##### Table of Contents



UNITED STATES
SECURITIES AND EXCHAGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF
1934
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2010
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) THE SECURITIES EXCHANGE ACT OF 1934o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) THE SECURITIES EXCHANGE ACT OF 1934
 
  
 KABUSHIKI KAISHA MAKITA
 MAKITA CORPORATION
  JAPAN
 
 
 Securities registered or to be registered pursuant to Section 12(b) of the Act.
 Title of Class
    
    Name of each exchange on which registered*American Depositary Shares
    
    Nasdaq Global Select Market**Common Stock
   Securities registered or to be registered pursuant to Section 12(g) of the Act.   Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
 
  þ o
  o þ
   o þ
    Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
  U.S.GAAP þ
    
    International Financial Reporting Standards
as issued by International Accounting Standards Boardo
    
    Othero
  o o
  o þ




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##### Table of Contents



TABLE OF CONTENTS
 PART I
    
    PageItem 1.
    
    Identity of Directors, Senior Management and Advisers
    
    
    1Item 2.
    
    Offer Statistics and Expected Timetable
    
    
    1Item 3.
    
    Key Information
    
    
    1A.
    
    Selected financial data
    
    
    1B.
    
    Capitalization and indebtedness
    
    
    3C.
    
    Reasons for the offer and use of proceeds
    
    
    3D.
    
    Risk factors
    
    
    3Item 4.
    
    Information on the Company
    
    
    8A.
    
    History and development of the Company
    
    
    8B.
    
    Business overview
    
    
    9C.
    
    Organizational structure
    
    
    16D.
    
    Property, plants and equipment
    
    
    17Item 4A.
    
    Unresolved Staff Comments
    
    
    18Item 5.
    

Operating
and Financial Review and Prospects
    
    
    18A.
    
    Operating results
    
    
    18B.
    
    Liquidity and capital resources
    
    
    36C.
    
    Research and development, patents and licenses, etc.
    
    
    41D.
    
    Trend information
    
    
    42E.
    
    Off-balance sheet arrangements
    
    
    43F.
    
    Tabular disclosure of contractual obligations
    
    
    43G.
    
    Safe harbor
    
    
    44Item 6.
    
    Directors, Senior Management and Employees
    
    
    44A.
    
    Directors and senior management
    
    
    44B.
    
    Compensation
    
    
    47C.
    
    Board practices
    
    
    48D.
    
    Employees
    
    
    50E.
    
    Share ownership
    
    
    50Item 7.
    
    Major Shareholders and Related Party Transactions
    
    
    51A.
    
    Major shareholders
    
    
    51B.
    
    Related party transactions
    
    
    52C.
    
    Interests of experts and counsel
    
    
    53Item 8.
    
    Financial Information
    
    
    53A.
    
    Consolidated statements and other financial information
    
    
    53B.
    
    Significant changes
    
    
    54Item 9.
    
    The Offer and Listing
    
    
    54A.
    
    Offer and listing details
    
    
    54B.
    
    Plan of distribution
    
    
    55C.
    
    Markets
    
    
    55D.
    
    Selling shareholders
    
    
    55E.
    
    Dilution
    
    
    55F.
    
    Expenses of the issue
    
    
    55Item 10.
    
    Additional Information
    
    
    56A.
    
    Share capital
    
    
    56B.
    
    Memorandum and articles of association
    
    
    56C.
    
    Material contracts
    
    
    65
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##### Table of Contents



D.
    
    Exchange controls
    
    
    65E.
    
    Taxation
    
    
    66F.
    
    Dividends and paying agents
    
    
    72G.
    
    Statement by experts
    
    
    72H.
    
    Documents on display
    
    
    72I.
    
    Subsidiary information
    
    
    72Item 11.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    72Item 12.
    
    Description of Securities Other than Equity Securities
    
    
    74A.
    
    Debt Securities
    
    
    74B.
    
    Warrants and Rights
    
    
    74C.
    
    Other Securities
    
    
    74D.
    
    American Depositary Shares
    
    
    75PART IIItem 13.
    
    Defaults, Dividend Arrearages and Delinquencies
    
    
    75Item 14.
    
    Material Modifications to the Rights of Security Holders and Use of
Proceeds
    
    
    75Item 15.
    
    Controls and Procedures
    
    
    76A.
    
    Disclosure controls and procedures
    
    
    76B.
    
    Managements annual report on internal control over financial reporting
    
    
    76C.
    
    Attestation report of the registered public accounting firm
    
    
    77D.
    
    Changes in internal control over financial reporting
    
    
    77Report of Independent Registered Public Accounting Firm
    
    
    78Item 16A.
    
    Audit Committee Financial Expert
    
    
    79Item 16B.
    
    Code of Ethics
    
    
    79Item 16C.
    
    Principal Accountant Fees and Services
    
    
    79Item 16D.
    
    Exemptions from the Listing Standards for Audit Committees
    
    
    80Item 16E.
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    80Item 16G.
    
    Corporate Governance
    
    
    81PART IIIItem 17.
    
    Financial Statements
    
    
    85Item 18.
    
    Financial Statements
    
    
    85Item 19.
    
    Exhibits
    
    
    85EX-12.1 302 Certification of Chief Executive Officer, President and Representative DirectorEX-12.2 302 Certification of Chief Financial Officer, Director and General Manager of Administration HeadquartersEX-13.1 906 Certification of Chief Executive Officer and Chief Financial Officer
  ii




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Certain References and Information
    Cautionary Statement with Respect to Forward-Looking Statements
    ▪
    
    The levels of construction activities and capital investments in Makitas markets▪
    
    Fluctuations in currency exchange rates▪
    
    Intense competition in the global power tools market for
professional-use▪
    
    Makitas overseas activities and entry into overseas markets▪
    
    Makitas inability to develop attractive products▪
    
    Geographic concentration of Makitas main offices and facilities▪
    
    Sharp rise in prices of raw materials or failure of Makita to procure necessary raw materials at an adequate price▪
    
    Failure of Makitas suppliers to deliver materials or parts required for production as scheduled▪
    
    Failure to maintain cooperative relationships with significant customers and reduction of purchase and sale of Makitas
products by significant customers▪
    
    Failure to protect Makitas intellectual property rights or infringing intellectual property rights of third parties
 iii




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##### Table of Contents



▪
    
    Product liability litigation or recalls▪
    
    Fluctuations in stock market prices▪
    
    Environmental or other government regulations▪
    
    Effectiveness of Makitas internal control over financial reporting and the related attestation provided by Makitas
auditors▪
    
    Halts or malfunctioning of Makitas operational network▪
    
    Makitas ability to retain talented personnel
   iv




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##### Table of Contents



PART I
 
 Item 1.Identity of Directors, Senior Management and Advisers
  
 Item 2.Offer Statistics and Expected Timetable
  
 Item 3.Key Information
 
 A. Selected financial data
  Income Statement Data
    
    Fiscal year ended March 31,2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    2010U.S. DollarsYen in millions
    
    in thousandsNet Sales
    
    ¥
    229,075
    
    
    ¥
    279,933
    
    
    ¥
    342,577
    
    
    ¥
    294,034
    
    
    ¥
    245,823
    
    
    $
    2,643,258Operating Income
    
    
    45,778
    
    
    
    48,176
    
    
    
    67,031
    
    
    
    50,075
    
    
    
    30,390
    
    
    
    326,774Net Income
    
    
    40,633
    
    
    
    37,371
    
    
    
    46,509
    
    
    
    33,712
    
    
    
    22,566
    
    
    
    242,645Net Income
attributable to
shareholders of the
Company
    
    
    40,411
    
    
    
    36,971
    
    
    
    46,043
    
    
    
    33,286
    
    
    
    22,258
    
    
    
    239,333Yen
    
    U.S. DollarsNet Income per share
of Common stock and
per ADS :Basic
    
    
    281.1
    
    
    
    257.3
    
    
    
    320.3
    
    
    
    236.9
    
    
    
    161.6
    
    
    
    1.74:Diluted
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -U.S. DollarsBalance Sheet Data
    
    Yen in millions
    
    in thousands2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    2010Total Assets
    
    ¥
    326,038
    
    
    ¥
    368,494
    
    
    ¥
    386,467
    
    
    ¥
    336,644
    
    
    ¥
    349,839
    
    
    $
    3,761,710Cash and Cash
equivalents, Time
Deposits, and
Short-term
investments
    
    
    88,672
    
    
    
    102,211
    
    
    
    98,142
    
    
    
    66,308
    
    
    
    104,312
    
    
    
    1,121,635Net Working Capital
    
    
    181,808
    
    
    
    212,183
    
    
    
    230,699
    
    
    
    199,586
    
    
    
    211,336
    
    
    
    2,272,430Short-term Borrowings
    
    
    1,728
    
    
    
    1,892
    
    
    
    1,724
    
    
    
    239
    
    
    
    385
    
    
    
    4,140Long-term Indebtedness
    
    
    104
    
    
    
    53
    
    
    
    908
    
    
    
    818
    
    
    
    544
    
    
    
    5,849Common Stock
    
    
    23,805
    
    
    
    23,805
    
    
    
    23,805
    
    
    
    23,805
    
    
    
    23,805
    
    
    
    255,968Treasury Stock
    
    
    (258
    )
    
    
    (298
    )
    
    
    (263
    )
    
    
    (6,435
    )
    
    
    (6,445
    )
    
    
    (69,301
    )Makita Corporation
Shareholders Equity
    
    
    266,584
    
    
    
    302,675
    
    
    
    316,498
    
    
    
    283,485
    
    
    
    297,207
    
    
    
    3,195,774Total Equity
    
    ¥
    268,219
    
    
    ¥
    304,810
    
    
    ¥
    319,014
    
    
    ¥
    285,746
    
    
    ¥
    299,673
    
    
    $
    3,222,290
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Total number ofsharesoutstanding
    
    Fiscal year ended March 31,2006
    
    2007
    
    2008
    
    2009
    
    2010143,711,766
    
    
    
    143,701,279
    
    
    
    143,773,625
    
    
    
    137,764,005
    
    
    
    137,760,402
 Note:
    
    
    1.
    
    Net income per share equals net income attributable to Makita
shareholders divided by the average number of outstanding shares of
common stock.2.
    
    Net working capital equals current assets less current liabilities.3.
    
    Diluted net income per share is not presented, as Makita has no
shares or other rights convertible or exchangeable for shares of
common stock.
 Exchange rates
  Yen per U.S. $ 1.00Fiscal year ended March 31,
    
    High
    
    Low
    
    Average
    
    Year-end2006
    
    
    120.93
    
    
    
    104.41
    
    
    
    113.15
    
    
    
    117.482007
    
    
    121.81
    
    
    
    110.07
    
    
    
    116.92
    
    
    
    117.562008
    
    
    124.09
    
    
    
    96.88
    
    
    
    114.31
    
    
    
    99.852009
    
    
    110.48
    
    
    
    87.80
    
    
    
    100.85
    
    
    
    99.152010
    
    
    100.71
    
    
    
    86.12
    
    
    
    92.49
    
    
    
    93.402011
(through June 25, 2010)
    
    
    94.68
    
    
    
    89.35
    
    
    
    91.47
    
    
    
    89.35
 Yen per U.S. $ 1.002010
    
    January
    
    February
    
    March
    
    April
    
    May
    
    JuneHigh
    
    
    93.31
    
    
    
    91.94
    
    
    
    93.40
    
    
    
    94.51
    
    
    
    94.68
    
    
    
    92.33Low
    
    
    89.41
    
    
    
    88.84
    
    
    
    88.43
    
    
    
    92.03
    
    
    
    89.89
    
    
    
    89.35
  Cash dividends declared per share of common stock and per ADS
 Fiscal year ended
    
    Yen
    
    U.S. DollarsMarch 31,
    
    Interim
    
    Year-end
    
    Interim
    
    Year-end2006
    
    
    19
    
    
    
    38
    
    
    
    0.16
    
    
    
    0.322007
    
    
    19
    
    
    
    55
    
    
    
    0.16
    
    
    
    0.472008
    
    
    30
    
    
    
    67
    
    
    
    0.30
    
    
    
    0.672009
    
    
    30
    
    
    
    50
    
    
    
    0.31
    
    
    
    0.532010
    
    
    15
    
    
    
    37
    
    
    
    0.17
    
    
    
    0.41
  2




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Note:
    
    Cash dividends in U.S. dollars are based on the exchange rates as of the respective payment
date, using the noon buying rate for cable transfers in Japanese yen in New York City as
certified for customs purposes by the Federal Reserve Bank of New York.
 
 B. Capitalization and indebtedness
  
 C. Reasons for the offer and use of proceeds
  
 D. Risk factors
  Makitas sales are affected by the levels of construction activities and capital investments in its markets.
 
 
 Currency exchange rate fluctuations may affect Makitas financial results.
  3




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Makita faces intense competition in the global market for its power tools for professional use.
 
 
 Makitas overseas activities and entry into overseas markets entail risks, which may have a material adverse effect on Makitas business activities.
 
  (1)
    
    Unexpected changes in laws and regulations, such as protectionist trade policy or change in
tariff policy affecting markets in which Makita conducts its business;(2)
    
    Disadvantageous political and economic factors;(3)
    
    The outflow of technical know-how and knowledge due to increased personnel turnover enabling
Makitas competitors to strengthen their position;(4)
    
    Potentially unfavorable tax systems and tariffs;(5)
    
    Terrorism, war, and other factors that lead to social turbulence; and(6)
    
    The interruption of or disruption to Makitas operations due to labor disputes.
 4




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If Makita is not able to develop attractive products, Makitas sales activities may be adversely affected.
   Geographic concentration of Makitas main offices and facilities may have adverse effects on Makitas business activities.
    If the procurement of raw materials used by Makita becomes difficult or prices of these raw materials rise sharply, this may have an adverse effect on Makitas performance.
    If any of Makitas suppliers fail to deliver materials or parts required for production as scheduled, Makitas production activities may be adversely affected.
  5




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If Makita fails to maintain its relationships with its significant customers or if such significant customers reduce their purchases and sales of Makitas product, Makitas sales may be significantly affected.
   Makita may not be able to protect its intellectual property rights and could incur significant liabilities, litigation costs or licensing expenses or be prevented from selling its products if it is determined to be infringing the intellectual property of third parties.
 
 
 6




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Product liability litigation or recalls may harm Makitas financial statements and reputation.
   Fluctuations in stock market prices may adversely affect Makitas financial statements.
  Environmental or other government regulations may have a material adverse impact on Makitas business activities.
 
  Investor confidence and the value of Makitas ADRs and ordinary shares may be adversely
impacted if Makitas management concludes that Makitas internal control over financial reporting
is not effective or if Makitas independent registered public accounting firm is unable to provide
adequate attestation over the effectiveness of the internal control over Makitas financial
reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002.
   7




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If Makitas operational network halts or malfunctions, Makitas production and shipment schedule may be adversely affected.
   If Makita is unable to retain talented personnel, this may have an adverse affect on Makitas competitiveness and result of operations.
   
 Item 4. Information on the Company
 
 A. History and development of the Company
   
  8




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B. Business overview
 
   9




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Consolidated
Net Sales by Product Categories
  U.S. DollarsYen in millions, except for percentage amounts
    
    in thousandsFiscal year ended March 31,2008
    
    2009
    
    2010
    
    2010Power Tools
    
    ¥
    255,869
    
    
    
    74.7
    %
    
    ¥
    214,703
    
    
    
    73.0
    %
    
    ¥
    173,998
    
    
    
    70.8
    %
    
    $
    1,870,946Gardening
Equipments,
Household and Other
Products
    
    
    40,410
    
    
    
    11.8
    
    
    
    36,916
    
    
    
    12.6
    
    
    
    34,145
    
    
    
    13.9
    
    
    
    367,151Parts, Repairs and
Accessories
    
    
    46,298
    
    
    
    13.5
    
    
    
    42,415
    
    
    
    14.4
    
    
    
    37,680
    
    
    
    15.3
    
    
    
    405,161Total
    
    ¥
    342,577
    
    
    
    100
    %
    
    ¥
    294,034
    
    
    
    100
    %
    
    ¥
    245,823
    
    
    
    100
    %
    
    $
    2,643,258
  10




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a) Power Tools
      
  11




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b) Gardening Equipments, Household and Other products
    c) Parts, Repairs and Accessories
  12




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Principal Markets, Distribution and After-Sale Services
  Consolidated Net Sales by Geographic Area
 U.S. DollarsYen in millions, except for percentage amounts
    
    in thousands2008
    
    
    2009
    
    
    2010
    
    
    2010Japan
    
    
    ¥ 52,193
    
    
    
    15.2
    %
    
    
    ¥ 46,222
    
    
    
    15.7
    %
    
    
    ¥ 42,697
    
    
    
    17.4
    %
    
    $
    459,108Europe
    
    
    160,360
    
    
    
    46.8
    
    
    
    137,113
    
    
    
    46.6
    
    
    
    109,106
    
    
    
    44.4
    
    
    
    1,173,182North America
    
    
    56,422
    
    
    
    16.5
    
    
    
    42,289
    
    
    
    14.4
    
    
    
    34,509
    
    
    
    14.0
    
    
    
    371,065Asia (excluding
Japan)
    
    
    22,629
    
    
    
    6.6
    
    
    
    21,995
    
    
    
    7.5
    
    
    
    18,373
    
    
    
    7.5
    
    
    
    197,559Other
    
    
    50,973
    
    
    
    14.9
    
    
    
    46,415
    
    
    
    15.8
    
    
    
    41,138
    
    
    
    16.7
    
    
    
    442,344Total
    
    
    ¥ 342,577
    
    
    
    100
    %
    
    
    ¥ 294,034
    
    
    
    100
    %
    
    
    ¥ 245,823
    
    
    
    100
    %
    
    $
    2,643,258
 Japan
 
 
    13




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Overseas
 
 
 
  Seasonality
  14




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Competition
  
   Raw Materials and Sources of Supply
   
 Government Regulations
   15




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Intellectual Property Rights
      
 C. Organizational structure
  16




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Country of
    
    Proportion of Ownership andCompany Name
    
    Incorporation
    
    Voting interestMakita Numazu Corporation
    
    Japan
    
    100.0%Makita U.S.A., Inc.
    
    U.S.A.
    
    100.0Makita Corporation of America
    
    U.S.A.
    
    100.0Makita Canada Inc.
    
    Canada
    
    100.0Makita Werkzeug GmbH
    
    Germany
    
    100.0Dolmar GmbH
    
    Germany
    
    100.0Makita (U.K.) Ltd.
    
    U.K.
    
    100.0Makita Manufacturing Europe Ltd.
    
    U.K.
    
    100.0Makita France S.A.
    
    France
    
    55.0Makita S.p.A.
    
    Italy
    
    100.0Makita Oy
    
    Finland
    
    100.0Makita Werkzeug GmbH
    
    Austria
    
    100.0Makita Sp. zo. o.
    
    Poland
    
    100.0Makita (China) Co., Ltd.
    
    China
    
    100.0Makita (Kunshan) Co., Ltd.
    
    China
    
    100.0Makita do Brasil Ferramentas Eletricas Ltda.
    
    Brazil
    
    99.9Makita Gulf FZE
    
    U.A.E.
    
    100.0Makita (Australia) Pty. Ltd.
    
    Australia
    
    100.0
 
 D. Property, plants and equipment
  Floor spaceLocation
    
    
    (square meters)
    
    
    Principal products manufacturedJapan:Makita Corp. Okazaki Plants
    
    
    135,126
    
    
    Electric power tools, etcMakita Numazu Corporation
    
    
    21,199
    
    
    Engine powered agricultural and gardening
equipmentsOverseas:Makita (China) Co., Ltd.
    
    
    61,332
    
    
    Electric power tools, etc.Makita (Kunshan) Co., Ltd.
    
    
    26,564
    
    
    Electric power tools, etc.Makita Corporation of America
    
    
    24,053
    
    
    Electric power tools, etc.Dolmar GmbH
    
    
    17,747
    
    
    Engine powered forestry equipmentsMakita EU S.R.L. (Romania)
    
    
    13,788
    
    
    Electric power tools, etc.Makita Manufacturing Europe
Ltd.
    
