(Summary English Translation of the Notice of the 105th Ordinary General Meeting of Shareholders Originally Issued inJapanese Language)

MAKITA CORPORATION(Stock code: 6586)
June 6, 2017
To the Shareholders of
MAKITA CORPORATIONNOTICE OF THE 105TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

You are respectfully requested to attend the 105th 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.

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

1.

Date and Time: 10 a.m., Wednesday, June 28, 2017

2.

Place:

3.

Agenda:Items to be Reported:
1. The Business Report, Consolidated Financial Statements for the 105th period (from April 1, 2016 to March 31,2017) and the Audit Reports on such Consolidated Financial Statements by the Accounting Auditors and the Audit &Supervisory Board
2. The Financial Statements for the 105th period

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

Items to be Resolved:
No.1
Appropriation of Surplus
No.2
Election of 13 Directors
No.3
Election of 1 Audit & Supervisory Board Member
No.4
Payment of Bonus to Directors
NOTES: 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.

-1-

BUSINESS REPORT(From April 1, 2016 to March 31, 2017)
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, 2017, the regional economy remained robust in
Europe, supported by solid domestic demand, although there was uncertainty regarding the outlook for the Western
European economy in relation to Brexit (the British referendum on remaining in or leaving the E.U.). In the U.S., theeconomy recovered, driven by the favorable employment and income situation. In Asia, Southeast Asian countries andIndia saw their economies grow steadily, while the Chinese economy continued to slow down. Meanwhile, the economy
gradually recovered in Japan, although some sectors, such as personal consumption, lacked strength.
Under these circumstances, on the development side, Makita expanded its product lineup, mainly lithium ion battery
products, such as high power models using high-capacity lithium ion batteries and small and light models using 10.8-volt
slide-on batteries. On the production side, overseas factories strove to reduce costs while raising local content ratios. To
improve product quality and enhance productivity, we worked on introducing facilities that require less manpower in eachfactory worldwide. On the sales side, while we worked to expand sales channels leveraging our wide-ranging family of
products, we sought to maintain and improve customer-based sales and after-sales services through various activities
including the establishment of a new sales and distribution location in Dallas, USA, in March 2017.
Our consolidated net sales for this year decreased by 2.0% to 414,999 million yen compared to the previous year, due toappreciation of the yen compared with the previous year, although sales grew steadily at home and abroad, mainly indeveloped countries.
Net sales by region are as follows:
Net sales in Japan increased by 8.7% to 74,381 million yen compared to the previous year. This was because sales
mainly on new products remained solid.
Net sales in Europe decreased by 2.9% to 168,992 million yen. This was due to the appreciation of the yen against theeuro from a year earlier, although sales in general were steady in European countries.
Net sales in North America decreased by 2.4% to 66,148 million yen. This was due to the strengthening of the yen against
the U.S. dollar compared to the same period of the previous year, despite an increase in local sales aided by the expanding
U.S. economy.
Net sales in Asia decreased by 3.3% to 40,079 million yen. This was due to the appreciation of the yen against local
currencies compared to the previous year, although we saw local sales grow in Vietnam, Taiwan and India.
Sales situations in other regions are as follows. Net sales in Oceania increased by 1.8% to 25,093 million yen due to
steady sales, mainly of lithium-ion battery products. Due to the impact of the yen’s appreciation against local currencies,
net sales in Central and South America, where the Brazilian economy remained stagnant, decreased by 11.6% to 23,110
million yen; while those in the Middle East and Africa, where recession continued in oil-producing countries, decreased
by 18.8% to 17,196 million yen.
Overall, overseas sales accounted for 82.1% of total sales.
Operating income decreased by 3.3% to 62,564 million yen (operating income ratio: 15.1%) because net sales declined
due to the influence of the exchange rate, although Makita managed to keep the operating income ratio almost unchanged.
Meanwhile, income before income taxes increased by 5.3% to 64,738 million yen (income before income taxes ratio:
15.6%) and net income attributable to Makita Corporation shareholders increased by 7.6% to 44,782 million yen (ratio of
net income attributable to Makita Corporation shareholders: 10.8%) because we had recorded valuation losses on
securities in the previous year.
(2) Management Challenges
In the future, political matters around the world remain very uncertain, trends of exchange rates and natural resource
prices remain unpredictable, Makita is expected to continue to face a challenging business environment.
Under these circumstances, Makita is developing new products that fully satisfy professional users. To that end, Makita isstrengthening its R&D and product development capabilities with respect to environmentally friendly power tools andgardening equipment among cordless products, while promoting the development of products that meet needs in bothdeveloped countries and emerging countries, which have been becoming bipolar. Also, Makita is strengthening its global-2-

production organizations and enhancing its efficiency in production, 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 OPE.
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.
*OPE stands for “Outdoor Power Equipment,” which is used for outdoor work such gardening, agriculture and forestry.
(3) Capital Expenditures
During the period, Makita allocated 13,222 million yen for its capital expenditures. These funds used by the Corporation
amounted to 2,808 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 10,414 million yen. This reflected
mainly capital expenditures for machinery equipment and metal molds for new products at the China plant and for landand buildings for the Dallas branch, a US sales subsidiary.
(4) Financial Position and Results of Operations for the Recent 3 Periods
102nd period(ended March
31, 2014)

