UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 6-K

Report of Foreign Private Issuer

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

For the month of November, 2009

COMMISSION FILE NUMBER: 1-7239

KOMATSU LTD.

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

Address of principal executive office

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

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

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

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No þ

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

 

 

INFORMATION TO BE INCLUDED IN REPORT

1.

Quarterly Report for the Second Quarter of the 141st Fiscal Year filed on November 12, 2009

On November 11, 2009, the registrant filed its Quarterly Report (“Shihanki Houkokusho”) with the Director of the Kanto Local Finance Bureau of Japan pursuant to the Financial Instruments and Exchange Law of Japan. This Quarterly Report contains, among other information, Quarterly Consolidated Financial Statements for the six months period ended September 30, 2009 and the three months period ended September 30, 2009.

Material information in the report, other than the Quarterly Consolidated Financial Statements, has already been reported by the registrant in its press release dated October 29, 2009, a copy of which was submitted under cover of Form 6-K on October 30, 2009 by the registrant.

Attached is an English translation of the registrant’s Quarterly Consolidated Financial Statements for the six months period ended September 30, 2009 and the three months period ended September 30, 2009.

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.

[Quarterly Consolidated Financial Statements]

Consolidated Balance Sheets (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

September 30, 2009 and March 31, 2009

		September 30, 2009								March 31, 2009
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Assets
Current assets
Cash and cash equivalents		¥	91,687							¥	90,563
Time deposits			578								44
Trade notes and accounts receivable, less allowance for doubtful receivables of ¥14,911 million at September 30, 2009 and ¥15,330 million at March 31, 2009			353,048								373,901
Inventories (Note 3)			436,450								507,357
Deferred income taxes and other current assets (Notes 4, 9, 10 and 11)			106,066								131,374
Total current assets			987,829				51.7				1,103,239				56.0
Long-term trade receivables			140,490				7.4				102,969				5.2
Investments
Investments in and advances to affiliated companies			21,925								19,249
Investment securities (Notes 4, 10 and 11)			61,027								53,854
Other			11,262								12,017
Total investments			94,214				4.9				85,120				4.3
Property, plant and equipment—less accumulated depreciation of ¥614,008 million at September 30, 2009 and ¥589,629 million at March 31, 2009			532,257				27.8				525,462				26.7
Goodwill			29,422				1.5				28,661				1.5
Other intangible assets			61,842				3.2				60,346				3.1
Deferred income taxes and other assets (Notes 9, 10 and 11)			65,739				3.5				63,262				3.2
		¥	1,911,793				100.0			¥	1,969,059				100.0

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these balance sheets.

		September 30, 2009								March 31, 2009
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Liabilities and Equity
Current liabilities
Short-term debt		¥	195,141							¥	220,087
Current maturities of long-term debt (Notes 10)			76,766								87,662
Trade notes, bills and accounts payable			153,013								214,375
Income taxes payable			6,718								10,818
Deferred income taxes and other current liabilities (Notes 9, 10 and 11)			175,019								199,345
Total current liabilities			606,657				31.7				732,287				37.2
Long-term liabilities
Long-term debt (Notes 10)			374,573								292,106
Liability for pension and retirement benefits			51,893								53,822
Deferred income taxes and other liabilities (Notes 9, 10 and 11)			38,819								42,510
Total long-term liabilities			465,285				24.4				388,438				19.7
Total liabilities			1,071,942				56.1				1,120,725				56.9
Commitments and contingent liabilities (Note 8)			—								—
Komatsu Ltd. shareholders’ equity
Common stock:
Authorized 3,955,000,000 shares at September 30, 2009 and at March 31, 2009
Issued 998,744,060 shares at September 30, 2009 and at March 31, 2009			67,870								67,870
Outstanding 968,044,150 shares at September 30, 2009 and 967,822,292 shares at March 31, 2009
Capital surplus			140,111								140,092
Retained earnings:
Appropriated for legal reserve			30,781								28,472
Unappropriated			707,680								719,222
Accumulated other comprehensive income (loss) (Notes 4 and 9)			(109,880	)							(105,744	)
Treasury stock at cost, 30,699,910 shares at September 30, 2009 and 30,921,768 shares at March 31, 2009			(34,730	)							(34,971	)
Total Komatsu Ltd. shareholders’ equity			801,832				41.9				814,941				41.4
Noncontrolling interest			38,019				2.0				33,393				1.7
Total equity (Note 6)			839,851				43.9				848,334				43.1
		¥	1,911,793				100.0			¥	1,969,059				100.0

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these balance sheets.