    
    11,520
    
    
    Electric power tools, etc.Makita do Brasil Ferramentas
Eletricas Ltda.
    
    
    6,789
    
    
    Electric power tools, etc.
 
 17




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
    
    Head offices and certain branch offices of Makita U.S.A., Makita Canada and Makita
Australia; and
    
    Head offices of Makita Germany, Makita France, Makita Nederland (the Netherlands), Makita
Belgium, Makita Italy, Makita Brazil, Makita Taiwan and Makita Singapore.
 
 
 Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
 
 A. Operating results
 General Overview
 
 
 18




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U.S. DollarsYen in millions, except for percentage amounts
    
    
    in thousands2008
    
    
    
    2009
    
    
    
    2010
    
    
    2010ChangeNET SALES
    
    ¥
    342,577
    
    
    100%
    
    ¥
    294,034
    
    
    100%
    
    ¥
    245,823
    
    
    100%
    
    
    (16.4
    )%
    
    
    $2,643,258Cost of Sales
    
    
    199,220
    
    
    58.2
    
    
    170,894
    
    
    58.1
    
    
    149,938
    
    
    61.0
    
    
    (12.3
    )
    
    
    1,612,236GROSS PROFIT
    
    
    143,357
    
    
    41.8
    
    
    123,140
    
    
    41.9
    
    
    95,885
    
    
    39.0
    
    
    (22.1
    )
    
    
    1,031,022Selling, General and Administrative
expenses
    
    
    76,326
    
    
    22.2
    
    
    73,065
    
    
    24.9
    
    
    65,495
    
    
    26.6
    
    
    (10.4
    )
    
    
    704,248OPERATING INCOME
    
    
    67,031
    
    
    19.6
    
    
    50,075
    
    
    17.0
    
    
    30,390
    
    
    12.4
    
    
    (39.3
    )
    
    
    326,774OTHER INCOME (EXPENSES)Interest and Dividend Income
    
    
    2,092
    
    
    0.6
    
    
    1,562
    
    
    0.5
    
    
    881
    
    
    0.3
    
    
    (43.6
    )
    
    
    9,473Interest Expense
    
    
    (269
    )
    
    (0.1)
    
    
    (236
    )
    
    (0.1)
    
    
    (71
    )
    
    (0)
    
    
    (69.9
    )
    
    
    (763
    )Exchange Gains(Losses) on Foreign
currency transactions
    
    
    (1,233
    )
    
    (0.4)
    
    
    (3,408
    )
    
    (1.1)
    
    
    2,044
    
    
    0.8
    
    
    -
    
    
    
    21,979Realized Gains(Losses) on Securities
    
    
    (1,384
    )
    
    (0.4)
    
    
    (3,548
    )
    
    (1.2)
    
    
    274
    
    
    0.1
    
    
    -
    
    
    
    2,946Other, net
    
    
    -
    
    
    
    
    
    
    
    (2
    )
    
    (0)
    
    
    -
    
    
    -
    
    
    -
    
    
    
    -Total
    
    
    (794
    )
    
    (0.3)
    
    
    (5,632
    )
    
    (1.9)
    
    
    3,128
    
    
    1.2
    
    
    -
    
    
    
    33,635INCOME BEFORE INCOME TAXES
    
    
    66,237
    
    
    19.3
    
    
    44,443
    
    
    15.1
    
    
    33,518
    
    
    13.6
    
    
    (24.6
    )
    
    
    360,409Provision for Income Taxes
    
    
    19,728
    
    
    5.7
    
    
    10,731
    
    
    3.6
    
    
    10,952
    
    
    4.4
    
    
    2.1
    
    
    
    117,764NET INCOME
    
    
    46,509
    
    
    13.6
    
    
    33,712
    
    
    11.5
    
    
    22,566
    
    
    9.2
    
    
    (33.1
    )
    
    
    242,645Net income attributable to the
noncontrolling interest
    
    
    (466
    )
    
    (0.2)
    
    
    (426
    )
    
    (0.2)
    
    
    (308
    )
    
    (0.1)
    
    
    (27.7
    )
    
    
    (3,312
    )NET INCOME ATTRIBUTABLE TO MAKITA
CORPORATION
    
    
    ¥46,043
    
    
    13.4%
    
    
    ¥33,286
    
    
    11.3%
    
    
    ¥22,258
    
    
    9.1%
    
    
    (33.1
    )%
    
    
    $239,333
 Currency Fluctuations
  20




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##### Table of Contents



FY2010 compared to FY2009
 Net Sales
  
 
 Sales
by Region
  
  21




---



##### Table of Contents



Review of Performance by Product Group
 Power Tools
 
 Gardening Equipments, Household and Other Products
 
 22




---



##### Table of Contents



Parts, Repairs and Accessories
 
 Gross Profit
   Selling, General and Administrative Expenses
   Operating Income
  Other Income (Expenses)
   (1)
    
    The amount of foreign exchange gain was ¥2,044 million, due to foreign exchange gain mainly
in Brazil resulting from transfer of loan payable to the Company from U.S. Dollar basis to
Japanese yen basis according to the renewal of the loan contract.
 23




---



##### Table of Contents



(2)
    
    Realized gains on securities amounted to ¥274 million, compared with realized losses on
securities of ¥3,548 million in FY2009. This gain was mainly due to the recovery of stock
prices.
  Income before Income taxes
  Provision for Income taxes
  Net Income Attributable to Makita Shareholders
  Earning per Share
  Regional Segments
    Japan Segment
 
 24




---



##### Table of Contents



Europe Segment
 
 North America Segment
 
 Asia Segment
 
 Other Segment
      25




---



##### Table of Contents



FY2009 compared to FY2008
 Net Sales
    Sales
by Region
    
 26




---



##### Table of Contents



Review of Performance by Product Group
 Power Tools
  
 Gardening Equipments, Household and Other Products
 
 27




---



##### Table of Contents



Parts, Repairs and Accessories
 
 Gross Profit
 
 Selling, General and Administrative Expenses
 
 Losses (Gains) on Disposal or Sales of Property, Plant and Equipment
  Operating Income
  Other Income (Expenses)
 
 (1)
    
    Realized losses on securities amounted to ¥3,548 million, compared with realized losses on
securities of ¥1,384 million in FY2008. This increase of losses was mainly due to the decline
of stock price.(2)
    
    The amount of foreign exchange losses increased by ¥2,175 million, to ¥3,408 million, in
FY2009 due to foreign exchange losses mainly in Brazil and China.
  Income before Income taxes
  28




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##### Table of Contents



Provision for Income taxes
 
 Net Income
  Earning per Share
 
 Regional Segments
 
 
 Japan Segment
 
 Europe Segment
 
 29




---



##### Table of Contents



North America Segment
 
 Asia Segment
 
 Other Segment
 
 CRITICAL   ACCOUNTING   POLICIES
  Revenue Recognition
   30




---



##### Table of Contents



U.S. DollarsYen in millions
    
    in thousandsFor the year ended March 31,2008
    
    2009
    
    2010
    
    2010Volume-based Rebates:Actual payment for the year
    
    ¥
    (9,626
    )
    
    ¥
    (10,343
    )
    
    ¥
    (6,763
    )
    
    $
    (72,720
    )Charge to earnings for the year
    
    
    9,897
    
    
    
    7,866
    
    
    
    6,519
    
    
    
    70,097Translation adjustments
    
    
    346
    
    
    
    662
    
    
    
    (1
    )
    
    
    (11
    )Accrued expense or deduction
of account receivable(BS) as
of March 31
    
    
    4,476
    
    
    
    2,661
    
    
    
    2,416
    
    
    
    25,978Cooperative Advertisings:Actual payment for the year
    
    
    (3,585
    )
    
    
    (3,981
    )
    
    
    (2,453
    )
    
    
    (26,376
    )Charge to earnings for the year
    
    
    3,517
    
    
    
    3,435
    
    
    
    2,923
    
    
    
    31,430Translation adjustments
    
    
    64
    
    
    
    185
    
    
    
    (109
    )
    
    
    (1,172
    )Accrued expense or deduction
of account receivable(BS) as
of March 31
    
    
    953
    
    
    
    592
    
    
    
    953
    
    
    
    10,247Cash Discounts:Actual payment for the year
    
    
    (5,891
    )
    
    
    (5,514
    )
    
    
    (4,281
    )
    
    
    (46,032
    )Charge to earnings for the year
    
    
    5,881
    
    
    
    5,444
    
    
    
    4,420
    
    
    
    47,527Translation adjustments
    
    
    58
    
    
    
    14
    
    
    
    8
    
    
    
    86Accrued expense or deduction
of account receivable(BS) as
of March 31
    
    ¥
    396
    
    
    ¥
    340
    
    
    ¥
    487
    
    
    $
    5,237
 Inventory Valuation
  31




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##### Table of Contents



Impairment Losses on Securities
     Allowance for Doubtful Receivables
  32




---



##### Table of Contents



Impairment of Long-lived Assets
   
   Impairment of Goodwill
   33




---



##### Table of Contents



Retirement and Termination Benefit Plans
   
 
 34




---



##### Table of Contents



Yen in millionsChange inprojected benefit
    
    Change in pre-taxChange in assumption
    
    obligation
    
    pension expenses50 basis point increase/decrease in discount rate
    
    
    (2,205) /
    
    
    
    2,462
    
    
    
    3/
    
    
    
    (5
    )50 basis point increase/decrease in expected return on assets
    
    
    -
    
    
    
    -
    
    
    
    (193)/
    
    
    
    193
 
 Realizability of Deferred Income Tax Assets
  
  New Accounting Standards Not yet Adopted
  35




---



##### Table of Contents



B. Liquidity and capital resources
 
   FY2010
 Cash Flows
 
 
    Cash inflow increased ¥92,743 million due to decreased purchases as a result of reduced
production, decreased inventories, and the effect of cost reduction efforts.
  
    Cash collected from customers decreased ¥57,795 million due to the sales decrease.
  
    ¥6,143 million increase due to higher purchases of available-for-sale securities and
held-to-maturity securities
    ¥15,593 million decrease due to a decrease in proceeds from sales and maturities of securities
    ¥2,815 million decrease due to proceeds from maturity of time deposits
    ¥6,209 million decrease due to lower capital expenditures compared with FY2009 including
expenditures for the partial renovation of the Okazaki Plant in Japan, the reconstruction of
sales offices and warehouse in Germany, the Netherlands, Poland and Switzerland, relocation of
Nagoya branch office in Japan, the extension of the Makita China
Plant and the Dubai warehouse of Makita Gulf.
 36




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##### Table of Contents




    ¥17,630 million decrease reflecting almost no acquisition of treasury shares during FY2010
    ¥4,900 million decrease due to reduced amount of cash dividends paid
  
 
 Capital Expenditures
 
  
 
 37




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##### Table of Contents



Financial Position
 
  
 
 
 
 38




---



##### Table of Contents



FY2009
 Cash Flows
   
    ¥25,428 million increase due to lower levels of cash used in operating activities such as
purchases of parts and raw materials, selling, general and administrative expenses and income
tax payments
  
    ¥32,525 million decrease due to lower level of cash received from customers as a result of
decrease in sales
  
    ¥20,565 million decrease due to lower purchases of available-for-sale securities and
held-to-maturity securities
    ¥8,302 million decrease due to a decrease in proceeds from sales and maturities of securities
    ¥4,791 million decrease due to proceeds from maturity of time deposits
 
    ¥2,010 million increase due to higher capital expenditures compared with FY2008 including
expenditures for the partial reconstruction of the Okazaki Plant, purchases of metal molds for
the manufacture of new products, construction of the research and development facility at the
Makita China Plant, expansion of the Makita Romania Plant, construction of the second plant in
Brazil and construction of the headquarter building of the sales company in France
  
    ¥17,640 million used for repurchase of the Companys own shares of common stock
    ¥1,638 million increase due to cash dividends paid
  
 
 39




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##### Table of Contents



Capital Expenditures
 
 
  
 Financial Position
 
  40




---



##### Table of Contents



C. Research and development, patents and licenses, etc.
   
 41




---



##### Table of Contents



D. Trend information
 
    
  42




---



##### Table of Contents



E. Off-balance sheet arrangements
  
 F. Tabular disclosure of contractual obligations
 Yen in millionsExpected payment date; year ending March 31,Total
    
    2011
    
    2012
    
    2013
    
    2014
    
    2015
    
    There-afterCapital lease
    
    
    ¥324
    
    
    
    ¥280
    
    
    
    ¥28
    
    
    
    ¥13
    
    
    
    ¥3
    
    
    
    -
    
    
    
    -Interest expenses on
capital lease
    
    
    13
    
    
    
    12
    
    
    
    1
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Operating Lease
    
    
    2,765
    
    
    
    840
    
    
    
    545
    
    
    
    410
    
    
    
    329
    
    
    
    244
    
    
    
    397Unsecured loans from bank
    
    
    500
    
    
    
    -
    
    
    
    500
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Interest expenses on
loans from bank
    
    
    16
    
    
    
    9
    
    
    
    7
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Contributions to defined
benefit plan
    
    
    2,475
    
    
    
    2,475
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Purchase obligation
    
    
    7,609
    
    
    
    7,609
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Total
    
    
    ¥13,702
    
    
    
    ¥11,225
    
    
    
    ¥1,081
    
    
    
    ¥423
    
    
    
    ¥332
    
    
    
    ¥244
    
    
    
    ¥397
 U.S. Dollars in thousandsExpected payment date; year ending March 31,Total
    
    2011
    
    2012
    
    2013
    
    2014
    
    2015
    
    There-afterCapital lease
    
    
    $ 3,484
    
    
    
    $ 3,011
    
    
    
    $ 301
    
    
    
    $ 140
    
    
    
    $ 32
    
    
    
    -
    
    
    
    -Interest expenses on
capital lease
    
    
    140
    
    
    
    129
    
    
    
    11
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Operating Lease
    
    
    29,731
    
    
    
    9,032
    
    
    
    5,860
    
    
    
    4,408
    
    
    
    3,538
    
    
    
    2,624
    
    
    
    4,269Unsecured loans from bank
    
    
    5,376
    
    
    
    -
    
    
    
    5,376
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Interest expenses on
loans from bank
    
    
    172
    
    
    
    97
    
    
    
    75
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Contributions to defined
benefit plan
    
    
    26,613
    
    
    
    26,613
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Purchase obligation
    
    
    81,817
    
    
    
    81,817
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Total
    
    $
    147,333
    
    
    $
    120,699
    
    
    $
    11,623
    
    
    $
    4,548
    
    
    $
    3,570
    
    
    $
    2,624
    
    
    $
    4,269
 Note: 1.
    
    Determination of contributions to defined benefit plan after FY2011 is not practicable.
 2.
    
    The notional amount of derivative financial instruments that are expected to settle
in FY2010 is ¥14,544 million and their estimated fair value is ¥(276) million at March
31, 2010.
Please see note 17, 18, 19 to the consolidated financial statements for further information.
 43




---



##### Table of Contents



G. Safe harbor
   
 Item 6. Directors, Senior Management and Employees
 
 A. Directors and senior management
   Masahiko GotoCurrent Position
    
    President, Representative Director and Chief Executive Officer since May 1989Date of Birth
    
    November 16, 1946Director since
    
    May 1984Business Experience
    
    May 1984
    
    Director, General Manager of General Planning DepartmentJuly 1987
    
    Managing Director of Administration HeadquartersYasuhiko KanzakiCurrent Position
    
    Director, Managing Corporate Officer, in charge of
International Sales and General Manager of International
Sales Headquarters: Europe, Middle East and Africa Region
since June 2009Date of Birth
    
    July 9, 1946Director since
    
    June 1999Business Experience
    
    April 1995
    
    Director of Makita International Europe Ltd.June 1999
    
    Director, Assistant General Manager of
International Sales Headquarters 1June 2003
    
    Director, General Manager of International
Sales Headquarters (Europe region)June 2007
    
    Managing Director, General Manager of
International Sales Headquarters (Europe
region)Tadayoshi ToriiCurrent Position
    
    Director, Managing Corporate Officer, in charge of Production and General
Manager of Production Headquarters since June 2009Date of Birth
    
    December 10, 1946Director since
    
    June 2001Business Experience
    
    October 1998
    
    General Manager of Production DepartmentJune 2001
    
    Director, General Manager of Quality Control HeadquartersJune 2003
    
    Director, General Manager of Production Headquarters
 44




---



##### Table of Contents



Shiro HoriCurrent Position
    
    Director, Managing Corporate Officer, in charge of
International Sales and General Manager of International
Sales Headquarters: America, Asia and Oceania Region since
June 2009Date of Birth
    
    February 24, 1948Director since
    
    June 2003Business Experience
    
    March 1999
    
    General Manager of Europe Sales DepartmentJune 2003
    
    Director, General Manager of
International Sales Headquarters: America
Area and International AdministrationSeptember 2007
    
    Director, General Manager of Overseas
Sales Headquarters (America, Asia and
Oceania Area, and International
Administration)Tomoyasu KatoCurrent Position
    
    Director, Corporate Officer, General Manager of Research and Development
Headquarters in charge of Research and Development since June 2009Date of Birth
    
    March 25, 1948Director since
    
    June 2001Business Experience
    
    March 1999
    
    General Manager of Technical Administration DepartmentJune 2001
    
    Director, General Manager of Research and Development HeadquartersTadashi AsanumaCurrent Position
    
    Director, Corporate Officer, in charge of Domestic Sales
and General Manager of Domestic Sales Marketing
Headquarters since June 2009Date of Birth
    
    January 4, 1949Director since
    
    June 2003Business Experience
    
    April 1995
    
    Manager of Saitama Branch OfficeApril 2001
    
    General Manager of Osaka Sales DepartmentJune 2003
    
    Director, Assistant General Manager of
Domestic Sales Marketing HeadquartersJune 2007
    
    Director, General Manager of Domestic
Sales Marketing Headquarters (Tokyo Sales Department)Hisayoshi NiwaCurrent Position
    
    Director, Corporate Officer, General Manager of Quality Headquarters since
June 2009Date of Birth
    
    February 24, 1949Director since
    
    June 2003Business Experience
    
    October 1991
    
    General Manager of Information System CenterOctober 1999
    
    General Manager of Production Control DepartmentJune 2003
    
    Director, General Manager of Quality Control HeadquartersApril 2005
    
    Director, General Manager of Quality Headquarters
 45




---



##### Table of Contents



Shinichiro TomitaCurrent Position
    
    Director, Corporate Officer, General Manager of Purchasing Headquarters
since May 2010Date of Birth
    
    January 11, 1951Director since
    
    June 2007Business Experience
    
    October 2001
    
    General Manager of Production Engineering DepartmentSeptember 2003
    
    President of Makita (China) Co., Ltd.June 2007
    
    Director, Assistant General Manager of Production
Headquarters in charge of China PlantJune 2009
    
    Director, Corporate Officer, General Manager of
Research and Development Headquarters in charge of
Product DevelopmentTetsuhisa KanekoCurrent Position
    
    Director, Corporate Officer, General Manager of Production Headquarters
in charge of China Plant since May 2010Date of Birth
    
    April 6, 1955Director since
    
    June 2007Business Experience
    
    April 2004
    
    General Manager of Technical Research DepartmentAugust 2005
    
    General Manager of 2nd Production DepartmentOctober 2006
    
    General Manager of 1st Production DepartmentJune 2007
    
    Director, General Manager of Purchasing HeadquartersJune 2009
    
    Director, Corporate Officer, General Manager of
Purchasing HeadquartersYoji AokiCurrent Position
    
    Director, Chief Financial Officer, Corporate Officer and General Manager of
Administration Headquarters since June 2009Date of Birth
    
    May 22, 1950Director since
    
    June 2009Business Experience
    
    July 2001
    
    General Manager of Personnel DepartmentJuly 2004
    
    General Manager of General Administration DepartmentMotohiko YokoyamaCurrent Position
    
    Outside Director since June 2005Date of Birth
    
    May 13, 1944Director since
    
    June 2005Business Experience
    
    June 2004
    
    President and Representative Director of Toyoda Machine Works, Ltd.January 2006
    
    Vice President and Representative Director of JTEKT Corporation,
which is the entity created by the merger of Toyoda Machine Works,
Ltd. with Koyo Seiko Co., Ltd.June 2007
    