103rd period(ended March
31, 2015)

104th period(ended March
31, 2016)

105th period(ended March
31, 2017)

Net sales (Millions of Yen)

383,207414,718

423,623

414,999

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 (%)

54,914

71,90564,67662,56456,974

68,394

61,49264,73838,45345,307

41,61544,782141.64166.89153.30164.96--153.29164.95519,121575,328

558,024597,249

435,934

486,021479,752

502,170

9.5

9.8

8.6

9.1

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 102nd period.
4. Earning per share (Diluted) Net income attributable to Makita Corporation common shareholders for the 102nd
period and 103rd period are not stated because dilutive potential shares do not exist.
5. Return on equity (ROE) = Net income attributable to Makita Corporation for the year / [(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.

-3-

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

Capital(Thousands)

Company Name

Principal Business

Makita U.S.A. Inc.

USD

200,368

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 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, OPE such as brushcutter,hedge trimmers, and household tools such as cordless cleaners.

-4-(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 Gulf FZE
Makita (Australia) Pty. Ltd.

Location
Los Angeles (United States)
London (United Kingdom)
Ratingen (Germany)
Bussy Saint-Georges (France)
Helsinki (Finland)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
15,344
2. Employees of the Corporation
Number of Employees
2,853

Increase / Decrease
560 (Increase)

Increase / Decrease
3 (Decrease)

Average Age
41.2

-5-

Average Years of Service
18.3

2. Shareholding Status of the Corporation(1) Total Number of Shares Authorized to be Issued by the Corporation:
496,000,000 shares
Note: The Corporation implemented a two-for-one common stock split of the Corporation, effective April 1, 2017. The total
number of shares authorized to be issued by the Corporation after the relevant stock split shall be nine hundred andninety-two million (992,000,000).
(2) Total Number of Outstanding Shares:
140,008,760 shares(including treasury stock of 4,278,474 shares)
Note: The Corporation implemented a two-for-one common stock split of the Corporation, effective April 1, 2017. The total
Number of Outstanding Shares after the relevant stock split shall be two hundred and eighty million, seventeen thousand,five hundred twenty (280,017,520).
(3) Number of Shareholders:

8,249(4) Major Shareholders:Number of shares held(Thousands of Shares)

Name of Shareholders

Percentage(%)

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

8,065

5.94

Japan Trustee Services Bank, Ltd. (Trust account)

5,295

3.90

The Bank of New York Mellon SA/NV 10

4,537

3.34

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

4,213

3.10

Maruwa, Ltd.

4,069

2.99

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

3,567

2.62

Makita Cooperation Companies' Investment Association

3,447

2.53

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

3,153

2.32

Sumitomo Mitsui Banking Corporation

2,900

2.13

Nippon Life Insurance Company

2,558

1.88

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

-6-

3. Status of the Stock Acquisition Rights, etc. of the Corporation
Status of the stock acquisition rights at the end of the period(1) Description of the terms of the stock acquisition rights
An outline of stock acquisition rights issued by the Corporation is as follows.
Round of Issuance
Kind of shares andAmount to be(Date of
Number of
number of shares
Amount to be paid
paid forResolution ofStock
to be acquired
upon exercise of
Stock
Issuance at
Acquisition
upon exercise of
Stock Acquisition
Acquisition
Meeting of Board
RightsStock Acquisition
Rights (Yen)
Rights (Yen)of Directors)
RightsFirst Stock
Acquisition Rights(July 31, 2015)
Second Stock
Acquisition Rights(July 28, 2016)

700

Common Stock
7,000

6,633

1

682

Common Stock
6,820

6,569

1

Exercise Period of Stock
Acquisition Rights
From
August 19, 2015
To
August 18, 2065
From
August 19, 2016
To
August 18, 2066

(2) Description of the terms of the stock acquisition rights held by Directors
Kind of shares and numberof shares to be acquired
Classification
Round of Issuanceupon exercise of the Stock
Acquisition Rights
First Stock
Common Stock700
Acquisition Rights
7,000
Director
Second Stock
Common Stock682
Acquisition Rights
6,820
Note: Stock acquisition rights are not allotted to Outside Directors and Directors who work overseas.
Number of the Stock
Acquisition Rights-7-

