FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June 2002
COMMISSION FILE NUMBER: 1-7239
KOMATSU LTD.
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Translation of registrant's name into English
3-6 Akasaka 2-chome, Minato-ku, Tokyo, Japan
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Address of principal executive offices
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F _____
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _____ No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-________
INFORMATION TO BE INCLUDED IN REPORT
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1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KOMATSU LTD.
---------------------------
(Registrant)
Date: June 5, 2002 By: /s/ Kenji Kinoshita
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Kenji Kinoshita
Executive Officer
(Translation)
June 3, 2002
NOTICE OF CONVOCATION OF THE
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ONE HUNDRED AND THIRTY THIRD ORDINARY
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GENERAL MEETING OF SHAREHOLDERS
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OF KOMATSU LTD.
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TO: THE SHAREHOLDERS
Please be advised that the 133rd Ordinary General Meeting of Shareholders
of Komatsu Ltd. ("Company") will be held in accordance with the particulars
indicated in the attachment hereto. Your attendance at the meeting is cordially
requested. If you are unable to attend the meeting, we would appreciate your
reviewing the attached documents, affixing your seal or signature on the
enclosed instruction card concerning the exercise of voting rights, and
returning it to the Company after indicating thereon your approval or
disapproval of the items of business enumerated in the attached documents.
Sincerely yours,
KOMATSU LTD.
3-6, Akasaka 2-chome, Minato-ku, Tokyo
By: Masahiro Sakane
President and Representative Director
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Note: This document has been translated from the Japanese original for
reference purposes only. In the event of any discrepancy between this
document and Japanese original, the original shall prevail.
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2
PARTICULARS OF MEETING
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1. Date and Time: June 26, 2002 (Wed.) at 10:00 a.m.
2. Place: 2nd Floor, Komatsu Building
3-6, Akasaka 2-chome, Minato-ku, Tokyo
3. Purpose of Meeting:
Items to be Reported Matters concerning the Balance Sheet as of March
31, 2002 and the Business Report, Statement of
Income for the 133rd business term (April 1, 2001-
March 31, 2002).
Items to be Resolved:
1st Item of Business: Matters concerning the approval of the proposed
Appropriation of Profit for the 133rd business
term (April 1, 2001 - March 31, 2002).
2nd Item of Business: Matters concerning the Company's acquisition of
its treasury shares. The details of this item are
set forth in the "Referential Documents Regarding
the Exercise of Voting Rights".
3rd Item of Business: Matters concerning partial amendment of the
Articles of Incorporation. The details of this
item are set forth in the "Referential Documents
Regarding the Exercise of Voting Rights".
4th Item of Business: Matters concerning the election of three
Directors.
5th Item of Business: Matters concerning the election of two Statutory
Auditors.
6th Item of Business: Matters concerning the issuance of share
acquisition rights to Directors and employees at
no cost to the recipients. The details of this
item are set forth in the "Referential Documents
Regarding the Exercise of Voting Rights".
7th Item of Business Matters concerning the payment of retirement
allowance to retiring Director and Statutory
Auditor.
3
ATTACHED DOCUMENTS
EXHIBIT I
Business Report
(April 1, 2001 - March 31, 2002)
(Note: As Komatsu's management is basically oriented towards global consolidated
management, this Business Report is prepared in an aim to also cover the
information on a consolidated basis as much as possible.)
I. Outline of Business
(1) Development and Results of Business Operations
During the period under review, it is projected that the Japanese economy
will register real negative growth, due to drastic decrease in capital
investment and industrial production as well as record high unemployment rate,
caused by the sluggish IT related markets and deflationary trend of the economy.
The United States began to generate steady momentum for recovery later in the
year. Nevertheless, it was on a declining trend when viewed for the whole
year. European economies also weakened for the year. All combined, world
economies slowed down simultaneously.
The business environment for construction and mining equipment business was
seriously affected by decline of demand over 20% in Japan from the previous
period. At the overseas markets, the Chinese market continued to expand during
the year, however, demand declined in our major markets of North America and
Europe reflecting economic slowdown in these regions. Overseas demand was slack
for the year under review.
In the electronics business, Komatsu witnessed a record-breaking drop of
the international semiconductor market for the year 2001, resulting in a drastic
fall for silicon wafers and their raw materials, and polycrystalline silicon.
Demand for thermo-modules (thermoelectric elements) for use in fiber optic
communication network also dropped sharply for this period, which is seen as a
reaction to surging growth in demand during the previous year.
Under these difficult conditions, in order to transform its corporate
structure into a new one capable of expanding profits, Komatsu has embarked on
the Reform of Business Structure which underscores cutback of capacity costs,
substantial reduction of production costs, and new growth for its mainstay
business of construction and mining equipment.
In cutting down costs, Komatsu consolidated some operations, restructured
its
4
organizations, improved operational efficiency and reduced costs. Particularly
in Japan, the Company solicited voluntary retirees and transferred employees to
affiliated companies in order to reduce personnel expenses.
In its construction and mining equipment business, Komatsu made aggressive
launchings of the new "GALEO" series machines equipped with IT and other latest
technological features in Japan, leading other markets of the world. On the
other hand, Komatsu also strengthened its business in the downstream fields such
as rental, used equipments, components and after-sales services. At overseas,
Komatsu carried out various measures designed for each region and product to
improve profits.
In the electronics business, in order to improve deteriorated profits,
Komatsu made thorough reassessment of the business structure and recorded
impairment losses on fixed assets of two U.S. subsidiaries.
While Komatsu is determined to bring about positive results from these
measures, the Company recorded an extra loss by including expenses associated
with voluntary retirement, transfers to affiliates and impairment losses of
fixed assets for the electronics business for the year under review.
As a result, the consolidated sales for this period was JPY 1035.8 billion
(5.5% decrease from the previous period) and to our regret, a net loss of JPY
80.6 billion (consolidated net income of JPY 6.9 billion for the previous
period) was recorded on a consolidated base.
On a non-consolidated basis, sales resulted in JPY 382.9 billion, down
11.0% from the previous period and ordinary profit was JPY 3.7 billion, down
66.4% from the previous period. However, due to extraordinary loss resulting
from the Reform of Business Structure, a loss of JPY 41.8 billion was recorded
for this period (net income of JPY 7.2 billion for the previous period).
The following is an outline of business result of each division of Komatsu.
Construction and Mining Equipment
---------------------------------
The consolidated sales for construction and mining equipment totaled JPY
731.3 billion yen, up 1.8 % from the previous period, and non-consolidated sales
of Komatsu totaled JPY 322.9 billion (down 10.5% from the previous period).
5
In Japan, consolidated sales totaled JPY 260.3 billion (down 14.8% from the
previous period), and the non-consolidated sales totaled JPY 182.9 billion (down
17.5 % from the previous period). Demand for construction equipment fell
sharply from the previous year, as customers' desire for investment was
critically influenced by cutback in public investments by the government as part
of its urgent measures to accelerate structural reforms and reduced private-
sector construction investment under the sluggish economy. In addition,
customers' reluctant attitudes for investment were compounded by uncertainty
caused by bankruptcies of major construction company. The decline of demand grew
larger in the second half of the period and the domestic shipped value for
construction equipments (main body) drastically decreased to less than half of
the last peak in fiscal 1996.
Komatsu worked to expand sales by teaming up with its distributors
nationwide for aggressive sales promotion timely with the market launchings of
over 20 new models under the GALEO series, including a renewed model of its
flagship PC200 hydraulic excavator. In addition, Komatsu strengthened its
business in the downstream fields after sales of new equipments. However, all
of these efforts fell short of making up for the sizable fall in demand, and
Japanese sales declined sharply from the previous year.
Consolidated sales outside of Japan totaled JPY 470.9 billion, up 14.2%
from the previous period and non-consolidated sales from exports totaled JPY
140.0 billion, up 0.6% from the previous period, which is attributable to
increase in sales in regions besides Europe and North America.
In North America, although construction investment and housing starts
remained steady, the demand for construction equipment declined for three
successive years from the peak year of 1998. Komatsu took various detailed
measures for the respective products and distributors and aggressively promoted
the sales for GALEO series and other machines. Efforts were made to reduce
inventories at the distributors and orders from the distributors showed signs of
recovery in the later half of the period. For the mining equipment business,
demand for coal hit the bottom, reflecting increased price and other factors,
and Komatsu expanded sales of super-large, electric-drive dump trucks to copper
mines. In utilities business (small-sized construction equipment), the Company
embarked on production of backhoe loaders at the new plant in Newbury, South
Carolina, U.S.A during the second half of the period. In addition, Komatsu
began marketing skid-steer loaders newly developed by Komatsu Utility Europe
S.p.A., to capture the anticipated recovery of demand in North America, the
largest market for the business.
In Europe, while demands remained strong in U.K. and Italy, demands in
Germany, the largest market in Europe, France and Spain began to turn downwards
and the market for
6
construction equipment, including utilities, which continued to expand over the
recent few years, slowed down. Despite such environment, Komatsu secured sales
at the same level as the previous year by capitalizing on increased demands in
east Europe as well as introducing the new model skid-steer loaders and wheel
loaders.
Demand continued to expand in China and sales increased especially for
hydraulic excavators manufactured by Komatsu Shantui Construction Machinery
Corp., a joint venture established with a local partner. In further expanding
business in China, Komatsu (China) Ltd. played a major role to strengthen its
distributors.
In other regions, Komatsu delivered super-large dump trucks "930E" for coal
mines and increased sales in the Pacific regions. In Southeast Asia, while
demand for logging machines declined, sales of equipment to coal mines in
Indonesia increased. In the Near & Middle East, sales of large bulldozers for
use in agricultural land development increased. The sales in Africa, mainly in
mining equipment, showed a steady growth.
Electronics
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The consolidated sales from the electronics business was JPY 76.7 billion,
down 34.8% from the previous period, and non-consolidated sales also decreased
to JPY 3.7 billion, down 56.1% from the previous period. The electronics
business on a non-consolidated basis was adversely affected by the slump in the
IT market, which caused a drop in sales for FA equipment and LAN equipment,
resulting in lower sales compared with the previous period.
Komatsu concentrated on production of silicon wafers in Japan and Taiwan
since 1999 to strengthen its presence in these markets. Komatsu Electronic
Metals Co., Ltd. placed all-out efforts on reinforcement of corporate strength
by enhancing product competitiveness mainly for 200mm wafers and production
efficiency and reducing capacity costs. As a result, the company sustained
ordinary profit, when it registered a drastic decline in sales as adversely
affected by sluggish demand. Formosa Komatsu Silicon Corporation, a joint-
venture entity with a local partner, experienced a sharp fall of demand at the
time of its full-scale production start-up and recorded the results in need for
great improvement. Concerning Komatsu Silicon America, Inc. which had ceased
manufacturing operation, Komatsu decided not to use it as a manufacturing plant
for silicon wafers and changed its policy to sell or dispose of the fixed assets
of the company. Accordingly, its fixed assets were reevaluated and the
impairment loss amounted to JPY 24.9 billion.
Result of Advance Silicon Materials LLC (hereinafter "ASM")'s performance
fell considerably below the previous period, due to drop in sales for
polycrystalline silicon and
7
special loss arising from the impairment loss of its fixed assets. It was
decided that it would be difficult for its Butte Plant (Montana, U.S.A.) to
sufficiently maintain its operating rate for its manufacturing facilities for a
while and accounted an impairment loss of JPY 13.4 billion. It was also decided
for its Moses Lake Plant (Washington, U.S.A.) to suspend production. ASM
accounted JPY 15.9 billion as impairment loss for the fixed assets of Moses Lake
Plant at the end of this period, and with a view to converting the Moses Lake
Plant into a manufacturing center for polycrystalline silicon for solar
batteries, ASM reached a basic agreement with Renewable Energy Corporation AS of
Norway to establish a joint venture and began negotiations on the details.
