(Summary English Translation of the Materials disclosed via the Internet pursuant to Laws, Regulations, and the Articles ofIncorporaion regarding the Notice of the 104th Ordinary General Meeting of Shareholders Originally Issued in Japanese
Language)

June 6, 2016

MATERIALS DISCLOSED VIA THE INTERNET PURSUANT TO LAWS, REGULATIONS,AND THE ARTICLES OF INCORPORATION REGARDING THE NOTICE OF THE 104TH
ORDINARY GENERAL MEETING OF SHAREHOLDERS

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

MAKITA CORPORATION

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

Notes to Consolidated Financial Statements
Notes to Important Basic Matters for Preparation of Consolidated Financial Statements
1. Basis of presentation
The consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles(“U.S. GAAP”) pursuant to the provision of Article 120-3, paragraph 1 of the Ordinance on Accounting of Companies.
Provided that certain statements and notes required by U.S. GAAP are omitted in accordance with Article 120, the second
sentence of Paragraph 1 of the said Ordinance, as applied mutatis mutandis pursuant to Article 120-3, Paragraph 3 of thesaid Ordinance.
2. Scope of consolidation
Number of consolidated subsidiaries: 51
Major subsidiaries are as follows:
Makita U.S.A. Inc., Makita (U.K.) Ltd., Makita Werkzeug G.m.b.H. (Germany), Makita France SAS
Makita Oy (Finland), Makita Gulf FZE (U.A.E.), Makita (China) Co., Ltd., Makita (Kunshan) Co., Ltd.,
Makita (Australia) Pty. Ltd., Makita do Brasil Ferramentas Elétricas Ltda., etc.
3. Valuation of Short-term investments and Investments
The Corporation and its affiliates (“Makita”) conforms to Accounting Standards Codification (“ASC”) 320,
“Investments-Debt and Equity Securities”
Held-to-maturity securities:
Amortized cost
Available-for-sale securities:
Evaluation by the fair value
All valuation allowances are reported in Accumulated othercomprehensive income (loss).
The cost of securities sold is based on the moving-average method.
4. Valuation of inventories
Inventories are valued at the lower of cost or market price, with cost determined principally based on the averagemethod. Inventory costs include raw materials, labor and production overheads.
5. Depreciation method of non-current assets
Property, plant and equipment:
Goodwill and other intangible assets, net:

6. Allowance
Allowance for doubtful receivables:

Retirement and termination allowances:

Depreciation of property, plant and equipment of Makita is computed byusing the straight-line method for computing depreciation.
With respect to goodwill, in compliance with ASC 350, “Intangibles-Goodwill and Other”, amortization is not performed, but impairment
testing is carried out at least once a year in principle. Amortization is
performed using the straight-line method with regard to other intangible
assets with definite useful lives.

The allowance is determined based on, but is not limited to, historicalcollection experience adjusted for the effects of the current economic
environment, assessment of inherent risks, aging and financial performance.
Allowance for doubtful receivables represents the Makita's best estimate of
the amount of probable credit losses in its existing receivables.
In accordance with ASC 715, “Compensation-Retirement Benefits”, pension
and severance cost is accrued based on the projected benefit obligations andthe fair value of plan assets at the balance sheet date.
Each overfunded plans and postretirement plans is recognized as an asset
and each underfunded plan and postretirement plans is recognized as aliability.
Unrecognized prior service cost is amortized by the straight-line method
over the average remaining service period of employees.
-1-Unrecognized actuarial difference is recognized by amortizing a portion inexcess of 10% of the greater of the projected benefit obligations or the fairvalue of plan assets at the beginning of the period by the straight-line
method over the average remaining service period of employees.
7. Consumption tax is accounted for by allocation separately from related sales and purchase accounts.
Notes to Consolidated Balance Sheet
Guarantee (contingent liabilities):

1

million yen

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

Beginning of the period
140,008,760 shares

Increase

Decrease--

End of the period
140,008,760 shares

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

Kind of shares

Total amount ofdividends

Record date(Millions of Yen)

Dividend
per share(Yen)

Effective dateOrdinary General Meeting of
Shareholders held on June 25, 2015

Common stock

13,573

100

March 31, 2015

June 26, 2015

Board of Directors' meeting held on
October 30, 2015

Common stock

2,443

18

September 30, 2015

November 25, 2015

(2) Although the record date falls during the period, some dividends become effective during the following period.
Scheduled resolution
Ordinary General
Meeting of Shareholders
to be held on June 28,
2016