Number of
Holders11
11

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

Masahiko Goto

President*

Shiro Hori

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
Director
Corporate Officer

Tadayoshi Torii
Tomoyasu Kato

General Manager of Research and Development Headquarters

Hisayoshi Niwa

General Manager of Quality Management Headquarters

Shinichiro Tomita

General Manager of Purchasing Headquarters

Tetsuhisa Kaneko

General Manager of Production Headquarters

Yoji Aoki

General Manager of Administration Headquarters

Tomoyuki Ota

Assistant General Manager of Research and Development Headquarters

Munetoshi Goto

General Manager of International Sales Headquarters

Takashi Tsuchiya

General Manager of Domestic Sales Headquarters

Masaki Yoshida

Director

Akiyoshi Morita

Director

Masahiro Sugino

Assistant General Manager of Production Headquarters (in charge ofChina plant)Counselor of Aichi Steel Corporation
Outside Director of Showa Denko K.K.
Advisor of LIXIL Corporation

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 17 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. Change of the Audit & Supervisory Board Members during the term
1) At the conclusion of the 104th Ordinary General Meeting of Shareholders held on June 28, 2016, the following
Audit & Supervisory Board Members retired from office due to the expiration of their terms of office.
Audit & Supervisory Board Member
Toshihito Yamazoe
Audit & Supervisory Board Member
Haruhito Hisatsune
Audit & Supervisory Board Member
Michiyuki Kondo
2) At the 104th Ordinary General Meeting of Shareholders held on June 28, 2016, the following Audit & Supervisory
Board Members newly elected and assumed offices.
Audit & Supervisory Board Member
Mitsuhiko Wakayama
Audit & Supervisory Board Member
Akira Kodama
Audit & Supervisory Board Member
Shoji Inoue-8-8. 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 amounts ofCompensation(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

374

136

14

193

12

45

11

Audit &
Supervisory
Board Members

41

41

7

-

-

-

-

Total

415

177

21

193

12

45

11

Notes: 1. The aggregate amount of base compensation includes the amount of 36 million yen paid to Outside Executives(2 Outside Directors and 5 Outside Audit & Supervisory Board Members).
2. The aggregate amount of base compensation includes compensation for the 3 Outside Audit & Supervisory Board
Members retired on June 28, 2016 during those term of office.
3. Other than the above, the amount of 145 million yen was paid to 9 Directors who concurrently serve as employees as
employee salaries (including bonuses).
4. The Corporation terminated the retirement allowance plan for Directors and Audit & Supervisory Board Members asof 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 and Audit & Supervisory Board
Members were to be paid at the time of each retirement, and it was further resolved that the determination of thespecific amount, payment method and other related matters are left to resolutions of meetings of the Board of
Directors with respect to the Directors and discussion of the Audit & Supervisory Board Members with respect to the
Audit & Supervisory Board Members. The amount recorded in the retirement allowance for Directors and Audit &Supervisory Board Members as of March 31, 2017 is 351 million yen, which will be paid to 5 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.
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.

-9-(4) Outside Directors and Audit & Supervisory Board Members
1. Director, Akiyoshi Morita(i) Relation between important organization of concurrent post and the Corporation
There is no special interest between important organization of concurrent post and the Corporation.
(ii) Major activities during the period
Mr. Morita attended all meetings of the Board of Directors. At the attended meetings, he expressed his opinions asnecessary based on the great perspective and management experience in the Toyota Group companies which are aworld’s leading corporate group.
(iii) Outline of Liability Limitation Agreement
With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation has enteredinto a liability limitation agreement with Mr. Morita which limits the maximum amount of his liabilities to thetotal amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.
2.

Director, Masahiro Sugino(i) Relation between important organization of concurrent post and the Corporation
There is no special interest between important organization of concurrent post and the Corporation.
(ii) Major activities during the period
Mr. Sugino attended all meetings of the Board of Directors. At the attended meetings, he expressed his opinions asnecessary based on the great perspective and management experience in the LIXIL Group companies which are aworld’s leading corporate group.
(iii) Outline of Liability Limitation Agreement
With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation has enteredinto a liability limitation agreement with Mr. Sugino which limits the maximum amount of his liabilities to thetotal amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.

3.

Audit & Supervisory Board Member, Akira Kodama(i) Major activities during the period
Mr. Kodama attended all meetings of the Board of Directors and the Audit & Supervisory Board after hisassumption on June, 2016. At the attended meetings, he expressed his opinions from his independent position asnecessary.
(ii) Outline of Liability Limitation Agreement
With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation has enteredinto a liability limitation agreement with Mr. Kodama which limits the maximum amount of his liabilities to thetotal amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.

4.

Audit & Supervisory Board Member, Fusahiro Yamamoto(i) Relation between important organization of concurrent post and the Corporation
There is no special interest between important organization of concurrent post and the Corporation.
(ii) Major activities during the period
Mr. Yamamoto attended 11 of the 12 meetings of the Board of Directors (attendance rate: 92%) and 13 of the 14
meetings of Audit & Supervisory Board (attendance rate: 93%) . At the attended meetings, he expressed his
opinions from the professional perspective of certified public accountant.
(iii) Outline of Liability Limitation Agreement
With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation has enteredinto a liability limitation agreement with Mr. Yamamoto which limits the maximum amount of his liabilities to thetotal amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.

