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This document has been translated from the Japanese original for the convenience of overseas stakeholders. In the event of any discrepancy
between this document and the Japanese original, the original shall prevail.
KOMATSU LTD.
E01532
The 145th Fiscal Year (from April 1, 2013 to March 31, 2014)
1. This is an English translation of the Annual Securities Report (“Yukashoken Hokokusho”) filed via the
Electronic Disclosure for Investors’ Network (“EDINET”) system as set forth in Article 27-30-2 of the
Financial Instruments and Exchange Act of Japan. The translation includes a table of contents and
pagination that are not included in the electronic filing.
2. Appended to the back of this document, are English translations of the auditors’ report that was attached
to the Annual Securities Report when it was filed using the aforementioned method, and the internal
control report and confirmation letter that were filed at the same time as the Annual Securities Report.
Certain References and Information
This report is prepared for overseas investors and compiled based on contents of the Annual Securities Report (“Yukashoken Hokokusho”) of
Komatsu Ltd. filed with the Director-General of the Kanto Local Finance Bureau of Japan on June 17, 2014.
In this report, Komatsu Ltd. is hereinafter referred to as the “Company” and together with its consolidated subsidiaries as “Komatsu.”
Cover ......................................................................................................................................................................................... 1
Part I Company Information ...................................................................................................................................................... 2
Item 1. Overview of the Company and Its Consolidated Subsidiaries ................................................................................ 2
1. Summary of Business Results ................................................................................................................................. 2
2. History ..................................................................................................................................................................... 4
3. Description of Business ........................................................................................................................................... 5
4. Overview of Subsidiaries and Affiliates .................................................................................................................. 8
5. Employees ............................................................................................................................................................... 14
Item 2. Business Overview ................................................................................................................................................. 15
1. Overview of Business Results ................................................................................................................................. 15
2. Overview of Production, Orders Received and Sales .............................................................................................. 15
3. Tasks Ahead ............................................................................................................................................................ 15
4. Risk Factors ............................................................................................................................................................. 17
5. Material Agreements, etc. ........................................................................................................................................ 19
6. Research and Development Activities ..................................................................................................................... 20
7. Analyses of Consolidated Financial Position, Operating Results and Cash Flows .................................................. 22
Item 3. Property, Plants and Equipment ............................................................................................................................. 32
1. Overview of Capital Investments ............................................................................................................................ 32
2. Major Facilities ........................................................................................................................................................ 32
3. Plans for Capital Investment, Disposal of Property, Plants and Equipment, etc. ..................................................... 35
Item 4. Information on the Company .................................................................................................................................. 36
1. Information on the Company’s Share, etc. .............................................................................................................. 36
(1) Total number of shares, etc. ................................................................................................................................. 36
(2) Stock acquisition rights, etc. ................................................................................................................................ 37
(3) Exercises, etc., of moving strike convertible bonds, etc. ...................................................................................... 77
(4) Rights plan ........................................................................................................................................................... 77
(5) Changes in number of issued shares, common stock, etc. .................................................................................... 77
(6) Shareholding by shareholder category ................................................................................................................. 77
(7) Major shareholders ............................................................................................................................................... 78
(8) Voting rights ........................................................................................................................................................ 79
(9) Stock option plans ................................................................................................................................................ 81
2. Acquisitions, etc. of Treasury Stock ........................................................................................................................ 88
3. Dividend Policy ....................................................................................................................................................... 89
4. Historical Records of Share Price ............................................................................................................................ 89
5. Board of Directors and Audit & Supervisory Board Members ................................................................................ 90
6. Corporate Governance, etc. ..................................................................................................................................... 100
(1) Overview of corporate governance ...................................................................................................................... 100
(2) Details of audit fee, etc. ....................................................................................................................................... 113
Item 5. Financial Information ............................................................................................................................................. 114
1. Consolidated Financial Statements, etc. .................................................................................................................. 115
(1) Consolidated Financial Statements ...................................................................................................................... 115
(2) Others ................................................................................................................................................................... 172
2. Non-Consolidated Financial Statements, etc. .......................................................................................................... 173
(1) Non-Consolidated Financial Statements .............................................................................................................. 173
(2) Primary assets and liabilities ............................................................................................................................... 188
(3) Others ................................................................................................................................................................... 188
Item 6. Stock-Related Administration for the Company ..................................................................................................... 189
Item 7. Reference Information on the Company ................................................................................................................. 190
1. Information on the Parent Company ........................................................................................................................ 190
2. Other Reference Information ................................................................................................................................... 190
Part II Information on Guarantors, etc., for the Company .......................................................................................................... 191
1
Part I Company Information
2
(2) The Company
(Millions of yen, unless otherwise stated)
st nd
Fiscal year 141 142 143rd 144th 145th
Year ended March 31, March 31, March 31, March 31, March 31,
2010 2011 2012 2013 2014
Net sales (Note 2) 457,676 742,519 851,139 738,871 757,766
Ordinary income or ordinary loss (1,120) 86,242 87,099 85,390 160,887
Net income 2,378 48,273 92,593 66,016 133,876
Capital stock 70,120 70,120 70,120 70,120 70,120
Number of common share issued (Thousands
998,744 998,744 983,130 983,130 983,130
of shares)
Net assets 518,467 541,600 563,668 592,734 683,183
Total assets 959,125 990,829 1,068,690 1,082,548 1,156,060
Net assets per share (Yen) 533.19 557.04 588.62 618.32 712.79
Cash dividends per share (Yen) 16.0 38.0 42.0 48.0 58.0
[ Of the above interim dividends per share ] (Yen) [8.0] [18.0] [21.0] [24.0] [29.0]
Net income per share (Yen) 2.46 49.85 96.10 69.28 140.38
Net income per share reflecting the potential dilution (Yen) 2.45 49.82 96.02 69.21 140.21
Total equity ratio (%) 53.8 54.4 52.5 54.5 58.8
Return on equity (%) 0.5 9.1 16.8 11.5 21.1
Price earnings ratio (Times) 796.7 56.7 24.5 32.5 15.2
Dividend payout ratio (%) 650.4 76.2 43.7 69.3 41.3
Number of employees 8,142 8,210 9,541 9,921 10,217
(Persons)
[Separately, average number of temporary employees] [1,503] [1,502] [1,807] [1,666] [1,354]
Notes:
1) The figures in the Company’s financial statements have been rounded down to the nearest million yen.
2) Net sales do not include consumption taxes, etc.
3) As part of the ¥58 per share of cash dividends for the 145th fiscal year, the ¥29 per share year-end dividend for the 145th fiscal year is a matter
to be resolved at the Company’s Ordinary General Meeting of Shareholders scheduled to be held on June 18, 2014.
4) “Expenses related to the disaster” which was presented as “Extraordinary loss” in the 143rd fiscal year, has been included in “Non-operating
expenses” in the 144th fiscal year. Due to this change, related figures have been reclassified for the 143 rd fiscal year.
3
2. History
May 1921 The business unit of Komatsu Iron Works was spun off from Takeuchi Kogyo (in English, Takeuchi Mining Co.) to
incorporate Kabushiki Kaisha Komatsu Seisakusho (in English, Komatsu Ltd.) in Komatsu Town (currently,
Komatsu City), Ishikawa Prefecture, Japan.
April 1922 Acquired the business unit of Komatsu Denkiseikousho from Takeuchi Mining Co.
May 1938 Established Awazu Plant.
May 1949 Listed its common share on the Tokyo Stock Exchange and the Osaka Securities Exchange.
October 1952 Established Osaka Plant.
December 1952 Established the Kawasaki Plant following the acquisition of Ikegai Automobile Manufacturing Company.
Established the Himi Plant following the acquisition of Chuetsu Electro Chemical Co., Ltd.
December 1962 Established Oyama Plant.
April 1985 Established a Research Division for research activities into cutting-edge technologies for mechatronics and new
materials.
September 1988 Incorporated Komatsu Dresser Company as a joint venture company with Dresser Industries, Inc., U.S.A., (later,
Komatsu Dresser Company changed its name to Komatsu America International Company, and was re-organized for
business integration to Komatsu America Corp.)
June 1994 Incorporated Komatsu Industries Corporation and Komatsu Machinery Corporation, and transferred a part of
business operations of the Company’s industrial machinery business (later, these companies were merged through an
absorption-type merger with Komatsu NTC Ltd.)
July 1997 Incorporated Komatsu Castex Ltd., and transferred its steel casting business operations on October 1997.
October 2006 Sold over 50% of holding shares of Komatsu Electronic Metals Co., Ltd. (currently, SUMCO TECHXIV
CORPORATION) to SUMCO CORPORATION.
January 2007 Established Ibaraki Plant and Kanazawa Plant.
April 2007 Succeeded the hydraulic component business of Komatsu Zenoah Co. through an absorption-type corporate split.
April 2007 Komatsu Forklift Co., Ltd. changed its company name to Komatsu Utility Co., Ltd. following an absorption-type
merger with Komatsu Zenoah Co. and transferred its outdoor power equipment business to the Japanese operating
company owned by Husqvarna AB (currently, Husqvarna Zenoah Co., Ltd.).
March 2008 Acquired over 50% of the issued shares of NIPPEI TOYAMA Corporation (currently, Komatsu NTC Ltd.)
August 2008 Acquired 100% ownership of NIPPEI TOYAMA Corporation (currently, Komatsu NTC Ltd.) through a share
exchange.
April 2009 Transferred the Company’s Japanese sales and service operations of construction and utility equipment business in
Japan to Komatsu Tokyo Ltd. through an absorption-type corporate split.
Komatsu Tokyo Ltd. merged with twelve Japanese distributors and changed its trade name to Komatsu Construction
Equipment Sales and Service Japan Ltd.
April 2010 Transferred the Company’s product development, sales and service operations of the large-sized press business to
Komatsu Industries Corporation through an absorption-type corporate split.
April 2011 Merged with Komatsu Utility Co., Ltd.
Note: When the main actor of a matter described above is not mentioned, please understand it to be the Company.
4
3. Description of Business
The Company’s consolidated financial statements have been prepared in accordance with U.S. GAAP, pursuant to Article 95 of the Ordinance on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976). Based
on the consolidated financial statements, its subsidiaries and affiliates are disclosed in accordance with definitions of U.S. GAAP. The same applies
to “Item 2. Business Overview” and “Item 3. Property, Plants and Equipment.”
Komatsu Group (the Company and its subsidiaries and affiliates) engages in the business activities of R&D, production, sales, marketing, and
services for customers in Japan and overseas, under two business segments: the “Construction, Mining and Utility Equipment” operating segment
and the “Industrial Machinery and Others” operating segment.
Komatsu is comprised 143 consolidated subsidiaries and 36 affiliated companies accounted for by the equity method.
The major business outlines of each business category and positioning of the Komatsu’s principal subsidiaries and affiliates are described as follows.
Major business categories below correspond to the business category in business segment information by operating segment.
Recycling equipment Mobile crushers, mobile soil recyclers China Ltd., PT Komatsu Indonesia, PT Komatsu Marketing & Support
and mobile tub grinders Indonesia, Bangkok Komatsu Co., Ltd., Komatsu Marketing Support
Industrial vehicles Forklift trucks Australia Pty. Ltd., Komatsu Australia Pty. Ltd., Komatsu Australia
Other equipment Railroad maintenance equipment Corporate Finance Pty. Ltd., Komatsu Southern Africa (Pty) Ltd. and
5
Category/principal products and businesses Principal companies
Industrial Machinery and Others
Metal forging and Servo presses and mechanical presses Komatsu Ltd., Komatsu Industries Corporation, Komatsu NTC Ltd.,
stamping presses Gigaphoton Inc. and other 23 subsidiaries.
Sheet metal machines Laser cutting machines, fine plasma (Total 27 companies)
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 Thermoelectric modules and
equipment temperature-control equipment for
semiconductor manufacturing
Others Commercial-use prefabricated
structures, excimer laser used for
lithography tools in semiconductor
manufacturing
Note: The number of principal companies includes the Company and consolidated subsidiaries.
6
Komatsu’s business structure, summarized above, is shown in the following chart.
(As of March 31, 2014)
Customers
Komatsu Group
[Japan]
Komatsu Ltd. (Parent Company)
Construction, Mining and Utility Equipment Construction, Mining and Utility Equipment Construction, Mining and Utility Equipment
◎ Komatsu America Corp. ◎ Komatsu Europe International N.V. ◎ Komatsu (China) Ltd.
◎ Komatsu do Brasil Ltda. ◎ Komatsu UK Ltd. ◎ Komatsu (Changzhou) Construction
Machinery Corp.
◎ Komatsu Brasil International Ltda. ◎ Komatsu Hanomag GmbH
◎ Komatsu Holding South America ◎ Komatsu Mining Germany GmbH ◎ Komatsu Shantui Construction
Machinery Co., Ltd.
◎ Komatsu Cummins Chile Ltda. ◎ Komatsu Italia Manufacturing S.p.A.
◎ Komatsu Financial Leasing China Ltd.
◎ Komatsu Cummins Chile Arrienda S.A. ◎ Komatsu Forest AB ◎ PT Komatsu Indonesia
◎ Komatsu Financial Limited Partnership ◎ Komatsu CIS, LLC ◎ PT Komatsu Marketing and Support
○ Cummins Komatsu Engine Company ◎ Komatsu Financial Europe N.V. Indonesia
◎ Bangkok Komatsu Co., Ltd.
◎ Komatsu Marketing Support
Australia Pty Ltd
◎ Komatsu Australia Pty Ltd
◎ Komatsu Australia Corporate
Finance Pty. Ltd.
◎ Komatsu Southern Africa (Pty) Ltd.
Industrial Machinery and Others Industrial Machinery and Others Industrial Machinery and Others
3 sales companies 3 sales companies 10 manufacturing & sales companies
[Legend Symbols]
◎ Consolidated Subsidiaries Supply of Products & Components
○ Affiliated Companies Accounted for by the Equity Method
7
4. Overview of Subsidiaries and Affiliates
Consolidated subsidiaries (Millions of yen, unless otherwise stated)
Company name Location Common Principal business Ownership Relationship
stock, of voting
investments rights (%)
Komatsu Construction Kawasaki, Construction, Sales and service of construction and
Equipment Sales and Kanagawa, Mining and utility equipment. (Note 1)
950 100.0
Service Japan Ltd. Japan Utility Equipment
*1
Komatsu Forklift Japan Ltd. Shinagawa-ku, Construction, Sales and service of industrial vehicles.
Tokyo, 500 Mining and 100.0
Japan Utility Equipment
Komatsu Rental Ltd. Yokohama, Construction, Rental of construction equipment and
Kanagawa, 100 Mining and 100.0 others.
Japan Utility Equipment
Komatsu Used Equipment Yokohama, Construction, Sales of used construction equipment.
[4.5]
Corp. Kanagawa, 290 Mining and
100.0
Japan Utility Equipment
Komatsu Castex Ltd. Himi, Construction, Manufacture and sales of casting
Toyama, Mining and product.
6,979 100.0
Japan Utility Equipment Supply of some products to the
Company.
Komatsu Diesel Co., Ltd Minato-ku, Construction, Sales of engine products.
*6 Tokyo, 50 Mining and 100.0
Japan Utility Equipment
Komatsu Cabtec Co., Ltd. Gamo, Construction, Manufacture and sales of construction
Shiga, Mining and equipment parts.
300 100.0
Japan Utility Equipment Supply of some products to the
Company.
Komatsu Logistics Corp. Yokohama, Construction, Transportation, warehousing and
Kanagawa, 1,080 Mining and 100.0 packing services.
Japan Utility Equipment (Note 2)
Komatsu Business Support Minato-ku, Construction, Retail financing related to construction
Ltd. Tokyo, 1,770 Mining and 100.0 equipment.
Japan Utility Equipment
Komatsu Industries Kanazawa, Industrial Manufacture, sales and service of metal
Corporation Ishikawa, 990 Machinery and 100.0 forging and stamping presses and sheet-
Japan Others metal machines. (Note 2)
Komatsu NTC Ltd. Nanto, Industrial Manufacture, sales and service of
Toyama, 6,014 Machinery and 100.0 machine tools and others.
Japan Others (Note 1)
Komatsu House Ltd. Shinagawa-ku, Industrial Manufacture, sales and rental of
[1.8]
Tokyo, 1,436 Machinery and commercial-use prefabricated structures
100.0
Japan Others for businesses
8
Company name Location Common Principal business Ownership Relationship
stock, of voting
investments rights (%)
Komatsu General Services Minato-ku, Industrial Temporary employment agency, real
Ltd. Tokyo, 160 Machinery and 100.0 estate, construction, insurance agency,
Japan Others providing other services, etc. (Note 1)
GIGAPHOTON INC. Oyama, Industrial Development, manufacture, sales and
Tochigi, Machinery and service of excimer laser and Extreme
Japan 5,000 Others 100.0 Ultra-Violet light sources used for
lithography tools in semiconductors.
(Notes 1 and 2)
Komatsu America Corp. Rolling 1,071 Construction, Manufacture and sales of construction,
*1, 2 Meadows, million Mining and 100.0 mining and utility equipment and
U.S.A. US dollars Utility Equipment supervision in the Americas. (Note 1)
Komatsu Finance America Rolling 140 Construction, Financing within Komatsu and
[100.0]
Inc. Meadows, million Mining and fundraising.
100.0
U.S.A. US dollars Utility Equipment
Komatsu do Brasil Ltda. Suzano, 73 Construction, Manufacture of construction equipment
[100.0]
Brazil million Mining and and casting products.
100.0
real Utility Equipment
Komatsu Brasil Jaragua, 27 Construction, Sales of construction equipment.
[100.0]
International Ltda. Brazil million Mining and
100.0
real Utility Equipment
Komatsu Holding South Santiago, 100 Construction, Sales and service of construction and
[100.0]
America Ltda. Chile thousand Mining and mining equipment. (Note 1)
100.0
US dollars Utility Equipment
Komatsu Cummins Chile Santiago, 34 Construction, Sales and service of construction and
[81.8]
Ltda. Chile million Mining and mining equipment. (Note 1)
81.8
US dollars Utility Equipment
Komatsu Cummins Chile Santiago, 43 Construction, Retail financing related to construction
[100.0]
Arrienda S.A. Chile million Mining and and mining equipment.
100.0
US dollars Utility Equipment
Komatsu Equipment Salt Lake City, 1 Construction, Sales and service of construction and
[100.0]
Company U.S.A. million Mining and mining equipment.
100.0
US dollars Utility Equipment
Modular Mining Systems, Tucson, 16 Construction, Development, manufacture, and sales of
Inc. U.S.A. thousand Mining and [100.0] large-sized mining equipment
US dollars Utility Equipment 100.0 management systems. (Note 1)
9
Company name Location Common Principal business Ownership Relationship
stock, of voting
investments rights (%)
Komatsu Europe Vilvoorde, 50 Construction, Sales of construction and mining
International N.V. Belgium million Mining and 100.0 equipment and supervision in Europe.
*1 euro Utility Equipment (Note 1)
Komatsu Europe Vilvoorde, 141 Construction, Financing within Komatsu group and
[100.0]
Coordination Center N.V. Belgium million Mining and fundraising.
100.0
*1 euro Utility Equipment
Komatsu Capital Europe Munsbach, 1 Construction, Financing within Komatsu group and
[100.0]
S.A. Luxembourg million Mining and fundraising.
100.0
euro Utility Equipment
Komatsu UK Ltd. Birtley, 23 Construction, Manufacture of construction equipment.
[100.0]
U.K. million Mining and
100.0
pounds Utility Equipment
Komatsu Hanomag GmbH Hannover, 19 Construction, Manufacture of construction equipment.
[49.3]
Germany million Mining and
100.0
euro Utility Equipment
Komatsu Mining Germany Dusseldorf, 5 Construction, Manufacture and sales of mining
[100.0]
GmbH Germany million Mining and equipment. (Note 1)
100.0
euro Utility Equipment
Komatsu France S.A.S Aubergenville, 5 Construction, Sales and service of construction
[100.0]
France million Mining and equipment.
100.0
euro Utility Equipment
Komatsu Italia Este, 6 Construction, Manufacture of construction equipment.
[100.0]
Manufacturing S.p.A. Italy million Mining and
100.0
*5 euro Utility Equipment
Komatsu Forest AB Umea, 397 Construction, Manufacture, sales, and service of
Sweden million Mining and forestry equipment.
100.0
Swedish Utility Equipment
krona
Komatsu CIS LLC Moscow, 5,301 Construction, Sales of construction and mining
*1 Russia million Mining and equipment.(Note 1)
100.0
Russian Utility Equipment
rubles
Komatsu Manufacturing Yaroslavl, 4,273 Construction, Manufacture of construction equipment.
Rus LLC Russia million Mining and [94.2]
*1 Russian Utility Equipment 94.2
rubles
Komatsu Financial Europe Vilvoorde, 40 Construction, Retail financing related to construction
[100.0]
N.V. Belgium million Mining and and mining equipment.
100.0
euro Utility Equipment
Komatsu (China) Ltd. Shanghai, 135 Construction, Sales of construction and mining
*1 China million Mining and 100.0 equipment and supervision in China.
US dollars Utility Equipment (Note 1)
10
Company name Location Common Principal business Ownership Relationship
stock, of voting
investments rights (%)
Komatsu (Changzhou) Changzhou, 41 Construction, Manufacture of construction equipment.
[10.0]
Construction Machinery Jiangsu, million Mining and
85.0
Corp. China US dollars Utility Equipment
Komatsu Shantui Jining, 21 Construction, Manufacture of construction equipment.
[30.0]
Construction Machinery Shandong, million Mining and
60.0
Co., Ltd. China US dollars Utility Equipment
Komatsu Undercarriage Jining, Construction, Manufacture and sales of components
[78.2]
China Corp. Shandong, 5,500 Mining and including crawler for construction
78.2
China Utility Equipment equipment.
Komatsu (Shandong) Jining, 188 Construction, Manufacture of construction equipment
Construction Machinery Shandong, million Mining and [100.0] and industrial vehicles.
Corp. China US dollars Utility Equipment 100.0
*1
Komatsu Financial Leasing Shanghai, 1,630 Construction, Retail financing related to construction
[100.0]
China Ltd. China million Mining and equipment.
100.0
*1 renminbi Utility Equipment
PT Komatsu Indonesia Jakarta, 192,780 Construction, Manufacture and sales of construction
*1 Indonesia million Mining and and mining equipment and casting
94.9
Indonesian Utility Equipment products.
rupiah
PT Komatsu Marketing & Jakarta, 5 Construction, Sales and service of construction and
[100.0]
Support Indonesia Indonesia million Mining and mining equipment. (Note 1)
100.0
US dollars Utility Equipment
PT Komatsu Undercarriage Bekasi, 15 Construction, Manufacture and sales of parts of
[84.3]
Indonesia Indonesia million Mining and construction and mining equipment.
84.3
US dollars Utility Equipment
PT KOMATSU Balikpapan, 1 Construction, Manufacture and sales of
[51.0]
REMANUFACTURING Indonesia million Mining and remanufacturing components for
51.0
ASIA US dollars Utility Equipment construction and mining equipment.
Bangkok Komatsu Co., Ltd. Chonburi, 620 Construction, Manufacture and sales of construction
[74.8]
Thailand million Mining and equipment and casting products.
74.8
Thai baht Utility Equipment
Komatsu Bangkok Leasing Samutprakarn, 550 Construction, Retail financing related to construction
[60.0]
Co., Ltd. Thailand million Mining and and mining equipment.
60.0
Thai baht Utility Equipment
Komatsu India Pvt. Ltd. Kanchpuram, 6,690 Construction, Manufacture and sales of construction
[69.4]
*1 India million Mining and and mining equipment.
100.0
Indian rupees Utility Equipment
Komatsu Marketing Fairfield, 21 Construction, Sales of construction and mining
Support Australia Pty. Ltd. Australia million Mining and [40.0] equipment. (Note 1)
Australian Utility Equipment 60.0
dollars
11
Company name Location Common Principal business Ownership Relationship
stock, of voting
investments rights (%)
Komatsu Australia Pty. Ltd. North Ryde, 30 Construction, Sales and service of construction and
Australia million Mining and [100.0] mining equipment. (Note 1)
Australian Utility Equipment 100.0
dollars
Komatsu Australia North Ryde, 49 Construction, Retail financing related to construction
Corporate Finance Pty. Ltd. Australia million Mining and [60.0] and mining equipment.
Australian Utility Equipment 60.0
dollars
Komatsu Southern Africa Isando, 1 Construction, Sales and service of construction and
(Pty) Ltd. Republic of thousand Mining and 80.0 mining equipment. (Note 1)
South Africa rand Utility Equipment
Other 89 companies
12
Affiliated companies accounted for by the equity method (Millions of yen, unless otherwise stated)
Company name Location Common Principal business Ownership Relationship
stock, of voting
investments rights (%)
KOMATSU SAITAMA Kitamoto, Construction, Sales and service of construction
[40.0]
LTD. Saitama, 635 Mining and equipment.
40.0
Japan Utility Equipment
Sanuki Lease Ltd. Takamatsu, Construction, Rental of construction equipment.
[35.0]
Kagawa, 90 Mining and
35.0
Japan Utility Equipment
Komatsu Cummins Engine Oyama, Construction, Manufacture and sales of diesel
Co., Ltd. Tochigi, 1,400 Mining and 50.0 engines.
Japan Utility Equipment
QUALICA Inc. Shinjuku-ku, Industrial Sales and development of software,
Tokyo, 1,234 Machinery and 20.0 sales of hardware, etc. Supply of some
Japan Others products to the Company. (Note 1)
Cummins Komatsu Engine Seymour, Construction, Manufacture and sales of diesel
[50.0]
Company U.S.A. - Mining and engines.
50.0
*4 Utility Equipment
PT Komatsu Astra Finance Jakarta, 54 Construction, Retail financing related to construction
[50.0]
Indonesia million Mining and and mining equipment.
50.0
US dollars Utility Equipment
Other 30 companies
Notes:
1) A certain member of the Board of Directors or an Audit & Supervisory Board Member of the Company concurrently holds a position on the
Board of Directors at this company.
2) The Company rents certain land and buildings to this company.
3) The name of the operating segment in which the companies are classified is shown in “Principal business.”
4) The figures in square brackets in “Ownership of voting right (%)” represent the percentage of voting rights owned indirectly by the Company,
among the total ownership percentage shown outside the square brackets.
5) Companies with an asterisk 1 (*1) in “Company name” are specified subsidiaries.
6) The total amount of sales (excluding inter-company transactions) of Komatsu America Corp. (indicated by asterisk 2 (*2) in “Company name”),
exceeded the 10% of the amount of consolidated net sales in the period that corresponds to the recent fiscal year.
Information on income or loss, etc. (Millions of yen)
Net sales Income before income taxes Net income Total equity Total assets
and equity in earnings of
affiliated companies
Komatsu America Corp. 327,687 48,869 33,782 371,093 732,031
7) Komatsu Financial Limited Partnership (indicated by asterisk 3 (*3) in “Company name”) is a limited partnership established based on the state
law of Delaware, the U.S., and the Company invests in it through Komatsu America Corp. Its net assets, which are equivalent to its equity,
amount to USD 426 million. It changed its Japanese company name in February 2014 but its English name remains unchanged.
8) Cummins Komatsu Engine Company (indicated by asterisk 4 (*4) in “Company name”) is a general partnership established based on the state
law of Indiana, the U.S., and the Company invests in it through Komatsu America Corp.; the total investments amount to USD 2 million.
9) Komatsu Italia Manufacturing S.p.A. (indicated by asterisk 5 (*5) in “Company name”) changed its company name from Komatsu Utility
Europe S.p.A. in January 2014.
10) In April 2014, the Company decided to merge with Komatsu Diesel Co., Ltd. (indicated by asterisk 6 (*6) in “Company name”)by absorption-
type merger in October 2014.
13
5. Employees
(1) Consolidated
(As of March 31, 2014)
Operating segment Number of employees
Construction, Mining and Utility Equipment 42,194 [3,715]
Industrial Machinery and Others 4,313 [877]
Corporate 701 [173]
Total 47,208 [4,765]
Notes:
1) The number of employees represents the number of employees actually at work. Separate from that, the average number of temporary
employees during the current fiscal year is disclosed in square brackets.
2) The number of employees under “Corporate” refers to employees working for administrative departments who cannot be classified into the two
operating segments.
14
Item 2. Business Overview
1. Overview of Business Results
See “7. Analyses of Consolidated Financial Position, Operating Results and Cash Flows.”
3. Tasks Ahead
In April 2013, Komatsu embarked on the “Together We Innovate GEMBA Worldwide” mid-range management plan scheduled for completion in the
fiscal year ending March 31, 2016. Since then, the Komatsu Group has followed it and generated some results, including the market launch of iMC
dozers equipped with the world’s first automatic blade control. At the same time, FY2013 tested Komatsu’s ability to respond to changes in the
market, such as a drastic drop in demand for mining equipment and belated recovery of demand for wire saws.
Komatsu anticipates that demand for construction and mining equipment will grow in the mid to long range, reflecting an increase in global
population and urbanization rates. Meanwhile, by considering economic slowdowns in some emerging countries and demand being at a standstill for
the immediate future in Strategic Markets, Komatsu is stepping up efforts in the business model which looks into comprehensive merits for
customers, such as reduction in their machines’ lifecycle costs.
While the external environment of Komatsu is dynamically changing, Komatsu is determined to speed up its implementation of three focused efforts
defined in the mid-range management plan, continue to strengthen its operations capable of flexibly meeting demand changes, and steadily generate
results.
Strategic Markets China, Latin America, Asia, Oceania, Africa, Middle East and CIS
Target figures of the “Together We Innovate GEMBA Worldwide” mid-range management plan
Items Targets for Fiscal Year Ending March 31, 2016
Operating income ratio 18 – 20%
ROE: Return on Equity 18 – 20%
Net debt-to-equity ratio 0.3 or below
Consolidated payout ratio 30 – 50% (stably)
*ROE=Net income attributable to Komatsu Ltd. for the year/[(Komatsu Ltd. shareholders’ equity at the beginning + Komatsu Ltd. shareholders’ equity at the end
of the fiscal year)/2]
* Net debt-to-equity ratio = (Interest-bearing debt – Cash and cash equivalents – Time deposits) / Komatsu Ltd. shareholders’ equity
[Premises]
Items Fiscal Year Ending March 31, 2016
Guideline on sales ¥2,300 billion ± ¥200 billion
15
Focused activities of the “Together We Innovate GEMBA Worldwide” mid-range management plan
1. Growth strategies based on innovation
We are going to actively make innovation, which will create totally new value at our customers’ GEMBA (workplaces), in our core businesses of
construction, mining and utility equipment as well as in industrial machinery. To this end, mainly through the Office of Chief Technology Officer
(CTO), we are going to develop mid- to long-range technology strategies and research policies, while we will promote academic-industrial as well as
private-sector collaborations for technologies we cannot obtain within the Komatsu Group.
In the construction, mining and utility equipment business, we introduced iMC dozers, equipped with the world’s first automatic blade control, to the
North American, European and Japanese markets last year. The iMC dozers represent our ICT-intensive construction equipment designed to enable
machine automation and efficient, centralized management of jobsite information. Starting in 2014, we are going to launch the medium-sized iMC
hydraulic excavator in these same markets. With respect to the Autonomous Haulage System (AHS), we will steadfastly advance the large-lot
deployment project with Rio Tinto in Australia. In April this year, we established a joint-ownership company with General Electric Company.
Through this new company, we are going to develop next-generation equipment for underground mining, in which we have no experience. We will
do this by emphasizing the importance of productivity and safety as we have done with mining equipment for use in open-pit mines. In the business
of 2- to 3-ton class, small forklift trucks, in May 2014 we launched the new FE25-1 electric model capable of outdoor work comparable to internal-
combustion models in performance as well as long hours of use, thanks mainly to high-speed charging technology.
In the industrial machinery and others business, we are working on in-house development and the manufacturing of key components and promoting
the market introduction of new products, such as innovative Servo presses and machine tools.
16
4. Risk Factors
Given that Komatsu operates on a global scale with development, production, sales and other bases established around the world, Komatsu is
exposed to a variety of risks. Komatsu has identified the following risks as its primary risks based on information currently available to it.
17
charged with double or additional taxation. When facing such an unexpected situation, Komatsu may experience an unfavorable impact on its
business results.
18
(10) Natural calamities, wars, terrorism, accidents and other matters
If natural disasters (such as earthquakes, tsunamis and floods), epidemics, radioactive contamination, wars, terrorist acts, riots, accidents (such as
fires and explosions), unforeseeable criticism or interference by third parties or computer virus infections were to occur in the regions in which
Komatsu operates, Komatsu may incur extensive damage to one or more of its facilities that then could not become fully operational within a short
period of time. Even if Komatsu’s operations were not directly harmed by such events, confusion in logistic and supply networks, shortages in the
supply of electric power, gas and other utilities, telecommunication problems and/or problems of supplier’s production may continue for a long
period of time. Accordingly, if delays or disruption in the procurement of materials and parts, or the production and sales of Komatsu’s products and
services, or deterioration of the capital-raising environment or other adverse developments were to take place as a result of such events, Komatsu’s
business results may be adversely affected.
1) Merger method:
In this simplified absorption-type merger, the Company will become the surviving company, and Komatsu Diesel will be dissolved upon
completion of the merger.