    President and Representative Director of JTEKT CorporationJune 2010
    
    Vice Chairman of JTEKT CorporationToshihito YamazoeCurrent Position
    
    Standing Statutory Auditor since June 2008Date of Birth
    
    October 16, 1949Statutory Auditor since
    
    June 2008Business Experience
    
    April 1999
    
    Assistant General Manager of Asia and Oceania Sales DepartmentAugust 2000
    
    President of Makita (China) Co., Ltd.April 2006
    
    General Manager of Europe Sales Department
 46




---



##### Table of Contents



Haruhito HisatsuneCurrent Position
    
    Outside Standing Statutory Auditor since June 2008Date of Birth
    
    February 7, 1947Statutory Auditor since
    
    June 2008Business Experience
    
    May 1990
    
    Manager of Government Securities Service Section of Operation
Department of the Bank of JapanMay 1991
    
    Officer of Examination Department of the Bank of JapanApril 1997
    
    General Manager of Overseas Section of the Hekikai Shinkin BankAugust 2003
    
    Management Director and Corporate Officer, Director of
Business Center of the Hekikai Shinkin BankMasafumi NakamuraCurrent Position
    
    Outside Statutory Auditor since June 2007Date of Birth
    
    September 17, 1942Statutory Auditor since
    
    June 2007Business Experience
    
    May 1983
    
    Representative partner of SAN-AI Audit CorporationApril 2001
    
    Representative partner of Tohmatsu & Co.January 2006
    
    Representative partner of Masafumi Nakamura Accountancy FirmJune 2007
    
    Outside Statutory Auditor for Taiyo Kagaku Co., Ltd.November 2008
    
    Outside Statutory Auditor for Shinwa Co., Ltd.April 2009
    
    Professor in Graduate School of Business at Aichi Shukutoku
UniversityMichiyuki KondoCurrent Position
    
    Outside Statutory
Auditor since June 2008
(Attorney-at-law, Kondo Michiyuki Law Firm)Date of Birth
    
    October 23, 1944Statutory Auditor since
    
    June 2008Business Experience
    
    April 1971
    
    Attorney-at-law, Takasu Hiroo Law FirmMay 1977
    
    Established Kondo Michiyuki Law FirmMay 2005
    
    Outside Statutory Auditor for ELMO Co., Ltd.April 2010
    
    Outside Statutory Auditor for TECNO HORIZON
HOLDINGS CO.,LTD
 
 
 B. Compensation
 
  47




---



##### Table of Contents



C. Board practices
 
    
 48




---



##### Table of Contents



49




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##### Table of Contents



D. Employees
  Employees by Geographic Areas
    
    As of March 31,2008
    
    2009
    
    2010Japan
    
    
    3,206
    
    
    
    3,171
    
    
    
    3,146Europe
    
    
    2,323
    
    
    
    2,381
    
    
    
    2,347North America
    
    
    995
    
    
    
    912
    
    
    
    848Asia
    
    
    3,278
    
    
    
    3,203
    
    
    
    3,230Other regions
    
    
    634
    
    
    
    745
    
    
    
    757Total
    
    
    10,436
    
    
    
    10,412
    
    
    
    10,328
 
  
 E. Share ownership
  Identity of person or group
    
    Number of shares owned
    
    Percentage of outstanding sharesDirectors and Statutory Auditors
    
    
    2,094,593
    
    
    
    1.52%
 50




---



##### Table of Contents



Name
    
    Position as of March 31, 2010
    
    Number of sharesMasahiko Goto
    
    CEO & President, Representative Director
    
    
    1,990,537Yasuhiko Kanzaki
    
    Director and Managing Corporate Officer
    
    
    23,104Tadayoshi Torii
    
    Director and Managing Corporate Officer
    
    
    16,477Shiro Hori
    
    Director and Managing Corporate Officer
    
    
    13,263Tomoyasu Kato
    
    Director and Corporate Officer
    
    
    14,777Tadashi Asanuma
    
    Director and Corporate Officer
    
    
    7,179Hisayoshi Niwa
    
    Director and Corporate Officer
    
    
    8,380Shinichiro Tomita
    
    Director and Corporate Officer
    
    
    4,406Tetsuhisa Kaneko
    
    Director and Corporate Officer
    
    
    7,005Yoji Aoki
    
    CFO & Director and Corporate Officer
    
    
    3,314Motohiko Yokoyama
    
    Outside Director
    
    
    0Toshihito Yamazoe
    
    Standing Statutory Auditor
    
    
    5,317Haruhito Hisatsune
    
    Standing Statutory Auditor
    
    
    0Masafumi Nakamura
    
    Outside Statutory Auditor
    
    
    0Michiyuki Kondo
    
    Outside Statutory Auditor
    
    
    834
 
 Item 7. Major Shareholders and Related Party Transactions
 
 A. Major shareholders
    Name of beneficial owner
    
    Number of shares
    
    PercentageMaster Trust Bank of Japan, Ltd. (Trust account)
    
    
    8,193,100
    
    
    
    5.85%
  51




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##### Table of Contents



Shares owned
    
    
    
    
    
    Number
    
    SharesDate of
    
    prior to
    
    
    
    
    
    of shares
    
    owned afterName of shareholder
    
    transaction
    
    transaction
    
    %
    
    changed
    
    transaction
    
    %Mitsubishi UFJ Financial Group
    
    April 14, 2008
    
    
    8,544,423
    
    
    
    5.93
    
    
    
    1,478,577
    
    
    
    10,023,000
    
    
    
    6.97Mitsubishi UFJ Financial Group
    
    June 30, 2008
    
    
    10,023,000
    
    
    
    6.97
    
    
    
    1,462,523
    
    
    
    11,485,523
    
    
    
    7.98Mitsubishi UFJ Financial Group
    
    October 27, 2008
    
    
    11,485,523
    
    
    
    7.98
    
    
    
    (1,446,434
    )
    
    
    10,039,089
    
    
    
    6.97Nomura Asset Management
    
    March 13, 2009
    
    
    7,528,400
    
    
    
    5.23
    
    
    
    (1,677,600
    )
    
    
    5,850,800
    
    
    
    4.18Nomura Asset Management
    
    October 15, 2009
    
    
    7,218,000
    
    
    
    5.16
    
    
    
    (1,652,200
    )
    
    
    5,565,800
    
    
    
    3.98
  
 
 B. Related party transactions
   
  52




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##### Table of Contents



C. Interests of experts and counsel
  
 Item 8. Financial Information
 
 A. Consolidated statements and other financial information
 1-3. Consolidated Financial Statements
     Legal or arbitration proceedings
  Dividend Policy
   53




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##### Table of Contents



Yen
    
    U.S. DollarsFiscal year ended March 31,
    
    Interim
    
    Year-end
    
    Interim
    
    Year-end2006
    
    
    19
    
    
    
    38
    
    
    
    0.16
    
    
    
    0.322007
    
    
    19
    
    
    
    55
    
    
    
    0.16
    
    
    
    0.472008
    
    
    30
    
    
    
    67
    
    
    
    0.30
    
    
    
    0.672009
    
    
    30
    
    
    
    50
    
    
    
    0.31
    
    
    
    0.532010
    
    
    15
    
    
    
    37
    
    
    
    0.17
    
    
    
    0.41
 Note:
    
    Cash dividends in U.S. dollars are based on the exchange rates at the respective payment
date (except for the FY2010 year-end dividend, which is based on the
exchange rate on June 25, 2010), using the noon buying rates for cable transfers in Japanese yen in New York City as
certified for customs purposes by the Federal Reserve Bank of New York.
 
 B. Significant changes
  
 Item 9. The Offer and Listing
 
 A. Offer and listing details
   54




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##### Table of Contents



Tokyo Stock Exchange price per
    
    NASDAQ price pershare of Common stock
    
    American Depositary ShareYen
    
    U.S. DollarsFiscal year ended March 31,
    
    High
    
    Low
    
    High
    
    Low2006
    
    
    3,820
    
    
    
    1,755
    
    
    
    34.19
    
    
    
    16.152007
    
    
    4,630
    
    
    
    2,995
    
    
    
    39.00
    
    
    
    26.032008
    
    
    5,920
    
    
    
    2,885
    
    
    
    50.60
    
    
    
    27.282009
    
    
    4,780
    
    
    
    1,160
    
    
    
    45.76
    
    
    
    12.722010
    
    
    3,400
    
    
    
    1,912
    
    
    
    39.65
    
    
    
    21.01
 QuarterlyFiscal year 20091st quarter ended June 30, 2008
    
    
    4,780
    
    
    
    3,000
    
    
    
    45.76
    
    
    
    29.942nd quarter ended September 30, 2008
    
    
    4,380
    
    
    
    1,965
    
    
    
    39.30
    
    
    
    19.073rd quarter ended December 31, 2008
    
    
    2,215
    
    
    
    1,160
    
    
    
    22.64
    
    
    
    12.724th quarter ended March 31, 2009
    
    
    2,490
    
    
    
    1,580
    
    
    
    25.09
    
    
    
    17.80Fiscal year 20101st quarter ended June 30, 2009
    
    
    2,535
    
    
    
    2,080
    
    
    
    25.58
    
    
    
    21.682nd quarter ended September 30, 2009
    
    
    3,060
    
    
    
    1,912
    
    
    
    33.87
    
    
    
    21.013rd quarter ended December 31, 2009
    
    
    3,400
    
    
    
    2,700
    
    
    
    39.65
    
    
    
    30.514th quarter ended March 31, 2010
    
    
    3,395
    
    
    
    2,771
    
    
    
    36.60
    
    
    
    31.44
 MonthlyJanuary 2010
    
    
    3,395
    
    
    
    2,953
    
    
    
    36.60
    
    
    
    32.78February 2010
    
    
    3,130
    
    
    
    2,771
    
    
    
    34.53
    
    
    
    31.44March 2010
    
    
    3,190
    
    
    
    2,800
    
    
    
    34.22
    
    
    
    31.67April 2010
    
    
    3,265
    
    
    
    2,810
    
    
    
    34.69
    
    
    
    30.55May 2010
    
    
    2,882
    
    
    
    2,375
    
    
    
    32.74
    
    
    
    25.55June 2010
    
    
    2,727
    
    
    
    2,380
    
    
    
    29.75
    
    
    
    26.66
 
 B. Plan of distribution
  
 C. Markets
  
 D. Selling shareholders
  
 E. Dilution
  
 F. Expenses of the issue
  55




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##### Table of Contents



Item 10. Additional Information
 
 A. Share capital
  
 B. Memorandum and articles of association
 Organization
 kabushiki kaisha) kaishaho shogyo tokibo
 Objects and purposes
  
    
    Manufacture and sale of machine tools including electric power tools, pneumatic tools,
engine-powered tools, etc., and wood-working tools;
    
    Manufacture and sale of electric machinery and equipment, gardening machinery and various
other machinery and equipment;
    
    Manufacture and sale of interior furnishings and household goods and their installation work;
    
    Purchase, sale, lease and management of real estate;
    
    Operation of sporting and recreational facilities;
    
    Casualty insurance agency and business relating to offering of life insurance;
    
    Tourist business under the Travel Agency Law;
    
    Acquisition, assignment and licensing of industrial property rights, copyright and other
intellectual property rights and provision of technical guidance;
    
    Investment in various kinds of business; and
    
    All other business incidental or relative to any of the preceding items.
 Directors
 
  
    
    the Directors or Statutory Auditors power to vote in connection with their compensation;
    
    the borrowing power exercisable by a Representative Director (or a Director who is given
power by a Representative Director to exercise such power);
 
    
    the Directors or Statutory Auditors retirement age; or
    
    requirement to hold any shares of capital stock of the Company.
 56




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##### Table of Contents




    
    to acquire or dispose of material assets;
    
    to borrow a substantial amount of money;
    
    to employ or discharge from employment important employees, such as general managers;
    
    to establish, change or abolish material corporate organization such as a branch office;
    
    to determine material conditions concerning offering of corporate bonds; and
    
    to establish and maintain an internal control system.
  Common stock
 General
 
    57




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##### Table of Contents



Unit share system
 
 Authorized capital
  
 Dividends from Surplus
 Dividends
from Surplus  General
       58




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##### Table of Contents



Voting rights
 
  Restriction on dividends from surplus
  
 A =
    
    the total amount of other capital surplus and other retained earnings, each such amount
being that appearing on the non-consolidated balance sheet as of the end of the last business
yearB =
    
    (if the Company has disposed of its treasury stock after the end of the last business year)
the amount of the consideration for such treasury stock received by the Company less the book
value thereofC =
    
    (if the Company has reduced its stated capital after the end of the last business year) the
amount of such reduction less the portion thereof that has been transferred to additional
paid-in capital or legal reserve (if any)D =
    
    (if the Company has reduced its additional paid-in capital or legal reserve after the end
of the last business year) the amount of such reduction less the portion thereof that has been
transferred to stated capital (if any)E =
    
    (if the Company has cancelled its treasury stock after the end of the last business year)
the book value of such treasury stockF =
    
    (if the Company has distributed Surplus to its shareholders after the end of the last
business year) the total book value of the Surplus so distributedG =
    
    certain other amounts set forth in ordinances of the Ministry of Justice, including (if the
Company has reduced Surplus and increased its stated capital, additional paid-in capital or
legal reserve after the end of the last business year) the amount of such reduction and (if
the Company has distributed Surplus to the shareholders after the end
of the last business
year) the amount set aside in additional paid-in capital or legal reserve (if any) as required
by ordinances of the Ministry of Justice
 59




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##### Table of Contents



(a)
    
    the book value of its treasury stock;(b)
    
    the amount of consideration for any of the treasury stock disposed of by the Company after
the end of the last business year; and(c)
    
    certain other amounts set forth in ordinances of the Ministry of Justice, including (if the
sum of one-half of goodwill and the deferred assets exceeds the total of stated capital,
additional paid-in capital and legal reserve, each such amount being that appearing on the
non-consolidated balance sheet as of the end of the last business year) all or certain part of
such exceeding amount as calculated in accordance with the ordinances of the Ministry of
Justice.
 renketsu haito
kisei tekiyo kaisha
  Capital and reserves
  Stock splits
    60




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##### Table of Contents



Consolidation of shares
 
 
 General meeting of shareholders
 
  
 Voting rights
  61




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##### Table of Contents



(1)
    
    acquisition of its own shares from specific persons other than its subsidiaries;(2)
    
    consolidation of shares;(3)
    
    any offering of new shares or existing shares held by the Company as treasury stock at a
specially favorable price (or any offering of stock acquisition rights, or bonds with stock
acquisition rights on specially favorable conditions) to any persons other than
shareholders;(4)
    
    the removal of a Statutory Auditor;(5)
    
    the exemption of liability of a Director, Statutory Auditor or Accounting Auditor with certain
exceptions;(6)
    
    a reduction of stated capital with certain exceptions in which a special shareholders
resolution is not required;(7)
    
    a distribution of Surplus in kind other than dividends which meets certain requirements;(8)
    
    dissolution, merger, consolidation or corporate split with certain exceptions in which a
shareholders resolution is not required;(9)
    
    the transfer of the whole or a material part of the business with certain exceptions in which
a shareholders resolution is not required;(10)
    
    the taking over of the whole of the business of any other corporation with certain exceptions
in which a shareholders resolution is not required; or(11)
    
    share exchange or share transfer for the purpose of establishing 100 percent
parent-subsidiary relationships with certain exceptions in which a shareholders resolution is
not required.
 Issue of additional shares and pre-emptive rights
  62




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##### Table of Contents



Liquidation rights
  Record date
 
  Acquisition by the Company of Common stock
   63




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##### Table of Contents



Unit share system
    
  General
 Sales
by the Company of shares held by shareholders whose location is unknown
 
 64




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##### Table of Contents



Reporting of substantial shareholdings
   
 
 C. Material contracts
  
 D. Exchange controls
 
 
    
    individuals who do not reside in Japan; and
    
    corporations whose principal offices are located outside Japan.
  65




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##### Table of Contents




    
    individuals who are exchange non-residents;
    
    corporations that are organized under the laws of foreign countries and areas or whose
principal offices are located outside of Japan;
    
    corporations of which 50 percent or more of their shares are held by individuals who are
exchange non-residents and/or corporations (1) that are organized under the laws of foreign
countries and areas or (2) whose principal offices are located outside of Japan; or
    
    corporations a majority of whose officers, or officers having the power of representation,
are individuals who are exchange non-residents.
 
 
  
 E. Taxation
 The discussion below is intended for general information only and does not constitute a complete
analysis of all tax consequences relating to the ownership of shares of Common Stock or ADSs.
Prospective purchasers of shares of Common Stock or ADSs should consult their own tax advisors
concerning the tax consequences of their particular situations.
 
 66




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##### Table of Contents



1.
    
    an individual citizen or resident of the United States;2.
    
    a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes)
organized in or under the laws of the United States, any state thereof, or the District of
Columbia;3.
    
    an estate the income of which is subject to U.S. federal income tax without regard to its
source; or4.
    
    a trust that is subject to the primary supervision of a U.S. court and the control of one or
more U.S. persons, or that has a valid election in effect under applicable Treasury
regulations to be treated as a U.S. person.An Eligible U.S. Holder is a U.S. Holder that:1.
    
    is a resident of the United States for purposes of the Treaty;2.
    
    does not maintain a permanent establishment in Japan (a) with which shares of Common Stock or
ADSs are effectively connected and through which the U.S. Holder carries on or has carried on
business and (b) of which shares of Common Stock or ADSs form part of the business property;
and3.
    
    is eligible for benefits under the Treaty, with respect to income and gain derived in connection
with shares of Common Stock or ADSs.
   Japanese Taxation
  67




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68




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##### Table of Contents



U.S. Federal Income Taxation
 U.S. Holders
  Taxation of Dividends
         69




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##### Table of Contents



Taxation of Capital Gains and Losses
   Passive Foreign Investment Companies
    70




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##### Table of Contents



Non-U.S. Holders
    (i)
    
    the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder
within the United States (and, if an applicable tax treaty requires, is attributable to a U.S.
permanent establishment or fixed base of such Non-U.S. Holder), or
 (ii)
    
    the Non-U.S. Holder is an individual who was present in the United States for 183 or more
days in the taxable year of the disposition and other conditions are met.
   Backup Withholding and Information Reporting
  71




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##### Table of Contents



F. Dividends and paying agents
  
 G. Statement by experts
  
 H. Documents on display
 http://www.sec.gov
 
 I. Subsidiary Information
  
 Item 11. Quantitative and Qualitative Disclosures about Market Risk
 Market Risk Exposure
   72




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##### Table of Contents



Equity and Debt Securities Price Risk
  
  Yen in millions
    
    
    U.S. Dollars in thousands2009
    
    
    2010
    
    
    2010Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair valueAmount
    
    
    value
    
    
    Amount
    
    
    value
    
    
    AmountDue within one year
    
    
    ¥     424
    
    
    ¥
    422
    
    
    
    ¥875
    
    
    
    ¥876
    
    
    
    $9,409
    
    
    
    $9,419Due after one year to five years
    
    
    1,947
    
    
    
    1,946
    
    
    
    2,343
    
    
    
    2,338
    
    
    
    25,194
    
    
    
    25,140Due after five years
    
    
    1,844
    
    
    
    1,794
    
    
    
    1,359
    
    
    
    1,304
    
    
    
    14,612
    
    
    
    14,022Indefinite periods
    
    
    25,347
    
    
    
    25,347
    
    
    
    29,607
    
    
    
    29,607
    
    
    
    318,355
    
    
    
    318,355Equity securities
    
    
    11,198
    
    
    
    11,198
    
    
    
    14,621
    
    
    
    14,621
    
    
    
    157,215
    
    
    
    157,215Total of marketable and
investment securities
    
    
    ¥40,760
    
    
    ¥
    40,707
    
    
    
    ¥48,805
    
    
    ¥
    48,746
    
    
    $
    524,785
    
    
    
    $524,151
 Foreign Exchange Risk
    73




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##### Table of Contents



U.S. DollarsYen in millions, except average contractual rates
    
    
    in thousands2009
    
    
    2010
    
    
    2010Average
    
    
    
