of
Shareholders.
The bonuses are to be paid to Directors (excluding Outside Directors), and are linked to consolidated business results withthe aim of enhancing their motivation for improvement of business results of Makita.
The stock-compensation-type stock options are allocated to Directors (excluding Outside Directors) with the aim ofstrengthening the morale and preparedness of Directors to contribute to enhancing the corporate value of the Corporation
over the medium and long term as well as enabling them to share the advantages and risks of share price fluctuations with
our shareholders.
Full amount of the compensation to Audit & Supervisory Board Members is fixed so that the independence of the Audit& Supervisory Board Members from the management can be secured and the specific amount for each Audit &Supervisory Board Member is decided through discussions among Audit & Supervisory Board Members.

(4) Outside Directors and Audit & Supervisory Board Members
1. Relation between important organization of concurrent post and the Corporation
There is no special interest between important organization of concurrent post and the Corporation.
2. Major activities during the period

Classification

Name

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

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

Director

Akiyoshi Morita

100%(12/12)-

Director

Masahiro Sugino

100%(12/12)-

Audit & Supervisory
Board Member

Akira Kodama

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

Audit & Supervisory
Board Member

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

Audit & Supervisory
Board Member

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

Major activities

He expressed his opinions asnecessary based on the great
perspective and management
experience in the Toyota
Group companies which are aworld’s leading corporategroup.
He expressed his opinions asnecessary based on the great
perspective and management
experience in the LIXILGroup companies which are aworld’s leading corporategroup.
He expressed his opinionsfrom his independent position
as necessary.
He expressed his opinions
fromtheprofessional
perspective of certified public
accountant.
He expressed his opinions
fromtheprofessional
perspective of attorney at law.

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

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

159

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

198

Notes: 1. As the audit agreement between the Corporation and its accounting auditors does not differentiate compensation
for audit under the Companies Act from the one for audit under Financial Instruments and Exchange Law, theamount shown in 1. above represents total compensation and other amounts for both audits.
2.The Audit & Supervisory Board agreed to compensation to Accounting Auditors as stipulated in Article 399,
Paragraph 1 of the Companies Act, after examination of their performance of accounting audit services and basis
for the calculation of the estimated amount of their compensation in the prior years, which examination was madein line with the “Practical Guidelines for Cooperation with Accounting Auditors” released by the Japan Audit &Supervisory Board Members Association.
3. KPMG AZSA LLC is a member firm in Japan of KPMG International and the accounting audits of all principal
subsidiaries of the Corporation are conducted by member firms of KPMG International.
(3) Contents of Non-Audit Services
The Corporation entrusts advisory services on the introduction of International Financial Reporting Standards to KPMG
AZSA LLC and pays consideration for such services.
(4) Decision-Making Policy on Dismissal or Non-Reappointment of Accounting Auditor
If the accounting auditor falls under any of the events prescribed in each of the items of Article 340, Paragraph 1 of theCompanies Act, the Audit & Supervisory Board shall dismiss such accounting auditor with the consent of all the Audit &Supervisory Board Members. In the case of such dismissal, such dismissal and reasons therefor shall be reported to the first
General Meeting of Shareholders to be held after such dismissal.
In addition, if it is identified as difficult for the accounting auditor to properly conduct audits as a result of any reason that
may harm the independence of the accounting auditor, the Audit & Supervisory Board will decide the details of the agenda
concerning the non-reappointment of such accounting auditor that is to be submitted to a General Meeting of Shareholders,and pursuant to such decision, the Board of Directors will submit the agenda concerning the non-reappointment of suchaccounting auditor to the General Meeting of Shareholders.