2) Effective date of the merger: October 1, 2014 (planned)
3) Substance of merger-related allotment of shares:
As the Company owns 100% of shares issued of Komatsu Diesel, there will be no allotment of shares, cash or the like in this merger.
4) Status of succeeded assets and liabilities (as of March 31, 2014):
Assets: ¥7,970 million
Liabilities: ¥4,729 million
5) Capital stock, main line of business, etc. of the surviving company:
Capital stock: ¥70,120 million
Main line of business: Manufacture and sale of construction and mining equipment, utility equipment (compact machines), forestry equipment,
industrial machinery and others.
19
6. Research and Development Activities
Consistent with its commitment to provide “Quality and Reliability,” Komatsu is actively engaged in research and development activities for new
technologies and new products in the fields of construction, mining and utility equipment, industrial machinery and others.
With respect to the structure of Komatsu’s research and development, the Research Division of the Company, Development Centers of the
Development Division of the Company, which focus on construction, mining and utility equipment and the technology departments of Komatsu’s
subsidiaries and affiliates are involved in its research and development activities. The total amount of research and development expenses for the
fiscal year ended March 31, 2014 was ¥64,479 million. The objectives, results and expenses of the research and development activities by operating
segment are described below.
20
The principal products developed and introduced to the market in the Construction, Mining and Utility Equipment operating segment during the
fiscal year ended March 31, 2014 are listed below:
Product Model
Hydraulic Excavators PC88MR-10, PC170LC-10, PC228US/USLC-10, PC240LC-11, PC490LC-11
Hybrid Hydraulic Excavators HB205/205LC-2, HB215/215LC-2, HB335-1, HB365-1
ICT Hydraulic Excavators PC210LCi-10
Bulldozers D65EX/PX-18, D155AX-8
ICT Bulldozers D37EXi/PXi-23, D39EXi/PXi-23, D51EXi/PXi-22
Wheel Loaders WA100/100M-7, WA380Z-6
Dump Trucks HD465-7E1, HD605-7E1, 730E-8
Motor Graders GD705-5
Forklift Trucks FE25-1, FH35-1
Forestry Equipment XT430/430L-2
The total amount of research and development expenses in the Construction, Mining and Utility Equipment operating segment for the fiscal year
ended March 31, 2014 was ¥56,619 million.
21
7. Analyses of Consolidated Financial Position, Operating Results and Cash Flows
Following description contains forward-looking statements which the Company judged as of the filing date of this Annual Securities Report.
Komatsu prepares its consolidated financial statements in conformity with U.S. GAAP. Komatsu’s management regularly makes certain estimates
and judgments that Komatsu believes are reasonable based upon available information. These estimates and judgments affect the reported amounts of
assets and liabilities as of the date of the financial statements, the reported amounts of income and expenses during the periods presented, and the
disclosed information regarding contingent liabilities and debts. These estimates and judgments are based on Komatsu’s historical experience, terms
of existing contracts, Komatsu’s observance of trends in the industry, information provided by its customers and information available from other
outside sources, as appropriate.
By their nature, these estimates and judgments are subject to an inherent degree of uncertainty, and may differ from actual results. For a summary of
Komatsu’s significant accounting policies, including the critical accounting policies discussed below, see Note 1 to the Consolidated Financial
Statements.
Komatsu’s management believes that the following accounting policies are critical in fully understanding and evaluating Komatsu’s reported
financial results.
22
allowance or reserve for unrecognized tax benefits if its estimates differ from actual results due to poor operating results, lower future taxable income
as compared to estimated taxable income or different interpretations of tax laws by the relevant tax authorities. These adjustments to the valuation
allowance or recognized tax benefits could materially affect Komatsu’s financial position and results of operations.
For additional information, see Note 15 to the Consolidated Financial Statements.
23
(5) Pension Liabilities and Expenses
The amount of Komatsu’s pension obligations and net period pension costs are dependent on certain assumptions used to calculate such amounts.
These assumptions are described in Note 12 to the Consolidated Financial Statements and include the discount rate, expected rate of return on plan
assets and rates of increase in compensation. Actual results that differ from these assumptions are accumulated and amortized over future service
years of employees and therefore generally affect Komatsu’s recognized expenses and recorded obligations during such future periods.
The discount rate is determined based on the rates of return of high-quality fixed income investments currently available and expected to be available
until the maturity of the pension benefits. The expected long-term rate of return on plan assets is determined by taking into consideration the current
expectations for future returns and actual historical returns of each plan asset category.
While Komatsu believes that its assumptions are appropriate, in the event that actual results differ significantly from these assumptions or significant
changes are made to these assumptions, Komatsu’s pension obligations and future expenses may be affected.
The following table illustrates the sensitivity of pension obligations and net periodic pension costs to changes in discount rates and expected long-
term rate of return on pension plan assets, while holding all other assumptions constant, for Komatsu’s pension plans as of March 31, 2014.
2. Operating Results
(1) Overview
Komatsu Ltd. (the “Company”) and its consolidated subsidiaries (together “Komatsu”) embarked on the “Together We Innovate GEMBA Worldwide”
three-year mid-range management plan in April 2013. Under this plan, Komatsu is making focused efforts on 1) growth strategies based on
innovation, 2) growth strategies of existing businesses, and 3) structural reforms designed to reinforce the business foundation.
For the fiscal year ended March 31, 2014, which represents the first year of the mid-range management plan, in the construction, mining and utility
equipment business, while demand for mining equipment remained slack, that for construction equipment increased in Japan, China and some other
regions. In addition, as the Japanese yen depreciated against the U.S. dollar, euro and renminbi, net sales increased from the fiscal year ended March
31, 2013. With respect to the industrial machinery and others business, while sales of sheet-metal and press machines were firm mainly in the
automobile manufacturing industry, net sales decreased from the fiscal year ended March 31, 2013, largely affected by further decrease in sales of
wire saws. As a result, consolidated net sales for the fiscal year ended March 31, 2014 increased by 3.6% from the fiscal year ended March 31, 2013,
to ¥1,953,657 million.
Concerning profits, while the loss of the inventories of wire saws was realized, operating income increased by 13.7% from the fiscal year ended
March 31, 2013, to ¥240,495 million, supported by the Japanese yen’s depreciation and continued focus on improving selling prices and production
costs as well as curtailing fixed costs. Operating income ratio increased by 1.1 percentage points from the fiscal year ended March 31, 2013, to
12.3%. Income before income taxes and equity in earnings of affiliated companies increased by 18.3% to ¥242,056 million. Net income attributable
to Komatsu Ltd. increased by 26.3% to ¥159,518 million.
24
Consolidated results for the fiscal year
145th fiscal year Changes from
(Millions of yen) 144 th fiscal year
Net sales 1,953,657 3.6%
Operating income 240,495 13.7%
Income before income taxes and equity in earnings of affiliated companies 242,056 18.3%
Net income attributable to Komatsu Ltd. 159,518 26.3%
(In this section, the amounts of sales represent net sales to external customers by customer locations.)
Japan
Demand for construction equipment advanced, reflecting an increase in sales as more customers anticipated stringer emission regulations for the near
future, in addition to full-scale start-ups of reconstruction projects in the regions destroyed by the Great East Japan Earthquake and tsunami. In
particular, demand in rental companies was strong. As a result, sales increased by 16.9% from the fiscal year ended March 31, 2013, to ¥342,156
25
million.
Concerning the products which are compliant with new emission regulations which have been steadily in effect since 2011, Komatsu has already
launched over 40 models in total, including the HB205-2 hybrid hydraulic excavator of which Komatsu began sales in October 2013. Komatsu
worked to expand sales of these new models. Since last year Komatsu Rental Ltd. and Komatsu Group rental companies began introducing D61PXi-
23 and D37PXi-23 iMC dozers. Having been deployed at over 20 job sites, these models have gained great responses from customers.
Americas
In North America, while renewal demand since FY2012 in the rental industry ran its course and demand decreased for equipment for use especially
in coal mines, demand grew in the housing sector and infrastructure development, such as highway construction. Sales decreased by 0.1% from the
fiscal year ended March 31, 2013, to ¥276,104 million. In June 2013, Komatsu launched the medium-sized D61EXi/PXi-23 iMC dozer in the United
States, the first in the world, and has steadily increased their sales volume. To meet the promising, growing trend of renting by customers, Komatsu
reinforced its rental-to-used equipment business, by increasing the amount of equipment at distributors.
In Latin America, while demand for equipment decreased for use in copper mines in Chile and Peru, sales increased from the fiscal year ended March
31, 2013, reflecting the Japanese yen’s depreciation. As a result, sales increased by 2.9% from the fiscal year ended March 31, 2013, to ¥266,761
million. In Brazil, Komatsu has built an integrated Komatsu group-wide support operation for mining customers, as Komatsu Brasil International
Ltda. commenced sales and service of mining equipment in April 2013.
China
Demand, which had been sluggish since FY2011, upturned for recovery in April 2013 and increased for the fiscal year ended March 31, 2014, albeit
some slowdown after the Chinese New Year in January 2014. Komatsu worked to expand sales of the 20-ton class PC200-8M0 hydraulic excavator
with improved performance of fuel economy, which was launched in February 2013. As a result, sales increased by 35.1% from the fiscal year ended
March 31, 2013, to ¥162,002 million.
To further strengthen production in China, Komatsu continuously worked to improve production costs and human resource development. In October
2013, Komatsu Shantui Construction Machinery Co., Ltd., a manufacturing subsidiary of medium-sized hydraulic excavators in Shandong Province,
received the Deming Prize for 2013, for its active engagement in TQM (total quality management). Komatsu Shantui became the first award-winning
company of overseas Komatsu Group companies.
26
Middle East & Africa
In the Middle East, demand grew steadily in some countries of Gulf nations, and sales increased by 86.6% from the fiscal year ended March 31, 2013,
to ¥55,399 million. In Saudi Arabia, Komatsu steadfastly reinforced sales and product support operations with a leading local company with whom
Komatsu signed the distributorship agreement at the end of 2012.
In Africa, Komatsu promoted proactive sales and service activities by effectively utilizing information obtained from the KOMTRAX Plus,
Komatsu’s mining equipment management system, and made good sales in mines in Namibia in addition to South Africa. As a result, sales increased
by 10.4% from the fiscal year ended March 31, 2013, to ¥108,278 million.
Production scale for the Construction, Mining and Utility Equipment operating segment increased by 8.7% from the fiscal year ended March 31,
2013 to approximately ¥1,707.1 billion (based on sales price).
Production scale for the Industrial Machinery and Others operating segment decreased by 6.3% from the fiscal year ended March 31, 2013 to
approximately ¥189.6 billion (based on sales price).
27
(8) Other income (expenses), net
Interest and dividend income decreased by ¥379 million to ¥3,898 million for the fiscal year ended March 31, 2014 as compared to ¥4,277 million
for the fiscal year ended March 31, 2013.
Interest expense increased by ¥595 million to ¥8,831 million for the fiscal year ended March 31, 2014 as compared to ¥8,236 million for the fiscal
year ended March 31, 2013.
Due primarily to the sale of marketable equity securities available for sale and others, other income was ¥6,494 million for the fiscal year ended
March 31, 2014. Due primarily to the write off of an other investment security, other expenses was ¥3,040 million for the fiscal year ended March 31,
2013.
(9) Income before income taxes and equity in earnings of affiliated companies
As a result of the above factors, income before income taxes and equity in earnings of affiliated companies for the fiscal year ended March 31, 2014
increased by ¥37,453 million to ¥242,056 million as compared to ¥204,603 million for the fiscal year ended March 31, 2013.
28
(15) Segment profit
(Segment profit is calculated by subtracting cost of sales and selling, general and administrative expenses from net sales.)
Segment profit for the Construction, Mining and Utility Equipment operating segment for the fiscal year ended March 31, 2014 increased by ¥33,150
million to ¥242,101 million as compared to ¥208,951 million for the fiscal year ended March 31, 2013. This increase was due primarily to while
demand for mining equipment remained slack, that for construction equipment increased in Japan, China and some other regions. In addition, as the
Japanese yen depreciated against the U.S. dollar, euro and renminbi, sales increased from the fiscal year ended March 31, 2013.
Segment profit for the Industrial Machinery and Others operating segment for the fiscal year ended March 31, 2014 decreased by ¥4,184 million to
¥2,038 million as compared to ¥6,222 million for the fiscal year ended March 31, 2013. This decrease was due primarily to while sales of sheet-metal
and press machines were firm mainly in the automobile manufacturing industry, total sales decreased from the fiscal year ended March 31, 2013,
largely affected by further decrease in sales of wire saws and the realization a loss of the inventories of wire saws.
Consolidated segment profit, which was added corporate expenses and elimination, increased by ¥28,193 million to ¥242,205 million as compared to
¥214,012 million for the fiscal year ended March 31, 2013.
Consolidated segment profit is not a consolidated income statement measurement in accordance with U.S. GAAP but is disclosed as beneficial
information providing for users.
29
million in EMTNs, (3) ¥90,000 million in unsecured bonds and (4) ¥6,218 million in capital lease obligations. Such long-term debt was used
primarily for capital expenditures and long-term working capital needs.
As a result, Komatsu’s interest-bearing debt as of March 31, 2014, including its capital lease obligations, decreased by ¥74,696 million to ¥605,067
million as compared to March 31, 2013. Net interest-bearing debt after deducting cash and deposits also decreased by ¥72,008 million to ¥513,918
million in the fiscal year ended March 31, 2014. As a result, Komatsu’s net debt to-equity ratio, as of March 31, 2014 was 0.37 to 1, compared to
0.49 to 1 as of March 31, 2013.
At March 31, 2014, Komatsu’s total current assets increased by ¥1,376 million to ¥1,493,432 million. Komatsu’s total current liabilities decreased by
¥35,345 million to ¥792,231 million. As a result, the current ratio, which is calculated by dividing current assets by current liabilities, as of March 31,
2014, was 188.5%, increased by 8.2 percentage points from the fiscal year ended March 31, 2013.
Based on anticipated cash flows from its operating activities, the available sources of funds and the level of its current ratio(which is calculated by
dividing current assets by current liabilities), Komatsu believes that it has sufficient means to satisfy its liquidity needs and future obligations.
As of March 31, 2014, Komatsu’s total cash and cash equivalents was ¥90,872 million. Out of total cash and cash equivalents, ¥73,263 million was
held outside of Japan in various overseas subsidiaries as of March 31, 2014. Under current tax laws and regulations, if cash and cash equivalents
associated with the overseas subsidiaries’ undistributed earnings were to be repatriated in the form of dividends or deemed distributions to Komatsu,
Komatsu would be subject to additional Japanese income taxes and foreign withholding taxes in certain countries. However, Komatsu sets aside a
part of its cash and cash equivalents in order to invest in its overseas operations. As of March 31, 2014, Komatsu plans to re-invest approximately
half of its total cash and cash equivalent held outside of Japan in its overseas operations.
The Company obtains credit ratings from three rating agencies: Standard and Poor’s Ratings Services (“S&P”), Moody’s Investors Service, Inc.
(“Moody’s”) and Rating and Investment Information, Inc. (“R&I”). As of March 31, 2014, the Company’s issuer ratings were as follows:
S&P: A (long-term)
Moody’s: A2 (long-term)
R&I: AA- (long-term), a-1+ (short-term)
30
(4) Tabular disclosure of contractual obligations
The following table sets forth Komatsu’s contractual obligations as of March 31, 2014.
Millions of yen
Cash payments due by period
Total Less than 1-3 years 3-5 years Greater than
1 year 5 years
Short-term debt obligations ¥ 176,515 ¥ 176,515 ¥ - ¥ - ¥ -
Long-term debt obligations (excluding capital lease
obligations) 421,913 114,364 207,774 95,824 3,951
Capital (Finance) lease obligations 6,218 3,266 2,232 414 306
Operating lease obligations 10,756 4,149 4,402 1,468 737
Interest on interest bearing debt (including capital lease
obligations) 17,100 8,117 6,989 1,748 246
Pension and other post retirement obligations 5,386 5,386 - - -
Total ¥ 637,888 ¥ 311,797 ¥ 221,397 ¥ 99,454 ¥ 5,240
Long-term debt obligations excluding market value adjustments of ¥421 million (loss).
Interest on interest-bearing debt is based on rates in effect as of March 31, 2014.
Pension and other post retirement obligations reflect contributions expected to be made during the year ending March 31, 2015 only, as the amounts
of funding obligations beyond the next year are not yet determinable.
Commitments for capital investment outstanding at March 31, 2014, aggregated approximately ¥19,900 million.
31
Item 3. Property, Plants and Equipment
1. Overview of Capital Investments
Komatsu (the Company and its consolidated subsidiaries) invests capital each year in the development and production of new products and the
improvement of the operating efficiency of its production infrastructure, primarily focusing on the Construction, Mining and Utility Equipment
operating segment. Capital investment (figures based on property, plants and equipment acquired; amounts do not include consumption taxes, etc.)
for the fiscal year ended March 31, 2014 by operating segment was as follows:
(Millions of yen) Fiscal year ended March 31, 2014 Percentage change as compared to
the fiscal year ended March 31, 2013
Construction, Mining and Utility Equipment 174,347 36.5 %
Industrial Machinery and Others 4,723 (49.0)%
Total 179,070 30.7 %
With respect to the Construction, Mining and Utility Equipment operating segment, Komatsu made capital investments to enhance production
efficiency and flexibility, to decrease electric power use and to enhance its rental-to-used equipment business.
With respect to the Industrial Machinery and Others operating segment, Komatsu made capital investments to renew obsolete equipment.
2.Major Facilities
Major facilities of Komatsu are as follows:
(1) The Company
(As of March 31, 2014)
Name and Operating segment Facilities & equipment Book value (Millions of yen) Number of
location Buildings Machinery Land Others Total employees
and (Thousand
vehicles square
meters)
Awazu Plant Construction, Manufacturing of bulldozers,
Komatsu, Mining and Utility hydraulic excavators, wheel
3,738
Ishikawa Equipment, loaders, motor graders, 11,942 7,745 5,017 28,444 2,321
(703)
Industrial Machinery defense systems, etc.
and Others
Kanazawa Construction, Manufacturing of hydraulic
Plant Mining and Utility excavators, presses, etc.
1,238
Kanazawa, Equipment, 5,739 1,965 178 9,121 296
(97)
Ishikawa Industrial Machinery
and Others
Osaka Plant Construction, Manufacturing of bulldozers,
4,240
Hirakata, Mining and Utility hydraulic excavators, 14,640 11,343 1,501 31,726 1,981
(562)
Osaka *1 Equipment recycling equipment, etc.
Ibaraki Plant Construction, Manufacturing of dump
10,086
Hitachinaka, Mining and Utility trucks, wheel loaders, etc. 8,022 2,835 236 21,180 804
(309)
Ibaraki Equipment
Shonan Plant Construction, Manufacturing of controllers,
2,214
Hiratsuka, Mining and Utility monitors, hybrid 1,802 395 71 4,483 580
(68)
Kanagawa Equipment components, etc.
Oyama Plant Construction, Manufacturing of engines,
584
Oyama, Mining and Utility hydraulic equipment, etc. 8,225 14,784 4,334 27,929 1,624
(584)
Tochigi Equipment
Tochigi Plant Construction, Manufacturing of industrial
2,780
Oyama, Mining and Utility vehicles, hydraulic 1,946 1,374 428 6,530 744
(214)
Tochigi Equipment excavators, etc.
32
Name and Operating segment Facilities & equipment Book value (Millions of yen) Number of
location Buildings Machinery Land Others Total employees
and (Thousand
vehicles square
meters)
Koriyama Construction, Manufacturing of hydraulic
Plant Mining and Utility equipment 895
3,138 2,479 114 6,628 358
Koriyama, Equipment (377)
Fukushima
Head office, - Others
1,179
Minato-ku, 1,608 4 220 3,013 1,022
(2)
Tokyo
*1 Osaka Plant’s book value and employees include those of the Rokko Plant.
33
Name and Operating segment Facilities & equipment Book value (Millions of yen) Number of
location Buildings Machinery Land Others Total employees
and (Thousand
vehicles square
meters)
Komatsu UK Construction, Manufacturing of hydraulic
-
Ltd. Mining and Utility excavators, etc. 723 790 7 1,520 288
(200)
Birtley, U.K. Equipment
Komatsu Construction, Manufacturing of wheel
Hanomag Mining and Utility loaders, etc.
527
GmbH Equipment 1,905 369 597 3,398 488
(158)
Hannover,
Germany
Komatsu Italia Construction, Manufacturing of hydraulic
Manufacturing Mining and Utility excavators, backhoe loaders, 246
1,617 718 1 2,582 345
S.p.A. Equipment etc. (134)
Este, Italy
Komatsu Construction, Manufacturing of forestry
Forest AB Mining and Utility equipment. 55
473 727 48 1,303 442
Umea, Equipment (44)
Sweden
Komatsu Construction, Manufacturing of hydraulic
Manufacturing Mining and Utility excavators, dump trucks, etc.
10
Rus, LLC Equipment 4,305 3,038 21 7,374 232
(400)
Yaroslavl,
Russia
Komatsu Construction, Manufacturing of hydraulic
(Changzhou) Mining and Utility excavators, wheel loaders, etc.
Construction Equipment -
Machinery 9,852 4,100 (-) 640 14,592 592
Corp. [281]
Jiangsu, China
*2
Komatsu Construction, Manufacturing of hydraulic
Shantui Mining and Utility excavators
Construction Equipment -
Machinery 1,901 3,186 (-) 120 5,207 841
Co., Ltd. [292]
Shandong,
China *2
Komatsu Construction, Manufacturing of construction
Undercarriage Mining and Utility and mining equipment -
China Corp. Equipment components 1,516 4,718 (-) 35 6,269 579
Shandong, [94]
China *2
Komatsu Construction, Manufacturing of hydraulic
(Shandong) Mining and Utility excavators, hydraulic
Construction Equipment equipment, steel castings, -
Machinery final drives, etc. 4,436 7,953 (-) 4,153 16,542 763
Corp. [470]
Shandong,
China *2
PT Komatsu Construction, Manufacturing of hydraulic
Indonesia Mining and Utility excavators, bulldozers and 3,088
3,005 2,935 399 9,427 1,039
Jakarta, Equipment dump trucks, etc. (258)
Indonesia
34
Name and Operating segment Facilities & equipment Book value (Millions of yen) Number of
location Buildings Machinery Land Others Total employees
and (Thousand
vehicles square
meters)
PT Komatsu Construction, Manufacturing of construction
Undercarriage Mining and Utility and mining equipment
478
Indonesia Equipment components 766 2,299 314 3,857 740
(45)
Bekasi,
Indonesia
Bangkok Construction, Manufacturing of hydraulic
Komatsu Co., Mining and Utility excavators, etc.
1,193
Ltd. Equipment 1,170 1,227 91 3,681 882
(150)
Chonburi,
Thailand
Komatsu India Construction, Manufacturing of dump
-
Pvt. Ltd Mining and Utility trucks, etc.
636 505 (-) 45 1,186 212
Kanchpuram, Equipment
[240]
India *2
*2 These companies rent the land for their operation. The figures in square brackets in the “Land” represent areas of rented land, which are not included in the figures
immediately above.
Note: The amount of “Others” is the total of tools, furniture and fixtures and construction in progress. These amounts in the above table don’t include consumption
taxes, etc.
3. Plans for Capital Investment, Disposal of Property, Plants and Equipment, etc.
(1) Capital investment
Komatsu has not decided any detail plans of capital investment for individual projects at the end of fiscal year ended March 31, 2014, because
Komatsu operates its various types of business all over the world. Therefore, Komatsu discloses capital investment amounts by operating segment.
Komatsu plans to make capital investments of ¥178,000 million in the fiscal year ending March 31, 2015(figures based on property, plants and
equipment acquired; amounts do not include consumption taxes, etc.), and the principal investment objectives and the sources of funding by
operating segment are set forth in the table below.
Operating segment Approximate expected capital Principal investment detail and objectives Sources of funding
investment amount in the fiscal year
ending March 31, 2015
(Millions of yen)
Construction, Mining To enhance production efficiency and Funds on hand, bank
and Utility 173,000 flexibility, to decrease electric power use and to borrowings, etc.
Equipment enhance its rental-to-used equipment business
Industrial Machinery To renew obsolete equipment Funds on hand, bank
5,000
and Others borrowings, etc.
Total 178,000
Notes:
1) Capital investment amounts do not include consumption taxes, etc.
2) An outline of capital investment plan for each segment is as follows:
With respect to the Construction, Mining and Utility Equipment operating segment, Komatsu plans to make capital investments to enhance
production efficiency and flexibility and to decrease electric power use in its production bases in Japan, in addition, to enhance its rental-to-used
equipment business.
With respect to the Industrial Machinery and Others operating segment, Komatsu plans to make capital investments to renew obsolete equipment.
35
Item 4. Information on the Company
1. Information on the Company’s Share, etc.
(1) Total number of shares, etc.
(i) Total number of shares
Class Total number of shares authorized to be issued (Shares)
Common shares 3,955,000,000
Total 3,955,000,000
36
(2) Stock acquisition rights, etc.
Stock Acquisition Rights issued for the Directors of the Company as remuneration in accordance with the Companies Act of Japan are as follows:
(i) Resolution at the Ordinary General Meeting of Shareholders on June 23, 2006 and the meeting of the Board of Directors on July 11, 2006.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 187 *1 171 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
187,000 *2 171,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥2,325 per share *3 Same as left *3
Acquisition Rights
From August 1, 2007
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2014
Share issue price and additional paid-in capital Issue price ¥2,325
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥1,163
1) After a holder of Stock Acquisition Rights
(hereinafter “Holder”) loses his or her position
at the time such rights were granted, which is
Director of the Company, the Holder may
exercise his or her Stock Acquisition Rights
pursuant to the conditions stipulated in the
Conditions for exercising the Stock Acquisition
contract(s) to be executed by and between the Same as left
Rights
Company and the Holder (hereinafter “the Stock
Acquisition Rights Contract(s)”).
2) In the event that the Holder dies, his or her
heir may exercise his or her Stock Acquisition
Rights pursuant to the conditions stipulated in
the Stock Acquisition Rights Contract(s).
Acquisition of the Stock Acquisition Rights by
Transfer of Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Fractions of less than one share resulting
from the foregoing adjustment shall be rounded down.
37
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock, or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock .
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as the “Number of the
Company’s shares in treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of common stock of the Company, or pays dividends in the form of shares of another
company to the holders of common stock of the Company, and if, there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company, or an exchange or transfer of shares (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”), in accordance with the conditions set forth below. In this
event, the Remaining Stock Acquisition Rights shall become null and void and the Reorganized Company shall issue new Stock Acquisition
Rights. However, the new Stock Acquisition Rights shall be granted, only if provisions for granting them in accordance with the following
conditions are included as conditions in a merger agreement (in which the Company is merged into a Reorganized Company or a Reorganized
Company is established as the result of the merger), a corporate split agreement (in which a division of the Company is merged into a
Reorganized Company), a plan for a corporate split (in which a division of the Company is spun off to establish a Reorganized Company), a
38
share exchange agreement, or a plan for transfer of shares (in both of which the Company becomes a fully-owned subsidiary of a Reorganized
Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
39
(ii) Resolution at the Ordinary General Meeting of Shareholders on June 22, 2007 and the meeting of the Board of Directors on July 10, 2007.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 181 *1 181 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
181,000 *2 181,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥3,661 per share *3 Same as left *3
Acquisition Rights
From September 3, 2008
Period for exercising Stock Acquisition Rights Same as left
to August 31, 2015
Share issue price and additional paid-in capital Issue price ¥3,661
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥1,831
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 22, 2007 for other reasons than the aforementioned, the Company shall properly adjust the number of
40
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
Exercise price 1
after adjustment
= Exercise price X
before adjustment Ratio of stock split (or stock consolidation)
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock, or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock.
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as the “Number of the
Company’s treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of the common stock of the Company, pays dividends in the form of shares of another
company to the holders of the common stock of the Company, and if, there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
41
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
42
(iii) Resolution at the meeting of the Board of Directors on July 15, 2008.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 144 *1 144 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
144,000 *2 144,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥2,499 per share *3 Same as left *3
Acquisition Rights
From September 1, 2009
Period for exercising Stock Acquisition Rights Same as left
to August 31, 2016
Share issue price and additional paid-in capital Issue price ¥2,499
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥1,250
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after July 15, 2008 for other reasons than the aforementioned, the Company shall properly adjust the number of
43
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock, or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock.
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as the “Number of the
Company’s treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of the common stock of the Company, or pays dividends in the form of shares of another stock
company to the holders of the common stock of the Company, and if, there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
44
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
45
(iv) Resolution at the meeting of the Board of Directors on July 14, 2009.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 124 *1 124 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
124,000 *2 124,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1,729 per share *3 Same as left *3
Acquisition Rights
From September 1, 2010
Period for exercising Stock Acquisition Rights Same as left
to August 31, 2017
Share issue price and additional paid-in capital Issue price ¥1,729
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥865
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after July 14, 2009 for other reasons than the aforementioned, the Company shall properly adjust the number of
46
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock, or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock.
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as the “Number of the
Company’s treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of the common stock of the Company, or pays dividends in the form of shares of another stock
company to the holders of the common stock of the Company, and if, there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as condition in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
47
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
48
(v) Resolution at the Ordinary General Meeting of Shareholders on June 23, 2010 and the meeting of the Board of Directors on July 13, 2010.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 64 *1 64 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
6,400 *2 6,400 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 2, 2013
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2018
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after July 13, 2010 for other reasons than the aforementioned, the Company shall properly adjust the number of
49
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
50
(vi) Resolution at the meeting of the Board of Directors on July 13, 2011.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 872 *1 872 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
87,200 *2 87,200 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 1, 2014
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2019
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after July 13, 2011 for other reasons than the aforementioned, the Company shall properly adjust the number of
51
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
52
(vii) Resolution at the meeting of the Board of Directors on July 12, 2012.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 843 *1 843 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
84,300 *2 84,300 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 1, 2015
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2020
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after July 12, 2012 for other reasons than the aforementioned, the Company shall properly adjust the number of
53
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
54
(viii) Resolution at the meeting of the Board of Directors on July 17, 2013.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 561 *1 561 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
56,100 *2 56,100 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 1, 2016
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2021
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after July 17, 2013 for other reasons than the aforementioned, the Company shall properly adjust the number of
55
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
56
Stock Acquisition Rights issued without consideration for certain employees of the Company, etc., in accordance with the Companies Act of Japan
are as follows:
(i) Resolution at the Ordinary General Meeting of Shareholders on June 23, 2006 and the meeting of the Board of Directors on July 11, 2006.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 283 *1 283 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
283,000 *2 283,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥2,325 per share *3 Same as left *3
Acquisition Rights
From August 1, 2007
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2014
Share issue price and additional paid-in capital Issue price ¥2,325
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥1,163
1) After a holder of Stock Acquisition Rights
(hereinafter “Holder”) loses his or her position
at the time such rights were granted, which is
Director of the Company, the Holder may
exercise his or her Stock Acquisition Rights
pursuant to the conditions stipulated in the
Conditions for exercising the Stock Acquisition
contract(s) to be executed by and between the Same as left
Rights
Company and the Holder (hereinafter “the Stock
Acquisition Rights Contract(s)”).
2) In the event that the Holder dies, his or her
heir may exercise his or her Stock Acquisition
Rights pursuant to the conditions stipulated in
the Stock Acquisition Rights Contract(s).
Acquisition of the Stock Acquisition Rights by
Transfer of Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Fractions of less than one share resulting
from the foregoing adjustment shall be rounded down.
57
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock, or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock.
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as the “Number of the
Company’s treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of common stock of the Company, or pays dividends in the form of shares of another
company to the holders of common stock of the Company, and if, there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company, or an exchange or transfer of shares (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”), in accordance with the conditions set forth below. In this
event, the Remaining Stock Acquisition Rights shall become null and void and the Reorganized Company shall issue new Stock Acquisition
Rights. However, the new Stock Acquisition Rights shall be granted, only if provisions for granting them in accordance with the following
conditions are included as conditions in a merger agreement (in which the Company is merged into a Reorganized Company or a Reorganized
Company is established as the result of the merger), a corporate split agreement (in which a division of the Company is merged into a
Reorganized Company), a plan for a corporate split (in which a division of the Company is spun off to establish a Reorganized Company), a
58
share exchange agreement, or a plan for transfer of shares (in both of which the Company becomes a fully-owned subsidiary of a Reorganized
Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
59
(ii) Resolution at the Ordinary General Meeting of Shareholders on June 22, 2007 and the meeting of the Board of Directors on July 10, 2007.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 253 *1 253 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
253,000 *2 253,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥3,661 per share *3 Same as left *3
Acquisition Rights
From September 1, 2008
Period for exercising Stock Acquisition Rights Same as left
to August 31, 2015
Share issue price and additional paid-in capital Issue price ¥3,661
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥1,831
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 22, 2007 for other reasons than the aforementioned, the Company shall properly adjust the number of
60
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock , or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock.
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as the “Number of the
Company’s treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of the common stock of the Company, or pays dividends in the form of shares of another
company to the holders of the common stock of the Company, and if, , there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
61
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
62
(iii) Resolution at the Ordinary General Meeting of Shareholders on June 24, 2008 and the meeting of the Board of Directors on July 15, 2008.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 206 *1 206 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
206,000 *2 206,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥2,499 per share *3 Same as left *3
Acquisition Rights
From September 1, 2009
Period for exercising Stock Acquisition Rights Same as left
to August 31, 2016
Share issue price and additional paid-in capital Issue price ¥2,499
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥1,250
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 24, 2008 for other reasons than the aforementioned, the Company shall properly adjust the number of
63
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
Exercise price 1
after adjustment
= Exercise price
before adjustment X
Ratio of stock split (or stock consolidation)
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock, or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock.
