UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 or 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of April, 2010

Commission file number 0-12602

MAKITA CORPORATION

(Translation of registrant’s name into English)

3-11-8, Sumiyoshi-cho, Anjo City, Aichi Prefecture, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x       Form 40-F  o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):  x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):  o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  o                No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-        

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 28, 2010

Makita Corporation

Consolidated Financial Results
for the year
ended March 31, 2010
(U.S. GAAP Financial Information)

(English translation of “KESSAN TANSHIN”

originally issued in Japanese)

CONSOLIDATED FINANCIAL RESULTS
FOR THE YEAR ENDED MARCH 31, 2010 (Unaudited)

April 28, 2010

Makita Corporation
Stock code: 6586
URL: http://www.makita.co.jp/
Masahiko Goto, President, Representative Director & CEO

1. Summary operating results of the year ended March 31, 2010 (From April 1, 2009 to March 31, 2010)
(1) CONSOLIDATED OPERATING RESULTS

		Yen (million)
		For the year ended								For the year ended
		March 31, 2009								March 31, 2010
						%								%
Net sales			294,034				(14.2	)			245,823				(16.4	)
Operating income			50,075				(25.3	)			30,390				(39.3	)
Income before income taxes			44,443				(32.9	)			33,518				(24.6	)
Net income attributable to Makita Corporation			33,286				(27.7	)			22,258				(33.1	)
		Yen
Earning per share (Basic)
Net income attributable to Makita Corporation common shareholders			236.88								161.57
Ratio of net income attributable to Makita Corporation to shareholders’ equity			11.1%								7.7%
Ratio of income before income taxes to total assets			12.3%								9.8%
Ratio of operating income to net sales			17.0%								12.4%

Notes:

1.		Amounts of less than one million yen have been rounded.
2.		The table above shows the changes in the percentage ratio of net sales, operating income, income before income taxes, and net income attributable to Makita Corporation against the corresponding period of the previous year.
3.		Equity in net earnings of affiliated companies (including non-consolidated subsidiaries): NIL
4.		Certain reclassifications have been made to the previous year’s consolidated financial statements to conform with the presentation used for the year ended March 31, 2010. The meaning of “Net income attributable to Makita Corporation” is the same as the former “Net income”.

(2) SELECTED CONSOLIDATED FINANCIAL POSITION

		Yen (million)
		As of March 31, 2009				As of March 31, 2010
Total assets			336,644				349,839
Total equity			285,746				299,673
Total Makita Corporation shareholders’ equity			283,485				297,207
Total Makita Corporation shareholders’ equity ratio to total assets (%)			84.2%				85.0%
		Yen
Total Makita Corporation shareholders’ equity per share			2,057.76				2,157.42

(3) CONSOLIDATED CASH FLOWS

		Yen (million)
		For the year ended				For the year ended
		March 31, 2009				March 31, 2010
Net cash provided by operating activities			22,178				57,126
Net cash provided by (used in) investing activities			232				(17,668	)
Net cash used in financing activities			(33,179	)			(9,114	)
Cash and cash equivalents, end of year			34,215				62,290

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English translation of “KESSAN TANSHIN” originally issued in Japanese

2. Dividend Information

		Yen
										For the year ending
		For the year ended				For the year ended				March 31, 2011
		March 31, 2009				March 31, 2010				(Forecast)
Cash dividend per share:
Interim			30.00				15.00				15.00
Year-end			50.00				37.00			(Note)
Total			80.00				52.00			(Note)
		Yen (million)
Total cash dividend			11,111				7,164				—
Dividend payout ratio (%)			33.8%				32.2%				—
Dividend to shareholders’ equity ratio (%)			3.8%				2.5%				—

Note:

While the Company has set forth under the Articles of Corporation of the Company that the record date for the payment of dividend shall be the last day of a relevant period, at the present time, the projected amount of dividends as of the said record date has not been determined yet. For further details, refer to “Explanation regarding proper use of business forecasts, and other significant matters” on page 3.