    
    
    
    
    
    
    
    AverageContract
    
    Fair
    
    
    contractual
    
    
    Contract
    
    Fair
    
    contractual
    
    
    Contract
    
    Fairamounts
    
    value
    
    
    rates
    
    
    amounts
    
    value
    
    rates
    
    
    amounts
    
    valueForeign currency contractsUS$/Yen
    
    
    ¥ 9,324
    
    
    
    ¥ (368
    )
    
    
    ¥ 94.31
    
    
    
    ¥ 6,866
    
    
    
    ¥ (198)
    
    
    
    ¥ 90.39
    
    
    
    $ 73,829
    
    
    
    $ (2,130)Euro/Yen
    
    
    5,495
    
    
    
    (397
    )
    
    
    121.04
    
    
    
    3,919
    
    
    
    (67)
    
    
    
    122.87
    
    
    
    42,140
    
    
    
    (720)A$/Yen
    
    
    294
    
    
    
    (20
    )
    
    
    62.61
    
    
    
    301
    
    
    
    (13)
    
    
    
    81.25
    
    
    
    3,237
    
    
    
    (140)GBP/Yen
    
    
    105
    
    
    
    (4
    )
    
    
    135.39
    
    
    
    175
    
    
    
    (4)
    
    
    
    137.55
    
    
    
    1,882
    
    
    
    (43)SFR/Yen
    
    
    332
    
    
    
    (10
    )
    
    
    83.02
    
    
    
    1,034
    
    
    
    (14)
    
    
    
    86.16
    
    
    
    11,117
    
    
    
    (151)Can$/Yen
    
    
    155
    
    
    
    (1
    )
    
    
    77.66
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Euro/GBP
    
    
    1,888
    
    
    
    4
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -US$/GBP
    
    
    17
    
    
    
    -
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -US$/euro
    
    
    1,380
    
    
    
    (44
    )
    
    
    -
    
    
    
    2,235
    
    
    
    20
    
    
    
    -
    
    
    
    24,032
    
    
    
    216GBP/euro
    
    
    5
    
    
    
    -
    
    
    -
    
    
    
    14
    
    
    
    -
    
    
    
    -
    
    
    
    151
    
    
    
    -US$/A$
    
    
    136
    
    
    
    (1
    )
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Total
    
    
    19,131
    
    
    
    (841
    )
    
    
    
    
    
    
    14,544
    
    
    
    (276)
    
    
    
    -
    
    
    
    156,388
    
    
    
    (2,968)Foreign currency swapsUS$/Yen
    
    
    3,462
    
    
    
    (104
    )
    
    
    96.16
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Euro/Yen
    
    
    2,073
    
    
    
    (217
    )
    
    
    118.48
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -SFR/Yen
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Total
    
    
    5,535
    
    
    
    (321
    )
    
    
    
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Options purchased to sell foreign currenciesUS$/Yen
    
    
    188
    
    
    
    4
    
    
    93.91
    
    
    
    87
    
    
    
    -
    
    
    
    87.02
    
    
    
    935
    
    
    
    -Options written to buy foreign currenciesUS$/Yen
    
    
    ¥ 190
    
    
    
    ¥(11
    )
    
    
    ¥ 94.94
    
    
    
    ¥  89
    
    
    
    ¥  (4)
    
    
    
    ¥  89.02
    
    
    
    $  957
    
    
    
    $  (43)
 
 Item 12. Description of Securities Other Than Equity Securities
 
 A. Debt Securities
  
 B. Warrants and Rights
  
 C. Other Securities
  74




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##### Table of Contents



D. American Depositary Shares
 D.3. Fees and Charges for Holders of American Depositary Receipts
 
 Persons depositing or withdrawing shares must pay:
    
    
    For:$5.00 (or less) per 100 ADSs
(or portion of 100 ADSs)
    
    
    ▪ Issuance of ADSs, including issuances
resulting from a distribution, sale or
exercise of shares or rights or other
property▪ Cancellation of ADSs for the purpose of
withdrawal including if the deposit
agreement terminatesA fee equivalent to the fee
that would be payable if
securities distributed had
been shares and the shares
had been deposited for
issuance of ADSs
    
    
    ▪ Distribution of securities distributed to
holders of deposited securities which are
distributed by the depositary to ADS
registered holdersRegistration or transfer fees
    
    
    ▪ Registration of transfer of shares on
Makitas share register to the name of the
depositary or its nominee or the custodian
or its nominee at the time of deposit or
withdraw of sharesExpenses of the depositary
    
    
    ▪ Cable, telex and facsimile transmissions
(when expressly provided in the deposit
agreement)▪ Converting foreign currency to US dollarsTaxes and other governmental
charges the depositary or the
custodian have to pay on any
ADS or share underlying an
ADS
    
    
    ▪ As necessary
 D.4. Fees and Other Payments Made by the Depositary to the Company
    
 PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  75




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Item 15. Controls and Procedures
 
 A. Disclosure controls and procedures
   
 B. Managements annual report on internal control over financial reporting
  (1)
    
    pertain to the maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the assets of the Company;(2)
    
    provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and(3)
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Companys assets that could have a material effect on
the financial statements.
  Internal Control-Integrated Framework
   76




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##### Table of Contents



C. Attestation report of the registered public accounting firm
  
 D. Changes in internal control over financial reporting
  77




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
       
 78




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##### Table of Contents



Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
  
 Item 16C. Principal Accountant Fees and Services
  Fiscal year/Yen in millionsFY2009
    
    FY2010Audit Fees (1)
    
    ¥
    743
    
    
    ¥   646   (5)Audit-related Fees (2)
    
    
    3
    
    
    
    4Tax Fees (3)
    
    
    139
    
    
    
    149All Other Fees(4)
    
    
    -
    
    

    -Total
    
    ¥
    885
    
    
    ¥
    799
  (1)
    
    Audit Fees consist of fees billed for the professional services rendered by the Independent
Registered Public Accounting Firm for the audit of Makitas annual or interim financial
statements and services that are normally provided by the Independent Registered Public
Accounting Firm in connection with statutory and regulatory filings or engagement.(2)
    
    Audit-related Fees consist of fees billed for assurance and related services by the Independent
Registered Public Accounting Firm that are reasonably related to employee benefit plan audits,
and consultation concerning financial accounting and reporting standards.(3)
    
    Tax Fees include fees billed for the professional services rendered by the Independent
Registered Public Accounting Firm for tax compliance and transfer pricing documentation.
 (4)
    
    All Other Fees comprise fees for all other services not included in any of other categories
noted above.(5)
    
    Audit Fees in FY2010 are subject to change.
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Policy on Pre-Approval of Audit and Non-Audit Services of Independent Registered Public
Accounting Firm
     
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  80




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Total number of shares
    
    Average price paidPeriod
    
    purchased (Shares)
    
    per share (Yen)April 2009
    
    
    334
    
    
    
    2,301May 2009
    
    
    546
    
    
    
    2,258June 2009
    
    
    419
    
    
    
    2,308July 2009
    
    
    552
    
    
    
    2,224August 2009
    
    
    164
    
    
    
    2,522September 2009
    
    
    207
    
    
    
    2,787October 2009
    
    
    312
    
    
    
    2,962November 2009
    
    
    27
    
    
    
    3,050December 2009
    
    
    104
    
    
    
    3,220January 2010
    
    
    227
    
    
    
    3,229February 2010
    
    
    384
    
    
    
    3,006March 2010
    
    
    437
    
    
    
    2,947Total number of
shares purchased
and average price
paid per share
    
    
    3,713
    
    
    
    2,613
 
 Item 16G. Corporate Governance
 1.
    
    Independent Directors: The Market Rule 4350(c)(1) by the National Association of Securities
Dealers Automated Quotations (the NASDAQ) requires a majority of the Companys board of
directors to be comprised of independent directors, and 4350(c)(2) requires periodical
executive sessions held by these independent directors.
Unlike the NASDAQ rules on corporate governance (the NASDAQ Rules), the Companies Act of Japan
and related legislation (collectively, the Japanese Company Law) sets forth the legal concept
of Outside directors. Under the Japanese Company Law, an outside director is defined as a
director (i) who is not a director of the company or any of its subsidiaries engaged in the
business operations of the company or such subsidiary, as the case may be, or an executive
officer or a company manager or other employee of the company or any of its subsidiaries, and
(ii) who has never been a director of the company or any of its subsidiaries engaged in the
business operations of the company or such subsidiary, as the case may be, or an executive
officer or a company manager or other employee of the company or any of its subsidiaries. Under
Japanese law, a directors status as an outside director is unaffected by the directors
compensation, his or her affiliation with business partners, or the boards affirmative
determination of independence.On the other hand, under Japanese law, a director who has had a career as a director
responsible for the execution of business operations, executive officer, or other employee of the
company or its subsidiaries is by definition not an outside director.Further, the Japanese Company Law does not require Japanese companies with boards of
statutory auditors such as the Company to have any independent directors on its board of
directors. Although it is not required under the Japanese Company Law, the Company currently has
an outside director.
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In addition, pursuant to recent amendments to the regulations of the Japanese stock exchanges
on which shares of Common Stock of the Company are listed, the Company is required to have at
least one independent director and one independent statutory auditor, defined respectively as an
outside director unlikely to have a conflict of interest with shareholders of the Company and an
outside statutory auditor unlikely to have a conflict of interest with shareholders of the
Company.
Each of the outside directors of the Company satisfies the requirements of an independent director
and each of the outside statutory auditors of the Company satisfies the requirements of an
independent statutory auditor under these regulations.
 2.
    
    Compensation of Officers: NASDAQ Rule 4350(c)(3) requires that compensation of the chief
executive officer or all other executive officers of the company must be determined, or
recommended to the board for determination, either by (i) a majority of the independent
directors, or (ii) a compensation committee comprised solely of independent directors.Under the Japanese Company Law, in the case of a company which has elected to structure its
corporate governance system as a company with board of statutory auditors like the Company, there
is no statutory position exactly the same as the chief executive officer or other executive
officers. Under the Japanese Company Law, the most similar executive position of the chief
executive officer is a representative director, who is authorized to represent the company by
virtue of law. Under the Japanese Company Law and the Companys Articles of Incorporation, the
aggregate compensation of directors including representative directors must be approved by the
Companys shareholders at a general meeting of shareholders. If an executive officer concurrently
assumes office as director, compensation of such executive officer is subject to the
shareholders approval as mentioned above.3.
    
    Nomination Committee and Nomination Committee Charter: NASDAQ Rule 4350(c)(4)(A) requires
that director nominees must either be selected, or recommended for boards selection, either
by (i) a majority of the independent directors, or (ii) a nomination committee comprised
solely of independent directors, and NASDAQ Rule 4350(c)(4)(B) requires that the Company must
certify that it has adopted a formal written charter or board resolution, addressing the
nominations process and required matters.However, under the Japanese Company Law, a company which has elected to structure its
corporate governance system as a company with board of statutory auditors like the Company, there
are no such requirements or any other similar requirements in the nomination of directors.
Consistent with the Japanese Company Law and generally accepted business practices in Japan,
directors are elected by shareholders at a general meeting of shareholders upon nomination by the
then board of directors.4.
    
    Audit Committee and Audit Committee Charter: NASDAQ Rule 4350(d)(2)(A) requires the Company
to have, and certify that it has and will continue to have, an audit committee of at least
three members, each of whom must (i) be independent, (ii) not have participated in the
preparation of the financial statements of the company or any current subsidiary of the
company at any time during the past three years and (iii) be able to read and understand
fundamental financial statements. NASDAQ Rule 4350(d)(1) also requires the Company to adopt a
formal written committee charter.In addition, at least one member of an audit committee needs to have a professional
background in finance or accounting.
In compliance with the Japanese Company Law, the Company has elected to structure its corporate
governance system as a company with board of statutory auditors. The statutory auditors
constitute the Companys board of statutory auditors which has a formal written charter.
Accordingly, the Company is not required to have and does not have an audit committee. The
Company is relying on paragraph (c)(3) of Rule 10A-3 of the Securities Exchange Act of 1934, as
amended, which provides a general exemption from the audit committee requirements to a foreign
private issuer with a board of statutory auditors, subject to certain requirements which continue
to be applicable under Rule 10A-3. Generally for purposes of complying with NASDAQ Rules, the
Company has interpreted the term audit committee appearing within NASDAQ Rules to mean the
Companys board of statutory auditors, as appropriate.
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Under the Japanese Company Law, statutory auditors are not required to be certified public
accountants. Statutory auditors have the statutory duty to examine the Companys consolidated and
non consolidated financial statements and the business reports which are made available by the
board of directors for reporting or approval purposes at the general meetings of shareholders
and, based on such examination, to report their opinions to shareholders. They also have the
statutory duty to supervise the administration by the board members of the Companys affairs.
Statutory auditors are obligated to attend the meetings of the board of directors but are not
entitled to vote.Under the Japanese Company Law, the board of statutory auditors has a statutory duty to
prepare and submit its audit report to the board of directors each year.A statutory auditor may note an opinion in the audit report if his or her opinion differs
from the opinion expressed in the audit report. The board of statutory auditors is empowered
to establish audit principles, the method of examination by statutory auditors of a companys
affairs and financial position, and other matters concerning the performance of the duties of
statutory auditors. Under the Japanese Company Law, boards of statutory auditors consist
solely of statutory auditors and statutory auditors may not be directors of the company.
Accordingly, no member of the board of statutory auditors is an outside director.Unlike the NASDAQ Rules, under the Japanese Company Law, at least half of the statutory
auditors of the Company must be persons who have not been a director, accounting counselor,
executive officer, company manager, or any other employee of the Company or any of its
subsidiaries at any time prior to their election as statutory auditors. Statutory auditors may
not at the same time be directors, company managers, or any other employees of the Company or any
of its subsidiaries, or accounting counselors or executive officers of any of the Companys
subsidiaries.5.
    
    Quorum: NASDAQ Rule 4350(f) requires each issuer to provide for a quorum as specified in its
by-laws for any meeting of the holders of common stock, which shall in no case be less than 33
1/3 percent of the outstanding shares of a companys common voting stock.Consistent with the Japanese Company Law and generally accepted business practices in Japan,
the Companys Articles of Incorporation provide that except as otherwise provided by law or by
the Articles of Incorporation, a resolution can be adopted at a general meeting of shareholders
by a majority of votes of all the shareholders represented at the meeting with no quorum
requirement.
The Japanese Company Law and the Companys Articles of Incorporation provide, however, that the
quorum for the election of directors and statutory auditors shall be one-third of the total
number of voting rights of all the shareholders. The Japanese Company Law and the Companys
Articles of Incorporation also provide that in order to amend the Companys Articles of
Incorporation and in certain other significant transactions specified in the Japanese Company
Law, the quorum shall be one-third of the total number of voting rights of all the shareholders
and the approval by at least two-thirds of the voting rights of all the shareholders represented
at the meeting is required.6.
    
    Conflicts of Interest:NASDAQ Rule 4350(h) requires that each issuer conduct an appropriate
review of all related party transactions for potential conflict of interest situations on an
ongoing basis and that all such transactions be approved by the companys audit committee or
another independent body of the board of directors.Unlike the NASDAQ Rules, the Japanese Company Law requires the full board of directors to
approve (1) all transactions that a director, on his or her own behalf or on behalf of a third
party, enters into with the Company, (2) guarantees by the Company of obligations of a director
and (3) all transactions with any person other than directors with respect to which there is a
conflict of interest between the Company and any director. In addition, under the Japanese
Company Law, no director may vote on a resolution at a meeting of the board of directors if that
director has a special interest in that resolution, including, but not limited to, resolutions
with respect to transactions with the Company referred to in the immediately preceding sentence.
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Under the Japanese Company Law, the quorum for meetings of the board of directors of the
Company is a majority of all directors then in office and the approval of a majority of all
directors present at the meeting is required. The number of directors who are not entitled to
vote at a meeting by having a special interest in the subject resolution shall be excluded from
the number of directors then in office and present at the meeting for such purpose.The Japanese Company Law does not require related party transactions other than those with
directors referred to above to be approved by the board of directors or any independent body at
or outside of the Company.7.
    
    Shareholder Approval:NASDAQ Rule 4350(i) requires each issuer to obtain shareholder approval
prior to the issuance of securities under certain circumstances.However, under the Japanese Company Law, regardless of the purpose of the issuance,
shareholder approval is required only in the cases of issuance of shares at a specially
favorable price or of stock acquisition rights or bonds with stock acquisition rights under
specially favorable price or specially favorable exercise conditions, except where such shares,
stock acquisition rights or bonds with stock acquisition rights are granted to all of its
shareholders on a pro rata basis.Such shareholder approval must be obtained by a special resolution of a general meeting
of shareholders, where the quorum is one-third of the total number of voting rights and the
approval of at least two-thirds of the voting rights represented at the meeting is required.
Accordingly, so far as the issue price or exercise conditions are not specially favorable,
shareholder approval is not required under the Japanese Company Law for the matters specified in
NASDAQ Rule 4350(i). The Companys practices taken in connection with such matters are
consistent with the Japanese Company Law.8.
    
    Solicitation of Proxies:NASDAQ Rule 4350(i) requires each issuer to solicit proxies and
provide proxy statement for all meetings of shareholders and provide copies of such proxy
solicitation to NASDAQ.
However, under the Japanese Company Law, the Company is required to send ballots to all
shareholders meeting.Although the Company may choose to solicit proxies from all shareholders with voting rights
instead of voting by ballot, the Company, in common with the majority of public companies in
Japan, provides its shareholders with the opportunity to vote directly by ballot.
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PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
 12.1
    
    302 Certification of Chief Executive Officer, President and Representative Director12.2
    
    302 Certification of Chief Financial Officer, Director and General Manager of Administration
Headquarters13.1
    
    906 Certification of Chief Executive Officer and Chief Financial Officer
 85




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##### Table of Contents



SIGNATURES
   MAKITA CORPORATIONBy:
    /s/ Masahiko GotoName:
    Masahiko GotoTitle:
    President,
Representative Director and
Chief Executive Officer  86




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Makita Corporation and Subsidiaries
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets as of March 31, 2009 and 2010
    
    F-3Consolidated Statements of Income for the years ended March 31, 2008, 2009 and 2010
    
    F-5Consolidated Statements of Changes in Equity and Comprehensive Income (Loss) for the
years ended March 31, 2008, 2009 and 2010
    
    F-6Consolidated Statements of Cash Flows for the years ended March 31, 2008, 2009 and 2010
    
    F-7Notes to Consolidated Financial Statements
    
    F-8(Financial Statements of 50% or less owned persons accounted for by the equity method have been
omitted because they are not applicable.)Schedules:II. Valuation and Qualifying Accounts and Reserves for
the years ended March 31, 2008, 2009 and 2010
    
    F-42
  F-1




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Report of Independent Registered Public Accounting Firm
 
       
 F-2




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CONSOLIDATED BALANCE SHEETS
   U.S. DollarsYen in millions
    
    in thousandsASSETS
    
    2009
    
    2010
    
    2010CURRENT ASSETS:Cash and cash equivalents
    
    
    ¥   34,215
    
    
    
    ¥   62,290
    
    
    
    $ 669,785Time deposits
    
    
    2,623
    
    
    
    8,383
    
    
    
    90,140Short-term investments
    
    
    29,470
    
    
    
    33,639
    
    
    
    361,710Trade receivables- Notes
    
    
    2,611
    
    
    
    2,214
    
    
    
    23,806- Accounts
    
    
    43,078
    
    
    
    43,680
    
    
    
    469,677Less- Allowance for doubtful receivables
    
    
    (1,129)
    
    
    
    (1,010)
    
    
    
    (10,860)Inventories
    
    
    111,002
    
    
    
    88,811
    
    
    
    954,957Deferred income taxes
    
    
    7,264
    
    
    
    6,434
    
    
    
    69,183Prepaid expenses and other current assets
    
    
    11,269
    
    
    
    9,356
    
    
    
    100,602Total current assets
    
    
    240,403
    
    
    
    253,797
    
    
    
    2,729,000PROPERTY, PLANT AND EQUIPMENT, AT COST:Land
    
    
    18,173
    
    
    
    19,050
    
    
    