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as the “Number of the
Company’s treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of the common stock of the Company, or pays dividends in the form of shares of another stock
company to the holders of the common stock of the Company, and if, there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
64
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
65
(iv) Resolution at the Ordinary General Meeting of Shareholders on June 24, 2009 and the meeting of the Board of Directors on July 14, 2009.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 246 *1 204 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
246,000 *2 204,000 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1,729 per share *3 Same as left *3
Acquisition Rights
From September 1, 2010
Period for exercising Stock Acquisition Rights Same as left
to August 31, 2017
Share issue price and additional paid-in capital Issue price ¥1,729
per share in the event of issuance of shares Additional paid-in capital per share *4 Same as left *4
upon exercise of Stock Acquisition Rights ¥865
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *5 *5
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 1,000 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 24, 2009 for other reasons than the aforementioned, the Company shall properly adjust the number of
66
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. Adjustment of the paid-in amount for each share to be granted upon exercise of the Stock Acquisition Rights (this paid-in amount is the
“Exercise Price”)
(1) If the Company effects a stock split or stock consolidation after the allotment date of the Stock Acquisition Rights, the Exercise Price
shall be adjusted in accordance with the following formula, with fractions of less than one yen resulting from the adjustment being
rounded up to a whole yen.
Exercise price 1
after adjustment
= Exercise price
before adjustment
X
Ratio of stock split (or stock consolidation)
(2) After the allotment date of the Stock Acquisition Rights, if the Company issues new common stock or disposes of the Company’s
common stock in treasury at a price below the market price, the Exercise Price shall be adjusted in accordance with the following
formula, with fractions of less than one yen being rounded up to a whole yen. However, this shall not apply to the cases of acquisition or
exercise of (i) securities that are acquired or made to be acquired in exchange of grants of the Company’s common stock, or (ii) Stock
Acquisition Rights (including Stock Acquisition Rights attached to corporate bonds with stock acquisition rights) that can claim grants
of the Company’s common stock.
Number of newly Paid-in amount per
Number of X
issued shares share
currently issued
shares
+
Market Price
Exercise price Exercise price
after adjustment = before adjustment X
Number of currently issued shares + Number of newly issued shares
In addition, the “Number of currently issued shares” in the formula above shall exclude the number of the Company’s treasury stock,
and when disposing of the Company’s treasury stock, the term “Number of newly issued shares” shall be read as “Number of the
Company’s treasury stock for disposal.”
(3) After the allotment date of the Stock Acquisition Rights, if the Company allots shares of the Company of a class other than the common
stock without consideration to the holders of the common stock of the Company, or pays dividends in the form of shares of another stock
company to the holders of the common stock of the Company, and if, there is a need to adjust the Exercise Price when all factors in the
situation are taken into consideration, the Company shall properly adjust the Exercise Price to the extent reasonable.
4. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
5. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
67
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
the Exercise Price after adjustment, which is adjusted after taking into consideration the conditions and other factors concerning the
Restructuring Actions, by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
68
(v) Resolution at the Ordinary General Meeting of Shareholders on June 23, 2010 and the meeting of the Board of Directors on July 13, 2010.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 374 *1 374 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
37,400 *2 37,400 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 2, 2013
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2018
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 23, 2010 for other reasons than the aforementioned, the Company shall properly adjust the number of
69
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company) a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares(in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
70
(vi) Resolution at the Ordinary General Meeting of Shareholders on June 22, 2011 and the meeting of the Board of Directors on July 13, 2011.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 2,529 *1 2,529 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
252,900 *2 252,900 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 1, 2014
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2019
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 22, 2011 for other reasons than the aforementioned, the Company shall properly adjust the number of
71
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be the common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
72
(vii) Resolution at the Ordinary General Meeting of Shareholders on June 20, 2012 and the meeting of the Board of Directors on July 12, 2012.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 2,555 *1 2,555 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
255,500 *2 255,500 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 1, 2015
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2020
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 20, 2012 for other reasons than the aforementioned, the Company shall properly adjust the number of
73
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
74
(viii) Resolution at the Ordinary General Meeting of Shareholders on June 19, 2013 and the meeting of the Board of Directors on July 17, 2013.
End of fiscal year: End of month previous to the filing month:
March 31, 2014 May 31, 2014
Number of Stock Acquisition Rights (Units) 2,358 *1 2,358 *1
Number of own share options, including
- -
number of Stock Acquisition Rights (Units)
Class of shares subject to Stock Acquisition
Common stock Same as left
Rights
Number of shares subject to Stock Acquisition
235,800 *2 235,800 *2
Rights (Shares)
Amount to be paid in to exercise Stock
¥1 per share Same as left
Acquisition Rights
From August 1, 2016
Period for exercising Stock Acquisition Rights Same as left
to July 31, 2021
Share issue price and additional paid-in capital Issue price ¥1
per share in the event of issuance of shares Additional paid-in capital per share *3 Same as left *3
upon exercise of Stock Acquisition Rights ¥1
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member,
or employee of the Company, or Director, Audit
& Supervisory Board Member, or employee of a
subsidiary or affiliate of the Company, loses all
their respective status set above, that person is
Conditions for exercising the Stock Acquisition able to exercise the Stock Acquisition Rights
Same as left
Rights only within three(3) year period from the date
they lost such position, and other terms and
conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the
contracts to be executed by and between the
Company and the holders of the Stock
Acquisition Rights.
Acquisition of the Stock Acquisition Rights by
Transfer of the Stock Acquisition Rights transfer shall be required to be approved by the Same as left
resolution of the Company’s Board of Directors.
Matters relating to subrogation payment - -
Matters relating to grants of Stock Acquisition
Rights in association with organizational *4 *4
restructuring actions
The Stock Acquisition Rights do not contain the
Provisions pertaining to acquisition of Stock
provisions pertaining to the acquisition of the Same as left
Acquisition Rights
Stock Acquisition Rights.
Notes:
1. The number of shares subject to one Stock Acquisition Right shall be 100 shares.
2. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 19, 2013 for other reasons than the aforementioned, the Company shall properly adjust the number of
75
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
3. If the Stock Acquisition Rights are exercised, new shares shall not be issued, but treasury stock shall be allotted.
4. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The class of shares subject to the Stock Acquisition Rights shall be common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 2. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
76
(3) Exercises, etc., of moving strike convertible bonds, etc.
Not applicable.
77
(7) Major shareholders
Number of
Shareholding
shares held
Name Address ratio
(Thousands of -
(%)
shares)
Japan Trustee Services Bank, Ltd. (Trust Account) 1-8-11, Harumi, Chuo-ku, Tokyo, Japan 38,014 3.86
2-11-3, Hamamatsuchou, Minato-ku, Tokyo,
The Master Trust Bank of Japan, Ltd. (Trust Account) 36,118 3.67
Japan
Taiyo Life Insurance Company 1-2-3, Kaigan, Minato-ku, Tokyo, Japan 34,000 3.45
Nippon Life Insurance Company 1-6-6, Marunouchi, Chiyoda-ku, Tokyo, Japan 29,954 3.04
State Street Bank and Trust Company P.O.BOX 351, BOSTON, MASSACHUSETTS
(Standing proxy: Mizuho Bank, Ltd., Settlement & 02101, U.S.A. 18,519 1.88
Clearing Services Division) (4-16-13, Tsukishima, Chuo-ku, Tokyo, Japan)
Sumitomo Mitsui Banking Corporation 1-1-2, Marunouchi, Chiyoda-ku, Tokyo, Japan 17,835 1.81
The Bank of New York Mellon as Depositary Bank for
ONE WALL STREET, NEW YORK, NY 10286,
Depositary Receipt Holders
U.S.A. 16,112 1.63
(Standing proxy: Sumitomo Mitsui Banking
(1-2-3, Otemachi, Chiyoda-ku, Tokyo, Japan)
Corporation)
JP Morgan Chase Bank 380072 25 BANK STREET, CANARY WHARF,
(Standing proxy: Mizuho Bank, Ltd., Settlement & LONDON, E14 5JP, UNITED KINGDOM 12,797 1.30
Clearing Services Division) (4-16-13, Tsukishima, Chuo-ku, Tokyo, Japan)
The Bank of New York Mellon SA/NV 10 RUE MONTOYERSTRAAT 46, 1000
(Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, BRUSSELS, BELGIUM 12,429 1.26
Ltd.) (2-7-1, Marunouchi, Chiyoda-ku, Tokyo, Japan)
The Chase Manhattan Bank, N.A. London Secs
WOOLGATE HOUSE, COLEMAN STREET
Lending Omnibus Account
LONDON EC2P 2HD, ENGLAND 12,142 1.23
(Standing proxy: Mizuho Bank, Ltd., Settlement &
(4-16-13, Tsukishima, Chuo-ku, Tokyo, Japan)
Clearing Services Division)
Total – 227,924 23.18
Notes:
1) The figures of “Shareholding ratio (%)” in the above table are rounded down to the second decimal place.
2) 29,377,000 shares (2.98% of the total number of shares issued) of treasury stock held by the Company are excluded from the list above.
3) All shares held by Japan Trustee Services Bank, Ltd. and The Master Trust Bank of Japan, Ltd. are held through trusts.
4) The Bank of New York Mellon as Depositary Bank for Depositary Receipt Holders is a registered shareholder of The Bank of New Mellon, the
depositary of the Company’s American Depositary Receipts.
5) The Company received a copy of Change Report No.1 pertaining to Report of Possession of Large Volume relating to the Company’s share
filed in the joint names of Sumitomo Mitsui Trust Bank, Limited and two joint holders at the date of July 4, 2013 under the Financial
Instruments and Exchange Act of Japan. However, the description in the table above is as the same with that in the shareholders’ list of the
Company and does not reflect the information in the Change Report, because the Company currently is not able to confirm the actual state of
shareholdings as of March 31, 2014. The major content of the Change Report is as follows:
Name, address and number of shares held (As of June 28, 2013)
Number of Shareholding
Name Address shares held ratio
(shares) (%)
Sumitomo Mitsui Trust Bank, Limited 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan 29,155,400 2.97
Sumitomo Mitsui Trust Asset Management Co., Ltd. 3-33-1, Shiba, Minato-ku, Tokyo, Japan 2,238,300 0.23
Nikko Asset Management Co., Ltd. 9-7-1, Akasaka, Minato-ku, Tokyo, Japan 6,321,700 0.64
Total - 37,715,400 3.84
6) The Company received a copy of the Report of Possession of Large Volume relating to the Company’s shares filed in the joint names of Walter
Scott & Partners Limited and three joint holders at the date of July 12, 2013 under the Financial Instruments and Exchange Act of Japan.
78
However, the description in the table above is as the same with that in the shareholders’ list of the Company and does not reflect the
information in the Report, because the Company currently is not able to confirm the actual state of shareholdings as of March 31, 2014. The
major content of the report is as follows:
The Dreyfus Corporation 200 Park Avenue, New York, NY 10166, USA 3,604,488 0.37
The Bank of New York Mellon One Wall Street, New York, New York, USA 1,379,166 0.14
Total - 53,978,041 5.49
79
(ii) Treasury stock, etc.
(As of March 31, 2014)
Number of shares Number of shares Ownership percentage
Total shares
Name of shareholders, address held under own held under the names to the total number of
held (Shares)
name (Shares) of others (Shares) issued shares (%)
The Company
29,377,300 - 29,377,300 2.98
2-3-6, Akasaka, Minato-ku, Tokyo, Japan
KOMATSU DOUTOU LTD.
1-3-4, Nishinijuyonjokita, Obihiro City, Hokkaido, 300,000 - 300,000 0.03
Japan
KOMATSU TOCHIGI LTD. *1
38-12, Hiradekougyodanchi, Utsunomiya City, 287,000 7,100 294,100 0.02
Tochigi, Japan
KOMATSU YAMAGATA LTD. *1
192, Machiura, Zaonarisawa, Yamagata City, 248,400 3,700 252,100 0.02
Yamagata, Japan
KOMATSU AKITA LTD. *1
- 72,100 72,100 0.00
9-48, Kawashiiriokawamachi, Akita City, Akita, Japan
KOMATSU AWAJI LTD. *1
- 69,200 69,200 0.00
1-1-7, Kuwama, Sumoto City, Hyogo, Japan
TOCHIGI SHEARING LTD. *2
19,400 45,300 64,700 0.00
1-22, Owada, Moka City, Tochigi, Japan
KOMATSU IBARAKI LTD. *1
- 17,700 17,700 0.00
358-1, Yoshizawacho, Mito City, Ibaraki, Japan
KOMATSU SANIN LTD. *1
10,000 7,200 17,200 0.00
1876, Higashitsudacho, Matsue City, Shimane, Japan
HAMAMATSU KOMATSU FORKLIFT LTD.
1-6-15, Sakuradai, Nishi-ku, Hamamatsu City, 6,000 - 6,000 0.00
Shizuoka, Japan
SHIZUOKA KOMATSU FORKLIFT LTD.
1-31-4, Kitamariko, Suruga-ku, Shizuoka City, 3,800 - 3,800 0.00
Shizuoka, Japan
OITA KOMATSU FORKLIFT LTD.
3,000 - 3,000 0.00
4-2-12, Toyomi, Oita City, Oita, Japan
KOMATSU MIYAZAKI LTD. *1
2957-12, Shimonaka, Sadowaracho, Miyazaki City, - 1,800 1,800 0.00
Miyazaki, Japan
YAMAGATA KOMATSU FORKLIFT LTD.
300 - 300 0.00
1-2-1, Ryutsu-Center, Yamagata City, Yamagata, Japan
Total 30,255,200 224,100 30,479,300 3.10
Notes:
1) A registered shareholder described in “Number of shares held under the names of others” in the above table is Komatsu Dealers’ Shareholding
Association (5, Higashiougishima, Kawasaki-ku, Kawasaki City, Kanagawa, Japan).
2) A registered shareholder described in “Number of shares held under the names of others” in the above table is Komatsu Suppliers’
Shareholding Association (2-3-6, Akasaka, Minato-ku, Tokyo, Japan).
3) The figures of “Ownership percentage to the total number of issued shares” for each shareholder are rounded down to the second decimal place.
Accordingly, the sum of the amounts indicated in each row does not necessarily add up to the figure provided as “Total.”
80
(9) Stock option plans
The Company issues Stock Acquisition Rights under the stock option plans.
(i) The plans to issue Stock Acquisition Rights for the Directors of the Company as remuneration in accordance with the Companies Act of Japan
Resolution at the Ordinary General Meeting of Shareholders on June 23, 2006 and the meeting of the Board of Directors on July 11, 2006.
Ordinary General Meeting of Shareholders June 23, 2006
Date of resolution
Meeting of the Board of Directors July 11, 2006
Individuals covered by the plan Directors of the Company: 10
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 331,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with organizational
See (2) Stock acquisition rights, etc.
restructuring actions
Resolution at the Ordinary General Meeting of Shareholders on June 22, 2007 and the meeting of the Board of Directors on July 10, 2007.
Ordinary General Meeting of Shareholders June 22, 2007
Date of resolution
Meeting of the Board of Directors July 10, 2007
Individuals covered by the plan Directors of the Company: 10
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 239,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with organizational
See (2) Stock acquisition rights, etc.
restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
81
Resolution at the meeting of the Board of Directors on July 14, 2009.
Date of resolution July 14, 2009
Individuals covered by the plan Directors of the Company: 10
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 239,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with organizational
See (2) Stock acquisition rights, etc.
restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
Resolution at the Ordinary General Meeting of Shareholders on June 23, 2010 and the meeting of the Board of Directors on July 13, 2010.
Ordinary General Meeting of Shareholders June 23, 2010
Date of resolution
Meeting of the Board of Directors July 13, 2010
Individuals covered by the plan Directors of the Company: 10
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 21,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with organizational
See (2) Stock acquisition rights, etc.
restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
82
Resolution at the meeting of the Board of Directors on July 12, 2012.
Date of resolution July 12, 2012
Individuals covered by the plan Directors of the Company: 10
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 84,300
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with organizational
See (2) Stock acquisition rights, etc.
restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
(ii) The plans to issue Stock Acquisition Rights without consideration for certain employees of the Company and directors of major subsidiaries of
the Company in accordance with the Companies Act of Japan
Resolution at the Ordinary General Meeting of Shareholders on June 23, 2006 and the meeting of the Board of Directors on July 11, 2006.
Ordinary General Meeting of Shareholders June 23, 2006
Date of resolution
Meeting of the Board of Directors July 11, 2006
Certain employees of the Company: 40
Individuals covered by the plan Directors of major subsidiaries of the Company: 15
Total: 55
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 497,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
83
Resolution at the Ordinary General Meeting of Shareholders on June 22, 2007 and the meeting of the Board of Directors on July 10, 2007.
Ordinary General Meeting of Shareholders June 22, 2007
Date of resolution
Meeting of the Board of Directors July 10, 2007
Certain employees of the Company: 39
Individuals covered by the plan Directors of major subsidiaries of the Company: 15
Total: 54
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 323,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
Resolution at the Ordinary General Meeting of Shareholders on June 24, 2008 and the meeting of the Board of Directors on July 15, 2008.
Ordinary General Meeting of Shareholders June 24, 2008
Date of resolution
Meeting of the Board of Directors July 15, 2008
Certain employees of the Company: 46
Individuals covered by the plan Directors of major subsidiaries of the Company: 16
Total: 62
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 271,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
Resolution at the Ordinary General Meeting of Shareholders on June 24, 2009 and the meeting of the Board of Directors on July 14, 2009.
Ordinary General Meeting of Shareholders June 24, 2009
Date of resolution
Meeting of the Board of Directors July 14, 2009
Certain employees of the Company: 54
Individuals covered by the plan Directors of major subsidiaries of the Company: 11
Total: 65
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 403,000
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
84
Resolution at the Ordinary General Meeting of Shareholders on June 23, 2010 and the meeting of the Board of Directors on July 13, 2010.
Ordinary General Meeting of Shareholders June 23, 2010
Date of resolution
Meeting of the Board of Directors July 13, 2010
Certain employees of the Company: 50
Individuals covered by the plan Directors of major subsidiaries of the Company: 12
Total: 62
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 55,800
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
Resolution at the Ordinary General Meeting of Shareholders on June 22, 2011 and the meeting of the Board of Directors on July 13, 2011.
Ordinary General Meeting of Shareholders June 22, 2011
Date of resolution
Meeting of the Board of Directors July 13, 2011
Certain employees of the Company: 65
Individuals covered by the plan Directors of major subsidiaries of the Company: 12
Total: 77
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 252,900
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
Resolution at the Ordinary General Meeting of Shareholders on June 20, 2012 and the meeting of the Board of Directors on July 12, 2012.
Ordinary General Meeting of Shareholders June 20, 2012
Date of resolution
Meeting of the Board of Directors July 12, 2012
Certain employees of the Company: 74
Individuals covered by the plan Directors of major subsidiaries of the Company: 13
Total: 87
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 255,500
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
85
Resolution at the Ordinary General Meeting of Shareholders on June 19, 2013 and the meeting of the Board of Directors on July 17, 2013.
Ordinary General Meeting of Shareholders June 19, 2013
Date of resolution
Meeting of the Board of Directors July 17, 2013
Certain employees of the Company: 71
Individuals covered by the plan Directors of major subsidiaries of the Company: 15
Total: 86
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 235,800
Amount to be paid in to exercise Stock Acquisition Rights See (2) Stock acquisition rights, etc.
Period for exercising Stock Acquisition Rights Same as above
Conditions for exercising Stock Acquisition Rights * Same as above
Transfer of Stock Acquisition Rights Same as above
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
See (2) Stock acquisition rights, etc.
organizational restructuring actions
Note: Other terms and conditions for the exercising the Stock Acquisition Rights are contracted between the Company and the individuals who are
allotted the Stock Acquisition Rights.
Proposed to be resolved at the Ordinary General Meeting of Shareholders on June 18, 2014.
Date of resolution June 18, 2014
Certain employees of the Company, directors of major
subsidiaries of the Company.
Individuals covered by the plan Individuals’ coverage will be resolved at the meeting of
the Board of Directors held after the Ordinary General
Meeting of Shareholders on June 18, 2014.
Class of shares subject to Stock Acquisition Rights Common stock
Number of shares 217,800 Maximum *1
Amount to be paid in to exercise Stock Acquisition Rights ¥ 1 per share
Period for exercising Stock Acquisition Rights From August 1, 2017 to July 31, 2022
If a holder of Stock Acquisition Rights who is a
Director, Audit & Supervisory Board Member, or
employee of the Company, or Director, Audit &
Supervisory Board Member, or employee of a
subsidiary or an affiliate of the Company, loses all his
or her respective status set above, that person is able to
exercise the Stock Acquisition Rights only within
Conditions for exercising Stock Acquisition Rights
three(3) year period from the date he or she lost his or
her position; provided, however, that the period shall
not exceed the original exercise period for the Stock
Acquisition Rights described above, and other terms
and conditions concerning the exercise of Stock
Acquisition Rights shall be decided at the Board of
Directors of the Company.
Acquisition of the Stock Acquisition Rights by transfer
Transfer of Stock Acquisition Rights shall be required to be approved by the resolution of the
Board of Directors.
Matters relating to subrogation payment -
Matters relating to grants of Stock Acquisition Rights in association with
*2
organizational restructuring actions
Notes:
1. If the Company effects a stock split of its common stock (including allotment of its common stock to shareholders without consideration; the
same applies hereinafter) or effects a stock consolidation, the number of shares granted subject to one Stock Acquisition Right shall be adjusted
proportionately, in accordance with the ratio of the stock split or the stock consolidation in question. Also, if it is necessary to adjust the
number of shares granted after June 18, 2014 for other reasons than the aforementioned, the Company shall properly adjust the number of
86
shares granted in connection with the aforementioned Stock Acquisition Rights to the extent reasonable. Fractions of less than one share
resulting from the foregoing adjustment shall be rounded down.
2. Policy for decision on extinguishment of Stock Acquisition Rights in organizational restructuring and details of granting Stock Acquisition
Rights of reorganized company
In the event where the Company engages in any merger (limited to a case where the Company ceases to exist as a result of the merger), a
corporate split in which a division of the Company is merged into an existing company, a corporate split in which a division of the Company is
spun off to establish a new company (for both, limited to cases where the Company is split up), or an exchange or transfer of shares (for both,
limited to cases where the Company becomes a wholly-owned subsidiary) (collectively “Restructuring Actions”), each person holding the
remaining Stock Acquisition Rights at the time the Restructuring Actions take effect (hereinafter “Remaining Stock Acquisition Rights”) shall
respectively be granted the Stock Acquisition Rights of the relevant stock companies set forth in Article 236, Paragraph 1, Item 8 (a) through
(e) inclusive of the Companies Act of Japan (hereinafter “Reorganized Company”). In this event, the Remaining Stock Acquisition Rights shall
become null and void and the Reorganized Company shall issue new Stock Acquisition Rights. However, the new Stock Acquisition Rights
shall be granted, only if provisions for granting them in accordance with the following items are included as conditions in a merger agreement
(in which the Company is merged into a Reorganized Company or a Reorganized Company is established as the result of the merger), a
corporate split agreement (in which a division of the Company is merged into a Reorganized Company), a plan for a corporate split (in which a
division of the Company is spun off to establish a Reorganized Company), a share exchange agreement, or a plan for transfer of shares (in both
of which the Company becomes a fully-owned subsidiary of a Reorganized Company).
(1) Number of the Stock Acquisition Rights of a Reorganized Company to be granted
At the time the Restructuring Actions take effect, each holder of the Remaining Stock Acquisition Rights shall be granted an identical
number of the Stock Acquisition Rights of the Reorganized Company.
(2) Class of shares of the Reorganized Company subject to the Stock Acquisition Rights
The Class of shares subject to the Stock Acquisition Rights shall be common stock of the Reorganized Company.
(3) Number of shares of the Reorganized Company subject to the Stock Acquisition Rights
The number of shares shall be determined in accordance with Note 1. above, after taking into consideration the conditions or other
factors concerning the Restructuring Actions.
(4) Amount of assets to be paid upon the exercise of the Stock Acquisition Rights
The amount of assets to be paid upon exercise of newly granted Stock Acquisition Rights shall be the amount obtained by multiplying
¥1 per share by the number of shares to be issued for each acquisition right as determined in (3) above.
(5) Exercise period for the Stock Acquisition Rights
The exercise period shall begin on either the first date of the exercise period for the Stock Acquisition Rights stipulated in the table
above, or the date that the Restructuring Actions take effect, whichever comes later, and shall continue to the expiration date of the
exercise period for the Stock Acquisition Rights stipulated in the table above.
(6) Increase in paid-in capital and capital surplus in the event of the issuance of shares upon exercise of the Stock Acquisition Rights
(i) The amount of paid-in capital increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be 1/2 of the maximum amount of capital increase, calculated in accordance with Article 17, Paragraph 1 of Corporate
Accounting Regulations of Japan. Fractions less than one yen resulting from the calculation shall be rounded up to a whole yen.
(ii) The amount of capital surplus increase in the event of the issuance of shares upon exercise of the Stock Acquisition Rights shall
be the amount obtained by subtracting the amount of the paid-in capital increase from the maximum amount of the capital
increase, as described in (i) above.
(7) Restriction on acquisition of the Stock Acquisition Rights by transfer
Acquisition of the Stock Acquisition Rights by transfer shall be required to be approved by the Reorganized Company.
(8) Provisions pertaining to acquisition of the Stock Acquisition Rights
The Stock Acquisition Rights do not contain the provisions pertaining to the acquisition of the Stock Acquisition Rights.
87
2. Acquisitions, etc. of Treasury Stock
Classes of shares, etc.
Acquisition of common shares by demand for purchase of shares less than one unit, which falls under Article 155, Item 7 of the Companies Act of
Japan
(1) Acquisitions by a resolution of the General Meeting of Shareholders
Not applicable.
(2) Acquisitions by a resolution of the Board of Directors
Not applicable.
(3) Acquisitions not based on a resolution of the General Meeting of Shareholders or the Board of Directors
Acquisition of common shares by demand for purchase of shares less than one unit, which falls under Article 155, Item 7 of the Companies Act of
Japan
Category Number of shares (Shares) Total amount (Yen)
Treasury stock acquired during the fiscal year 13,575 31,059,613
Treasury stock acquired during the current period * 1,247 2,729,227
Note: Treasury stock acquired during the current period does not include shares constituting less than one unit purchased during the period from
June 1, 2014 to the filing date of this Annual Securities Report.
88
3. Dividend Policy
The Company, aiming to increase corporate value, strives to build a structure with financial soundness, the capability of agile response to change and
flexibility. The Company’s dividend policy is to redistribute profits taking into consideration its consolidated business results while striving to
continue providing stable dividend payments. The Company distributes dividends twice a year (i.e., year-end dividends and interim dividends). The
distribution of year-end dividends and interim dividends are to be resolved at the Ordinary General Meeting of Shareholders and the meeting of the
Board of Directors, respectively.
The Company has set the goal of a consolidated dividend payout ratio of 30% or higher. Further, the Company maintains a policy of not decreasing
dividends, as long as the consolidated dividend payout ratio does not surpass 50%. In accordance with such dividend policy, the Company plans to
set the fiscal year-end dividend at ¥29 per share. Annual cash dividends for the fiscal year ended March 31, 2014, including the interim dividend of
¥29 per share, are expected to amount to ¥58 per share.
The Company considers using its retained earnings for expanding its business and enhancing its operating structures by investing actively for its
global operation activities, its development and introduction activities of new products which have technical competitiveness, etc.
The Company can declare an interim dividend once a fiscal year according to its Articles of Incorporation under Article 454, Paragraph 5 of the
Companies Act of Japan.
Dividends for the 145th fiscal year are as follows:
Date of resolution Total dividend amount Dividend amount per share
(Millions of yen) (Yen)
October 28, 2013
27,658 29
Resolution of the meeting of the Board of Directors
June 18, 2014 (planned)
27,658 29
Resolution of the Ordinary General Meeting of Shareholders
Note: These are the year-end dividends of the Company whose record date shall be March 31 of each year. These are proposed to be resolved at the
Ordinary General Meeting of Shareholders of the Company to be held on June 18, 2014.
(2) Highest and lowest share price of each month in the last six months
Month October 2013 November 2013 December 2013 January 2014 February 2014 March 2014
Highest (Yen) 2,454 2,204 2,150 2,179 2,175 2,250
Lowest (Yen) 2,135 2,033 2,001 2,021 1,958 2,002
Note: Share prices in the above table are quoted from the First Section of the Tokyo Stock Exchange.
89
5. Board of Directors and Audit & Supervisory Board Members
(1) The Board of Directors and Audit & Supervisory Board Members of the Company as of June 17, 2014 (As of the filing date of this Annual
Securities Report) are shown as below.
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1969 Joined the Company
Field Testing Department, Technical Division
Jun. 1993 General Manager of Production Control Department,
Technical Division in Construction Equipment Division
Feb. 1995 Plant Manager of Chattanooga Manufacturing Operation,
Komatsu Dresser Company (now Komatsu America Corp.)
(until Feb. 1997)
Mar. 1997 President of Information Systems Division
Jun. 1997 Took office as Director
Chairman of the
Jun. 1999 Resigned as Director, took office as Executive Officer
Board and Kunio
Nov. 17, 1946 Apr. 2000 President of Production Division *4 113
Representative Noji
Director Jun. 2000 Took office as Senior Executive Officer
Jun. 2001 Took office as Managing Director and Senior Executive
Officer
Apr. 2003 Took office as Director and Senior Executive Officer
Apr. 2003 President of Construction & Mining Equipment Marketing
Division
Jun. 2007 Took office as President and Representative Director, and
CEO
Apr. 2013 Took office as Chairman of the Board and Representative
Director (current)
Apr. 1977 Joined the Company
Product Control Section, Planning & Coordination
Department of Awazu Plant
Jun. 1982 Graduate School, Stanford University, USA
(until Jun. 1984)
Oct. 1998 General Manager of Planning & Cooperation Department
of Awazu Plant, Production Division
Oct. 2001 Plant Manager of Moka Plant, Production Division
President and * Jan. 2004 President and COO of Komatsu America Corp. (until Mar.
Representative CEO Tetsuji Mar. 23, 1954 2007) *4 42
Director Ohashi
Apr. 2007 Took office as Executive Officer
Apr. 2007 President of Production Division
Apr. 2008 Took office as Senior Executive Officer
Jun. 2009 Took office as Director and Senior Executive Officer
Apr. 2012 Took office as Director and Senior Executive Officer
Apr. 2013 Took office as President and Representative Director
(current)
Apr. 2013 CEO (current)
Apr. 1977 Joined the Company
Accounting Section, Administration Department of Awazu
Plant
Jul. 1988 Komatsu Australia Pty., Ltd. (until Feb. 1994)
Jun. 2001 General Manager of Corporate Controlling Department
Apr. 2005 Took office as Executive Officer
Apr. 2008 President of Global Retail Finance Business Division and
*
President and Representative Director of Komatsu
Director CFO Mikio Mar. 13, 1955 *4 22
Business Support Ltd.
Fujitsuka
Feb. 2009 General Manager of Corporate Planning Division and
President of Global Retail Finance Business Division
Apr. 2010 Took office as Senior Executive Officer
Apr. 2011 CFO (current)
Jun. 2011 Took office as Director and Senior Executive Officer
Apr. 2013 Took office as Director and Senior Executive Officer
(current)
90
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1977 Joined the Company
Construction Equipment Technical Center of Osaka Plant
Jun. 1982 Brown University, USA (until Jun. 1984)
Apr. 2004 General Manager of Construction Equipment Technical
Center 1, Development Division
* Apr. 2006 Took office as Executive Officer
Director CTO Fujitoshi Dec. 21, 1954 *4 17
Apr. 2010 Took office as Senior Executive Officer
Takamura
Apr. 2010 President of Development Division
Jun. 2011 Took office as Director and Senior Executive Officer
Apr. 2013 Took office as Director and Senior Executive Officer
(current)
Apr. 2014 CTO (current)
Apr. 1978 Joined the Company
Product Control Section, Planning & Coordination
Department of Oyama Plant
Jun. 1981 National Autonomous University of Mexico, Mexico (until
May 1982)
Oct. 1991 General Manager of Istanbul Office, International Division
(until Oct. 1995)
Jul. 1997 Vice President of Komatsu Latin-America Corp.
President of
Construction (until Oct. 2002)
* May 2005 General Manager of The Americas & European Business,
& Mining
Director Hisashi Jul. 16, 1954 Construction & Mining Equipment Marketing Division *4 14
Equipment
Shinozuka Apr. 2007 President and COO of Komatsu America Corp.