5.

Audit & Supervisory Board Member, Shoji Inoue(i) Relation between important organization of concurrent post and the Corporation
There is no special interest between important organization of concurrent post and the Corporation.
(ii) Major activities during the period
Mr. Inoue attended 9 of the 10 meetings of the Board of Directors (attendance rate: 90%) and 9 of the 10 meetingsof Audit & Supervisory Board (attendance rate: 90%) after his assumption on June, 2016. At the attended
meetings, he expressed his opinions from the professional perspective of attorney at law.
(iii) Outline of Liability Limitation Agreement- 10 -

With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation has enteredinto a liability limitation agreement with Mr. Inoue which limits the maximum amount of his liabilities to the total
amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.
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

173

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

185

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 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.

- 11 -

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.

- 12 -

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.”- 13 -

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 (17 officers as of March 31, 2017, including 4 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.

- 14 -

CONSOLIDATED BALANCE SHEET(As of March 31, 2017)(Millions of Yen)
(Assets)
Current assets(Liabilities)
452,569

78,272Current liabilities

Cash and cash equivalents

142,181

Short-term borrowings

6,579

Time deposits

34,329Trade notes and accounts payable

26,347

Short-term investments

23,441Other payables

7,122

Accrued expenses

10,537

Trade receivablesNotes

1,199

Accrued payroll

9,431

Accounts

67,086

Income taxes payable

6,944

Less- Allowance for doubtful receivables(1,137)

Deferred income taxes

3,134

Inventories

167,398

Other liabilities

8,178

Deferred income taxes

4,723

Long-term liabilities

13,166

Prepaid expenses and other current assets

13,349Long-term indebtedness

94,507

Accrued retirement and termination benefits

3,161

Land

22,358Deferred income taxes

8,313

Buildings and improvements

94,927

Other liabilities

1,674

Machinery and equipment

91,493

Construction in progress

5,531

Property, plant and equipment, at costLess- Accumulated depreciation andamortization

18

91,438

Total liabilities(Equity)Common stock

23,80550,173

Additional paid-in capital

45,501

Investments

34,004

Legal reserve and retained earnings

Goodwill

721

Investments and other assets

Other intangible assets, net
Deferred income taxes
Other assets(119,802)

Legal reserve

3,641

Retained earnings

650
11,157(17,728)

Treasury stock, at cost

(11,623)

Non-controlling interest
Total equity
597,249

Total liabilities and equity- 15 -

456,546

Accumulated other comprehensive income (loss)

Total Makita Corporation shareholders’ equity

Total assets

5,669

502,170
3,641
505,811597,249

CONSOLIDATED STATEMENT OF INCOME(From April 1, 2016 to March 31, 2017)(Millions of Yen)
Net sales

414,999

Cost of sales

267,506

Gross profit

147,493

Selling, general, administrative and others, net

84,929Operating income

62,564

Other income (Expense):
Interest and dividend income

2,512Interest expense(104)

Exchange losses on foreign currency transactions, net(233)

Realized gains on securities, net

26

Loss on valuation of securities(27)

Income before income taxes

2,174
64,738Provision for income taxes:
Current

19,988Deferred(378)

Net income

19,61045,128Less- Net income attributable to the non-controlling interest

346

Net income attributable to Makita Corporation

44,782- 16 -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY(From April 1, 2016 to March 31, 2017)(Millions of Yen)
Makita Corporation shareholders’ equity

Beginning balanceCommon stock

Additional
paid-in capital

23,80545,456

Legal reserve
5,669

Retained earnings

Accumulated othercomprehensive
income (loss)

Treasury stock

425,473(9,049)(11,602)

Purchases anddisposal of treasury
stock, net(21)

Cash dividends(13,709)

Comprehensive
income:Net income

44,782

Other
comprehensive
income (loss)(8,679)Other increase
Ending balance

45
23,805

Total Makita
Corporation’sshareholders’equityNon- controllinginterest

Beginning balance

479,752

Purchases anddisposal of treasury
stock, net(21)

Cash dividends

45,501

3,618

5,669

Total

483,370(21)(13,709)(124)(13,833)

Net income

44,782346

45,128Other
comprehensive
income (loss)(8,679)(199)(8,878)Comprehensive
income:Other increase

45

Ending balance

502,17045
3,641

505,811- 17 -

456,546(17,728)(11,623)

BALANCE SHEET(As of March 31, 2017)(Millions of Yen)
(Assets)
Current assets(Liabilities)
136,445

