UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under
the Securities Exchange Act of 1934

KOMATSU LTD.

Translation of registrant’s name into English

3-6 Akasaka 2-chome, Minato-ku, Tokyo, Japan

Address of principal executive office

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

Form 20-F þ     Form 40-F o

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

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

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

Yes o     No þ

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

 

 

INFORMATION TO BE INCLUDED IN REPORT

1.		Notice of Convocation of the 141st Ordinary General Meeting of Shareholders.

SIGNATURES

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

(Translation)

Notes: 1.		This document has been translated from the Japanese original for the convenience of non-Japanese shareholders. In the event of any discrepancy between this document and the Japanese original, the original shall prevail.
2.		Regarding nonresident shareholders, if you wish to exercise your voting rights, please instruct your custodians, nominees or brokers accordingly in advance of the date of the Ordinary General Meeting of Shareholders.

NOTICE OF CONVOCATION OF THE
ONE HUNDRED AND FORTY-FIRST (141ST)
ORDINARY GENERAL MEETING OF SHAREHOLDERS
OF KOMATSU LTD.

Securities Code: 6301
June 1, 2010

Dear Shareholders:

Please be advised that the 141st Ordinary General Meeting of Shareholders of Komatsu Ltd. (hereinafter “the Company”) will be held in accordance with the particulars indicated in the attachment hereto. Your attendance at the meeting is cordially requested.

If you are unable to attend the above Meeting in person, it would be very appreciated if you could “Exercise voting rights by conventional postal delivery” or “Exercise voting rights via the Internet.” Please check the “Reference Materials for the General Meeting of Shareholders” (pages 55 to 67) and exercise your voting rights by 5:45 p.m. on Tuesday, June 22, 2010 (Japan Time).

(Exercising voting rights by conventional postal delivery)

Please indicate “for” or “against” for each agenda item shown on the enclosed Card for Exercising Voting Rights, and return it via the conventional postal delivery system. The mail must be delivered to the Company by the above time for exercising voting rights.

(Exercising voting rights via the Internet)

Please carefully access the website (http://www.evote.jp/) designated by the Company, follow the directions on the screen, and indicate “for” or “against” for each agenda item. Voting must be performed by the above time for exercising voting rights.

Institutional investors can utilize the electronic platform for exercising voting rights, which is operated by ICJ, Inc. (hereinafter “ICJ”).

In an effort to enhance the convenience of institutional investors, the Company participates in the electronic voting platform operated by ICJ via ProxyEdge system of Broadridge. For details on the platform, please contact your custodians, nominees or brokers. Voting via Internet other than ICJ platform is only available for registered shareholders in Japan with Japanese language only.

Details

1. Date and Time:		Wednesday, June 23, 2010 at 10:00 a.m. (Japan Time)
2. Place:		West Hall 1, West Exhibition Hall, Tokyo Big Sight 11-1, Ariake 3-chome, Koto-ku, Tokyo

3. Purpose:

Items to Be Reported

	(1)		The Business Report and the Consolidated Statutory Report for the 141st fiscal year (April 1, 2009 — March 31, 2010), as well as the Accounting Auditors’ Report and Board of Corporate Auditors’ Report on the Result of the Audited Consolidated Statutory Report.
	(2)		The Non-Consolidated Statutory Report for the 141st fiscal year (April 1, 2009 — March 31, 2010).

Items to Be Resolved

Item 1:		Appropriation of Surplus
Item 2:		Election of Ten (10) Directors
Item 3:		Election of One (1) Corporate Auditor
Item 4:		Payment of Bonuses for Directors
Item 5:		Establishment of the Amount and Features of Remuneration for Directors of the Company in the Form of Stock Acquisition Rights to be Granted as “Stock-Based Remuneration”
Item 6:		Giving the Board of Directors the Authority to Issue Stock Acquisition Rights as “Stock-Based Remuneration” to Employees of the Company and Directors of Major Subsidiaries of the Company

4. Matters Related to the Exercise of Voting Rights

	(1)		Handling of duplicated voting
			If you exercise your voting rights twice, both by mail and via the Internet, the voting via the Internet shall prevail regardless of the arrival date of the mailed vote. In the case of multiple voting via the Internet, the last voting shall prevail.
	(2)		Split exercise of voting rights
			If you split your exercise of voting rights, you are required to notify the Company the details and the reasons for this in writing.

Notes:

1.		In the event that you attend in person, please submit the enclosed Card for Exercising Voting Rights at the reception.
2.		Please note that any changes in the matters described in Reference Materials for the General Meeting of Shareholders, Business Report, Non-Consolidated Statutory Report, and Consolidated Statutory Report will be posted on our website on the Internet (http://www.komatsu.co.jp/).
		Information in English will be posted on our English website (http://www.komatsu.com).
3.		This document, entitled “Notice of Convocation of the 141st Ordinary General Meeting of Shareholders of Komatsu Ltd.” is also available on our website (http://www.komatsu.co.jp/).
		Information in English will be posted on our English website (http://www.komatsu.com).
4.		After the General Meeting of Shareholders, we are planning to hold an event “New Technology and CSR* Exhibition”, so that please feel free to stop by if you have time.

ATTACHED DOCUMENTS

Business Report
(April 1, 2009 - March 31, 2010)

1. Current Conditions of the Komatsu

(1) Outline of Operations and Business Results

During the fiscal year ended March 31, 2010, some economies of the world generated signs of recovery, reflecting positive effects of the economic stimulus packages of their respective governments. In particular, leading other economies, the Chinese economy upturned for full-momentum growth in the first half, supported by the government’s massive economic stimulus measures. The positive effects of the Chinese economic growth are reaching to surrounding Asian countries and those with natural resources, helping their economic recovery. However, the pace of economic recovery was dull in developed countries including Japan, North America and Europe, bringing about a challenging overall business environment.

Komatsu Ltd. and its subsidiaries (hereinafter “Komatsu”) engaged in production adjustment around the world and achieved an appropriate level of inventories in the first half. Komatsu also reorganized production of businesses of both the Construction, Mining and Utility Equipment and the Industrial Machinery and Others, while realigning sales of construction equipment and forklift trucks in Japan. At the same time, Komatsu worked to substantially cut down fixed costs. To ensure sales and profits, Komatsu reinforced ICT*-deployed businesses, such as the KOMTRAX (Komatsu Machine Tracking System), strengthened operations in China and mining equipment, in which business was expanding, and worked to strengthen the parts and service business. However, as affected by global demand, which did not come back to the level of the pre-financial meltdown and the Japanese yen’s appreciation against major currencies, consolidated net sales for the fiscal year declined 29.2% from the previous fiscal year, to JPY 1,431.5 billion (USD 15,393 million, at USD 1.00=JPY 93.00). With respect to profits, operating income decreased 55.9% to JPY 67.0 billion (USD 721 million). Income before income taxes and equity in earnings of affiliated companies amounted to JPY 64.9 billion (USD 699 million), down 49.5%. Net income attributable to Komatsu Ltd. declined 57.4% to JPY 33.5 billion (USD 361 million). These results were all lower than those of the previous fiscal year.

Consolidated Results for the Fiscal Year

		141st Fiscal Year				Changes
		(April 2009-March 2010)				(141st/140th)
Net sales		JPY	1,431.5 billion				-29.2	%
Operating income		JPY	67.0 billion				-55.9	%
Income before income taxes and equity in earnings of affiliated companies		JPY	64.9 billion				-49.5	%
Net income attributable to Komatsu Ltd.		JPY	33.5 billion				-57.4	%

Notes:

Business results by operations are described below.

Consolidated Sales by Operation

						Changes
Segment		141st Fiscal Year				(141st/140th)
Construction, Mining and Utility Equipment		JPY	1,268.5 billion				-27.3	%
Industrial Machinery and Others		JPY	162.9 billion				-41.2	%
Total		JPY	1,431.5 billion				-29.2	%

1) Construction, Mining and Utility Equipment

In addition to China, with full-scale recovery in demand, in some emerging economies, such as Indonesia, India and Brazil, demand headed for recovery. Meanwhile, demand remained slack in Japan, North America, Europe and other regions, reducing global demand to a level lower than that in the previous fiscal year. While global demand dropped, Komatsu reduced production in order to attain an appropriate level of inventories, including those of distributors and the Japanese yen appreciated against major currencies. Adversely affected by these factors, consolidated net sales of construction, mining and utility equipment declined 27.3% from the previous fiscal year, to JPY 1,268.5 billion (USD 13,641 million).

In response to growing concerns over global warming and the need to reduce CO₂ emissions around the world, Komatsu launched hybrid hydraulic excavators in China during the fiscal year under review, following their launching in Japan two years ago, in order to reduce CO₂ emissions from Komatsu equipment being used by customers. Hybrid models are expected to cut down fuel consumption substantially. In Indonesia, Komatsu embarked on a new joint project with a mining equipment customer and a Komatsu distributor. This project calls for the production of biodiesel fuel from Jatropha* and other feedstock plants grown on the customer’s reclamation areas and the use of biodiesel fuel to power Komatsu dump trucks at the customer’s mine.