3. Consolidated Financial Performance Forecast for the year ending March 31, 2011 (From April 1, 2010 to March 31, 2011)

		Yen (million)
		For the six months ending								For the year ending
		September 30, 2010								March 31, 2011
						%								%
Net sales			127,000				7.0				255,000				3.7
Operating income			16,200				9.0				33,000				8.6
Income before income taxes			16,700				(3.3	)			34,000				1.4
Net income attributable to Makita Corporation			11,100				4.5				22,500				1.1
		Yen
Earning per share (Basic)
Net income attributable to Makita Corporation common shareholders			80.57								163.33

4. Other

(1)		Changes in important subsidiaries for the year (Changes in specific subsidiaries accompanied by changes in scope of consolidation): None
(2)		Changes in principle, procedure and representation of the accounting policies concerning consolidated financial statements preparation (Changes indicated to “CHANGE OF SIGNIFICANT ACCOUNTING POLICIES”): Yes
(3)		Number of shares outstanding (common stock)

1. Number of shares issued (including treasury stock):		As of March 31, 2010: As of March 31, 2009:		140,008,760           140,008,760
2. Number of treasury stock:		As of March 31, 2010: As of March 31, 2009:		2,248,358           2,244,755
3.Average number of shares outstanding:		For the year ended March 31,2010 For the year ended March 31,2009		137,762,051           140,518,582

			2
English translation of “KESSAN TANSHIN” originally issued in Japanese

Explanation regarding proper use of business forecasts, and other significant matters

1.

Regarding the assumptions for the forecasts and other matters. The financial forecasts given above are based on information as available at the present time, and include potential risks and uncertainties. As a consequence of various factors above and other, actual results may vary from the forecasts provided above.

2.

Makita’s basic policy on the distribution of profits is to maintain a consolidated dividend payout ratio of 30% or greater, with a lower limit on annual cash dividends of 18 yen per share. However, in the event special circumstances arise, computation of the amount of dividends will be based on consolidated net income attributable to Makita Corporation after certain adjustments.

   The Board of Directors plans to meet in April 2011 for a report on earnings for the year ending March 31, 2011. At the time, in accordance with the basic policy regarding profit distribution mentioned above, the Board of Directors plans to propose a dividend equivalent to at least 30% of net income attributable to Makita Corporation. The Board of Directors will submit this proposal to the General Meeting of Shareholders scheduled for June 2011.

   The consolidated dividend payout ratio is calculated as annual dividends per share divided by consolidated net income attributable to Makita Corporation per share (after adjustments for special circumstances) and multiplied by 100.

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English translation of “KESSAN TANSHIN” originally issued in Japanese

1. OPERATING RESULTS

1. Operating results
(1) Outline of operations results for the year ended March 31, 2010

   In the year ended March 31, 2010, economic conditions were much severer than ever before due to the impact of the simultaneous global recession. However, some regions have shown signs of gradual improvement mainly due to the effects of the stimulus packages implemented by major countries and the economic growth in emerging countries. In Europe, while recovery has remained slow in Eastern Europe and Russia, Western Europe such as Germany and France has shown a modest recovery trend. In Asia, China’s steady economic growth has prompted vigorous investments in Southeast Asian countries. In Japan and the United States, economy has been picking up moderately but a full-scale recovery has yet to be seen as shown by sluggish housing starts and other unfavorable factors.

   Meanwhile, the demand for power tools decreased substantially in developed countries compared to before the financial recession in the year before last and has remained sluggish. Some emerging countries, however, led other countries in showing a recovery trend.

   Under these circumstances, Makita implemented group-wide cost reduction activities and steadily reinforced its business infrastructure. In development side, Makita continuously expanded its product lines, including those of power tools, rechargeable tools and gardening equipment through the development of smaller and lighter tools or tools with lower noise and vibration. In October 2009, Tokyo Technical Center was established to strengthen our infrastructure for improving environmental performance of our small-type engines. In production side, based on Makita’s unique global production system centered on domestic plants that manufacture diverse high-value-added products in small quantities and Chinese plants that function as hubs for mass production, we stepped up our production capacities to continuously produce high-quality brands, while responding to rapidly changing demands in a prompt and flexible manner. In sales side, we rebuilt the buildings of our sales subsidiaries in France, the Netherlands and Poland, thereby enhancing their training functions for retailers. In November 2009, a sales subsidiary was established in Vietnam, resulting in the even further improvement of our sales and after-sales service system which has already been the best in the industry.