- 12 -

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

- 13 -

7. Matters to ensure the independence of employees from Directors, as stated in the preceding item, and the effectivenessof directions given by Audit & Supervisory Board Members to those employees(i) Employees assisting the duties of Audit & Supervisory Board Members shall not work concurrently at otherdivisions, but shall exclusively follow directions from Audit & Supervisory Board Members.
(ii) In order to ensure the independence of such employees from Directors, the consent of the Audit & Supervisory
Board is required for matters concering the appointment and change of such employees.
8. Systems in accordance with which the Directors and employees report to the Audit & Supervisory Board Members,
other systems concerning reports to the Audit & Supervisory Board Members and systems to ensure that Directors andemployees who make a report are not treated unfairly because of the report(i) Directors, Corporate Officers and employees of Makita shall report to the Audit & Supervisory Board Memberswith respect to matters that may cause significant damage to Makita, important management matters, mattersconcerning misconduct, status of structures and operation of the internal control system, and the operation ofinternal reporting system and the results of reports received under such system.
(ii) The Corporation shall prepare a system that enables the Audit & Supervisory Board Members to request reports
from Directors, Corporate Officers and employees of Makita when necessary and that the Audit & Supervisory
Board to exchange opinions with the Directors and Accounting Auditors of Makita.
(iii) The Corporation prohibits any unfair treatment of Directors, Corporate Officers, and employees of Makita whomake a report to the Audit & Supervisory Board Members as a result of such report, and ensures all Directors,
Corporate Officers, and employees of Makita are informed to that effect.
9. Other systems to ensure that audits by the Audit & Supervisory Board Members will be conducted effectively(i) In order to enhance the supervisory function of the Audit & Supervisory Board over Accounting Auditors,“Policies and Procedures concerning Prior Approval of Auditing and Non-Auditing Services” shall be established.
In addition, to ensure that audits by the Audit & Supervisory Board Members will be conducted effectively, audit
shall be conducted in accordance with Standards for audit by Audit & Supervisory Board.
(ii) Full amount of the compensation to Audit & Supervisory Board Members shall be fixed so that the independenceof the Audit & Supervisory Board Members can be secured.
(iii) Expenses related to executing the duties of Audit & Supervisory Board Members are securely budgeted each fiscal
year and borne by the Corporation.
10. Systems to ensure elimination of antisocial forces(i) From the viewpoint of corporate social responsibility, Makita will consistently take a resolute stance against
involvement in, and have absolutely no relationship with, the activities of antisocial forces that may threaten theorder and the security of civil society.
(ii) Makita’s policy of “no intervention by antisocial forces has been permitted” is publicly announced, both internallyand outside the Corporation, by expressly stipulating such in the management policy/quality policy and by
displaying such on the Corporation’s website.
(iii) Ban on transactions with antisocial forces is expressly stated in the “Guidelines to the Code of Ethics for Makita”
which prescribes the standards for officer and employee conduct applicable in the execution of their tasks. Each
Director shall keep all Corporate Officers and employees informed of and in compliance with such prohibition.
(iv) The Corporation has been liaising closely with the police and external related organizations, including the Public
Interest Incorporated Foundation for Aichi Residents’ Conference for Violence, and endeavors to prevent any
involvement in activities of antisocial forces, any damage caused thereby, and others.
(v) In addition to collecting information relevant to activities of antisocial forces from the police and external relatedorganizations, the Corporation voluntarily participates in seminars. Also, the Corporation endeavors to share
information within the Corporation and related departments of Makita.
(2) Implementation status of systems necessary for ensuring that the Corporation’s operations are conducted
appropriately
1. Compliance(i) The Corporation kept all officers and employees of Makita informed and provided training on the “Code of
Ethics,” “Guidelines to the Code of Ethics for Makita,” and “Regulations Regarding Corporate Ethics Help Line
(Internal Reporting),” on a continual basis.
(ii) The Corporation conducted a questionnaire survey of all employees to raise awareness about the importance ofcompliance and have them better understand the “Code of Ethics.”- 14 -

2. Risk management
The Disclosure Committee meetings were held three times during the period, at which Representative Directors,
Directors in charge, Standing Audit & Supervisory Board Members, and General Managers of Internal Audit Divisionand respective departments of the Corporation met to detect and extract and examine risks involved in the businessactivities of Makita.
3. Internal audits(i) The Internal Audit Division carried out internal audits of Makita, and reported their results to the Audit &Supervisory Board and the management.
(ii) The Corporation has established a framework under which any deficiency in internal controls found during aninternal control audit is appropriately corrected or redressed in a timely manner.
4. Systems to ensure the efficient execution of Directors’ duties(i) The Board of Directors approved annual targets set by each department and oversaw their progress towardachievement.
(ii) Corporate Officers in charge of operation (18 officers as of March 31, 2018, including 6 officers overseas) wereassigned to major departments in order to operate business systematically and efficiently.
5. Duties of Audit & Supervisory Board Members(i) Audit & Supervisory Board Members met Accounting Auditors and exchanged information every quarter.
(ii) Audit & Supervisory Board Members had individual interviews with all Directors to exchange information.
(iii) Expenses necessary for executing the Audit & Supervisory Board Members’ duties were handled promptly at therequest of Audit & Supervisory Board Members.