Cash and time deposits

50,910Trade notes receivable

228

Current liabilities

58,690Trade accounts payable

42,851Other payable

2,976

Trade accounts receivable

47,821

Accrued expenses

5,856

Marketable securities

4,160

Income taxes payable

4,684

Finished goods and merchandise

16,910Allowance for directors’ bonuses

193

Work-in-process

1,209

Allowance for product warranties

517

Raw materials and supplies

2,774

Allowance for environmental measures

560

Short-term loans receivable

9,015

Other

Deferred income tax assets

2,825

1,053

Long term liabilities

Other

599

Retirement and termination allowance

Allowance for doubtful accounts(6)

Retirement allowance for directors and audit &supervisory board members
Long-term deposits payable

Fixed assets

219,339

Asset retirement obligation

Tangible fixed assets

38,530

Deferred income tax liabilities

Buildings

17,924Structures

695

Machinery and equipment

Vehicles and transportation equipment

1,663
73

6,604
240
351
212
29
5,772

Total liabilities

65,294(Net assets)
Shareholders' equity

272,123

Tools, furniture and fixtures

3,649

Common stock

24,206

Land

13,635

Capital surplus

47,527

Construction in progress
Intangible fixed assets
SoftwareIndustrial property rights

891
2,484

Additional paid-in capital
Other capital surplus

47,5252

774

Retained earnings

212,0131,275

Legal reserve

5,669

435

Other retained earnings

206,344

Investment and other assets

178,325

Reserve for dividend

750

Investment securities

42,037

Reserve for technical research

1,500

Stocks of affiliates

72,554

Reserve for advanced depreciation

1,417

Investment in affiliates

53,791

General reserves

85,000Retained earnings carried forward

117,677

Other

Long-term loans receivable

474

Lease deposits

294

Prepaid pension cost
Other

9,135
40

Treasury stock
Valuation and translation adjustments

18,287Net unrealized gains on securities

18,287

Stock acquisition rights
Total net assets
Total assets(11,623)355,784

Total liabilities and net assets- 18 -

80
290,490355,784

STATEMENT OF INCOME(From April 1, 2016 to March 31, 2017)(Millions of Yen)
Net sales

242,267

Cost of sales

186,045
56,222Gross profit

33,150

Selling, general and administrative expenses

23,072

Operating income
Non-operating income
Interest and dividend income

24,377

Other non-operating income

364

24,741Non-operating expense
913

Exchange losses on foreign currency transactions

3

Other non-operating expense

916
46,897

Ordinary income
Extraordinary gain
Gain on sales of fixed assets

2

Gain on sales of investment securities

5

7

234

234

Extraordinary loss
Loss on sale and disposal of fixed assets
Income before income taxes

46,670

Income taxes - current

8,655

Income taxes - deferred(329)

Net income

38,344- 19 -STATEMENT OF CHANGES IN NET ASSETS(From April 1, 2016 to March 31, 2017)(Millions of Yen)
Shareholders’ equity
Common stock
Beginning balance
Changes during the period
Reversal of reserve foradvanced depreciation
Dividends paid
Net income
Purchase of treasury stock
Net change of items otherthan shareholders’ equity
Total changes during the periodEnding balance

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

Capital surplus
Additional paid-in capital

Other capital surplus

Total capital surplus

24,20647,5252

47,527

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

24,20647,5252

47,527

Shareholders’ equity
Retained earnings
Other retained earnings
Reserve
Retained Total
Legal Reserve
Reserve forGeneralforearnings retained
reserveadvancedfortechnical depreciation reserves carried earnings
dividend
research
forward
5,669
750
1,500
1,465 85,000 92,994 187,378(11,602)247,509

-

-

-

(21)

(13,709)38,344
(21)

-

-

-

- 24,683 24,635
85,000 117,677 212,013(21)(11,623)

24,614272,123

-

-

-

(48)

-

-

-

-

-

-

-

-

-

-

- (13,709) (13,709)- 38,344 38,344
-

-

-

-

-

-

(48)
1,417

-

-

-

5,669

750

1,500

Total
shareholders’equityTreasury
stock

-

48

-

(Millions of Yen)

Beginning balance
Changes during the period
Reversal of reserve
for advanced depreciation
Dividends paid
Net income
Purchase 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
7,419
7,419

Stock
acquisitionrights35

Total net assets
254,963

-

-

-

-

-

-

-

(13,709)38,344(21)

10,868

10,86845

10,913

10,86818,287

10,86818,28745
80

35,527
290,490- 20 -

(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 23, 2017
The Board of Directors
Makita Corporation

KPMG AZSA LLC
Hideaki Koyama (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 shareholders’ equity and the notes to consolidated financial statements of Makita
Corporation as at March 31, 2017 and for the year from April 1, 2016 to March 31, 2017 in accordance with Article 444-4 of theCompanies 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.
Opinion- 21 -

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.

Notes 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.

- 22 -

(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 23, 2017
The Board of Directors
Makita Corporation

KPMG AZSA LLC
Hideaki Koyama (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, 2017 and for the year from April 1, 2016 to March 31, 2017 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.
Opinion- 23 -

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.