   Our consolidated net sales for this year decreased by 16.4% compared to the previous year to 245,823 million yen. This was because of a substantial decrease in demands due to the simultaneous global recession as well as the stronger yen against other currencies as compared to the previous year.

   Profit was adversely affected by a rise in cost of sales ratio due to the lower operation rate of our production sites resulting from production reduction in response to decreased demands. Moreover, approximately 1.6 billion yen worth of assets were impaired as a result of the revaluation of goodwill and long-lived assets of Makita Numazu which was acquired in May 2007. Consequently, operating income for the year decreased by 39.3% to 30,390 million yen compared to the previous year (operating income ratio: 12.4%). Meanwhile, income before income taxes decreased by 24.6% to 33,518 million yen compared to the previous year, as a result of a substantial improvement in non-operating income (expenses) compared to the previous year due to such factors as foreign exchange gains (income before income taxes ratio: 13.6%). As a result, net income attributable to Makita Corporation was 22,258 million yen (ratio of net income attributable to Makita Corporation: 9.1%), a decrease of 33.1% compared to the previous year.

   Net Sales results by region were as follows:

   Net sales in Japan decreased by 7.6% compared to the previous year to 42,697 million yen because housing construction demands remained sluggish.

   Net sales in Europe decreased by 20.4% compared to the previous year to 109,106 million yen. This decrease was mainly because the Eastern Europe and Russian markets have yet to reach the stage of recovery, while demands were steady in Germany and France. In addition, the yen’s exchange rate rose against the European currencies.

   Net sales in North America decreased by 18.4% compared to the previous year to 34,509 million yen. Although good sales achieved in the United States during Christmas season mainly in home improvement retailer, demands remained sluggish in the housing market throughout the year.

   Net sales in Asia, against the backdrop of China’s economic growth, demands in Southeast Asia began to recover from the second half of the year. Yet the impact of a decline in demands in the first half of the year was so unfavorable that the annual sales decreased by 16.5% compared to the previous year to 18,373 million yen.

   With respect to other regions, while sales in Central and South America, particularly Brazil, were steady, the stronger yen against the local currencies than the previous year resulted in a sales decreased by 9.0% compared to the previous year to 15,228 million yen. In Oceania, although demands were steady in Australia, sales decreased by 0.7% compared to the previous year to 13,116 million yen. In the Middle East and Africa, sales decreased by 22.3% compared to the previous year to 12,794 million yen because market conditions were severe due partly to the impact of the Dubai shock.

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English translation of “KESSAN TANSHIN” originally issued in Japanese

(2) Outlook for the year ending March 31, 2011

   Regarding the future forecast, competition among companies is expected to intensify due to modest recovery of demand in developed countries. In emerging countries in Asia and other regions where construction demands are continuously expected in housing and others, markets with a strong orientation toward low-price products are likely to emerge. With trends in raw material prices and the foreign exchange market being unpredictable, Makita is expected to continue facing a challenging business environment.

   Based on these forecasts, Makita will strive to reinforce its R&D and product development activities to deliver more user-friendly, earth-conscious power tools and gardening equipment. It will also strengthen the technical development of compact engines. The global production organizations will be strengthened to respond to changes in demand conditions. Sales activities to professional users will be promoted. In addition, aggressive activities will be pursued to maintain and improve our No. 1 sales and after-sales service system in the industry.

   Makita will strive to maintain a solid financial position enabling it to implement these measures, which, we believe, will lead to enhancing customer satisfaction and raising Makita’s position in the industry, resulting, in turn, in the improvement of its corporate value.

   In projecting the operational results for the next year, we use the following assumptions:

	•		In terms of foreign exchange rates, the yen will be stronger against such major currencies as the euro and U.S. dollar than this year.
	•		Recovery of the demand for power tools is unlikely in Japan, the United States, Western Europe and other developed countries.
	•		Raw material prices will become higher compared with the current year.
	•		The potential demand in many emerging markets is strong and those markets will grow, however, the relevant foreign currency exchange rates will be unpredictable.

   To cope with these assumed conditions, Makita will:

	•		Strengthen its R&D and product development capabilities with respect to environmentally friendly power tools and gardening equipment;
	•		Continue development of new products that meet the changing needs of the market by, for example, rolling out each product line as a series;
	•		Implement production cost-saving measures, taking advantage of its global production organizations; and
	•		Strive to improve its marketing and brand power by fine-tuned response to customer needs and further improved after-sales service.