Kind of shares

Common stock

Dividend resource

Retained earnings

Total amount ofdividends(Millions of Yen)

Dividend
per share(Yen)

11,266

83

Record date

Effective date

March 31, 2016

June 29, 2016

Notes to Financial Instruments
1. Matter regarding status of financial instruments
Makita carries out short-term and other investments in order to secure profits on a stable basis. Short-term investment
consists primarily of MMF (Money Management Fund) and FFF (Free Financial Fund). Other investment is mademainly in marketable shares (shares other than those purely for trading purpose). Long-term liabilities compriselong-term loans from banks and capital-lease obligations. Forward exchange contracts and currency swap were enteredinto with the aim of reducing such market risks as foreign exchange rate fluctuations.
2.

Matter regarding such as fair value of financial instruments
The following methods and significant assumptions were used to estimate the fair value of each class of financial
instruments for which it is practicable to estimate a fair value:(1) Cash and cash equivalents, Time deposits, Trade receivable, Short-term borrowings, Trade notes and accounts payable,
Other payables, and Accrued expenses
The carrying amount is considered to be fair value since maturities are either short or do not exist.
(2) Long-term time deposits
The fair value is estimated by discounting future cash flows using the current rates that Makita would be offered fordeposits with similar terms and remaining maturities.

-2-(3) Short-term investments and Investments
The fair value of marketable investment securities is estimated based on quoted market prices. For certain
investments such as non-marketable securities, since there are no quoted market prices existing, a reasonableestimation of a fair value could not be made without incurring excessive cost, and such securities have been
excluded from fair value disclosure. Fair value is measured if it declines significantly or there is a likelihood ofsuch. Non-marketable securities amounted to 387 million yen, of which 5 million yen is invested in Short-term
investments and 382 million yen is invested in Investments as of March 31, 2016.
(4) Long-term indebtedness
The fair value of long-term indebtedness is a present value of future cash flows associated with each instrument
discounted using Makita’s current borrowing rates for similar debt instruments of comparable maturities.
(5) Derivative financial instruments
The fair values of other derivative financial instruments, composed by foreign currency contracts, and currency
swap agreements which are used for hedging purposes, are estimated by obtaining quotes and other relevant
information from brokers.
The carrying amounts and estimated fair value of the financial instruments, and the amount of difference thereof as of March 31,
2016 are as follows:(Millions of Yen)
Carrying amount
Short-term investments
Investments
Long-term time deposits
Long-term indebtedness including current maturities
Foreign currency contracts:
AssetsLiabilities
Currency swap agreements:
Liabilities

Fair value

Amount of difference

48,25821,4908(355)

48,25821,504
8
(355)

14
-

1,225
(670)

1,225
(670)

-

(8)

(8)

-

The fair value estimates are made at a specific point in time, based on relevant market information and information about
the financial instrument.
These estimates are made by the Corporation based on the Corporation’s judgment and contain uncertainties. Therefore,
any changes to the underlying assumptions may significantly affect estimates.

-3-Notes to Information Per ShareTotal Makita Corporation shareholders' equity per share

3,534.52 yen

Total Makita Corporation shareholders' equity per share attributable to common stock was computed based onfollowing;
479,752 million yen
Total Makita Corporation shareholders' equity in the consolidated balance sheet
Total Makita Corporation shareholders' equity available to common stock
Number of shares issued (excluding treasury stock) as of March 31, 2016

479,752 million yen
135,733,261 shares

Earning per share (Basic) Net income attributable to Makita Corporation common
306.59 yenshareholders
Earning per share (Basic) Net income attributable to Makita Corporation common shareholders was computed
based on following;
Net income attributable to Makita Corporation in the consolidated statement ofincome41,615 million yen
41,615 million yen
Net income attributable to Makita Corporation available to common stock
The average number of shares of common stock outstanding during the period

135,734,118 shares

Earning per share (Diluted) Net income attributable to Makita Corporation
306.58 yen
common shareholders
Earning per share (Diluted) Net income attributable to Makita Corporation common shareholders was computed
based on following;
Net income attributable to Makita Corporation in the consolidated statement of
41,615 million yen
income41,615 million yen
Net income attributable to Makita Corporation available to common stock
The average number of diluted shares of common stock outstanding during theperiod-4-

135,738,493

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

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

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

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

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

38 to 50 years
5 to 10 years

Intangible fixed assets:(Excluding lease assets)

Straight-line method
Software for internal use is depreciated on the straight-line method over its
estimated useful life (5 years).
Industrial property rights are depreciated on the straight-line method over 8 to
14 year period.