<Japan>

While public-sector investment was firm, as supported by the effects of a supplementary budget, private-sector capital investment and residential investment remained slack. As a result, overall demand sharply receded from the previous fiscal year, and sales also declined from the previous fiscal year.

During the fiscal year under review, Komatsu concerted efforts to further enhance the efficiency of production and sales operations by closing down its Mooka Plant in Tochigi and transferring production to Ibaraki and other plants and by restructuring its distributors. Meanwhile, by anticipating future market growth for hybrid hydraulic excavators in Japan and overseas, Komatsu expanded the production capacity for electric motors and other key components for hybrid hydraulic excavators at its Shonan Plant in Kanagawa.

<Americas>

In North America, the operating rate of construction equipment showed signs of bottoming out, but fell short of increasing market demand against the backdrop of uncertainty over prolonged economic recovery. As a result, the business environment remained challenging. In Latin America, market demand upturned for recovery in Brazil and some other countries from being affected by market deterioration caused by the financial meltdown. However, overall demand in the Americas declined from the previous fiscal year. Sales in the Americas decreased from the previous fiscal year, reflecting Komatsu’s proactive efforts to reduce distributors’ inventory to an appropriate level, in addition to the sluggish market conditions. In these conditions, Komatsu promoted the reorganization of its production and sales operations in North America, while reinforcing its sales and service operations in Latin America by establishing a new subsidiary in Chile and opening a service support center in Mexico.

<Europe & CIS>

A sharp drop in demand continued during the fiscal year under review, against the backdrop of sluggish economies in Europe and CIS. Komatsu doubled sales promotion and other efforts toward large-scale customers in collaboration with its distributors in Europe, while reinforcing its product support capability for mines in CIS. However, sales declined from the previous fiscal year, reflecting its focused efforts to reduce distributors’ inventory to an appropriate level and to narrow down the models of local production in Europe while demand plunged in both regions.

<China>

The Chinese government’s economic stimulus measures advanced large-scale infrastructure developments, such as railways and highways and upturned year-on-year monthly demand in June last year and following months, renewing record highs by a big margin after the Chinese New Year in February this year. By capitalizing on this market recovery, Komatsu advanced sales from the previous fiscal year by strengthening production and teaming up with its distributors for aggressive sales efforts. As a result, sales in China increased to account for 19.3% of total sales of the construction, mining and utility equipment business. Furthermore, by anticipating further market expansion, Komatsu (Changzhou) Construction Machinery Corp. is relocating its head office and is building a new plant, while Komatsu (China) Ltd. is building the KC Techno Center. The latter is designed to reinforce its machine demonstration capability for customers and to train service engineers.

<Asia & Oceania>

In Indonesia and India, year-on-year monthly demand upturned for recovery in the second half of the fiscal year under review. Demand remained firm for mining-related equipment in Australia. Against this backdrop, while sales picked up quickly in Asia in and after the third quarter, sales in Asia & Oceania for the full fiscal year declined from the previous fiscal year. Komatsu worked to reinforce operations further by enhancing a global Reman capability in Indonesia and reorganizing its distributors in Thailand.

<Middle East & Africa>

Although commodity prices upturned for an increase from the drastic plunge in 2008, market demand failed short of recovery in the Middle East & Africa, as affected by recessionary economies. Affected also by efforts to reduce distributors’ inventories, sales in both regions declined from the previous fiscal year. To prepare for future recovery of demand in new mines and infrastructure development, Komatsu worked to strengthen its product support capability. For example, it opened a new training center in Dakar, Senegal and a new product service support center in Tanzania.

2) Industrial Machinery and Others

As the automobile and many other industries continued the restraint of making capital investment, resulting in a sharp drop in new orders received, consolidated net sales of industrial machinery and others for the fiscal year under review declined 41.2% from the previous fiscal year, to JPY 162.9 billion (USD 1,753 million).

While the business environment remained challenging, Komatsu worked to reorganize production centering on the closure of the Komatsu Plant and production transfer to the Kanazawa Plant, in addition to continuing to cut down fixed costs. In order to further streamline the press business, develop new markets and expand business in China and other emerging economies, Komatsu embarked on the integration of development, as well as sales and service operations of the large press business, into Komatsu Industries Corporation By anticipating growth of the solar cell market, Komatsu also worked to enhance the product competitiveness of wire saws made by Komatsu NTC Ltd. Komatsu also commenced sales of industrial machinery, such as small and medium-sized presses, equipped with the KOMTRAX as a standard feature. KOMTRAX is a Komatsu-original system that monitors operating conditions of construction equipment. It has been well received on the market.

[Performance of the Company on a Non-consolidated Basis]

In the fiscal year under review, the Company has registered declines in both sales and income on a non-consolidated basis due largely to a drop in sales of construction and mining equipment and the Japanese yen’s appreciation, as shown below.

						Changes
		141st Fiscal Year				(141st/140th)
Net sales		JPY	457.6 billion				-41.8	%
Ordinary loss		JPY	1.1 billion				—
Net income		JPY	2.3 billion				-74.5	%

Non-Consolidated Sales by Operation

						Changes
Segment		141st Fiscal Year				(141st/140th)
Construction, Mining and Utility Equipment		JPY	390.1 billion				-45.2	%
Industrial Machinery and Others		JPY	67.5 billion				-10.7	%
Total		JPY	457.6 billion				-41.8	%

(2) Capital Investment

Capital investment decreased by JPY 66.3 billion from the previous fiscal year, to JPY 96.1 billion (USD 1,034 million).

1) Breakdown by Segment

Segment		Invested Amounts
Construction, Mining and Utility Equipment		JPY	92.9 billion		(USD 1,000 million)
Industrial Machinery and Others		JPY	3.2 billion		(USD 35 million)
Total		JPY	96.1 billion		(USD 1,034 million)

2) Main Facilities Completed in the Fiscal Year Under Review

No items to report.

3) New Constructions, Expansions and Overhauls of Main Facilities in Progress in the Fiscal Year Under Review

Segment		Main Facilities
Construction, Mining and Utility Equipment		Komatsu Manufacturing Rus, LLC: building a new plant •    Products: Medium-sized hydraulic excavators •    Location: Yaroslavl, Russia
		Komatsu (Changzhou) Construction Machinery Corp.: relocating (expanding) the plant •    Products: Hydraulic excavators, wheel loaders, dump trucks, etc. •    Location: Changzhou, Jiangsu, China
		Komatsu Castex Ltd.: Expanding manufacturing facilities for key components (iron castings) •    Products: Cylinder blocks, etc. •    Location: Himi City, Toyama, Japan

(3) Financing

During the fiscal year under review, the Company issued its sixth unsecured bond worth JPY 10.0 billion and seventh unsecured bond worth JPY 30.0 billion to obtain long-term, stable funds. To appropriate funds to working capital and capital investment, the Company also issued commercial papers and made long-term borrowings. Despite an increase in capital demand from our retail finance business and other areas, production adjustments to attain an appropriate level of inventories resulted in a decrease by JPY 13.4 billion of the balance of interest-bearing debt at the fiscal year-end to JPY 586.3 billion (USD 6,305 million). Net debt-to-equity ratio* improved 0.02 point to 0.60.

(4) Tasks Ahead

To improve our profitability, strengthen our financial position, enhance our market position in Greater Asia and so forth, Komatsu worked on the “Global Teamwork for 15” mid-range management plan for three years, from April 2007 to the end of March 2010. For the fiscal year ended March 31, 2008, we attained an operating income ratio of 14.8%, virtually achieving the goal of 15%, against the backdrop of good tailwind on the market in addition to our own efforts, such as the development of DANTOTSU products. We sustained a high ratio up through the first half of the following fiscal year.

In the wake of the financial crisis triggered in the United States in September 2008, world economies went into recession, reducing the volume of global demand for construction equipment to half the size of the peak period recorded in April through June, 2008. We also weathered a similarly drastic drop in demand in our other businesses. In response to this change in our business environment, we quickly promoted structural reforms, such as the reorganization of production on a global scale and consolidation of sales operation, and cut down our inventories and fixed costs. As a result, we have sculpted our corporate structure into a leaner and stronger entity.

Today, market demand for construction and mining equipment has upturned for recovery in China and other emerging countries in Asia and Latin America. We anticipate that economic growth in these emerging countries will drive global demand upward. We are going to turn our rudder sharply for growth again as we capitalize on market recovery by taking advantage of our solid corporate strength built through previous structural reforms. To generate further growth through teamwork among all employees and with distributors and suppliers around the world, we looked ahead and started the new three-year mid-range management plan “Global Teamwork for Tomorrow” in April this year.

In the new mid-range management plan, we have positioned China, Asia, Oceania, Latin America, Africa and some other emerging economies as “Strategic Markets.” Together with this move, we are going to work on the following activities of importance in order to further refine our accumulated strengths of ICT applications, development of key components, manufacturing technologies, global sales and service networks, and flexible procurement and production. We will generate positive outcomes. We are also continuing our efforts to anchor The KOMATSU Way by encouraging all employees of Komatsu to acquire it through their Kaizen (improvement) activities, while emphasizing the importance of Brand Management designed to build on relationships with customers and promote mutual business growth with them. We are going to materialize these two efforts in the form of human resource development needed for global business expansion.