   On the basis of above measures, Makita forecasts the following performance for the year ending March 31, 2011.

Consolidated Financial Performance Forecast for the Year Ending March 31, 2011
		Yen (million)
		For the six months ending				For the year ending
		September 30, 2010				March 31, 2010
Net sales			127,000				255,000
Operating income			16,200				33,000
Income before income taxes			16,700				34,000
Net income attributable to Makita Corporation			11,100				22,500

Assumption:

The above forecast is based on the assumption of exchange rates of 92 yen to US$1 and 123 yen to 1 Euro.

			5
English translation of “KESSAN TANSHIN” originally issued in Japanese

2. Financial position

(1) Analysis on assets, liabilities and total assets

   Total assets at the end of year increased by 13,195 million yen compared to the previous year to 349,839 million yen. Main factors for this increase were a decrease in inventories and an increase of financial assets such as cash and cash equivalents.

   Liabilities decreased by 732 million yen compared to the previous year to 50,166 million yen. The major reasons for this increase were an increase of trade notes and accounts payable and a decrease in accrued retirement and termination benefits.

   Shareholders’ equity at the end of the year increased by 13,927 million yen compared to the previous year to 299,673 million yen. The principal factor for this increase was an increase in retained earnings.

(2) Analysis on cash flows and financial ratios

   Total cash and cash equivalents at the end of the year amounted to 62,290 million yen, increasing by 28,075 million yen compared to the end of the previous year.
(Net Cash Provided by Operating Activities)

   Cash collected from customers decreased due to a decrease in sales. However, net cash provided by operating activities was 57,126 million yen (22,178 million yen for the previous year) because cash paid for purchases of parts and raw materials decreased as a result of production reduction.
(Net Cash Used in Investing Activities)

   Net cash used in investing activities was 17,668 million yen (232 million yen in surplus for the previous year) due to capital expenditures, purchases of marketable securities and other factors.
(Net Cash Used in Financing Activities)

   Net cash used in financing activities totaled 9,114 million yen (33,179 million yen for the previous year). Cash was used mainly for payments of dividends to shareholders.

(Reference)
Trend information of financial ratios
		As of (year ended) March 31,
		2006				2007				2008				2009				2010
Ratio of operating income to net sales			20.0	%			17.2	%			19.6	%			17.0	%			12.4	%
Equity ratio			81.8	%			82.1	%			81.9	%			84.2	%			85.0	%
Equity ratio based on a current market price			160.0	%			170.4	%			116.4	%			90.0	%			121.3	%
Interest-bearing liabilities to net cash provided by operating activities (years)			0.1				0.1				0.1				0.0				0.0
Interest coverage ratio (times)			54.7				102.4				108.8				95.6				984.9

   Definitions:

   Notes:

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English translation of “KESSAN TANSHIN” originally issued in Japanese

3. Basic policy regarding profit distribution and cash dividend for the fiscal 2010 and 2011

     Makita’s basic policy on the distribution of profits is to maintain a consolidated dividend payout ratio of 30% or greater, with a lower limit on annual cash dividends of 18 yen per share. However, in the event special circumstances arise, computation of the amount of dividends will be based on consolidated net income attributable to Makita Corporation after certain adjustments. With respect to repurchases of its outstanding shares, Makita aims to implement a flexible capital policy, augment the efficiency of its capital employment, and thereby boost shareholder profit. Also Makita continues to consider execution of own share repurchases in light of trends in stock prices.

     Makita intends to maintain a financial position strong enough to withstand the challenges associated with changes in its operating environment and other changes and allocate funds for strategic investments aimed at expanding its global operations.

Our forecast for dividends is as follows;
		For the year ended				For the year ending
		March 31, 2010				March 31, 2011
		(Result and Forecast)				(Forecast)
Cash dividend per share:
Interim		15.00 yen				15.00 yen
Year-end		37.00 yen (Note 1)				(Note 2)
Total		52.00 yen (Note 1)				(Note 2)

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English translation of “KESSAN TANSHIN” originally issued in Japanese

2. GROUP STRUCTURE

     Makita Corporation (the “Company”) and its consolidated subsidiaries (collectively “Makita”) mainly manufacture and sell portable electric power tools. Makita is comprised of the Company and 48 consolidated subsidiaries.

