Code of Business Conduct

1. Regardless of the conditions and regardless of who asks you, you are not permitted to break the "Rules".
   (The "Rules" means the "Rules of the Business Community", as defined in KOMATSU'S CODE OF WORLDWIDE BUSINESS CONDUCT, which generically includes the laws, ordinances, customs and practices of respective countries and regions.)
2. Ignorance of the Rules will not be tolerated. If you are not sure, you must check the Rules by yourself or consult a specialist.
   (All employees of the Komatsu Group must repeatedly read and make sure that they clearly understand KOMATSU'S CODE OF WORLDWIDE BUSINESS CONDUCT.)
3. Never patch over or cover up any mistake or failure to follow the Rules.
4. If you discover any mistake or failure to follow the Rules, you must immediately correct it and implement preventive measures to ensure that it does not happen again.
5. If you learn of any violation of the Rules, you must immediately inform the person responsible for compliance.
   (Komatsu is committed to ensuring that no unfavorable action will be taken against the person for providing such information.)

Every single employee of the Komatsu Group must obey these Principles in order to make Komatsu a company that is truly trusted by society.

A. Quality and Reliability

  The cornerstone of Komatsu's management is commitment to Quality and Reliability for maximization of its corporate value. Our corporate value is the total sum of trust given to us by society and all our stakeholders. To enhance this trust, all Komatsu Group companies must strengthen their corporate governance and Manufacturing Competitiveness.

  This policy not only applies to our products and services but also extends to all other aspects of the Komatsu Group, including organizations, businesses, employees and management.

  The following five guidelines indicate what we must do to enhance the Quality and Reliability of these above aspects. These will also serve as Komatsu corporate guidelines and are expected to be the beacon for every employee of the Komatsu Group in performing his/her daily tasks. They are to:

1. Constantly provide environment-friendly, safe and innovative products/services and systems from the viewpoint of our customers;
2. Constantly promote self-initiated innovations in technology and management;
3. Promote consolidated management from global perspective;
4. Work for the community as a good corporate citizen; and
5. Provide employees with opportunities for challenge and creativity.

B. Emphasis on Corporate Governance

  The core organization for corporate governance is the Board of Directors. All top management members of Komatsu Group companies must always work in harmony with the Board of Directors, ensure thorough and substantial discussions of important management agenda and implement necessary reviews, decision making and reporting.

  All top management members of Komatsu Group companies are required to have full awareness of Corporate Social Responsibility ("CSR"), eliminate unnecessary business risks and conduct steady management in accordance with this Code, while enhancing the soundness and transparency of management by establishing the respective internal control system in accordance with applicable local laws and regulations as well as Komatsu Group's policies.

C. Reinforcement of Manufacturing Competitiveness and the KOMATSU Way

  The source of Komatsu's strengths lies in the strengthening of its corporate governance and the advantage of its Manufacturing Competitiveness.

  Komatsu Group's commitment to manufacturing means that we must provide products (hardware and software) that satisfy our customers. It also emphasizes that we must care about the environmental effects in all our activities through the product lifecycle. The reinforcement of our Manufacturing Competitiveness requires teamwork activities performed in our value chain consisting of not only internal divisions, such as research and development, procurement, production, sales services and administration, but also suppliers, distributors and other stakeholders. The KOMATSU Way comprises our manufacturing strengths, the beliefs that support those strengths and our basic attitudes and patterns of behavior. It is important that Komatsu Group companies share the KOMATSU Way (formally introduced in 2006), while working to pass on the KOMATSU Way to the future generations, even when existing employees are replaced with new ones in the respective organizations.

A. Observing Judicial and Social Rules

  All top management, employees and others who work for the Komatsu Group (hereinafter "employees and others") must be conscious of corporate citizenship and correctly understand and observe the laws, ordinances, customs and practices of their respective countries and regions, which are defined as the"Rules of the Business Community" (hereinafter the "Rules").