The performance of Komatsu Electronics, Inc. dropped largely below the
previous year, affected by the reduced capital investment in thermo-regulators
for production of semiconductors as well as sharp decline in demand for thermo-
modules for fiber optic communication.
Others
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Consolidated sales of other businesses for this period increased 12.6% to
JPY 227.7 billion. Non-consolidated sales was JPY 56.1 billion, down 7.6% from
the previous year.
Komatsu expanded sales of large-sized presses supported by increase in
overseas investment by Japanese car manufacturers. Sales to Japan's Self Defense
Agency remained strong, although it fell slightly below the previous year due to
partial completion of the research project consigned by the Agency. Sales of the
environmental business, including recycling plant business, dropped largely
below the previous year.
Komatsu Forklift Co., Ltd. ("Komatsu Forklift") engaged in active sales
promotion such as for "Arion Plus", the renewed battery-powered type forklift.
Komatsu Forklift strengthened its cooperative relationship with Linde AG
("Linde") of Germany by supplying OEM to Linde's local subsidiary in the U.S.
through the production subsidiary of Komatsu Forklift and it also launched
production of Komatsu Forklift-brand products at the Chinese subsidiary of
Linde. Despite of these activities, sales of Komatsu Forklift declined sharply
from the previous year due to decrease in demand for industrial vehicles in
domestic and foreign markets.
Despite of the harsh market environment, Komatsu Industries Corporation, a
manufacturer of sheet metal forging press machinery, increased both its sales
and profit
8
consecutively to the previous period which turned into a surplus, by carrying
out customer- tailored, proposal- oriented sales and services mainly based on
superior products such as "E2W series" transfer presses, Twister Fine Plasma
cutting machines and laser cutting machines manufactured by TRUMPF GmbH of
Germany, which has a cooperative relationship with Komatsu Industries.
In the agricultural and forestry equipment business of Komatsu Zenoah Co.,
sales for "EZ Start brushcutters" which feature significantly improved ignition
and self-propelled brush cutters "Hammer Knife Mower" showed a steady growth in
Japan. In addition, orders increased for "Blowers", which was developed for the
U.S. market. As a result, the sales of the business achieved the same level as
the previous period.
(2) Capital Expenditure
During the period under review, most of the investments were concentrated
in the construction and mining equipment business, where investments were made
in developing and manufacturing new products and in achieving production
efficiency. In the electronics business, investments were made to improve the
precision of silicon wafers, to develop next-generation technologies and to
improve production efficiency.
As a result, total capital expenditure in facilities amounted to JPY 74.4
billion on a consolidated basis, down JPY 4.8 billion from the previous period,
and JPY 11.3 billion on a non-consolidated basis, down JPY 9 billion from the
previous period.
(3) Fund Raising
During the period under review, Komatsu focused on stabilizing its
operating capital, and replaced short-term capital procurement through
commercial papers with long-term borrowings from banks and life insurance
companies. In addition, Komatsu effected further securitization of trade
receivables to diversify its capital resources.
(4) Future Challenges
For the period under review, Komatsu accounted a substantial loss due to
worsening business environment and implementation of measures against such
adverse condition. In order to improve profitability and achieve successful
recovery, Komatsu will address the following four challenges:
(1) To promote faster growth strategy in construction and mining equipment
business;
9
(2) To solidify the basis for competitiveness by reducing capacity costs in
all business areas;
(3) To make the electronics businesses stand independent and revitalized
businesses;
(4) To promote "skillsmanship" reform;
(1) To promote faster growth strategy in construction and mining equipment
business
In order to expand the construction and mining equipment business, Komatsu
will address the following two challenges.
First, Komatsu will focus on businesses in the downstream fields, after
sales of new products, such as rental, used equipments, components and after-
sales services. In order to achieve certain results in these fields, it would be
necessary to change current business methods and to establish new business
models. Based on such innovative products as the GALEO series, Komatsu will
build solution businesses and strengthen used equipment business, thereby
differentiating its products and services from those of competitors.
Secondly, Komatsu will improve its presence, mainly based on the new
products, in the overseas markets. In the long run, demand in the overseas
market is on the rise. Recently, Komatsu reorganized the divisions in charge of
construction and mining equipment marketing and appointed directors who shall be
responsible respectively for the four regions of North and South America,
Europe, Southeast Asia & Oceania and China. By strengthening close cooperation
among these regions and taking advantage of the globally developed businesses,
Komatsu will expand its businesses, with a central focus on GALEO series, as
well as improving competitiveness in terms of cost at its production fronts,
thereby improving its position and profitability in these areas.
(2) To solidify basis for competitiveness by reducing capacity costs in all
business areas
Komatsu is executing its cost reduction plan ahead of schedule and this is
anticipated to produce further satisfactory results in the future. In the
construction and mining equipment business, Komatsu will consolidate the types
of equipment as well as to effect large reduction in manufacturing costs from
the early stages of development.
Furthermore, Komatsu will actively establish alliances with other companies
to reduce
10
costs and to efficiently utilize managerial resources. At present, Komatsu is
considering to establish cooperative relations with Volvo Construction Equipment
("Volvo CE") and Hitachi Construction Machinery Co., Ltd. in the areas of
production, development and purchase of components for construction equipment,
while maintaining competition in sales and services. As a starter of these
initiatives, Komatsu has decided to consign the production of cab for Komatsu's
wheel loaders in Europe to Volvo CE.
(3) To make the electronics businesses stand independent and revitalized
businesses
Komatsu shall aim to make its electronics businesses stand independent and
revitalize itself in each area of business. The silicon wafer business and
polycrystalline silicon business reduced their future risk over this period and
will aim to further differentiate their technologies from those of their
competitors as well as to focus on improving productivity and reducing costs,
thereby improving its competitiveness. The areas of thermo-modules and excimer
lasers will seek to expand their businesses in alliance with other companies
based on its technological advantages.
(4) To promote "skillmanship" reform
In order for Komatsu to improve its competitiveness as a manufacturer, it
is highly important to improve its "skillsmanship". The concept of a
skillsmanship is "to provide such products (hardware and software) to the
satisfactory of the customers and earn profits" and we believe that this is a
power to challenge in continuously creating even better products with everyone
engaged in product research, development, purchase, production, sales and
services feeling united towards this challenge. "Skillsmanship" is Komatsu's
competitive edge. By reinforcing this skillsmanship unique to Komatsu, Komatsu
will aim to develop products, services and systems which would have unique
features which will prevail over its competitors and each of the production
bases throughout the world will aim to win the competition in their respective
fields of products.
Komatsu's basic management policy is to pursue "quality and reliability"
and to maximize its corporate value. This policy will not change. The top
priority at present is to recover profit from business and to up-turn the
performance. Not only the management but all the employees of the Komatsu Group,
whether in Japan or overseas, will bring together their wisdom to address the
above challenges quickly and to soon realize the recovery of performance of the
group.
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(5) Comparison of Financial Data
The financial position for this period and the recent 3 years are as
follows:
(i) Consolidated Results
(Unit: in billion yen)
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1998 1999 2000 2001
(April 1998 - (April 1999 - (April 2000 - (April 2001 -
March 1999) March 2000) March 2001) March 2002)
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Net Sales 1,061.5 1,055.6 1,096.3 1,035.8
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Income before Taxes (9.6) 19.3 20 (106.7)
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Net Income (12.3) 13.3 6.9 (80.6)
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Total Assets 1,524.6 1,375.2 1,403.1 1,340.2
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(ii) Non-consolidated Results
(Unit: in billion yen except per share data)
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130/th/ Period 131/st/ Period 132/nd/ Period 133/rd/ Period
(April 1998 - (April 1999 - (April 2000 - (April 2001 -
March 1999) March 2000) March 2001) March 2002)
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Net Sales 475.7 441.4 430.2 382.9
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Operating Profit 11.6 12.9 14.1 8.7
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Ordinary Profit 8.5 9.9 11.2 3.7
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Net Income 2.1 13.6 7.2 (41.8)
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Earnings per Common
Share (Unit: in yen) 2.24 14.05 7.53 (43.81)
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Total Assets 771.7 746.8 765.4 685.9
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Net Assets
(Shareholders' Equity) 450.4 469.1 473.7 418.8
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Shareholders' Equity
Ratio (%) 58.4 62.8 61.9 61.1
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(Note) Effective from 133rd Period, Treasury Shares is provided as an item to be
deducted from the capital. Accordingly, Earnings per Common Share, which were
calculated on the basis of the number of shares issued and outstanding at the
end of the period until 132nd Period, is now calculated on the basis of the
average number of shares issued and outstanding for the period deducting there
from the average number of treasury shares for the same period.
In the 130/th/ Period, the Japanese economy continued to suffer from the
long-prevailing recession. Komatsu pooled the efforts of all its group companies
inside and outside of Japan aiming at improvement of sales and profits. At the
same time, Komatsu assumed measures
12
towards the declining demand in construction equipment in Japan and reorganized
the production system. However, on a non-consolidated basis, sales and profits
both resulted in a decrease from the previous period. On a consolidated basis,
the construction equipment achieved performance above that of the previous
period, however, due to significant drop in the results of the electronics
division, the sales dropped from the previous period and net income for the
period was regretfully a loss.
For the 131/st/ Period, the Japanese economy did not realize autonomous
recovery in spite that the economic measures were implemented by the government.
At overseas, the U.S. economy continued to grow and Europe showed signs of mild
recovery and Asian economy faced into the direction of recovery. For the purpose
of recovering the performance, Komatsu engaged in three major tasks, to
significantly strengthen corporate governance centering around reorganization of
the Board of Directors, to recover the profits for the domestic construction
equipment business, and to effect structural reforms in the group's electronics
business. As the result, the consolidated sales for this period was the level
with the previous period but the net income for this period improved
significantly. On a non-consolidated basis, sales decreased slightly from the
previous year but the profit for the period improved significantly.
For the 132/nd/ Period, the Japanese economy accommodated some signs of
moderate autonomous recovery in the first half of the period. In the latter half
of the period, however, the Japanese economic mindset returned less positive. At
overseas, while U.S. economy began to slow down, European economies remained
strong in general. The recovery pace of Asian economies slowed down. For its
construction and mining equipment business, Komatsu completed the restructuring
program for Japanese production and worked to expand its business domain by
utilization of IT. Komatsu's electronics business continued to facilitate
differentiation of products and technologies. Komatsu also worked to reinforce
its businesses where it can demonstrate its technological superiority by
carrying out business restructuring and establishing business alliances. As a
result, on a consolidated basis, sales increased but the net income decreased
from the previous period. On a non-consolidated basis, both sales and net income
dropped from the previous period.
The outline of business for the current 133/rd/ Period is as set forth in
above (1) "Development and Results of Business Operations".