Numerical Targets of the “Global Teamwork for Tomorrow”

Items		Targets for Fiscal Year Ending March 31, 2013
Operating income ratio		15% or above
ROE: Return on equity*1		20%
Net debt-to-equity ratio*2		0.4 or below
Excluding debt of finance companies		0.2 or below
Consolidated payout ratio		20 - 40% (stably)

[Premises]

Items

Fiscal Year Ending March 31, 2013

Guideline on sales

JPY 2,000.0 billion ± JPY 100.0 billion

Guidelines on exchange rate

USD 1

EUR 1

RMB 1

JPY 90

JPY 125

JPY 13.5

Activities of Importance in the “Global Teamwork for Tomorrow”

(i)

Promotion of ICT Applications

We have refined our ICT applications mainly in the domain of construction and mining equipment as represented by KOMTRAX (Komatsu Machine Tracking System) for construction equipment and Autonomous Haulage System for use in large-scale mines. We are continuing our applications of leading-edge ICT to machine management, machine control and construction management to enhance our product competitiveness. We are also going to proactively promote ICT applications to industrial machinery and forklift trucks. Furthermore, we are going to advance our utilization of KOMTRAX-originated information to improve customers’ productivity and our sales and production planning.

(ii)

Development of Environment-Friendly Products

To help our customers reduce CO2 emissions from their equipment, we are going to advance our hybrid and HST (hydrostatic transmission) technologies for construction equipment and forklift trucks and our AC Servo technology for presses in the industrial machinery business. With respect to hybrid hydraulic excavators, in particular, we are going to lead other companies in worldwide marketing. In the domain of mining equipment, we are going to generate steady results in the Biodiesel Fuel Project we have recently started in Indonesia.

Starting in and after 2011, the new emission control regulations which require further reduction of NO_X (nitrogen oxides) and PM (particulate matters) will be effective in Japan, the United States and Europe. We are going to continue our efforts to develop new regulations-compliant products by integrating leading-edge technologies into our strategic advantage of in-house development and manufacturing capabilities for engines, hydraulic units and control systems and to ensure their smooth market introduction.

(iii)

Expansion of Sales and Service Operations in Strategic Markets

In Strategic Markets with high growth potential and in the domain of mining equipment, we are going to make a difference from competitors by not only supplying products featuring excellent QCDS (quality, costs, delivery and safety) but also enhancing operating rates of customers’ equipment through quick and responsive delivery of parts and service. To this end, we are going to upgrade our sales and service capabilities by developing and strengthening distributors, expanding service support bases, reinforcing parts and Reman businesses and supporting customers through ICT applications. Also, in the domains of industrial machinery and forklift trucks, we are going to promote more synergy effects with the construction equipment operation and improve sales and service networks in response to an expanding weight on Strategic Markets centering on China.

iv)

Promotion of Continuous Kaizen (Improvement) by Strengthening Workplace Capability

While growth of emerging economies offers us a great chance to expand our business, we need to expect new competition with companies of emerging economies in addition to conventional competition. To win this global mega competition, it is important for us to continuously refine our capability and cost competitiveness to meet the changes, as we advance our engagement in activities for growth which are defined in the new mid-range management plan. To this end, it is absolutely necessary for us to demonstrate workplace capability, i.e., the power to continue our Kaizen (improvement) activities. With this workplace capability and effective ICT utilization, we are going to further heighten our operational flexibility of global production, optimize logistics, and reduce our production costs substantially. We are also going to continue efforts to reform and streamline our administrative work. Through these Kaizen (improvement) activities, we are going to further enhance our workplace capability and promote human resource development.

Based on the belief that “our corporate value is the total sum given to us by society and all our stakeholders,” Komatsu is further strengthening our corporate governance to ensure sound and transparent management, while improving management efficiency. Being committed to promoting thorough compliance, we will also ensure that all employees share The KOMATSU Way. In addition to improving our business performance, we will facilitate the development of both corporate strength and social responsibility in a well balanced manner.

(5) Financial Position and Profit/Loss Trends

1) Financial Position and Profit/Loss Trends of Komatsu

(JPY billion)

		138th				139th				140th				141st
		Fiscal Year				Fiscal Year				Fiscal Year				Fiscal Year
		(April 2006 -				(April 2007 -				(April 2008 -				(April 2009 -
		March 2007)				March 2008)				March 2009)				March 2010)
Net sales			1,893.3				2,243.0				2,021.7				1,431.5
Operating income			244.7				332.8				151.9				67.0
Income before income taxes and equity in earnings of affiliated companies			236.4				322.2				128.7				64.9
Net income attributable to Komatsu Ltd.			164.6				208.7				78.7				33.5
Net income attributable to Komatsu Ltd. per share (JPY)			165.70				209.87				79.95				34.67
ROE (Net income attributable to Komatsu Ltd. on Komatsu Ltd. shareholders’ equity)			23.5	%			25.1	%			9.3	%			4.1	%
ROA (Income before income taxes and equity in earnings of affiliated companies on Total assets)			13.5	%			16.3	%			6.3	%			3.3	%
Total assets			1,843.9				2,105.1				1,969.0				1,959.0
Komatsu Ltd. shareholders’ equity			776.7				887.1				814.9				833.9

Notes:

2) Financial Position and Profit/Loss Trends of the Company

(JPY billion)

		138th				139th				140th				141st
		Fiscal Year				Fiscal Year				Fiscal Year				Fiscal Year
		(April 2006 -				(April 2007 -				(April 2008 -				(April 2009 -
		March 2007)				March 2008)				March 2009)				March 2010)
Net sales			758.5				926.7				787.0				457.6
Operating income (loss)			90.4				127.1				26.7				(26.8	)
Ordinary income (loss)			98.1				135.5				40.0				(1.1	)
Net income			82.8				96.8				9.3				2.3
Net income per share (JPY)			83.34				97.28				9.45				2.46
Total assets			974.8				1,047.0				981.0				959.1
Net assets			576.1				622.3				540.9				518.4

(6) Acquisition or Disposal of Other Companies’ Shares, Other Equity Stakes or Stock Acquisition Rights

Komatsu NTC Ltd. subscribed to the tender offer to SHIBUYA KOGYO CO., LTD. and transferred 4,346,000 shares of common stock of Fabrica Toyama Corporation to SHIBUYA KOGYO CO., LTD. in August 2009.

(7) Status of Principal Subsidiaries

1) Principal Subsidiaries (As of March 31, 2010)

						Equity
						Ratio
Name		Capital				(%)				Main Businesses
Komatsu Utility Co., Ltd.		JPY	13,033 mil				100.0			Manufacture and sale of construction equipment and industrial vehicles
Komatsu Castex Ltd.		JPY	4,979 mil				100.0			Manufacture and sale of casting products
Komatsu Construction Equipment Sales and Service Japan Ltd.		JPY	950 mil				100.0			Sale and servicing of construction equipment
Komatsu Used Equipment Corp.		JPY	290 mil				*100.0			Sale of used construction equipment
Komatsu Rental Japan Ltd.		JPY	1,034 mil				79.0			Rental of construction equipment, etc.
Komatsu Forklift Japan Ltd.		JPY	500 mil				*100.0			Sale and servicing of industrial vehicles
Komatsu Logistics Corp.		JPY	1,080 mil				100.0			Transportation, warehousing baling and other services
Komatsu Industries Corporation		JPY	990 mil				100.0			Manufacture, sale and servicing of presses and sheet metal machines
Komatsu Machinery Corporation		JPY	600 mil				100.0			Manufacture, sale and servicing of machine tools and semiconductor material processing equipment
Komatsu NTC Ltd.		JPY	6,014 mil				100.0			Manufacture, sale and servicing of machine tools, etc.
Komatsu Business Support Ltd.		JPY	1,770 mil				*100.0			Retail financing of construction equipment