Marketing
Division Apr. 2011 Took office with status equivalent to a Senior Executive
Officer
Apr. 2012 Took office as Senior Executive Officer
Apr. 2012 President of Construction Equipment Marketing Division
Jun. 2013 Took office as Director and Senior Executive Officer
(current)
Apr. 2014 President of Construction & Mining Equipment Marketing
Division (current)
Apr. 1980 Joined the Company
Technical Center of Awazu Plant
Jun. 1985 Graduate School, University of California, Los Angeles,
USA (until Jun. 1987)
Apr. 2006 General Manager of Construction Equipment Electronics,
Development Division
Apr. 2007 Took office as Executive Officer
Apr. 2008 President of AHS Business, Construction & Mining
President of * Equipment Marketing Division
Director ICT Solution Kazunori May 23, 1955 *4 11
Apr. 2009 President of IT Construction Business, Construction &
Division Kuromoto
Mining Equipment Marketing Division
Apr. 2012 Took office as Senior Executive Officer
Apr. 2012 President of ICT Business Division
Apr. 2013 President of Global Mining Business Division and
President of ICT Business Division
Jun. 2013 Took office as Director and Senior Executive Officer
(current)
Apr. 2014 President of ICT Solution Division (current)
Apr. 1981 Joined the Company
Labor Section, Human Resources Department
Apr. 2004 General Manager of General Affairs Department, Engines
* & Hydraulics Business Division
Director Masanao Feb. 8, 1958 Apr. 2008 General Manager of Human Resources Department *4 11
Mori Apr. 2009 Took office as Executive Officer
Apr. 2013 Took office as Senior Executive Officer
Jun. 2013 Took office as Director and Senior Executive Officer
(current)
91
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1962 Joined The Sumitomo Bank, Ltd. (now Sumitomo Mitsui
Banking Corporation, hereinafter the “Bank”)
Jun. 1987 Took office as Director of the Bank
Oct. 1990 Took office as Managing Director of the Bank
Oct. 1992 Took office as Senior Managing Director and
Representative Director of the Bank
Jun. 1997 Took office as Deputy President and Representative
Director of the Bank
Nov. 2000 Retired from the Bank
Kensuke Jan. 2001 Took office as Chairman of Morgan Stanley Japan Limited
Director Oct. 12, 1938 *4 1
Hotta Apr. 2006 Took office as Chairman and Representative Director of
Morgan Stanley Japan Securities Co., Ltd. (now Morgan
Stanley MUFG Securities Co., Ltd.)
Oct. 2007 Took office as Chairman and Representative Director of
Hotta Partners Inc. (current)
Dec. 2007 Took office as Senior Advisor of Morgan Stanley Japan
Securities Co., Ltd.
Jun. 2008 Took office as Director of the Company (current)
Dec. 2008 Took office as Chairman and Representative Director of
Greenhill & Co. Japan Ltd. (current)
Oct. 1982 Took office as Professor at Faculty of Engineering, Tokyo
University of Science
Noriaki Jun. 2006 Took office as Professor Emeritus at Tokyo University of
Director Apr. 29, 1940 *4 17
Kano Science (current)
Jun. 2008 Took office as Director of the Company (current)
Apr. 1963 Joined Asahi Breweries, Ltd. (now Asahi Group Holdings,
Ltd.)
Mar. 1996 Took office as Director of Asahi Breweries, Ltd.
Mar. 1997 Took office as Managing Director of Asahi Breweries, Ltd.
Mar. 1999 Took office as Senior Managing Director of Asahi
Breweries, Ltd.
Mar. 2000 Took office as Senior Managing Executive Officer of
Asahi Breweries, Ltd.
Kouichi Mar. 2001 Took office as Senior Managing Director and Senior
Director Apr. 21, 1940 Managing Executive Officer of Asahi Breweries, Ltd. *4 -
Ikeda
Jan. 2002 Took office as President and COO of Asahi Breweries,
Ltd.
Mar. 2006 Took office as Chairman of the Board and CEO of Asahi
Breweries, Ltd.
Mar. 2010 Took office as Corporate Advisor of Asahi Breweries, Ltd.
Jun. 2010 Took office as Director of the Company (current)
Jul. 2011 Took office as Corporate Advisor of Asahi Group
Holdings, Ltd. (current)
Apr. 1977 Joined the Company
Accounting Section, Administration Department of Osaka
Plant
Nov. 1992 PT Komatsu Indonesia (until Oct. 1996)
Jul. 1998 Komatsu Mining Systems, Inc. (until Mar. 2002)
Standing Audit & Apr. 2002 Komatsu America Corp. (until Jan. 2004)
Makoto
Supervisory Jul. 18, 1954 *5 17
Morimoto Apr. 2004 General Manager of Corporate Accounting Department
Board Member
Sep. 2006 General Manager of Corporate Controlling Department
Apr. 2008 General Manager of Internal Audit Department
Jun. 2012 Assistant to Audit & Supervisory Board Member
Jun. 2012 Took office as Standing Audit & Supervisory Board
Member (current)
92
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1977 Joined the Company
Purchasing Controlling Section, Purchasing Department of
Osaka Plant
Aug. 1996 Komatsu America Corp. (until Mar. 1999)
Apr. 1999 General Manager of Planning & Coordination Department
of Osaka Plant, Production Division
Apr. 2002 Plant Manager of Awazu Plant, Production Division
Apr. 2004 Took office as Executive Officer
Standing Audit &
Koji Apr. 2005 President of Industrial Machinery Division and President
Supervisory Jun. 21, 1954 *6 17
Yamada and Representative Director of Komatsu Industries
Board Member
Corporation
Feb. 2009 Representative of All India Operations (until Mar. 2013)
Apr. 2009 President of Komatsu India Pvt. Ltd. (until Mar. 2013)
Apr. 2010 Took office with a status equivalent to Senior Executive
Officer
Apr. 2013 Advisor to President
Jun. 2013 Took office as Standing Audit & Supervisory Board
Member (current)
Apr. 1963 Joined Teijin Limited
Jun. 1994 Took office as Director of Teijin Seiki Co., Ltd. (now
Nabtesco Corporation)
Jun. 1996 Took office as Managing Director of Teijin Seiki Co., Ltd.
Jun. 1998 Took office as President and Representative Director of
Teijin Seiki Co., Ltd.
Jun. 1999 Took office as Director of Teijin Limited
Sep. 2003 Took office as President and Representative Director of
Audit & Nabtesco Corporation
Makoto
Supervisory Dec. 2, 1939 *7 -
Okitsu Jun. 2004 Took office as Director of Teijin Limited
Board Member
Jun. 2005 Took office as Chairman and Representative Director of
Teijin Limited
Jun. 2005 Took office as Chairman and Director of Nabtesco
Corporation
Jun. 2006 Took office as Chairman and Director of Teijin Limited
Jun. 2006 Took office as Audit & Supervisory Board Member of the
Company (current)
Jun. 2008 Took office as Advisor of Teijin Limited (current)
Apr. 1971 Joined the Ministry of Foreign Affairs (hereinafter
“MOFA”)
Audit & Dec. 1978 Retired from MOFA
Hiroyuki
Supervisory Jul. 21, 1945 Apr. 1981 Registered as attorney at law (current) *8 3
Kamano
Board Member Oct. 1988 Partner of the Kamano Sogo Law Offices (current)
Jun. 2007 Took office as Audit & Supervisory Board Member of the
Company (current)
Apr. 1968 Appointed as Prosecutor of Tokyo District Public
Prosecutors Office
Apr. 1988 Took office as Counsellor of Minister’s Secretariat,
Ministry of Justice
May 1998 Took office as Prosecutor of Supreme Public Prosecutors
Office
Audit & Sep. 2003 Took office as Superintending Prosecutor of Tokyo High
Kunihiro
Supervisory Sep. 13, 1942 Public Prosecutors Office *6 -
Matsuo
Board Member Jun. 2004 Took office as Prosecutor-General of Supreme Public
Prosecutors Office
Jun. 2006 Retired from the position of Prosecutor-General of
Supreme Public Prosecutors Office
Sep. 2006 Registered as attorney at law (current)
Jun. 2009 Took office as Audit & Supervisory Board Member of the
Company (current)
Total 289
Notes:
1) Directors Kensuke Hotta, Noriaki Kano and Kouichi Ikeda are Outside Directors.
2) Audit & Supervisory Board Members Makoto Okitsu, Hiroyuki Kamano and Kunihiro Matsuo are Outside Audit & Supervisory Board
Members.
3) The Company introduced an executive officer system in June 1999. As of June 17, 2014, the Company has 38 officers including 6 persons
93
simultaneously holding the position of director. Such persons have been marked with an asterisk above their names in the above table.
4) The term of office of the Directors shall expire at the conclusion of the Ordinary General Meeting of Shareholders for the last business year of
the Company ending within 1 year after the Ordinary General Meeting of Shareholders held on June 19, 2013.
5) The term of office of Audit & Supervisory Board Member Makoto Morimoto shall expire at the conclusion of the Ordinary General Meeting of
Shareholders for the last business year of the Company ending within 4 years after the Ordinary General Meeting of Shareholders held on June
20, 2012.
6) The term of office of Audit & Supervisory Board Members Koji Yamada and Kunihiro Matsuo shall expire at the conclusion of the Ordinary
General Meeting of Shareholders for the last business year ending within 4 years after the Ordinary General Meeting of Shareholders held on
June 19, 2013.
7) The term of office of Audit & Supervisory Board Member Makoto Okitsu shall expire at the conclusion of the Ordinary General Meeting of
Shareholders for the last business year ending within 4 years after the Ordinary General Meeting of Shareholders held on June 23, 2010.
8) The term of office of Audit & Supervisory Board Member Hiroyuki Kamano shall expire at the conclusion of the Ordinary General Meeting of
Shareholders for the last business year ending within 4 years after the Ordinary General Meeting of Shareholders held on June 22, 2011.
9) The names of organizations and subsidiaries, etc., of the Company shown in the “Career summary” above present those at the time.
94
(2) The Board of Directors and Audit & Supervisory Board Members of the Company will be as shown below, when the proposed items of “Election
of ten (10) Directors” and “Election of one (1) Audit & Supervisory Board Member” will be resolved at the Ordinary General Meeting of
Shareholders to be held on June 18, 2014.
The table below also shows the proposed items, including titles and positions, to be resolved at the Board of Directors and Audit & Supervisory
Board of the Company to be held immediately after the Ordinary General Meeting of Shareholders.
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1969 Joined the Company
Field Testing Department, Technical Division
Jun. 1993 General Manager of Production Control Department,
Technical Division in Construction Equipment Division
Feb. 1995 Plant Manager of Chattanooga Manufacturing Operation,
Komatsu Dresser Company (now Komatsu America Corp.)
(until Feb. 1997)
Mar. 1997 President of Information Systems Division
Jun. 1997 Took office as Director
Chairman of the
Jun. 1999 Resigned as Director, took office as Executive Officer
Board and Kunio
Nov. 17, 1946 Apr. 2000 President of Production Division *4 113
Representative Noji
Director Jun. 2000 Took office as Senior Executive Officer
Jun. 2001 Took office as Managing Director and Senior Executive
Officer
Apr. 2003 Took office as Director and Senior Executive Officer
Apr. 2003 President of Construction & Mining Equipment Marketing
Division
Jun. 2007 Took office as President and Representative Director, and
CEO
Apr. 2013 Took office as Chairman of the Board and Representative
Director (current)
Apr. 1977 Joined the Company
Product Control Section, Planning & Coordination
Department of Awazu Plant
Jun. 1982 Graduate School, Stanford University, USA
(until Jun. 1984)
Oct. 1998 General Manager of Planning & Cooperation Department
of Awazu Plant, Production Division
Oct. 2001 Plant Manager of Moka Plant, Production Division
President and * Jan. 2004 President and COO of Komatsu America Corp. (until Mar.
Representative CEO Tetsuji Mar. 23, 1954 2007) *4 42
Director Ohashi
Apr. 2007 Took office as Executive Officer
Apr. 2007 President of Production Division
Apr. 2008 Took office as Senior Executive Officer
Jun. 2009 Took office as Director and Senior Executive Officer
Apr. 2012 Took office as Director and Senior Executive Officer
Apr. 2013 Took office as President and Representative Director
(current)
Apr. 2013 CEO (current)
Apr. 1977 Joined the Company
Accounting Section, Administration Department of Awazu
Plant
Jul. 1988 Komatsu Australia Pty., Ltd. (until Feb. 1994)
Jun. 2001 General Manager of Corporate Controlling Department
Apr. 2005 Took office as Executive Officer
Apr. 2008 President of Global Retail Finance Business Division and
*
President and Representative Director of Komatsu Business
Director CFO Mikio Mar. 13, 1955 *4 22
Support Ltd.
Fujitsuka
Feb. 2009 General Manager of Corporate Planning Division and
President of Global Retail Finance Business Division
Apr. 2010 Took office as Senior Executive Officer
Apr. 2011 CFO (current)
Jun. 2011 Took office as Director and Senior Executive Officer
Apr. 2013 Took office as Director and Senior Executive Officer
(current)
95
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1977 Joined the Company
Construction Equipment Technical Center of Osaka Plant
Jun. 1982 Brown University, USA (until Jun. 1984)
Apr. 2004 General Manager of Construction Equipment Technical
Center 1, Development Division
* Apr. 2006 Took office as Executive Officer
Director CTO Fujitoshi Dec. 21, 1954 *4 17
Apr. 2010 Took office as Senior Executive Officer
Takamura
Apr. 2010 President of Development Division
Jun. 2011 Took office as Director and Senior Executive Officer
Apr. 2013 Took office as Director and Senior Executive Officer
(current)
Apr. 2014 CTO (current)
Apr. 1978 Joined the Company
Product Control Section, Planning & Coordination
Department of Oyama Plant
Jun. 1981 National Autonomous University of Mexico, Mexico (until
May 1982)
Oct. 1991 General Manager of Istanbul Office, International Division
(until Oct. 1995)
President of Jul. 1997 Vice President of Komatsu Latin-America Corp.
Construction (until Oct. 2002)
* May 2005 General Manager of The Americas & European Business,
& Mining
Director Hisashi Jul. 16, 1954 Construction & Mining Equipment Marketing Division *4 14
Equipment
Shinozuka Apr. 2007 President and COO of Komatsu America Corp.
Marketing
Division Apr. 2011 Took office with status equivalent to a Senior Executive
Officer
Apr. 2012 Took office as Senior Executive Officer
Apr. 2012 President of Construction Equipment Marketing Division
Jun. 2013 Took office as Director and Senior Executive Officer
(current)
Apr. 2014 President of Construction & Mining Equipment Marketing
Division (current)
Apr. 1980 Joined the Company
Technical Center of Awazu Plant
Jun. 1985 Graduate School, University of California, Los Angeles,
USA (until Jun. 1987)
Apr. 2006 General Manager of Construction Equipment Electronics,
Development Division
Apr. 2007 Took office as Executive Officer
Apr. 2008 President of AHS Business, Construction & Mining
President of * Equipment Marketing Division
Director ICT Solution Kazunori May 23, 1955 *4 11
Apr. 2009 President of IT Construction Business, Construction &
Division Kuromoto
Mining Equipment Marketing Division
Apr. 2012 Took office as Senior Executive Officer
Apr. 2012 President of ICT Business Division
Apr. 2013 President of Global Mining Business Division and
President of ICT Business Division
Jun. 2013 Took office as Director and Senior Executive Officer
(current)
Apr. 2014 President of ICT Solution Division (current)
Apr. 1981 Joined the Company
Labor Section, Human Resources Department
Apr. 2004 General Manager of General Affairs Department, Engines
* & Hydraulics Business Division
Director Masanao Feb. 8, 1958 Apr. 2008 General Manager of Human Resources Department *4 11
Mori Apr. 2009 Took office as Executive Officer
Apr. 2013 Took office as Senior Executive Officer
Jun. 2013 Took office as Director and Senior Executive Officer
(current)
96
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1963 Joined Asahi Breweries, Ltd. (now Asahi Group Holdings,
Ltd.)
Mar. 1996 Took office as Director of Asahi Breweries, Ltd.
Mar. 1997 Took office as Managing Director of Asahi Breweries, Ltd.
Mar. 1999 Took office as Senior Managing Director of Asahi
Breweries, Ltd.
Mar. 2000 Took office as Senior Managing Executive Officer of
Asahi Breweries, Ltd.
Kouichi
Director Apr. 21, 1940 Mar. 2001 Took office as Senior Managing Director and Senior *4 -
Ikeda
Managing Executive Officer of Asahi Breweries, Ltd.
Jan. 2002 Took office as President and COO of Asahi Breweries, Ltd.
Mar. 2006 Took office as Chairman of the Board and CEO of Asahi
Breweries, Ltd.
Mar. 2010 Took office as Corporate Advisor of Asahi Breweries, Ltd.
Jun. 2010 Took office as Director of the Company (current)
Jul. 2011 Took office as Corporate Advisor of Asahi Group
Holdings, Ltd. (current)
Apr. 1968 Joined The Sumitomo Bank, Ltd. (now Sumitomo Mitsui
Banking Corporation, hereinafter the “Bank”)
Jun. 1994 Took office as Director of the Bank
Nov. 1998 Took office as Managing Director of the Bank
Jan. 2001 Took office as Representative Director and Senior
Managing Director of the Bank
Apr. 2001 Took office as Representative Director and Senior
Managing Director of Sumitomo Mitsui Banking
Corporation
Dec. 2002 Took office as Representative Director and Senior
Masayuki
Director Dec. 2, 1944 Managing Director of Sumitomo Mitsui Financial Group, *4 -
Oku
Inc. (hereinafter “SMFG”)
Jun. 2003 Took office as Representative Director and Deputy
President of Sumitomo Mitsui Banking Corporation
Jun. 2005 Took office as Representative Director and Chairman of
the Board of SMFG
Jun. 2005 Took office as Representative Director and President of
Sumitomo Mitsui Banking Corporation
Apr. 2011 Retired from Sumitomo Mitsui Banking Corporation
Apr. 2011 Took office as Chairman of the Board of SMFG (current)
Jun. 2014 Took office as Director of the Company (current)
Apr. 1969 Joined the Ministry of Foreign Affairs (hereinafter
“MOFA”)
Mitoji
Director Jan. 23, 1948 Jan. 2008 Took office as Vice-Minister for Foreign Affairs *4 -
Yabunaka
Aug. 2010 Took office as Adviser to MOFA (current)
Jun. 2014 Took office as Director of the Company (current)
Apr. 1977 Joined the Company
Accounting Section, Administration Department of Osaka
Plant
Nov. 1992 PT Komatsu Indonesia (until Oct. 1996)
Jul. 1998 Komatsu Mining Systems, Inc. (until Mar. 2002)
Standing Audit &
Makoto Apr. 2002 Komatsu America Corp. (until Jan. 2004)
Supervisory Jul. 18, 1954 *5 17
Morimoto Apr. 2004 General Manager of Corporate Accounting Department
Board Member
Sep. 2006 General Manager of Corporate Controlling Department
Apr. 2008 General Manager of Internal Audit Department
Jun. 2012 Assistant to Audit & Supervisory Board Member
Jun. 2012 Took office as Standing Audit & Supervisory Board
Member (current)
97
Share
Term of ownership
Title Position Name Date of birth Career summary
office (Thousands
of shares)
Apr. 1977 Joined the Company
Purchasing Controlling Section, Purchasing Department of
Osaka Plant
Aug. 1996 Komatsu America Corp. (until Mar. 1999)
Apr. 1999 General Manager of Planning & Coordination Department
of Osaka Plant, Production Division
Apr. 2002 Plant Manager of Awazu Plant, Production Division
Apr. 2004 Took office as Executive Officer
Standing Audit &
Koji Apr. 2005 President of Industrial Machinery Division and President
Supervisory Jun. 21, 1954 *6 17
Yamada and Representative Director of Komatsu Industries
Board Member
Corporation
Feb. 2009 Representative of All India Operations (until Mar. 2013)
Apr. 2009 President of Komatsu India Pvt. Ltd. (until Mar. 2013)
Apr. 2010 Took office with a status equivalent to Senior Executive
Officer
Apr. 2013 Advisor to President
Jun. 2013 Took office as Standing Audit & Supervisory Board
Member (current)
Apr. 1971 Joined the Ministry of Foreign Affairs (hereinafter
“MOFA”)
Audit & Dec. 1978 Retired from MOFA
Hiroyuki
Supervisory Jul. 21, 1945 Apr. 1981 Registered as attorney at law (current) *7 3
Kamano
Board Member Oct. 1988 Partner of the Kamano Sogo Law Offices (current)
Jun. 2007 Took office as Audit & Supervisory Board Member of the
Company (current)
Apr. 1968 Appointed as Prosecutor of Tokyo District Public
Prosecutors Office
Apr. 1988 Took office as Counsellor of Minister’s Secretariat,
Ministry of Justice
May 1998 Took office as Prosecutor of Supreme Public Prosecutors
Office
Audit & Sep. 2003 Took office as Superintending Prosecutor of Tokyo High
Kunihiro
Supervisory Sep. 13, 1942 Public Prosecutors Office *6 -
Matsuo
Board Member Jun. 2004 Took office as Prosecutor-General of Supreme Public
Prosecutors Office
Jun. 2006 Retired from the position of Prosecutor-General of
Supreme Public Prosecutors Office
Sep. 2006 Registered as attorney at law (current)
Jun. 2009 Took office as Audit & Supervisory Board Member of the
Company (current)
Apr. 1974 Joined the Bank of Japan (hereinafter “BOJ”)
Audit & Oct. 2008 Took office as Deputy Governor of BOJ
Hirohide
Supervisory Mar. 6, 1951 Mar. 2013 Retired from BOJ *8 -
Yamaguchi
Board Member Jun. 2014 Took office as Audit & Supervisory Board Member of the
Company (current)
Total 271
Notes:
1) Directors Kouichi Ikeda, Masayuki Oku and Mitoji Yabunaka are Outside Directors.
2) Audit & Supervisory Board Members Hiroyuki Kamano, Kunihiro Matsuo and Hirohide Yamaguchi are Outside Audit & Supervisory Board
Members.
3) The Company introduced an executive officer system in June 1999. As of June 18, 2014, the Company has 38 officers including 6 persons
simultaneously holding the position of director. Such persons have been marked with an asterisk above their names in the above table.
4) The term of office of the Directors shall expire at the conclusion of the Ordinary General Meeting of Shareholders for the last business year of
the Company ending within 1 year after the Ordinary General Meeting of Shareholders held on June 18, 2014.
5) The term of office of Audit & Supervisory Board Member Makoto Morimoto shall expire at the conclusion of the Ordinary General Meeting of
Shareholders for the last business year of the Company ending within 4 years after the Ordinary General Meeting of Shareholders held on June
20, 2012.
6) The term of office of Audit & Supervisory Board Members Koji Yamada and Kunihiro Matsuo shall expire at the conclusion of the Ordinary
General Meeting of Shareholders for the last business year ending within 4 years after the Ordinary General Meeting of Shareholders held on
98
June 19, 2013.
7) The term of office of Audit & Supervisory Board Member Hiroyuki Kamano shall expire at the conclusion of the Ordinary General Meeting of
Shareholders for the last business year ending within 4 years after the Ordinary General Meeting of Shareholders held on June 22, 2011.
8) The term of office of Audit & Supervisory Board Member Hirohide Yamaguchi shall expire at the conclusion of the Ordinary General Meeting
of Shareholders for the last business year ending within 4 years after the Ordinary General Meeting of Shareholders held on June 18, 2014.
9) The names of organizations and subsidiaries, etc., of the Company shown in the “Career summary” above present those at the time.
99
6. Corporate Governance, etc.
(1) Overview of corporate governance
<Basic stance on corporate governance>
The Company believes its corporate value is the total sum of trust given to us by society and all stakeholders. To become a company which enjoys
more trust from shareholders and all other stakeholders, the Company is working to strengthen corporate governance, improve management
efficiency, advocate corporate ethics and ensure sound management on a group-wide basis. To further improve the transparency of management for
its shareholders and investors, the Company discloses information in a fair and timely manner and actively engages in investor relations’ activities by
holding meetings with shareholders and investors.
Recommend
Audit reports
Having introduced the Executive Officer System in 1999, the Company has worked to separate management decision making and supervisory
functions from executive functions to the extent permitted by laws and regulations. The Company also limits the Board of Directors to a small
number of members and appoints Outside Directors and Outside Audit & Supervisory Board Members. To improve the effectiveness of discussions
at meetings of the Board of Directors, the Company has worked to reform their operational aspect, primarily by putting in place a system to ensure
thorough discussions of important management matters and prompt decision making.
The Company holds Board of Directors’ meetings periodically at least once every month. The Board of Directors deliberates and makes resolutions
on important matters, determines management policies of Komatsu, and rigorously controls and supervises the execution of duties by all members of
the executive management team including Representative Directors. Of the ten (10) Directors on the Board, three (3) are Outside Directors to ensure
transparent and objective management.
100
Furthermore, at least half of the five (5) Audit & Supervisory Board Members are Outside Audit & Supervisory Board Members. The Audit &
Supervisory Board determines such matters as audit policies and the division of duties among Audit & Supervisory Board Members. Each Audit &
Supervisory Board Member attends meetings of the Board of Directors and other important meetings, and audits the execution of duties by Directors.
Meetings of the Audit & Supervisory Board are in principle held periodically at least once every month, and the Board performs appropriate audits
by such means as hearing reports from members of the executive management team on their execution of duties. The Company has also established
the Office of Corporate Auditors’ Staff to assist the Audit & Supervisory Board Members in their duties.
Note: The Company is going to propose the agendas of Election of ten (10) Directors and Election of one (1) Auditor as the matters requiring a
resolution by the 145th Ordinary General Meeting of Shareholders scheduled for June 18, 2014. When the said agendas are approved, the
Company will have ten (10) Directors (including three (3) Outside Directors), five (5) Audit & Supervisory Board Members (including three
(3) Outside Audit & Supervisory Board Members), and six (6) Directors who concurrently hold the position of Executive Officer which is held
by thirty-eight (38) members in total.
To promote efficient management of the Board of Directors, the Company has established 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.
As a means to supplement executive functions, the Company established the International Advisory Board (IAB) in 1995. Through the IAB, the
Company aims to secure objective advice and suggestions from experts from Japan and abroad about how to function as a global company by
exchanging opinions and holding discussions.
Furthermore, the Company works to mitigate legal risks by securing timely advice from expert law offices regarding important legal issues.
3.Basic policy on internal control system and status of maintenance and development thereof
(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 Audit & Supervisory Board Members, while limiting the
members of the Board of Directors 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.
101
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.
(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, Audit & Supervisory Board Members 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. It shall also position the Komatsu Code of
Worldwide Business Conduct, as the code to be applied by all companies affiliated with Komatsu. Each department or division of the
Company in charge of affiliated companies shall manage and support each relevant company, and each company in Komatsu shall stipulate
various regulations for the proper promotion of duties.
ii) The Company shall assign and dispatch Directors and Audit & Supervisory Board Members 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
102
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 Audit & Supervisory Board as needed.
(7) Employees Assisting Audit & Supervisory Board Members 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 Audit & Supervisory Board Members in their duties, and
allocate employees who work as assistants to Audit & Supervisory Board Members either exclusively or concurrently in another position within the
Company.
(8) Matters Regarding the Independence of the Assistants to Audit & Supervisory Board Members 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 Audit & Supervisory Board Members.
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 Audit & Supervisory Board Members.
(9) Systems for Directors and Employees Reporting to Audit & Supervisory Board Members; Systems Relating to Other Reports to Audit &
Supervisory Board Members and Ensuring Effective Audits by Audit & Supervisory Board Members
i) In accordance with laws and regulations, Audit & Supervisory Board Members 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 Audit & Supervisory Board Members immediately.
iii) The Audit & Supervisory Board Members 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) Audit & Supervisory Board Members may appoint legal counsels and other advisors needed for the execution of their duties.
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B. Internal Audit and Audit & Supervisory Board Members’ Audit
There are twenty-seven (27) employees in the Internal Audit Department, which is in charge of the corporate internal audit of the Company. With
respect to the Audit & Supervisory Board Members (which consists of five (5) persons in total), the Company has consistently made sure that at least
half of them are Outside Audit & Supervisory Board Members. The Company has established the Office of Corporate Auditors’ Staff and assigned
seven (7) employees who work as assistants to Audit & Supervisory Board Members either exclusively or concurrently in another position within the
Company. Standing Audit & Supervisory Board Member Makoto Morimoto has long engaged in accounting-related duties at the Company, and has
considerably profound knowledge concerning financial affairs and accounting.
Collaborations between Audit & Supervisory Board Members (including Outside Audit & Supervisory Board Members), the Independent Public
Accounting Firm and the Internal Audit Department and processes are as follows:
[Collaboration Between Audit & Supervisory Board Members (including Outside Audit & Supervisory Board Members) and Independent Public
Accounting Firm and Processes]
To complete the audit process effectively and efficiently, Audit & Supervisory Board Members exchange opinions with the contracted independent
public accounting firm concerning audit policies, audit items to be focused upon and audit approaches. Audit & Supervisory Board Members also
observe the independent public accounting firm, when the firm audits Komatsu’s business bases, subsidiaries and affiliates and other related entities.
Audit & Supervisory Board Members and the independent public accounting firm also hold meetings to exchange audit information as needed during
a given fiscal year. These exchanges lead to better collaboration between Audit & Supervisory Board Members and the independent public
accounting firm and a more expeditious audit process. In addition, Audit & Supervisory Board Members receive reports of the independent public
accounting firm’s review at the end of the first, second and third quarters, and review and confirm important financial statement matters at the end of
the second quarter and the fiscal year-end. Furthermore, Audit & Supervisory Board Members evaluate the methods and results of the independent
public accounting firm’s review and audit by listening to their summaries and receiving their review and audit reports at the meetings of the Audit &
Supervisory Board Members.
When the Audit & Supervisory Board approves the engagement of an accounting firm to perform audit and non-audit work, the Board defines the
policies, procedures and other related matters for such work, and conducts preliminary reviews of individual procedures followed by the accounting
firm in order to maintain the independence of the accounting firm from the Company and its consolidated subsidiaries.
[Collaboration Between Audit & Supervisory Board Members (including Outside Audit & Supervisory Board Members) and the Internal Audit
Department and processes]
The Internal Audit Department, in cooperation with other related departments, regularly audits business bases and subsidiaries and affiliates both in
Japan and overseas, evaluates the effectiveness of their internal control, reinforces their risk management and works to prevent misconduct and errors.
Audit & Supervisory Board Members observe audits by the Internal Audit Department, form their own audit opinions, and give advice and
recommendations to the Internal Audit Department.
In addition to the audit results reported by the Internal Audit Department to the Board of Audit & Supervisory Board Members, the Board of Audit &
Supervisory Board Members closely maintains substantive cooperation with the Internal Audit Department, such as receiving various pieces of
information relevant to their duties on a routine basis.
[Collaboration Between the Internal Audit Department and the Independent Public Accounting Firm and processes]
In assessing the effectiveness of internal control implemented by the Internal Audit Department, the Independent Public Accounting firm collaborates
with the Internal Audit Department as needed by exchanging opinions and sharing information.
[Relationship Between Audit & Supervisory Board Members (including Outside Audit & Supervisory Board Members), the Internal Audit
Department, the Independent Public Accounting Firm and Certain Committees and Corporate Departments Concerning Internal Control]
Corporate departments concerning internal control over matters, including corporate planning, accounting, financing, administration and legal
departments as well as certain committees concerning internal control, including the “Compliance Committee” and “Risk Management Committee”
mutually collaborate with Audit & Supervisory Board Members, the Internal Audit Department and the independent public accounting firm.
104
C. Articles of Incorporation of the Company
The following are prescribed by the Articles of Incorporation of the Company.
1) The Company shall have no more than fifteen (15) Directors.
2) A resolution for the election of a Director shall be adopted by a majority of the voting rights of the shareholders who are eligible to exercise the
voting rights and who are present at the meeting, where the shareholders holding one-third (1/3) or more of the voting rights of all shareholders
eligible to exercise the voting rights must be present.
3) Cumulative voting shall not be used in a resolution for the election of a Director.
4) To ensure a quorum can be secured, when a special resolution is required, resolutions made pursuant to Article 309, Paragraph 2 of the
Companies Act of Japan shall be adopted by two-thirds (2/3) or more of the voting rights of the shareholders who are eligible to exercise the
voting rights and who are present at the meeting, where the shareholders holding one-third (1/3) or more of the voting rights of all shareholders
eligible to exercise the voting rights must be present.
5) To enable the execution of flexible capital policy to respond to changes in the business environment, pursuant to the provisions of Article 165,
Paragraph 2 of the Companies Act of Japan, the Company may acquire its own shares through transactions on the market, etc., by a resolution of
the Board of Directors.
6) To ensure Directors and Audit & Supervisory Board Members can fully perform the role expected of them, in accordance with the provisions of
Article 426, Paragraph 1 of the Companies Act of Japan, the Company may, by a resolution of the Board of Directors, exempt a Director or an
Audit & Supervisory Board Member from his/her liability for damages caused by his/her dereliction of duty, within the limits stipulated by laws
or regulations.
7) To provide flexible redistribution of profits to shareholders, the Company may distribute interim dividends, by a resolution of the Board of
Directors, by setting the record date as of September 30 of each year.
D. Accounting Audit
The Company has entered into an audit contract with KPMG AZSA LLC and receives audit services for its accounts in connection with both
consolidated and non-consolidated financial statements. Certified public accountants who executed an accounting audit of the Company and other
information are as follows:
Certified public accountants Tsutomu Takahashi (engaged for five (5) consecutive years in auditing)
Kensuke Sodekawa (engaged for four (4) consecutive years in auditing)
Shin Suzuki (engaged for two (2) consecutive years in auditing)
Audit Corporation KPMG AZSA LLC
Assistants involved in auditing work Twenty-three (23) other certified public accountants
Thirty-four (34) associates
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The reasons for electing Outside Directors and Outside Audit & Supervisory Board Members of the Company are outlined below.
