Annual Report - Makita Corporation Global Site

1. DESCRIPTION OF BUSINESS
MAKITA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Makita Corporation (the “Company”) is a recognized leader in the manufacture and sale of power tools. The Company and its
subsidiaries’ main products include drills, rotary hammers, demolition hammers, grinders and cordless impact drivers. The
Company and its subsidiaries (collectively “Makita”) also manufacture and sell pneumatic tools and garden tools.
Domestic sales in Japan are made by the Company, while overseas sales are made almost entirely through sales subsidiaries and
distributors under the Makita or Maktec brand name. 84.3% of consolidated net sales for the year ended March 31, 2009, were
generated from customers outside Japan, with 46.6% from Europe, 14.4% from North America and 7.5% from Asia and 15.8%
from other areas.
Makita’s manufacturing and assembly operations are conducted primarily at three plants in Japan and eight plants overseas,
located in the United States, Germany, the United Kingdom, Brazil (two plants), China (two plants) and Romania.
2. BASIS OF PRESENTING FINANCIAL STATEMENTS
The books of the Company and its domestic subsidiaries are maintained in conformity with Japanese accounting principles,
while foreign subsidiaries maintain their books in conformity with the standards of their countries of domicile.
The accompanying consolidated financial statements reflect all necessary adjustments, not recorded in the Company’s and its
subsidiaries’ books, to present them in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”).
3. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
(a)
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company, all of its majority owned
subsidiaries and those variable interest entities where Makita is the primary beneficiary under Financial Accounting
Standards Board (“FASB”) Interpretation No. 46 (revised December 2003) (“FIN 46R”), “Consolidation of Variable Interest
Entities.” All significant inter-company balances and transactions have been eliminated in consolidation. Makita did not have
any consolidated variable interest entities as set out in FIN 46R for any of the periods presented herein.
(b) Foreign Currency Translation
Under the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation,”
overseas subsidiaries’ assets and liabilities denominated in their local foreign currencies are translated at the exchange rate in
effect at each fiscal year-end and income and expenses are translated at the average rates of exchange prevailing during each
fiscal year. The local currencies of the overseas subsidiaries are regarded as their functional currencies. The resulting
currency translation adjustments are included in accumulated other comprehensive income (loss) in shareholders’ equity.
Gains and losses resulting from all foreign currency transactions, including foreign exchange contracts, and translation of
receivables and payables denominated in foreign currencies are included in other income (expenses).
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