     Group Structure of Makita is outlined as follows;

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English translation of “KESSAN TANSHIN” originally issued in Japanese

3. MANAGEMENT POLICIES

1. Basic Policies

     Makita has set itself the goal of consolidating a strong position in the global power tool industry as a global supplier of a comprehensive range of power tools that assist people in creating homes and living environments. In order to achieve this, Makita has established strategic business approaches and quality policies such as “A management approach in symbiosis with society” “Managing to take good care of our customers,” “Proactive, sound management” and “Emphasis on trustworthy and reliable corporate culture as well as management to draw out the capabilities of each employee.” Makita aims to generate solid profitability so that Makita can promote its sustained corporate development and meet the needs of its shareholders, customers, and employees as well as regional societies where Makita operates.

2. Target Management Indicators

     Makita believes that attaining sustained growth and maintaining high profitability are the ways to increase corporate value. Makita’s specific numerical target is to maintain a stable ratio of operating income to net sales on a consolidated basis of 10% or more.

3. Medium-to-Long-Term Management Strategy

     Makita aims to establish high brand recognition and become a “Strong Company” capable of acquiring and maintaining the top market share as an international total supplier of power tools for professional use, pneumatic tools, gardening equipment and other tools in each international region. To achieve these objectives, we will put focus on maintaining and expanding our efforts to develop new products that guarantee great satisfaction to professional users, our global production structure realizing both high quality and cost competitiveness at the same time, and the best marketing and after-sale service structure of the power tools industry in Japan and in international regions.

     In order to carry out this management strategy, Makita is focusing its management resources on the professional-use tool category, while maintaining its strong financial position that can withstand any unpredictable changes in the operational environment including those related to foreign exchange risk and country risk.

4. Preparing for the Future

     Makita will strive to reinforce its R&D and product development activities to deliver more user-friendly and earth-conscious power tools and gardening equipment. It will also strengthen the technical development of compact engines. The global production organizations will be strengthened to respond to changes in demand conditions. Sales activities to professional users will be promoted. In addition, activities to maintain and improve our No. 1 sales and after-sales service system in the industry will be aggressively promoted. We strive to improve our corporate value.

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English translation of “KESSAN TANSHIN” originally issued in Japanese

4. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Condensed Consolidated Balance Sheets

		Yen (millions)
		As of March 31, 2009								As of March 31, 2010
		Composition ratio								Composition ratio
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			34,215								62,290
Time deposits			2,623								8,383
Short-term investments			29,470								33,639
Trade receivables-
Notes			2,611								2,214
Accounts			43,078								43,680
Less- Allowance for doubtful receivables			(1,129	)							(1,010	)
Inventories			111,002								88,811
Deferred income taxes			7,264								6,434
Prepaid expenses and other current assets			11,269								9,356
Total current assets			240,403				71.4	%			253,797				72.6	%
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land			18,173								19,050
Buildings and improvements			65,223								70,668
Machinery and equipment			74,458								74,652
Construction in progress			4,516								2,257
			162,370								166,627
Less- Accumulated depreciation			(89,674	)							(93,427	)
Total net property, plant and equipment			72,696				21.6	%			73,200				20.9	%
INVESTMENTS AND OTHER ASSETS:
Investments			11,290								15,166
Goodwill			1,987								721
Other intangible assets, net			2,280								4,664
Deferred income taxes			5,050								1,611
Other assets			2,938								680
Total investments and other assets			23,545				7.0	%			22,842				6.5	%
Total assets			336,644				100.0	%			349,839				100.0	%

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English translation of “KESSAN TANSHIN” originally issued in Japanese