- 15 -

CONSOLIDATED BALANCE SHEET(As of March 31, 2018)(Millions of Yen)
(Assets)
Current assets(Liabilities)
496,577

80,598Current liabilities

Cash and cash equivalents

147,320

Short-term borrowings

3,411Time deposits

43,013

Trade notes and accounts payable

28,156

Short-term investments

14,782Other payables

7,131

Accrued expenses

11,952

Trade receivablesNotes

1,343

Accrued payroll

10,731

Accounts

79,092

Income taxes payable

9,720

Less- Allowance for doubtful receivables(1,340)

Other liabilities

9,497

Inventories

196,217Long-term liabilities

14,300Prepaid expenses and other current assets

16,150Accrued retirement and termination benefits

3,206

99,864

Deferred income taxes

9,391

Land

22,626

Other liabilities

1,703

Buildings and improvements

98,648

Machinery and equipment

98,868Construction in progress

6,027

Property, plant and equipment, at costLess- Accumulated depreciation andamortization
Investments and other assets

94,898

Total liabilities(Equity)Common stock

23,805Additional paid-in capital

45,531(126,305)
Legal reserve and retained earnings

54,590Investments

33,815

Goodwill

721

Legal reserve
Retained earnings

5,669
497,456

Other intangible assets, net

3,944

Accumulated other comprehensive income (loss)(8,905)

Deferred income taxes

3,975

Treasury stock, at cost

(11,617)

Other assets

12,135

Total Makita Corporation shareholders’ equity
Non-controlling interest
Total equity

Total assets

651,031

Total liabilities and equity

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

- 16 -

551,9394,194
556,133

651,031

CONSOLIDATED STATEMENT OF INCOME(From April 1, 2017 to March 31, 2018)(Millions of Yen)
Net sales

477,298

Cost of sales

302,173
175,125

Gross profit

95,363

Selling, general, administrative and others, net

79,762

Operating income

Other income (Expense):
2,919Interest and dividend income(43)Interest expense(3,235)

Exchange losses on foreign currency transactions, net

299

Realized gains on securities, net(24)

Loss on valuation of securities
Income before income taxes(84)

79,678Provision for income taxes:
24,943Current(536)

Deferred
Net income

24,40755,271
516

Less- Net income attributable to the non-controlling interest

54,755

Net income attributable to Makita Corporation
Note: Amounts less than 1 million yen have been rounded.

- 17 -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(From April 1, 2017 to March 31, 2018)(Millions of Yen)
Makita Corporation shareholders’ equity

Beginning balanceCommon stock

Additional
paid-in capital

23,80545,501

Purchases anddisposal of treasury
stock, net
Disposal of treasury
stock by exercise ofstock options
Cash dividends

Legal reserve

Retained earnings

5,669

(11)

456,546(13,845)

Net income

54,755

Other
comprehensive
income (loss)

Purchases anddisposal oftreasury stock, net
Disposal oftreasury stock by
exercise of stock
options
Cash dividends(17,728)(11,623)
(5)

8,823
41

Other increase

Beginning balance

Treasury stock

11

Comprehensive
income:Ending balance

Accumulated othercomprehensive
income (loss)

23,80545,531

Total Makita
Corporation’sshareholders’ equity

Non- controllinginterest

502,170

3,641

5,669

Total

505,811

(5)

(5)

0

0

Comprehensive
income:(13,845)(180)(14,025)

Net income

54,755516

55,271

Other
comprehensive
income (loss)

8,823

217

9,040

Other increase

41

Ending balance

551,93941
4,194

556,133

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

- 18 -

497,456(8,905)(11,617)