<Outside Directors>
Name Important concurrent Reason for appointment as Outside Director
(Month and year of positions held in other
taking office) organizations
Kensuke Hotta Chairman and Representative Having served as Representative Director of The Sumitomo Bank, Ltd. (name at the
(June 2008) Director of Greenhill & Co. time) and having experience as Representative Director of Morgan Stanley Japan
Japan Ltd. Securities Co., Ltd. (name at the time), Mr. Kensuke Hotta has been active
internationally in the financial field and has considerable insight and rich experience in
Chairman and Representative the business world.
Director of Hotta Partners Using this insight and experience, his proposals concerning the overall management of
Inc. the Company are expected to contribute to sustaining and improving transparency and
soundness of management and enhancing corporate governance. Therefore, the Company
appointed him as an Outside Director.
Mr. Kensuke Hotta held the position of Senior Managing Director and Representative
Director, and Deputy President and Representative Director of The Sumitomo Bank, Ltd.
(name at the time), which is one of the main lenders of the Komatsu Group, from
October 1992 to November 2000. However, he retired from the aforementioned bank
about eight (8) years before he assumed the position of Outside Director of the Company
in June 2008 and more than ten (10) years have passed since the said retirement.
The Komatsu Group consigns some of maritime transportation of construction and
mining equipment to the MOL Group, which centers around Mitsui O.S.K. Lines,
Limited where Mr. Kensuke Hotta served as Outside Auditor from June 2003 to June
2011. The commission fee to the MOL Group was less than one (1) % of the Company’s
consolidated net sales for FY2013. Accordingly, Mr. Kensuke Hotta is unlikely to have a
conflict of interest with general investors and is considered as an Independent Director.
Noriaki Kano Professor Emeritus at Tokyo Having served as President of the Japanese Society for Quality Control, Dr. Noriaki
(June 2008) University of Science Kano has been active internationally as a specialist of quality control and has
considerable insight and rich experience.
Using this insight and experience, his proposals concerning the overall management of
the Company are expected to pursue higher “Quality and Reliability,” the fundamentals
of the Company’s management, and enhance corporate value. Therefore, the Company
appointed him as an Outside Director. Dr. Noriaki Kano is unlikely to have a conflict of
interest with general investors and is considered as an Independent Director.
Kouichi Ikeda Corporate Advisor of Asahi Having served as Representative Director of Asahi Breweries, Ltd. (name at the time),
(June 2010) Group Holdings, Ltd. Mr. Kouichi Ikeda has considerable insight and rich experience in the business world.
Using this insight and experience, his proposals concerning the overall management of
the Company are expected to help to sustain and improve transparency and soundness of
management and enhance corporate governance. Therefore, the Company appointed him
as an Outside Director.
Mr. Kouichi Ikeda is unlikely to have a conflict of interest with general investors and is
considered as an Independent Director.
Note: Kouichi Ikeda is proposed to be elected at the 145th Ordinary General Meeting of Shareholders.
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<Outside Audit & Supervisory Board Members>
Name Important concurrent Reasons for appointment as Outside Audit & Supervisory Board Members
(Month and year of positions held in other
taking office) organizations
Makoto Okitsu Advisor of Teijin Limited Having served as Representative Director of Teijin Limited. and Nabtesco Corporation,
(June 2006) Mr. Makoto Okitsu has considerable insight and profound experience in the business
world. Using this experience, the Company expects him to execute his duties as Outside
Audit & Supervisory Board Member from the standpoint of a specialist. Therefore, the
Company appointed him as Outside Audit & Supervisory Board Member.
The Komatsu Group procures drive motors from the Nabtesco Group, of which the core
company is Nabtesco Corporation, where Mr. Makoto Okitsu served as Representative
Director, President & Chief Executive Officer (CEO) from September 2003 until June
2004. However the amount of procurement from the Nabtesco Group in the fiscal year was
less than 1% of the total procurement of the Komatsu Group in the fiscal year.
Furthermore, at present the Company and Nabtesco Corporation have a mutual investment
relationship for the purpose of maintaining and strengthening cooperation as well as
promoting tie-ups in business related to hydraulic equipments. Accordingly, as of March
31, 2014, the Company held 1,032 thousand shares of Nabtesco Corporation (0.80% of
that company’s total number of issued shares), and Nabtesco Corporation held 342
thousand shares of the Company (0.03% of the Company’s total number of issued shares).
Since neither of these facts are likely to cause a conflict of interest with general investors,
Mr. Okitsu is considered as an Independent Audit & Supervisory Board Member.
Hiroyuki Kamano Partner (Attorney at law) of Having served as an international attorney at law, Mr. Hiroyuki Kamano has rich
(June 2007) Kamano Sogo Law Offices experience in the field of international legal affairs. Using this experience, the Company
expected him to execute his duties as an Outside Audit & Supervisory Board Member
from the standpoint of a specialist. Therefore, the Company appointed him as an Outside
Audit & Supervisory Board Member.
In addition, SUMITOMO LIFE INSURANCE COMPANY, where Mr. Hiroyuki Kamano
serves as Outside Director, is one of the group life insurance providers of the Company.
However, since this fact is not likely to cause a conflict of interest with general investors,
Mr. Kamano is considered as an Independent Audit & Supervisory Board Member.
Kunihiro Matsuo Attorney at law Having served as Prosecutor-General of the Supreme Public Prosecutors Office, Mr.
(June 2009) Kunihiro Matsuo has rich experience in the legal profession. Using this experience, the
Company expects him to execute his duties as Outside Audit & Supervisory Board
Member from the standpoint of a specialist. Therefore, the Company appointed him as an
Outside Audit & Supervisory Board Member.
Mr. Kunihiro Matsuo was a party to a legal consultant agreement with the Audit &
Supervisory Board of the Company from October 2007 until June 23, 2009, which was the
day before his appointment as Outside Audit & Supervisory Board Member of the
Company. Mr. Matsuo’s legal consultant duties for the Audit & Supervisory Board were
only undertaken to help strengthen the functions of Audit & Supervisory Board Members
and Audit & Supervisory Board, which have a function of auditing the Board of Directors
from an independent standpoint and did not give rise to any interests between Mr. Matsuo
and the Board of Directors or in terms of the execution of business. Almost five (5) years
have already passed since the cancellation of the said agreement, and during his term of
office as an Outside Audit & Supervisory Board Member, Mr. Matsuo has made use of his
rich experience in the legal profession to provide excellent directions and advice on issues
related to business such as export control and Act on Prohibition of Private
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Monopolization and Maintenance of Fair Trade of Japan, compliance, internal auditing,
risk management, and others, from an independent standpoint, and has fulfilled his role
sufficiently. Since taking office as an Audit & Supervisory Board Member of the
Company, Mr. Matsuo has received only the remuneration for Audit & Supervisory Board
Member from the Company.
In addition, the Company and its consolidated subsidiaries sell industrial machinery to
Toyota Group, which centers around Toyota Motor Corporation where Mr. Matsuo serves
as Outside Audit & Supervisory Board Member. However, the share of sales to the Toyota
Group was less than one (1) % of the Company’s consolidated net sales in the fiscal year.
Furthermore, MITSUI Group, which centers around MITSUI & CO., LTD. where Mr.
Matsuo serves as Outside Audit & Supervisory Board Member, contributes capital and
provides other financial assistance to some consolidated subsidiaries and distributors, etc.
of the Company for the overseas sale and servicing of construction and mining equipment.
Since none of these facts is likely to cause a conflict of interest with general investors, Mr.
Matsuo is considered as an Independent Audit & Supervisory Board Member.
[Support for Outside Directors and Outside Audit & Supervisory Board Members]
As a general rule, the Company provides materials for Board meetings to Outside Directors and Outside Audit & Supervisory Board Members in
advance of the meetings so that they have sufficient time to review the matters that are to be discussed. With respect to matters that may be of
particular importance, the Board of Directors discusses them at the Board meeting prior to the Board meeting where such matters are scheduled for
resolution. In this manner, the Company ensures that the Directors have sufficient time to review the matters before decisions are made and that they
will have an opportunity to consider the points noted in earlier discussions before deciding upon such matters.
F. Compensation
1. Aggregate amount of remuneration, etc., paid to each classification of Directors and Audit & Supervisory Board Members of the Company,
aggregate amount of remuneration, etc., by type thereof, as well as the number of Directors and Audit & Supervisory Board Members of the
Company
(Millions of yen)
Non-Monetary
Monetary Remuneration Amount of
Number of Remuneration
Classification Remuneration
Persons Paid Basic Stock-Based
Bonus Total Paid
Remuneration Remuneration
(Note 3)
(Note 4)
Director 13 458 261 719 108 827
(Outside Director included above) 3 40 9 49 5 53
Audit & Supervisory Board Member 6 122 - 122 - 122
(Outside Audit & Supervisory Board
3 45 - 45 - 45
Member included above)
Total 19 580 261 841 108 949
(Outside Director and Outside Audit &
Supervisory Board Member included 6 85 9 94 5 98
above)
Notes:
1) As of the end of the fiscal year, there are ten (10) Directors (three (3) of whom are Outside Directors) and five (5) Audit & Supervisory Board
Members (three (3) of whom are Outside Audit & Supervisory Board Members). However, the numbers and amounts in the table above include
that for three (3) Directors and one (1) Audit & Supervisory Board Member who retired as of the close of the 144th Ordinary General Meeting of
Shareholders in June 2013.
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-based remuneration) shall not exceed ¥60 million (however, not including salaries
as employees) and it was resolved at the 143rd Ordinary General Meeting of Shareholders, held in June 2012, that the maximum amount of
108
remuneration to be paid to Audit & Supervisory Board Members in total per month shall not exceed ¥13.5 million. It was also resolved at the
141st Ordinary General Meeting of Shareholders, held in June 2010, that the maximum amount of remuneration to be paid to Directors in the
form of Stock Acquisition Rights to be granted as stock-based remuneration shall not exceed ¥360 million in total per year (however, not
including salaries as employees) and the maximum amount of remuneration to be paid to Outside Directors in total per year shall not exceed ¥50
million out of those ¥360 million.
3) The amount of Bonuses for Directors shows the total amount to be paid to Directors, which is planned to be resolved at the 145th Ordinary
General Meeting of Shareholders.
4) Stock-based remuneration represents the amount of expense allocated as remuneration for Directors, which are not monetary, in accounting for
the fiscal year.
5) The portions of salaries as employees for Directors concurrently serving as employees are not paid.
6) Amounts of less than one (1) million yen are rounded to the nearest million yen.
2. Total amount of remuneration paid, etc., paid by the Company to persons whose total remuneration paid equaled or exceeded ¥100 million for
the fiscal year ended March 31, 2014.
(Millions of yen)
Non-Monetary Amount of
Monetary Remuneration
Remuneration Remuneration
Name and title
Basic Stock-Based Paid
Bonus Total
Remuneration Remuneration
Tetsuji Ohashi
100 63 163 25 188
Director of the Company
Kunio Noji
91 57 148 25 173
Director of the Company
Notes:
1) Stock-based remuneration represents the amount of expense allocated as remuneration for Directors, which are not monetary, in accounting for
the fiscal year. More specifically, Tetsuji Ohashi and Kunio Noji have each been granted the right to acquire 129 shares (Upon exercise of each
Stock Acquisition Rights, 100 common shares of the Company will be delivered) of the common stock of the Company. The value for stock-
based remuneration that has been recorded by the Company from an accounting perspective for the fiscal year ended March 31, 2014 has been
calculated pursuant to the Accounting Standard for Share-based Payments of Japan by multiplying the fair value per share (¥1,932 per share) as
of the grant date (August 1, 2013) by the number of shares granted.
2) The Directors’ bonus of the above-mentioned two Directors is described in the amount of remuneration that is planned to be paid, which will be
resolved at a Board of Directors meeting after the total amount of proposed remuneration is resolved by the 145th Ordinary General Meeting of
Shareholders of the Company.
3) The portions of salaries as employees for Directors concurrently serving as employees are not paid.
4) Amounts of less than one (1) million yen are rounded to the nearest million yen.
3. Details and decision process of the policy on deciding the amounts of remuneration or calculation method thereof
In an effort to maintain an objective and transparent remuneration system, the policy and levels of remuneration for Directors and Audit &
Supervisory Board Members of the Company are deliberated by the Compensation Advisory Committee, which consists of four (4) external members
(two (2) Outside Audit & Supervisory Board Members, 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
Audit & Supervisory Board Members is determined by discussions by the Audit & Supervisory Board Members, 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 comprised of fixed remuneration (paid monthly) and performance-based remuneration linked to Komatsu’s
consolidated performance. The total amount paid of performance-based remuneration shall be calculated each year by evaluating the basic indicators
109
of ROE and ROA at the ratio described in the table below and making adjustments for growth (growth rate of consolidated sales) and profitability
(profit margin of segment).
Indicator Ratio
Consolidated ROE (net income attributable to Komatsu Ltd. divided by
Basic Indicators 70%
Komatsu Ltd. shareholders' equity)
Consolidated ROA (income before income taxes and equity in earnings of
30%
affiliated companies divided by total assets)
Adjustment Indicators Adjustment according to growth rate of consolidated sales and profit margin of segment
Two-thirds (2/3) of the total amount of the performance-based remuneration shall be paid in the form of cash as Director’s bonuses, and the
remaining one-third (1/3) shall be paid by granting Stock Acquisition Rights as stock-based remuneration 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.
Regarding the amount levels of performance-based remuneration, the maximum amount thereof shall be roughly 60% of the total amount of annual
remuneration of Directors (which is made up of fixed remuneration (paid monthly) and performance-based remuneration), and the minimum shall be
zero (0) (in which case, only fixed remuneration will be paid to the Directors).
The remuneration for Audit & Supervisory Board Members only consists of a fixed remuneration (paid monthly) designed to support their
independent position with authority to audit the execution of duties by Directors without getting fettered by the changes of business performance of
Komatsu.
The retirement allowance system for Directors and Audit & Supervisory Board Members was terminated as of June 2007.
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G. Shareholdings
1. Investment securities held for purposes other than pure investment
Number of stock names: 71
Total amount on the balance sheet: ¥53,661 million.
2. Stock name, number of shares, amount on the balance sheet and holding purpose of investment securities held for purposes other than pure
investment
Specified investment securities, fiscal year ended March 31, 2014
Amount
Number of shares
Stock name on the balance sheet Holding purpose
(Thousands of shares)
(Millions of yen)
Maintaining and strengthening cooperation and
Cummins Inc. 1,785 27,384 enhancing the alliance in diesel engine business with the
issuer.
Facilitating fund procurement from Taiyo Life Insurance
T&D Holdings, Inc. 8,167 10,021 Company, which is a principal financial institution for the
Company and a subsidiary of the issuer.
Facilitating fund procurement from Sumitomo Mitsui
Sumitomo Mitsui Financial Banking Corporation, which is a principal financial
1,517 6,691
Group, Inc. institution for the Company and a subsidiary of the
issuer.
Facilitating fund procurement from the issuer, which is a
The Hokkoku Bank, Ltd. 8,592 3,101
principal financial institution for the Company.
Maintaining and strengthening cooperation and
Nabtesco Corporation 1,032 2,449 enhancing the alliance in hydraulic equipment business
with the issuer.
Reducing business risk through necessary and
appropriate insurance transactions by strengthening
NKSJ Holdings, Inc. 351 932 relationship with NIPPONKOA Insurance Company,
Limited, which is one of the main insurance underwriters
for the Company and a subsidiary of the issuer.
Maintaining and strengthening Komatsu’s product
T.RAD Co., Ltd. 2,250 659 competitiveness by using the issuer’s cooling
technologies.
Stable steel materials supply from JFE Steel Corporation,
JFE Holdings, Inc. 283 550 which is a major supplier to the Company and a
subsidiary of the issuer.
To facilitate fund procurement from the Bank of Tokyo-
Mitsubishi UFJ Financial Mitsubishi UFJ, Ltd., which is a principal financial
399 226
Group, Inc. institution for the Company and a subsidiary of the
issuer.
Stable supply of heat treatment materials, etc., from
Netsuren Co., Ltd. 277 182
issuer, which is a major supplier to the Company.
Maintaining and strengthening cooperation and
FUJI TECHNICA &
64 26 enhancing the relationship in Industrial Machinery and
MIYAZU INC.
Others business with the issuer.
111
Specified investment securities, fiscal year ended March 31, 2013
Amount
Number of Shares
Stock Name on the Balance sheet Holding purpose
(Thousands of shares)
(Millions of yen)
Maintaining and strengthening cooperation and
Cummins Inc. 1,785 19,451 enhancing the alliance in diesel engine business with the
issuer.
Facilitating fund procurement from Taiyo Life Insurance
T&D Holdings, Inc. 8,167 9,278 Company, which is a principal financial institution for the
Company and a subsidiary of the issuer.
Facilitating fund procurement from Sumitomo Mitsui
Sumitomo Mitsui Financial Banking Corporation, which is a principal financial
1,517 5,728
Group, Inc. institution for the Company and a subsidiary of the
issuer.
The Company acquired the issuer’s shares through a
share exchange when the issuer acquired 100% shares of
SUMCO CORPORATION 3,961 4,317 SUMCO TECHXIV CORPORATION (previous name:
Komatsu Electronic Metals Co., Ltd.), and has been
holding them since then.
Facilitating fund procurement from the issuer, which is a
The Hokkoku Bank, Ltd. 8,592 3,376
principal financial institution for the Company.
Maintaining and strengthening cooperation and
Nabtesco Corporation 1,032 1,996 enhancing the alliance in hydraulic equipment business
with the issuer.
Reducing business risk through necessary and
appropriate insurance transactions by strengthening
NKSJ Holdings, Inc. 351 690 relationship with NIPPONKOA Insurance Company,
Limited, which is one of the main insurance underwriters
for the Company and a subsidiary of the issuer.
Maintaining and strengthening Komatsu’s product
T.RAD Co., Ltd. 2,250 558 competitiveness by using the issuer’s cooling
technologies.
Stable steel materials supply from JFE Steel Corporation,
JFE Holdings, Inc. 283 500 which is a major supplier to the Company and a
subsidiary of the issuer.
To facilitate fund procurement from the Bank of Tokyo-
Mitsubishi UFJ Financial Mitsubishi UFJ, Ltd., which is a principal financial
399 222
Group, Inc. institution for the Company and a subsidiary of the
issuer.
Stable supply of heat treatment materials, etc., from
Netsuren Co., Ltd. 277 196
issuer, which is a major supplier to the Company.
Maintaining and strengthening cooperation and
FUJI TECHNICA &
64 45 enhancing the relationship in Industrial Machinery and
MIYAZU INC.
Others business with the issuer.
3. Investment securities held for pure investment
Not applicable.
4. Investment securities for which the holding purpose has changed
Not applicable.
112
(2) Details of audit fee, etc.
(i) Details of fee to auditors
Fiscal year ended March 31, 2014 Fiscal year ended March 31, 2013
Category Fees for audit services Fees for non-audit services Fees for audit services Fees for non-audit services
(Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)
The Company 375 17 375 14
Consolidated subsidiaries 317 9 314 1
Total 692 26 689 15
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Item 5. Financial Information
1. Basis of preparation of the consolidated financial statements and the non-consolidated financial statements
(1) The consolidated financial statements of the Company are prepared in accordance with the accounting principles generally
accepted in the United States of America (hereinafter “U.S. GAAP”), pursuant to the provision of Article 95 of the “Ordinance on
Terminology, Forms and Preparation Methods of Consolidated Financial Statements,” the Ordinance of the Ministry of Finance No.
28 of 1976 (hereinafter “Ordinance on Consolidated Financial Statements”).
(2) The non-consolidated financial statements of the Company are prepared in accordance with the Ordinance of the Ministry of
Finance No. 59 of 1963 “Ordinance on Terminology, Forms and Preparation Methods of Financial Statements, etc.” (hereinafter
“Ordinance on Financial Statements, etc.”).
Pursuant to Article 2, paragraph 2, Supplementary Provisions of the Cabinet Office Ordinance No. 61 of September 21, 2012 “Cabinet
Office Ordinance for Partial Revision of the Ordinance on Terminology, Forms and Preparation Methods of Financial Statements, etc.,”
comparative information contained in the financial statements for the fiscal year from April 1, 2013 to March 31, 2014 was prepared
in accordance with the Ordinance on Financial Statements, etc. prior to the revision.
Also, the Company is qualified as a company submitting financial statements prepared in accordance with special provision and
prepares financial statements in accordance with the provision of Article 127 of the Ordinance on Financial Statements, etc.
2. Audit certification
Pursuant to Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act of Japan, the consolidated financial statements
for the fiscal year from April 1, 2013, to March 31, 2014 and the non-consolidated financial statements for the 145th fiscal year (from
April 1, 2013 to March 31, 2014) were audited by KPMG AZSA LLC.
3. Particular efforts to secure the appropriateness of the consolidated financial statements, etc.
The Company carries out special measures for ensuring the appropriateness of consolidated financial statements, etc. Specifics of such
efforts are shown below.
(1) For the purpose of both ensuring that the Company has an appropriate grasp of the contents of Accounting Standards and related
regulations, and properly preparing consolidated financial statements, etc., the Company became a member of the Financial
Accounting Standards Foundation, and is kept informed of changes in Accounting Standards and other events by participating in
seminars and other events hosted by the foundation.
(2) The Company works to keep every employee informed about Accounting Standards by developing internal accounting regulations
and manuals and other means.
(3) The Company confirms the appropriateness of consolidated financial statements, etc. by setting up internal structures such as the
Information Disclosure Committee.
114
1. Consolidated Financial Statements, etc.
(1) Consolidated Financial Statements
Consolidated Balance Sheets Komatsu Ltd. and Consolidated Subsidiaries March 31, 2014 and 2013
2014 2013
Assets Millions of yen Ratio (%) Millions of yen Ratio (%)
Current assets
Cash and cash equivalents (Notes 9 and 20) ¥ 90,872 ¥ 93,620
Time deposits (Note 20) 277 217
Trade notes and accounts receivable, net (Notes 4, 7, 20 and 23) 617,334 606,904
Inventories (Note 5) 625,077 633,647
Deferred income taxes and other current assets (Notes 9, 15, 19, 20, 21 and 23) 159,872 157,668
Total current assets 1,493,432 56.3 1,492,056 59.3
Long-term trade receivables, net (Notes 4, 20 and 23) 260,904 9.8 235,825 9.4
Investments
Investments in and advances to affiliated companies (Note 7) 23,192 19,404
Investment securities (Notes 6, 20 and 21) 67,175 59,279
Other 2,020 2,574
Total investments 92,387 3.5 81,257 3.2
Property, plant and equipment
– less accumulated depreciation and amortization (Notes 8, 9 and 16) 667,347 25.2 585,220 23.2
Goodwill (Notes 3 and 10) 36,020 1.4 34,703 1.4
Other intangible assets
– less accumulated amortization (Note 10) 58,532 2.2 58,523 2.3
Deferred income taxes and other assets (Notes 12, 15, 19, 20, 21 and 23) 42,934 1.6 30,273 1.2
¥ 2,651,556 100.0 ¥ 2,517,857 100.0
2014 2013
Liabilities and Equity Millions of yen Ratio (%) Millions of yen Ratio (%)
Current liabilities
Short-term debt (Notes 9, 11 and 20) ¥ 176,515 ¥ 205,156
Current maturities of long-term debt (Notes 11, 16 and 20) 117,485 130,793
Trade notes, bills and accounts payable (Notes 7 and 20) 234,231 226,275
Income taxes payable (Note 15) 42,211 33,227
Deferred income taxes and other current liabilities (Notes 12, 15, 18, 19, 20, 21 and 23) 221,789 232,125
Total current liabilities 792,231 29.9 827,576 32.8
Long-term liabilities
Long-term debt (Notes 11, 16 and 20) 311,067 343,814
Liability for pension and retirement benefits (Note 12) 49,428 49,912
Deferred income taxes and other liabilities (Notes 15, 18, 19, 20 and 21) 57,719 43,860
Total long-term liabilities 418,214 15.8 437,586 17.4
Total liabilities 1,210,445 45.7 1,265,162 50.2
Commitments and contingent liabilities (Note 18)
Equity
Komatsu Ltd. shareholders’ equity (Note 13)
Common stock:
Authorized 3,955,000,000 shares
Issued 983,130,260 shares
Outstanding 953,196,968 shares in 2014 and 952,778,859 shares in 2013 67,870 67,870
Capital surplus 138,984 138,818
Retained earnings:
Appropriated for legal reserve 39,962 38,230
Unappropriated 1,141,751 1,034,504
Accumulated other comprehensive income (loss) (Notes 6, 12, 14, 19 and 21) 30,035 (43,440)
Treasury stock at cost,
29,933,292 shares in 2014 and 30,351,401 shares in 2013 (42,211) (42,788)
Total Komatsu Ltd. shareholders’ equity 1,376,391 51.9 1,193,194 47.4
Noncontrolling interests 64,720 2.4 59,501 2.4
Total equity 1,441,111 54.3 1,252,695 49.8
¥ 2,651,556 100.0 ¥ 2,517,857 100.0
The accompanying Notes are an integral part of these Consolidated Financial Statements.
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Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Komatsu Ltd. and Consolidated Subsidiaries
Years ended March 31, 2014 and 2013.
2014 2013
Yen
Per share data (Note 17):
Net income attributable to Komatsu Ltd.:
Basic 167.36 132.64
Diluted 167.18 132.51
Cash dividends per share 53.00 45.00
The accompanying Notes are an integral part of these Consolidated Financial Statements.
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Consolidated Statements of Comprehensive Income
Millions of yen
2014 2013
The accompanying Notes are an integral part of these Consolidated Financial Statements.
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Consolidated Statements of Equity
Komatsu Ltd. and Consolidated Subsidiaries
Balance at March 31, 2014 ¥ 67,870 ¥ 138,984 ¥ 39,962 ¥ 1,141,751 ¥ 30,035 ¥ (42,211 ) ¥ 1,376,391 ¥ 64,720 ¥ 1,441,111
Balance at March 31, 2013 ¥ 67,870 ¥ 138,818 ¥ 38,230 ¥ 1,034,504 ¥ (43,440) ¥ (42,788 ) ¥ 1,193,194 ¥ 59,501 ¥1,252,695
The accompanying Notes are an integral part of these Consolidated Financial Statements.
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Consolidated Statements of Cash Flows
Komatsu Ltd. and Consolidated Subsidiaries
Years ended March 31, 2014 and 2013
Millions of yen
2014 2013
Operating activities
Net income ¥ 169,604 ¥ 137,135
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 87,273 89,322
Deferred income taxes 2,007 (5,539)
Impairment loss and net loss (gain) from sale of investment securities (1,701) 3,058
Net gain on sale of property (4,157) (567)
Loss on disposal of fixed assets 4,045 1,867
Impairment loss on long-lived assets 2,300 1,907
Pension and retirement benefits, net 1,558 (979)
Changes in assets and liabilities:
Decrease (increase) in trade receivables 9,491 (21,656)
Decrease (increase) in inventories 49,504 42,040
Increase (decrease) in trade payables 369 (54,347)
Increase (decrease) in income taxes payable 8,320 9,407
Other, net (9,189) 12,397
Net cash provided by operating activities 319,424 214,045
Investing activities
Capital expenditures (186,030) (142,992)
Proceeds from sale of property 18,672 11,436
Proceeds from sale of available for sale investment securities 4,568 3,766
Purchases of available for sale investment securities (73) (11)
Acquisition of subsidiaries and equity investees, net of cash acquired (5,639) (5,051)
Collection of loan receivables 366 706
Disbursement of loan receivables (16) (50)
Decrease in time deposits, net 713 799
Net cash used in investing activities (167,439) (131,397)
Financing activities
Proceeds from debt issued (Original maturities greater than three months) 198,686 292,013
Payment on debt (Original maturities greater than three months) (240,743) (392,647)
Short-term debt - net (Original maturities three months or less) (48,632) 84,823
Repayments of capital lease obligations (6,671) (6,591)
Sale (purchase) of treasury stock, net (31) 38
Dividends paid (50,539) (42,877)
Other, net (7,419) (6,573)
Net cash used in financing activities (155,349) (71,814)
Effect of exchange rate change on cash and cash equivalents 616 (293)
Net increase (decrease) in cash and cash equivalents (2,748) 10,541
Cash and cash equivalents, beginning of year 93,620 83,079
Cash and cash equivalents, end of year ¥ 90,872 ¥ 93,620
The accompanying Notes are an integral part of these Consolidated Financial Statements.
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Notes to Consolidated Financial Statements
Komatsu Ltd. and Consolidated Subsidiaries
Years ended March 31, 2014 and 2013
1. Description of Business, Basis of Financial Statement Presentation and Summary of Significant Accounting Policies
Description of Business
Komatsu Ltd. (“Company”) and subsidiaries (together “Komatsu”) primarily manufacture and market various types of construction,
mining and utility equipment throughout the world. Komatsu is also engaged in the manufacture and sale of industrial machinery and
others.
The consolidated net sales of Komatsu for the year ended March 31, 2014, consisted of the following: Construction, Mining and
Utility Equipment – 89.6%, Industrial Machinery and Others – 10.4%.
Sales are made principally under the Komatsu brand name, and are almost entirely executed through sales subsidiaries and sales
distributors. These subsidiaries and distributors are responsible for marketing and distribution and primarily sell to retail dealers in
their geographical area. Of consolidated net sales for the year ended March 31, 2014, 77.8% were generated outside Japan, with 29.5%
in the Americas, 10.2% in Europe and CIS, 9.6% in China, 20.1% in Asia (excluding Japan and China) and Oceania, and 8.4% in the
Middle East and Africa.
The manufacturing operations of Komatsu are conducted primarily at plants in Japan, the United States, Germany, the United
Kingdom, Italy, Sweden, Russia, Brazil, China, Thailand, Indonesia, and India.
Preparation of Financial Statement and Registration with the U.S. Securities and Exchange Commission
The Company has been preparing its consolidated financial statements in accordance with U.S. GAAP since 1963, because the
Company issued foreign currency convertible bonds at European market in 1964. The Company registered its convertible bonds issued
in the United States in 1967 and its common shares issued for U.S. shareholders as well as Japanese shareholders in 1970 with the U.S.
Securities and Exchange Commission (the “SEC”). Since then, the Company, as a non-U.S. issuer, has been having the reporting
obligations, such as filing annual report with its consolidated financial statements in accordance with U.S. GAAP, under the Securities
Exchange Act of 1934 (the “Exchange Act”).
The Company filed a Form 15F with the SEC to terminate its reporting obligations under the Exchange Act on April 1, 2014. As a
result of the filing of Form 15F, the Company’s reporting obligations under the Exchange Act have been suspended, and is scheduled
to be terminated on June 30, 2014. The schedule may be changed upon the SEC’s objection or request for an extended review.
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(2) Foreign Currency Translation and Transactions
Assets and liabilities of foreign operations are translated at the exchange rates in effect at each fiscal year-end, and income and
expenses of foreign operations are translated at the average rates of exchange prevailing during each fiscal year in consolidating the
financial statements of overseas subsidiaries. The resulting translation adjustments are included as a separate component of
accumulated other comprehensive income (loss) in the accompanying consolidated financial statements. All foreign currency
transaction gains and losses are included in other income (expenses), net in the period incurred.
(4) Inventories
Inventories are stated at the lower of cost or market. Komatsu determines cost of work in process and finished products using the
specific identification method based on actual costs accumulated under a job-order cost system. The cost of finished parts is
determined principally using the first-in first-out method. Cost of materials and supplies is stated at average cost.
(6) Property, Plant and Equipment, and Related Depreciation and Amortization
Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated principally by the straight-
line method based on the estimated useful lives of the assets.
The estimated useful lives used in computing depreciation of property, plant and equipment are as follows:
Asset Life
Buildings 2 to 50 years
Machinery and equipment 2 to 20 years
Certain leased machinery and equipment are accounted for as capital leases. The aggregate cost included in property, plant and
equipment and related accumulated amortization as of March 31, 2014 and 2013 were as follows:
Millions of yen
2014 2013
Aggregate cost ¥ 17,275 ¥ 23,184
Accumulated amortization 10,339 14,468
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(Change in the depreciation method)
The Company and some of its consolidated subsidiaries, which had adopted the declining-balance method for depreciation of property,
plant and equipment, changed the depreciation method to the straight-line method, beginning in April 1, 2013.
Komatsu promotes continuous innovation of technologies by concentrating the production of high-value added and technologically
important key components in Japan, and also undertakes integrated development and production under the Mother Plant system. As a
general rule, Komatsu engages in local assembly in different parts of the world where there is sufficient market demand for its
products. With respect to mainstay products, however, Komatsu has facilitated effective use of its global production capacities by
cross sourcing finished products after producing them at its most cost-effective plants and exporting them in light of changes in market
demand and foreign exchange rate. In order to improve management efficiency, Komatsu is establishing production efficiency,
standardization of production and stable operation of production facilities through renewing its old factory buildings in Japan,
reassessing logistics and reforming production process by technology innovation as well as cutting down electric power consumption
in half at its plants in Japan. With respect to capital investment, Komatsu continues to invest in its production facilities for renovation
at a constant level. In light of those activities, Komatsu expects stable production and facility utilization within its production capacity,
and is able to receive economic benefits from those facilities at a constant rate throughout their useful lives.