    204,839Building and improvements
    
    
    65,223
    
    
    
    70,668
    
    
    
    759,871Machinery and equipment
    
    
    74,458
    
    
    
    74,652
    
    
    
    802,709Construction in progress
    
    
    4,516
    
    
    
    2,257
    
    
    
    24,269Sub total
    
    
    162,370
    
    
    
    166,627
    
    
    
    1,791,688Less- Accumulated depreciation
    
    
    (89,674)
    
    
    
    (93,427)
    
    
    
    (1,004,591)Total net property, plant and equipment
    
    
    72,696
    
    
    
    73,200
    
    
    
    787,097INVESTMENT AND OTHER ASSETS:Investments
    
    
    11,290
    
    
    
    15,166
    
    
    
    163,075Goodwill
    
    
    1,987
    
    
    
    721
    
    
    
    7,753Other intangible assets, net
    
    
    2,280
    
    
    
    4,664
    
    
    
    50,151Deferred income taxes
    
    
    5,050
    
    
    
    1,611
    
    
    
    17,323Other assets
    
    
    2,938
    
    
    
    680
    
    
    
    7,311Total investments and Other assets
    
    
    23,545
    
    
    
    22,842
    
    
    
    245,613Total assets
    
    
    ¥ 336,644
    
    
    
    ¥ 349,839
    
    
    
    $ 3,761,710
 F-3




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CONSOLIDATED BALANCE SHEETS, CONTINUED
 U.S. DollarsYen in millions
    
    in thousandsLIABILITIES
    
    2009
    
    2010
    
    2010CURRENT LIABILITIES:Short-term borrowings
    
    
    ¥       239
    
    
    
    ¥       385
    
    
    $
    4,140Trade notes and accounts payable
    
    
    14,820
    
    
    
    18,359
    
    
    
    197,409Other payables
    
    
    4,397
    
    
    
    5,089
    
    
    
    54,720Accrued expenses
    
    
    5,642
    
    
    
    4,694
    
    
    
    50,473Accrued payroll
    
    
    7,361
    
    
    
    6,835
    
    
    
    73,495Income taxes payable
    
    
    2,772
    
    
    
    1,722
    
    
    
    18,516Deferred income taxes
    
    
    50
    
    
    
    40
    
    
    
    430Other liabilities
    
    
    5,536
    
    
    
    5,337
    
    
    
    57,387Total current liabilities
    
    
    40,817
    
    
    
    42,461
    
    
    
    456,570LONG-TERM LIABILITIES:Long-term indebtedness
    
    
    818
    
    
    
    544
    
    
    
    5,849Accrued retirement and termination benefits
    
    
    7,116
    
    
    
    3,778
    
    
    
    40,624Deferred income taxes
    
    
    548
    
    
    
    677
    
    
    
    7,280Other liabilities
    
    
    1,599
    
    
    
    2,706
    
    
    
    29,097Total long-term liabilities
    
    
    10,081
    
    
    
    7,705
    
    
    
    82,850Total liabilities
    
    
    50,898
    
    
    
    50,166
    
    
    
    539,420COMMITMENTS AND CONTINGENT LIABILITIES (Note 15)
    
    
    -
    
    
    
    -
    
    
    
    -EQUITYMAKITA CORPORATION SHAREHOLDERS EQUITY:Common stock, authorized - 496,000,000 sharesIssued and outstanding- 140,008,760 and 137,764,005
shares, respectively in 2009Issued and outstanding- 140,008,760 and 137,760,402
shares, respectively in 2010
    
    
    23,805
    
    
    
    23,805
    
    
    
    255,968Additional paid-in capital
    
    
    45,420
    
    
    
    45,420
    
    
    
    488,387Legal reserve
    
    
    5,669
    
    
    
    5,669
    
    
    
    60,957Retained earnings
    
    
    257,487
    
    
    
    270,790
    
    
    
    2,911,720Accumulated other comprehensive loss
    
    
    (42,461)
    
    
    
    (42,032)
    
    
    
    (451,957)Treasury stock, at cost  2,244,755 shares in 2009 2,248,358 shares in 2010
    
    
    (6,435)
    
    
    
    (6,445)
    
    
    
    (69,301)Total Makita Corporation shareholders equity
    
    
    283,485
    
    
    
    297,207
    
    
    
    3,195,774NONCONTROLLING INTEREST
    
    
    2,261
    
    
    
    2,466
    
    
    
    26,516Total equity
    
    
    285,746
    
    
    
    299,673
    
    
    
    3,222,290Total liabilities and equity
    
    
    ¥ 336,644
    
    
    
    ¥ 349,839
    
    
    $
    3,761,710
  F-4




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##### Table of Contents



CONSOLIDATED STATEMENTS OF INCOME
   U.S. DollarsYen in millions
    
    in thousands2008
    
    2009
    
    2010
    
    2010NET SALES
    
    
    ¥ 342,577
    
    
    
    ¥ 294,034
    
    
    
    ¥ 245,823
    
    
    
    $ 2,643,258Cost of sales
    
    
    199,220
    
    
    
    170,894
    
    
    
    149,938
    
    
    
    1,612,236GROSS PROFIT
    
    
    143,357
    
    
    
    123,140
    
    
    
    95,885
    
    
    
    1,031,022Selling, general and administrative expenses
    
    
    76,326
    
    
    
    73,065
    
    
    
    65,495
    
    
    
    704,248OPERATING INCOME
    
    
    67,031
    
    
    
    50,075
    
    
    
    30,390
    
    
    
    326,774OTHER INCOME (EXPENSES):Interest and divided income
    
    
    2,092
    
    
    
    1,562
    
    
    
    881
    
    
    
    9,473Interest expense
    
    
    (269)
    
    
    
    (236)
    
    
    
    (71)
    
    
    
    (763)Exchange gains (losses) on foreign currency transactions, net
    
    
    (1,233)
    
    
    
    (3,408)
    
    
    
    2,044
    
    
    
    21,979Realized gains (losses) on securities, net
    
    
    (1,384)
    
    
    
    (3,548)
    
    
    
    274
    
    
    
    2,946Other, net
    
    
    -
    
    
    
    (2)
    
    
    
    -
    
    
    
    -Total
    
    
    (794)
    
    
    
    (5,632)
    
    
    
    3,128
    
    
    
    33,635INCOME BEFORE INCOME TAXES
    
    
    66,237
    
    
    
    44,443
    
    
    
    33,518
    
    
    
    360,409Provision for income taxes: Current
    
    
    19,148
    
    
    
    11,277
    
    
    
    8,760
    
    
    
    94,194: Deferred
    
    
    580
    
    
    
    (546)
    
    
    
    2,192
    
    
    
    23,570Total
    
    
    19,728
    
    
    
    10,731
    
    
    
    10,952
    
    
    
    117,764NET INCOME
    
    
    46,509
    
    
    
    33,712
    
    
    
    22,566
    
    
    
    242,645Less: Net income attributable to the noncontrolling interest
    
    
    (466)
    
    
    
    (426)
    
    
    
    (308)
    
    
    
    (3,312)NET INCOME ATTRIBUTABLE TO MAKITA
CORPORATION
    
    
    ¥ 46,043
    
    
    
    ¥33,286
    
    
    
    ¥22,258
    
    
    
    $239,333Yen
    
    U.S. Dollars2008
    
    2009
    
    2010
    
    2010PER SHARE OF COMMON STOCK AND ADS:Earning per share: Basic
    
    
    ¥    320.3
    
    
    
    ¥    236.9
    
    
    
    ¥   161.6
    
    
    
    $   1.74Cash dividends per share paid for the year
    
    
    85.0
    
    
    
    97.0
    
    
    
    65.0
    
    
    
    0.70
  F-5




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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND COMPREHENSIVE INCOME (LOSS)
    Makita Corporation shareholders equity
    
    
    
    
    
    
    
    
    
    Comprehensive income (Loss)Net incomeAccumulated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    attributable toAdditional
    
    
    
    
    
    
    
    
    
    
    other
    
    
    
    
    
    
    Non-
    
    
    
    
    
    
    attributable
    
    
    theCommon
    
    
    paid-in
    
    
    Legal
    
    
    Retained
    
    
    comprehensive
    
    
    Treasury
    
    
    controlling
    
    
    
    
    
    
    to Makita
    
    
    non-controllingstock
    
    
    capital
    
    
    reserve
    
    
    earnings
    
    
    income (loss)
    
    
    stock
    
    
    interest
    
    
    Total
    
    
    Corporation
    
    
    interest
    
    
    TotalYen (millions)Balance as of
April 1, 2007
    
    
    23,805
    
    
    
    45,437
    
    
    
    5,669
    
    
    
    215,365
    
    
    
    12,697
    
    
    
    (298)
    
    
    
    2,135
    
    
    
    304,810Purchases of
treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51)
    
    
    
    
    
    
    
    (51)Disposal of
treasury stock
    
    
    
    
    
    
    316
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    402Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,217)
    
    
    
    
    
    
    
    
    
    
    
    (698)
    
    
    
    (12,915)Capital transactions and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    588
    
    
    
    588Comprehensive
income (loss)Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,043
    
    
    
    
    
    
    
    
    
    
    
    466
    
    
    
    46,509
    
    
    
    46,043
    
    
    
    466
    
    
    
    46,509Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,274)
    
    
    
    
    
    
    
    25
    
    
    
    (10,249)
    
    
    
    (10,274)
    
    
    
    25
    
    
    
    (10,249)Unrealized holding
losses on
available-for-
sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,395)
    
    
    
    
    
    
    
    
    
    
    
    (6,395)
    
    
    
    (6,395)
    
    
    
    
    
    
    
    (6,395)Pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,685)
    
    
    
    
    
    
    
    
    
    
    
    (3,685)
    
    
    
    (3,685)
    
    
    
    
    
    
    
    (3,685)Total
comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,689
    
    
    
    491
    
    
    
    26,180Balance as of
March 31, 2008
    
    
    23,805
    
    
    
    45,753
    
    
    
    5,669
    
    
    
    249,191
    
    
    
    (7,657)
    
    
    
    (263)
    
    
    
    2,516
    
    
    
    319,014Purchases of
treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,655)
    
    
    
    
    
    
    
    (17,655)Retirement of
treasury stock
    
    
    
    
    
    
    (329)
    
    
    
    
    
    
    
    (11,135)
    
    
    
    
    
    
    
    11,464
    
    
    
    
    
    
    
    0Disposal of
treasury stock
    
    
    
    
    
    
    (4)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    15Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,855)
    
    
    
    
    
    
    
    
    
    
    
    (235)
    
    
    
    (14,090)Comprehensive
income (loss)Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,286
    
    
    
    
    
    
    
    
    
    
    
    426
    
    
    
    33,712
    
    
    
    33,286
    
    
    
    426
    
    
    
    33,712Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,051)
    
    
    
    
    
    
    
    (446)
    
    
    
    (28,497)
    
    
    
    (28,051)
    
    
    
    (446)
    
    
    
    (28,497)Unrealized holding
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 loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,518)
    
    
    
    (20)
    
    
    
    (1,538)Balance as of March
31, 2009
    
    
    23,805
    
    
    
    45,420
    
    
    
    5,669
    
    
    
    257,487
    
    
    
    (42,461)
    
    
    
    (6,435)
    
    
    
    2,261
    
    
    
    285,746Purchases of
treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10)
    
    
    
    
    
    
    
    (10)Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,955)
    
    
    
    
    
    
    
    
    
    
    
    (197)
    
    
    
    (9,152)Capital
transactions and
other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    181
    
    
    
    181Comprehensive
income (loss)Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,258
    
    
    
    
    
    
    
    
    
    
    
    308
    
    
    
    22,566
    
    
    
    22,258
    
    
    
    308
    
    
    
    22,566Foreign currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,931)
    
    
    
    
    
    
    
    (87)
    
    
    
    (3,018)
    
    
    
    (2,931)
    
    
    
    (87)
    
    
    
    (3,018)Unrealized holding
gains on
available-for-
sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,430
    
    
    
    
    
    
    
    
    
    
    
    2,430
    
    
    
    2,430
    
    
    
    
    
    
    
    2,430Pension liability
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    930
    
    
    
    
    
    
    
    
    
    
    
    930
    
    
    
    930
    
    
    
    
    
    
    
    930Total Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,687
    
    
    
    221
    
    
    
    22,908Balance as of March
31, 2010
    
    
    23,805
    
    
    
    45,420
    
    
    
    5,669
    
    
    
    270,790
    
    
    
    (42,032)
    
    
    
    (6,445)
    
    
    
    2,466
    
    
    
    299,673Balance as of March
31, 2010  US$ in
thousands
    
    
    255,968
    
    
    
    488,387
    
    
    
    60,957
    
    
    
    2,911,720
    
    
    
    (451,957)
    
    
    
    (69,301)
    
    
    
    26,516
    
    
    
    3,222,290
    
    
    
    243,946
    
    
    
    2,377
    
    
    
    246,323
  F-6




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
   U.S. DollarsYen in millions
    
    in thousands2008
    
    2009
    
    2010
    
    2010CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    ¥
    46,509
    
    
    ¥
    33,712
    
    
    ¥
    22,566
    
    
    $
    242,645Adjustments to reconcile net income to net cash provided by 
operating activities-Depreciation and amortization
    
    
    8,871
    
    
    
    8,887
    
    
    
    8,308
    
    
    
    89,333Deferred income tax expense (benefit)
    
    
    580
    
    
    
    (546)
    
    
    
    2,192
    
    
    
    23,570Realized losses (gains) on securities, net
    
    
    1,384
    
    
    
    3,548
    
    
    
    (274)
    
    
    
    (2,946)Losses on disposal or sales of property, plant and
equipment, net
    
    
    128
    
    
    
    430
    
    
    
    284
    
    
    
    3,054Impairment of goodwill and long-lived assets
    
    
    -
    
    
    
    -
    
    
    
    1,605
    
    
    
    17,258Changes in assets and liabilities-Trade receivables
    
    
    (6,463)
    
    
    
    9,555
    
    
    
    (29)
    
    
    
    (312)Inventories
    
    
    (22,499)
    
    
    
    (17,314)
    
    
    
    20,738
    
    
    
    222,989Trade notes and accounts payable and accrued expense
    
    
    6,896
    
    
    
    (10,005)
    
    
    
    3,013
    
    
    
    32,398Income taxes payable
    
    
    (3,357)
    
    
    
    (4,589)
    
    
    
    1,480
    
    
    
    15,914Accrued retirement and termination benefits
    
    
    (2,053)
    
    
    
    (2,297)
    
    
    
    (1,615)
    
    
    
    (17,366)Other, net
    
    
    (721)
    
    
    
    797
    
    
    
    (1,142)
    
    
    
    (12,279)Net cash provided by operating activities
    
    
    29,275
    
    
    
    22,178
    
    
    
    57,126
    
    
    
    614,258CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (15,036)
    
    
    
    (17,046)
    
    
    
    (10,837)
    
    
    
    (116,527)Purchases of available-for-sale securities
    
    
    (19,944)
    
    
    
    (375)
    
    
    
    (4,996)
    
    
    
    (53,720)Purchases of held-to-maturity securities
    
    
    (996)
    
    
    
    -
    
    
    
    (1,522)
    
    
    
    (16,366)Proceeds from sales of available-for-sale securities
    
    
    4,382
    
    
    
    15,310
    
    
    
    1,967
    
    
    
    21,151Proceeds from maturities of available-for-sale securities
    
    
    21,030
    
    
    
    2,500
    
    
    
    500
    
    
    
    5,376Proceeds from maturities of held-to-maturity securities
    
    
    1,300
    
    
    
    600
    
    
    
    350
    
    
    
    3,763Proceeds from sales of property, plant and equipment
    
    
    1,812
    
    
    
    135
    
    
    
    299
    
    
    
    3,215Decrease (increase) in time deposits
    
    
    4,231
    
    
    
    (560)
    
    
    
    (3,375)
    
    
    
    (36,290)Cash paid for acquisition of business, net of cash acquired
    
    
    (2,034)
    
    
    
    -
    
    
    
    -
    
    
    
    -Other, net
    
    
    747
    
    
    
    (332)
    
    
    
    (54)
    
    
    
    (580)Net cash provided by (used in) investing activities
    
    
    (4,508)
    
    
    
    232
    
    
    
    (17,668)
    
    
    
    (189,978)CASH FLOWS FROM FINANCING ACTIVITIES:Increase (decrease) in short-term borrowings
    
    
    (1,279)
    
    
    
    (1,345)
    
    
    
    (7)
    
    
    
    (75)Purchase of treasury stock, net
    
    
    (47)
    
    
    
    (17,640)
    
    
    
    (10)
    
    
    
    (108)Cash dividends paid
    
    
    (12,217)
    
    
    
    (13,855)
    
    
    
    (8,955)
    
    
    
    (96,290)Other, net
    
    
    (272)
    
    
    
    (339)
    
    
    
    (142)
    
    
    
    (1,527)Net cash used in financing activities
    
    
    (13,815)
    
    
    
    (33,179)
    
    
    
    (9,114)
    
    
    
    (98,000)EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
    
    
    (1,774)
    
    
    
    (1,322)
    
    
    
    (2,269)
    
    
    
    (24,398)NET CHANGE IN CASH AND CASH EQUIVALENTS
    
    
    9,178
    
    
    
    (12,091)
    
    
    
    28,075
    
    
    
    301,882CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
    
    
    37,128
    
    
    
    46,306
    
    
    
    34,215
    
    
    
    367,903CASH AND CASH EQUIVALENTS, END OF YEAR /
    
    
    46,306
    
    
    
    34,215
    
    
    
    62,290
    
    
    
    669,785SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the year for interest
    
    
    269
    
    
    
    232
    
    
    
    58
    
    
    
    624Cash paid during the year for income taxes
    
    
    22,505
    
    
    
    15,866
    
    
    
    7,280
    
    
    
    78,280NON-CASH INVESTING AND FINANCING ACTIVITIES:Delivery of treasury stock in connection with the
share exchange
    
    ¥
    397
    
    
    ¥
    -
    
    
    ¥
    -
    
    
    $
    -
  F-7




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. DESCRIPTION OF BUSINESS
     2. BASIS OF PRESENTING FINANCIAL STATEMENTS
   3. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
 (a) Principles of Consolidation
  (b) Foreign Currency Translation and Transactions
  (c) Cash and Cash Equivalents
  (d) Short-term investments and Investments
  F-8




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##### Table of Contents



(e) Allowance for Doubtful Receivables
  (f) Inventories
  (g) Property, Plant and Equipment and Depreciation
   F-9




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##### Table of Contents



U.S. DollarsYen in millions
    
    in thousands2009
    
    2010
    
    2010Aggregate cost
    
    
    ¥   723
    
    
    
    ¥602
    
    
    
    $   6,473Accumulated amortization
    
    
    279
    
    
    
    271
    
    
    
    2,914
 (h) Goodwill
   (i) Environmental Liabilities
  (j) Research and Development Costs and Advertising Costs
   (k) Shipping and Handling Costs
  (l) Income Taxes
  F-10




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##### Table of Contents



(m) Product Warranties
  (n) Pension Plans
   (o) Earning per Share
  (p) Impairment of Long-lived Assets
  F-11




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##### Table of Contents



(q) Derivative Financial Instruments
   (r) Use of Estimates in the Preparation of Financial Statement
   (s) Revenue Recognition
        F-12




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##### Table of Contents



(t) New Accounting Standards Adopted
      F-13




---



##### Table of Contents



4. TRANSLATION OF FINANCIAL STATEMENTS
  5. INVENTORIES
  U.S. DollarsYen in millions

    
    in thousands2009

    
    2010

    
    2010Finished goods
    
    ¥
    95,837
    
    
    ¥
    75,084
    
    
    $
    807,355Work in process
    
    
    2,408
    
    
    
    2,400
    
    
    
    25,806Raw materials
    
    
    12,757
    
    
    
    11,327
    
    
    
    121,796Total
    
    ¥
    111,002
    
    
    ¥
    88,811
    
    
    $
    954,957
 6. IMPAIRMENT OF LONG-LIVED ASSETS
    F-14




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##### Table of Contents



7. SHORT-TERM INVESTMENTS AND INVESTMENTS
   Gross Unrealized Holding
 Yen in millionsFair
    
    
    CarryingAs of March 31, 2009
    
    Cost
    
    Gains
    
    Losses
    
    value
    
    amountShort-term investments:Available-for-sale:Corporate and bank debt securities
    