Consolidated Statements of Income (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Six months ended September 30, 2009 and 2008

		Six months ended								Six months ended
		September 30, 2009								September 30, 2008
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Net sales		¥	645,963				100.0			¥	1,211,288				100.0
Cost of sales			505,082				78.2				885,675				73.1
Selling, general and administrative expenses (Note 5)			119,483				18.5				166,224				13.7
Other operating income (expenses), net			(1,613	)			(0.2	)			265				0.0
Operating income			19,785				3.1				159,654				13.2
Other income (expenses), net			(1,333	)							(2,926	)
Interest and dividend income			3,965				0.6				4,414				0.4
Interest expense			(5,125	)			(0.8	)			(7,565	)			(0.6	)
Other — net			(173	)			(0.0	)			225				0.0
Income before income taxes and equity in earnings of affiliated companies			18,452				2.9				156,728				12.9
Income taxes
Current			15,488								53,350
Deferred			(8,845	)							51
Total			6,643				1.0				53,401				4.4
Income before equity in earnings of affiliated companies			11,809				1.8				103,327				8.5
Equity in earnings of affiliated companies			41				0.0				1,334				0.1
Net income			11,850				1.8				104,661				8.6
Less net income attributable to the noncontrolling interest			(3,652	)			(0.6	)			(4,320	)			(0.4	)
Net income attributable to Komatsu Ltd.		¥	8,198				1.3			¥	100,341				8.3

		Yen
		Six months ended				Six months ended
		September 30, 2009				September 30, 2008
Net income attributable to Komatsu Ltd. per share (Note 7)
Basic		¥	8.47			¥	100.82
Diluted			8.47				100.72
Cash dividends per share (Note 13)			18.00				22.00

Three months ended September 30, 2009 and 2008

		Three months ended								Three months ended
		September 30, 2009								September 30, 2008
						Component								Component
		Millions of yen				ratio (%)				Millions of yen				ratio (%)
Net sales		¥	325,535				100.0			¥	604,456				100.0
Cost of sales			252,609				77.6				445,839				73.8
Selling, general and administrative expenses (Note 5)			59,997				18.4				80,882				13.4
Other operating income (expenses), net			(1,417	)			(0.4	)			(1,345	)			(0.2	)
Operating income			11,512				3.5				76,390				12.6
Other income (expenses), net			(1,788	)							(12,430	)
Interest and dividend income			2,106				0.6				1,814				0.3
Interest expense			(2,394	)			(0.7	)			(3,636	)			(0.6	)
Other — net			(1,500	)			(0.5	)			(10,608	)			(1.8	)
Income before income taxes and equity in earnings of affiliated companies			9,724				3.0				63,960				10.6
Income taxes
Current			7,772								30,413
Deferred			(3,310	)							(9,958	)
Total			4,462				1.4				20,455				3.4
Income before equity in earnings of affiliated companies			5,262				1.6				43,505				7.2
Equity in earnings of affiliated companies			142				0.0				572				0.1
Net income			5,404				1.7				44,077				7.3
Less net income attributable to the noncontrolling interest			(1,969	)			(0.6	)			(1,467	)			(0.2	)
Net income attributable to Komatsu Ltd.		¥	3,435				1.1			¥	42,610				7.0

		Yen
		Three months ended				Three months ended
		September 30, 2009				September 30, 2008
Net income attributable to Komatsu Ltd. per share (Note 7)
Basic		¥	3.55			¥	42.81
Diluted			3.55				42.78
Cash dividends per share			—				—