		Yen (millions)
		As of March 31, 2009								As of March 31, 2010
		Composition ratio								Composition ratio
LIABILITIES
CURRENT LIABILITIES:
Short-term borrowings			239								385
Trade notes and accounts payable			14,820								18,359
Other payables			4,397								5,089
Accrued expenses			5,642								4,694
Accrued payroll			7,361								6,835
Income taxes payable			2,772								1,722
Deferred income taxes			50								40
Other current liabilities			5,536								5,337
Total current liabilities			40,817				12.1	%			42,461				12.1	%
LONG-TERM LIABILITIES:
Long-term indebtedness			818								544
Accrued retirement and termination benefits			7,116								3,778
Deferred income taxes			548								677
Other liabilities			1,599								2,706
Total long-term liabilities			10,081				3.0	%			7,705				2.2	%
Total liabilities			50,898				15.1	%			50,166				14.3	%
EQUITY
MAKITA CORPORATION SHAREHOLDERS’ EQUITY:
Common stock			23,805								23,805
Additional paid-in capital			45,420								45,420
Legal reserve			5,669								5,669
Retained earnings			257,487								270,790
Accumulated other comprehensive income (loss)			(42,461	)							(42,032	)
Treasury stock, at cost			(6,435	)							(6,445	)
Total Makita Corporation shareholders’ equity			283,485				84.2	%			297,207				85.0	%
NONCONTROLLING INTEREST			2,261				0.7	%			2,466				0.7	%
Total equity			285,746				84.9	%			299,673				85.7	%
Total liabilities and equity			336,644				100.0	%			349,839				100.0	%

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English translation of “KESSAN TANSHIN” originally issued in Japanese

2. Condensed Consolidated Statements of Income

		Yen (millions)
		For the year ended March 31, 2009								For the year ended March 31, 2010
		Composition ratio								Composition ratio
NET SALES			294,034				100.0	%			245,823				100.0	%
Cost of sales			170,894				58.1	%			149,938				61.0	%
GROSS PROFIT			123,140				41.9	%			95,885				39.0	%
Selling, general, administrative and other expenses			73,065				24.9	%			65,495				26.6	%
OPERATING INCOME			50,075				17.0	%			30,390				12.4	%
OTHER INCOME (EXPENSES):
Interest and dividend income			1,562								881
Interest expense			(236	)							(71	)
Exchange gains (losses) on foreign currency transactions, net			(3,408	)							2,044
Realized gains (losses) on securities, net			(3,548	)							274
Other, net			(2	)							-
Total			(5,632	)			(1.9	)%			3,128				1.2	%
INCOME BEFORE INCOME TAXES			44,443				15.1	%			33,518				13.6	%
PROVISION FOR INCOME TAXES:
Current			11,277								8,760
Deferred			(546	)							2,192
Total			10,731				3.6	%			10,952				4.4	%
NET INCOME			33,712				11.5	%			22,566				9.2	%
Less: Net income attributable to the noncontrolling interest			(426	)			(0.2	)%			(308	)			(0.1	)%
NET INCOME ATTRIBUTABLE TO MAKITA CORPORATION			33,286				11.3	%			22,258				9.1	%

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English translation of “KESSAN TANSHIN” originally issued in Japanese

3. Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss)		Yen (millions)

		For the year ended March 31, 2009
		Makita Corporation shareholders’ equity																																Comprehensive income (Loss)
		Common stock				Additional paid-in capital				Legal reserve				Retained earnings				Accumulated other comprehensive income (loss)				Treasury stock				Non- controlling interest				Total				Net income attributable to Makita Corporation				Net income attributable to the non- controlling interest				Total
Beginning balance			23,805				45,753				5,669				249,191				(7,657	)			(263	)			2,516				319,014
Purchases and disposal of treasury stock, net							(333	)							(11,135	)							(6,172	)							(17,640	)
Cash dividends															(13,855	)											(235	)			(14,090	)
Comprehensive income (loss)
Net income															33,286												426				33,712				33,286				426				33,712
Foreign currency translation adjustment																			(28,051	)							(446	)			(28,497	)			(28,051	)			(446	)			(28,497	)
Unrealized holding gains (losses) on available-for- sale securities																			(3,065	)											(3,065	)			(3,065	)							(3,065	)
Pension liability adjustment																			(3,688	)											(3,688	)			(3,688	)							(3,688	)
Total comprehensive income (loss)																																			(1,518	)			(20	)			(1,538	)
Ending balance			23,805				45,420				5,669				257,487				(42,461	)			(6,435	)			2,261				285,746
		Yen (millions)
		For the year ended March 31, 2010
		Makita Corporation shareholders’ equity																																Comprehensive income (Loss)
		Common stock				Additional paid-in capital				Legal reserve				Retained earnings				Accumulated other comprehensive income (loss)				Treasury stock				Non- controlling interest				Total				Net income attributable to Makita Corporation				Net income attributable to the non- controlling interest				Total
Beginning balance			23,805				45,420				5,669				257,487				(42,461	)			(6,435	)			2,261				285,746
Purchases and disposal of treasury stock, net																							(10	)							(10	)
Cash dividends															(8,955	)											(197	)			(9,152	)
Capital transactions and other																											181				181
Comprehensive income (loss)
Net income															22,258												308				22,566				22,258				308				22,566
Foreign currency translation adjustment																			(2,931	)							(87	)			(3,018	)			(2,931	)			(87	)			(3,018	)
Unrealized holding gains (losses) on available-for- sale securities																			2,430												2,430				2,430								2,430
Pension liability adjustment																			930												930				930								930
Total comprehensive income (loss)																																			22,687				221				22,908
Ending balance			23,805				45,420				5,669				270,790				(42,032	)			(6,445	)			2,466				299,673

