Further Enhancing Diversity in the Workplace

Gender-equal Opportunity

Currently, the number of women in managerial positions is low compared with the number of men, and Komatsu recognizes this as an issue to be addressed. Childcare leave and shorter working hours are among the working conditions that would contribute to an environment that facilitates productive careers, particularly for women. In 2007, Komatsu acquired the Japanese Ministry of Health, Labour and Welfare mark designating companies that assist in the growth of the next generation. Since then, the company has advanced discussions on working conditions through the appointment of seven female employees to a newly launched Panel on Fostering Future Generations. The four major recommendations from the Panel were incorporated into labor agreement revisions for FY2007, further improving the company's approach in this area. These recommendations were: (1) allocating five days of special leave for cases of employee pregnancy, delivery by the employee's wife, and childcare by the employee (such as to take care of a sick baby or toddler); (2) extending the eligibility period for shorter working hours from March 31 after the child turns age four to the child's completion of the third grade at elementary school; (3) providing monetary allowances for childcare leave beyond the amount required under the law; and (4) providing financial support to offset the costs of nursery schools and babysitters.

The number of female managers increased from 31 in September 2011 to 37 as of April 2012, and the number of employees taking advantage of the system for childcare leave increased from 43 in FY2010 to 51 (including two male) in FY2011. Komatsu will continue its efforst to establish working conditions that take into account the needs of working parents.

Additionally, when the labor agreement was revised in FY 2011, the available term for childcare leave was extended up to 3 years from childbirth to when the child is able to enter preschool. The 3 years of childcare leave has also become available for parents of children under third grade, who encounter events that make childcare difficult, such as spouse's workplace relocation.

Enhancing Work-Life Balance

Reducing the total number of actual working hours is one of the key aspects in achieving a healthy work-life balance for employees. Komatsu has worked in coordination with labor unions on this issue to formulate numerical targets, which are now set at 2,100 or less working hours per year, and at least 16 days of paid vacation taken per year. The company has brought down to an average level the workload of divisions that are chronically shouldering intense levels of operations by hiring more employees, both newly graduated and experienced, and investing in necessary facilities and equipment. Komatsu has each workplace formulate a concrete Action Plan for seriously considering and addressing working hour management. The plan enforces the appropriate number of working hours by reducing overtime and encouraging employees to take more paid annual leave. In FY 2011, an annual leave reserve policy separate from the regular paid annual leave policy was introduced when the labor agreement was revised, as well as improvements to the paid annual leave policies for fixed term employees. Furthermore, we sought enhancement of other policies, such as making up to 3 years of nursing care leave available.

Komatsu will continue to appropriately manage working hours.

Employing Persons with Disabilities

As of April 2012, 1.99% of employees at Komatsu were persons with disabilities. Recognizing the need to enhance its hiring rate of persons with disabilities, in April 2008 Komatsu established the Business Creation Center within the Human Resources Department. The Center is designed exclusively for increasing the hiring of persons with mental disabilities. As of April 2012, 53 people with such disabilities were employed by Komatsu, raising the rate of employment for persons with disabilities compared to the previous year. Komatsu established branch offices of the center in Ishikawa in April 2010, in Osaka and Shonan in December 2010, in Oyama and Ibaraki in February 2011, and Koriyama in April 2011. The staff of the Business Creation Center are currently active in 7 business sites.

Komatsu will continue to work on approaches for further employment of disabled persons throughout the entire company.

Eco-commuting Allowance System

The Eco-commuting Allowance System, which had been introduced on a trial basis in April 2010, was fully introduced in April 2011. Eco-commuting means environmentally friendly commuting, where employees leave their car at home and walk, ride a bicycle or use public transport, such as the bus or train, to commute to work, in an effort to reduce CO2 emissions. Every person that uses eco-commuting can reduce CO2 emissions by 1.4 tons a year, equivalent to the amount absorbed by 100 cedar trees (of 50-year-old).

This activity is also endorsed by the labor union, as part of an initiative for contributing to society through activities that are "close to home" for our employees.