						Equity
						Ratio
Name		Capital				(%)				Main Businesses
Komatsu America Corp.		USD	1,027 mil				100.0			Manufacture and sale of construction and mining equipment and supervision in the Americas
Komatsu do Brasil Ltda.		BRL	73 mil				*100.0			Manufacture of construction equipment and casting products
Komatsu Brasil International Ltda.		BRL	27 mil				*100.0			Sale of construction equipment
Komatsu Holding South America Ltda.		USD	100 thou				*100.0			Sale and servicing of construction and mining equipment
Komatsu Cummins Chile Ltda.		USD	13 mil				*81.8			Sale and servicing of construction and mining equipment
Komatsu Financial Limited Partnership			—				*100.0			Retail financing, etc. of construction and mining equipment
Komatsu Europe International N.V.		EUR	45 mil				100.0			Sale of construction and mining equipment and supervision in Europe
Komatsu UK Ltd.		GBP	23 mil				*100.0			Manufacture of construction equipment
Komatsu Hanomag GmbH		EUR	19 mil				*100.0			Manufacture of construction equipment
Komatsu Mining Germany GmbH		EUR	5 mil				100.0			Manufacture and sale of mining equipment
Komatsu Deutschland GmbH		EUR	6 mil				*100.0			Sale of construction equipment
Komatsu France S.A.S		EUR	5 mil				*100.0			Sale and servicing of construction equipment
Komatsu Utility Europe S.p.A.		EUR	6 mil				*100.0			Manufacture of construction equipment
Komatsu Italia S.p.A.		EUR	4 mil				*100.0			Sale and servicing of construction equipment
Komatsu Forest AB		SEK	397 mil				100.0			Manufacture and sale of forestry equipment
Komatsu CIS LLC		RUB	5,301 mil				100.0			Sale of construction and mining equipment
Komatsu Financial Europe N.V.		EUR	40 mil				*100.0			Retail financing of construction and mining equipment
Komatsu Southern Africa (Pty) Ltd.		ZAR	1,000				80.0			Sale and servicing of construction and mining equipment
Komatsu Asia & Pacific Pte Ltd.		SGD	28 mil				100.0			Sale of construction and mining equipment
PT Komatsu Indonesia		IDR	192,780 mil				94.9			Manufacture and sale of construction and mining equipment, casting products
Bangkok Komatsu Co., Ltd.		THB	620 mil				*74.8			Manufacture and sale of construction equipment
Komatsu Australia Pty. Ltd.		AUD	21 mil				*60.0			Sale and servicing of construction and mining equipment
Komatsu Australia Corporate Finance Pty. Ltd.		AUD	49 mil				*60.0			Retail financing of construction and mining equipment
Komatsu (China) Ltd.		USD	135 mil				100.0			Sale of construction and mining equipment and supervision in China

						Equity
						Ratio
Name		Capital				(%)				Main Businesses
Komatsu (Changzhou) Construction Machinery Corp.		USD	41 mil				*85.0			Manufacture of construction equipment
Komatsu Shantui Construction Machinery Co., Ltd.		USD	21 mil				*60.0			Manufacture of construction equipment
Komatsu Financial Leasing China Ltd.		RMB	780 mil				*100.0			Retail financing of construction equipment

2) Others (update on important combination)

	i)		In April 2009, Komatsu Tokyo Ltd. merged with 11 consolidated subsidiaries consisting of distributors including Komatsu Kinki Ltd. and Komatsu Nishinihon Ltd., as well as Komatsu All Parts Support Ltd. by absorption-type merger. In the same month, the Company transferred its sales and service business for construction equipment (excluding underground construction equipment) in Japan to Komatsu Tokyo Ltd. by absorption-type company split. As a result, Komatsu Tokyo Ltd. changed its trade name to Komatsu Construction Equipment Sales and Service Japan Ltd. in the same month.
	ii)		In April 2009, Komatsu Rental Ltd. merged with BIGRENTAL Co., Ltd., its wholly-owned subsidiary, by absorption-type merger.
	iii)		Nine consolidated subsidiaries consisting of distributors of forklift trucks have merged in October 2009 and changed its trade name to Komatsu Forklift Japan Ltd.
	iv)		In April 2010, the Company transferred a portion of the large press business (product development, sales and service operations) to Komatsu Industries Corporation by absorption-type company split.

(8) Major Lines of Business (As of March 31, 2010)

Segment		Principal Products and Businesses
Construction, Mining and Utility Equipment		Excavating Equipment		Hydraulic excavators, mini excavators and backhoe loaders
		Loading Equipment		Wheel loaders, mini wheel loaders and skid-steer loaders
		Grading and Roadbed Preparation Equipment		Bulldozers, motor graders and vibratory rollers
		Hauling Equipment		Off-highway dump trucks, articulated dump trucks and crawler carriers
		Forestry Equipment		Harvesters, forwarders and feller bunchers
		Tunneling Machines		Shield machines, tunnel-boring machines and small-diameter pipe jacking machines
		Recycling Equipment		Mobile debris crushers, mobile soil recyclers and mobile tub grinders
		Industrial Vehicles		Forklift trucks
		Other Equipment		Railroad maintenance equipment
		Engines and Components		Diesel engines, diesel generator sets and hydraulic equipment
		Casting Products		Steel castings and iron castings
		Logistics		Packing and transport
Industrial Machinery and Others		Metal Forging and Stamping Presses		Large presses, servo presses, small and medium-sized presses and forging presses
		Sheet Metal Machines		Laser cutting machines, fine plasma cutting machines, press brakes and shears
		Machine Tools		Transfer machines, machining centers, crankshaft millers, grinding machines and wire saws
		Defense Systems		Ammunition and armored personnel carriers
		Temperature-Control Equipment		Thermoelectric modules and temperature-control equipment for semiconductor manufacturing
		Others		Commercial-use prefabricated structures

(9) Principal Offices and Plants (As of March 31, 2010)

1) The Company

Offices		Head Office (Minato-ku, Tokyo), Research Division (Hiratsuka City, Kanagawa)
Plants		Awazu Plant (Komatsu City, Ishikawa), Kanazawa Plant (Kanazawa City, Ishikawa), Osaka Plant (Hirakata City, Osaka), Rokko Plant (Kobe City, Hyogo), Ibaraki Plant (Hitachinaka City, Ibaraki), Shonan Plant (Hiratsuka City, Kanagawa), Oyama Plant (Oyama City, Tochigi), Koriyama Plant (Koriyama City, Fukushima)

2) Principal Subsidiaries

Name		Office/Plant
Komatsu Utility Co., Ltd.		Head Office /Plant (Oyama City, Tochigi)
Komatsu Castex Ltd.		Head Office /Plant (Himi City, Toyama), Plant (Oyama City, Tochigi)
Komatsu Construction Equipment Sales and Service Japan Ltd.		Head Office (Sagamihara City, Kanagawa)
Komatsu Used Equipment Corp.		Head Office (Yokohama City, Kanagawa)
Komatsu Rental Japan Ltd.		Head Office (Yokohama City, Kanagawa)
Komatsu Forklift Japan Ltd.		Head Office (Shinagawa-ku, Tokyo)
Komatsu Logistics Corp.		Head Office (Yokohama City, Kanagawa)
Komatsu Industries Corporation		Head Office (Komatsu City, Ishikawa)
Komatsu Machinery Corporation		Head Office /Plant (Komatsu City, Ishikawa)
Komatsu NTC Ltd.		Head Office (Shinagawa-ku, Tokyo), Plant (Nanto City, Toyama)
Komatsu Business Support Ltd.		Head Office (Minato-ku, Tokyo)
Komatsu America Corp.		Head Office (Rolling Meadows, Illinois, USA), Plants (Chattanooga, Tennessee, Peoria, Illinois, Newberry, South Carolina, USA)
Komatsu do Brasil Ltda.		Head Office /Plant (Suzano, São Paulo, Brazil)
Komatsu Brasil International Ltda.		Head Office (Jaraguá, São Paulo, Brazil)
Komatsu Holding South America Ltda.		Head Office (Iquique, Chile)
Komatsu Cummins Chile Ltda.		Head Office (Santiago, Chile)
Komatsu Financial Limited Partnership		Head Office (Rolling Meadows, Illinois, USA)
Komatsu Europe International N.V.		Head Office (Vilvoorde, Belgium)
Komatsu UK Ltd.		Head Office /Plant (Birtley, UK)
Komatsu Hanomag GmbH		Head Office /Plant (Hannover, Germany)
Komatsu Mining Germany GmbH		Head Office /Plant (Dusseldorf, Germany)
Komatsu Deutschland GmbH		Head Office (Hannover, Germany)
Komatsu France S.A.S		Head Office (Aubergenville, France)
Komatsu Utility Europe S.p.A.		Head Office /Plant (Este, Italy)
Komatsu Italia S.p.A.		Head Office (Noventa, Italy)
Komatsu Forest AB		Head Office /Plant (Umeå, Sweden)
Komatsu CIS LLC		Head Office (Moscow, Russia)
Komatsu Financial Europe N.V.		Head Office (Vilvoorde, Belgium)
Komatsu Southern Africa (Pty) Ltd.		Head Office (Isando, South Africa)
Komatsu Asia & Pacific Pte Ltd.		Head Office (Singapore)

Name		Office/Plant
PT Komatsu Indonesia		Head Office /Plant (Jakarta, Indonesia)
Bangkok Komatsu Co., Ltd.		Head Office /Plant (Chonburi, Thailand)
Komatsu Australia Pty. Ltd.		Head Office (North Ryde, New South Wales, Australia)
Komatsu Australia Corporate Finance Pty. Ltd.		Head Office (North Ryde, New South Wales, Australia)
Komatsu (China) Ltd.		Head Office (Shanghai, China)
Komatsu (Changzhou) Construction Machinery Corp.		Head Office /Plant (Changzhou, Jiangsu, China)
Komatsu Shantui Construction Machinery Co., Ltd.		Head Office /Plant (Jining, Shandong, China)
Komatsu Financial Leasing China Ltd.		Head Office (Shanghai, China)

(10) Employees (As of March 31, 2010)

1) Employees of Komatsu

Segment		Number of Employees
Construction, Mining and Utility Equipment			33,766
Industrial Machinery and Others			4,180
Others			572
Total			38,518

Notes:
1.		Number of employees decreased by 1,337 from the end of the previous fiscal year.
2.		“Others” above includes the number of administrative employees that cannot be classified into the above two (2) business segments.
2)		Employees of the Company

		Increase (Decrease)
		Over Previous				Average Years of
Number of Employees		Fiscal Year-End		Average Age		Services
8,142		324		38.2		15.3

Note: Number of employees of the Company is included in the number of employees of Komatsu in 1) above.