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II. Outline of the Company (as of March 31, 2002)
(1) Major Lines of Business
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Division Principal Products and Business
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Construction Excavating Equipment hydraulic excavators, mini excavators and backhoe loaders*
& Mining
Equipment
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Loading Equipment wheel loaders, mini wheel loaders, and skid-steer loaders*
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Grading and Roadbed Bulldozers, motor graders, and vibratory rollers
Preparation Equipment
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Hauling Equipment dump trucks and crawler carriers
--------------------------------------------------------------------------------------
Tunneling machines shield machines, tunnel-boring machines (TBM), and
small-diameter pipe jacking machines (Iron Moles)
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Recycling Equipment mobile debris crushers (Galapagos), automatic soil
improver (Literra), and automatic lumber crusher (Refole)
--------------------------------------------------------------------------------------
Other Equipment rough-terrain cranes, reach tower cranes, and railroad
maintenance equipment
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Engine and Equipment diesel engines, diesel generator sets, and hydraulic
equipment
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Castings steel castings and iron castings*
------------------------------------------------------------------------------------------------------
Electronics Electronic Materials silicon wafers* and polycrystalline
silicon*
--------------------------------------------------------------------------------------
Communication Equipment, Network related products, LAN peripheral equipment,
Control and Information terminal for location based services, and vehicles
Equipment controller
--------------------------------------------------------------------------------------
Temperature Control Thermoelectric modules*, temperature control equipment
Equipment for semiconductor wet process*
------------------------------------------------------------------------------------------------------
Others Metal Forging and Large sized presses, middle and small sized presses*,
Stamping Presses forging presses* and therbo presses*
--------------------------------------------------------------------------------------
Sheet-metal Machines press brakes*, shears*, gatling press centers*, laser
and Machines Tools cutting machines*, fine plasma cutting machines*, and
crankshaft millers*
--------------------------------------------------------------------------------------
Industrial vehicles, Lifttrucks*, packing and logistics*
Logistics
--------------------------------------------------------------------------------------
Defense Ammunition and armored personnel carriers
--------------------------------------------------------------------------------------
Others Commercial-use-prefabricated structures for businesses*,
construction waste recycling plant
------------------------------------------------------------------------------------------------------
(Note : The products and businesses listed above include those of the
subsidiaries. Those with * mark are the principal products and major lines of
businesses of the subsidiaries.)
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(2) Shares of the Company
(i) Number of Shares and Number of Shareholders
Number of Shares Authorized to be Issued: 3,955,000,000 shares
Total Number of Shares Issued and 958,921,701 shares
Capital stock: JPY70,120,637,607
Number of Shareholders: 65,105
(ii) Major Shareholders (Top 10)
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Name of Shareholders Status of Investment by the Status of Investment by the
Shareholder in the Company Company in the Shareholder
--------------------------------------------------------------------------------
Number of Ratio of Number of Ratio of
Shares held shareholding Shares held Shareholding
(thousand shares) (%) (thousand shares) (%)
--------------------------------------------------------------------------------------------------------------------------
The Taiyo Mutual Life Insurance Company 55,224 5.8 - -
--------------------------------------------------------------------------------------------------------------------------
NATS CUMCO 55,056 5.7
--------------------------------------------------------------------------------------------------------------------------
Nippon Life Insurance Co. 34,863 3.6 - -
--------------------------------------------------------------------------------------------------------------------------
The Chase Manhattan Bank N.A. London 30,312 3.2 - -
--------------------------------------------------------------------------------------------------------------------------
Komatsu Ltd. Employees Stockholding 30,080 3.1 - -
Association
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State Street Bank and Trust Company 29,852 3.1 - -
--------------------------------------------------------------------------------------------------------------------------
Japan Trustee Services Co., Ltd.
(held by trust units) 28,225 2.9 - -
--------------------------------------------------------------------------------------------------------------------------
Sumitomo Mitsui Banking Corporation 21,840 2.3 15,176 0.3
--------------------------------------------------------------------------------------------------------------------------
UFJ Trust Bank Ltd.
(held by Trust Account A) 20,886 2.2 - -
--------------------------------------------------------------------------------------------------------------------------
The Mitsubishi Trust and Banking
Corporation (held by trust units) 20,507 2.1 - -
--------------------------------------------------------------------------------------------------------------------------
(Notes)
1. NATS CUMCO is the share nominee of CITIBANK, N.A. which is a trustee of the
Company's ADR (American Depository Receipts).
2. The Company's holding in the Sumitomo Mitsui Banking Corporation is
computed by excluding the preferential shares with no voting rights issued
by the same bank.
3. The Company holds 189 shares (shareholding ratio: 0.0%) of UFJ Holdings
Inc. which is the parent company of UFJ Trust Bank Ltd.
15
(iii) The Status of Acquisition, Disposal, etc. and Holding of the Treasury
Shares
(1) The status of acquisition of the treasury shares of the Company during
this period:
(a) Acquisition for transfer to the directors and employees:
Type and Number: Ordinary shares 1,100,000 shares
Total Acquisition Price: JPY621,776,771
(b) Acquisition through purchase of shares less than one unit (tangen)
of shares (including shares less than one unit (tan-i)):
Type and Number: Ordinary shares 104,742 shares
Total Acquisition Price: JPY52,096,775
(2) Treasury shares disposed during this period:
Type and Number Ordinary shares 57,000 shares
Total Disposal Price: JPY31,909,000
(3) Treasury shares canceled during this period:
No treasury shares were canceled during this period.
(4) Treasury shares held at the end of this period:
Type and Number: Ordinary shares 4,519,972 shares
(3) Employees
------------------------------------------------------------------------------------
Number of Increase (Decrease) Average Age Average Service Years
--------- ------------------- ----------- ---------------------
Employees Over Previous Period
--------- --------------------
------------------------------------------------------------------------------------
8,206 (2,906) 43.1 20.8
------------------------------------------------------------------------------------
(Note) There has been a large decrease in the number of employees compared to
the end of the previous period as a result of call for early retirement
and transfer to affiliated companies that were conducted as a part of
management structural reforms.
The number of employees on a consolidated base is 30,760.
16
(4) Status of Consolidation
(i) Results of Consolidation
=============================================================================================================================
Fiscal 2000 Fiscal 2001
(From April 1,2000 to (From April 1, 2001 to
March 31, 2001) March 31, 2002)
-----------------------------------------------------------------------------------------------------------------------------
Consolidated Net Sales (in billion yen) 1,096.3 1,035.8
-----------------------------------------------------------------------------------------------------------------------------
Consolidated Net Income (in billion yen) 6.9 (80.6)
-----------------------------------------------------------------------------------------------------------------------------
Consolidated ROE (Ratio of Net Income to 1.4% (18.5%)
Shareholders' Equity)
-----------------------------------------------------------------------------------------------------------------------------
Consolidated ROA 1.4% (7.8%)
(Ratio of Pretax Income to Total Assets)
=============================================================================================================================
(Note) The Company's consolidated financial statements are based on the
accounting principles generally accepted in the United States of
America.
(ii) Principal Subsidiaries
---------------------------------------------------------------------------------------------------------------------------------
Name Capital Ownership (%) Main Business
---- ------- --------- --- -------------
(in JPY million)
--------------
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Electronic 11,636 61.9 Manufacture and sales of silicon wafers for semiconductors
Metals Co., Ltd.
----------------------------------------------------------------------------------------------------------------------------------
Komatsu Forklift Co., 11,411 51.5 Manufacture and sales of industrial vehicles, and
Ltd. logistics-related machinery and equipment
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Zenoah Co. 5,099 54.3 Manufacture and sales of agricultural and forestry
equipment, construction equipment and industrial machinery
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Castex Ltd. 4,979 100.0 Manufacture and sales of steel castings and iron castings
---------------------------------------------------------------------------------------------------------------------------------
Komatsu House Co., 1,436 86.7 Manufacture, sales and lease of commercial-use-
Ltd. prefabricated structures for businesses
---------------------------------------------------------------------------------------------------------------------------------
17
----------------------------------------------------------------------------------------------------------------------------------
Komatsu Logistics 1,080 96.3 Packing, baling, transportation, warehousing and
Corp. port-and-harbor services
----------------------------------------------------------------------------------------------------------------------------------
Komatsu Industries 990 100.0 Manufacture and sale of middle and small sized presses and
Corporation forging presses
----------------------------------------------------------------------------------------------------------------------------------
Komatsu Tokyo Ltd. 837 100.0 Sales, repair and service of construction equipment
----------------------------------------------------------------------------------------------------------------------------------
Komatsu Machinery 600 100.0 Manufacture of machine tools and semiconductor material
Corporation processing equipment
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Hokkaido 487 100.0 Sales, repair and service of construction equipment
Ltd.
---------------------------------------------------------------------------------------------------------------------------------
Komatsu 390 100.0 Manufacture and sale of thermo electric modules and
Electronics, Inc. temperature control equipment for semiconductor wet
process
---------------------------------------------------------------------------------------------------------------------------------
Komatsu America US$655mil 100.0 Holding company in the U.S.
Corp.
---------------------------------------------------------------------------------------------------------------------------------
Komatsu America -- 100.0 Manufacture and sales of construction
International Company equipment
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Mining US$ 65 mil 100.0 Manufacture and sales of mining equipment
Systems, Inc.
---------------------------------------------------------------------------------------------------------------------------------
Komatsu do Brasil CR$ 55 mil 100.0 Manufacture and sales of construction equipment and
Ltda. castings
---------------------------------------------------------------------------------------------------------------------------------
Advanced Silicon -- 100.0 Manufacture and sales of polycrystalline silicon
Materials LLC and silane gas
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Europe EUR 45 mil 100.0 Supervision of European subsidiaries' operations and
International N.V. sales of construction equipment
---------------------------------------------------------------------------------------------------------------------------------
Komatsu UK Ltd. Stg. (Pounds)23 mil 100.0 Manufacture and sales of construction equipment
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Hanomag AG EUR 19 mil 98.4 Manufacture and sales of construction equipment
---------------------------------------------------------------------------------------------------------------------------------
18
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Mining DM 10 mil 100.0 Manufacture and sales of mining equipment
Germany GmbH
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Utility EUR 6 mil 100.0 Manufacture and sale of construction equipment
Europe S.p.A.
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Asia & 12 mil 100.0 Supervision of Asian Pacific subsidiaries' operations,
Pacific Pte. Ltd. Singapore $ sales of construction equipment and industrial machines
---------------------------------------------------------------------------------------------------------------------------------
P.T. Komatsu 192,780 mil 55.1 Manufacture and sales of construction equipment and
Indonesia Rupiahs steel and iron castings
---------------------------------------------------------------------------------------------------------------------------------
Bangkok Komatsu 620 mil Bahts 74.8 Manufacture and sales of construction equipment
Co., Ltd.
---------------------------------------------------------------------------------------------------------------------------------
Komatsu (China) US$ 34 mil 100.0 Supervision of business in China
Ltd.
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Changzhou US$ 21 mil 85.0 Manufacture and sales of construction equipment
Construction
Machinery Corp.
---------------------------------------------------------------------------------------------------------------------------------
(Note) 1. Komatsu America International Company is a general partnership
established under the laws of Delaware, U.S.A. The Company holds an
equity interest in this company indirectly through its subsidiary. The
Company's accrued investment in this company amount to US$23 million
(after deducting the profit dividend from this company from the paid-
in capital).
2. Komatsu Mining Systems, Inc. and Komatsu do Brasil Ltda. are
indirectly owned by the Company through subsidiaries.
3. Advanced Silicon Materials LLC is a limited liability company
established under the laws if Delaware, U.S.A. The Company holds an
equity interest in this company indirectly through its subsidiary. The
accrued investment amount which is equivalent to its capital is US$
215 million.
4. The shareholding percentages in Komatsu U.K. Ltd., Komatsu Hanomag AG,
Komatsu Utility Europe S.p.A. and Bangkok Komatsu Co., Ltd. and the
equity holdings in Komatsu Changzhou Construction Machinery Corp.
include the shares and the equity holdings held by the Company's
subsidiaries.
5 In April 2002, Komatsu Mining Systems, Inc. was merged into Komatsu
America International Company.
19
(iii) Principal Affiliated Companies
---------------------------------------------------------------------------------------------------------------------------------
Name Capital Ownership (%) Main Business
---- ------- --------- --- -------------
(in JPY million)
--------------
---------------------------------------------------------------------------------------------------------------------------------
Gigaphoton Inc. 2,000 50.0 Manufacture and sale of excimer lasers for semiconductor
exposures
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Cummins 1,400 50.0 Manufacture of diesel engines
Engine Co., Ltd.