    ¥
    954
    
    
    ¥
    60
    
    
    ¥
    -
    
    
    ¥
    1,014
    
    
    ¥
    1,014Investments in trusts
    
    
    5,796
    
    
    
    204
    
    
    
    110
    
    
    
    5,890
    
    
    
    5,890MMF and FFF
    
    
    20,908
    
    
    
    -
    
    
    
    -
    
    
    
    20,908
    
    
    
    20,908Marketable equity securities
    
    
    998
    
    
    
    343
    
    
    
    33
    
    
    
    1,308
    
    
    
    1,308Sub total
    
    
    28,656
    
    
    
    607
    
    
    
    143
    
    
    
    29,120
    
    
    
    29,120Held-to-maturity:Japanese corporate debt securities
    
    
    350
    
    
    
    -
    
    
    
    2
    
    
    
    348
    
    
    
    350Total Short-term investments
    
    
    29,006
    
    
    
    607
    
    
    
    145
    
    
    
    29,468
    
    
    
    29,470Investments:Available-for-sale:Investments in trusts
    
    
    1
    
    
    
    -
    
    
    
    -
    
    
    
    1
    
    
    
    1Marketable equity securities
    
    
    7,818
    
    
    
    1,847
    
    
    
    177
    
    
    
    9,488
    
    
    
    9,488Sub total
    
    
    7,819
    
    
    
    1,847
    
    
    
    177
    
    
    
    9,489
    
    
    
    9,489Held-to-maturity:Japanese corporate debt securities
    
    
    1,399
    
    
    
    1
    
    
    
    52
    
    
    
    1,348
    
    
    
    1,399Total Investments
    
    ¥
    9,218
    
    
    ¥
    1,848
    
    
    ¥
    229
    
    
    ¥
    10,837
    
    
    ¥
    10,888
  F-15




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##### Table of Contents



Yen in millionsFair
    
    CarryingAs of March 31, 2010
    
    Cost
    
    Gains
    
    Losses
    
    value
    
    amountShort-term investments:Available-for-sale:Corporate and bank debt securities

    
    ¥
    553
    

    
    ¥
    30
    

    
    ¥
    -
    

    
    ¥
    583
    

    
    ¥
    583Investments in trusts
    
    
    4,493
    
    
    
    490
    
    
    
    3
    
    
    
    4,980
    
    
    
    4,980MMF and FFF
    
    
    25,700
    
    
    
    -
    
    
    
    -
    
    
    
    25,700
    
    
    
    25,700Marketable equity securities
    
    
    951
    
    
    
    625
    
    
    
    -
    
    
    
    1,576
    
    
    
    1,576Sub total
    
    
    31,697
    
    
    
    1,145
    
    
    
    3
    
    
    
    32,839
    
    
    
    32,839Held-to-maturity:Japanese corporate debt securities
    
    
    800
    
    
    
    1
    
    
    
    -
    
    
    
    801
    
    
    
    800Total Short-term investments
    
    
    32,497
    
    
    
    1,146
    
    
    
    3
    
    
    
    33,640
    
    
    
    33,639Investments:Available-for-sale:Marketable equity securities
    
    
    7,582
    
    
    
    5,066
    
    
    
    5
    
    
    
    12,643
    
    
    
    12,643Held-to-maturity:Japanese corporate debt securities
    
    
    2,121
    
    
    
    -
    
    
    
    60
    
    
    
    2,061
    
    
    
    2,121Total Investments
    
    ¥
    9,703
    
    
    ¥
    5,066
    
    
    ¥
    65
    
    
    ¥
    14,704
    
    
    ¥
    14,764
  U.S. Dollars in thousandsCarryingAs of March 31, 2010
    
    Cost
    
    Gains
    
    Losses
    
    Fair value
    
    amountShort-term investments:Available-for-sale:Corporate and bank debt securities
    
    $
    5,946
    
    
    $
    323
    
    
    $
    -
    
    
    $
    6,269
    
    
    $
    6,269Investments in trusts
    
    
    48,312
    
    
    
    5,269
    
    
    
    32
    
    
    
    53,549
    
    
    
    53,549MMF and FFF
    
    
    276,344
    
    
    
    -
    
    
    
    -
    
    
    
    276,344
    
    
    
    276,344Marketable equity securities
    
    
    10,226
    
    
    
    6,720
    
    
    
    -
    
    
    
    16,946
    
    
    
    16,946Sub total
    
    
    340,828
    
    
    
    12,312
    
    
    
    32
    
    
    
    353,108
    
    
    
    353,108Held-to-maturity:Japanese corporate debt securities
    
    
    8,602
    
    
    
    11
    
    
    
    -
    
    
    
    8,613
    
    
    
    8,602Total Short-term investments
    
    
    349,430
    
    
    
    12,323
    
    
    
    32
    
    
    
    361,721
    
    
    
    361,710Investments:Available-for-sale:Marketable equity securities
    
    
    81,528
    
    
    
    54,473
    
    
    
    54
    
    
    
    135,947
    
    
    
    135,947Held-to-maturity:Japanese corporate debt securities
    
    
    22,806
    
    
    
    -
    
    
    
    645
    
    
    
    22,161
    
    
    
    22,806Total Investments
    
    $
    104,334
    
    
    $
    54,473
    
    
    $
    699
    
    
    $
    158,108
    
    
    $
    158,753
  F-16




---



##### Table of Contents



Yen in millionsLess than 12 months
    
    12 months or moreAs of March 31, 2009
    
    Fair
    
    Gross unrealized
    
    Fair
    
    Gross unrealizedvalue
    
    holding losses
    
    value
    
    holding lossesShort-term investments:Available-for-sale:Investment in trusts
    ¥
    
    1,739
    
    ¥
    
    110
    
    ¥
    
    -
    
    ¥
    
    -Marketable equity securities
    
    
    249
    
    
    
    33
    
    
    
    -
    
    
    
    -Sub total
    
    
    1,988
    
    
    
    143
    
    
    
    -
    
    
    
    -Held-to-maturity:Japanese corporate debt securities
    
    
    -
    
    
    
    -
    
    
    
    148
    
    
    
    2Investments:Available-for-sale:Marketable equity securities
    
    
    2,142
    
    
    
    177
    
    
    
    -
    
    
    
    -Held-to-maturity:Japanese corporate debt securities
    ¥
    
    98
    
    ¥
    
    2
    
    ¥
    
    749
    
    ¥
    
    50Yen in millionsLess than 12 months
    
    12 months or moreAs of March 31, 2010
    
    Fair
    
    Gross unrealized
    
    Fair
    
    Gross unrealizedvalue
    
    holding losses
    
    value
    
    holding lossesShort-term investments:Available-for-sale:Investment in trusts
    ¥
    
    234
    
    ¥
    
    3
    
    ¥
    
    -
    
    ¥
    
    -Investments:Available-for-sale:Marketable equity securities
    
    
    37
    
    
    
    5
    
    
    
    -
    
    
    
    -Held-to-maturity:Japanese corporate debt securities
    ¥
    
    1,516
    
    ¥
    
    5
    
    ¥
    
    545
    
    ¥
    
    55
 F-17




---



##### Table of Contents



U.S. Dollars in thousandsLess than 12 months
    
    12 months or moreAs of March 31, 2010
    
    
    
    
    
    Gross unrealized
    
    
    
    
    
    Gross unrealizedFair value
    
    holding losses
    
    Fair value
    
    holding lossesShort-term investments:Available-for-sale:Investment in trusts
    
    $
    2,516
    
    
    $
    32
    
    
    $
    -
    
    
    $
    -Investments:Available-for-sale:Marketable equity securities
    
    
    398
    
    
    
    54
    
    
    
    -
    
    
    
    -Held-to-maturity:Japanese corporate debt securities
    
    $
    16,301
    
    
    $
    54
    
    
    $
    5,860
    
    
    $
    591
  Maturities of debt securities based on Cost as of March 31, 2010
 Yen in millions
    
    U.S. Dollars in thousandsAvailable
    
    Held-to
    
    
    
    
    
    Available
    
    Held-to-for-sale
    
    maturity
    
    Total
    
    -for-sale
    
    maturity
    
    TotalDue within one year
    ¥
    
    -
    
    ¥
    
    800
    
    ¥
    
    800
    
    $
    
    -
    
    $
    
    8,602
    
    $
    
    8,602Due after one to five year
    
    
    98
    
    
    
    1,521
    
    
    
    1,619
    
    
    
    1,054
    
    
    
    16,355
    
    
    
    17,409Due after five to ten year
    
    
    455
    
    
    
    400
    
    
    
    855
    
    
    
    4,892
    
    
    
    4,301
    
    
    
    9,193Due after ten year
    
    
    -
    
    
    
    200
    
    
    
    200
    
    
    
    -
    
    
    
    2,150
    
    
    
    2,150Total
    ¥
    
    553
    
    ¥
    
    2,921
    
    ¥
    
    3,474
    
    $
    
    5,946
    
    $
    
    31,408
    
    $
    
    37,354
 Maturities of debt securities based on Fair value as of March 31, 2010
 Yen in millions
    
    U.S. Dollars in thousandsAvailable
    
    Held-to
    
    
    
    
    
    Available
    
    Held-to-for-sale
    
    maturity
    
    Total
    
    -for-sale
    
    maturity
    
    TotalDue within one year
    ¥
    
    -
    
    ¥
    
    801
    
    ¥
    
    801
    
    $
    
    -
    
    $
    
    8,613
    
    $
    
    8,613Due after one to five year
    
    
    102
    
    
    
    1,516
    
    
    
    1,618
    
    
    
    1,097
    
    
    
    16,301
    
    
    
    17,398Due after five to ten year
    
    
    481
    
    
    
    366
    
    
    
    847
    
    
    
    5,172
    
    
    
    3,935
    
    
    
    9,107Due after ten year
    
    
    -
    
    
    
    179
    
    
    
    179
    
    
    
    -
    
    
    
    1,925
    
    
    
    1,925Total
    ¥
    
    583
    
    ¥
    
    2,862
    
    ¥
    
    3,445
    
    $
    
    6,269
    
    $
    
    30,774
    
    $
    
    37,043
   F-18




---



##### Table of Contents



GOODWILL AND OTHER INTANGIBLE ASSETS, NET
   Yen in millions
    
    U.S. Dollars in thousands2009
    
    2010
    
    2010Gross
    
    Accumulated
    
    Gross
    
    Accumulated
    
    Gross
    
    Accumulatedcarrying
    
    amortization
    
    carrying
    
    amortization
    
    carrying
    
    amortizationamount
    
    
    
    
    
    amount
    
    
    
    
    
    amountIntellectual property right
    ¥
    
    108
    
    ¥
    
    29
    
    ¥
    
    2,866
    
    ¥
    
    157
    
    $
    
    30,817
    
    $
    
    1,688Software
    
    
    2,695
    
    
    
    1,542
    
    
    
    2,841
    
    
    
    1,826
    
    
    
    30,548
    
    
    
    19,634Other
    
    
    1,373
    
    
    
    441
    
    
    
    1,224
    
    
    
    383
    
    
    
    13,162
    
    
    
    4,119Total
    ¥
    
    4,176
    
    ¥
    
    2,012
    
    ¥
    
    6,931
    
    ¥
    
    2,366
    
    $
    
    74,527
    
    $
    
    25,441
   U.S. DollarsYen in millions
    
    in thousands2009
    
    2010
    
    2010Gross carrying amount
    
    ¥
    116
    
    
    ¥
    99
    
    
    $
    1,065
 F-19




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##### Table of Contents



U.S. DollarsYen in millions
    
    in thousands2009
    
    2010
    
    2010Beginning balance
    
    ¥
    2,001
    
    
    ¥
    1,987
    
    
    $
    21,366Impairment
    
    
    -
    
    
    
    (1,251)
    
    
    
    (13,452)Other
    
    
    (14)
    
    
    
    (15)
    
    
    
    (161)Ending balance
    
    ¥
    1,987
    
    
    ¥
    721
    
    
    $
    7,753
   INCOME TAXES
  U.S. DollarsYen in millions
    
    in thousands2008
    
    2009
    
    2010
    
    2010Income before income taxes:Domestic
    ¥
    
    19,896
    
    ¥
    
    8,523
    
    ¥
    
    3,301
    
    $
    
    35,495Foreign
    
    
    46,341
    
    
    
    35,920
    
    
    
    30,217
    
    
    
    324,914Total
    
    
    66,237
    
    
    
    44,443
    
    
    
    33,518
    
    
    
    360,409Provision for income taxes:Current - Domestic
    
    
    6,957
    
    
    
    2,721
    
    
    
    1,647
    
    
    
    17,710- Foreign
    
    
    12,191
    
    
    
    8,556
    
    
    
    7,113
    
    
    
    76,484Sub total
    
    
    19,148
    
    
    
    11,277
    
    
    
    8,760
    
    
    
    94,194Deferred - Domestic
    
    
    1,283
    
    
    
    (158)
    
    
    
    1,838
    
    
    
    19,763- Foreign
    
    
    (703)
    
    
    
    (388)
    
    
    
    354
    
    
    
    3,807Sub total
    
    
    580
    
    
    
    (546)
    
    
    
    2,192
    
    
    
    23,570Consolidated provision for income taxes
    ¥
    
    19,728
    
    ¥
    
    10,731
    
    ¥
    
    10,952
    
    $
    
    117,764Total income taxes were allocated as follows:U.S. DollarsYen in millions
    
    in thousands2008
    
    2009
    
    2010
    
    2010Net income
    ¥
    
    19,728
    
    ¥
    
    10,731
    
    ¥
    
    10,952
    
    $
    
    117,764Other comprehensive income (loss):Foreign currency translation adjustments
    
    
    (107)
    
    
    
    (127)
    
    
    
    5
    
    
    
    54Net
unrealized holding gains (losses) on available-for sale securities
    
    
    (4,320)
    
    
    
    (2,066)
    
    
    
    1,639
    
    
    
    17,624Pension liability adjustment
    
    
    (2,549)
    
    
    
    (2,491)
    
    
    
    673
    
    
    
    7,237Total income taxes
    ¥
    
    12,752
    
    ¥
    
    6,047
    
    ¥
    
    13,269
    
    $
    
    142,679
 F-20




---



##### Table of Contents



Year ended March, 312008
    
    2009
    
    2010Combined statutory income tax rate in Japan
    
    
    40.
    3%
    
    
    40.
    3%
    
    
    40.
    3%Non-deductible expenses
    
    
    0.
    6
    
    
    0.
    8
    
    
    0.
    7Non-taxable dividends received
    
    
    (0.
    1)
    
    
    (0.
    3)
    
    
    (0.
    1)Change in valuation allowance
    
    
    (0.
    4)
    
    
    0.
    1
    
    
    5.
    0Tax sparing impact
    
    
    (0.
    7)
    
    
    (3.
    0)
    
    
    (0.
    7)Effect of the foreign tax rate differential
    
    
    (11.
    1)
    
    
    (14.
    9)
    
    
    (14.
    2)Other, net
    
    
    1.
    2
    
    
    1.
    1
    
    
    1.
    7Effective income tax rate
    
    
    29.
    8%
    
    
    24.
    1%
    
    
    32.
    7%
     F-21




---



##### Table of Contents



U.S. DollarsYen in millions
    

    
    in thousands2008
    
    2009
    
    2010

    
    2010Deferred tax expense (exclusive of the effects of other components below)
    
    ¥
    765
    
    
    ¥
    (546)
    
    
    ¥
    1,172
    
    
    
    $
    12,602Increase (decrease) in beginning-of-the-year balance of the valuation
allowance for deferred tax assets
    
    
    (185)
    
    
    
    -
    
    
    
    1,020
    
    
    
    
    10,968¥
    580
    
    
    ¥
    (546)
    
    
    ¥
    2,192
    

    
    $
    23,570
  Yen in millions
    
    
    U.S. Dollars in thousands2009
    
    2010
    
    2010Deferred income tax assets:Marketable securities and investment securities
    ¥
    
    2,854
    
    ¥
    
    2,567
    
    
    $
    27,602Accrued retirement and termination benefits
    
    
    2,423
    
    
    
    1,310
    
    
    
    14,086Accrued expenses
    
    
    1,076
    
    
    
    862
    
    
    
    9,269Inventories
    
    
    1,940
    
    
    
    2,023
    
    
    
    21,753Property, plant and equipment
    
    
    2,028
    
    
    
    2,308
    
    
    
    24,817Accrued payroll
    
    
    1,813
    
    
    
    1,542
    
    
    
    16,581Net operating loss carryforwards
    
    
    602
    
    
    
    1,044
    
    
    
    11,226Other
    
    
    1,976
    
    
    
    1,952
    
    
    
    20,989Total gross deferred income tax assets
    
    
    14,712
    
    
    
    13,608
    
    
    
    146,323Valuation allowance
    
    
    (329)
    
    
    
    (2,021)
    
    
    
    (21,731)Sub total
    
    
    14,383
    
    
    
    11,587
    
    
    
    124,592Deferred income tax liabilities:Undistributed earnings of overseas subsidiaries
    
    
    (449)
    
    
    
    (360)
    
    
    
    (3,871)Unrealized gain on available-for-sale securities
    
    
    (859)
    
    
    
    (2,500)
    
    
    
    (26,882)Property, plant and equipment
    
    
    (1,353)
    
    
    
    (1,395)
    
    
    
    (15,000)Other
    
    
    (6)
    
    
    
    (4)
    
    
    
    (43)Total gross deferred income tax liabilities
    
    
    (2,667)
    
    
    
    (4,259)
    
    
    
    (45,796)Net deferred income tax assets
    ¥
    
    11,716
    
    ¥
    
    7,328
    
    
    $
    78,796Net deferred income taxes are recorded in the consolidated balance sheets as follows:Yen in millions
    
    
    U.S. Dollars in thousands2009
    
    2010
    
    2010Deferred income taxes:Current assets
    ¥
    
    7,264
    
    ¥
    
    6,434
    
    
    $
    69,183Investment and other assets
    
    
    5,050
    
    
    
    1,611
    
    
    
    17,323Current liabilities
    
    
    (50)
    
    
    
    (40)
    
    
    
    (430)Long-term liabilities
    
    
    (548)
    
    
    
    (677)
    
    
    
    (7,280)Total
    ¥
    
    11,716
    
    ¥
    
    7,328
    
    
    $
    78,796
 F-22




---



##### Table of Contents



U.S. DollarsYen in millions
    
    in thousandsWithin 5 years
    
    ¥
    241
    
    
    $
    2,5916 to 20 years
    
    
    1,505
    
    
    
    16,183Indefinite
    
    
    1,517
    
    
    
    16,312Total
    
    ¥
    3,263
    
    
    $
    35,086
     F-23




---



##### Table of Contents



10. RETIREMENT AND TERMINATION BENEFIT PLANS
    U.S. DollarsYen in millions

    
    in thousands2008
    
    
    2009
    
    
    2010
    
    
    2010Service cost-benefit earned during the
year
    
    ¥
    1,410
    
    
    ¥
    1,525
    
    
    ¥
    1,282
    
    
    $
    13,785Interest cost on projected benefit
obligation
    
    
    927
    
    
    
    906
    
    
    
    902
    
    
    
    9,699Expected return on plan assets
    
    
    (1,459)
    
    
    
    (1,444)
    
    
    
    (1,114)
    
    
    
    (11,978)Amortization of prior service cost
    
    
    (215)
    
    
    
    (206)
    
    
    
    (208)
    
    
    
    (2,237)Amortization of net transition obligation
    
    
    37
    
    
    
    4
    
    
    
    -
    
    
    
    -Recognized actuarial loss
    
    
    414
    
    
    
    191
    
    
    
    180
    
    
    
    1,935Net periodic pension costs
    
    ¥
    1,114
    
    
    ¥
    976
    
    
    ¥
    1,042
    
    
    $
    11,204
  U.S. DollarsYen in millions
    
    in thousands2011
    
    2011Net actuarial loss
    
    ¥
    287
    
    
    $
    3,086Amortization of prior service cost
    
    
    (208)
    