  The Rules may be amended to reflect social changes that might occur. Thus, all employees must work to always obtain the latest information available. As ignorance of the Rules will not be tolerated, all employees will also need to investigate and confirm the Rules related to their business and duties and ensure that all concerned persons are thoroughly updated with the latest information. When they face uncertain situations in determining their actions in light of the Rules, they must consult their superiors, compliance-related departments or a specialist for appropriate actions.

  All employees and others of the Komatsu Group must comply with the Rules as their top priority and duty, and it is absolutely prohibited for any employee to engage in actions or have their colleagues or juniors engage in actions which violate the Rules. The Komatsu Group will never tolerate any employee violating the Rules under any circumstance, even when requested by customers or instructed by superiors or when acting for the sake of the company and/or the Komatsu Group.

  All employees of the Komatsu Group must never postpone tasks and problems related to the Rules in any business areas and operational domains.

  When they happen to learn about any violation of the Rules, they are required to correct it and implement preventive measures, while promptly contacting the department in charge of compliance and related departments. They must not patch over or cover up any mistake or failure for any reason.

  When violations of the Rules and/or cover-ups are discovered, the Komatsu Group shall take disciplinary action in accordance with company regulations and all other necessary actions against the person or persons concerned, including criminal charges.

B. Attitude toward Antisocial Organizations

  In view of corporate responsibility to social justice and society, the Komatsu Group will not associate with any antisocial powers or organizations which would threaten the order or security of civil society.

A. Stakeholder Relations

People with interest in Komatsu Group�es business are herein referred to as "Stakeholders." Stakeholders include customers, shareholders (including investors), distributors, business associates, local community members and Komatsu Group employees. By regarding Stakeholders as valuable equal business participants, the Komatsu Group strives to build and maintain a long-term, fair and trustworthy relationship with them by disclosing accurate information in an appropriate and fair manner through public relations, investor relations and other activities.

1. Customers

     Customers are the most important stakeholders for the businesses of the Komatsu Group. We will work to deliver the best possible solutions for our customers' problems through safe, environment-friendly, innovative and superior-quality products, services and systems.

     Valuing relations with customers does not mean blind obedience to them. While customers and their requests will be respected, we need to discuss the issues with them and decline their requests courageously when we determine that complying with them will result in a violation of the Rules and/or go against customers' interest.

2. Shareholders (including Investors)

     Shareholders own the company. On the basis of their entrustment, the Komatsu Group will exert its best efforts to protect their investment value and to maximize their benefit.

     Maximizing the benefit of shareholders does not mean aiming at short-term profits but, rather, stable management from a long-term perspective for growth, while following the Rules.

     All shareholders shall be treated equally and they shall receive as much accurate information as possible in a timely fashion. The information shall not only be that required by laws but shall also include appropriate overall management information such as management policy, business results and dividend policy.

3. Distributors

     Distributors are the foundation of Komatsu's sales and service network. We will respect the contracts with our distributors and strive to establish, maintain, and support long-term stable relationships. We will also provide all necessary and possible support to our distributors, and cooperate with them in their efforts to follow the Rules.

     Selection of our distributors shall be made objectively on business and management grounds.

4. Business Associates

     Vendors and suppliers are considered to be close business associates and are on an equal standing with us. We will strive to establish long-term stable relationships with them. Relations with these associates are restricted to business only. Excessive entertainment and requests for favors violating the Rules are prohibited.

     Selection of business associates shall be made on a free competitive basis, judged solely on objective business criteria, such as quality, cost and delivery.

5. Local Communities

     Blending harmoniously into the local community is imperative to the continuity of a company. Through close communication, the Komatsu Group will strive to become an active contributing member of the local community, while working for a harmonious balance of interests with the community.

6. Employees

     Employees are the source of power promoting business and irreplaceable assets of the company. The Komatsu Group will respect the uniqueness and character of each individual employee worldwide and treat him/her equally without any discrimination.

     The Komatsu Group will also strive to ensure a safe and comfortable work environment for employees and to provide a place of opportunities for creativity and challenge where each and every employee can develop one's ability, have satisfaction and pride in his/her job, and do his/her best to achieve their maximum performance.