---------------------------------------------------------------------------------------------------------------------------------
Cummins Komatsu - 50.0 Manufacture of diesel engines
Engine Company
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Soft Ltd. 1,234 35.0 Subcontracts for computer software development and sales
---------------------------------------------------------------------------------------------------------------------------------
Komatsu Shantui US$ 21 mil 40.0 Manufacture and sales of construction equipment
Construction
Machinery Co., Ltd.
---------------------------------------------------------------------------------------------------------------------------------
(Notes) 1. Cummins Komatsu Engine Company is a general partnership established
under the laws of Indiana, U.S.A. The Company holds an equity
interest in this company indirectly through its subsidiary, which
investments amount to US$2 million.
2. The ownership in Komatsu Shantui Construction Machinery Co., Ltd.
includes the ownership held by the subsidiaries.
(5) Major Borrowing
---------------------------------------------------------------------------------------------------------------------------------
Name of Lenders Balance of Loans Number of Shares of the (Ratio of
--------------- ---------------- ---------------------- ---------
(in JPY billions) Company held by such Shareholding by the
-------------------- -------------------
Lenders Lenders in the
------- --------------
(in thousand shares) Company)(%)
-----------
---------------------------------------------------------------------------------------------------------------------------------
The Taiyo Mutual Life Insurance Co. 6.1 55,224 5.8
---------------------------------------------------------------------------------------------------------------------------------
The Hokkoku Bank, Ltd. 5.4 9,486 1.0
---------------------------------------------------------------------------------------------------------------------------------
The Dai-ichi Mutual Life Insurance 4.0 14,350 1.5
Company
---------------------------------------------------------------------------------------------------------------------------------
Meiji-life Insurance Company 2.9 7,544 0.8
---------------------------------------------------------------------------------------------------------------------------------
Mitsui Mutual Life Insurance, Co. 2.5 4,035 0.4
---------------------------------------------------------------------------------------------------------------------------------
The major lenders on a consolidated basis are The Sumitomo Mitsui Banking
Corporation (JPY 36.1 billion), The Bank of Tokyo-Mitsubishi, Ltd. (JPY 31.6
billion), and the Japan Bank for International Cooperation (JPY 28.7 billion).
(The amounts are the balance of borrowing.)
20
(6) Principal Business Offices
=======================================================================================================
Name Location
---- --------
-------------------------------------------------------------------------------------------------------
Head Office Head Office Minato-ku, Tokyo
-------------------------------------------------------------------------------------------------------
Research Division Research Center Hiratsuka City, Kanagawa Pref.
-------------------------------------------------------------------------------------------------------
Plant The Company Awazu Plant Komatsu City, Ishikawa Pref.
-----------------------------------------------------------------------------
Osaka Plant Hirakata City, Osaka Pref.
-----------------------------------------------------------------------------
Mohka Plant Mohka City, Tochigi Pref.
-----------------------------------------------------------------------------
Oyama Plant Oyama City, Tochigi Pref.
------------------------------------------------------------------------------------------------
Subsidiaries Komatsu Electronic Metals Co., Ltd. Ohmura City, Nagasaki Pref.,
Kiyotake-cho, Miyazaki Pref.
-----------------------------------------------------------------------------
Komatsu Forklift Co., Ltd. Oyama City, Tochigi Pref.
-----------------------------------------------------------------------------
Komatsu Zenoah Co. Kawagoe City, Saitama Pref.
-----------------------------------------------------------------------------
Komatsu Castex Ltd. Himi City, Toyama Pref.
-----------------------------------------------------------------------------
Komatsu Electronics, Inc. Hiratsuka City, Kanagawa Pref.
-----------------------------------------------------------------------------
Komatsu America International Company Chatanooga, Tennessee, USA
-----------------------------------------------------------------------------
Komatsu Mining Systems, Inc. Piorea, Illinois, USA
-----------------------------------------------------------------------------
Advanced Silicon Materials, Inc. Butte, Montana, USA
-----------------------------------------------------------------------------
Komatsu do Brasil Ltda. Suzano, San Paulo, Brazil
-----------------------------------------------------------------------------
Komatsu UK Ltd. Bartley, UK
-----------------------------------------------------------------------------
Komatsu Hanomag AG Hannover, Germany
-----------------------------------------------------------------------------
Komatsu Mining Germany GmbH Dusseldorf, Germany
-----------------------------------------------------------------------------
Komatsu Utility Europe S.p.A. Este, Italy
-----------------------------------------------------------------------------
P.T. Komatsu Indonesia Jakarta, Indonesia
-----------------------------------------------------------------------------
Bangkok Komatsu Co., Ltd. Chonburi, Thai
-----------------------------------------------------------------------------
Komatsu Changlin Construction City of Changzhou, Jiangsu
Machinery Corp. Province, China
=======================================================================================================
(Note) The above also includes the major plants of the subsidiaries.
21
(7) Directors and Auditors
Position Name Responsibility in the Company, or
--------- ---- ---------------------------------
Principal Occupation
--------------------
-----------------------------------------------------------------------------------------------------
Chairman and Director Satoru Anzaki
-----------------------------------------------------------------------------------------------------
President and Representative *Masahiro Sakane
Director
-----------------------------------------------------------------------------------------------------
Executive Vice President and *Toshitaka Hagiwara Advisor to President, Supervision of
Representative Director Administration, the overall business and
public relations
-----------------------------------------------------------------------------------------------------
Executive Managing Director *Koji Ogaki General Manager of Research Division
-----------------------------------------------------------------------------------------------------
Executive Managing Director *Kazuhiro Aoyagi General Manager of Corporate Planning
Dept.
-----------------------------------------------------------------------------------------------------
Managing Director *Kunio Noji General Manager of Production Division
and General Manager of e-Komatsu
Promotion Division
-----------------------------------------------------------------------------------------------------
Director and Counselor Tetsuya Katada
-----------------------------------------------------------------------------------------------------
Director Toshio Morikawa Counselor of The Sumitomo Mitsui Banking
Corporation
-----------------------------------------------------------------------------------------------------
Standing Statutory Auditor Norimichi Kitagawa
-----------------------------------------------------------------------------------------------------
Standing Statutory Auditor Hiroyuki Watanabe
-----------------------------------------------------------------------------------------------------
Statutory Auditor Masahiro Yoshiike President and Representative Director of
The Taiyo Mutual Life Insurance Co.
-----------------------------------------------------------------------------------------------------
Statutory Auditor Takaharu Dohi Lawyer
-----------------------------------------------------------------------------------------------------
(Notes) 1. Messrs. Hiroyuki Watanabe, Masahiro Yoshiike and Takaharu Dohi,
each of them being a Statutory Auditor, satisfy the requirements
for outside auditors provided in Article 18, Paragraph 1 of the
"Law for Special Exceptions to the Commercial Code Concerning
Audit, etc. of Kabushiki-Kaisha"
2. Each Director with the mark * concurrently holds the post of an
Executive Officer.
The Directors and Statutory Auditors who resigned from their positions during
this term:
---------------------------------------------------------------------------------------------
Position at the time of resignation Name Date of resignation
---------------------------------------------------------------------------------------------
Executive Managing Director Norimichi Kitagawa June 27, 2001
---------------------------------------------------------------------------------------------
Director Arlie G. Tucker June 27, 2001
---------------------------------------------------------------------------------------------
Standing Statutory Auditor Toshiro Nakaya June 27, 2001
---------------------------------------------------------------------------------------------
22
(Reference)
The Company introduces the "Executive Officer" system and the "Global
Officer" system in which the latter is comprised of the management class
personnel of the major foreign local subsidiaries. The below is the list
of the Executive Officers and the Global Officers as of March 31, 2002.
The five persons with * mark holds both of the post as a Director and an
Executive Officer.
-------------------------------------------------------------------------------------------------------
Position Name Responsibility in the Company, or Principal
-------- ---- -------------------------------------------
Occupation
----------
-------------------------------------------------------------------------------------------------------
President and *Masahiro Sakane
Representative Director
(Executive Officer)
-------------------------------------------------------------------------------------------------------
Executive Vice President *Toshitaka Hagiwara Advisor to President, Supervision of
and Representative Administration, the overall business and public
Director (Executive relations
Officer)
-------------------------------------------------------------------------------------------------------
Executive Managing *Koji Ogaki General Manager of Research Division
DirectorExecutive Vice
President and
Representative Director
(Executive Officer)
-------------------------------------------------------------------------------------------------------
Executive Managing *Kazuhiro Aoyagi General Manager of Corporate Planning Dept.
Director (Executive
Officer)
-------------------------------------------------------------------------------------------------------
Managing Director *Kunio Noji General Manager of Production Division and General
(Executive Officer) Manager of e-Komatsu Promotion Division
-------------------------------------------------------------------------------------------------------
Senior Executive Naomi Anesaki Compliance, Administration-and Defense Systems
Officer
-------------------------------------------------------------------------------------------------------
Senior Executive Kunihiko Komiyama General Manager of Engines and Hydraulics
Officer Division
-------------------------------------------------------------------------------------------------------
Senior Executive Hisashi Wada General Manager of Domestic Sales Division
Officer
-------------------------------------------------------------------------------------------------------
Senior Executive Teruo Nakahara General Manager of Development Division
Officer
-------------------------------------------------------------------------------------------------------
Executive Officer Shuji Sugi Deputy General Manager of Development Division
-------------------------------------------------------------------------------------------------------
Executive Officer Susumu Isoda Deputy General Manager of Production Division and
General Manager of Osaka Plant
-------------------------------------------------------------------------------------------------------
Executive Officer Teruo Nagayasu General Manager of Product Support Division
-------------------------------------------------------------------------------------------------------
23
-------------------------------------------------------------------------------------------------------
Executive Officer Kanetake Nakatani General Manager of Awazu Plant, Production Division
-------------------------------------------------------------------------------------------------------
Executive Officer Yuzo Tsumura General Manager of Purchasing Division
-------------------------------------------------------------------------------------------------------
Executive Officer Masahiro Yoneyama Deputy General Manager of e-Komatsu Promotion
Division, and Deputy General Manager of Corporate
Planning Division
-------------------------------------------------------------------------------------------------------
Executive Officer Shigeki Fujimori General Manager of Defense Systems Business
Division
-------------------------------------------------------------------------------------------------------
Executive Officer Munenori Nakao General Manager of Environmental Control and
System Development Business Division
-------------------------------------------------------------------------------------------------------
Executive Officer Yuji Watanabe Deputy General Manager of Corporate Planning
Division
-------------------------------------------------------------------------------------------------------
Executive Officer Kenji Kinoshita CFO (Chief Financial Officer)
-------------------------------------------------------------------------------------------------------
Executive Officer Makoto Nakamura General Manager of International Division
-------------------------------------------------------------------------------------------------------
Executive Officer Hiroshi Suzuki Deputy General Manager of Domestic Sales Division
-------------------------------------------------------------------------------------------------------
Executive Officer Mamoru Hironaka Deputy General Manager of Development Division
-------------------------------------------------------------------------------------------------------
Executive Officer Masao Fuchigami Deputy General Manager of Research Division
-------------------------------------------------------------------------------------------------------
Global Officer James E. Boyle Chairman and CEO of Komatsu America
International Company
-------------------------------------------------------------------------------------------------------
Global Officer David W. Grzelak Chairman and CEO of Komatsu Mining Systems, Inc.
-------------------------------------------------------------------------------------------------------
Global Officer Kota Hoshino President and COO of Komatsu Mining Systems, Inc.
-------------------------------------------------------------------------------------------------------
Global Officer Peter J. Howe President of Komatsu UK Ltd.
-------------------------------------------------------------------------------------------------------
Global Officer Junro Kawanabe President of Komatsu do Brasil Ltda.
-------------------------------------------------------------------------------------------------------
Global Officer Michael W. Kerschen President and COO of Advanced Silicon Materials LLC
-------------------------------------------------------------------------------------------------------
Global Officer Yoichi Kobayashi President of Komatsu Latin America Corp.