Notes 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.

- 24 -

(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 105th period, from April 1, 2016 to March
31, 2017, 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 Auditors maintaintheir independence and conduct their audits in an appropriate manner. The Audit & Supervisory Board Members
received reports from the Accounting Auditors on the performance of their duties and, when necessary, requested
their explanations. The Audit & Supervisory Board Members also received notification from the Accounting Auditorsthat they have taken steps to improve the “system for ensuring appropriate execution of the duties of the accounting
auditors” (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.
- 25 -

(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 Auditors, 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 Auditors, areappropriate.
May 25, 2017
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- 26 -

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 18 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 100 yen per share that include interim
dividends in the amount of 18 yen per share, and the consolidated dividend payout ratio is 30.3%.
1. Matters on allocation of dividends to shareholders and total amount of allocation
82 yen per share of common stock
Total amount: 11,129,883,452 yen
2. Effective date of dividend payment
June 29, 2017
Note: The Company implemented a two-for-one common stock split, effective April 1, 2017. Year-end dividend above is based on
the number of shares before the relevant stock split.
Agenda Item No. 2: Election of 13 Directors
The term of offices of all 14 Directors will have expired at the conclusion of this General Shareholders' Meeting.
We would like to request the election of 13 Directors (including two Outside Directors).
The candidates are as follows:
Candidate Name
Number (Date of birth)

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

1

2

1971

Joined the Corporation

1984

Director, Manager of Corporate Planning Department

1987

May
Reelection
July
Masahiko Goto
(November 16, 1946)
May

1989

Managing Director, General Manager of Administration
Headquarters
President and Representative Director

June

2013

Chairman and Representative Director (present)

April

1999

Joined the Corporation

April

2012

June

2013

General Manager of International Sales Administration
Department
Director, Corporate Officer, General Manager ofInternational Sales Headquarters (present)

Reelection
Munetoshi Goto
(April 26, 1975)- 27 -

Number of the
Corporation's
shares held

2,837,886

457,890

Candidate Name
Number (Date of birth)

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

3

4

5

6

7

8

June

2015

Joined the Corporation
General Manager of Production Department (Assembly)
General Manager of Production Department
Director, General Manager of Quality Control
Headquarters
Director, General Manager of Production Headquarters
Director, Managing Corporate Officer, in charge of
Production and General Manager of Production
Headquarters
Director, Managing Corporate Officer (present)

March

1972

Joined the Corporation

October

1991

Manager of E.D.P. System Department

October
Reelection
Hisayoshi Niwa
June
(February 24, 1949)
April

1999

General Manager of Production Control Department

2003

Director, General Manager of Quality Control
Headquarters
Director, General Manager of Quality Management
Headquarters

Reelection
Tadayoshi Torii(December 10, 1946) June
June

Reelection
Shinichiro Tomita(January 11, 1951)

Reelection
Tetsuhisa Kaneko(April 6, 1955)

Reelection
Tomoyuki Ota(March 22, 1956)

Reelection
Takashi Tsuchiya(September 1, 1957)

1964
1998
1998
2001
2003
2009

2005

June

2009

Director, Corporate Officer, General Manager of Quality
Management Headquarters (present)

March
October

1974
2000

October
September
June

2001
2003
2007

June

2009

Joined the Corporation
General Manager of Plant Engineering-maintenance
Department
General Manager of Production Engineering Department
President of Makita (China) Co., Ltd.
Director, Assistant General Manager of Production
Headquarters of the Corporation (in charge of China
Plant)
Director, Corporate Officer, General Manager ofResearch and Development Headquarters (in charge of
Product Development)

May

2010

Director, Corporate Officer, General Manager of Purchasing
Headquarters (present)

March
April
AugustOctober
June
June

1981
2004
2005
2006
2007
2009

May

2010

Joined the Corporation
General Manager of Technical Research Department
General Manager of Production Department 2
General Manager of Production Department 1
Director, General Manager of Purchasing Headquarters
Director, Corporate Officer, General Manager ofPurchasing Headquarters
Director, Corporate Officer, General Manager of
Production Headquarters (in charge of China Plant)

June

2015

Director, Corporate Officer, General Manager of Production
Headquarters (present)

March
October
August

1978
2003
2005

July

2012

June

2013

March
April
October
April
June

1982
2001
2003
2010
2013

June

2015

Joined the Corporation
General Manager of Production Department 1
General Manager of Products & Engineering
Administration Department
General Manager of Products & Engineering
Administration Department and General Manager of
Product Design & Development Department 1
Director, Corporate Officer, Assistant General Manager
of Research and Development Headquarters (present)
Joined the Corporation
Manager of Shizuoka Branch Office
Manager of Tokyo Branch Office
General Manager of Sales Administration Department
Corporate Officer, Domestic Sales Headquarters (incharge of Tokyo Sales Department)
Director, Corporate Officer, General Manager ofDomestic Sales Headquarters (present)- 28 -