BALANCE SHEET(As of March 31, 2018)(Millions of Yen)
(Assets)
Current assets(Liabilities)
140,830

Cash and time deposits

52,318Trade notes receivable

206

Current liabilities

62,449Trade accounts payable

43,855

Other payable

3,477

Trade accounts receivable

49,080Accrued expenses

6,355

Marketable securities

4,764

Income taxes payable

7,017

Finished goods and merchandise

19,103

Allowance for directors’ bonuses

231

Work-in-process

1,319

Allowance for product warranties

482

Raw materials and supplies

3,294

Other

Short-term loans receivable

7,123

Deferred income tax assets

3,037

1,032

Long term liabilities
Retirement and termination allowance

Other

593

Retirement allowance for directors and audit &Allowance for doubtful accounts(7)

supervisory board members

Fixed assets

252,077

Tangible fixed assets

39,811

Buildings

17,305Structures

654

Machinery and equipment

Vehicles and transportation equipment

Long-term deposits payable

Asset retirement obligation
Deferred income tax liabilities
Total liabilities

2,111
67
4,106

Land

13,635

Capital surplus

Construction in progress

1,933

Additional paid-in capital

2,690

Other capital surplus

Industrial property rights
Other

326
190
29
4,911

(Net assets)

Tools, furniture and fixtures

Software247

68,152

Shareholders' equity
Common stock

Intangible fixed assets

5,703

307,733
47,54424,20647,52519763

Retained earnings

247,600

1,080

Legal reserve

5,669

847

Other retained earnings

241,931

209,576

Reserve for dividend

750

Investment securities

43,797

Reserve for technical research

1,500

Stocks of affiliates

84,160Reserve for advanced depreciation

1,370

Investment in affiliates

71,572

General reserves

85,000Retained earnings carried forward

153,311

Investment and other assets

Long-term loans receivable

374

Lease deposits

302

Prepaid pension cost
Other

Treasury stock

9,348

Valuation and translation adjustments

23

Net unrealized gains on securities
Stock acquisition rights

Total assets

392,907(11,617)
16,93016,93092

Total net assets

324,755

Total liabilities and net assets

392,907

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

- 19 -STATEMENT OF INCOME(From April 1, 2017 to March 31, 2018)(Millions of Yen)
Net sales

309,647

Cost of sales

242,505
67,142Gross profit

37,136

Selling, general and administrative expenses

30,006

Operating income
Non-operating income
Interest and dividend income

30,391Other non-operating income

643

31,034Non-operating expense
276

Exchange losses on foreign currency transactions

2

Other non-operating expense

278
60,762

Ordinary income
Extraordinary gain
2

Gain on sales of fixed assets

491

Revarsal of allowance for environmental measures

493

Extraordinary loss
Loss on sale and disposal of fixed assets

170

Loss on valuation of securities

18

188

Income before income taxes

61,067

Income taxes - current

12,120(485)

Income taxes - deferred

49,432

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

- 20 -STATEMENT OF CHANGES IN NET ASSETS(From April 1, 2017 to March 31, 2018)(Millions of Yen)
Shareholders’ equity
Capital surplus
Common stock
Additional paid-in capital
Beginning balance
Changes during the period
Reversal of reserve foradvanced depreciation
Dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Net change of items otherthan shareholders’ equity
Total changes during the periodEnding balance

24,206

Other capital surplus

47,52524,20647,525

Total capital surplus
247,527

17

17

17

17

19

47,544

Shareholders’ equity
Retained earnings
Other retained earnings

Beginning balance
Changes during the period
Reversal of reserve foradvanced depreciation
Dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Net change of items otherthan shareholders’ equity
Total changes during the periodEnding balance

Legal Reserve Reserve Reserve forfor
reserveadvancedfortechnical depreciation
dividend
research
5,669
750
1,500
1,417

Generalreserves
85,000(47)

Retainedearnings
carriedforward117,677

750

1,500

(47)
1,370

212,013

Total
Treasuryshareholders’stockequity(11,623)

272,123(6)
12(13,845)
49,432(6)
29

6(11,617)35,610307,73347(13,845)
49,432

5,669

Total
retainedearnings

85,00035,634
153,311(13,845)
49,43235,587
247,600(Millions of Yen)

Beginning balance
Changes during the period
Reversal of reserve
for advanced depreciation
Dividends paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Net change of items otherthan shareholders’ equity
Total changes during the periodEnding balance

Valuation and translation adjustments
Net unrealized gains on
Total valuation and translation
securities
adjustments
18,28718,287(1,357)(1,357)(1,357)
16,930(1,357)
16,930Note: Amounts less than 1 million yen have been rounded.