-------------------------------------------------------------------------------------------------------
Global Officer Yoshinori Komamura President of Komatsu Europe International N.V.
-------------------------------------------------------------------------------------------------------
Global Officer Gerhard Lehnen President of Komatsu Hanomag AG
-------------------------------------------------------------------------------------------------------
Global Officer John H. Matlock President and CEO of Komatsu Silicon America, Inc.
-------------------------------------------------------------------------------------------------------
24
-------------------------------------------------------------------------------------------------------
Global Officer Edson R. McCord General Manager, USA Research & Development
Center, Komatsu America Corp.
-------------------------------------------------------------------------------------------------------
Global Officer Kenichi Nakamura President and COO of Komatsu America
International Company
-------------------------------------------------------------------------------------------------------
Global Officer Teruaki Noda President and COO of Komatsu America Corp.
-------------------------------------------------------------------------------------------------------
Global Officer Ian Olivieri President of Komatsu Australia Pty.Ltd
-------------------------------------------------------------------------------------------------------
Global Officer Yoshitaka Ohmura President of Komatsu Asia & Pacific Pte. Ltd.
-------------------------------------------------------------------------------------------------------
Global Officer Toshiji Onuma President of Komatsu Mexicana S.A. de C.V.
-------------------------------------------------------------------------------------------------------
Global Officer Frank Planke President of Komatsu Europe Coordination Center
N.V.
-------------------------------------------------------------------------------------------------------
Global Officer Enrico Tonetti President of Komatsu Utility Europe S.p.A.
-------------------------------------------------------------------------------------------------------
Global Officer Hideo Ueda Chairman and CEO of Advanced Silicone Materials LLC
-------------------------------------------------------------------------------------------------------
Global Officer Norbert H.H. Walther President of Komatsu Mining Germany GmbH
-------------------------------------------------------------------------------------------------------
25
EXHIBIT II
BALANCE SHEET
-------------
(As of March 31, 2002)
(in million yen)
------------------------------------------------------------------------
ASSETS
------
CURRENT ASSETS: 319,287
Cash on hand and in banks 25,957
Notes receivable trade 6,643
Accounts receivable trade 150,890
Finished products 25,114
Materials and supplies 2,327
Work in process 22,912
Prepaid expenses 558
Deferred taxes 21,488
Short-term loans receivable 57,660
Other current assets 12,181
Allowance for doubtful receivables (6,446)
FIXED ASSETS: 366,635
TANGIBLE FIXED ASSETS: 134,231
Buildings 44,785
Structures 8,484
Machinery and equipment 28,266
Vehicles and delivery equipment 246
Tools, furniture and fixtures 7,380
Land 44,570
Construction in progress 497
INTANGIBLE FIXED ASSETS: 11,045
Utility rights 180
Software 10,803
Other intangible fixed assets 60
INVESTMENTS AND MISCELLANEOUS 221,358
ASSETS:
Investment securities 43,536
Capital stock of subsidiaries and contributions 183,509
Long-term loans receivable 4,764
Non-current prepaid expenses 750
Deferred taxes 30,214
Other investments 5,853
Allowance for doubtful receivables (2,067)
Allowance for investments valuation (45,203)
TOTAL ASSETS 685,922
------------
------------------------------------------------------------------------
26
------------------------------------------------------------------------
LIABILITIES
-----------
CURRENT LIABILITIES: 166,412
Notes payable trade 3,663
Accounts payable trade 70,513
Short-term loans payable 11,145
Commercial paper 4,000
Accounts payable 59,460
Accrued corporation taxes, etc. 104
Advances received 974
Deferred profit on installment sales 4,122
Accrued bonuses 3,718
Warranty reserve 4,111
Other current liabilities 4,597
LONG-TERM LIABILITIES: 100,691
Bonds 62,447
Long-term loans payable 25,681
Liabilities for severance payments 10,723
Allowance for retirement payments to directors and auditors 1,092
Other long-term liabilities 746
TOTAL LIABILITIES 267,103
-----------------
------------------------------------------------------------------------
27
------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
--------------------
CAPITAL: 70,120
Capital stock 70,120
LEGAL RESERVES: 127,366
Capital surplus 109,337
Legal earned surplus 18,029
RETAINED EARNINGS: 219,100
Reserve for special depreciation 168
Reserve for losses on overseas investment 1
Reserve for advanced depreciation deduction 15,068
General reserve 230,359
Undisposed loss for this period 26,496
(including net loss for this period, JPY 41,828 million)
VARIANCE OF THE ESTIMATE 4,624
Variance of the estimate 4,624
TREASURY SHARES (2,394)
Treasury Shares (2,394)
TOTAL SHAREHOLDERS' EQUITY 418,818
--------------------------
--------------------------------------------------------------------------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 685,922
----------------------------------------
--------------------------------------------------------------------------------
28
EXHIBIT III
STATEMENT OF INCOME
-------------------
From April 1, 20021 to March 31, 20002)
(in million yen)
--------------------------------------------------------------------------------
ORDINARY PROFITS AND LOSSES
---------------------------
Operating Profit And Loss
Operating income:
Net sales 382,908
Operating expenses:
Cost of sales 285,866
Adjustment to deferred profit on installment (5,648)
Sales
Selling, general and administrative expenses 93,982 374,200
----------------------
Operating profit: 8,708
Non-operating Profit and Loss:
Non-operating income:
Interest and dividend Income 7,108
Other non-operating income 2,318 9,427
---------
Non-operating expenses:
Interest expenses 1,922
Other non-operating Expenses 12,418 14,341
---------------------
Ordinary Profit: 3,794
SPECIAL PROFITS AND LOSSES
--------------------------
Special Income:
Proceeds from sale of land 11,967
Proceeds from sale of 1,249
investment securities
Gains from sale of shares 74 13,290
---------
Special Losses:
Valuation loss in securities invested 7,547
Deferred allowance of securities investment 38,022
Valuation loss of the shares of the 24,376
subsidiaries
Cost of reorganization 21,540
Loss from sale of land 57 91,544
-----------------------
Loss before income taxes 74,460
Corporation, resident and 44
enterprise taxes
Foreign tax returns 327
Adjustments to corporation tax, etc. (32,349)
Net loss for the period 41,828
Unappropriated retained earnings 18,195
brought forward
Interim cash dividend paid 2,863
Undisposed loss at the end of the period 26,496
-------------------------------------------------------------------------------
29
(Notes)
1. Accounting Principles
(1) Method and basis of valuation of securities
Bonds held until maturity: Amortized at cost
Subsidiary shares and shares of affiliates: At cost at moving average
Other securities:
Quoted securities: At market value based on the market quotation on
the settlement date (the valuation difference
shall be disposed by directly accounting all this
amount to capital, and the sale price shall be
computed through moving average)
Unquoted securities: At cost (moving average)
(2) Method and basis of valuation of inventories
Finished products (excluding spare parts and real estate held for sale)
and work in process: Lower of cost (specific identification basis)
Spare parts: Lower of cost (last-in, first-out)
Real estate held for sale: At cost (specific identification basis)
Materials and supplies: Lower of cost (periodic average)
(3) Depreciation of tangible fixed assets and intangible fixed assets is
computed according to the declining-balance method and the straight-line
method respectively.
(4) As for the provision of severance payments to officers and/or employees,
the amount that actually arose as of the end of the period is accounted
pursuant to liabilities for severance payments and pension assets. (With
respect to the corporate pension system, as the pension assets exceed the
liabilities for severance payments, the prepaid pension expense is
accounted.)
(5) Accounting method of lease transactions
General accounting methods employed for ordinary lease transactions are
used for accounting finance lease transactions, excluding such transactions
in which it is recognized that the ownership of the leased article is being
transferred to the borrower.
(6) Accounting for consumption tax
Accounting procedures in regard to consumption taxes follow the tax-exempt
method.
(7) Change in accounting principles
Formerly, for long-term installment sales in which the installment period
is in excess of two years, the profits to be collected after the next
period were deferred, however, from this period the installment basis was
changed to sales basis and the amount of profit is not deferred. Due to
this change, when compared based on the previous
30
period's accounting method, the operating profit and ordinary profit are
increased JPY6,236 million respectively and loss before income taxes is
accounted JPY6,236 million less.
2. Matters concerning the Balance Sheet
(1) Fractions of one million yen have been discarded.
(2) Short-term receivables from subsidiaries: JPY163,905 million
Short-term debts payable to subsidiaries: JPY24,377 million
Long-term receivables from subsidiaries: JPY622 million
(3) Accumulated depreciation of tangible fixed assets: JPY296,444
million
(4) In addition to the fixed assets shown in the balance sheet, there are
computers and peripherals leased and used as important fixed assets.
(5) Important assets and liabilities denominated in foreign currencies
Accounts receivable denominated in foreign currencies:
JPY9,752 million
Denominated in:
US dollars: US$58 million
Euro: EUR 17 million
The above does not include accounts subject to forward foreign exchange
contracts.
(6) The allowance for severance payments and pension assets in the severance
payment trust that is offset with the former allowance as of the end of the
period (excluding differences due to unrecognized computation of figures)
are as follows:
Lump sum payment of severance payment
-------------------------------------
Allowance for severance payments JPY21,911 million
(before deduction of pension assets in
severance payment trust)
Pension assets in severance payment trust JPY11,187 million
(excluding differences due to
unrecognized computation of figures)
-------------------------------------------------------------------------------
Allowance for severance payments JPY10,723 million
(after deduction of the pension assets in
the severance payment trust)
31
Qualified Pension
-----------------
Prepaid pension expense JPY1,247 million
(7) The allowance for directors' retirement payments is an allowance
accounted pursuant to Article 287-2 of the Commercial Code.
(8) Guaranteed liability: JPY55,480 million
Balance under letters of awareness, etc. :
JPY119,450 million
Maximum repurchase amount for the transferred claims for installment
sales receivables: JPY1,172 million
(9) The accounting for the notes that matured at the end of the period are
disposed as having been settled on the date of note exchange. As the last
day of the subject period fell on a holiday for the financial
institutions, the notes that matured at the end of the period are
included in the balance for the period as follows:
Notes receivable: JPY1,138 million
Notes payable: JPY1,058 million
(10) With respect to the treasury shares, as the former "Rules Concerning the
Balance sheet, Profit and Loss Statement, Business Report and
supplemental Schedules for a Kabushiki Kaisha" was amended, this is
indicated at the end of the "Total Shareholders' Equity" as an item to be
deducted from the capital effective from the end of the subject period.
(11) The amount of net assets prescribed in Article 290, Paragraph 1, Item 6
of the Commercial Code: JPY4,624 million
(12) Loss per common share (calculated based on the number of average
outstanding shares (excluding treasury shares)): JPY43.81
3. Matters concerning the Statement of Income
(1) Fractions of one million yen have been discarded.
(2) Tradings with subsidiaries
Sales: JPY208,327 million
Purchases: JPY93,586 million
Trading other than operating transactions: JPY9,272 million
32
EXHIBIT IV
PROPOSAL FOR APPROPRIATION OF PROFIT
------------------------------------
(For the period ending in March 2002)
(in yen)
Unappropriated loss at the end of the period 26,496,476,028
Reversal of reserve for special Depreciation 44,458,426
Reversal of reserve for loss on overseas investments 244,300
Reversal of reserve for advanced depreciation deduction 1,229,225,138
Reversal of general reserve 50,000,000,000
TOTAL 24,777,451,836
The foregoing amount is proposed to be appropriated as follows:
Cash dividends 2,863,205,187
(Per share) (JPY 3)
Reserve for advanced depreciation deduction 1,272,384,256
Reserve for special advanced depreciation account 4,288,551,616
Unappropriated retained earnings carried forward to the 16,353,310,777
next period
Notes: 1. The total dividends applicable to this fiscal period would amount to
JPY5,726,557,380 (including the interim dividends of JPY3 per share,
totaling JPY2,863,352,193 paid on December 7, 2001).