			13
English translation of “KESSAN TANSHIN” originally issued in Japanese

4. Condensed Consolidated Statements of Cash Flows
		Yen (millions)
		For the year ended				For the year ended
		March 31, 2009				March 31, 2010
Net cash provided by operating activities			22,178				57,126
Net cash provided by (used in) investing activities			232				(17,668	)
Net cash used in financing activities			(33,179	)			(9,114	)
Effect of exchange rate changes on cash and cash equivalents			(1,322	)			(2,269	)
Net change in cash and cash equivalents			(12,091	)			28,075
Cash and cash equivalents, beginning of year			46,306				34,215
Cash and cash equivalents, end of year			34,215				62,290

5. Notes on the preconditions for a going concern: None

6. Significant Accounting Policies

(1) Scope of consolidation and equity method

		Number of consolidated subsidiaries: 48
		Major subsidiaries are as follows;

		Makita U.S.A. Inc., Makita (U.K.) Ltd.,
		Makita France SAS, Makita Werkzeug GmbH (Germany), Makita Oy (Finland), Makita Gulf FZE,
		Makita (China) Co., Ltd., Makita (Kunshan) Co., Ltd., Makita (Australia) Pty. Ltd.

(2) Significant Accounting Policies (Summary)

Consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.

	1.		Short-term investments and Investments
			Makita accounts for Short-term investments and Investments in accordance with Accounting Standards Codification (ASC) 320, “Investments-Debt and Equity Securities” (former SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,”) which requires investments in debt and marketable equity securities to be classified as either trading, available-for-sale securities or held-to-maturity securities.
	2.		Allowance for Doubtful Receivables
			Allowance for doubtful receivables represents the Makita’s best estimate of the amount of probable credit losses in its existing receivables. The allowance is determined based on, but is not limited to, historical collection experience adjusted for the effects of the current economic environment, assessment of inherent risks, aging and financial performance.
	3.		Inventories
			Inventory costs include raw materials, labor and manufacturing overheads. Inventories are valued at the lower of cost or market price, with cost determined principally based on the average cost method.
	4.		Property, Plant and Equipment and Depreciation
			For the Company, depreciation of property, plant and equipment is computed principally by using the declining-balance method over the estimated useful lives. Most of the consolidated subsidiaries have adopted the straight-line method for computing depreciation.