Number of the
Corporation's
shares held

50,00022,20014,40020,00012,10015,600Candidate Name
Number (Date of birth)

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

1985
2007
2010
2011

Number of the
Corporation's
shares held

Joined the Corporation
General Manager of Production Control Department
General Manager of Production Department 2
General Manager of Production Development
Reelection
Department
7,300
9Masaki YoshidaFebruary
2012 Vice President of Makita (China) Co., Ltd(June 17, 1962)
June
2015 Director, Corporate Officer, Assistant General Manager
of Production Headquarters of the Corporation (in chargeof China Plant) (present)
March
1982 Joined the Corporation
January
1995 President of Makita Mexico, S.A. de C.V.
New Candidate
March2001 President of Makita do Brasil Ferramentas Elétricas
6,500
10
Takashi Omote
Ltda. (present)(February 10, 1959)
June
2013 Corporate Officer of the Corporation (in charge ofCentral and South America Sales) (present)
March
1983 Joined the Corporation
New Candidate
April2009 Assistant Manager of Finance Department
11
December 2009 Vice President of Makita (China) Co., Ltd
5,800
Yukihiro Otsu
2013 General Manager of Accounting Department of the(August 27, 1960) October
Corporation (present)
April
1967 Jointed Toyota Motor Co., Ltd. (present; Toyota Motor
Corporation, “TOYOTA”)
September 1994 Director of TOYOTA
June
1998 Managing Director of TOYOTA
June
1999 Senior Managing Director of TOYOTA
June
2000 Director and Vice President of Aichi Steel Corporation
Reelection(“AICHI STEEL”)
OutsideJune
2004 President and Representative Director of AICHI STEEL
12
IndependentJune
2008 Chairman and Representative Director of AICHI STEEL
Akiyoshi Morita
June
2011 Advisor of AICHI STEEL(August 23, 1941) March2012 Outside Director of Showa Denko K.K. (present)June2013 Outside Director of the Corporation (present)June2015 Counselor of AICHI STEEL (present)(Important Concurrent Posts)
Counselor of AICHI STEEL
Outside Director of Showa Denko K.K.
April
1967 Jointed Ina Seito Co., Ltd. (present; LIXIL Corporation )January
1992 Director of INAX Corporation (“INAX”,past; Ina Seito Co.,Ltd.)
January
1996 Managing Director of INAX
January
2000 Senior Managing Director of INAX
October
2001 President and Representative Director of INAX
ReelectionJune2007 Chairman and Representative Director of INAX
OutsideJune
2007 President and Representative Director of JS Group
14
Independent
Corporation (present; LIXIL Group Corporation)
Masahiro Sugino April
2011 President and Representative Director of LIXIL(November 18, 1944)
CorporationJune
2011 Director and Advisor of LIXIL CorporationJune
2013 Advisor of LIXIL Corporation (present)June2015 Outside Director of the Corporation (present)(Important Concurrent Posts)
Advisor of LIXIL Corporation
Notes: 1. There is no special interest between the above candidates and the Corporation.
2. Mr. Akiyoshi Morita and Mr. Masahiro Sugino are candidates for Outside Director.
3. The matters concerning Outside Director candidate Mr. Akiyoshi Morita are as follows:(i) Mr. Akiyoshi Morita has great perceptiveness and many years of experience as a management of TOYOTA andAICHI STEEL, core companies of Toyota Group which is a world’s leading corporate group. The Corporation
proposes his appointment as Outside Director, considering that the Corporation receives his useful opinionsfrom his broad perspective as top management of the above mentioned companies.
(ii) Mr.Akiyoshi Morita serves as an counselor of AICHI STEEL. Makita purchases components from AICHI- 29 -STEEL and its corporate group. This year, such purchases amounted to 555 million yen, which constituted only
0.26% of Aichi steel group’s consolidated sales.
(iii) Mr. Akiyoshi Morita is currently an Outside Director of the Corporation, and his term of office will be four
years at the conclusion of this General Meeting of Shareholders.
(iv) With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation hasentered into a liability limitation agreement with Mr. Akiyoshi Morita which limits the maximum amount of his
liabilities to the total amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.
If Mr. Akiyoshi Morita is appointed to be an Outside Director, the Corporation will extend such liability
limitation agreement.
(v) The Corporation has designated Mr. Akiyoshi Morita 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. If Mr. Akiyoshi Morita is elected,
the Company intends to appoint him again as an Independent Director.
4.The matters concerning Outside Director candidate Mr. Masahiro Sugino are as follows:(i) Mr. Masahiro Sugino has great perceptiveness and many years of experience as a management of LIXIL Group
Corporation and LIXIL Corporation. The Corporation proposes his appointment as Outside Director, consideringthat the Corporation receives his useful opinions from his broad perspective as top management of the above
mentioned companies.
(ii) Mr. Masahiro Sugino serves as an advisor of LIXIL Corporation. Makita sells products to LIXIL Corporation andits corporate group. This year, such sales amounted to 3 million yen, which constituted less than 0.01% of ourconsolidated net sales.
(iii) Mr. Masahiro Sugino is currently an Outside Director of the Corporation, and his term of office will be twoyears at the conclusion of this General Meeting of Shareholders.
(iv) With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation hasentered into a liability limitation agreement with Mr. Masahiro Sugino which limits the maximum amount of his
liabilities to the total amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.
If Mr. Masahiro Sugino is appointed to be an Outside Director, the Corporation will extend such liability
limitation agreement.
(v) The Corporation has designated Mr. Masahiro Sugino 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. If Mr. Masahiro Sugino is elected,
the Company intends to appoint him again as an Independent Director.
5. The Corporation implemented a two-for-one common stock split of the Corporation, effective April 1, 2017.
The number of the Corporation's shares held by each candidate for Directors is based on the number of shares
after the relevant stock split.
6. The number of the Corporation's shares held by candidates for Directors represents the actual number of shareseach candidate holds, including those vested to him in Makita’s stock ownership plan for the Executives or forthe employees.
Agenda Item No. 3: Election of 1 Audit & Supervisory Board Member
The term of office of an Audit & Supervisory Board Member presently in office, Mr. Fusahiro Yamamoto will have
expired at the conclusion of this General Shareholders' Meeting. We would like to request the election of 1 Audit &Supervisory Board Member.
The candidate is as follows:
Audit & Supervisory Board has agreed to this proposal.