2. The amounts entered respectively for reversals and provisions of
"Reserve for special depreciation", "Reserve for loss on overseas
investments", "Reversal" and "Reserve" for "Advanced depreciation
deduction" and "Reserve for special advanced depreciation account"
are recorded in accordance with the Special Taxation Measures Law.
33
EXHIBIT V
AUDIT REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------------
AUDIT REPORT
------------
May 7, 2002
To: KOMATSU LTD.
Mr. Masahiro Sakane
President and Representative Director
We have made an examination, under the provision of Article 2 of "The Law
for Special Exceptions to the Commercial Code Concerning Audit, etc. of
Kabushiki-Kaisha", of the Balance Sheet, Statement of Income, Business Report
(as to accounting information only), Proposal for Appropriation of Profit, and
Supplemental Schedules (as to accounting information only) of Komatsu Ltd. (the
"Company"), with respect to its 133rd fiscal period beginning on April 1, 2001
and ending on March 31, 2002. Our examination with respect to the Business
Report and Supplemental Schedules was limited to the information therein derived
from the Company's books of account.
In performing the above examination, we have followed the auditing
standards generally recognized as fair and appropriate and applied such auditing
procedures as are normally required. This auditing procedures also include the
audits conducted on the subsidiaries which we considered as necessary.
Our opinions, based on such examination, are as follows:
(1) The above-mentioned Balance Sheet and Statement of Income properly
present the conditions concerning assets of the Company and its profit and
loss in compliance with applicable laws and regulations and the Company's
Articles of Incorporation.
(2) As indicated in the "Notes to the Balance Sheet and Statement of Income,
1. Accounting Principles, (7) Changes in accounting principles", with
respect to the long-term installment sales in which the installment period
is in excess of two years, the installment basis was changed to sales basis
and the amount of profit therefrom is not deferred from this period.
This change, introduced as a result of a review conducted on the risk
involved in collecting the payments under long-term installment sales which
period extends over two years and the actual circumstances of the collection
of payments, where it was found that in the recent years, the rate of sales
indirectly made through directly owned sales companies of the Company
increased and as the counterparties of the claims are changing to directly
34
owned sales companies of the Company, it was recognized that the risk of
collecting the payments have decreased and that the collection costs have
become minimal and the same situation is anticipated to continue
hereafterwards, is appropriate.
(3) The above-mentioned Business Report (as to the accounting information
only) properly presents the conditions of the Company in compliance with
applicable laws and regulations and the Company's Articles of
Incorporation.
(4) The above-mentioned Proposal for Appropriation of Profit is in
conformity with applicable laws and regulations and the Company's Articles
of Incorporation.
(5) There are no matters that the auditors are required to mention with
respect to the above-mentioned Supplemental Schedules (as to accounting
information only) in accordance with applicable provisions of the
Commercial Code.
Our firm and engagement partners do not have any interest in or
relationship with the Company as to which disclosure is required under the
applicable provision of the Certified Public Accountants Law.
Independent Certified Public Accountants
Asahi & Co.
Representative Partner, Engagement Partner,
Certified Public Accountant:
Tadao Kuwano (seal)
Engagement Partner,
Certified Public Accountant:
Tetsuzo Hamajima (seal)
Engagement Partner,
Certified Public Accountant:
Fumio Koike (seal)
35
EXHIBIT VI
BOARD OF STATUTORY AUDITORS' REPORT
-----------------------------------
AUDIT REPORT
------------
May 10, 2002
To: KOMATSU LTD.
Mr. Masahiro Sakane
President and Representative Director
Having been reported by each Statutory Auditor on the method and results of
the audit in regard to the performance of duties by the directors of Komatsu
Ltd. (the "Company") for the 133rd fiscal year (beginning on April 1, 2001 and
ending on March 31, 2002), the Board of Statutory Auditors of the Company
prepares this Audit Report on deliberation and reports as follows:
1. Outline of Method of Examination
In accordance with the policy of audit and the assignment prescribed by the
Board of Statutory Auditors, each Statutory Auditor participated in meetings of
the Board of Directors and other important meetings of the Company, received
reports from the directors, etc. on matters relating to the business operations
of the Company, read important approval documents, etc., investigated at the
head office and the major places of business of the Company into matters
relating to the management of business and the status of property thereof, and
requested subsidiaries to report on business as considered necessary. We also
received reports and explanations from the independent certified public
accountants and examined the contents of the Company's financial documents and
supplemental schedules.
We requested reports from directors, etc. as necessary, in addition to the
above method of audit, for matters such as those concerning the directors'
involvement in transactions competitive with the Company's business and in
transactions which may conflict with the Company's interests, the Company's
bestowing benefits, the Company's unusual transactions with subsidiaries and
shareholders and the Company's acquisition or disposal of its treasury shares,
and investigated such transactions in detail.
36
2. Results of Examination
We are of the view:
(1) that the method and results of the audit conducted by Asahi & Co., the
Company's independent certified public accountants, are appropriate;
(2) that the contents of the Business Report (other than accounting
information) present fairly the conditions of the Company as required by
related laws and regulations and the Articles of Incorporation of the
Company;
(3) that there are no matters which we are required to mention in the
Proposal for Appropriation of Profit in the light of the financial
conditions of the Company and other circumstances;
(4) that the Supplemental Schedules (other than accounting information)
properly contain information required to be contained therein and that there
are no matters which we are required to mention; and
(5) that in connection with performance of duties by the directors
including their duties relating to subsidiaries, we did not find any
unlawful act or any material fact which constitutes violation of laws and
regulations or the Articles of Incorporation of the Company. Further, with
respect to matters such as the directors' involvement in transactions
competitive with the Company's business and in transactions which may
conflict with the Company's interests, the Company's bestowing of benefits
and the Company's unusual transactions with subsidiaries and shareholders,
and the Company's acquisition or disposal of its own stocks, we are of the
opinion that there was no breach of obligation of directors.
Standing Statutory Auditor Norimichi Kitagawa (seal)
Standing Statutory Auditor Hiroyuki Watanabe (seal)
Statutory Auditor Masahiro Yoshiike (seal)
Statutory Auditor Takaharu Dohi (seal)
Note: Mr. Hiroyuki Watanabe of Standing Statutory Auditor and Messrs.
Masahiro Yoshiike and Takaharu Dohi of Statutory Auditors are outside
auditors provided in Article 18, Paragraph 1 of the "Law for Special
Exceptions to the Commercial Code Concerning Audit, etc. of Kabushiki-
Kaisha".
37
REFERENTIAL DOCUMENTS REGARDING
-------------------------------
THE EXERCISE OF VOTING RIGHTS
-----------------------------
1. Total number of voting rights held by all the shareholders:
945,979 voting rights
2. Explanations of items of business:
1st Item of Business: Matters concerning the approval of the proposed
Appropriation of Profit for the 133rd business term
(April 1, 2001 - March 31, 2002)
The proposal for appropriation of profit is as described in EXHIBIT IV.
Regretfully, the results for the period ended in a net loss of JPY 41.8
billion, however, we reversed part of our reserve and we decided for the amount
of cash dividend per share as of the end of the period be JPY 3.00 per share
which amount is based on our prospects that our efforts in our management
reforms will be rewarding and will contribute to the recovery of profit from the
next period onwards.
As a note, we did not account for the bonuses for directors and statutory
auditors.
2nd Item of Business: Matters concerning the Company's acquisition of its
treasury shares
For the purposes of realizing a flexible management that can cope with the
changing corporate environment, the Company seeks approval from the shareholders
for the Company to purchase the Company's ordinary shares up to a maximum of ten
million shares at the total acquisition price of JPY 5 billion during the period
from the close of this General Meeting of Shareholders ("Meeting") until the
close of the following ordinary general meeting of shareholders.
3rd Item of Business: Matters concerning partial amendment of the Articles of
Incorporation
38
1. Reason for amendments:
(1) Business objectives shall be added to Article 2 in order to prepare for
future business diversification.
(2) Pursuant to the resolution of the Board of Directors Meeting held on May 2,
2000, the Company acquired for profit 10 million treasury shares and the
canceled all of these on May 17, 2000, therefore, "Number of Shares
Authorized to be Issued" in Article 5 shall be decreased accordingly.
(3) The "Law Concerning Amendments to the Commercial Code" (Law No. 79 of 2001)
was enacted on October 1, 2001 and the par value shares were integrated
into non-par value shares, the provisions in relation to the number of
shares in one unit (tangen) were created, and the Law Concerning Exceptions
to Cancellation of Shares was abolished. In accordance with these
amendments, the Company will delete the provisions concerning the par value
shares (Article 6) and cancellation of shares (Article 7-2) and will add
new provisions concerning non-issuance of share certificate for the shares
less than one unit (tangen) share (proposed new Article 7), amend the word
"unit (tan-i)" to "unit (tangen)" (in all of the proposed new provisions,
Article 6, Article 8 and Article 9), and amend the provision concerning the
quorum for the election of directors and statutory auditors (in both of the
proposed new Article 19 and Article 29).
(4) In aim of the management to promptly deal with the changing managerial
environment and to flexibly establish the best management structure, the
term of directors provided in Article 21 shall be shortened to one year.
(5) In view of the enactment of the "Law Concerning Amendments to the
Commercial Code and the Law for Special Exceptions to the Commercial Code
Concerning Audit, Etc. of Kabushiki Kaisha" (Law No. 149 of 2001) on May 1,
2002, in order to allow directors and statutory auditors to fully exercise
their expected roles, and pursuant to Article 266, Paragraph 12 of the
Commercial Code and Article 280, Paragraph 1 of the same, in order to
mitigate the responsibilities of directors and statutory auditors by
resolution of the Board of Directors within the statutory maximum amount,
it is proposed that new Article 27 and Article 36 be added. For
information, the proposal to newly add the provisions concerning mitigation
of the director's responsibilities to be presented to the current
Shareholders' Meeting was unanimously approved by the Board of the
Statutory Auditors.
(6) Other minor amendments shall be made accompanying the creation of new
provisions and deletions of former provisions such as to renumber the
provisions.
39
2. Details of the amendments:
The amendments to be made are as follows:
(amendments are shown in underlines)
------------------------------------------------------------------------------------------------
Current Articles of Incorporation Proposed amendments
--------------------------------- -------------------
------------------------------------------------------------------------------------------------
CHAPTER I. CHAPTER I.
GENERAL PROVISIONS GENERAL PROVISIONS
Article 2. Objectives and Purposes Article 2. Objectives and Purposes
The objectives and purposes of the The objectives and purposes of the Company
Company shall be to engage in the shall be to engage in the following
following businesses: businesses:
1. Manufacture, repair, sale and 1. (No change)
purchase of construction machinery,
agricultural machinery, industrial
machinery, automobiles, internal
combustion engines and various other
machinery and equipment and parts
thereof.
2. Manufacture, sale and purchase of 2. (No change)
various iron and steel goods.
3. Tempering, processing, sale and 3. (No change)
purchase of various types of iron and
steel, pig-iron, ferroalloys and other
special metals.
4. Manufacture, sale and purchase of 4. (No change)
various types of electric materials and
equipment.
5. Manufacture, sale and purchase of 5. (No change)
various synthetic resin products.
6. Manufacture, repair, sale and 6. (No change)
purchase of various arms and parts
thereof.
7. Mining industry, and sale and 7. (No change)
purchase of minerals.
8. Designing, executing, supervising 8. (No change)
and contracting various types of civil
engineering and construction work for
plants, dwelling houses, and other
structures.