    
    
    (2,237)
 F-24




---



##### Table of Contents



U.S. DollarsYen in millions
    
    
    
    in thousands2009
    

    2010
    
    
    
    2010Change on benefit obligation:Benefit obligation at beginning of year
    
    ¥
    38,898
    
    
    ¥
    36,854
    
    
    $
    396,280Service cost
    
    
    1,525
    
    
    
    1,282
    
    
    
    13,785Interest cost
    
    
    906
    
    
    
    902
    
    
    
    9,699Plan amendment
    
    
    (3)
    
    
    
    35
    
    
    
    376Actuarial (gain) loss
    
    
    (1,636)
    
    
    
    804
    
    
    
    8,645Benefits paid
    
    
    (2,282)
    
    
    
    (1,888)
    
    
    
    (20,301)Foreign exchange impact
    
    
    (554)
    
    
    
    (91)
    
    
    
    (979)Benefit obligation at end of year
    
    
    36,854
    
    
    
    37,898
    
    
    
    407,505Change in plan assets:Fair value of plan assets at beginning of year
    
    
    35,052
    
    
    
    29,622
    
    
    
    318,516Actual return on plan assets
    
    
    (6,350)
    
    
    
    3,556
    
    
    
    38,237Employer contributions
    
    
    2,961
    
    
    
    2,490
    
    
    
    26,774Benefits paid
    
    
    (1,974)
    
    
    
    (1,729)
    
    
    
    (18,591)Foreign exchange impact
    
    
    (67)
    
    
    
    (10)
    
    
    
    (108)Fair value of plan assets at end of year
    
    
    29,622
    
    
    
    33,929
    
    
    
    364,828Underfunded status
    
    
    (7,232)
    
    
    
    (3,969)
    
    
    
    (42,677)Amounts recognized in accumulated other comprehensive income consisted of:Net actuarial loss
    
    
    15,346
    
    
    
    13,513
    
    
    
    145,301Prior service cost
    
    
    (2,372)
    
    
    
    (2,142)
    
    
    
    (23,032)12,974
    
    
    
    11,371
    
    
    
    122,269Amounts recognized in the consolidated balance sheet consisted of:Current liabilities
    
    
    (116)
    
    
    
    (191)
    
    
    
    (2,053)Non-current liabilities
    
    
    (7,116)
    
    
    
    (3,778)
    
    
    
    (40,624)¥
    (7,232)
    
    
    ¥
    (3,969)
    
    
    $
    (42,677)
 Measurement date
  The accumulated benefit obligation for all defined benefit plans
 Yen in millions
    
    U.S. Dollars in thousands2009
    
    2010
    
    2010Accumulated benefit obligation
    
    
    ¥ 33,084
    
    
    
    ¥ 33,478
    
    
    
    $ 359,978
 F-25




---



##### Table of Contents



Assumptions
  2009
    
    2010Discount rate
    
    
    2.5
    %
    
    
    2.3
    %Assumed rate of increase in future compensation levels
    
    
    2.8
    %
    
    
    2.8
    %
  2008
    
    
    2009
    
    
    2010Discount rate
    
    
    2.5
    %
    
    
    2.4
    %
    
    
    2.5
    %Assumed rate of increase in future compensation
levels
    
    
    3.3
    %
    
    
    3.3
    %
    
    
    2.8
    %Expected long-term rate of return on plan assets
    
    
    4.2
    %
    
    
    3.8
    %
    
    
    2.9
    %
   Plan Assets
  Asset Class:
    
    TargetAllocationsEquity securities
    
    
    26.0
    
    %Debt securities
    
    
    50.0Life insurance company general accounts
    
    
    16.0Short-term assets
    
    
    2.0Alternative investments
    
    
    6.0Total
    
    
    100
    
    %
   F-26




---



##### Table of Contents



As of March 31, 2010
    
    Yen in millions
    
    
    
    U.S. Dollars in thousandsLevel 1

    
    
    Level 2

    
    
    Level 3

    
    
    Level 1

    
    
    Level 2

    
    
    Level 3Equity securities:
    
    ¥
    
    
    
    ¥
    
    
    
    ¥
    
    
    
    $
    
    
    
    $
    
    
    
    $DemesticSecurities
    
    
    2,315
    
    
    
    -
    
    
    
    -
    
    
    
    24,892
    
    
    
    -
    
    
    
    -Securities (commingled funds)
    
    
    -
    
    
    
    2,739
    
    
    
    -
    
    
    
    -
    
    
    
    29,452
    
    
    
    -OverseasSecurities
    
    
    1,174
    
    
    
    -
    
    
    
    -
    
    
    
    12,624
    
    
    
    -
    
    
    
    -Securities (commingled funds)
    
    
    -
    
    
    
    3,346
    
    
    
    -
    
    
    
    -
    
    
    
    35,978
    
    
    
    -Debt securities:DomesticGovernment bonds
    
    
    -
    
    
    
    674
    
    
    
    -
    
    
    
    -
    
    
    
    7,247
    
    
    
    -Commingled funds
    
    
    -
    
    
    
    9,394
    
    
    
    -
    
    
    
    -
    
    
    
    101,011
    
    
    
    -OverseasGovernment bonds
    
    
    -
    
    
    
    772
    
    
    
    -
    
    
    
    -
    
    
    
    8,301
    
    
    
    -Commingled funds
    
    
    -
    
    
    
    4,947
    
    
    
    -
    
    
    
    -
    
    
    
    53,194
    
    
    
    -Life insurance company general
accounts
    
    
    -
    
    
    
    4,996
    
    
    
    -
    
    
    
    -
    
    
    
    53,720
    
    
    
    -Short-term assets
    
    
    1,767
    
    
    
    -
    
    
    
    -
    
    
    
    19,000
    
    
    
    -
    
    
    
    -Alternative investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -Commodity
    
    
    150
    
    
    
    -
    
    
    
    -
    
    
    
    1,613
    
    
    
    -
    
    
    
    -Commingled funds
    
    
    -
    
    
    
    1,655
    
    
    
    -
    
    
    
    -
    
    
    
    17,796
    
    
    
    -Total
    
    ¥
    5,406
    
    
    ¥
    28,523
    
    
    ¥
    -
    
    
    $
    58,129
    
    
    $
    306,699
    
    
    $
    -
     F-27




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##### Table of Contents



Information for pension plans with an accumulated benefit obligation in excess of plan assets
 U.S. DollarsYen in millions

    
    
    in thousands2009
    
    
    2010
    
    
    2010Projected benefit obligation
    
    ¥
    36,854
    
    
    ¥
    3,752
    
    
    $
    40,344Accumulated benefit obligation
    
    
    33,084
    
    
    
    3,665
    
    
    
    39,409Fair value of plan assets
    
    
    29,622
    
    
    
    364
    
    
    
    3,914Accumulated benefit
obligation in excess of plan
assets
    
    ¥
    3,462
    
    
    ¥
    3,301
    
    
    $
    35,495
 Cash flows
   Estimated future benefit payments
  Year ending March 31,
    
    
    
    
    
    U.S. DollarsYen in millions

    
    in thousands2011
    
    ¥
    1,935
    
    
    $
    20,8062012
    
    
    1,877
    
    
    
    20,1832013
    
    
    1,936
    
    
    
    20,8172014
    
    
    1,799
    
    
    
    19,3442015
    
    
    1,788
    
    
    
    19,2262016-2020
    
    
    9,233
    
    
    
    99,280Total
    
    ¥
    18,568
    
    
    $
    199,656
 ¥ 270 million,
  F-28




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##### Table of Contents



11. SHORT-TERM BORROWINGS AND LONG-TERM INDEBTEDNESS
  Yen in millions

    
    U.S. Dollars in thousands2009
    

    2010
    

    2010Bank borrowings
    
    ¥
    110
    
    
    ¥
    105
    
    
    $
    1,129Current maturities
of long-term
indebtedness
    
    
    129
    
    
    
    280
    
    
    
    3,011Total
    
    ¥
    239
    
    
    ¥
    385
    
    
    $
    4,140
     U.S. DollarsYen in millions

    
    
    in thousands2009
    
    
    2010
    
    
    20101.9% (weighted average rate) unsecured loans from banks,
due 2012
    
    ¥
    500
    
    
    ¥
    500
    
    
    $
    5,376Capital lease obligations (see Note 3 (g))
    
    
    447
    
    
    
    324
    
    
    
    3,484Less- Current maturities included in short-term borrowings
    
    
    (129)
    
    
    
    (280)
    
    
    
    (3,011)Total
    
    ¥
    818
    
    
    ¥
    544
    
    
    $
    5,849
   U.S. DollarsYear ending March 31,
    
    Yen in millions

    
    in thousands2011
    
    ¥
    280
    
    
    $
    3,0112012
    
    
    528
    
    
    
    5,6772013
    
    
    13
    
    
    
    1402014
    
    
    3
    
    
    
    322015
    
    
    -
    
    
    
    -2016 and after
    
    
    -
    
    
    
    -Total
    
    ¥
    824
    
    
    $
    8,860
 F-29




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##### Table of Contents



12. SHAREHOLDERS EQUITY
     13. OTHER COMPREHENSIVE INCOME (LOSS)
  U.S. DollarsYen in millions
    
    
    in thousands2008
    
    

    2009
    
    

    2010
    
    

    2010Foreign currency translation adjustments:Beginning balance
    
    ¥
    2,764
    
    
    ¥
    (7,510)
    
    
    ¥
    (35,561)
    
    
    $
    (382,376)Adjustments to for the year
    
    
    (10,274)
    
    
    
    (28,051)
    
    
    
    (2,931)
    
    
    
    (31,516)Ending balance
    
    
    (7,510)
    
    
    
    (35,561)
    
    
    
    (38,492)
    
    
    
    (413,892)Net unrealized holding gains on
available-for-sale securities:Beginning balance
    
    
    10,280
    
    
    
    3,885
    
    
    
    820
    
    
    
    8,817Adjustments to for the year
    
    
    (6,395)
    
    
    
    (3,065)
    
    
    
    2,430
    
    
    
    26,129Ending balance
    
    
    3,885
    
    
    
    820
    
    
    
    3,250
    
    
    
    34,946Pension liability adjustment:Beginning balance
    
    
    (347)
    
    
    
    (4,032)
    
    
    
    (7,720)
    
    
    
    (83,011)Adjustments to for the year
    
    
    (3,685)
    
    
    
    (3,688)
    
    
    
    930
    
    
    
    10,000Ending balance
    
    
    (4,032)
    
    
    
    (7,720)
    
    
    
    (6,790)
    
    
    
    (73,011)Total other accumulated comprehensive
income (loss):Beginning balance
    
    
    12,697
    
    
    
    (7,657)
    
    
    
    (42,461)
    
    
    
    (456,570)Adjustments to for the year
    
    
    (20,354)
    
    
    
    (34,804)
    
    
    
    429
    
    
    
    4,613Ending balance
    
    ¥
    (7,657)
    
    
    ¥
    (42,461)
    
    
    ¥
    (42,032)
    
    
    $
    (451,957)
 F-30




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##### Table of Contents



Yen in millionsPretax
    
    

    Tax benefit

    
    

    Net of taxamount

    
    
    (expense)


    
    
    amountFor the year ended March 31, 2008Foreign currency translation adjustment
    
    ¥
    (10,381)
    
    
    ¥
    107
    
    
    ¥
    (10,274)Unrealized holding losses on available-for- sale securities:Unrealized holding losses arising during the year
    
    
    (12,099)
    
    
    
    4,878
    
    
    
    (7,221)Less-Reclassification adjustment for gains realized in
net income
    
    
    1,384
    
    
    
    (558)
    
    
    
    826Net unrealized losses
    
    
    (10,715)
    
    
    
    4,320
    
    
    
    (6,395)Pension liability adjustment:Unrealized holding losses arising during the year
    
    
    (6,470)
    
    
    
    2,633
    
    
    
    (3,837)Less-Reclassification adjustment for gains realized in
net income
    
    
    236
    
    
    
    (84)
    
    
    
    152Net unrealized losses
    
    
    (6,234)
    
    
    
    2,549
    
    
    
    (3,685)Other comprehensive losses
    
    ¥
    (27,330)
    
    
    ¥
    6,976
    
    
    ¥
    (20,354)For the year ended March 31, 2009Foreign currency translation adjustment
    
    ¥
    (28,178)
    
    
    ¥
    127
    
    
    ¥
    (28,051)Unrealized holding losses on available-for- sale securities:Unrealized holding losses arising during the year
    
    
    (8,679)
    
    
    
    3,497
    
    
    
    (5,182)Less-Reclassification adjustment for gains realized in
net income
    
    
    3,548
    
    
    
    (1,431)
    
    
    
    2,117Net unrealized losses
    
    
    (5,131)
    
    
    
    2,066
    
    
    
    (3,065)Pension liability adjustment:Unrealized holding losses arising during the year
    
    
    (6,168)
    
    
    
    2,487
    
    
    
    (3,681)Less-Reclassification adjustment for gains realized in
net income
    
    
    (11)
    
    
    
    4
    
    
    
    (7)Net unrealized losses
    
    
    (6,179)
    
    
    
    2,491
    
    
    
    (3,688)Other comprehensive losses
    
    ¥
    (39,488)
    
    
    ¥
    4,684
    
    
    ¥
    (34,804)For the year ended March 31, 2010Foreign currency translation adjustment
    
    ¥
    (2,926)
    
    
    ¥
    (5)
    
    
    ¥
    (2,931)Unrealized holding gains on available-for- sale securities:Unrealized holding gains arising during the year
    
    
    4,343
    
    
    
    (1,750)
    
    
    
    2,593Less-Reclassification adjustment for gains realized in
net income
    
    
    (274)
    
    
    
    111
    
    
    
    (163)Net unrealized gains
    
    
    4,069
    
    
    
    (1,639)
    
    
    
    2,430Pension liability adjustment:Unrealized holding gains arising during the year
    
    
    1,622
    
    
    
    (682)
    
    
    
    940Less-Reclassification adjustment for gains realized in
net income
    
    
    (19)
    
    
    
    9
    
    
    
    (10)Net unrealized gains
    
    
    1,603
    
    
    
    (673)
    
    
    
    930Other comprehensive gains
    
    ¥
    2,746
    
    
    ¥
    (2,317)
    
    
    ¥
    429
 F-31




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U.S. Dollars in thousandsPretax
    
    
    Tax benefit
    
    
    Net of taxamount
    
    
    (expense)
    
    
    amountFor the year ended March 31, 2010Foreign currency translation adjustment
    
    $
    (31,462)
    
    
    $
    (54)
    
    
    $
    (31,516)Unrealized holding gains on available-for- sale securities:Unrealized holding gains arising during the year
    
    
    46,699
    
    
    
    (18,817)
    
    
    
    27,882Less-Reclassification adjustment for gains realized in
net income
    
    
    (2,946)
    
    
    
    1,193
    
    
    
    (1,753)Net unrealized gains
    
    
    43,753
    
    
    
    (17,624)
    
    
    
    26,129Pension liability adjustment:Unrealized holding gains arising during the year
    
    
    17,441
    
    
    
    (7,333)
    
    
    
    10,108Less-Reclassification adjustment for gains realized in
net income
    
    
    (204)
    
    
    
    96
    
    
    
    (108)Net unrealized gains
    
    
    17,237
    
    
    
    (7,237)
    
    
    
    10,000Other comprehensive gains
    
    $
    29,528
    
    
    $
    (24,915)
    
    
    $
    4,613
 14. EARNINGS PER SHARE
  U.S. DollarsYen in millions
    
    
    in thousandsNumerator
    
    
    2008
    
    
    2009
    
    
    2010
    
    2010Net income available to common share holders- Basic
    
    ¥
    46,043
    
    
    ¥
    33,286
    
    
    ¥
    22,258
    
    
    $
    239,333Denominator
    
    Number of sharesWeighted average common
shares outstanding-
Basic
    
    
    143,749,824
    
    
    
    140,518,582
    
    
    
    137,762,051Yen
    
    
    U.S. DollarsEarning per share- Basic
    
    ¥
    320.3
    
    
    ¥
    236.9
    
    
    ¥
    161.6
    
    
    $
    1.74
 15. COMMITMENTS AND CONTINGENT LIABILITIES
     F-32




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##### Table of Contents



Year ending March 31,
    
    Yen in millions2011
    
    ¥
    8402012
    
    
    5452013
    
    
    4102014
    
    
    3292015
    
    
    2442016 and after
    
    
    397Total
    
    ¥
    2,765
  U.S. DollarsYen in millions
    
    
    in thousands2008
    
    
    2009
    
    
    2010
    
    
    2010Balance at beginning of year
    
    ¥
    1,306
    
    
    ¥
    1,964
    
    
    ¥
    1,677
    
    
    $
    18,032Addition
    
    
    2,117
    
    
    
    1,648
    
    
    
    1,484
    
    
    
    15,957Utilization
    
    
    (1,357)
    
    
    
    (1,593)
    
    
    
    (1,373)
    
    
    
    (14,763)Foreign exchange impact
    
    
    (102)
    
    
    
    (342)
    
    
    
    47
    
    
    
    505Balance at end of year
    
    ¥
    1,964
    
    
    ¥
    1,677
    
    
    ¥
    1,835
    
    
    $
    19,731
 FAIR VALUE MEASUREMENTS
      F-33




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##### Table of Contents



As of March 31, 2009
    
    Yen in millionsLevel 1
    
    
    Level 2
    
    
    Level 3Assets:
    
    ¥
    
    
    
    ¥
    
    
    
    ¥Short-term investments:Corporate and bank debt securities
    
    
    -
    
    
    
    1,014
    
    
    
    -Investments in trusts
    
    
    4,175
    
    
    
    1,715
    
    
    
    -MMF and FFF
    
    
    -
    
    
    
    20,908
    
    
    
    -Marketable equity securities
    
    
    1,308
    
    
    
    -
    
    
    
    -Derivatives
    
    
    -
    
    
    
    119
    
    
    
    -Investments:Investments in trusts
    
    
    -
    
    
    
    1
    
    
    
    -Marketable equity securities
    
    
    9,488
    
    
    
    -
    
    
    
    -Liabilities:Derivatives
    
    ¥
    -
    
    
    ¥
    (1,288)
    
    
    ¥
    -
 As of March 31, 2010
    
    Yen in millions
    
    
    U.S. Dollars in thousandsLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Assets:
    
    ¥
    
    
    
    ¥
    
    
    
    ¥
    
    
    
    $
    
    
    
    $
    
    
    
    $Short-term investments:Corporate and bank debt securities
    
    
    -
    
    
    
    583
    
    
    
    -
    
    
    
    -
    
    
    
    6,269
    
    
    
    -Investments in trusts
    
    
    3,648
    
    
    
    1,332
    
    
    
    -
    
    
    
    39,226
    
    
    
    14,323
    
    
    
    -MMF and FFF
    
    
    -
    
    
    
    25,700
    
    
    
    -
    
    
    
    -
    
    
    
    276,344
    
    
    
    -Marketable equity securities
    
    
    1,576
    
    
    
    -
    
    
    
    -
    
    
    
    16,946
    
    
    
    -
    
    
    
    -Derivatives
    
    
    -
    
    
    
    25
    
    
    
    -
    
    
    
    -
    
    
    
    269
    
    
    
    -Investments:Marketable equity securities
    
    
    12,643
    
    
    
    -
    
    
    
    -
    
    
    
    135,947
    
    
    
    -
    
    
    
    -Liabilities:Derivatives
    
    ¥
    -
    
    
    ¥
    (305)
    
    
    ¥
    -
    
    
    $
    -
    
    
    $
    (3,280)
    
    
    $
    -
  
 F-34




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##### Table of Contents



17. DERIVATIVES AND HEDGING ACTIVITIES
 (a) Risk management policy
   (b) Foreign currency exchange rate risk management
    Yen in millionsAsset Derivatives
    
    Liability DerivativesDerivatives not designated as
    
    
    Balance sheet
    
    
    
    
    