Lease assets:

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

-5-5. Allowances
Allowance for doubtful accounts:

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

6. Consumption tax is accounted for by allocation separately from related sales and purchase accounts.

-6-Notes to Balance Sheet
1. Accumulated depreciation on tangible fixed assets:
Buildings

26,552

million yen

Structures

2,324

million yen

Machinery and equipment

13,636

million yen

280

million yen

Tools, furniture and fixtures

26,825

million yen

Total

69,617

million yen

5,634

million yen

340

million yen

1million yen

11million yen

5,986

million yen

Short-term receivables

36,326

million yen

Long-term receivables

200

million yen

Short-term payables

9,114

million yen

Sales

75,198million yen

Purchases, etc.
Amount of non-operating transactions

64,295

million yen

13,857

million yen

Vehicles and transportation equipment

2. Guarantee:
Guarantee for borrowing from financial institution
Maximum amount of guarantee for Makita U.S.A. Inc.
(50 million U.S. dollars)
Maximum amount of guarantee for Makita Power Tools
India Private. Ltd. (200 million India Rupee)
Guarantee for educational loan to employees
Guarantee for accounts payable of the following company
Makita General Service Co., Ltd.
Total
3. Receivables and payables for affiliates:

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

Notes to Statement of Changes in Net Assets
1. Matter regarding treasury stock
Beginning of theKind of sharesperiodCommon stock
4,273,892 shares(Reasons for the change)

Increase

Decrease

1,646 shares

39 shares

End of the period
4,275,499 shares

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

1,646

shares39

shares

The reasons for the decrease are as follows:
Disposal of shares constituting less than a full unit:
2. Matter regarding stock acquisition rights
Type and number of shares to be issued or transferred upon the exercise of Stock Acquisition Rights(excluding Stock Acquisition Rights that are not exercisable) at the end of the period
Common stock
7,000 shares-7-Notes to Tax Effect Accounting
1. The main reasons for deferred income tax assets and liabilities are as follows:
Short-term deferred income tax assets
Accrued expenses
1,424
Allowances for environmental measures
170
Inventories
467
Accrued enterprise taxes
250
Others12

million yen
million yen
million yen
million yen
million yen

Net amount of short-term deferred income tax assets

2,323

million yen

3,124
2,510

million yen
million yen

106

million yen

84289

million yen
million yen

Long-term deferred income tax assets
Loss on evaluation of investment securities
Excess in depreciation
Retirement allowances for directors and audit &supervisory board members
Loss on impairment of fixed assets
OthersSubtotal
Valuation allowance

6,113 million yen(359) million yen

Total
Long-term deferred income tax liabilities
Retirement and termination allowances
Net unrealized gains on securities
Reserve for advanced depreciation of fixed assets
Other
Total

5,754

million yen(2,536)(3,212)
(634)
(270)

million yen
million yen
million yen
million yen(6,652) million yen

Net amount of long-term deferred income tax liabilities(898) million yen

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

32.5%

(Reconciliations)
Dividend income and other permanently
non-taxable income(14.7%)Tax sparing impact
Difference due to the change in the tax rate

(2.1%)

Other
Effective income tax rate after the adoption of tax effectaccounting

0.6%

0.8%
17.1%

3. Change of the amount of deferred income tax assets and liabilities due to a change in the statutory effective tax rate
Along with the enactment as of March 29, 2016, of the Act Concerning Partial Amendment of the Income Tax Act,etc. (Act No. 15 of 2016) and the Act Concerning Partial Amendment of the Local Tax Act, etc. (Act No. 13 of 2016),
the statutory effective tax rate used for calculating deferred income tax assets and liabilities in this fiscal year
(provided that limited to those which will be eliminated after April 1, 2016) was changed from 31.8% that wasapplicable in the previous year to 30.4% for the temporary difference expected to be eliminated during the period year
beginning on April 1, 2016 through March 31, 2018, and to 30.2% for the temporary difference expected to beeliminated during the period beginning on April 1, 2018, respectively. As a result, the amount of deferred income
tax assets (net of the amount of deferred income tax liabilities) decreased by 59 million yen, while income taxes deferred and net unrealized gains on securities increased by 229 million yen and 170 million yen, respectively.
-8-