9. Sale and purchase of lumber 9. (No change)
processed lumber products and various
types of civil engineering and
construction materials, machinery and
equipment.
40
10. Sale, purchase and lease of real 10. (No change)
property.
(New) 11. Manufacture, sale and repair of
------------------------------------
industrial waste and general waste
----------------------------------
treatment device.
-----------------
(New) 12. Collection, transportation, treatment,
-------------------------------------------
and recycling of industrial wastes and
--------------------------------------
general wastes, sale of the recycled
------------------------------------
products, and consulting on these
---------------------------------
matters.
--------
(New) 13. Development, creation, sales and
-------------------------------------
consulting on the computer software
-----------------------------------
and computer systems.
---------------------
(New) 14. Electronic commerce using networks
---------------------------------------
such as the internet.
---------------------
(New) 15. Information processing and information
-------------------------------------------
providing service.
------------------
11. All business incidental to each and 16. All business incidental to each and
--- ---
every one of the preceding item. every one of the preceding item.
12. Investing in other companies or 17. Investing in other companies or
--- ---
promoting organization of other promoting organization of other
companies. companies.
---------------------------------------------------------------------------------------------------
CHAPTER II. SHARES CHAPTER II. SHARES
Article 5. Number of Shares Authorized Article 5. Number of Shares Authorized to
to be Issued be Issued
The total number of shares authorized to The total number of shares authorized to be
be issued by the Company shall be three issued by the Company shall be three billion
----- -------------
billion nine hundred sixty five million nine hundred fifty five million (3,955,000,000)
--------------------------------------- -----------------------------------------------
(3,965,000,000) shares. shares.
----------------------- ------
Provided, however, this number shall be Provided, however, this number shall be
decreased accordingly if the shares are decreased accordingly if the shares are
---------------------------------------------------------------------------------------------------
41
-------------------------------------------------------------------------------------------------------------------------
canceled. canceled.
-------------------------------------------------------------------------------------------------------------------------
Article 6. Par Value of Shares
---------------------------------
The amount of each share having a par (Deleted)
value issued by the Company shall be
fifty yen ((Yen)50).
-------------------------------------------------------------------------------------------------------------------------
Article 7. One Unit (tan-i) of Article 6. One Unit (tangen) of
--------------------------------- --------------------------------
Shares Shares
------ ------
The number of one unit (tan-i) of shares The number of one unit (tangen) of shares
------------ -------------
of the Company shall be one thousand of the Company shall be one thousand
(1000) shares. (1,000) shares.
-------------------------------------------------------------------------------------------------------------------------
Article 7. Non-issuance of share certificate for the
-----------------------------------------------------
shares less than one unit (tangen) of
--------------------------------------
shares
------
(New)
The Company shall not issue share
---------------------------------
certificates for the shares less than the
-----------------------------------------
one unit (tangen) of shares, unless
-----------------------------------
otherwise described in the share handling
-----------------------------------------
rules.
-----
-------------------------------------------------------------------------------------------------------------------------
Article 7-2. Acquisition of the Company's
------------------------------------------
Shares by a Resolution of the
-----------------------------
Board of Directors
------------------
The Company can acquire for cancellation
----------------------------------------
by appropriation of retained earnings (Deleted)
-------------------------------------
the Company's shares up to the maximum
--------------------------------------
number of ninety million (90,000,000)
-------------------------------------
shares pursuant to a resolution of the
--------------------------------------
Board of Directors.
-------------------
-------------------------------------------------------------------------------------------------------------------------
Article 8. Transfer Agent Article 8. Transfer Agent
The Company shall appoint a transfer The Company shall appoint a transfer
agent relating to the shares. agent relating to the shares.
The transfer agent and the place for The transfer agent and the place for
providing shareholder service shall be providing shareholder service shall be
designated by a resolution of the Board designated by a resolution of the Board
of Directors and published by the of Directors and published by the
Company. Company.
The Register of Shareholders and the The Register of Shareholders and the
-------------------------------------------------------------------------------------------------------------------------
42
--------------------------------------------------------------------------------------------------------------------------
Register of Beneficial Owners of the Register of Beneficial Owners of the
Company shall be kept at the place for Company shall be kept at the place for
shareholders service of the transfer shareholders service of the transfer
agent. The Company shall have such agent. The Company shall have such
transfer agent handle registration of transfer agent handle registration of
change of holders, registration of pledge change of holders, registration of
of shares, indication of shares held in pledge of shares, indication of shares
trust, re-issuance of share certificates, held in trust, re-issuance of share
receiving of various notifications, certificates, receiving of various
preparation of the Register of Beneficial notifications, preparation of the
Owners, receiving of beneficial owners' Register of Beneficial Owners,
notification, purchase of shares less than receiving of beneficial owners'
one unit (tan-i) of shares, and any other notification, purchase of shares less
------------
services concerning shares. The Company than one unit (tangen) of shares, and
-------------
shall not handle these services. any other services concerning shares.
The Company shall not handle these
services.
--------------------------------------------------------------------------------------------------------------------------
Article 9. Share Handling Regulations Article 9. Share Handling Regulations
Types of shares, and the handling of Types of shares, and the handling of
registration of change of holders, registration of change of holders,
registration of pledge of shares, registration of pledge of shares,
indication of shares held in trust, indication of shares held in trust,
re-issuance of share certificates, re-issuance of share certificates,
preparation of the register of preparation of the register of Beneficial
Beneficial Owners, receiving of Owners, receiving of beneficial owners'
beneficial owners' notification, notification, purchase of shares less than
purchase of shares less than one unit one unit (tangen) of shares, and any other
---- -------------
(tan-i) of shares, and any other handling concerning shares shall be
------- governed by the Share Handling Regulations
handling concerning shares shall be established by resolution of the Board of
governed by the Share Handling Directors.
Regulations established by resolution
of the Board of Directors.
--------------------------------------------------------------------------------------------------------------------------
CHAPTER IV. DIRECTORS CHAPTER IV. DIRECTORS
AND BOARD OF DIRECTORS AND BOARD OF DIRECTORS
Article 19. Election of Directors Article 19. Election of Directors
Directors shall be elected at a general Directors shall be elected at a general
meeting of shareholders of the Company. meeting of shareholders of the Company.
For a resolution of the election of For a resolution of the election of
directors, the presence of shareholders directors, the presence of the
representing at least one third (1/3) shareholders representing at least one
or more of the shares having voting third (1/3) or more of the voting rights
-------------------- -------------
rights among the total number of shares held by all the shareholders is required.
--------------------------------------- ----------------------------
issued and outstanding is required.
---------------------- Cumulative voting shall not be used in
Cumulative voting shall not be used in electing directors.
electing directors.
--------------------------------------------------------------------------------------------------------------------------
43
--------------------------------------------------------------------------------------------------------------------------
Article 21. Term of Office of Directors Article 21. Term of Office of Directors
The term of office of a director shall The term of office of a director shall
expire at the close of the ordinary expire at the close of the ordinary
general meeting of shareholders general meeting of shareholders pertaining
pertaining to the last settlement of to the last settlement of accounts
accounts occurring within two (2) years occurring within one (1) year after
------------- ------------
after his/her assumption of office. his/her assumption of office.
The term of office of a director elected The term of office of a director elected
to fill a vacancy shall be concurrent to fill a vacancy shall be concurrent with
with the term of office of his/her the term of office of his/her predecessor.
predecessor.
--------------------------------------------------------------------------------------------------------------------------
Article 27. Indemnification of the
-----------------------------------
Directors
---------
The Company may exempt the director from
----------------------------------------
the director's liability concerning the
---------------------------------------
director's conducts pursuant to Article
---------------------------------------
(New) 266, Paragraph 1 , Item 5 of the
--------------------------------
Commercial Code, by a resolution of the
---------------------------------------
Board of Directors to the statutory
-----------------------------------
maximum amount in accordance with the
-------------------------------------
provisions of Article 266, Paragraph 12 of
------------------------------------------
the Commercial Code.
--------------------
--------------------------------------------------------------------------------------------------------------------------
CHAPTER V. STATUTORY CHAPTER V. STATUTORY
AUDITORS AND THE BOARD AUDITORS AND THE BOARD
STATUTORY AUDITORS OF STATUTORY AUDITORS
--------------------------------------------------------------------------------------------------------------------------
Article 27. Number of Statutory Article 28. Number of Statutory
----------- -----------
Auditors Auditors
The Company shall have no more than five (Only the numbering of the provision
(5) statutory auditors (Kansayaku). changed but no changes are made to the
provision.)
--------------------------------------------------------------------------------------------------------------------------
Article 28. Election of Statutory Article 29. Election of Statutory Auditors
----------- -----------
The statutory auditors shall be elected at The statutory auditors shall be elected at
a general meeting of shareholders of the a general meeting of shareholders of the
Company. Company.
For a resolution of the election of For a resolution of the election of
statutory auditors, the presence of statutory auditors, the presence of
shareholders representing at least one shareholders representing at least one
third (1/3) or more of the shares third (1/3) or more of the voting rights
------ -------------
having voting rights among the total held by all the shareholders is required.
------------------------------------ ----------------------------
number of shares issued and outstanding
---------------------------------------
is
--------------------------------------------------------------------------------------------------------------------------
44
--------------------------------------------------------------------------------------------------------------------------
required.
--------------------------------------------------------------------------------------------------------------------------
Article 29. through Article 34. Article 30. through Article 35.
---------- ---------- ---------- ----------
(Indication of the contents of the (Only the numberings of the provisions
provisions is omitted.) changed but no changes are made to the
provisions.)
--------------------------------------------------------------------------------------------------------------------------
Article 36. Indemnification of the
-----------------------------------
Statutory Auditors
------------------
The Company shall exempt the statutory
--------------------------------------
auditor from its liabilities by a
---------------------------------
(New) resolution of the Board of Directors to
---------------------------------------
the statutory maximum amount in accordance
------------------------------------------
with the provisions of Article 280,
-----------------------------------
Paragraph 1 of the Commercial Code.
-----------------------------------
--------------------------------------------------------------------------------------------------------------------------
CHAPTER VI. ACCOUNTING CHAPTER VI. ACCOUNTING
Article 35. through Article 39. Article 37. through Article 41.
----------- ----------- ----------- -----------
(Indication of the contents of the (Only the numberings of the provisions
provisions is omitted.) changed but no changes are made to the
provisions.)
--------------------------------------------------------------------------------------------------------------------------
CHAPTER VII. CHAPTER VII.
SUPPLEMENTARY PROVISIONS SUPPLEMENTARY PROVISIONS
Article 40. Article 42.
----------- -----------
(Indication of the contents of the (Only the numbering of the provision
provision is omitted.) changed but no changes are made to the
provision.)
--------------------------------------------------------------------------------------------------------------------------
Article 43. Notwithstanding the
----------- -------------------
provisions of Article 21, the terms of the
------------------------------------------
directors elected at the General Meeting
----------------------------------------
of Shareholders held on June 27, 2001
-------------------------------------
(New) shall be until the close of the General
---------------------------------------
Meeting of Shareholders to be held in year
------------------------------------------
2003.
-----
This supplementary provision shall be
-------------------------------------
deleted after the lapse of the period in
----------------------------------------
the preceding paragraph.
------------------------
--------------------------------------------------------------------------------------------------------------------------
45
4th Item of Business: Election of three Directors
The terms of office of two Directors, Messrs. Satoru Anzaki and Toshitaka
Hagiwara, will terminate as of the close of this General Shareholders' Meeting
(the "Meeting"). Also, Mr. Koji Ogaki will resign as a Director as of the close
of the Meeting.
The Company is aiming to strengthen corporate governance and one of such
measures being taken is to decrease the number of Directors and inviting outside
Directors. The Board, through its decreased members, intends to further
strengthen corporate governance this year.