B. Corporate Social Responsibility (CSR)

  The importance of requirements for corporate social responsibility (CSR) is growing today.

  Because specific elements of CSR differ depending on countries, regions and companies, the key for companies to sustain growth lies in how to meet social requests and thus gain social trust. Therefore, the Komatsu Group will not only implement activities designed to ensure compliance with the Rules stipulated in this booklet, but will also strive to take care of the natural environment and emphasize social contributions, while more proactively promoting a better understanding of every stakeholder concerning such activities of the Komatsu Group.

  To reinforce such activities, Komatsu Ltd. has established the CSR Department in the head office as the department which oversees Komatsu Group's CSR activities and promotes those activities in cooperation with related departments.

C. Social Contributions

1. Basic Stance

   In addition to engaging in business, companies are expected to promote harmonious relations with society and make social contributions as good corporate citizens.

   As one part of its social responsibility, the Komatsu Group will continue to actively work for the community.

   The purpose and five basic principles concerning our social contributions are as follows.

   Purpose:

     "The Komatsu Group and its employees, as local community members, will contribute to society."

   Basic Principles: Contributions shall be:

   • Consistent
   • In the public interest
   • Voluntary
   • Acceptable by employees
   • Not aimed at advertisement.


2. Employees' Volunteer Activities

   The Komatsu Group will respect employees' self-motivated participation in volunteer activities, and will prepare various systems to support their participation. The Komatsu Group will never require employees to join such activities.

A. Fair Competition

As a world leader in the industry, Komatsu Group shall comply with the applicable laws and regulations and vigorously endorse fair and free competition. We will put special emphasis on the following principles:

1. We are determined to oppose, and never get involved in, any activities such as participation in collusive bidding or cartel arrangements that will result in suppression of competition;
2. In competition, we shall refrain from engaging in unfair practices, including defamation and interference in competitors' business activities;
3. We shall not engage in unfair trade practices that are against laws and regulations of each respective country and region of the world;
4. We shall make fair and appropriate representation of the quality, price and other characteristics of our products and services, and shall not take any action that may cause any misunderstanding on the part of our distributors or customers;
5. We shall respect the intellectual property of others and shall not infringe upon them; and
6. We shall neither make any attempt to illegally obtain confidential information of others nor use any such information that becomes known to us in any way that violates the Rules.

B. Business Practices

  The Komatsu Group recognizes and follows business practices unique to each country or region. However, when any practices are deemed inappropriate in light of the globalization of our operations based on fairness, we will actively reassess and modify them.

C. Appropriate International Trade

  Komatsu Group companies shall pay due attention to the preservation of world peace and security. As a part of such general proposition, employees and others of Komatsu Group shall ensure that the company's international trade practices, including transfer of goods or technologies, do not end up in promoting any activities related to weapons of mass destruction, terrorism or other imminent threat to world peace. In this regard, all employees shall meticulously follow the relevant rules and regulations as well as internal rules on export control.

D. Minimization of Formalities

  Formalities should be minimized to the extent practical and appropriate given international or social standards.

  Giving or receiving gifts is not permitted in principle except for unavoidable cases with regard to local laws and local business customs. In those exceptional cases separate guidelines should be developed consistent with local laws and local business customs.

  Ceremonial events for business relations shall be performed as simply as possible.

  Entertainment among Komatsu Group employees shall not be permitted. Entertainment expenses shall be used only when sound business reasons justify and/or require it. Guidelines consistent with local laws and local business customs should be set for each region, and such guidelines must be within the international practice.

E. Relations with Japanese and Foreign Government Organizations

  Relations with government offices and agencies should be fair and sound. Collusive acts must be avoided by all means. All Komatsu Group companies shall comply with applicable laws and regulations, and thus business relationships with government employees of host or foreign countries must be kept very transparent so that nobody questions it. Proposals and suggestions should be made honestly with pride and confidence as a Komatsu corporate member.

A. Global Policy of Human Resources

  Human resource systems must reflect the historical and cultural background of each region. Such differences must be acknowledged and respected.