(11) Main Lenders (As of March 31, 2010)

		Balance of Loans
Name of Lenders		(JPY billion)
Sumitomo Mitsui Banking Corporation			87.0
The Bank of Tokyo-Mitsubishi UFJ, Ltd.			57.2
Mizuho Corporate Bank, Ltd.			31.8
The Hokkoku Bank, Ltd.			20.7
Taiyo Life Insurance Company			13.0

2. Shares of the Company (As of March 31, 2010)

(1) Number of shares authorized to be issued:		3,955,000,000 shares
(2) Total number of shares issued and outstanding:		968,586,114 shares
		(excluding 30,157,946 shares of treasury stock)
(3) Number of shareholders:		267,505

(4) Major shareholders (top ten)

		Status of Investment by the
		Shareholder in the Company
		Number of
		Shares Held				Equity Ratio
Name of Shareholders		(thousand shares)				(%)
Japan Trustee Services Bank, Ltd. (Trust Account)			51,931				5.3
Taiyo Life Insurance Company			42,000				4.3
The Master Trust Bank of Japan, Ltd. (Trust Account)			39,468				4.0
Nippon Life Insurance Company			33,283				3.4
JPMorgan Chase Bank 380055			23,344				2.4
State Street Bank and Trust Company			22,950				2.3
CBNY-IVY Funds Inc Asset Stratgy Fund			20,661				2.1
Sumitomo Mitsui Banking Corporation			17,835				1.8
The Bank of New York Mellon as Depositary Bank for Depositary Receipt Holders			16,818				1.7
NIPPONKOA Insurance Co., Ltd.			13,962				1.4

Notes:
1.		Equity ratio is calculated by subtracting treasury stock.
2.		Although the Company holds 30,157 thousand shares of treasury stock, it is excluded from the major shareholders list above.

3. Matters Regarding Stock Acquisition Rights of the Company etc.

(1)		Outline of Contents of Stock Acquisition Rights Held by Directors and Corporate Auditors of the Company, Which Were Granted as Remuneration for Their Execution of Duties (As of March 31, 2010)
1)		Type of Shares Subject to Stock Acquisition Rights Common stock
2)		Total of Holdings by Classification

Number of Shares

Issue Date

Number of

Subject to Stock

Paid-in Amount

Number of

(Period for

Stock

Acquisition Rights

per one (1)

Exercise Price per

Holders of

Exercise of Stock

Acquisition

(Number of Shares

Stock

one (1) Stock

Stock

Acquisition

Rights

per one (1) Stock

Acquisition

Acquisition Right

Acquisition

Classification

Rights)

Owned

Acquisition Right)

Right

(Note 1)

Rights

Director (excluding Outside Director)

August 1, 2006 (From August 1, 2007 to July 31, 2014)

155

155,000 shares (1,000 shares)

JPY 801,000

JPY 2,325,000

4

(Note 2)

Same as above

41,000 shares

(Same as above)

41

(1,000 shares)

Issued gratis

Same as above

3

September 3, 2007

(From September 3, 2008 to August 31,

156,000 shares

2015)

156

(1,000 shares)

JPY 1,266,000

JPY 3,661,000

5

(Note 2)

Same as above

(From September 1, 2008 to August 31,

21,000 shares

2015)

21

(1,000 shares)

Issued gratis

Same as above

2

September 1, 2008

(From September 1, 2009 to August 31,

128,000 shares

2016)

128

(1,000 shares)

JPY 813,000

JPY 2,499,000

5

(Note 2)

Same as above

22,000 shares

(Same as above)

22

(1,000 shares)

Issued gratis

Same as above

2

September 1, 2009

(From September 1, 2010 to August 31,

206,000 shares

2017)

206

(1,000 shares)

JPY 643,000

JPY 1,729,000

7

Number of Shares

Issue Date

Number of

Subject to Stock

Paid-in Amount

Number of

(Period for

Stock

Acquisition Rights

per one (1)

Exercise Price per

Holders of

Exercise of Stock

Acquisition

(Number of Shares

Stock

one (1) Stock

Stock

Acquisition

Rights

per one (1) Stock

Acquisition

Acquisition Right

Acquisition

Classification

Rights)

Owned

Acquisition Right)

Right

(Note 1)

Rights

Outside Director

August 1, 2006 (From August 1, 2007 to July 31, 2014)

16

16,000 shares (1,000 shares)

JPY 801,000

JPY 2,325,000

1

September 3, 2007

(From September 3, 2008 to August 31,

11,000 shares

2015)

11

(1,000 shares)

JPY 1,266,000

JPY 3,661,000

1

September 1, 2008

(From September 1, 2009 to August 31,

24,000 shares

2016)

24

(1,000 shares)

JPY 813,000

JPY 2,499,000

3

September 1, 2009

(From September 1, 2010 to August 31,

33,000 shares

2017)

33

(1,000 shares)

JPY 643,000

JPY 1,729,000

3

Corporate Auditor (Note 3)

August 1, 2006 (From August 1, 2007 to July 31, 2014)

10

10,000 shares (1,000 shares)

Issued gratis

JPY 2,325,000

1

September 3, 2007

(From September 1, 2008 to August 31,

14,000 shares

2015)

14

(1,000 shares)

Issued gratis

JPY 3,661,000

1

Notes:
1.		“Exercise price” above means the “amount of assets to be paid upon exercise of Stock Acquisition Rights.”
2.		Indicates Stock Acquisition Rights issued at the time when incumbent Directors, as of March 31, 2010, were employees of the Company (prior to being elected as Directors).
3.		Indicates Stock Acquisition Rights issued at the time when an incumbent Corporate Auditor, as of March 31, 2010, was an employee of the Company (prior to being elected as Corporate Auditor).
3)		Major Conditions for Exercise of Stock Acquisition Rights
i)		Major conditions for exercise of Stock Acquisition Rights issued on August 1, 2006
•		Any person granted Stock Acquisition Rights may exercise his or her rights pursuant to the Agreement Concerning Issuance of Stock Acquisition Rights (hereinafter “the Agreement”) even after the person loses his or her status as of the allocation of the Stock Acquisition Rights.
•		When a grantee is deceased, his or her heir may exercise the rights in accordance with the terms and conditions of the Agreement.

ii)

Major conditions for exercise of Stock Acquisition Rights issued on and after September 3, 2007 If a holder of Stock Acquisition Rights, who is a Director, Corporate Auditor or employee of the Company, or a Director, Corporate Auditor or employee of an affiliate of the Company, loses his or her all respective status set above, that person is able to exercise the Stock Acquisition Rights only within a period of three years from the day they lose their status, and other terms and conditions concerning the exercise of Stock Acquisition Rights shall be decided at the contracts regarding issuance of Stock Acquisition Rights to be executed by and between the Company and the grantees of the Stock Acquisition Rights.

(2)

Outline of Contents of Stock Acquisition Rights Issued During the Fiscal Year to Employees of the Company and Directors of the Subsidiaries of the Company as Remuneration for Their Execution of Duties

Issue Date		September 1, 2009
Period for Exercise of Stock Acquisition Rights		From September 1, 2010 to August 31, 2017
Number of Grantees		65 in total Of the total, 54 are employees of the Company (excluding those who concurrently serve as Director of the Company) and 11 are Directors of the subsidiaries of the Company (excluding those who concurrently serve as Directors or employees of the Company).
Number of Stock Acquisition Rights Issued		403 in total Of the total, 340 are granted to employees of the Company (excluding those who concurrently serve as Director of the Company) and 63 are granted to Directors of the subsidiaries of the Company (excluding those who concurrently serve as Directors or employees of the Company).
Type of Shares Subject to Stock Acquisition Rights		Common stock
Number of Shares Subject to Stock Acquisition Rights		403,000 shares (1,000 shares per one (1) Stock Acquisition Right)
Paid-in Amount per one (1) Stock Acquisition Right		Stock Acquisition Rights are issued gratis.
Exercise Price per one (1) Stock Acquisition Right		JPY 1,729,000
Major Conditions for Exercise of Stock Acquisition Rights		If a holder of Stock Acquisition Rights, who is a Director, Corporate Auditor or employee of the Company, or a Director, Corporate Auditor or employee of an affiliate of the Company, loses his or her all respective status set above, that person is able to exercise the Stock Acquisition Rights only within a period of three years from the day they lose their status, and other terms and conditions concerning the exercise of Stock Acquisition Rights shall be decided at the contracts regarding issuance of Stock Acquisition Rights to be executed by and between the Company and the grantees of the Stock Acquisition Rights.