- 21 -

Stockacquisitionrights
80

(29)
41
12
92

Total net assets
290,490(13,845)
49,432(6)
0(1,316)34,265
324,755

(English Translation of the Independent Auditor’s Report Originally Issued in the Japanese Language)
Accounting Audit Report of Accounting Auditor on Consolidated Financial Statements
Independent Auditor’s Report
May 21, 2018
The Board of Directors
Makita Corporation

KPMG AZSA LLC

Yasuyuki Morimoto (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Masaki Kawaguchi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the consolidated financial statements, comprising the consolidated balance sheet, the consolidated statement ofincome, the consolidated statement of changes in equity and the notes to consolidated financial statements of Makita Corporation
as at March 31, 2018 and for the year from April 1, 2017 to March 31, 2018 in accordance with Article 444-4 of the Companies
Act.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with thesecond sentence of Article 120-1 of the Ordinance of Companies Accounting, as applied mutatis mutandis pursuant to Article120-3-3 of the said Ordinance, that prescribes some omissions of disclosure items required under accounting principles generally
accepted in the United States of America, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated financial statements based on our audit as independent auditor.
We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of
the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal
control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit
procedures that are appropriate in the circumstances, while the objective of the financial statement audit is not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

- 22 -

Opinion
In our opinion, the consolidated financial statements referred to above, which were prepared in accordance with the second
sentence of Article 120-1 of the Ordinance of Companies Accounting, as applied mutatis mutandis pursuant to Article 120-3-3 ofthe said Ordinance, that prescribes some omissions of disclosure items required under accounting principles generally accepted in
the United States of America, present fairly, in all material respects, the financial position and the results of operations of Makita
Corporation and its subsidiaries for the period, for which the consolidated financial statements were prepared.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of theCertified Public Accountants Law of Japan.

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

- 23 -

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

Independent Auditor’s Report
May 21, 2018
The Board of Directors
Makita Corporation

KPMG AZSA LLC

Yasuyuki Morimoto (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Masaki Kawaguchi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the financial statements, comprising the balance sheet, the statement of income, the statement of changes in net
assets and the notes to non-consolidated financial statements, and the supplementary schedules of Makita Corporation as at March
31, 2018 and for the year from April 1, 2017 to March 31, 2018 in accordance with Article 436-2-1 of the Companies Act.
Management’s Responsibility for the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and the supplementary schedules inaccordance with accounting principles generally accepted in Japan, and for such internal control as management determines isnecessary to enable the preparation of financial statements and the supplementary schedules that are free from material
misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial statements and the supplementary schedules based on our audit as
independent auditor. We conducted our audit in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the
supplementary schedules are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements
and the supplementary schedules. The procedures selected depend on our judgement, including the assessment of the risks ofmaterial misstatement of the financial statements and the supplementary schedules, whether due to fraud or error. In making
those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the financial
statements and the supplementary schedules in order to design audit procedures that are appropriate in the circumstances, while theobjective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements and the supplementaryschedules.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