Based on the basic policies below, all Komatsu Group companies shall establish their own human resource systems which incorporate and are appropriate for the respective local characteristics.

a. Employees shall be respected for their individuality, integrity and privacy.

b. Each and every employee shall be fairly appraised and treated. They will not be unjustly discriminated against for reason of national origin, race, religion, age, sex, disability or other factors, or suffer from sexual harassment or unfair employment.

c. In developing and implementing personnel policies, a clear understanding of the policies by the employees must be ensured. Human resource policies and procedures shall be disclosed to the employees as appropriately and fully as possible.

d. In each region, the Komatsu Group shall comply with the laws concerning the rights of employees.

e. The Komatsu Group shall comply with international conventions or treaties on the rights of children and never engage in child labor.

Should any violation in behavior or condition of the above basic policies be discovered in any company of the Komatsu Group, such company shall immediately investigate and implement necessary remedial actions.

B. Occupational Safety and Health of Employees

All Komatsu Group companies work to ensure a safe and comfortable work environment for their employees and maintain and improve the health of their employees. To this end, all Komatsu Group companies shall promote occupational safety and health as well as health care management activities under full cooperation of top management and employees in accordance with the following policies.

a. Employees shall understand and comply with related laws and regulations as well as internal rules, and respond promptly to any problems as they occur.

b. Management and employees shall cooperate to discover problems and promptly respond to them. To this end, the two shall work to ensure that communications work smoothly.

c. While making utmost efforts to prevent fires or other calamities on a daily basis, employees shall place utmost efforts to minimize the adverse effects of natural disasters.

C. Safekeeping of Corporate Properties and Assets

  All employees of the Komatsu Group are required to perform their work honestly in order to maximize the interests of their companies. In particular, they shall comply with the following policies.

1) Protection of Corporate Assets

No employee of the Komatsu Group may use facilities, fixtures, funds or information of the Company for any purpose other than proper business of the Company. All employees are required to ensure the thorough management of such assets according to the internal regulations of the Company in order not to cause loss, leakage, theft or illegal use thereof.

2) Protection and Utilization of Corporate Intellectual Property

Employees and others of Komatsu Group shall acknowledge that intellectual property rights of the Komatsu Group constitute its important assets. All inventions, breakthroughs and works of any proprietary nature that may arise in the course of employees or others discharging their duties shall be protected as Komatsu Group property, and all necessary steps shall promptly taken in accordance with the relevant internal rules. Employees and others shall also ensure that intellectual property rights of the company are vigorously utilized in a most effective manner while being duly protected against infringement or misappropriation.

3) Prohibition of Conflicts of Interest

No employee of the Komatsu Group may get involved in any business which competes with the Komatsu Group or work for his or her own or third person's interests by compromising the interests of the Company.

While the Komatsu Group's products are used to realize a pleasant and comfortable life for people, they also generate environmental stress in the production, use and disposal phases. As a member of society, we must work to reduce these environmental stresses.

We also have the important responsibility to provide our customers with products and services that are friendly to both the natural environment and mankind.

We have clearly defined our commitment to protecting the earth's environment in the Komatsu Earth Environment Charter (established in 1992 and revised in 2003). Under this charter, we have positioned the earth's environment as a top management priority and are promoting environmental conservation activities decisively and thoroughly.

[Summary of the Komatsu Earth Environmental Charter and Corporate Principles]

1. Contributions to the Realization of a Sustainable Society

   Having positioned environmental conservation activities as a top management priority, the Komatsu Group applies leading-edge technologies to make contributions toward the realization of a sustainable society. To this end, the Komatsu Group has established an environmental management system, promoting the reduction of environmental impact in all operations, ranging from research and development, purchasing and manufacturing to logistics, sales and services, in all regions where the Group operates.

2. Simultaneous Realization of Environmental and Economic Performance

   The Komatsu Group is committed to improving both ecology (environmental performance) and economy (economic efficiency), as it engages in a spirit of manufacturing that will merit the approval of the customer.

   a. Ecology: The Komatsu Group works to minimize environmental impact through its product lifecycle.

   b. Economy: The Komatsu Group works constantly on technology innovation to provide products with excellent economic efficiencies, such as improved fuel consumption and recycling ratio.