As a result of reviewing its depreciation method, Komatsu concluded that the straight-line method would be an appropriate
depreciation method to reflect its future usage of property, plant and equipment more accurately and to allocate the costs in earnings.
The effect of the change in depreciation method is recognized prospectively as a change in accounting estimate in accordance with
ASC 250 “Accounting Changes and Error Corrections.”
As a result of the change in depreciation method, in the fiscal year, depreciation expenses decreased by ¥12,181 million and net
income attributable to Komatsu Ltd. increased by ¥7,540 million compared with the case where the method before the revisions is
applied. Basic and diluted net income attributable to Komatsu Ltd. per share for the fiscal year ended March 31, 2014 increased by
¥7.91, and ¥7.90, respectively.
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(9) Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be
realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
If a tax position meets the more-likely-than-not recognition threshold based on the technical merits of the position, Komatsu
recognizes the benefit of such position in the financial statements. The benefit of the tax position is measured at the largest amount of
benefit that is greater than 50 percent likely of being realized upon settlement with appropriate taxing authority.
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(15) Derivative Financial Instruments
Komatsu uses various derivative financial instruments to manage its interest rate and foreign exchange exposure.
All derivatives, including derivatives embedded in other financial instruments, are measured at fair value and recognized as either
assets or liabilities on the consolidated balance sheet. Changes in the fair values of derivative instruments not designated or not
qualifying as hedges and any ineffective portion of qualified hedges are recognized in earnings in the current period. Changes in the
fair values of derivative instruments which qualify as fair value hedges are recognized in earnings, along with changes in the fair value
of the hedged item. Changes in the fair value of the effective portions of cash flow hedges are reported in accumulated other
comprehensive income (loss), and recognized in earnings when the hedged item is recognized in earnings.
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2. Supplemental Cash Flow Information
Additional cash flow information and noncash investing and financing activities for the years ended March 31, 2014 and 2013, are as
follows:
Millions of yen
2014 2013
Additional cash flow information:
Interest paid ¥ 9,330 ¥ 8,554
Income taxes paid 76,982 59,438
Noncash investing and financing activities:
Capital lease obligations incurred ¥ 1,438 ¥ 3,286
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3. Business Combination
Log Max AB and Log Max, Inc.
On November 30, 2012, Komatsu Forest AB (hereinafter “KFAB”), the Company’s wholly owned subsidiary acquired all of the
equity interests in Log Max AB and Log Max, Inc., for ¥6,782 million from Log Max International Holding AB. Through this
acquisition, Log Max AB and Log Max, Inc., became wholly owned subsidiaries of KFAB.
Log Max AB, is a Swedish-based manufacturer of forest machine attachments such as harvester heads and Log Max, Inc. is its U.S.
sales arm. Harvester heads manufactured by Log Max AB and KFAB are mutually complementary in types of harvesting and tree
sizes and Komatsu expects synergies through the sales expansion of forestry machines. Goodwill recognized is attributable primarily
to expected synergies.
The allocation of fair value to the acquired assets and assumed liabilities under ASC 805, “Business Combinations” was completed in
the year ended March 31, 2013.
Following is a summary of the assets acquired and liabilities adjusted to reflect purchase price allocation assumed as of the date of
acquisition.
Millions of yen
Consideration
Cash and cash equivalents ¥ 6,782
Fair value of total consideration transferred 6,782
Acquisition-related cost (included in selling, general and administrative expenses) ¥ 298
Recognized amounts of identifiable assets and liabilities assumed
Current assets ¥ 2,340
Property, plant and equipment 50
Intangible assets 3,758
Other assets 16
Total assets acquired 6,164
Current liabilities (492)
Long-term liabilities (931)
Total liabilities assumed (1,423)
Net assets acquired 4,741
Goodwill 2,041
¥ 6,782
The goodwill of ¥2,041 million was assigned to the Construction, Mining and Utility Equipment operating segment. The goodwill is
not deductible for tax purpose.
The amounts of sales and income of Log Max AB and Log Max, Inc. included in Komatsu’s consolidated income statement since the
date of acquisition for the year ended March 31, 2013 were immaterial.
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4. Trade Notes and Accounts Receivable
Receivables at March 31, 2014 and 2013 are summarized as follows:
Millions of yen
2014 2013
Trade notes ¥ 131,071 ¥ 121,423
Accounts receivable 503,878 502,141
Total 634,949 623,564
Less: allowance-current (17,615) (16,660)
Trade notes and accounts receivable, net ¥ 617,334 ¥ 606,904
Long-term trade receivables 262,752 237,159
Less: allowance-noncurrent (1,848) (1,334)
Long-term trade receivables, net 260,904 235,825
Installment and lease receivables (less unearned interest) are included in trade notes and accounts receivable and long-term trade
receivables.
The roll-forward schedule of the allowance for credit losses of the financing receivables for the years ended March 31, 2014 and 2013
are as follows:
Millions of yen
2014 2013
Balance at beginning of year ¥ 9,194 ¥ 7,750
Provision 1,016 1,094
Charge-offs (822) (794)
Other 680 1,144
Balance at end of year ¥ 10,068 ¥ 9,194
Komatsu considers that financing receivables of retail finance subsidiaries are past due, if unpaid for greater than 30 days. Cumulative
past due financing receivables (31-90 days, greater than 90 days) at March 31, 2014 and 2013 were summarized as follows:
Millions of yen
2014 2013
31-90 days past due ¥ 5,726 ¥ 5,942
Greater than 90 days past due 12,950 7,093
Total past due ¥ 18,676 ¥ 13,035
Nonaccrual financing receivables at March 31, 2014 and 2013 were not material.
Equipment sales revenue from sales-type leases is recognized at the inception of the lease. At March 31, 2014 and 2013, lease
receivables comprised the following:
Millions of yen
2014 2013
Minimum lease payments receivable ¥ 197,498 ¥ 225,463
Unearned income (16,741) (19,252)
Net lease receivables ¥ 180,757 ¥ 206,211
The residual values of leased assets at March 31, 2014 and 2013 were not material.
Komatsu did not have any cash flows from securitization activities from the sale of trade notes and accounts receivable for the fiscal
years ended March 31, 2014 and 2013.
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5. Inventories
At March 31, 2014 and 2013, inventories comprised the following:
Millions of yen
2014 2013
Finished products, including finished parts held for sale ¥ 444,586 ¥ 437,729
Work in process 128,458 141,166
Materials and supplies 52,033 54,752
Total ¥ 625,077 ¥ 633,647
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6. Investment Securities
Investment securities at March 31, 2014 and 2013, primarily consisted of securities available for sale.
Unrealized holding gains and losses are included as a component of accumulated other comprehensive income (loss) until realized.
The cost, gross unrealized holding gains and losses, and fair value for such investment securities by major security types at March 31,
2014 and 2013, are as follows:
Millions of yen
Gross unrealized holding
Cost Gains Losses Fair value
Proceeds from the sale of investment securities available for sale during the years ended March 31, 2014 and 2013, amounted to
¥4,568 million and ¥3,766 million, respectively.
Impairment loss and net gain (loss) from sale of investment securities available for sale during the years ended March 31, 2014 and
2013, amounted to gains of ¥1,701 million and losses of ¥3,058 million, respectively. Such gains and losses were included in other
income (expense), net in the accompanying consolidated statements of income.
The cost of the investment securities sold was computed based on the average cost method.
Gross unrealized holding losses and the fair value of available for sale securities, aggregated by length of time that individual
securities have been in a continuous unrealized loss position at March 31,2014 and 2013, are as follows:
Millions of yen
Less than 12 months 12 months or longer Total
Gross Gross Gross
unrealized unrealized unrealized
holding holding holding
Fair value losses Fair value losses Fair value losses
Komatsu judged the decline in fair value of investment securities at year end to be temporary, by considering such factors as financial
and operating condition of issuer, the industry in which the issuer operates and other relevant factors.
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7. Investments in and Advances to Affiliated Companies
At March 31, 2014 and 2013, investments in and advances to affiliated companies comprised the following:
Millions of yen
2014 2013
Investments in capital stock ¥22,861 ¥18,862
Advances 331 542
Total ¥23,192 ¥19,404
The investments in and advances to affiliated companies relate to 20% to 50% owned companies whereby Komatsu has the ability to
exercise significant influence over the operational and financial policies.
Dividends received from affiliated companies were ¥444 million and ¥400 million during the years ended March 31, 2014 and 2013,
respectively.
Trade notes and accounts receivable from affiliated companies at March 31, 2014 and 2013, were ¥23,976 million and ¥22,417
million, respectively.
Short-term loans receivable from affiliated companies at March 31, 2014 and 2013 were ¥482 million and ¥565 million, respectively.
Trade notes and accounts payable to affiliated companies at March 31, 2014 and 2013, were ¥10,559 million and ¥8,879 million,
respectively.
Net sales to affiliated companies for the years ended March 31, 2014 and 2013, were ¥59,678 million and ¥52,785 million,
respectively.
Intercompany profits (losses) have been eliminated in the consolidated financial statements.
As of March 31, 2014 and 2013, consolidated unappropriated retained earnings included Komatsu’s share of undistributed earnings of
affiliated companies accounted for by the equity method in the amount of ¥11,043 million and ¥7,496 million, respectively.
The difference between the carrying value of the investments in affiliated companies and Komatsu’s equity in the underlying net
assets of such affiliated companies is insignificant as of March 31, 2014 and 2013.
Summarized financial information for affiliated companies at March 31, 2014 and 2013, and for the years ended March 31, 2014 and
2013, is as follows:
Millions of yen
2014 2013
Current assets ¥129,293 ¥ 118,422
Net property, plant and equipment – less accumulated depreciation and amortization 44,722 39,318
Investments and other assets 30,941 34,533
Total assets ¥204,956 ¥ 192,273
Current liabilities ¥ 96,985 ¥ 92,642
Noncurrent liabilities 45,106 47,517
Equity 62,865 52,114
Total liabilities and equity ¥204,956 ¥ 192,273
Millions of yen
2014 2013
Net sales ¥223,404 ¥ 185,381
Net income ¥ 7,929 ¥ 4,090
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8. Property, Plant and Equipment
The major classes of property, plant and equipment at March 31, 2014 and 2013, are as follows:
Millions of yen
2014 2013
Land ¥ 104,801 ¥ 107,168
Buildings 405,806 389,484
Machinery and equipment 876,870 772,526
Construction in progress 21,480 22,339
Total 1,408,957 1,291,517
Less: accumulated depreciation and amortization (741,610) (706,297)
Net property, plant and equipment ¥ 667,347 ¥ 585,220
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9. Pledged Assets
At March 31, 2014 and 2013, assets pledged as collateral for short-term debt and guarantees for debt are as follows:
Millions of yen
2014 2013
Cash and cash equivalents ¥ 3 ¥ 3
Other current assets 1,423 1,682
Property, plant and equipment – less accumulated depreciation and amortization 858 788
Total ¥2,284 ¥2,473
Millions of yen
2014 2013
Appearing in the consolidated balance sheets as:
Short-term debt ¥ 858 ¥ 788
Guarantees for debt 1,426 1,685
Total ¥2,284 ¥2,473
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10. Goodwill and Other Intangible Assets
Intangible assets other than goodwill at March 31, 2014 and 2013 are as follows:
Millions of yen
2014 2013
Gross Net Gross Net
carrying Accumulated carrying carrying Accumulated carrying
amount amortization amount amount amortization amount
Other intangible assets subject to amortization:
Software ¥ 30,675 ¥ (17,919) ¥ 12,756 ¥ 33,026 ¥ (19,983) ¥ 13,043
Leasehold 8,041 (824) 7,217 7,499 (734) 6,765
Other 39,179 (15,659) 23,520 36,808 (12,930) 23,878
Total 77,895 (34,402) 43,493 77,333 (33,647) 43,686
Other intangible assets not subject to amortization 15,039 14,837
Total other intangible assets ¥ 58,532 ¥ 58,523
At March 31, 2014, net carrying amounts of other intangible assets subject to amortization mainly consist of customer relationships of
¥1,055 million and technology assets of ¥4,777 million resulting from the acquisition of additional shares of Gigaphoton Inc. for the
fiscal year ended March 31, 2012 and customer relationships of ¥9,272 million and technology assets of ¥2,960 million resulting from
the acquisition of additional shares of Komatsu NTC Ltd. for the fiscal year ended March 31, 2008.
The aggregate amortization expense of other intangible assets subject to amortization for the years ended March 31, 2014 and 2013
were ¥7,390 million and ¥8,477 million, respectively.
At March 31, 2014, the future estimated amortization expenses for each of five years relating to intangible assets currently recorded in
the consolidated balance sheet are as follows:
133
The changes in carrying amounts of goodwill for the years ended March 31, 2014 and 2013 are as follows:
Millions of yen
Construction, Mining Industrial Machinery
and Utility Equipment and Others
operating segment operating segment Total
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11. Short-Term and Long-Term Debt
(1) Short-term debt at March 31, 2014 and 2013, consisted of the following:
Millions of yen
2014 2013
Banks, insurance companies and other financial institutions ¥ 128,515 ¥ 164,156
Commercial paper 48,000 41,000
Short-term debt ¥ 176,515 ¥ 205,156
The weighted-average annual interest rates applicable to short-term debt outstanding at March 31, 2014 and 2013, both were 1.9%.
Certain consolidated subsidiaries have entered into contracts for committed credit lines totaling ¥35,998 million and have unused
committed lines of credit amounting to ¥17,619 million with certain financial institutions at March 31, 2014, which are available for
full and immediate borrowings. The Company is party to a committed ¥180,000 million commercial paper program and unused
committed commercial paper program amounting to ¥132,000 million at March 31, 2014, is available upon the satisfaction of certain
customary procedural requirements.
(2) Long-term debt at March 31, 2014 and 2013, consisted of the following:
Millions of yen
2014 2013
Long-term debt without collateral:
Banks, insurance companies and other financial institutions
maturing serially through 2014–2022, weighted-average rate 2.3% ¥ 212,261 ¥ 260,536
Euro Medium-Term Notes
maturing serially through 2014–2018, weighted-average rate 1.5% 116,052 80,734
1.53% Unsecured Bonds due 2013 — 30,000
1.19% Unsecured Bonds due 2014 30,000 30,000
0.58% Unsecured Bonds due 2016 30,000 30,000
0.32% Unsecured Bonds due 2017 30,000 30,000
Capital lease obligations (Note 16) 6,218 9,976
Other 4,021 3,361
Total 428,552 474,607
Less: current maturities (117,485) (130,793)
Long-term debt ¥ 311,067 ¥ 343,814
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(3) In 1996, the Company, Komatsu Finance America Inc. and Komatsu Finance (Netherlands) B.V. registered the US$1.0 billion
Euro Medium-Term Note Program (“the Program”) on the London Stock Exchange. On April 1, 1999, the registered amount of the
Program was increased to US$1.2 billion. On October 14, 2003, Komatsu Europe Coordination Center N.V. and on September 25,
2008, Komatsu Capital Europe S.V. were added as an issuer under the Program, respectively. On September 18, 2013, the registered
amount of the Program was increased to US$1.3 billion.
At March 31, 2014, the issuers under the Program were the Company, Komatsu Finance America Inc. and Komatsu Capital Europe
S.A.
Under the Program, each of the issuers may from time to time issue notes denominated in any currency as may be agreed between the
relevant issuers and dealers. The issuers under the Program issued ¥35,545 million during the fiscal year ended March 31, 2014, and
¥29,588 million during the fiscal year ended March 31, 2013 of Euro Medium-Term Notes with various interest rates and maturity
dates.
The Company has established a program to issue up to ¥100,000 million of variable term bonds.
(4) As is customary in Japan, substantially all bank loans are made under general agreements.
(5) Maturities of long-term debt at March 31, 2014 and 2013, excluding market value adjustments of ¥421 million (loss) and ¥1,153
million (loss), respectively are as follows:
Millions of yen
2014 2013
Due within one year ¥ 117,630 ¥ 130,480
Due after one year through two years 121,065 119,162
Due after two years through three years 88,941 112,345
Due after three years through four years 69,926 69,659
Due after four years through five years 26,312 41,185
Due after five years 4,257 623
Total ¥ 428,131 ¥ 473,454
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12. Liability for Pension and Other Retirement Benefits
The Company’s employees, with certain minor exceptions, are covered by a severance payment and a defined benefit cash balance
pension plan. The plan provides that approximately 60% of the employee benefits are payable as a pension payment, commencing
upon retirement at age 60 (mandatory retirement age) and that the remaining benefits are payable as a lump-sum severance payment
based on remuneration, years of service and certain other factors at the time of retirement. The plan also provides for lump-sum
severance payments, payable upon earlier termination of employment.
Under the cash balance pension plan, each employee has an account which is credited yearly based on the current rate of pay and
market-related interest rate.
Certain subsidiaries have various funded pension plans and/or unfunded severance payment plans for their employees, which are
based on years of service and certain other factors. The Company and certain subsidiaries’ funding policies are to contribute the
amounts to provide not only for benefits attributed to service to date but also for those expected to be earned in the future.
The reconciliation of beginning and ending balances of the benefit obligations and the fair value of the plan assets of the defined
benefit plans are as follows:
Millions of yen
2014 2013
Change in benefit obligations:
Benefit obligations, beginning of year ¥ 144,511 ¥ 134,572
Service cost 7,619 7,247
Interest cost 3,331 3,516
Actuarial loss (gain) (229) 6,233
Plan participants’ contributions 171 175
Acquisition — 168
Plan amendment 179 410
Settlements (5) (104)
Benefits paid (7,427) (10,838)
Foreign currency exchange rate change 4,381 3,132
Benefit obligations, end of year ¥ 152,531 ¥ 144,511
Change in plan assets:
Fair value of plan assets, beginning of year ¥ 101,508 ¥ 89,061
Actual return on plan assets 7,069 9,922
Employers’ contributions 5,998 7,193
Plan participants’ contributions 171 175
Settlements (5) (104)
Benefits paid (5,247) (7,602)
Foreign currency exchange rate change 3,915 2,863
Fair value of plan assets, end of year ¥ 113,409 ¥ 101,508
Funded status, end of year ¥ (39,122) ¥ (43,003)
Amounts recognized in the consolidated balance sheets at March 31, 2014 and 2013 are as follows:
Millions of yen
2014 2013
Deferred income taxes and other assets ¥ 6,571 ¥ 2,899
Deferred income taxes and other current liabilities (279) (112)
Liability for pension and retirement benefits (45,414) (45,790)
¥ (39,122) ¥ (43,003)
137
Amounts recognized in accumulated other comprehensive income (loss) at March 31, 2014 and 2013 are as follows:
Millions of yen
2014 2013
Actuarial loss ¥ 28,624 ¥ 34,628
Prior service cost 1,972 2,183
¥ 30,596 ¥ 36,811
The accumulated benefit obligations for all defined benefit plans at March 31, 2014 and 2013 were ¥139,078 million and ¥133,537
million, respectively.
Information for pension plans with accumulated benefit obligations in excess of plan assets and pension plans with projected benefit
obligations in excess of plan assets is as follows:
Millions of yen
2014 2013
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations ¥ 108,874 ¥ 106,196
Fair value of plan assets 74,019 69,466
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations ¥ 135,482 ¥ 132,078
Fair value of plan assets 89,790 86,119
Net periodic cost of the companies’ defined benefit plans for the years ended March 31, 2014 and 2013, consisted of the following
components:
Millions of yen
2014 2013
Service cost ¥ 7,619 ¥ 7,247
Interest cost on projected benefit obligations 3,331 3,516
Expected return on plan assets (3,118) (2,804)
Amortization of actuarial loss 1,824 2,188
Amortization of prior service cost 390 369
Net periodic cost ¥ 10,046 ¥ 10,516
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for the years ended March 31,
2014 and 2013 are summarized as follows:
Millions of yen
2014 2013
Current year actuarial gain ¥ (4,180) ¥ (885)
Amortization of actuarial loss (1,824) (2,188)
Current year prior service cost 179 410
Amortization of prior service cost (390) (369)
¥ (6,215) ¥ (3,032)
138
The estimated actuarial loss and prior service cost for the defined benefit plans that will be amortized from accumulated other
comprehensive income (loss) into net periodic cost for the year ending March 31, 2015 are summarized as follows:
Millions of yen
Amortization of actuarial loss ¥ 1,463
Amortization of prior service cost 332
Weighted-average assumptions used to determine benefit obligations of the companies’ defined benefit plans at March 31, 2014 and
2013 are as follows:
Weighted-average assumptions used to determine net periodic cost of the companies’ defined benefit plans for the years ended
March 31, 2014 and 2013 are as follows:
The Company and certain Japanese subsidiaries have defined benefit cash balance pension plans. These companies adopt the assumed
rate of increase in future compensation levels under the point-based benefit system.
The Company and certain subsidiaries determine the expected long-term rate of return on plan assets based on the consideration of the
current expectations for future returns and actual historical returns of each plan asset category.
Plan assets
In order to secure long-term comprehensive earnings, the Company and certain subsidiaries’ investment policies are designed to
ensure adequate plan assets to provide future payments of pension benefits to eligible participants. Taking into account the expected
long-term rate of return on plan assets, the Company and certain subsidiaries formulate a basic portfolio comprised of the judged
optimum combination of equity and debt securities. Plan assets are principally invested in equity securities, debt securities and life
insurance company general accounts in accordance with the guidelines of the basic portfolio in order to produce a total return that will
match the expected return on a mid-term to long-term basis. The Company and certain subsidiaries evaluate the gap between expected
return and actual return of invested plan assets on an annual basis to determine if such differences necessitate a revision in the
formulation of the basic portfolio. The Company and certain subsidiaries revise the basic portfolio when and to the extent considered
necessary to achieve the expected long-term rate of return on plan assets.
The “Pension and Retirement Benefit Committee” is organized in the Company in order to periodically monitor the employment of
such plan assets.
Komatsu’s target basic portfolio for plan assets consists of three major components: approximately 35% invested in equity securities,
approximately 30% invested in debt securities, and approximately 35% invested in other assets, primarily consisting of investments in
life insurance company general accounts.
139
The equity securities are selected primarily from stocks that are listed on the securities exchanges. Prior to investing, Komatsu has
investigated the business condition of the investee companies, and appropriately diversified investments by type of industry and other
relevant factors. The debt securities are selected primarily from government bonds and municipal bonds, and corporate bonds. Prior
investing, Komatsu has investigated the quality of the issue, including rating, interest rate and repayment dates, and has appropriately
diversified the investments. Pooled funds are selected using strategies consistent with the equity described above. As for investments
in life insurance company general accounts, the contracts with the insurance companies include a guaranteed interest rate and return of
capital. With respect to investments in foreign investment assets, Komatsu has investigated the stability of the underlying governments
and economies, the market characteristics such as settlement systems and the taxation systems. For each such investment, Komatsu
has selected the appropriate investment country and currency. There is no significant concentration of risk within the portfolio of
investments.
The three levels of input used to measure fair value are more full described in Note 21.
The fair values of benefit plan assets at March 31, 2014 and 2013 by asset class are as follows:
Millions of yen
At March 31, 2014 Level 1 Level 2 Level 3 Total
Plan assets
Cash ¥ 7,256 ¥ — ¥ — ¥ 7,256
Equity securities
Japanese equities 7,302 522 — 7,824
Foreign equities 15,471 6,695 — 22,166
Pooled funds 6,751 1,075 — 7,826
Debt securities
Government bonds and municipal bonds 16,356 7,089 — 23,445
Corporate bonds — 10,142 — 10,142
Other assets
Life insurance company general accounts — 33,670 — 33,670
Other 585 495 — 1,080
Total ¥ 53,721 ¥ 59,688 ¥ — ¥113,409
Millions of yen
At March 31, 2013 Level 1 Level 2 Level 3 Total
Plan assets
Cash ¥ 2,787 ¥ — ¥ — ¥ 2,787
Equity securities
Japanese equities 8,974 498 — 9,472
Foreign equities 16,580 5,195 — 21,775
Pooled funds 6,040 1,106 — 7,146
Debt securities
Government bonds and municipal bonds 17,640 6,443 — 24,083
Corporate bonds — 5,085 — 5,085
Other assets
Life insurance company general accounts — 30,267 — 30,267
Other 495 398 — 893
Total ¥ 52,516 ¥ 48,992 ¥ — ¥101,508
(1) The plan’s equity securities include common stock of the Company in the amount of ¥21 million (0.03% of the Company’s total
plan assets) and ¥37 million (0.06% of the Company’s total plan assets) at March 31, 2014 and 2013, respectively.
(2) The plan’s pooled funds which are primarily held by the U.S. subsidiaries include listed foreign equity securities primarily
consisting of U.S. equity.
(3) The plan’s government bonds and municipal bonds include approximately 25% Japanese bonds and 75% foreign bonds.
Each level into which assets are categorized is based on inputs used to measure the fair value of the assets, and does not indicate the
risks of the assets.
140
Level 1 assets are comprised principally of equity securities and debt securities, which are valued using quoted prices in active
markets. Level 2 assets are comprised of equity securities, debt securities and investments in life insurance company general accounts.
Equity securities and debt securities are valued using inputs other than quoted prices included within Level 1 that are observable for
the assets or liabilities, either directly or indirectly. Investments in life insurance company general accounts are valued at conversion
value.
Cash flows
(1) Contributions
The Company and certain subsidiaries expect to contribute ¥5,348 million to their benefit plans in the year ending March 31, 2015.
141
Other postretirement benefit plans
Some U.S. subsidiaries provide certain postretirement health care and life insurance benefits for substantially all of their employees.
The plans are contributory, with contributions indexed to salary levels. Employee contributions are adjusted to provide for any costs of
the plans in excess of those paid for by the subsidiaries. The policy is to fund the cost of these benefits as claims and premiums are
paid. In the fiscal year ended March 31, 2008 certain U.S. subsidiaries established a Voluntary Employees’ Beneficiary Association
(“VEBA”) trust to hold assets and pay substantially all of these subsidiaries’ self-funded post employment benefit plan obligations.
The VEBA trust arrangement provides for segregation and legal restriction of the plan assets to satisfy plan obligations, and tax
deductibility for contributions to the trust, subject to certain tax code limitations.
The reconciliation of beginning and ending balances of the accumulated postretirement benefit obligations and the fair value of the
plan assets of the U.S. subsidiaries’ plans are as follows:
Millions of yen
2014 2013
Change in accumulated postretirement benefit obligations:
Accumulated postretirement benefit obligations, beginning of year ¥ 11,231 ¥ 9,091
Service cost 434 317
Interest cost 484 413
Actuarial loss (gain) (375) 379
Plan participants’ contributions 3 3
Medicare Part D 55 36
Benefits paid (793) (413)
Foreign currency exchange rate change 1,311 1,405
Accumulated postretirement benefit obligation, end of year ¥ 12,350 ¥ 11,231
Change in plan assets:
Fair value of plan assets, beginning of year ¥ 8,114 ¥ 6,305
Actual return on plan assets 562 469
Employers’ contributions 534 1,318
Plan participants’ contributions 3 3
Benefits paid (598) (1,002)
Foreign currency exchange rate change 781 1,021
Fair value of plan assets, end of year ¥ 9,396 ¥ 8,114
Funded status, end of year ¥ (2,954) ¥ (3,117)
Amounts recognized in the consolidated balance sheets at March 31, 2014 and 2013 are as follows:
Millions of yen
2014 2013
Deferred income taxes and other assets ¥ 949 ¥ 840
Deferred income taxes and other current liabilities (38) (41)
Liability for pension and retirement benefits (3,865) (3,916)
¥ (2,954) ¥ (3,117)
Amounts recognized in accumulated other comprehensive income (loss) at March 31, 2014 and 2013 are as follows:
Millions of yen
2014 2013
Actuarial loss ¥ 2,980 ¥ 3,734
Prior service cost 395 476
¥ 3,375 ¥ 4,210
Accumulated postretirement benefit obligations exceed plan assets for each of the U.S. subsidiaries’ plans.
142
Net periodic cost of the U.S. subsidiaries’ plans for the years ended March 31, 2014 and 2013 included the following components:
Millions of yen
2014 2013
Service cost ¥ 434 ¥ 317
Interest cost on projected benefit obligations 484 413
Expected return on plan assets (434) (360)
Amortization of actuarial loss 251 193
Amortization of prior service cost 81 67
Net periodic cost ¥ 816 ¥ 630
Other changes in plan assets and accumulated postretirement benefit obligations recognized in other comprehensive income (loss) for
the years ended March 31, 2014 and 2013 are summarized as follows:
Millions of yen
2014 2013
Current year actuarial loss (gain) ¥ (503) ¥ 270
Amortization of actuarial loss (251) (193)
Amortization of prior service cost (81) (67)
¥ (835) ¥ 10
The estimated actuarial loss and prior service cost for the postretirement benefit plans that will be amortized from accumulated other
comprehensive income (loss) into net periodic cost for the year ending March 31, 2015 are summarized as follows:
Millions of yen
Amortization of actuarial loss ¥ 234
Amortization of Prior service cost 83
Weighted-average assumptions used to determine accumulated postretirement benefit obligations of the U.S. subsidiaries’ plans at
March 31, 2014 and 2013 are as follows:
2014 2013
Discount rate 4.5% 4.1%
Assumed rate of increase in future compensation levels 4.0% 4.0%
Current healthcare cost trend rate 7.0% 7.8%
Ultimate healthcare cost trend rate 5.0% 4.8%
Number of years to ultimate healthcare cost trend rate 8 3
Weighted-average assumptions used to determine net periodic cost of the U.S. subsidiaries’ plans for the years ended March 31, 2014
and 2013 are as follows:
2014 2013
Discount rate 4.1% 4.7%
Assumed rate of increase in future compensation levels 4.0% 4.0%
Expected long-term rate of return on plan assets 5.2% 5.2%
Current healthcare cost trend rate 7.8% 7.9%
Ultimate healthcare cost trend rate 4.8% 4.8%
Number of years to ultimate healthcare cost trend rate 3 4
At March 31, 2014 and 2013, the impact of one percentage point change in the assumed health care cost trend rates would not be
material to Komatsu’s consolidated financial position or results of operations.
143
Plan assets
The U.S. subsidiaries’ investment policies are to provide returns that will maximize principal growth while accepting only moderate
risk.
The U.S. subsidiaries’ asset portfolio will be invested in a manner that emphasizes safety of capital while achieving total returns
consistent with prudent levels of risk. The basic portfolio for the plan assets are comprised approximately of 35% equity securities and
65% debt securities.
The equity securities are selected primarily from stocks that are listed on the securities exchanges. Prior to investing, Komatsu has
investigated the business condition of the invested companies, and appropriately diversified investments by type of industry and other
relevant factors. The debt securities are selected primarily from government bonds and municipal bonds, and corporate bonds. Prior
investing, Komatsu has investigated the quality of the issue, including rating, interest rate and repayment dates, and has appropriately
diversified the investments. Pooled funds are selected using strategies consistent with the equity described above. There is no
significant concentration of risk within the portfolio of investments.
The three levels of input used to measure fair value are more full described in Note 21.
The fair values of postretirement benefit plan assets at March 31, 2014 and 2013, by asset class are as follows:
Millions of yen
At March 31, 2014 Level 1 Level 2 Level 3 Total
Plan assets
Cash ¥ 311 ¥ — ¥ — ¥ 311
Equity securities
Foreign equities 1,791 — — 1,791
Pooled funds 1,718 — — 1,718
Debt securities
Government bonds and municipal bonds 552 3,463 — 4,015
Corporate bonds — 1,561 — 1,561
Total ¥ 4,372 ¥ 5,024 ¥ — ¥ 9,396
Millions of yen
At March 31, 2013 Level 1 Level 2 Level 3 Total
Plan assets
Cash ¥ 460 ¥ — ¥ — ¥ 460
Equity securities
Foreign equities 966 — — 966
Pooled funds 1,796 — — 1,796
Debt securities
Government bonds and municipal bonds 333 3,200 — 3,533
Corporate bonds — 1,359 — 1,359
Total ¥ 3,555 ¥ 4,559 ¥ — ¥ 8,114
(1) The plan’s pooled funds include listed foreign equity securities primarily consisting of U.S. equity.
(2) The plan’s government bonds consist of U.S. government bonds.
Each level into which assets are categorized is based on inputs used to measure the fair value of the assets, and does not indicate the
risks of the assets.
Level 1 assets are comprised principally of equity securities, which are valued using quoted prices in active markets. Level 2 assets are
comprised of debt securities, which are valued using inputs other than quoted prices included within Level 1 that are observable for
the assets or liabilities, either directly or indirectly.
144
Cash flows
(1) Contributions
The U.S. subsidiaries expect to contribute ¥38 million to their postretirement benefit plans in the year ending March 31, 2015.
Directors of Japanese subsidiaries are primarily covered by unfunded retirement allowance plans. At March 31, 2014 and 2013, the
amounts required if all directors covered by the plans had terminated their service have been fully accrued. Such amounts are not
material to Komatsu’s consolidated financial position or results of operations for any of the periods presented.
Certain subsidiaries maintain various defined contribution plans covering certain employees. The amount of cost recognized for all
periods presented is not material to Komatsu’s consolidated financial position or results of operations.
145
13. Komatsu Ltd. Shareholders’ Equity
(1) At March 31, 2014 and 2013, affiliated companies owned 1,192,000 and 1,092,000 shares which represent 0.13% and 0.11% of the
Company’s common shares outstanding, respectively.