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

149
371

million yen
million yen

Notes to Transactions with Related Parties
1. Directors and primary individual shareholders
Attribute

Companies which directors and their relatives own the
majority of voting rights (including the subsidiaries of suchcompanies)

Corporate name

TOA Co., Ltd. (Note 1)

Maruwa, Ltd. (Note 2)

Principal

Design, production andReal estate businessbusiness or

distribution of automatic

position

regulators

Owning andDirect owned ratio: 0.0

Direct owned ratio: 2.9

Purchase of production

AdvertisingequipmentInterlocking Directors

Interlocking Directors(Number of directors: 2)

owned ratio ofvoting rights (%)

Relationship(Number of directors: 2)
Principal

Purchase of production

transactions

equipment (Note 3)Advertising (Note 3)

Transaction
amount (Millions

97

2

Other payable

-

3

-

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

Terms of transactions and the policy to decide the terms(Note 1) Masahiko Goto, Chairman and Representative Director of the Corporation, Munetoshi Goto, Director of the
Corporation, and their relatives own 100% of voting rights of TOA Co., Ltd.
(Note 2) Masahiko Goto, Chairman and Representative Director of the Corporation, Munetoshi Goto, Director of the
Corporation, and their relatives own 68.1% of voting rights of Maruwa, Ltd.
(Note 3) The terms of the transactions with TOA Co., Ltd. and Maruwa, Ltd. are the same as those other generaltransactions.
(Note 4) The above stated transaction amount does not include consumption tax, and that balance at the end of theperiod includes consumption tax.

-9-

2. Subsidiaries
Attribute
Corporate nameSubsidiaries
Makita U.S.A. Inc.

Makita Gulf FZE(United States)(U.A.E.)

Direct owning ratio: 100.0

Direct owning ratio: 100.0

Debt guarantee

Money loan

Owning and owned
ratio of voting
rights (%)

Relationship

Sales of finished goods and merchandiseInterlocking Director

Interlocking Directors(Number of director: 1)(Number of directors:2)
Principaltransactions

Sales of finished goods andDebt guarantee (Note 1)

merchandise (Note 2)

Money loan (Note 3)

Transaction amount(Millions of Yen)

5,634

30,585

6,176(Note 4)
Account title

Trade accounts receivable-

Short-term loans receivable

Balance at end of
the period (Millions

3,865

-

2,592

of Yen) (Note 4)
Attribute

Subsidiaries
Makita do Brasil Ferramentas

Corporate nameElétricas Ltda.
(Brazil)Owning and owned
ratio of voting
rights (%)

Direct owning ratio: 99.9
Indirect owning ratio: 0.1

Makita (Kunshan) Co., Ltd.
(China)Direct owning ratio: 100.0
Purchase of finished goods andRelationshipmerchandise

Money loan

Interlocking Directors(Number of directors: 5)

Principaltransactions

Purchase of finished goods andMoney loan (Note 3)

merchandise(Note 2)

Transaction
amount(Millions of Yen)

8,357

45,877(Note 4)
Account title

Short-term loans receivable

Trade accounts payable

Balance at end of
the period(Millions of Yen)

7,937

6,233

(Note 4)

Terms of transactions and the policy to decide the terms(Note 1) For Makita U.S.A. Inc., the Corporation has guaranteed its debt, and the amount shown in “Transaction
amount” represents the maximum amount of guarantee (50 million U.S. dollars with no payment deadline).
- 10 -

(Note 2)(Note 3)(Note 4)The sales price and other sales conditions of products are determined upon consultation, considering theprevailing market conditions.
Regarding money loan, we decide upon reasonable rates of interest, considering the prevailing market rate.
We have not taken collateral.
Consumption tax is not included in the transaction amount and the balance at the end of the period.

Notes to Information Per Share
Net assets per share

1,878.41

yen

Total net assets in the balance sheet

254,963

million yen

Net assets available to common stock

254,963

million yen

Net assets per share attributable to common stock was computed based on following:

Number of shares issued (excluding treasury stock) as of March 31, 2016

135,733,261

Net income per share

shares

173.55yen

23,556

million yen

Net income per share attributable to common stock was computed based on following:
Net income
Net income available to common stock

23,556

Average number of outstanding shares of common stock- 11 -

135,734,118

million yen
shares