3. Corporate Social Responsibility

   Each company of the Komatsu Group shall comply with all laws and regulations, including those concerning environmental conservation, and shall fulfill its CSR.

   Each Komatsu Group company shall also actively become involved in local environmental conservation activities and become a good corporate citizen of the respective host community.

   Each company of the Komatsu Group shall promote environmental conservation activities in every business operation in accordance with the above policies.

A. Protection and Management of Information

  The Komatsu Group considers its information and infrastructure thereof (hereinafter called collectively "Information Assets") a valuable corporate asset. All employees of the Komatsu Group are required to properly protect and manage the Information Assets in accordance with applicable laws and regulations as well as our internal rules. In particular, all employees must pay sufficient attention to avoid the following behavior.

• Disclosing non-public Information Assets to third parties (inside and outside of the company) without reasonable justification (including compliance with applicable laws)
• Using Information Assets for personal reasons.
• Modifying Information Assets without reasonable justification.
• Taking actions which might hamper the utilization of Information Assets for work.

Important matters which must be observed concerning protection and management of Information Assets according to the type include the following:

1. Corporate Information

   Information concerning Komatsu's technologies, sales and other activities is an important asset of the Komatsu Group. All employees of the Komatsu Group shall make effective use of such information for their work, and may not disclose, modify or destroy it without reasonable justification.

2. Information Concerning Business Transactions with Customers and Business Partners

   Each company of the Komatsu Group is obliged to safekeep information concerning its customers and business partners, which is gained in the course of business transactions appropriately based on applicable laws, contracts and other official agreements. Therefore, all employees of the Komatsu Group are required to pay careful attention when handling information concerning their customers and business partners, and may not disclose such information to third parties without reasonable justification or use it for any purpose other than officially approved.

3. Information Concerning Employees

   Each company of the Komatsu Group is obliged to properly safekeep personal information concerning employees in compliance with applicable laws and not to use it for any unofficial purpose. Concerning information about other employees which is gained in the course of work, no employees may disclose it to third parties or use it for any purpose other than required, without the consent of those concerned.

B. Use and Channelization of Information Assets

All Information Assets are designed for business use only. Employees are prohibited from using such Assets in a manner that is illegal, unethical, against the Rules or for personal purposes. Use and channelization of Information Assets are subject to the internal rules, and each employee is required to handle Information Assets according to his/her official responsibility.

C. Prohibition against Insider Trading

No employee of the Komatsu Group may ever engage in insider trading or other questionable transactions using non-public internal or external information, whether gained in the course of work or otherwise.

D. Internal and External Disclosure of Information

The Komatsu Group shall actively disclose corporate information to stakeholders such as shareholders (including investors) as much as possible within the limitations of protecting confidential information, and shall respond to inquiries properly and promptly on the basis of fairness. Similarly, information shall be disclosed actively to all Komatsu employees in the world.

A. Responsibilities for Proper Financial Reporting

Based on the Sarbanes-Oxley Act of 2002 (hereinafter "Act") of the United States, Komatsu has submitted an affidavit to the U.S. Security Exchange Commission concerning the effectiveness of internal controls and procedures related to financial reporting. The Act imposes very serious responsibilities in this area.

B. Improvement of Internal Control System and Attestation of Reliable Financial Reporting at Komatsu Group Companies

With awareness of the above, each company of the Komatsu Group is required to improve the organizational framework and system designed to ensure the reliability of its own financial reporting. In accordance with the related laws and regulations, applicable accounting standards and internal rules, each company is also required to record and report financial, tax and accounting matters in a timely manner.

The CEO and CFO of each Komatsu Group company bear responsibility to send a written promise to Komatsu Ltd. that the annual financial reports of their companies are proper in light of related laws and applicable accounting standards, and are required to report material weakness or significant deficiency on reliability of their financial reporting to Komatsu Ltd.