(2) The Companies Act of Japan (“the Act”) imposes certain limitations on the amount of retained earnings available for dividends.
Accordingly, total shareholders’ equity of ¥425,126 million, included in the Company’s general books of account as of March 31,
2014 is available for dividends under the Act.
The payment of a cash dividend totaling ¥27,659 million to shareholders of record on March 31, 2014 will be discussed at the
Ordinary General Meeting of Shareholders held on June 18, 2014. The dividend has not been reflected in the consolidated financial
statements as of March 31, 2014. Dividends are reported in the consolidated statements of equity when approved and paid.
(3) The Company has two types of stock option plans as stock-based remuneration.
The stock option plans resolved by the meeting of the Board of Directors held in and before June 2010.
The right to purchase the Company’s shares is granted at a predetermined price to directors and certain employees and certain
directors of major subsidiaries. The purchase price is the amount calculated by taking the average of the closing prices applicable to
ordinary transactions of shares of the Company on the Tokyo Stock Exchange on all days for a month immediately preceding the
month in which the date of grant of the right falls and multiplying by 1.05, provided that the exercise price shall not be less than the
closing price of the shares of the Company on the Tokyo Stock Exchange on the date of the grant.
The stock option plans resolved by the meeting of the Board of Directors held in and after July 2010.
The right to purchase the Company’s shares is granted at an exercise price of ¥1 per share to directors and certain employees and
certain directors of major subsidiaries.
Based on the resolutions of the Ordinary General Meeting of Shareholders on June 23, 2010 and the Board of Directors on July 12,
2012, the Company issued 843 rights of its Stock Acquisition Rights to directors. Based on the resolutions of the Ordinary General
Meeting of Shareholders on June 20, 2012 and the Board of Directors on July 12, 2012, the Company also issued 2,555 rights of its
Stock Acquisition Rights to certain employees and certain directors of major subsidiaries during the year ended March 31, 2013. The
options vest 100% on each of the grant dates and are exercisable from August 1, 2015.
In addition, based on the resolutions of the Ordinary General Meeting of Shareholders on June 23, 2010 and the Board of Directors on
July 17, 2013, the Company issued 561 rights of its Stock Acquisition Rights to directors. Based on the resolutions of the Ordinary
General Meeting of Shareholders on June 19, 2013 and the Board of Directors on July 17, 2013, the Company also issued 2,358 rights
of its Stock Acquisition Rights to certain employees and certain directors of major subsidiaries during the year ended March 31, 2014.
The options vest 100% on each of the grant dates and are exercisable from August 1, 2016.
The number of shares subject to one Stock Acquisition Right is 100 shares.
The Company recognizes compensation expense using the fair value method. Compensation expenses during the years ended
March 31, 2014 and 2013 were ¥564 million and ¥500 million, respectively, and were recorded in selling, general and administrative
expenses.
The Company transfers treasury stock without issuance of new stock when the Stock Acquisition Rights are exercised.
The following table summarizes information about stock option activity for the years ended March 31, 2014 and 2013:
2014 2013
Weighted average Weighted average
exercise price exercise price
Number Number
of shares Yen of shares Yen
Outstanding at beginning of year 2,987,700 ¥ 1,861 3,182,900 ¥ 1,947
Granted 291,900 1 339,800 1
Exercised (438,000) 1,637 (535,000) 1,189
Forfeited (202,000) 3,206 ― ―
Outstanding at end of year 2,639,600 1,590 2,987,700 1,861
Exercisable at end of year 1,667,800 2,516 2,231,000 2,492
The intrinsic values of options exercised were ¥471 million and ¥632 million for the years ended March 31, 2014 and 2013.
146
The information for options outstanding and options exercisable at March 31, 2014 is as follows:
The fair value of each share option award is estimated on the date of grant using a discrete-time model (a binomial model) based on
the assumptions noted in the following table. Because a discrete-time model incorporates ranges of assumptions for inputs, those
ranges are disclosed. Expected volatilities are based on implied volatilities from historical volatility of the Company’s shares.
The Company uses historical data to estimate share option exercise and employee departure behavior used in the discrete-time model.
The expected term of share options granted represents the period of time that share options granted are expected to be outstanding.
The risk-free rate for periods within the contractual term of the share option is based on the Japanese government bond yield curve in
effect at the time of grant.
Interest rate corresponding to discount periods is applied to risk-free rate, that is as follows:
1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years
2014 0.10% 0.12% 0.15% 0.23% 0.29% 0.37% 0.51% 0.66% 0.74% 0.81%
2013 0.10% 0.10% 0.10% 0.13% 0.20% 0.30% 0.41% 0.55% 0.68% 0.81%
147
14. Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) for the years ended March 31, 2014 and 2013 are as follows:
Millions of yen
2014
Net unrealized Net unrealized
Foreign holding gains holding gains
currency (losses) on Pension (losses)
translation securities liability on derivative
adjustments available for sale adjustments instruments Total
Balance, beginning of year ¥ (38,833) ¥ 21,519 ¥ (24,835) ¥ (1,291) ¥ (43,440)
Other comprehensive income (loss) before
reclassifications 65,616 7,690 3,017 (3,495) 72,828
Amounts reclassified from accumulated other
comprehensive income (loss) (2,290) (908) 1,657 4,875 3,334
Net other comprehensive income (loss) 63,326 6,782 4,674 1,380 76,162
Less: other comprehensive income (loss) attributable
to noncotrolling interests 2,539 — 78 104 2,721
Other comprehensive income (loss) attributable to
Komatsu Ltd. 60,787 6,782 4,596 1,276 73,441
Equity transactions with noncontrolling interests 34 — — — 34
Balance, end of year ¥ 21,988 ¥ 28,301 ¥ (20,239) ¥ (15) ¥ 30,035
All amounts are net of tax.
Millions of yen
2013
Net unrealized Net unrealized
Foreign holding gains holding gains
currency (losses) on Pension (losses)
translation securities liability on derivative
adjustments available for sale adjustments instruments Total
Balance, beginning of year ¥ (131,009) ¥ 16,829 ¥ (26,338) ¥ (1,871) ¥ (142,389)
Net other comprehensive income (loss) 99,195 4,690 1,440 555 105,880
Less: other comprehensive income (loss) attributable
to noncotrolling interests 7,019 — (63) (25) 6,931
Current year other comprehensive income (loss) 92,176 4,690 1,503 580 98,949
Balance, end of year ¥ (38,833) ¥ 21,519 ¥ (24,835) ¥ (1,291) ¥ (43,440)
All amounts are net of tax.
148
Reclassification out of accumulated other comprehensive income (loss) for the year ended March 31, 2014 is as follows:
Millions of yen
*1 These amounts are included in the computation of net periodic pension cost. (Note 12)
149
Tax effects allocated to each component of other comprehensive income (loss) for the years ended March 31, 2014 and 2013 are as
follows:
Millions of yen
2014
Before tax Tax (expense) Net of tax
amount or benefit amount
Millions of yen
2013
Before tax Tax (expense) Net of tax
amount or benefit amount
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15. Income Taxes
The sources of income before income taxes and equity in earnings of affiliated companies and the sources of income taxes for the
years ended March 31, 2014 and 2013, were as follows:
Millions of yen
2014 2013
Income before income taxes and equity in earnings of affiliated companies:
Japan ¥ 90,172 ¥ 54,445
Foreign 151,884 150,158
¥ 242,056 ¥ 204,603
Income taxes:
Current –
Japan ¥ 31,513 ¥ 23,885
Foreign 42,423 50,743
¥ 73,936 ¥ 74,628
Deferred –
Japan ¥ (2,074) ¥ (2,627)
Foreign 4,081 (2,912)
¥ 2,007 ¥ (5,539)
Total ¥ 75,943 ¥ 69,089
Total income taxes recognized for the years ended March 31, 2014 and 2013 were applicable to the following:
Millions of yen
2014 2013
Income before income taxes and equity in earnings of affiliated companies ¥ 75,943 ¥ 69,089
Other comprehensive income(loss):
Foreign currency translation adjustments 118 220
Net unrealized holding gains(losses) on securities available for sale 3,628 2,412
Pension liability adjustments 2,376 1,495
Net unrealized holding gains(losses) on derivative instruments 793 356
Total income taxes ¥ 82,858 ¥ 73,572
151
Temporary differences and tax loss carryforwards which gave rise to deferred tax assets and liabilities at March 31, 2014 and 2013,
are as follows:
Millions of yen
2014 2013
Deferred tax assets:
Allowances provided, not yet recognized for tax ¥ 6,235 ¥ 4,537
Accrued expenses 36,434 38,093
Investment securities 3,614 5,828
Pension and retirement benefits 9,806 11,120
Property, plant and equipment 8,048 10,735
Inventories 14,440 10,783
Net operating loss carryforwards 21,437 19,143
Research and development expenses 1,685 1,376
Other 9,236 12,141
Total gross deferred tax assets 110,935 113,756
Less: valuation allowance (25,649) (25,015)
Total deferred tax assets ¥ 85,286 ¥ 88,741
Deferred tax liabilities:
Unrealized holding gains on securities available for sale ¥ 15,406 ¥ 11,750
Property, plant and equipment 10,040 10,705
Intangible assets 10,051 10,583
Undistributed earnings of foreign subsidiaries and affiliated companies accounted for by the equity
method 5,470 5,393
Total deferred tax liabilities ¥ 40,967 ¥ 38,431
Total deferred tax assets ¥ 44,319 ¥ 50,310
Net deferred tax assets and liabilities as of March 31, 2014 and 2013 are reflected on the consolidated balance sheets under the
following captions:
Millions of yen
2014 2013
Deferred income taxes and other current assets ¥ 50,210 ¥ 55,591
Deferred income taxes and other assets 16,440 13,442
Deferred income taxes and other current liabilities (180) (507)
Deferred income taxes and other liabilities (22,151) (18,216)
¥ 44,319 ¥ 50,310
The valuation allowance was ¥20,730 million as of March 31, 2012. The net changes in the total valuation allowance for the years
ended March 31, 2014 and 2013 were an increase of ¥634 million and an increase of ¥4,285 million, respectively.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of
the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences become deductible and net operating losses available to be
utilized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning
strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over
the periods in which the deferred tax assets, net of the existing valuation allowances at March 31, 2014 and 2013, are deductible,
management believes it is more likely than not that the companies will realize the benefits of these deductible differences and net
operating loss carryforwards. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if
estimates of future taxable income during the carryforward period are reduced.
152
The Company and its Japanese subsidiaries are subject to a National Corporate tax rate of approximately 28%, an inhabitant tax of
approximately 5% and a deductible Enterprise tax of approximately 8%, which in the aggregate resulted in a Japanese statutory tax
rate of approximately 38.1% for the years ended March 31, 2014 and 2013. The inhabitant tax rate and Enterprise tax rate vary by
local jurisdiction.
The differences between the Japanese statutory tax rates and the effective tax rates for the years ended March 31, 2014 and 2013, are
summarized as follows:
2014 2013
Japanese statutory tax rate 38.1% 38.1%
Increase (decrease) in tax rates resulting from:
Change in valuation allowance (0.7) 1.3
Expenses not deductible for tax purposes 0.9 0.5
Income of foreign subsidiaries taxed at lower than Japanese normal rate (5.2) (6.2)
Tax credit for research and development expenses (2.7) (1.3)
Other, net 1.0 1.4
Effective tax rate 31.4% 33.8%
On March 20, 2014, the National Diet of Japan approved amendments to existing income tax laws and the Special Reconstruction
Corporation Tax imposed on companies will be abolished for fiscal years beginning on or after April 1, 2014. Upon the change in the
laws, the statutory tax rate in Japan which the Company and its Japanese subsidiaries applied to re-measure deferred tax assets and
liabilities was changed from approximately 38.1% to approximately 35.7% for temporary differences expected to be recovered or
settled in the fiscal year beginning on April 1, 2014. The effect of tax rate changes in Japan did not have a material impact on
Komatsu’s consolidated financial statements.
Foreign subsidiaries are subject to income taxes of the countries in which they operate. At March 31, 2014 and 2013, undistributed
earnings of foreign subsidiaries amount to ¥680,703 million and ¥629,808 million, respectively. Komatsu has a policy to distribute a
certain portion of undistributed earnings of foreign subsidiaries. As of March 31, 2014 and 2013, Komatsu recognized deferred tax
liabilities of ¥1,840 million and ¥1,773 million, respectively, associated with those earnings. As of March 31, 2014 and 2013,
Komatsu did not recognize deferred tax liabilities of ¥33,801 million and ¥19,442 million, respectively, for such portion of
undistributed earnings of foreign subsidiaries that the Company intends to reinvest indefinitely.
At March 31, 2014, certain subsidiaries had net operating loss carryforwards aggregating approximately ¥65,540 million, which may
be used as a deduction in determining taxable income in future periods. The period available to offset future taxable income varies in
each tax jurisdiction as follows:
Although Komatsu believes its estimates of unrecognized tax benefits are reasonable, uncertainties regarding the final determination
of income tax audit settlements and any related litigation could affect the total amount of unrecognized tax benefits in the future
periods. For the years ended March 31, 2014 and 2013, Komatsu did not have material unrecognized tax benefits and thus, no
significant interest and penalties related to unrecognized tax benefits were recognized. Based on the information available as of
March 31, 2014, Komatsu does not expect significant changes to the unrecognized tax benefits within the next twelve months.
Komatsu files income tax returns in Japan and various foreign tax jurisdictions. Komatsu is no longer subject to income tax
examinations by the tax authority before and in the fiscal year ended March 31, 2009 in Japan and, is no longer subject to income tax
examinations by the tax authority before and in the fiscal year ended March 31, 2007 in the United States. In other foreign tax
jurisdictions, the other subsidiaries are no longer subject to income tax examinations by tax authorities before and in the fiscal year
ended March 31, 2008 with few exceptions.
153
16. Rent Expenses
Komatsu leases office space and equipment and employee housing under cancelable and non-cancelable lease agreements. Rent
expenses under cancelable and non-cancelable operating leases amounted to ¥16,308 million and ¥15,437 million, respectively, for the
years ended March 31, 2014 and 2013.
At March 31, 2014, the future minimum lease payments under non-cancelable operating leases and capital leases are as follows:
Millions of yen
Operating lease
Year ending March 31 Capital leases commitments Total
2015 ¥ 3,390 ¥ 4,149 ¥ 7,539
2016 1,860 2,614 4,474
2017 458 1,788 2,246
2018 279 959 1,238
2019 176 509 685
Thereafter 328 737 1,065
Total minimum lease payments ¥ 6,491 ¥ 10,756 ¥ 17,247
Less: amounts representing interest (273)
Present value of net minimum capital lease payments ¥ 6,218
At March 31, 2013, the future minimum lease payments under non-cancelable operating leases and capital leases were as follows:
Millions of yen
Operating lease
Year ending March 31 Capital leases commitments Total
2014 ¥ 4,675 ¥ 4,300 ¥ 8,975
2015 3,297 3,047 6,344
2016 1,515 2,154 3,669
2017 367 1,284 1,651
2018 187 639 826
Thereafter 389 1,558 1,947
Total minimum lease payments ¥ 10,430 ¥ 12,982 ¥ 23,412
Less: amounts representing interest (454)
Present value of net minimum capital lease payments ¥ 9,976
154
17. Net Income Attributable to Komatsu Ltd. per Share
A reconciliation of the numerators and denominators of the basic and diluted net income attributable to Komatsu Ltd. per share
computations is as follows:
Millions of yen
2014 2013
Net income attributable to Komatsu Ltd. ¥ 159,518 ¥ 126,321
Number of shares
2014 2013
Weighted average common shares outstanding, less treasury stock 953,134,746 952,376,139
Dilutive effect of:
Stock options 1,040,817 902,065
Weighted average diluted common shares outstanding 954,175,563 953,278,204
Yen
2014 2013
Net income attributable to Komatsu Ltd. per share:
Basic 167.36 132.64
Diluted 167.18 132.51
155
18. Commitments and Contingent Liabilities
At March 31, 2014 and 2013, Komatsu was contingently liable for discounted and transferred receivables on a recourse basis with the
financial institutions of ¥447 million and ¥406 million, respectively.
Komatsu provides guarantees to third parties of loans of the employees, affiliated companies, customers and other companies. The
guarantees of loans relating to the employees are mainly made for their housing loans. The guarantees of loans relating to the affiliated
companies, customers and other companies are made to enhance the credit of those companies. For each guarantee provided, Komatsu
would have to perform under a guarantee, if the borrower defaults on a payment within the contract terms. The contract terms are from
10 years to 30 years in the case of employees with housing loans, and from 1 year to 11 years in the case of loans relating to the
affiliated companies, customers and other companies. The maximum amount of undiscounted payments Komatsu would have had to
make in the event of default at March 31, 2014 and 2013 is ¥67,388 million and ¥94,776 million, respectively. The fair value of the
liabilities recognized for Komatsu’s obligations as guarantors under those guarantees at March 31, 2014 were insignificant. Certain of
those guarantees were secured by collateral and insurance issued to the Company.
Management of Komatsu believes that losses from those contingent liabilities, if any, would not have a material effect on the
consolidated financial statements.
Commitments for capital investment outstanding at March 31, 2014 and 2013 aggregated approximately ¥19,900 million and
approximately ¥13,100 million, respectively.
Komatsu is involved in certain legal actions and claims arising in the ordinary course of its business. It is the opinion of management
and legal counsel that such litigation and claims will be resolved without material effect on Komatsu’s financial position.
Komatsu has business activities with customers, dealers and associates around the world and its trade receivables from such parties
and the guarantees for them are well diversified to minimize concentrations of credit risks. Management does not anticipate incurring
losses on its trade receivables in excess of established allowances.
Komatsu also issues contractual product warranties under which it generally guarantee the performance of products delivered and
services rendered for a certain period or term. Change in accrued product warranty cost for the years ended March 31, 2014 and 2013
is summarized as follows:
Millions of yen
2014 2013
Balance at beginning of year ¥ 31,200 ¥ 30,534
Addition 19,346 25,624
Utilization (21,893) (27,412)
Other 2,281 2,454
Balance at end of year ¥ 30,934 ¥ 31,200
156
19. Derivative Financial Instruments
Risk Management Policy
Komatsu is exposed to market risk primarily from changes in foreign currency exchange and interest rates with respect to debt
obligations, international operations and foreign currency denominated credits and debts. In order to manage these risks that arise in
the normal course of business, Komatsu enters into various derivative transactions for hedging pursuant to its policies and procedures
(Notes 20 and 21). Komatsu does not enter into derivative financial transactions for trading or speculative purposes.
Komatsu has entered into interest rate swap and cap agreements, partly concurrent with currency swap agreements for the purpose of
managing the risk resulting from changes in cash flow or fair value that arise in their interest rate and foreign currency exposure with
respect to certain short-term and long-term debts.
Komatsu operates internationally, which expose Komatsu to the foreign exchange risk against existing assets and liabilities and
transactions denominated in foreign currencies (principally the U.S. dollar and the Euro). In order to reduce these risks, Komatsu
executes forward exchange contracts and option contracts based on its projected cash flow in foreign currencies.
Komatsu is exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments, but
Komatsu does not expect any counterparties to fail to meet their obligations because of the high credit rating of the counterparties.
Komatsu has not held any derivative instruments which consisted credit-risk-related contingent features.
157
Notional Principal Amounts of Derivative Financial Instruments
Notional principal amounts of derivative financial instruments outstanding at March 31, 2014 and 2013 are as follows.
Millions of yen
2014 2013
Forwards:
Sale of foreign currencies ¥ 117,622 ¥ 130,060
Purchase of foreign currencies 45,304 39,904
Interest rate swaps, cross-currency swaps and interest rate cap agreements 114,278 103,182
Fair value of derivative instruments at March 31, 2014 and 2013 on the consolidated balance sheets are as follows:
Millions of yen
2014
Derivative Assets Derivative Liabilities
Derivative instruments designated as Location on the consolidated Estimated Location on the consolidated Estimated
hedging instruments Balance Sheets fair value Balance Sheets fair value
Forwards contracts Deferred income taxes and other ¥ 507 Deferred income taxes and other ¥ 481
current assets current liabilities
Deferred income taxes and other 4 Deferred income taxes and other 5,788
assets liabilities
Interest rate swaps, cross-currency Deferred income taxes and other 4 Deferred income taxes and other 613
swaps and interest rate cap current assets current liabilities
agreements
Total ¥ 515 ¥ 6,882
158
Millions of yen
2013
Derivative Assets Derivative Liabilities
Derivative instruments designated as Location on the consolidated Estimated Location on the consolidated Estimated
hedging instruments Balance Sheets fair value Balance Sheets fair value
Forwards contracts Deferred income taxes and other ¥ 43 Deferred income taxes and other ¥ 2,479
current assets current liabilities
Deferred income taxes and other — Deferred income taxes and other 3,905
assets liabilities
Interest rate swaps, cross-currency Deferred income taxes and other 42 Deferred income taxes and other 1,063
swaps and interest rate cap current assets current liabilities
agreements
Total ¥ 85 ¥ 7,447
159
The effects of derivative instruments on the consolidated statements of income and the consolidated statements of comprehensive
income for the years ended March 31, 2014 and 2013 are as follows:
Millions of yen
2014
Ineffective portion and amount
Effective portion excluded from effectiveness testing
Amount of Location of Amount of Location of Amount of
gains (losses) gains (losses) gains (losses) gains (losses) gains (losses)
recognized reclassified reclassified recognized recognized
in OCI from accumulated from accumulated in income in income
on derivatives OCI into income OCI into income on derivatives on derivatives
Forwards contracts Other income
(expenses), net:
¥ (5,783) Other, net ¥ (7,585) — ¥ —
Interest rate swaps, cross-currency
swaps and interest rate cap
agreements 371 — — — —
Total ¥ (5,412) ¥ (7,585) ¥ —
Millions of yen
2013
Ineffective portion and amount
Effective portion excluded from effectiveness testing
Amount of Location of Amount of Location of Amount of
gains (losses) gains (losses) gains (losses) gains (losses) gains (losses)
recognized reclassified reclassified recognized recognized
in OCI from accumulated from accumulated In income in income
on derivatives OCI into income OCI into income on derivatives on derivatives
Forwards contracts Other income
(expenses), net:
¥ (7,737) Other, net ¥ (8,741) — ¥ —
Interest rate swaps, cross-currency
swaps and interest rate cap
agreements (93) — — — —
Total ¥ (7,830) ¥ (8,741) ¥ —
160
Derivative instruments not designated as hedging instruments relationships
Millions of yen
2014
Location of gains (losses) recognized Amount of gains (losses) recognized
in income on derivatives in income on derivatives
Forwards contracts Other income (expenses), net: Other, net ¥ (3,344)
Option contracts Other income (expenses), net: Other, net —
Interest rate swaps, cross-currency Cost of sales 227
swaps and interest rate cap
agreements Other income (expenses), net: Other, net 165
Total ¥ (2,952)
Millions of yen
2013
Location of gains (losses) recognized Amount of gains (losses) recognized
in income on derivatives in income on derivatives
Forwards contracts Other income (expenses), net: Other, net ¥ (5,737)
Option contracts Other income (expenses), net: Other, net (4)
Interest rate swaps, cross-currency Cost of sales (216)
swaps and interest rate cap
agreements Other income (expenses), net: Other, net 579
Total ¥ (5,378)
161
20. Fair Values of Financial Instruments
(1) Cash and cash equivalents, Time deposits, Trade notes and accounts receivable, Other current assets, Short-term debt,
Trade notes, bills and accounts payables, and Other current liabilities
The carrying amount approximates fair value because of the short maturity of these instruments.
162
The carrying amounts and the estimated fair values of the financial instruments, including financial instruments not qualifying as
hedge, as of March 31, 2014 and 2013, are summarized as follows:
Millions of yen
2014 2013
Carrying Estimated Carrying Estimated
amount fair value amount fair value
Cash and cash equivalents ¥ 90,872 ¥ 90,872 ¥ 93,620 ¥ 93,620
Time deposits 277 277 217 217
Trade notes and accounts receivable, net 617,334 617,334 606,904 606,904
Long-term trade receivables, net 260,904 260,904 235,825 235,825
Investment securities, marketable equity securities 59,109 59,109 50,954 50,954
Short-term debt 176,515 176,515 205,156 205,156
Trade notes, bills and accounts payable 234,231 234,231 226,275 226,275
Long-term debt, including current portion 428,552 421,487 474,607 469,444
Derivatives:
Forwards contracts
Assets 978 978 507 507
Liabilities 8,342 8,342 10,023 10,023
Interest rate swaps, cross-currency swap and interest rate cap
agreements
Assets 457 457 332 332
Liabilities 1,139 1,139 2,126 2,126
Limitations
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial
instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot
be determined with precision. Changes in assumptions could affect the estimates.
163
21. Fair value measurements
ASC 820, “Fair Value Measurements” defines that fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level fair value
hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:
Level 1 – Quoted prices in active markets for identical assets or liabilities
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either
directly or indirectly
Level 3 – Unobservable inputs for the assets or liabilities
Assets and liabilities that are measured at fair value on a recurring basis
The fair value hierarchy levels of assets and liabilities that are measured at fair value on a recurring basis at March 31, 2014 and 2013
are as follows:
Millions of yen
At March 31, 2014 Level 1 Level 2 Level 3 Total
Assets
Investment securities available for sale
Manufacturing industry ¥ 32,678 ¥ — ¥ — ¥ 32,678
Financial service industry 20,974 — — 20,974
Other 5,457 — — 5,457
Derivatives
Forward contracts — 978 — 978
Interest rate swaps, cross-currency swaps and interest
rate cap agreements — 457 — 457
Total ¥ 59,109 ¥ 1,435 ¥ — ¥ 60,544
Liabilities
Derivatives
Forward contracts ¥ — ¥ 8,342 ¥ — ¥ 8,342
Interest rate swaps, cross-currency swaps and interest
rate cap agreements — 1,139 — 1,139
Other — 80,619 508 81,127
Total ¥ — ¥ 90,100 ¥ 508 ¥ 90,608
Millions of yen
At March 31, 2013 Level 1 Level 2 Level 3 Total
Assets
Investment securities available for sale
Manufacturing industry ¥ 28,061 ¥ — ¥ — ¥ 28,061
Financial service industry 19,299 — — 19,299
Other 3,594 — — 3,594
Derivatives
Forward contracts — 507 — 507
Interest rate swaps, cross-currency swaps and interest
rate cap agreements — 332 — 332
Total ¥ 50,954 ¥ 839 ¥ — ¥ 51,793
Liabilities
Derivatives
Forward contracts ¥ — ¥ 10,023 ¥ — ¥ 10,023
Interest rate swaps, cross-currency swaps and interest
rate cap agreements — 2,126 — 2,126
Other — 76,239 639 76,878
Total ¥ — ¥ 88,388 ¥ 639 ¥ 89,027
164
Investment securities available for sale
Marketable equity securities are classified in Level 1 in the fair value hierarchy. Marketable equity securities are measured using a
market approach based on the quoted market prices in active markets.
Other
Other primarily represents loans which are measured at fair value under the Fair Value Option of ASC 825, “Financial Instruments”.
The fair value of loans is based on a valuation model based on market yield curve data and credit spread data and is classified in Level
2 in the fair value hierarchy. The credit spread data was obtained through use of credit default swaps for each counterparty.
The following table summarizes information about changes of Level 3 for the years ended March 31, 2014 and 2013:
Millions of yen
2014 2013
Balance, beginning of year ¥(639) ¥(752)
Total gains or losses (realized / unrealized) 131 113
Included in earnings 184 190
Included in other comprehensive income (loss) (53) (77)
Balance, end of year ¥(508) ¥(639)
The amount of unrealized gains on classified in Level 3 liabilities recognized in earnings for the years ended March 31, 2014 and 2013
related to liabilities still held at March 31, 2014 and 2013 were gains of ¥184 million and ¥190 million, respectively. These gains were
reported in other income (expense), net of the consolidated statements of income.
Assets and liabilities that are measured at fair value on a non-recurring basis
For the fiscal year ended March 31, 2014, assets and liabilities that were measured at fair value on a non-recurring basis were not
material.
Komatsu measured certain other investment securities at cost at fair value by using various evaluation models based on inputs that are
unobservable in the market such as cash flow projection, which are classified as Level 3 in the fair value hierarchy. As of March 31,
2013, an other investment security at cost was written down from their book value of ¥4,411 million to its fair value of ¥425 million
estimated from its cash flow projection, and Komatsu recognized impairment losses of ¥3,986 million for the years ended March 31,
2013, which are reported in other income (expense), net of the consolidated statements of income.
165
22. Business Segment and Geographic Information
Komatsu has two operating segments: 1) Construction, Mining and Utility Equipment, and 2) Industrial Machinery and Others.
The accounting policies used by the segments are the same as those used in the preparation of the consolidated financial statements.
Segment profit is determined by subtracting the cost of sales and selling, general and administrative expenses from net sales attributed
to the operating segment. Segment profit excludes certain general corporate administration and finance expenses, such as costs of
executive management, corporate development, corporate finance, human resources, internal audit, investor relations, legal and public
relations. Segment profit also excludes certain charges which may otherwise relate to operating segments, including impairments of
long lived assets and goodwill.
The following tables present financial information regarding Komatsu’s operating segments and geographic information at March 31,
2014 and 2013, and for the years then ended:
Operating segments:
Millions of yen
2014 2013
Net sales:
Construction, Mining and Utility Equipment –
External customers ¥ 1,749,755 ¥ 1,677,049
Intersegment 2,505 2,530
Total 1,752,260 1,679,579
Industrial Machinery and Others –
External customers 203,902 207,942
Intersegment 5,275 8,349
Total 209,177 216,291
Elimination (7,780) (10,879)
Consolidated ¥ 1,953,657 ¥ 1,884,991
Segment profit:
Construction, Mining and Utility Equipment ¥ 242,101 ¥ 208,951
Industrial Machinery and Others 2,038 6,222
Total segment profit 244,139 215,173
Corporate expenses and elimination (1,934) (1,161)
Total 242,205 214,012
Impairment loss on long-lived assets 2,300 1,907
Other operating income (expenses), net 590 (503)
Operating income 240,495 211,602
Interest and dividend income 3,898 4,277
Interest expense (8,831) (8,236)
Other, net 6,494 (3,040)
Consolidated income before income taxes and equity in earnings of affiliated companies ¥ 242,056 ¥ 204,603
Segment assets:
Construction, Mining and Utility Equipment ¥ 2,322,045 ¥ 2,195,232
Industrial Machinery and Others 267,369 282,342
Corporate assets and elimination 62,142 40,283
Consolidated ¥ 2,651,556 ¥ 2,517,857
Depreciation and amortization:
Construction, Mining and Utility Equipment ¥ 79,290 ¥ 78,589
Industrial Machinery and Others 6,547 9,416
Consolidated ¥ 85,837 ¥ 88,005
Capital investment:
Construction, Mining and Utility Equipment ¥ 174,347 ¥ 127,706
Industrial Machinery and Others 4,723 9,256
Consolidated ¥ 179,070 ¥ 136,962
166
Business categories and principal products and services included in each operating segment are as follows:
Segment assets are those assets used in the operations of each segment. Unallocated corporate assets consist primarily of cash and
cash equivalents and marketable investment securities maintained for general corporate purposes.
Amortization for the years ended March 31, 2014 and 2013, does not include amortization of long-term prepaid expenses of
¥1,436 million and ¥1,317 million.
Impairment loss on long-lived assets and goodwill recorded in each segment asset for the years ended March 31, 2014 and 2013, are
as follows:
Millions of yen
2014 2013
Construction, Mining and Utility Equipment ¥ 1,893 ¥ 1,153
Industrial Machinery and Others 407 754
Total ¥ 2,300 ¥ 1,907
The Company and some of its consolidated subsidiaries which had adopted the declining-balance method for depreciation of property,
plant and equipment, changed the depreciation method to the straight-line method, beginning in April 1, 2013. As a result of this
change, compared to the former method, depreciation expenses decreased by ¥10,880 million in the Construction, Mining and Utility
Equipment operating segment, and by ¥1,301 million in the Industrial Machinery and Others operating segment, and resulted in the
increases in segment profit of two segments for the fiscal year. For more details, see Note 1 Description of Business, Basis of
Financial Statements Presentation and Summary of Significant Accounting Policies - Summary of Significant Accounting Policies -
(6) Property, Plant and Equipment, and Related Depreciation and Amortization: Change in the depreciation method.
167
Geographic information:
Net sales determined by customer location for the years ended March 31, 2014 and 2013, are as follows:
Millions of yen
2014 2013
Japan ¥ 434,999 ¥ 380,024
The Americas 575,620 561,962
Europe and CIS 198,803 203,878
China 187,705 156,030
Asia (excluding Japan and China) and Oceania 392,822 454,394
Middle East and Africa 163,708 128,703
Consolidated net sales ¥1,953,657 ¥1,884,991
Net sales determined by geographic origin for the years ended March 31, 2014 and 2013, and property, plant and equipment
determined based on physical location at March 31, 2014 and 2013, are as follows:
Millions of yen
2014 2013
Net sales:
Japan ¥ 645,474 ¥ 622,121
U.S.A. 546,267 534,781
Europe and CIS 213,256 203,668
China 168,441 122,373
Others 380,219 402,048
Total ¥1,953,657 ¥1,884,991
Property, plant and equipment:
Japan ¥ 389,590 ¥ 367,610
U.S.A. 134,421 85,499
Europe and CIS 32,116 32,015
Others 111,220 100,096
Total ¥ 667,347 ¥ 585,220
No individual country within Europe and CIS or Others had a material impact on net sales.