- 24 -

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

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

- 25 -

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

AUDIT REPORTThe Audit & Supervisory Board, having discussed with each other based on the audit reports prepared by each Audit &Supervisory Board Member regarding the performance of duties of Directors during the 106th period, from April 1, 2017 to March
31, 2018, does hereby report the results of their audit as follows:
1. Auditing Method Employed by Audit & Supervisory Board Members and Audit & Supervisory Board and Details Thereof(1) The Audit & Supervisory Board established the audit policy and duties of each Audit & Supervisory Board Member,received reports from each Audit & Supervisory Board Member on the execution of audits and results thereof and received
reports from Directors and other related persons and Accounting Auditors on the performance of their duties, and, whennecessary, requested explanations.
(2) In conformity with the auditing standards for the Audit & Supervisory Board Members established by the Audit &Supervisory Board and in accordance with the audit policy and the duties assigned to each Audit & Supervisory Board
Member by the Audit & Supervisory Board, each Audit & Supervisory Board Member has had communication with Directors,
employees such as a staff of Internal Audit Division and other related persons and endeavored to gather information andcreate an improved environment for auditing, and conducted the audits in the following methods:(i) Each Audit & Supervisory Board Member also attended meetings of the Board of Directors and other important
meetings, received from Directors, employees and other related persons reports on the performance of their duties,
and, when necessary, requested explanations. Each Audit & Supervisory Board Member also inspected the important
documents and examined the status of operations and properties at the head office and the principal offices of the
Corporation. As for the subsidiaries of the Corporation, the Audit & Supervisory Board Members, having
communication with the directors and Audit & Supervisory Board Members and other related persons of thesubsidiaries and sharing information among them, received reports from such subsidiaries as necessary.
(ii) Audit & Supervisory Board Members regularly received from Directors, employees and other related persons reports
and, when necessary, requested explanations and expressed their opinions in connection with the resolution of theBoard of Directors concerning the internal control systems necessary to ensure that the execution of duties bydirectors complies with laws and regulations and the Articles of Incorporation, and other systems necessary to ensure
the properness of operations of a corporate group composed of a company and its subsidiary, prescribed in Article
100, Paragraphs 1 and 3 of the Ordinance for Enforcement of the Companies Act, and the status of framework
construction and operations of such internal control systems, developed based on the said resolution.
(iii) The Audit & Supervisory Board Members also monitored and examined whether the Accounting Auditor maintains
its independence and conducts its audits in an appropriate manner. The Audit & Supervisory Board Members
received reports from the Accounting Auditor on the performance of its duties and, when necessary, requested its
explanations. The Audit & Supervisory Board Members also received notification from the Accounting Auditor thatit has taken steps to improve the “system for ensuring appropriate execution of the duties of an accounting auditor”(as set forth in Items of Article 131 of the Ordinance on Corporate Accounting) in compliance with the “Quality
Control Standard for Auditing” (adopted by the Business Accounting Council on October 28, 2005). The Audit &Supervisory Board Members requested explanations on such notifications when necessary.
According to the foregoing method, the Audit & Supervisory Board Members reviewed the business report, the accompanying
supplemental schedules and the financial statements for this period (balance sheet, statement of income, statement of changes in
net assets and notes to non-consolidated financial statements) and the accompanying supplemental schedules and the consolidated
financial statements (consolidated balance sheet, consolidated statement of income, consolidated statement of changes in equity
and notes to consolidated financial statements).

2. Results of Audit(1) Results of Audit of the Business Report and Others(i) We confirm that the business report and the accompanying supplemental schedules present fairly the status of the
Corporation in conformity with the applicable laws and regulations of Japan as well as the Articles of Incorporationof the Corporation.
(ii) We confirm that there are no fraudulent acts or material facts that violated the applicable laws and regulations ofJapan or the Articles of Incorporation of the Corporation in the course of the performance of the duties of the
Directors.
(iii) We confirm that the substance of the resolutions by the Board of Directors regarding establishment of Internal
Control System is appropriate. We do not see anything to be pointed out on the description of the business report, andthe performance of the Directors regarding the Internal Control System.
- 26 -

(2) Results of Audit of the Financial Statements and the Accompanying Supplemental Schedules
We confirm that the method and the results of the audit conducted by KPMG AZSA LLC, the Accounting Auditor, areappropriate.
(3) Results of Audit of the Consolidated Financial Statements
We confirm that the method and the results of the audit conducted by KPMG AZSA LLC, the Accounting Auditor, areappropriate.
May 23, 2018
Audit & Supervisory Board
Makita Corporation
Mitsuhiko Wakayama (Seal)
Standing Audit & Supervisory Board Member
Akira Kodama (Seal)
Standing Audit & Supervisory Board Member(Outside Audit & Supervisory Board Member)
Fusahiro Yamamoto (Seal)
Outside Audit & Supervisory Board Member
Shoji Inoue (Seal)
Outside Audit & Supervisory Board Member- 27 -