C. Proper Processing of Accounting and Tax Matters

To ensure proper financial reporting, all employees of the Komatsu Group shall perform proper accounting and taxation procedures for reporting their sales and expenses in accordance with related laws and regulations as well as internal rules.

A. Compliance Committee and Compliance Officer

  To ensure thorough group-wide observance of the Rules, Komatsu Ltd. has established the Compliance Committee (hereinafter "Committee") at the head office. This Committee will discuss and work to solve related problems. The President of Komatsu Ltd. has been appointed chairperson of the Committee.

By assigning a Compliance Officer to the head office of Komatsu Ltd., Komatsu has publicly announced the Officer who is responsible for thorough group-wide observance of the Rules.

B. Compliance Department

  Komatsu Ltd. has established the Compliance Department (hereinafter "Department") at the head office as a full-time body. To ensure thorough group-wide observation of the Rules, the Department shall:

1. Establish the guidelines and policies related to observance of the Rules;
2. Communicate and promote the guidelines and policies to Komatsu employees and Komatsu Group companies;
3. Promote collection of an extensive range of information from employees and others, and respond to them;
4. Promote and audit observation of the Rules; and
5. Respond to compliance-related issues (consultation, advice and responses to actual cases).

C.Receiving Information, Consultation for Employees and Internal Hotline Services

Opportunities for open and frank discussion relating to the Rules are actively encouraged for all employees.

To that end, and in order to promptly offer solutions for individual problems, Komatsu Ltd. has established the Business Rule Consultation Office at the head office. This Office provides an open opportunity for all employees of the Komatsu Group to discuss any matters related to the Rules and promptly offer solutions to individual problems. The Office will provide consultations for individual problems, receive information individually, offer internal hotline services and investigate any violations and develop measures for improvement.

D.Protection of Employees for Consultations and Reporting Information

The Komatsu Group guarantees that no unfavorable action will be taken against employees of the Komatsu Group who receive consultations related to the Rules above, provide information or use internal hotline services, except for such cases as reporting with an ulterior motive.

E. Group-wide Compliance Management

To further promote observance of the Rules at Komatsu Group companies, the top management of each company shall take the initiative to provide occasions where employees can discuss compliance-related matters openly.

Similarly to Komatsu Ltd., each company of the Komatsu Group shall clearly identify a department responsible for compliance and ensure that all employees know about it. To ensure thorough observance of the Rules, the responsible department shall honestly receive information individually from employees and consult them.

Each company of the Komatsu Group shall also introduce its own compliance-related regulations while establishing a compliance management system defining a responsible structure, which reflects its respective regional and business characteristics.

A. Declaration of Rules Observance

All top management officers of Komatsu Group companies shall declare that they properly understand "Komatsu's Code of Worldwide Conduct" and perform their management responsibilities in compliance with the Code. Directors of the Board, Executive Officers and other employees in management positions of Komatsu Ltd. shall submit an annual statement of their observance of the Code.

Presidents of all Komatsu Group companies shall submit a statement of compliance with the Rules to the President of Komatsu Ltd.

B. Responsibilities of Employees in Management Positions

All employees in management positions at Komatsu Group companies shall take the initiative to observe the Rules and the Code and strive to maintain their own work discipline. In addition to ensuring thorough observance of the Code among their staff members, those in management positions shall be required to execute their authority to follow the Rules.

C. Distribution of and Thorough Compliance with the Code

"Komatsu's Code of Worldwide Business Conduct" is a guideline which stipulates the Rules observed by the top management of Komatsu Group companies and all other employees of the Komatsu Group. Any violation will be subject to stringent disciplinary action based on the corporate rules and/or job contracts of each company.

The Code will be reviewed annually with the approval of the Compliance Committee, and each edition will be distributed to all employees of the Komatsu Group.

D. Establishment of Code of Conduct by Komatsu Group Companies

When judged necessary, each company of the Komatsu Group shall work to establish its own code of conduct compatible with the business rules of the respective host country and its own business activities, as long as it does not materially conflict with "Komatsu's Code of Worldwide Conduct."