Note: “Exercise price” means the “amount of assets to be paid upon exercise of Stock Acquisition Rights.”

(3) Other Significant Matters Regarding Stock Acquisition Rights etc. (As of March 31, 2010)

						Number of
		Type of Shares		Number of Stock		Shares Subject to
		Subject to Stock		Acquisition		Stock Acquisition
		Acquisition Rights		Rights Owned		Rights
1) Stock options through Stock Acquisition Rights under the former Commercial Code		Common stock		1,010		1,010,000 shares
2) Stock options through Stock Acquisition Rights under the Corporation Act		Common stock		2,323		2,323,000 shares

Note:

“2) Stock options through Stock Acquisition Rights under the Corporation Act” above includes Stock Acquisition Rights in the “(1) Outline of Contents of Stock Acquisition Rights Held by Directors and Corporate Auditors of the Company, Which Were Granted as Remuneration for Their Execution of Duties” and “(2) Outline of Contents of Stock Acquisition Rights Issued During the Fiscal Year to Employees of the Company and Directors of the Subsidiaries of the Company as Remuneration for Their Execution of Duties.”

4. Directors and Corporate Auditors of the Company

(1) Names etc. of Directors and Corporate Auditors (As of March 31, 2010)

						Important Concurrent
						Positions Held in Other
Position		Name		In Charge at the Company		Organizations
Chairman of the Board and Representative Director		Masahiro Sakane		—		Outside Director of Nomura Holdings, Inc. Outside Director of Tokyo Electron Limited
President and Representative Director, and Chief Executive Officer		Kunio Noji		—		—
Director and Senior Executive Officer		Yoshinori Komamura		President of Construction & Mining Equipment Marketing Division		—
Director and Senior Executive Officer		Yasuo Suzuki		President of Industrial Machinery Division In Charge of the Ishikawa Prefecture Area		Outside Director of Fuji Technica Inc.
Director and Senior Executive Officer		Kenji Kinoshita		Chief Financial Officer Supervising CSR and Corporate Communications & Investor Relations		—
Director and Senior Executive Officer		Masao Fuchigami		Supervising Environment, Research, Design & Development and Quality Assurance		—
Director and Senior Executive Officer		Tetsuji Ohashi		President of Production Division Supervising Production and e-KOMATSU		—

						Important Concurrent
						Positions Held in Other
Position		Name		In Charge at the Company		Organizations
Director		Morio Ikeda		—		Advisor of Shiseido Company, Limited Chairman of the Board of Trustees of Toyo Eiwa Jogakuin Chairman of the Board of Trustees of Shiseido Beauty Academy
Director		Kensuke Hotta		—		Chairman and Representative Director of Greenhill & Co. Japan Ltd. Chairman and Representative Director of Hotta Partners Inc.
Director		Noriaki Kano		—		Professor Emeritus at Tokyo University of Science
Standing Corporate Auditor		Masaji Kitamura		—		—
Standing Corporate Auditor		Kyoji Torii		—		—
Corporate Auditor		Makoto Okitsu		—		Advisor of Teijin Limited
Corporate Auditor		Hiroyuki Kamano		—		Partner (Attorney at law) of Kamano Sogo Law Offices
Corporate Auditor		Kunihiro Matsuo		—		Attorney at law

Notes:

1.		Directors Morio Ikeda, Kensuke Hotta and Noriaki Kano are Outside Directors.
2.		Corporate Auditors Makoto Okitsu, Hiroyuki Kamano and Kunihiro Matsuo are Outside Corporate Auditors.
3.		The Company designated Directors Morio Ikeda, Kensuke Hotta and Noriaki Kano as Independent Director and Corporate Auditors Makoto Okitsu, Hiroyuki Kamano and Kunihiro Matsuo as Independent Corporate Auditor and notified the Tokyo Stock Exchange and Osaka Securities Exchange in accordance with their criteria.
4.		Regarding important concurrent positions held at other organizations, relations between Komatsu and those organizations are as follows.

	(i)		There is no special relation between the Company and Toyo Eiwa Jogakuin and Shiseido Beauty Academy, for which Mr. Morio Ikeda serves as Chairman of the Board of Trustees.
	(ii)		There is no special relation between the Company and Greenhill & Co. Japan Ltd. and Hotta Partners Inc., for which Mr. Kensuke Hotta serves as Chairman and Representative Director.

5.		Important concurrent positions held in other organizations by Outside Directors and Outside Corporate Auditors are listed in “(3) Outside Directors and Outside Corporate Auditors” (page 25).
6.		Standing Corporate Auditor Kyoji Torii has long engaged in accounting-related duties at the Company, and has considerably profound knowledge concerning financial affairs and accounting.
7.		The Company employs the Executive Officer System.

(2)		Remuneration for Directors and Corporate Auditors
1)		Policy regarding the determination of remuneration
		In an effort to maintain an objective and transparent remuneration system, the policy and levels of remuneration for Directors and Corporate Auditors of the Company are deliberated by the Compensation Advisory Committee, which consists of four (4) external members (two (2) Outside Corporate Auditors, one (1) Outside Director and one (1) outside expert) and one (1) internal member. Taking its reports and recommendations into consideration, the remuneration for Directors is determined by the Board of Directors, and the remuneration for Corporate Auditors is determined by discussions by the Corporate Auditors, respectively, within the range previously determined by resolution of the General Meeting of Shareholders.

With regards to remuneration levels, comparison of other key, globally active manufacturers in Japan is made by the Compensation Advisory Committee and is reflected in its reports and recommendations.

The remuneration for Directors is composed of a fixed remuneration (paid monthly) and a performance-based remuneration linked to Komatsu’s consolidated performance and stock price fluctuations. The performance-based remuneration is made up of the annual bonus, reflecting business results, and stock options, granted to give Directors the same perspective on earnings as shareholders, both of which have the purpose of motivating them to manage with the aim of enhancing corporate value. The amount of the performance-based remuneration linked to Komatsu’s consolidated performance represents roughly 60% of that of total remuneration during periods of favorable performance.

The remuneration for Corporate Auditors only consists of a fixed remuneration (paid monthly) designed to support their independent position with authority to audit the execution of duties by the Directors without getting fettered by the movements of corporate performance of the Company.

Regarding the retirement allowance system for Directors and Corporate Auditors, the system was terminated as of June 2007.

(For reference) Revision of System of Remuneration for Directors

Taking the results of deliberations and reports of the Compensation Advisory Committee into consideration, the Company resolved at a meeting of the Board of Directors held on April 27, 2010 to revise the remuneration system for Directors for the purpose of fostering the same perspective on corporate value with the shareholders, and consequently clarifying their incentive to enhance the long-term corporate value of the Company, by linking the remuneration of Directors more closely to the Company’s consolidated performance. For details, refer to page 62.

2)

Remuneration for Directors and Corporate Auditors for the Fiscal Year

		Number of				Amount of
Classification		Persons Paid				Remuneration Paid				Reference
Director			12			JPY 613 million				Including bonuses and stock options
(Outside Director included above)			(3	)		(JPY 67 million)
Corporate Auditor			7			JPY 109 million				—
(Outside Corporate Auditor included above)			(4	)		(JPY 40 million)
Total			19			JPY 723 million				—
(Outside Director and Outside Corporate Auditor included above)			(7	)		(JPY 107 million)

Notes:

1.		As of the end of this fiscal year, there are ten (10) Directors (three (3) of whom are Outside Directors) and five (5) Corporate Auditors (three (3) of whom are Outside Corporate Auditors). However, the above-mentioned “Amount of Remuneration Paid,” includes two (2) Directors and two (2) Corporate Auditors (one (1) of whom is Outside Corporate Auditor) who have retired as of the close of the 140th Ordinary General Meeting of Shareholders on June 24, 2009.
2.		It was resolved at the 135th Ordinary General Meeting of Shareholders, held in June 2004, that the maximum amount of remuneration to be paid to Directors in total per month (excluding bonuses and stock options) shall not exceed JPY 60 million (however, not including salaries as employees) and the maximum amount of remuneration to be paid to Corporate Auditors in total per month shall not exceed JPY 10 million. It was also resolved at the 138th Ordinary General Meeting of Shareholders, held in June 2007, that the maximum amount of remuneration concerning stock options as remuneration to Directors shall not exceed JPY 360 million in total per year (however, not including salaries as employees) and the maximum amount of remuneration or other payment to be paid to Outside Directors in total per year shall not exceed JPY 50 million out of those JPY 360 million.
3.		The above-mentioned “Amount of Remuneration Paid” to Directors and Corporate Auditors includes the following:

	1)		Bonuses for Directors (Total amount to be paid, which is planned to be resolved in Item 4 (Payment of Bonuses for Directors) at the 141st Ordinary General Meeting of Shareholders) Ten (10) Directors: JPY 68 million (of which, JPY 7 million is for three (3) Outside Directors)
	2)		Stock options (amount posted as remuneration in the fiscal year) Ten (10) Directors: JPY 154 million (of which, JPY 21 million is for three (3) Outside Directors)

4.		The Company does not grant bonuses and stock options to Corporate Auditors.
5.		The portions of salaries as employees for Directors concurrently serving as employees are not paid.
6.		Amounts of less than JPY 1 million are rounded to the nearest million yen.