There were no sales to a single major external customer for the years ended March 31, 2014 and 2013.
168
23. Supplementary Information to Balance Sheets
At March 31, 2014 and 2013, deferred income taxes and other current assets were comprised of the following:
Millions of yen
2014 2013
Prepaid expenses ¥ 5,005 ¥ 8,923
Short-term loans receivable:
Affiliated companies 482 565
Other 21 33
Total ¥ 503 ¥ 598
Deferred income taxes 50,210 55,591
Other 104,154 92,556
Total ¥159,872 ¥157,668
At March 31, 2014 and 2013, deferred income taxes and other current liabilities were comprised of the following:
Millions of yen
2014 2013
Accrued expenses ¥ 90,543 ¥ 96,815
Deferred income taxes 180 507
Other 131,066 134,803
Total ¥221,789 ¥232,125
Valuation and qualifying accounts deducted from assets to which they apply for the years ended March 31, 2014 and 2013 were
comprised of the following:
Millions of yen
2014 2013
Allowance for doubtful receivables
Balance at beginning of fiscal period ¥17,994 ¥15,243
Additions
Charged to costs and expenses 2,138 3,050
Charged to other accounts 30 118
Deductions (699) (417)
Balance at end of fiscal period 19,463 17,994
Deductions were principally collectible or uncollectible accounts and notes charged to the allowance.
Millions of yen
2014 2013
Valuation allowance for deferred tax assets
Balance at beginning of fiscal period ¥25,015 ¥20,730
Additions
Charged to costs and expenses 3,921 4,423
Charged to other accounts 1,990 1,729
Deductions (5,277) (1,867)
Balance at end of fiscal period 25,649 25,015
Deductions were principally realization or expiration of net operating loss carryforwards.
169
24. Supplementary Information to Statements of Income
The following information shows research and development expenses and advertising costs, for the years ended March 31, 2014 and
2013. Research and development expenses and advertising costs are charged to expense as incurred and are included in cost of sales
and selling, general and administrative expenses in consolidated statements of income.
Millions of yen
2014 2013
Research and development expenses ¥ 64,479 ¥ 60,788
Advertising costs 2,131 2,452
Shipping and handling costs included in selling, general and administrative expenses for the years ended March 31, 2014 and 2013,
were as follows:
Millions of yen
2014 2013
Shipping and handling costs ¥ 41,219 ¥ 41,849
For the fiscal year ended March 31, 2014 and 2013, Komatsu recognized an impairment loss of ¥2,300 million and ¥1,907 million
related to property, plant and equipment and intangible assets subject to amortization at the Company and certain subsidiaries, as
profitability of the assets was expected to be low in the future and Komatsu estimated the carrying amounts would not be recovered by
the future cash flows.
Other operating income (expenses), net for the years ended March 31, 2014 and 2013, were comprised of the following:
Millions of yen
2014 2013
Gain on sale of property ¥ 4,820 ¥ 764
Loss on disposal or sale of fixed assets (4,708) (2,064)
Other 478 797
Total ¥ 590 ¥ (503)
Other income (expenses), net for the years ended March 31, 2014 and 2013, were comprised of the following:
Millions of yen
2014 2013
Interest income
Installment receivables ¥ 634 ¥ 329
Other 1,720 2,732
Dividends 1,544 1,216
Interest expense (8,831) (8,236)
Impairment loss and net gain (loss) from sale of investment securities 1,701 (3,058)
Exchange gain, net 1,733 1,214
Other 3,060 (1,196)
Total ¥ 1,561 ¥ (6,999)
170
25. Material Subsequent Events
Not applicable.
171
Supplementary Schedule
Detailed Statements of Bonds
Refer to Note 11 in the notes of consolidated financial statements.
(2) Others
Quarterly Financial Information
Millions of yen except per share amounts
Three months Six months Nine months Fiscal year
ended June ended ended ended March
30, 2013 September 30, December 31, 31, 2014
2013 2013
Net sales ¥ 455,159 ¥ 925,121 ¥ 1,389,514 ¥ 1,953,657
Income before income taxes and equity in earnings of
affiliated companies 51,589 112,461 170,131 242,056
Net income attributable to Komatsu Ltd. 37,291 78,810 115,337 159,518
Net income attributable to Komatsu Ltd. per share (Yen)
Basic 39.13 82.69 121.01 167.36
Diluted 39.09 82.60 120.88 167.18
Yen
Three months Three months Three months Three months
ended June ended ended ended March
30, 2013 September 30, December 31, 31, 2014
2013 2013
Net income attributable to Komatsu Ltd. per share
Basic 39.13 43.56 38.32 46.35
Diluted 39.09 43.51 38.28 46.30
172
2. Non-Consolidated Financial Statements, etc.
(1) Non-Consolidated Financial Statements
Non-Consolidated Balance Sheet
Years ended March 31, 2014 and 2013
Millions of yen
2014 2013
Assets
Current assets:
Cash and deposits 107,953 63,167
Notes receivable-trade 336 219
Accounts receivable-trade 190,057 202,723
Merchandise and finished goods 37,643 33,443
Work in process 37,825 35,118
Raw materials and supplies 3,111 2,597
Prepaid expenses 3,404 2,375
Deferred tax assets 11,079 11,653
Short-term loans receivable 66,303 65,504
Accounts receivable-other 11,229 14,081
Other current assets 1,021 627
Allowance for doubtful accounts (375) (375)
Total current assets 469,591 431,138
Non-current assets:
Property, plant and equipment:
Buildings 72,219 68,029
Structures 13,023 10,774
Machinery and equipment 52,851 51,893
Vehicles 652 544
Tools, furniture and fixtures 8,439 6,376
Rental equipment 64,302 53,555
Land 50,856 54,461
Construction in progress 9,237 4,805
Total property, plant and equipment 271,583 250,440
Intangible assets:
Software 8,685 9,365
Other intangible assets 1,547 191
Total intangible assets 10,233 9,557
Investments and other assets:
Investment securities 53,661 47,936
Stocks of subsidiaries and affiliates 286,825 286,805
Investments in capital of subsidiaries and affiliates 40,950 35,115
Long-term loans receivable 25,263 23,302
Long-term prepaid expenses 796 1,429
Other investments 8,965 8,845
Allowance for doubtful accounts (1,600) (1,864)
Allowance for investment loss (10,210) (10,158)
Total investments and other assets 404,652 391,411
Total non-current assets 686,469 651,409
Total assets 1,156,060 1,082,548
173
Millions of yen
2014 2013
Liabilities
Current liabilities:
Notes payable-trade 8 5
Accounts payable-trade 97,701 97,597
Short-term loans payable 29,000 5,500
Commercial papers 48,000 41,000
Current portion of bonds 30,000 30,000
Accounts payable-other 9,990 10,589
Accrued expenses 19,466 21,296
Income taxes payable 21,169 12,552
Advances received 961 935
Deposits received 48,998 54,975
Provision for bonuses 8,624 8,111
Provision for directors’ bonuses 218 268
Provision for product warranties 4,840 4,465
Other current liabilities 2,894 4,067
Total current liabilities 321,872 291,363
Non-current liabilities:
Bonds payable 60,000 90,000
Long-term loans payable 51,000 75,000
Deferred tax liabilities 5,475 554
Provision for product warranties 208 841
Provision for retirement benefits 30,542 29,021
Other long-term liabilities 3,778 3,032
Total non-current liabilities 151,004 198,449
Total liabilities 472,877 489,813
Net Assets
Shareholders’ equity:
Capital stock 70,120 70,120
Capital surplus:
Legal capital surplus 140,140 140,140
Other capital surplus 343 –
Total capital surplus 140,483 140,140
Retained earnings:
Legal retained earnings 18,036 18,036
Other retained earnings:
Reserve for special depreciation 448 34
Reserve for advanced depreciation of non-current
14,626 16,337
assets
Reserve for special account for advanced
– 11
depreciation of non-current assets
General reserve 210,359 210,359
Retained earnings brought forward 241,170 156,523
Total retained earnings 484,641 401,302
Treasury stock (41,821) (42,414)
Total shareholders’ equity 653,423 569,148
Valuation and translation adjustments:
Valuation difference on available-for-sale securities 26,302 20,879
Deferred gains or losses on hedges 95 (561)
Total valuation and translation adjustments 26,397 20,317
Stock acquisition rights 3,361 3,268
Total net assets 683,183 592,734
Total liabilities and net assets 1,156,060 1,082,548
174
Non-Consolidated Statement of Income
(Years ended March 31, 2014 and 2013)
Millions of yen
2014 2013
Net sales 757,766 738,871
Cost of sales 545,282 575,874
Gross profit 212,484 162,997
Selling, general and administrative expenses
Haulage expenses 24,600 25,173
Salaries and allowances 38,150 35,807
Provision for bonuses 3,953 3,612
Provision for directors’ bonuses 218 268
Retirement benefit expenses 2,613 2,590
Depreciation 8,101 10,309
Research and development expenses 48,762 47,725
Other (8,389) (8,186)
Total selling, general and administrative expenses 118,010 117,299
Operating income 94,474 45,697
Non-operating income
Interest and dividends income 70,082 40,593
Other 4,121 5,518
Total non-operating income 74,203 46,112
Non-operating expenses
Interest expenses 1,388 1,911
Other 6,401 4,508
Total non-operating expenses 7,790 6,419
Ordinary income 160,887 85,390
Extraordinary income
Gain on sales of land 1,342 113
Gain on sales of investment securities 1,892 480
Gain on sales of subsidiaries and affiliates’ stocks 97 84
Gain on sales of investments in capital of subsidiaries and
– 55
affiliates
Total extraordinary income 3,331 733
Extraordinary losses
Loss on sales of land 56 22
Impairment loss 160 164
Loss on valuation of investment securities – 23
Loss on valuation of stocks of subsidiaries and affiliates 125 –
Provision of allowance for investment loss – 2,734
Total extraordinary losses 342 2,946
Income before income taxes 163,877 83,177
Income taxes - current 27,255 15,606
Income taxes - deferred 2,744 1,554
Total income taxes 30,000 17,160
Net income 133,876 66,016
175
Non-Consolidated Statement of Changes in Net Assets
(From April 1, 2013 to March 31, 2014)
(Millions of yen)
Shareholders’ equity
Capital surplus Retained earnings
Other retained earnings
Reserve for
Capital Reserve for Total
Legal capital Other capital Total capital Legal retained special account Retained
stock Reserve for advanced retained
surplus surplus surplus earnings for advanced General earnings
special depreciation of earnings
depreciation of reserve brought
depreciation non-current
non-current forward
assets
assets
Balance at the
beginning of 70,120 140,140 – 140,140 18,036 34 16,337 11 210,359 156,523 401,302
current period
Changes of items
during the period
Provision of
reserve for special 430 (430) –
depreciation
Reversal of reserve
for special (16) 16 –
depreciation
Provision of reserve
for advanced
53 (53) –
depreciation of
non-current assets
Reversal of reserve
for advanced
(1,765) 1,765 –
depreciation of
non-current assets
Provision of reserve
for special account
for advanced 39 (39) –
depreciation of
non-current assets
Reversal of reserve
for special account
for advanced (51) 51 –
depreciation of
non-current assets
Dividends from
(50,538) (50,538)
surplus
Purchase of
treasury stock
Disposal of treasury
343 343
stock
Net changes of
items other than
shareholders’
equity
Total changes of
items during the – – 343 343 – 414 (1,711) (11) – 84,647 83,338
period
Balance at the end
70,120 140,140 343 140,483 18,036 448 14,626 – 210,359 241,170 484,641
of current period
176
(Millions of yen)
Shareholders’ equity Valuation and translation adjustments
177
(From April 1, 2012 to March 31, 2013)
(Millions of yen)
Shareholders’ equity
Capital surplus Retained earnings
Other retained earnings
Reserve for
Capital Reserve for Total
Legal capital Other capital Total capital Legal retained special account Retained
stock Reserve for advanced retained
surplus surplus surplus earnings for advanced General earnings
special depreciation of earnings
depreciation of reserve brought
depreciation non-current
non-current forward
assets
assets
Balance at the
beginning of 70,120 140,140 – 140,140 18,036 49 17,282 11 210,359 132,483 378,223
current period
Changes of items
during the period
Provision of
reserve for special
depreciation
Reversal of reserve
for special (15) 15 –
depreciation
Provision of reserve
for advanced
9 (9) –
depreciation of
non-current assets
Reversal of reserve
for advanced
(954) 954 –
depreciation of
non-current assets
Provision of reserve
for special account
for advanced 11 (11) –
depreciation of
non-current assets
Reversal of reserve
for special account
for advanced (11) 11 –
depreciation of
non-current assets
Dividends from
(42,877) (42,877)
surplus
Purchase of
treasury stock
Disposal of treasury
(59) (59)
stock
Net changes of
items other than
shareholders’
equity
Total changes of
items during the – – – – – (15) (944) 0 – 24,039 23,079
period
Balance at the end
70,120 140,140 – 140,140 18,036 34 16,337 11 210,359 156,523 401,302
of current period
178
(Millions of yen)
Shareholders’ equity Valuation and translation adjustments
179
Notes to Non-Consolidated Financial Statements
Significant Accounting Policies
(1) Method and basis of valuation of securities
Investments in subsidiaries and affiliated companies:
Stated at cost determined by the moving-average method.
Available-for-sale securities:
Securities whose market value is readily determinable:
Stated at fair market value, based on market quotation at the balance sheet date.
(Unrealized gains and losses are reported, net of applicable income taxes, as a separate component of net assets.
The cost of securities sold is determined based on the moving-average method.)
Securities whose market value is not readily determinable:
Stated at cost determined by the moving-average method.
180
4) Provision for directors’ bonuses
Provision for directors’ bonuses is provided for payment prospect of bonuses to Directors at an amount considered to be
recorded for the fiscal year.
5) Provision for product warranties
Provision for product warranties is provided for product after-sales service expenses based on the historical performance.
6) Provision for retirement benefits
In order to provide for employee retirement benefits, the Company accrues liabilities for severance payments and pension
at the amount calculated based on the projected benefit obligations and plan assets at the balance sheet date.
Prior service cost is charged to income when incurred. Actuarial loss is amortized in an amount proportionally appropriated
on a straight-line basis over a 10-year period, which is shorter than the averaged remaining service period of employees,
beginning with the following term when the difference is recognized.
181
Changes in Accounting Policies
(Change in the depreciation method)
The Company, which had adopted the declining-balance method for depreciation of property, plant and equipment, changed the
depreciation method to the straight-line method, beginning in April 1, 2013.
Komatsu promotes continuous innovation of technologies by concentrating the production of high-value added and technologically
important key components in Japan, and also undertakes integrated development and production under the Mother Plant system. As a
general rule, Komatsu engages in local assembly in different parts of the world where there is sufficient market demand for its products.
With respect to mainstay products, however, Komatsu has facilitated effective use of its global production capacities by cross sourcing
finished products after producing them at its most cost-effective plants and exporting them in light of changes in market demand and
foreign exchange rate. In order to improve management efficiency, Komatsu is establishing production efficiency, standardization of
production and stable operation of production facilities through renewing its old factory buildings in Japan, reassessing logistics and
reforming production process by technology innovation as well as cutting down electric power consumption in half at its plants in Japan.
With respect to capital investment, Komatsu continues to invest in its production facilities for renovation at a constant level. In light of
those activities, Komatsu expects stable production and facility utilization within its production capacity, and is able to receive economic
benefits from those facilities at a constant rate throughout their useful lives.
As a result of reviewing its depreciation method, Komatsu concluded that the straight-line method would be an appropriate depreciation
method to reflect its future usage of property, plant and equipment more accurately and to allocate the costs in earnings. As a result,
operating income, ordinary income and income before income taxes for the fiscal year increased by ¥ 9,701 million respectively, compared
with the case where the method before the revisions is applied.
Changes in presentation
Balance sheet, statement of income, statement of changes in net assets, detailed statement of property, plant and equipment, etc. and
detailed statement of reserves are prepared in accordance with the form set forth in Article 127, paragraph 1 of the Ordinance on
Financial Statements, etc.
Notes on items set forth in Article 127, paragraph 2 of the Ordinance on Financial Statements, etc. are changed to the notes on
corresponding items in the Corporate Accounting Regulation of Japan.
Following items are omitted.
• Notes on lease transactions prescribed in Article 8-6 of the Ordinance on Financial Statements, etc. are omitted under paragraph 4 of
the same Article.
• Notes on net assets per share prescribed in Article 68-4 of the Ordinance on Financial Statements, etc. are omitted under paragraph 3
of the same Article.
• Detailed statement of manufacturing cost prescribed in Article 75 of the Ordinance on Financial Statements, etc. is omitted under
the provisory clause of paragraph 2 of the same Article.
• Information about writing-off of book value of inventories prescribed in Article 80 of the Ordinance on Financial Statements, etc. is
omitted under paragraph 3 of the same Article.
• Notes on research and development expenses prescribed in Article 86 of the Ordinance on Financial Statements, etc. are omitted
under paragraph 2 of the same Article.
• Notes on impairment loss prescribed in Article 95-3-2 of the Ordinance on Financial Statements, etc. are omitted under paragraph 2
of the same Article.
• Notes on net income or loss per share prescribed in Article 95-5-2 of the Ordinance on Financial Statements, etc. are omitted under
paragraph 3 of the same Article.
• Notes on diluted net income per share prescribed in Article 95-5-3 of the Ordinance on Financial Statements, etc. are omitted under
paragraph 4 of the same Article.
• Notes on treasury stock prescribed in Article 107 of the Ordinance on Financial Statements, etc. are omitted under paragraph 2 of
the same Article.
• Detailed statement of securities prescribed in Article 121, paragraph 1, item 1 of the Ordinance on Financial Statements, etc. is
omitted under paragraph 3 of the same Article.
182
Notes to Non-Consolidated Balance Sheet
(Years ended March 31, 2014 and 2013)
2. Contingency liability
Millions of yen
2014 2013
Balance of guarantees for debt for borrowings from financial institutions by
48,160 37,653
subsidiaries and affiliates and cooperation companies
Balance of guarantees for debt for borrowings from financial institutions by employees
1,603 1,904
(home loans)
Balance of keep-well agreements for the bonds of subsidiaries and affiliates 117,760 82,230
183
Notes to Non-Consolidated Statement of Changes in Net Assets
The 145th Fiscal Year (From April 1, 2013 to March 31, 2014)
(1) Type and number of shares issued and outstanding
(Thousands of shares)
Number of Shares
Increase During Decrease During Number of Shares
at Fiscal Year-
the Fiscal Year the Fiscal Year at Fiscal Year-end
beginning
Common stock 983,130 – – 983,130
Total 983,130 – – 983,130
(2) Dividends
1) Payment amount of dividends
Dividend
Total Dividends
Resolution Type of Shares per Share Record Date Effective Date
(Millions of yen)
(yen)
Ordinary General
Meeting of March 31, June 20,
Common stock 22,879 24
Shareholders held on 2013 2013
June 19, 2013
Meeting of the Board of
September 30, November 29,
Directors held on Common stock 27,658 29
2013 2013
October 28, 2013
2) Among dividends of which record date is in the fiscal year and effective date is in the next fiscal year
The Company proposed the following dividends to be resolved at the Ordinary General Meeting of Shareholders to be held on
June 18, 2014
Dividend
Total Dividends Resource of Record Effective
Planned Resolution Type of Shares per Share
(Millions of yen) Dividends Date Date
(yen)
Ordinary General
Meeting of Retained March 31, June 19,
Common stock 27,658 29
Shareholders to be held earnings 2014 2014
on June 18, 2014
184
The 144th Fiscal Year (From April 1, 2012 to March 31, 2013)
(1) Type and number of shares issued and outstanding
(Thousands of shares)
Number of Shares
Increase During Decrease During Number of Shares
at Fiscal Year-
the Fiscal Year the Fiscal Year at Fiscal Year-end
beginning
Common stock 983,130 – – 983,130
Total 983,130 – – 983,130
(2) Dividends
1) Payment amount of dividends
Dividend
Total Dividends
Resolution Type of Shares per Share Record Date Effective Date
(Millions of yen)
(yen)
Ordinary General
Meeting of March 31, June 21,
Common stock 20,008 21
Shareholders held on 2012 2012
June 20, 2012
Meeting of the Board of
September 30, November 30,
Directors held on Common stock 22,868 24
2012 2012
October 30, 2012
2) Among dividends of which record date is in the fiscal year and effective date is in the next fiscal year
The Company proposed the following dividends to be resolved at the Ordinary General Meeting of Shareholders to be held on
June 19, 2013
Dividend
Total Dividends Resource of Record Effective
Planned Resolution Type of Shares per Share
(Millions of yen) Dividends Date Date
(yen)
Ordinary General
Meeting of Retained March 31, June 20,
Common stock 22,879 24
Shareholders to be held earnings 2013 2013
on June 19, 2013
Securities
Shares of subsidiaries (carrying amount of ¥284,656 million and ¥284,621 million as of March 31, 2014 (145th fiscal year) and March
31, 2013 (144th fiscal year), respectively) and shares of affiliated companies (carrying amount of ¥2,168 million and ¥2,183 million as
of March 31, 2014 (145th fiscal year) and March 31, 2013 (144th fiscal year), respectively) are not presented because their market
prices are not available and it is extremely difficult to determine their fair values.
185
Tax Effect Accounting
1. Major Reasons for the accrual of deferred tax assets and deferred tax liabilities
Years ended March 31, 2014 and 2013
Millions of yen
2014 2013
Deferred tax assets
Provision for product warranties 1,789 1,993
Inventories 521 806
Accrued enterprise tax 2,013 1,387
Provision for bonuses 3,056 3,067
Provision for retirement benefits 8,533 8,277
Allowance for investment loss 3,618 3,743
Impairment loss 3,292 3,917
Investment securities and stocks of subsidiaries and affiliates 5,689 7,703
Excess over depreciation limit 2,504 3,328
Excess allowance for doubtful accounts 648 747
Others 7,233 8,394
Subtotal deferred tax assets 38,901 43,366
Less valuation allowance (10,092) (10,961)
Total deferred tax assets 28,809 32,405
2. Major components of difference between the statutory tax rate and the effective tax rate after adoption of tax effect accounting
2014 2013
Statutory tax rate 37.8% 37.8%
Adjustments
Expenses not deductible permanently such as entertainment expenses 0.8 0.0
Income not taxable permanently such as dividend income (15.1) (16.8)
Foreign tax credit ( 0.2) ( 0.4)
Valuation allowance ( 0.3) 2.8
Tax credit for experiment and research expenses ( 3.7) (3.0)
Reduction of deferred tax assets at end of period due to change in
0.6 -
income tax rates
Other ( 1.6) 0.2
Effective tax rate after tax effect accounting is applied 18.3 20.6
3. Changes in the amounts of deferred tax assets and deferred tax liabilities due to changes in the rates of income taxes
“Act on Partial Revision of the Income Tax Act, etc.” (Act No. 10 of 2014) was promulgated on March 31, 2014 and, effective
from the fiscal year beginning on or after April 1, 2014, the special income tax for reconstruction is not levied. Accordingly, the
effective statutory tax rate used to measure deferred tax assets and deferred tax liabilities, which is applied to temporary
differences expected to be eliminated in the fiscal year beginning on April 1, 2014, has been changed from the previous rate of
37.82% to 35.44%.
As a result of this change in tax rate, the amount of deferred tax assets (the amount deducted deferred tax liabilities) decreased by
¥945 million and the amount of income taxes-deferred increased by the same amount.
186
Significant Subsequent Events
The 145th fiscal year (From April 1, 2013 to March 31, 2014)
No items to report.
iv) Non-consolidated supplementary schedule for the 145th Fiscal Year (From April 1, 2013 to March 31, 2014)
187
(2) Primary assets and liabilities
As the consolidated financial statements are prepared, this information is omitted here.
(3) Others
There are no special items to report.
188
Item 6. Stock-Related Administration for the Company
Note:
Shareholders of the Company are not entitled to exercise their rights pertaining to shares constituting less than one (1) unit (Tangen) of shares held by
them, except for the following rights:
(1) The rights provided for in each item of Article 189, Paragraph 2 of the Companies Act of Japan;
(2) The right to make a request provided for in the provisions of Article 166, Paragraph 1 of the Companies Act of Japan;
(3) The right to receive the allotment of offered shares and offered stock acquisition rights in proportion to the number of shares held by each
shareholder.
(4) The right to make a request to the Company for transfer of shares constituting less than one unit.
189
Item 7. Reference Information on the Company
1. Information on the Parent Company
Not applicable.
(2) Internal Control Report and Filed with Director-General of the Kanto
documents attached Local Finance Bureau on June 18, 2013
(3) Quarterly Report and (145th First From April 1, 2013 Filed with Director-General of the Kanto
Confirmation Letter Quarter) To June 30, 2013 Local Finance Bureau on August 8, 2013
(145th Second From July 1, 2013 Filed with Director-General of the Kanto
Quarter) To September 30, 2013 Local Finance Bureau on November 11,
2013
(145th Third From October 1, 2013 To Filed with Director-General of the Kanto
Quarter) December 31, 2013 Local Finance Bureau on February 12,
2014
(4) Extraordinary Report Pursuant to Article 19, paragraph 2, item 9-2 of Filed with Director-General of the Kanto
the Cabinet Office Ordinance Concerning Local Finance Bureau on June 21, 2013
Disclosure of Corporate Affairs, etc.
Pursuant to Article 19, paragraph 2, item 2-2 of Filed with Director-General of the Kanto
the Cabinet Office Ordinance Concerning Local Finance Bureau on July 17, 2013
Disclosure of Corporate Affairs, etc.
(5) Amendment to Extraordinary Amendment to (4) Extraordinary Report dated Filed with Director-General of the Kanto
Report July 17, 2013 Local Finance Bureau on August 1, 2013
(7) Amended Shelf Registration Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
Statement the Shelf Registration Statement which was Local Finance Bureau on June 18, 2013
submitted on November 22, 2012
Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
the Shelf Registration Statement which was Local Finance Bureau on June 21, 2013
submitted on November 22, 2012
Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
the Shelf Registration Statement which was Local Finance Bureau on July 17, 2013
submitted on November 22, 2012
Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
the Shelf Registration Statement which was Local Finance Bureau on August 1, 2013
submitted on November 22, 2012
Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
the Shelf Registration Statement which was Local Finance Bureau on August 8, 2013
submitted on November 22, 2012
Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
the Shelf Registration Statement which was Local Finance Bureau on November 11,
submitted on November 22, 2012 2013
Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
the Shelf Registration Statement which was Local Finance Bureau on February 12,
submitted on November 22, 2012 2014
Amended Shelf Registration Statement concerning Filed with Director-General of the Kanto
the Shelf Registration Statement which was Local Finance Bureau on May 15, 2014
submitted on November 22, 2012
190
Part II Information on Guarantors, etc., for the Company
Not applicable.
191
[English Translation of the Independent Auditor’s Report Originally Issued in the Japanese Language]
Independent Auditor’s Report on the Financial Statements
and
Internal Control Over Financial Reporting
June 17, 2014
To The Board of Directors
of Komatsu Ltd.
KPMG AZSA LLC
Tsutomu Takahashi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
Auditor’s Responsibility
Our responsibility is to independently express an opinion on these consolidated financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The
procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial statement,
whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation
of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while the objective of the
financial statements audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used, the method of their application, and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Komatsu Ltd and its consolidated
subsidiaries as at March 31, 2014, and their financial performance and cash flows for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Emphasis of Matter
As described in Note 1. Description of Business, Basis of Financial Statement Presentation and Summary of Significant Accounting Policies
Description of Business - Summary of Significant Accounting Policies, Komatsu Ltd. and some of its consolidated subsidiaries have changed the
method for depreciation of property, plant and equipment from declining-balance method to the straight-line method, beginning in April 1, 2013.
This matter does not have any impact on our opinion.
Major Differences with Auditing Standards for Internal Control over Financial Reporting Generally Accepted in Japan
We conducted internal control audit in accordance with the PCAOB auditing standards. Major differences between the PCAOB auditing standards
and the auditing standards for internal control over financial reporting generally accepted in Japan are as follows:
1. We express an audit opinion on the Report of Management on Internal Control Over Financial Reporting prepared by the company’s management
under the auditing standards generally accepted in Japan while we express an audit opinion on the internal control over financial reporting under
the PCAOB auditing standards.
2. As the scope of internal control over financial reporting is different between the auditing standards generally accepted in Japan and the PCAOB
auditing standards, our internal control audit only covers internal controls for preparation of consolidated financial statements provided in the
“Accounting” section, and does not cover internal controls related only to non-consolidated financial statements or internal controls related to
disclosure items which could have material effects on the reliability of the company’s financial statements. Also, our audit does not cover internal
controls of affiliated companies accounted for by the equity method.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public
Accountants Act.
Notes to the Reader of Independent Auditor’s Report and Internal Control Over Financial Reporting:
The Independent Auditor’s Report and Internal Control Over Financial Reporting herein is the English translation of the Independent Auditor’s
Report and Internal Control Over Financial Reporting as required by the Financial Instruments and Exchange Act of Japan.
[English Translation of the Independent Auditor’s Report Originally Issued in the Japanese Language]
Independent Auditor’s Report on the Financial Statements
June 17, 2014
To The Board of Directors
of Komatsu Ltd.
KPMG AZSA LLC
Tsutomu Takahashi (Seal)
Designated Limited Liability Partner
Engagement Partner
Certified Public Accountant
We have audited the non-consolidated financial statements of Komatsu Ltd provided in the “Accounting” section in the Komatsu’s Annual Securities
Report (“Yukashoken Hokokusho”), which comprise the non-consolidated balance sheet, the non-consolidated statement of income, the non-
consolidated statement of changes in net assets, significant accounting policies, the related notes, and the supplementary schedules of Komatsu Ltd.
as at March 31, 2014 and for the 145th fiscal year from April 1, 2013 to March 31, 2014, in accordance with Article 193-2, Paragraph 1 of the
Financial Instruments and Exchange Act of Japan.
Auditor’s Responsibility
Our responsibility is to express an opinion on the non-consolidated financial statements based on our audit as independent auditor. We conducted our
audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the non-consolidated financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the non-consolidated financial statements.
The procedures selected and applied depend on our judgment, including the assessment of the risks of material misstatement of the non-consolidated
financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation
and fair presentation of the non-consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the non-consolidated financial statements audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used, the method of their application, and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the non-consolidated financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the non-consolidated financial statements present fairly, in all material respects, the financial position of Komatsu Ltd as at March 31,
2014, and their financial performance for the year then ended in accordance with accounting principles generally accepted in Japan.
Emphasis of Matter
As described in Notes to Changes in Accounting Policies under Notes to Non-Consolidated Financial Statements, the Company has changed the
method for depreciation of property, plant and equipment from declining-balance method to the straight-line method, beginning in April 1, 2013.
This matter does not have any impact on our opinion.
Other Matter
Our firm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certified Public
Accountants Act.
2. Matters relating to the scope of assessment, the base date of assessment and the assessment
procedures
Management assessed the effectiveness of the Company’s and its consolidated subsidiaries’ internal control over financial reporting as of March
31, 2014. In making this assessment, management used the criteria set forth by the COSO criteria. The Company’s and its consolidated
subsidiaries’ internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
The internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company and its consolidated subsidiaries, (2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.
generally accepted accounting principles, and that receipts and expenditures of the Company and its consolidated subsidiaries are being made
only in accordance with authorizations of management and directors of the Company and its consolidated subsidiaries and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s and its
consolidated subsidiaries’ assets that could have a material effect on their financial statements.
4. Additional notes
The Company’s management assessed the effectiveness of internal control over financial reporting to comply with the requirements of the U.S.
Securities Exchange Act. Main differences between the internal control assessment required in the United States and the internal control
assessment based on the assessment criteria of internal control over financial reporting generally accepted in Japan are as follows.
(1) While it is required in Japan to comply with the basic framework for internal control set forth in “On the Setting of the Standards and
Practice Standards for Management Assessment and Audit of Internal Control Over Financial Reporting (Council Opinion)” established by
the Business Accounting Council, the Company used criteria set forth in the COSO criteria.
(2) The assessment was only made for internal control over the preparation of the consolidated financial statements included in “Financial
Information” of the Annual Securities Report, and internal control related only to the non-consolidated financial statements or internal
control over disclosures and other matters that have a material effect on the reliability of the financial statements are not included in the
scope of the assessment.
(3) Internal control of affiliated companies accounted for by the equity method is not included in the scope of the assessment.
5. Special notes
The Company registered its convertible bonds issued in the United States in 1967 and its common shares issued for U.S. shareholders as well as
Japanese shareholders in 1970 with the U.S. Securities and Exchange Commission (the “SEC”).
Therefore, the Company is preparing this internal control report in accordance with terminology, forms and preparation methods which are
required in the United States.
The Company filed a Form 15F with the SEC to terminate its reporting obligations under the U.S. Securities Exchange Act of 1934 on April 1,
2014. As a result of the filing of Form 15F, the Company’s reporting obligations under the said Act have been suspended, and is scheduled to be
terminated on June 30, 2014 that is valid for 90 days after filing.
The schedule may be changed upon the SEC’s objection or request for an extended review.
Cover
2. Special Notes
Not applicable.