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Name(Date of birth)

Brief personal background, title and position and Important concurrent posts

1977 Joined Ito Audit Corporation
1981 Qualified as certified public accountant
1985 Seconded to Asahi & Co. America
1989 Qualified as US certified public accountant
2000 Representative partner of Ito Audit Corporation
2001 Merged with Chuo Aoyama Audit Corporation
Representative Partner of Chuo Aoyama Audit
Corporation
September 2006 Joined PricewaterhouseCoopers Aarata
Reelection(Present:PricewaterhouseCoopers Aarata LLC)
OutsideRepresentative Partner of PricewaterhouseCoopers Aarata
IndependentJune
2013 Outside Audit & Supervisory Board Member of theFusahiro Yamamoto
Corporation (present)(December 6, 1952) July
2013 Representative of Yamamoto Accounting Office (present)June2014 Outside Audit & Supervisory Board Member of SHIROKICorporation (present)June2015 Outside Audit & Supervisory Board Member of Daihatsu
Motor Co., Ltd (present)(Important Concurrent Posts)
Representative of Yamamoto Accounting OfficeOutside Audit & Supervisory Board Member of SHIROKI Corporation
Outside Audit & Supervisory Board Member of Daihatsu Motor Co., Ltd

Number of the
Corporation's
shares held

NovemberAugustSeptember
September
June
January-

Notes: 1. There is no special interest between the above candidate and the Corporation.
2. Mr. Fusahiro Yamamoto is a candidate for an Outside Audit & Supervisory Board Member.
3. The Corporation proposes the election of Mr. Fusahiro Yamamoto as an Outside Audit & Supervisory Board
Member, considering that, he has substantial amount of experience as a certified public accountant in Japan andthe U.S. in the field of corporate accounting audits, and he provides the Corporation with informative opinions.
4. Although Mr. Fusahiro Yamamoto does not have experience directly involving corporate management, theCompany considers that he will be able to execute the duties appropriately as Outside Audit & Supervisory
Board Member of the Corporation, with his extensive knowledge and abundant experience through his practices
as a certified public accountant.
5. Mr. Fusahiro Yamamoto is currently an Outside Audit & Supervisory Board Member of the Corporation, and his
term of office will be four years at the conclusion of this General Meeting of Shareholders.
6. With respect to liabilities set forth in Article 423, Paragraph 1 of the Companies Act, the Corporation has enteredinto a liability limitation agreement with Mr. Fusahiro Yamamoto which limits the maximum amount of his
liabilities to the total amount provided for in each of the items of Article 425, Paragraph 1 of the Companies Act.
If Mr. Fusahiro Yamamoto is appointed to be an Outside Director, the Corporation will extend such liability
limitation agreement.
7. The Corporation has designated Mr. Fusahiro Yamamoto 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. If Mr. Fusahiro Yamamoto is elected, theCompany intends to appoint him again as an Independent Audit & Supervisory Board Member.

Agenda Item No. 4: Payment of Bonus to Directors

Bonus to Directors of the Corporation are, 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 14 directors. In accordance with above policy, we would like to pay directors’
bonuses to 12 directors in the amount of 193 million yen considering performance during the period. This is with the
exception of Mr. Akiyoshi Morita and Mr. Masahiro Sugino, who are Outside Directors.

- 31 -