(3)		Outside Directors and Outside Corporate Auditors
1)		Positions of Outside Directors and Outside Corporate Auditors Concurrently Held in Other Organizations (As of March 31, 2010)

				Name of Organization Where
Classification		Name		Position is Held Concurrently		Position Held Concurrently
Outside Director		Morio Ikeda		Isetan Mitsukoshi Holdings Ltd.		Outside Director
				Asahi Kasei Corporation		Outside Director
		Kensuke Hotta		Mitsui O.S.K. Lines, Ltd.		Outside Corporate Auditor
				SEIREN CO., LTD.		Outside Corporate Auditor
		Noriaki Kano		—		—
Outside Corporate Auditor		Makoto Okitsu		—		—
		Hiroyuki Kamano		SUMITOMO LIFE INSURANCE COMPANY		Outside Director
		Kunihiro Matsuo		Asahi Glass Co., Ltd.		Outside Director
				Tokyo Stock Exchange Group, Inc.		Outside Director
				Toyota Motor Corporation		Outside Corporate Auditor
				MITSUI & CO., LTD.		Outside Corporate Auditor
				Sompo Japan Insurance Inc.		Outside Corporate Auditor

Notes:

1.		The Company consigns some of the maritime transportation of construction and mining equipment to Mitsui O.S.K. Lines, Ltd., for which Outside Director Kensuke Hotta serves as Outside Corporate Auditor.
2.		SUMITOMO LIFE INSURANCE COMPANY, for which Outside Corporate Auditor Hiroyuki Kamano serves as Outside Director, is one of the group life insurance providers of the Company.
3.		The Company and its consolidated subsidiaries sell industrial machinery to Toyota Motor Corporation, for which Outside Corporate Auditor Kunihiro Matsuo serves as Outside Corporate Auditor.
4.		MITSUI & CO., LTD., for which Outside Corporate Auditor Kunihiro Matsuo serves as Outside Corporate Auditor, contributes capital and provides other financial assistance to some subsidiaries and distributors, etc. of the Company for the overseas sale and servicing of construction and mining equipment.
5.		There are no particular trading relationships, etc. between the Company and other than 1. to 4. above.

2)

Major Activities in the Fiscal Year

i)

Outside Directors

		Attendance to the Meetings
Name		of the Board of Directors		Details of Major Activities
Morio Ikeda		Attended 15 meetings of the 15 meetings held		Having served as Representative Director of Shiseido Company, Limited, Mr. Morio Ikeda speaks at the Board of Directors especially from CSR (Corporate Social Responsibility) point of view based on his profound experience in the business world.
Kensuke Hotta		Attended 14 meetings of the 15 meetings held		Having served as Representative Director of The Sumitomo Bank, Ltd. (now Sumitomo Mitsui Banking Corporation) and as Representative Director of Morgan Stanley Japan Securities Co., Ltd. (now Morgan Stanley MUFG Securities Co., Ltd.), Mr. Kensuke Hotta speaks at the Board of Directors especially on the subject of finance based on his profound experience in the business world.
Noriaki Kano		Attended 15 meetings of the 15 meetings held		Having served as President of the Japanese Society for Quality Control, Dr. Noriaki Kano speaks at the Board of Directors especially on the subject of quality control and production from his standpoint as a specialist of quality control.

ii)

Outside Corporate Auditors

		Attendance to Meetings
				Board of Corporate
Name		Board of Directors		Auditors		Details of Major Activities
Makoto Okitsu		Attended 15 meetings of the 15 meetings held		Attended 15 meetings of the 15 meetings held		Having served as Representative Director of Teijin Limited, Mr. Makoto Okitsu speaks especially on the subject of the corporate governance and other issues at the Board of Corporate Auditors and the Board of Directors based on his profound experience in the business world.
Hiroyuki Kamano		Attended 15 meetings of the 15 meetings held		Attended 15 meetings of the 15 meetings held		From his professional standpoint based on his profound experience in cross-border transactions as a lawyer, Mr. Hiroyuki Kamano speaks especially on the subject of the global businesses and other issues at the Board of Corporate Auditors and the Board of Directors.
Kunihiro Matsuo		Attended 11 meetings of the 11 meetings held		Attended 11 meetings of the 11 meetings held		From his professional standpoint based on his profound experience in the legal profession, Mr. Kunihiro Matsuo speaks especially on the subject of the risk management and the compliance system of Komatsu and other issues at the Board of Corporate Auditors and the Board of Directors.

3)		Outline of Contents of Limited Liability Agreement
		In accordance with the provisions of Article 427, Paragraph 1 of the Corporation Act, the Company has entered into limited liability agreements with Outside Directors and Outside Corporate Auditors to limit liability for damages under Article 423, Paragraph 1 of the same. The minimum liability amount under these agreements shall be equivalent to those amount stipulated in the Corporation Act etc.

5.

Status of Accounting Auditors

(1)		Name of Accounting Auditors
		KPMG AZSA & Co.

(2)

Amount of Remuneration for Accounting Auditors

1) Remuneration for the Accounting Auditor of the Company in the Fiscal Year:		JPY 381 million
2) Total amount of money and other financial benefits that the Company and its subsidiaries should pay to the Accounting Auditor:		JPY 764 million

(3)

Details of Non-Auditing Services

The Company pays the remuneration to the Accounting Auditor for services principally regarding issuance of bonds other than services defined in Article 2, Paragraph 1 of the Certified Public Accountants Law of Japan.

(4)

Policy on Decision to Discharge or Not to Reappoint Accounting Auditors

When Accounting Auditors fall under any of the items in Article 340, Paragraph 1 of the Corporation Act, the Board of Corporate Auditors shall discharge the Accounting Auditors based on the consent of all Corporate Auditors.

When Accounting Auditors lack qualifications and qualities required as Accounting Auditors of the Company, including cases that fall under disqualification reasons specified in Article 337, Paragraph 3 of the Corporation Act, Directors shall submit to a General Meeting of Shareholders a proposal for discharging or not reappointing the Accounting Auditors after obtaining the consent of the Board of Corporate Auditors or at the request of the Board of Corporate Auditors.

6.

Systems for Ensuring That the Execution of Duties by Directors Complies With Laws and Regulations, and the Company’s Articles of Incorporation, and Other Systems for Ensuring the Properness of Operation

With regards to systems for ensuring that the execution of duties by Directors complies with laws and regulations, and the Company’s Articles of Incorporation, and other systems for ensuring the properness of operation, the details of the resolution of the Board of Directors are as follows:

(1)

Basic Policy on Internal Control

The Company defines its corporate value as the total sum of trust given to us by society and all stakeholders.

To increase this corporate value, the Company recognizes the importance of strengthening corporate governance. The Company strives to maintain transparency and soundness of management by appointing Outside Directors and Outside Corporate Auditors, while limiting the number of the Board members small so that discussions at the Board of Directors are more substantial. The Company also does its utmost to improve the operation of the Board of Directors, aiming at more effective governance by the Board, ample discussions and quick decision making.

(2)

Systems for Retention and Management of Information Related to Directors’ Execution of Duties

The Company shall adequately retain and manage important information related to Directors’ execution of duties, including the record of Board meetings and other consensus-based, approved documents, as stipulated by laws and regulations, and the Company’s regulations and rules.

(3)

Rules and Other Systems for Risk Management

While continuing to make efforts to raise its corporate value, the Company recognizes the problems related to compliance, environment, product quality, accidents and information security in particular, and other matters, as major risks for continuous growth and is thus implementing the following countermeasures.

	i)		The Company shall establish Risk Management Rules to correctly recognize and manage risks. In accordance with the rules, the Company has appointed personnel in charge of individual risks, further promoting the build-up of a solid foundation for risk management.
	ii)		The Company shall establish Risk Management Committee to devise risk management policies of Komatsu, evaluate risk measures in place, and take control of risks when they surface. The Risk Management Committee regularly reports its reviews and activities to the Board of Directors.
	iii)		The Company shall establish an emergency headquarters when serious risks surface, and work to minimize damage(s) and implement appropriate measures.

(4)

Systems for Ensuring Efficient Execution of Duties by Directors

To ensure the efficient execution of duties by Directors, the Company shall implement the following:

	i)		The Board of Directors shall meet every month and more often as needed. It shall strive to maintain transparency and soundness of management through the participation of Outside Directors. It shall also establish the Regulations of the Board of Directors and the Standards for Agenda of Board Meetings, thereby clarifying the matters on which the Board of Directors should make decisions.
	ii)		Together with the introduction of the Executive Officer System, the Company shall define the separation of duties for Directors, Executive Officers and senior managers, and set up internal rules including the Regulations of Decision-Making Authority, to ensure appropriate and effective execution of duties by Directors, Executive Officers and other senior managers.

iii)

To promote efficient management of the Board of Directors, the Company shall establish a Strategy Review Committee consisting of Senior Executive Officers and senior managers. Based on the reviews of the Committee, Executive Officers and senior managers execute their duties within the authority delegated by the Board of Directors.