	5.		Goodwill and Other Intangible Assets
			Makita follows the provisions of ASC 805 and ASC 350 (former SFAS No. 141 and SFAS No. 142). ASC805, “Business Combinations” (former SFAS No. 141, “Business Combinations”) requires the use of only the purchase method of accounting for business combinations and refines the definition of intangible assets acquired in a purchase business combination. ASC 350, “Intangibles—Goodwill and Other” (former SFAS No. 142, “Goodwill and Other Intangible Assets”) eliminates the amortization of goodwill and instead requires annual impairment testing thereof. ASC 350 also requires acquired intangible assets with a definite useful life to be amortized over their respective estimated useful lives and reviewed for impairment in accordance with ASC360, “Property, Plant, and Equipment” (former SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets)”.
	6.		Income Taxes
			Makita accounts for income taxes in accordance with the provision of ASC 740,“Income Taxes” (former SFAS No. 109, “Accounting for Income Taxes”), which requires an asset and liability approach for financial accounting and reporting for income taxes.
			The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
	7.		Pension Plans
			Makita accounts for pension plans in accordance with the provisions of ASC 715,“Compensation-Retirement Benefits” (former SFAS No. 87, “Employers’ Accounting for Pensions” and SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”).
	8.		Impairment of Long-Lived Assets
			Makita accounts for impairment of long-lived assets with finite useful lives in accordance with the provisions of ASC 360,“Property, Plant, and Equipment” (former SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets”).
	9.		Derivative Financial Instruments
			Makita conforms to ASC 815, “Derivatives and Hedging” (former SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”).
	10.		Use of Estimates in the Preparation of Financial Statements
			The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	11.		Revenue Recognition
			Makita recognizes revenue at the time of delivery or shipment when all of the following conditions are met; (1) The sales price is fixed and determinable, (2) Collectability is reasonably assured, (3) The title and risk of loss pass to the customer, and (4) Payment terms are established consistent with Makita’s normal payment terms.
	12.		Changes in principles, procedures and disclosures of the accounting policies concerning consolidated financial statements preparation
			Starting with this fiscal year beginning April 1, 2009, the Company has adopted Financial Accounting Standards Board (“FASB”) ASC 810, “Consolidation” (former SFAS No.160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No.51”). This statement establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of noncontrolling interests (minority interests) as equity in the consolidated financial statements. The amount of net income attributable to noncontrolling interests is now included in consolidated net income on the face of the consolidated income statements.
			This statement also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. The adoption did not give rise to any material effect on the Company’s consolidated results of operations and financial position. These financial statements presentation requirements have been adopted retrospectively and previous year amounts in the consolidated financial statements have been reclassified or adjusted to conform to this statement.

			15
English translation of “KESSAN TANSHIN” originally issued in Japanese

Operating segment information

		Yen (millions)
		For the year ended March 31, 2009
		Japan				Europe				North America				Asia				Other				Total				Corporate and elimi- nations				Consoli- dated
Sales:
(1) External customers			63,859				137,230				42,446				9,954				40,545				294,034				-				294,034
(2) Inter-segment			56,371				4,154				4,690				86,697				121				152,033				(152,033	)			-
Total			120,230				141,384				47,136				96,651				40,666				446,067				(152,033	)			294,034
Operating expenses			112,109				121,668				46,291				84,438				35,816				400,322				(156,363	)			243,959
Operating income (loss)			8,121				19,716				845				12,213				4,850				45,745				4,330				50,075

		Yen (millions)
		For the year ended March 31, 2010
		Japan				Europe				North America				Asia				Other				Total				Corporate and elimi- nations				Consoli- dated
Sales:
(1) External customers			55,767				109,484				34,547				9,007				37,018				245,823				-				245,823
(2) Inter-segment			33,309				2,809				1,847				57,820				98				95,883				(95,883	)			-
Total			89,076				112,293				36,394				66,827				37,116				341,706				(95,883	)			245,823
Operating expenses			89,719				99,418				36,034				57,947				34,942				318,060				(102,627	)			215,433
Operating income (loss)			(643	)			12,875				360				8,880				2,174				23,646				6,744				30,390

			16
English translation of “KESSAN TANSHIN” originally issued in Japanese

   Short-term investments and Investments

As of March 31, 2009		Yen(millions)
										Gross				Gross
										unrealized				unrealized
										holding				holding				Fair				Carrying
						Cost				gains				losses				value				amount
Short-term investments		Marketable securities:		Debt securities			954				60				-				1,014				1,014
				Investments in trusts			26,704				204				110				26,798				26,798
				Equity securities			998				343				33				1,308				1,308
				Total			28,656				607				143				29,120				29,120
		Held-to-maturity securities:		Debt securities			350				-				2				348				350
				Total			350				-				2				348				350
		Total					29,006				607				145				29,468				29,470
Investments:		Marketable securities:		Equity securities			7,819				1,847				177				9,489				9,489
				Total			7,819				1,847				177				9,489				9,489
		Held-to-maturity securities:		Debt securities			1,399				1				52				1,348				1,399
				Total			1,399				1				52				1,348				1,399
		Total					9,218				1,848				229				10,837				10,888