    
    Balance sheethedging instruments
    
    
    Location
    
    
    Fair value
    
    
    Location
    
    
    Fair valueForeign currency contracts
    
    Other current assets
    
    ¥
    25
    
    
    Other liabilities
    
    ¥
    301Currency option contracts
    
    Other current assets
    
    
    -
    
    
    Other liabilities
    
    
    4Total
    
    
    
    
    
    ¥
    25
    
    
    
    
    
    
    ¥
    305U.S. Dollars in thousandsAsset Derivatives
    
    Liability DerivativesDerivatives not designated as
    
    
    Balance sheet
    
    
    
    
    
    
    Balance sheethedging instruments
    
    
    Location
    
    
    Fair value
    
    
    Location
    
    
    Fair valueForeign currency contracts
    
    Other current assets
    
    $
    269
    
    
    Other liabilities
    
    $
    3,237Currency option contracts
    
    Other current assets
    
    
    -
    
    
    Other liabilities
    
    
    43Total
    
    
    
    
    
    $
    269
    
    
    
    
    
    
    $
    3,280
 F-35




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##### Table of Contents



Amount of gain (loss) recognized in income on derivative
 Yen in millions
    
    U.S. Dollars in thousandsDerivatives not designated
    
    Location of gain (loss)
    
    Amount of gain (loss)
    
    Amount of gain (loss)as hedging instruments
    
    recognized in income
    
    recognized in income on
    
    recognized in income onon derivative
    
    derivative
    
    derivative2010
    
    2010Foreign currency contracts
    
    Exchange gains (losses)
    
    ¥
    565
    
    
    $
    6,075Currency swaps
    
    Exchange gains (losses)
    
    
    321
    
    
    
    3,452Currency option contracts
    
    Exchange gains (losses)
    
    
    3
    
    
    
    32Total
    
    
    
    
    
    ¥
    889
    
    
    $
    9,559
  Yen in millions
    
    U.S. Dollars in thousands2010
    
    2010Foreign currency contracts
    
    ¥
    14,544
    
    
    $
    156,388Currency swaps
    
    
    -
    
    
    
    -Currency option contracts
    
    
    176
    
    
    
    1,892Total
    
    ¥
    14,720
    
    
    $
    158,280
  Yen in millions
    
    U.S. Dollars in thousands2010
    
    2010U.S. Dollars
    
    ¥
    9,277
    
    
    $
    99,753Euro
    
    
    3,919
    
    
    
    42,140Other
    
    
    1,524
    
    
    
    16,387Total
    
    ¥
    14,720
    
    
    $
    158,280
 (c) Interest rate risk management
  18. FAIR VALUE OF FINANCIAL INSTRUMENTS
  (a)
    
    Cash and Cash Equivalents, Time Deposits, Trade Notes and Accounts Receivable, Short-term
Borrowings, Trade Notes and Accounts Payable, Other payables, and Other Accrued Expenses
  F-36




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##### Table of Contents



(b) Long-term Time Deposits
  (c) Short-term investments and investments
 
 (d) Long-term Indebtedness
  (e) Other Derivative Financial Statements
   Yen in millions
    
    U.S. Dollars in thousands2009
    
    
    2010
    
    
    2010Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fairamount
    
    
    value
    
    
    amount
    
    
    value
    
    
    amount
    
    
    valueShort-term investments
    
    ¥
    29,470
    
    
    ¥
    29,468
    
    
    ¥
    33,639
    
    
    ¥
    33,640
    
    
    $
    361,710
    
    
    $
    361,721Investments
    
    
    10,888
    
    
    
    10,837
    
    
    
    14,764
    
    
    
    14,704
    
    
    
    158,753
    
    
    
    158,108Long-term time deposits
    
    
    2,203
    
    
    
    2,203
    
    
    
    3
    
    
    
    3
    
    
    
    32
    
    
    
    32Long-term indebtedness including current maturities
    
    
    (947)
    
    
    
    (947)
    
    
    
    (824)
    
    
    
    (832)
    
    
    
    (8,860)
    
    
    
    (8,946)Foreign currency contracts:Assets
    
    
    22
    
    
    
    22
    
    
    
    25
    
    
    
    25
    
    
    
    269
    
    
    
    269Liabilities
    
    
    (863)
    
    
    
    (863)
    
    
    
    (301)
    
    
    
    (301)
    
    
    
    (3,237)
    
    
    
    (3,237)Currency swaps:Assets
    
    
    93
    
    
    
    93
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Liabilities
    
    
    (414)
    
    
    
    (414)
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Currency option contracts:Assets
    
    
    4
    
    
    
    4
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Liabilities
    
    ¥
    (11)
    
    
    ¥
    (11)
    
    
    ¥
    (4)
    
    
    ¥
    (4)
    
    
    $
    (43)
    
    
    $
    (43)
 F-37




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##### Table of Contents



(f) Limitation
   19. OPERATING SEGMENT INFORMATION
    Europe:
    
    Germany, United Kingdom, France, Italy, FinlandNorth America:
    
    United States, CanadaAsia:
    
    China, SingaporeOther regions:
    
    Australia, Brazil, United Arab Emirates
   Segment Products and Services
  F-38




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##### Table of Contents



Yen in millionsNorth
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Corporate andJapan
    
    
    Europe
    
    
    America
    
    
    Asia
    
    
    regions
    
    
    Total
    
    
    Eliminations
    
    
    ConsolidatedSales:External customers
    
    ¥
    72,466
    
    
    ¥
    160,218
    
    
    ¥
    56,234
    
    
    ¥
    11,271
    
    
    ¥
    42,388
    
    
    ¥
    342,577
    
    
    ¥
    -
    
    
    ¥
    342,577Inter-segment
    
    
    69,540
    
    
    
    5,606
    
    
    
    5,212
    
    
    
    101,211
    
    
    
    172
    
    
    
    181,741
    
    
    
    (181,741)
    
    
    
    -Total
    
    
    142,006
    
    
    
    165,824
    
    
    
    61,446
    
    
    
    112,482
    
    
    
    42,560
    
    
    
    524,318
    
    
    
    (181,741)
    
    
    
    342,577Operating expenses
    
    
    120,020
    
    
    
    138,850
    
    
    
    59,727
    
    
    
    98,468
    
    
    
    36,964
    
    
    
    454,029
    
    
    
    (178,483)
    
    
    
    275,546Segment income
    
    
    21,986
    
    
    
    26,974
    
    
    
    1,719
    
    
    
    14,014
    
    
    
    5,596
    
    
    
    70,289
    
    
    
    (3,258)
    
    
    
    67,031Other income (expenses)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (794)Income before income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    66,237Long-lived assets
    
    
    42,752
    
    
    
    10,563
    
    
    
    2,656
    
    
    
    9,961
    
    
    
    3,313
    
    
    
    69,245
    
    
    
    (187)
    
    
    
    69,058Segment assets
    
    
    264,721
    
    
    
    126,428
    
    
    
    39,523
    
    
    
    52,890
    
    
    
    31,556
    
    
    
    515,118
    
    
    
    (128,651)
    
    
    
    386,467Capital expenditures
    
    
    8,637
    
    
    
    2,453
    
    
    
    713
    
    
    
    2,220
    
    
    
    1,113
    
    
    
    15,136
    
    
    
    (100)
    
    
    
    15,036Depreciation and amortization
    
    ¥
    4,874
    
    
    ¥
    1,653
    
    
    ¥
    691
    
    
    ¥
    1,397
    
    
    ¥
    320
    
    
    ¥
    8,935
    
    
    ¥
    (64)
    
    
    ¥
    8,871
  Yen in millionsNorth
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Corporate andJapan
    
    
    Europe
    
    
    America
    
    
    Asia
    
    
    regions
    
    
    Total
    
    
    Eliminations
    
    
    ConsolidatedSales:External customers
    
    ¥
    63,859
    
    
    ¥
    137,230
    
    
    ¥
    42,446
    
    
    ¥
    9,954
    
    
    ¥
    40,545
    
    
    ¥
    294,034
    
    
    ¥
    -
    
    
    ¥
    294,034Inter-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)
    
    
    
    294,034Operating expenses
    
    
    112,109
    
    
    
    121,668
    
    
    
    46,291
    
    
    
    84,438
    
    
    
    35,816
    
    
    
    400,322
    
    
    
    (156,363)
    
    
    
    243,959Segment income
    
    
    8,121
    
    
    
    19,716
    
    
    
    845
    
    
    
    12,213
    
    
    
    4,850
    
    
    
    45,745
    
    
    
    4,330
    
    
    
    50,075Other income (expenses)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (5,632)Income before income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    44,443Long-lived assets
    
    
    44,114
    
    
    
    11,395
    
    
    
    2,231
    
    
    
    11,302
    
    
    
    3,827
    
    
    
    72,869
    
    
    
    (173)
    
    
    
    72,696Segment assets
    
    
    235,252
    
    
    
    110,897
    
    
    
    33,533
    
    
    
    48,311
    
    
    
    36,134
    
    
    
    464,127
    
    
    
    (127,483)
    
    
    
    336,644Capital expenditures
    
    
    6,682
    
    
    
    5,245
    
    
    
    359
    
    
    
    3,045
    
    
    
    1,856
    
    
    
    17,187
    
    
    
    (141)
    
    
    
    17,046Depreciation and amortization
    
    ¥
    5,084
    
    
    ¥
    1,534
    
    
    ¥
    586
    
    
    ¥
    1,493
    
    
    ¥
    268
    
    
    ¥
    8,965
    
    
    ¥
    (78)
    
    
    ¥
    8,887
 F-39




---



##### Table of Contents



Yen in millionsNorth
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Corporate andJapan
    
    
    Europe
    
    
    America
    
    
    Asia
    
    
    regions
    
    
    Total
    
    
    Eliminations
    
    
    ConsolidatedSales:External customers
    
    ¥
    55,767
    
    
    ¥
    109,484
    
    
    ¥
    34,547
    
    
    ¥
    9,007
    
    
    ¥
    37,018
    
    
    ¥
    245,823
    
    
    ¥
    -
    
    
    ¥
    245,823Inter-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)
    
    
    
    245,823Operating expenses
    
    
    89,719
    
    
    
    99,418
    
    
    
    36,034
    
    
    
    57,947
    
    
    
    34,942
    
    
    
    318,060
    
    
    
    (102,627)
    
    
    
    215,433Segment income
    
    
    (643)
    
    
    
    12,875
    
    
    
    360
    
    
    
    8,880
    
    
    
    2,174
    
    
    
    23,646
    
    
    
    6,744
    
    
    
    30,390Other income (expenses)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    3,128Income before income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    33,518Long-lived assets
    
    
    41,214
    
    
    
    14,887
    
    
    
    1,983
    
    
    
    10,732
    
    
    
    4,543
    
    
    
    73,359
    
    
    
    (159)
    
    
    
    73,200Segment assets
    
    
    232,226
    
    
    
    110,009
    
    
    
    30,281
    
    
    
    58,148
    
    
    
    39,229
    
    
    
    469,893
    
    
    
    (120,054)
    
    
    
    349,839Capital expenditures
    
    
    3,800
    
    
    
    4,817
    
    
    
    198
    
    
    
    1,541
    
    
    
    543
    
    
    
    10,899
    
    
    
    (62)
    
    
    
    10,837Depreciation and amortization
    
    
    4,693
    
    
    
    1,351
    
    
    
    431
    
    
    
    1,497
    
    
    
    397
    
    
    
    8,369
    
    
    
    (61)
    
    
    
    8,308Impairment loss
    
    ¥
    1,605
    
    
    ¥
    -
    
    
    ¥
    -
    
    
    ¥
    -
    
    
    ¥
    -
    
    
    ¥
    1,605
    
    
    ¥
    -
    
    
    ¥
    1,605
  U.S. Dollars in thousandsNorth
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Corporate andJapan
    
    
    Europe
    
    
    America
    
    
    Asia
    
    
    regions
    
    
    Total
    
    
    Eliminations
    
    
    ConsolidatedSales:External customers
    
    $
    599,645
    
    
    $
    1,177,247
    
    
    $
    371,473
    
    
    $
    96,849
    
    
    $
    398,044
    
    
    $
    2,643,258
    
    
    $
    -
    
    
    $
    2,643,258Inter-segment
    
    
    358,161
    
    
    
    30,204
    
    
    
    19,860
    
    
    
    621,720
    
    
    
    1,055
    
    
    
    1,031,000
    
    
    
    (1,031,000)
    
    
    
    -Total
    
    
    957,806
    
    
    
    1,207,451
    
    
    
    391,333
    
    
    
    718,569
    
    
    
    399,099
    
    
    
    3,674,258
    
    
    
    (1,031,000)
    
    
    
    2,643,258Operating expenses
    
    
    964,720
    
    
    
    1,069,010
    
    
    
    387,462
    
    
    
    623,085
    
    
    
    375,723
    
    
    
    3,420,000
    
    
    
    (1,103,516)
    
    
    
    2,316,484Segment income
    
    
    (6,914)
    
    
    
    138,441
    
    
    
    3,871
    
    
    
    95,484
    
    
    
    23,376
    
    
    
    254,258
    
    
    
    72,516
    
    
    
    326,774Other income (expenses)
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    33,635Income before  income taxes
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    360,409Long-lived assets
    
    
    443,161
    
    
    
    160,075
    
    
    
    21,323
    
    
    
    115,398
    
    
    
    48,849
    
    
    
    788,806
    
    
    
    (1,709)
    
    
    
    787,097Segment assets
    
    
    2,497,054
    
    
    
    1,182,892
    
    
    
    325,602
    
    
    
    625,247
    
    
    
    421,818
    
    
    
    5,052,613
    
    
    
    (1,290,903)
    
    
    
    3,761,710Capital expenditures
    
    
    40,860
    
    
    
    51,796
    
    
    
    2,129
    
    
    
    16,570
    
    
    
    5,839
    
    
    
    117,194
    
    
    
    (667)
    
    
    
    116,527Depreciation and amortization
    
    
    50,462
    
    
    
    14,527
    
    
    
    4,634
    
    
    
    16,097
    
    
    
    4,269
    
    
    
    89,989
    
    
    
    (656)
    
    
    
    89,333Impairment loss
    
    $
    17,258
    
    
    $
    -
    
    
    $
    -
    
    
    $
    -
    
    
    $
    -
    
    
    $
    17,258
    
    
    $
    -
    
    
    $
    17,258
 F-40




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##### Table of Contents



Consolidated Net Sales by Geographic Area
 U.S. DollarsYen in millions, except for percentage amounts
    
    in thousandsFiscal year ended March 31,2008
    
    
    
    
    2009
    
    
    
    
    2010
    
    
    
    
    2010Japan
    
    
    ¥ 52,193
    
    
    15.2
    %
    
    
    ¥ 46,222
    
    
    15.7
    %
    
    
    ¥   42,697
    
    
    17.4
    %
    
    
    $     459,108Europe
    
    
    160,360
    
    
    46.8
    
    
    
    137,113
    
    
    46.6
    
    
    
    109,106
    
    
    44.4
    
    
    
    1,173,182U.S.A.
    
    
    45,780
    
    
    13.4
    
    
    
    33,250
    
    
    11.3
    
    
    
    26,292
    
    
    10.7
    
    
    
    282,710North America (excluding U.S.A)
    
    
    10,642
    
    
    3.1
    
    
    
    9,039
    
    
    3.1
    
    
    
    8,217
    
    
    3.3
    
    
    
    88,355Asia (excluding Japan)
    
    
    22,629
    
    
    6.6
    
    
    
    21,995
    
    
    7.5
    
    
    
    18,373
    
    
    7.5
    
    
    
    197,559Other
    
    
    50,973
    
    
    14.9
    
    
    
    46,415
    
    
    15.8
    
    
    
    41,138
    
    
    16.7
    
    
    
    442,344Total
    
    
    ¥ 342,577
    
    
    100
    %
    
    
    ¥ 294,034
    
    
    100
    %
    
    
    ¥ 245,823
    
    
    100
    %
    
    
    $  2,643,258
  Consolidated Net Sales by Product Categories
 U.S. DollarsYen in millions, except for percentage amounts
    
    in thousandsFiscal year
    
    2008
    
    
    2009
    
    
    2010
    
    2010Power Tools
    
    ¥
    255,869
    
    
    74.7
    %
    
    ¥
    214,703
    
    
    73.0
    %
    
    ¥
    173,998
    
    
    70.8
    %
    
    $
    1,870,946Gardening Equipments, 
Household and Other Products
    
    
        40,410
    
    
    11.8
    
    
    
    36,916
    
    
    12.6
    
    
    
    34,145
    
    
    13.9
    
    
    
    367,151Parts, Repairs and Accessories
    
    
    46,298
    
    
    13.5
    
    
    
    42,415
    
    
    14.4
    
    
    
    37,680
    
    
    15.3
    
    
    
    405,161Total
    
    ¥
    342,577
    
    
    100
    %
    
    ¥
    294,034
    
    
    100
    %
    
    ¥
    245,823
    
    
    100
    %
    
    $
    2,643,258
 20. RELATED PARTY TRANSACTIONS
   
 F-41




---



##### Table of Contents



SCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
   Yen in millionsAdditionsBalance at
    
    
    Charged to
    
    
    Chargedbeginning
    
    
    costs and
    
    
    to other
    
    
    
    
    
    
    Translation
    
    
    Balance atDescriptions
    
    
    of year
    
    
    expenses
    
    
    accounts
    
    
    Deductions
    
    
    adjustments
    
    
    end of year2008:Allowance for doubtful receivables
    
    ¥
    869
    
    
    ¥
    269
    
    
    ¥
    -
    
    
    ¥
    (73)
    
    
    ¥
    (47)
    
    
    ¥
    1,018Deferred income tax assets valuation allowance
    
    
    318
    
    
    
    251
    
    
    
    -
    
    
    
    (237)
    
    
    
    (1)
    
    
    
    331Volume-based rebates
    
    
    3,859
    
    
    
    -
    
    
    
    9,897
    
    
    
    (9,626)
    
    
    
    346
    
    
    
    4,476Cooperative advertisings
    
    
    957
    
    
    
    -
    
    
    
    3,517
    
    
    
    (3,585)
    
    
    
    64
    
    
    
    953Cash discounts
    
    ¥
    348
    
    
    ¥
    -
    
    
    ¥
    5,881
    
    
    ¥
    (5,891)
    
    
    ¥
    58
    
    
    ¥
    3962009:Allowance for doubtful receivables
    
    ¥
    1,018
    
    
    ¥
    474
    
    
    ¥
    -
    
    
    ¥
    (131)
    
    
    ¥
    (232)
    
    
    ¥
    1,129Deferred income tax assets valuation allowance
    
    
    331
    
    
    
    41
    
    
    
    -
    
    
    
    (32)
    
    
    
    (11)
    
    
    
    329Volume-based rebates
    
    
    4,476
    
    
    
    -
    
    
    
    7,866
    
    
    
    (10,343)
    
    
    
    662
    
    
    
    2,661Cooperative advertisings
    
    
    953
    
    
    
    -
    
    
    
    3,435
    
    
    
    (3,981)
    
    
    
    185
    
    
    
    592Cash discounts
    
    ¥
    396
    
    
    ¥
    -
    
    
    ¥
    5,444
    
    
    ¥
    (5,514)
    
    
    ¥
    14
    
    
    ¥
    3402010:Allowance for doubtful receivables
    
    ¥
    1,129
    
    
    ¥
    152
    
    
    ¥
    -
    
    
    ¥
    (289)
    
    
    ¥
    18
    
    
    ¥
    1,010Deferred income tax assets valuation allowance
    
    
    329
    
    
    
    1,704
    
    
    
    -
    
    
    
    (15)
    
    
    
    3
    
    
    
    2,021Volume-based rebates
    
    
    2,661
    
    
    
    -
    
    
    
    6,519
    
    
    
    (6,763)
    
    
    
    (1)
    
    
    
    2,416Cooperative advertisings
    
    
    592
    
    
    
    -
    
    
    
    2,923
    
    
    
    (2,453)
    
    
    
    (109)
    
    
    
    953Cash discounts
    
    ¥
    340
    
    
    ¥
    -
    
    
    ¥
    4,420
    
    
    ¥
    (4,281)
    
    
    ¥
    8
    
    
    ¥
    487
 F-42