Thus, an election of three Directors is requested and the following
candidates are nominated for the position.
DIRECTOR CANDIDATES
-------------------
-------------------------------------------------------------------------------------------------------
Name Brief Personal History Number of
---- ---------------------- --------
(Date of Birth) (Representative positions in other companies) Shares of the
------------- -------------
Company Held
------------
-------------------------------------------------------------------------------------------------------
Satoru Anzaki 4/1961 Joined the Company 133,488
(March 3, 1937) 3/1985 Director
11/1988 Managing Director
6/1991 Executive Managing Director
6/1995 President and Representative
Director
6/2001 Chairman of the Board (current
position)
-------------------------------------------------------------------------------------------------------
Toshitaka Hagiwara 12/1969 Joined the Company 46,559
(June 15, 1940) 6/1990 Director
6/1995 Managing Director
6/1997 Executive Managing Director
6/1999 Executive Vice President and
Representative Director (current
position)
46
(Representative positions in other companies)
President and Representative Director of Komatsu
General Service, Inc.
------------------------------------------------------------------------------
Kunihiko Komiyama 4/1968 Joined the Company 28,000
(May 5, 1945)
6/1996 Director
6/1999 General Manager of Engine and
Hydraulics Division
6/1999 Senior Executive officer
(current position)
4/2002 General Manager of Corporate
Planning Division (current
position)
(Representative positions in other companies)
President and Representative Director of
Industrial Power Alliance Ltd.
------------------------------------------------------------------------------
5th Item of Business: Matters concerning the election of two Statutory Auditors
The term of office of the Statutory Auditor, Mr. Takaharu Dohi, will expire
at the close of the Meeting. Also, Mr. Hiroyuki Watanabe will resign as
Statutory Auditor as of the close of the Meeting.
Accordingly, it is proposed that two Statutory Auditors be elected and the
following candidates are nominated for the position.
For information, this item for resolution was reviewed and approved by the
Board of Statutory Auditors.
STATUTORY AUDITOR CANDIDATES
----------------------------
--------------------------------------------------------------------------------
Name Brief Personal History Number of
---- ---------------------- ---------
(Date of Birth) (Representative positions in other companies) shares of the
--------------- -------------
Company Held
-------------
-------------------------------------------------------------------------------
Takaharu Dohi 4/1958 Prosecutor 0
(July 12, 1933) 5/1992 Vice-chief Prosecutor
7/1993 Chief Prosecutor of the Osaka
High Public Prosecutors Office
7/1995 Chief Prosecutor of the Tokyo
High Public Prosecutors Office
1/1996 Prosecutor General
6/1998 Retired from the above positions
47
7/1998 Registered as attorney-at-law
(bengoshi) (current position)
6/1999 Statutory Auditor of the Company
(current position)
------------------------------------------------------------------------------
Masafumi Kanemoto 4/1970 Joined the Company 12,100
(May 11, 1947) 12/1994 Senior Manager of
Accounting Division, Control
Department
9/1996 Director of Komatsu Asia &
Pacific Pte. Ltd.
3/1999 General Manager of Internal
Audit Dept. of the Company
(current position)
------------------------------------------------------------------------------
(Note) Mr. Takaharu Dohi, a candidate for the Statutory Auditor, satisfies the
conditions of outside auditors provided in Article 18-1 of the "Law for Special
Exceptions to the Commercial Code Concerning Audit, Etc. of Kabushiki Kaisha".
6th Item of Business: Matters concerning the issuance of share acquisition
rights to Directors and employees at no cost.
Pursuant to the provisions of Article 280-20 and Article 280-21 of the
Commercial Code, the Company shall issue stock acquisition rights at no cost to
its Directors and employees for the reasons stated below and in the following
manner and hereby requests for approval from the shareholders.
1. Reason for issuing share acquisition rights to non-shareholders at no cost:
For the purposes of raising the motivation and lifting the morale of the
Directors and employees which shall contribute to the improvement of the
performance of the Company, the Company wishes to issue rights to acquire new
shares at no cost to the Directors and employees in the form of stock options
("share acquisition rights"). As described below, the amount to be paid upon
exercise of the share acquisition rights shall be based on the market price of
the share at the time of issuance of the share acquisition rights.
2. Manner of issuing share acquisition rights:
(1) Persons who will receive share acquisition rights:
48
Directors and employees of the Company
(2) Class and number of shares subject to the stock option:
A maximum of 950,000 ordinary shares of the Company. Provided,
however, if the number of shares to be issued due to exercise of share
acquisition rights should be adjusted due to below (3) (including
transfer of treasury shares instead of issuance of new shares;
hereinafter the same), the above maximum of the total number of shares
shall also be adjusted in accordance with such increase or decrease in
the total number of shares.
(3) Total number of share acquisition rights to be issued:
A maximum of 950 rights shall be issued.
The number of shares subject to one right of share acquisition rights
shall be 1,000 shares. Provided, however, if the Company effects stock
splits or stock consolidations, the number of shares subject to the
share acquisition rights that have not been exercised at such time
shall be adjusted in accordance with the following formula and
fractions of less than one share shall be discarded.
Number of shares after adjustment = number of shares before adjustment x ratio
of stock split (or stock consolidation)
(4) Issue price of the share acquisition rights:
Share acquisition rights shall be issued at no cost.
(5) Amount to be paid to exercise the share acquisition rights:
The amount to be paid at the exercise of the share acquisition rights
shall be the amount obtained by multiplying the amount of one share to
be issued at the exercise of each share acquisition right (the "paid-
in amount") by the number of shares that are the subject of one right
of share acquisition rights.
The paid-in amount shall be the amount calculated as the average of
the closing price of the Company's ordinary shares of each day
(excluding days on which there are no trades of the shares) of the
month immediately preceding the month in which the date of issue of
49
the share acquisition rights falls, at the Tokyo Stock
Exchange, multiplied by 1.05, with fractions less than one
yen being rounded up to a whole yen. However, the paid-in
amount shall not be less than the closing price of the
Company's ordinary shares on the issue date of such share
acquisition rights.
If the Company effects stock splits or stock consolidation
after issuing the share acquisition rights, the paid-in
amount shall be adjusted as follows with fractions less than
one yen being rounded up to a whole yen.
1
Paid-in amount = Paid-in amount before adjustment x ---------------------------------------------
after adjustment Ratio of stock split (or stock consolidation)
If the new shares are to be issued at a price below the
market price (excluding when converting the convertible
bonds provided in the Commercial Code before the amendment
of April 1, 2002 or when exercising the rights under the
stock option provided in the Commercial Code before the
amendment of April 1, 2002, the paid-in amount shall be
adjusted in accordance with the below formula with fractions
less than one yen being rounded up to a whole yen.
Number of newly Amount paid
Number of issued shares x per share
currently issued + -----------------------------------
shares
Market price per share
Paid-in amount = Paid-in amount x --------------------------------------------------------
After adjustment before adjustment Number of currently issued shares
+ Number of new shares issued
(6) Period for exercising the rights:
From August 1, 2003 to July 31, 2008. Notwithstanding the
foregoing, if any of the persons who are granted the above
share acquisition rights dies before the end of the
exercising period, his or her heir may exercise the rights
within 24 months of the dated of the death of the person.
50
(7) Conditions for exercising the rights:
(i) Any of the persons granted the share acquisition rights
may exercise his or her rights pursuant to the Agreement
Concerning Issuance of Share acquisition rights (the
"Agreement") based on the resolution of this Meeting and the
resolution of the Board of Directors Meeting even after the
person is no longer a director or an employee of the Company.
(ii) If any of the persons granted the share acquisition rights
dies, his or her heir may exercise the rights pursuant to the
Agreement.
(8) Events and conditions for cancellation of the share acquisition
rights:
The share acquisition rights may be canceled at no cost in the
following events:
(i) Pursuant to the Agreement, if the person granted the share
acquisition rights loses his/her share acquisition rights or if
it becomes definitive that the share acquisition rights will
not be exercised.
(ii) If the Company executes a merger agreement pursuant to
which the Company will become the dissolving company.
(9) Restrictions on transfer:
The transfer of share acquisition rights shall be subject to
the approval of the Board of Directors.
(10) Handlings in the event of share exchange or mandatory share
transfer:
If the Company effects a share exchange or a mandatory share
transfer for purpose of the Company becoming a wholly-owned
subsidiary of another company, the Company's obligations with
respect to the share acquisition rights shall be succeeded by
the company which shall become the 100% holding parent company
as a result of such share exchange or mandatory share transfer.
51
(11) Other matters:
Other matters concerning the issue of share acquisition rights
shall be referred to the Agreement.
7th Item of Business: Matters concerning the payment of retirement allowance to
retiring Director and Statutory Auditor.
As of the close of this meeting, Mr. Koji Ogaki will retire from the
office of the Director and Mr. Hiroyuki Watanabe from the office of the
Statutory Auditor. To reward them for the services they have rendered, the Board
of Directors proposes to pay retirement allowance in reasonable amounts in
accordance with the rules prescribed by the Company. It is also proposed that
the details of the allowance for the retiring Director and the retiring
Statutory Auditor in terms of individual amount, time and method of payment, be
determined by the Board of Directors for the Director and by consultation
between the Statutory Auditors for the Statutory Auditor, respectively. Their
brief personal histories are as follows:
------------------------------------------------------------------------
Name Brief Personal History
---- ----------------------
------------------------------------------------------------------------
Koji Ogaki 6/1991 Director
6/1996 Managing Director
6/1999 Executive Managing Director (current
position)
------------------------------------------------------------------------
Hiroyuki Watanabe 6/1997 Standing Statutory Auditor (current
position)
------------------------------------------------------------------------
END
52
NOTICE
1. Komatsu Forklift Co., Ltd. ("Komatsu Forklift") and Komatsu Zenoah Co.
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("Komatsu Zenoah") to become Wholly Owned Subsidiaries of Komatsu Ltd.
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("Company") through Share Exchange
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The Company, at its Board of Directors Meeting held on May 10, 2002,
resolved to effect a share exchange respectively with the Company's listed
subsidiaries, Komatsu Forklift and Komatsu Zenoah, to acquire these companies to
become the Company's wholly-owned subsidiaries.
Komatsu Forklift and Komatsu Zenoah also resolved at their respective
Board of Directors Meeting held on May 10, 2002 to effect a share exchange with
the Company and for each to become a wholly-owned subsidiary of the Company.
Pursuant to the above resolutions, the Company executed a share exchange
agreement respectively with Komatsu Forklift and Komatsu Zenoah on May 10, 2002.
In executing these share exchanges, the Company is not required to obtain
approval at its general meeting of shareholders prescribed under Article 358 of
the Commercial Code, however, Komatsu Forklift and Komatsu Zenoah will obtain
approval to the subject share exchange from their respective shareholders at
their respective ordinary general meeting of shareholders scheduled to be held
on June 26, 2002.
Each of the above share exchanges is scheduled to close on October 1,
2002.
2. Convert Komatsu Forklift into a Joint Venture
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The Company, at the Board of Directors Meeting held on May 10, 2002,
resolved to execute a basic agreement with Linde AG ("Linde") of Germany, a
company with which the Company and Komatsu Forklift have a global tie-up with in
the forklift business, to make Komatsu Forklift a joint venture with Linde, and
on that same day, the Company executed the basic agreement with Linde.
After Komtasu Forklift becomes a wholly-owned subsidiary of the Company
through the share exchange mentioned above, the Company will execute a joint
venture agreement with Linde by the end of November 2002, and on condition of
obtaining approval under the Anti-Monopoly Law of the applicable jurisdictions,
procedures shall be taken to transform Komatsu Forklift into a joint venture.
Linde is scheduled to acquire 35% of the shares of The Company Forklift by
the middle of 2003 and thereafter, plans to raise its holding ratio up to 48%.