(5)

Systems for Ensuring That the Execution of Duties by Directors and Employees Complies With Laws and Regulations, and the Company’s Articles of Incorporation

The Board of Directors makes decisions on important management matters in accordance with laws and regulations and the Regulations of the Board of Directors. Based on the decisions made by the Board of Directors, each Director not only executes his or her own duties but also supervises employees for the execution of their duties, and reports the conditions thereof to the Board of Directors.

The Company shall establish the Compliance Committee as Komatsu to oversee compliance, and the Committee regularly reports its reviews and activities to the Board of Directors. The Company shall also establish a system to ensure Directors and employees thorough compliance to business rules as well as laws and regulations through a variety of measures, including the provision of Komatsu Code of Worldwide Business Conduct, appointment of the Executive Officer in charge of compliance, and establishment of the Compliance Department. Through all of these, we work to supervise, educate and train Directors, Corporate Auditors and employees.

In addition, the Company shall establish the internal reporting system where those who are discretely reporting questionable actions in light of laws and regulations and business rules will not be penalized.

(6)

Systems for Ensuring the Proper Operation of Komatsu Comprising the Company and Its Subsidiaries

	i)		The Company shall establish the Affiliated Company Regulations and relevant rules to contribute to proper and efficient operation of Group management while respecting the independence of the management of affiliated companies. Each affiliated company receives prescribed management and support of the department or division of the Company in charge. It shall also position the Komatsu Code of Worldwide Business Conduct, as the code to be applied by all companies affiliated with Komatsu. Each company in Komatsu shall stipulate various regulations for the proper promotion of duties.
	ii)		The Company shall assign and dispatch Directors and Corporate Auditors from the Company to major affiliated companies as needed, in order to strengthen corporate governance on a group-wide basis and monitor their management.
	iii)		Important committees of the Company, including the Compliance Committee, Risk Management Committee and Export Control Committee, shall take actions with the entire Group in view, and allow representatives of affiliated companies to take part in their meetings on occasion.
	iv)		The Company shall make particularly important affiliated companies regularly report to the Board of Directors of the Company on the status of business, including risks and compliance.
	v)		The Internal Audit Department of the Company shall audit each division of the Company, and implement or supervise auditing of major affiliated companies that belong to Komatsu. It shall also monitor and instruct each affiliated company on its internal control and operation built in conformity with the Company. The Internal Audit Department regularly reports the internal control and auditing conditions to the Board of Directors, and also reports to the Board of Corporate Auditors as needed.

(7)

Employees Assisting Corporate Auditors for Execution of Their Duties, When They Ask for Such Employees

The Company shall set up the Office of Corporate Auditors’ Staff, which shall assist Corporate Auditors in their duties, and allocate employees who work as assistants to Corporate Auditors either exclusively or concurrently in another position within the Company.

(8)

Matters Regarding the Independence of the Assistants to Corporate Auditors From Directors

	i)		Handling of personnel affairs (employment, appointment and personnel changes) of the employees who belong to the Office of Corporate Auditors’ Staff shall be premised on approval of the Standing Corporate Auditors.
	ii)		The employees who exclusively assist the Office of Corporate Auditors’ Staff are independent of control and command of the Directors, and their performance shall be rated by the Standing Corporate Auditors.

(9)

Systems for Directors and Employees Reporting to Corporate Auditors; Systems Relating to Other Reports to Corporate Auditors and Ensuring Effective Audits by Corporate Auditors

	i)		In accordance with laws and regulations, Corporate Auditors receive reports by Directors, Executive Officers and other senior managers concerning the conditions of execution of their respective duties.
	ii)		In the event that Directors find a serious violation of laws and regulations or other important facts regarding compliance at the Company or affiliated companies of Komatsu, they shall report to the Corporate Auditors immediately.
	iii)		The Corporate Auditors shall attend various committees and principle meetings concerning internal control as observers, and also read circulars per management approval sent around to obtain the sanction of executives, which are important decision-making documents of the Company, and essential prior settlement documents.
	iv)		Corporate Auditors may appoint legal counsels and other advisors needed for the execution of their duties.

(10)

Basic Policy Pertaining to the Elimination of Antisocial Forces

It shall be the basic policy of the Company to prohibit Komatsu from having any relation whatsoever with antisocial movements or groups that threaten the order and security of civil society from the perspectives of social justice and corporate social responsibility.

	i)		The above policy shall be provided in Komatsu Code of Worldwide Business Conduct and diffused throughout the Company as well as each company in Komatsu.
	ii)		The general affairs divisions of the Head Office of the Company as well as the general affairs divisions of its main offices and Group companies will work with police and other specialized external organizations to prevent the involvement of antisocial movements or groups in its management and quell any harmful effects they may bring about in accordance with the basic policy.
	iii)		The Company will do its utmost to collect information and receive education training from the above external organizations and use above information communally both within the Company and among related Group divisions.

END

Consolidated Balance Sheet
(As of March 31, 2010)

		(JPY million)
Assets
Current assets:
Cash and cash equivalents			82,429
Time deposits			1,132
Trade notes and accounts receivable, less allowance for doubtful receivables of JPY 14,941 million			447,693
Inventories			396,416
Deferred income taxes and other current assets			112,451
Total current assets			1,040,121
Long-term trade receivables			150,972
Investments:
Investments in and advances to affiliated companies			24,002
Investment securities			60,467
Other			2,399
Total investments			86,868
Property, plant and equipment, less accumulated depreciation			525,100
Goodwill			29,570
Other intangible assets			61,729
Deferred income taxes and other assets			64,695
Total assets			1,959,055

		(JPY million)
Liabilities
Current liabilities:
Short-term debt			123,438
Current maturities of long-term debt			105,956
Trade notes, bills and accounts payable			207,024
Income taxes payable			22,004
Deferred income taxes and other current liabilities			183,324
Total current liabilities			641,746
Long-term liabilities:
Long-term debt			356,985
Liability for pension and retirement benefits			46,354
Deferred income taxes and other liabilities			37,171
Total long-term liabilities			440,510
Equity
Komatsu Ltd. Shareholders’ equity
Common stock			67,870
Capital surplus			140,421
Retained earnings:
Appropriated for legal reserve			31,983
Unappropriated			724,090
Accumulated other comprehensive income (loss)			(95,634	)
Treasury stock at cost			(34,755	)
Total Komatsu Ltd. shareholders’ equity			833,975
Noncontrolling interests			42,824
Total equity			876,799
Total liabilities and equity			1,959,055

Consolidated Statement of Income
(From April 1, 2009 to March 31, 2010)

		(JPY million)
Net sales			1,431,564
Cost of sales			1,101,559
Selling, general and administrative expenses			249,286
Other operating income (expenses)			(13,684	)
Operating income			67,035
Other income (expenses):
Interest and dividend income			6,158
Interest expense			(8,502	)
Other-net			288
Other income (expenses)			(2,056	)
Income before income taxes and equity in earnings of affiliated companies			64,979
Income taxes:
Current			32,722
Deferred			(7,358	)
Income taxes			25,364
Income before equity in earnings of affiliated companies			39,615
Equity in earnings of affiliated companies			1,588
Net income			41,203
Less net income attributable to noncontrolling interests			(7,644	)
Net income attributable to Komatsu Ltd.			33,559

Consolidated Statement of Equity
(From April 1, 2009 to March 31, 2010)

(JPY million)

																		Accumulated								Total Komatsu
										Retained earnings								other				Treasury				Ltd.				Non-
		Common				Capital				Appropriated								comprehensive				stock at				shareholders’				controlling				Total
		stock				surplus				for legal reserve				Unappropriated				income (loss)				cost				equity				interests				equity
Balance, beginning of period			67,870				140,092				28,472				719,222				(105,744	)			(34,971	)			814,941				33,393				848,334
Cash dividends															(25,180	)											(25,180	)			(3,368	)			(28,548	)
Transfer to retained earnings appropriated for legal reserve											3,511				(3,511	)											—								—
Other changes																											—				2,531				2,531
Comprehensive income:
Net income															33,559												33,559				7,644				41,203
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments																			(904	)							(904	)			1,897				993
Net unrealized holding gains (losses) on securities available for sale																			5,480								5,480				—				5,480
Pension liability adjustments																			4,920								4,920				2				4,922
Net unrealized holding gains (losses) on derivative instruments																			614								614				725				1,339
Total comprehensive income																											43,669				10,268				53,937
Issuance and exercise of stock acquisition rights							413																				413								413
Purchase of treasury stock																							(40	)			(40	)							(40	)
Sales of treasury stock							(84	)															256				172								172
Balance, end of period			67,870				140,421				31,983				724,090				(95,634	)			(34,755	)			833,975				42,824				876,799