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

Consolidated Statements of Shareholders’ Equity (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Six months ended September 30, 2009 and 2008

		Millions of yen
		Six months ended				Six months ended
		September 30, 2009				September 30, 2008
Common stock
Balance, beginning of year		¥	67,870			¥	67,870
Balance, end of period		¥	67,870			¥	67,870
Capital surplus
Balance, beginning of year		¥	140,092			¥	138,170
Sales of treasury stock			(84	)			1,702
Issuance and exercise of stock acquisition rights (Note 5)			103				69
Balance, end of period		¥	140,111			¥	139,941
Retained earnings, appropriated for legal reserve
Balance, beginning of year		¥	28,472			¥	26,714
Transfer from unappropriated retained earnings			2,309				276
Balance, end of period		¥	30,781			¥	26,990
Unappropriated retained earnings
Balance, beginning of year		¥	719,222			¥	685,986
Net income attributable to Komatsu Ltd.			8,198				100,341
Cash dividends paid to Komatsu Ltd. Shareholders (Note 13)			(17,431	)			(21,904	)
Transfer to retained earnings appropriated for legal reserve			(2,309	)			(276	)
Balance, end of period		¥	707,680			¥	764,147
Accumulated other comprehensive income (loss)
Balance, beginning of year		¥	(105,744	)		¥	(28,779	)
Other comprehensive income(loss), for the period, net of tax			(4,136	)			(9,274	)
Balance, end of period		¥	(109,880	)		¥	(38,053	)
Treasury stock
Balance, beginning of year		¥	(34,971	)		¥	(2,835	)
Purchase of treasury stock			(15	)			(3,050	)
Sales of treasury stock			256				779
Balance, end of period		¥	(34,730	)		¥	(5,106	)
Total Komatsu Ltd. shareholders’ equity		¥	801,832			¥	955,789
Noncontrolling interest
Balance, beginning of year		¥	33,393			¥	30,239
Net income attributable to the noncontrolling interest			3,652				4,320
Cash dividends paid to the noncontrolling interest			(1,727	)			(2,243	)
Other comprehensive income(loss), for the period, net of tax			1,187				(692	)
Other changes in noncontrolling interest			1,514				2,037
Balance, end of period		¥	38,019			¥	33,661
Total equity (Note 6)		¥	839,851			¥	989,450

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

Consolidated Statements of Cash Flows (Unaudited)

Komatsu Ltd. and Consolidated Subsidiaries

Six months ended September 30, 2009 and 2008

		Millions of yen
		Six months ended				Six months ended
		September 30, 2009				September 30, 2008
Operating activities
Net income		¥	11,850			¥	104,661
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			44,427				45,914
Deferred income taxes			(8,845	)			51
Net loss (gain) from sale of investment securities and subsidiaries			(252	)			1,311
Net loss (gain) on sale of property			(251	)			(62	)
Loss on disposal of fixed assets			922				1,273
Pension and retirement benefits, net			199				(42	)
Changes in assets and liabilities:
Decrease (increase) in trade receivables			21,396				(2,515	)
Decrease (increase) in inventories			69,679				(42,501	)
Increase (decrease) in trade payables			(56,819	)			(10,104	)
Increase (decrease) in income taxes payable			(4,215	)			(18,240	)
Other, net			9,363				(21,349	)
Net cash provided by (used in) operating activities			87,454				58,397
Investing activities
Capital expenditures			(50,342	)			(68,586	)
Proceeds from sale of property			7,519				6,894
Proceeds from sale of available for sale investment securities			74				147
Purchases of available for sale investment securities			(3,505	)			(9,318	)
Proceeds from sale of subsidiaries and equity investees, net of cash disposed			661				—
Acquisition of subsidiaries and equity investees, net of cash acquired			627				302
Collection of loan receivables			901				4,959
Disbursement of loan receivables			(970	)			(3,386	)
Decrease (increase) in time deposits			(52	)			(1,519	)
Net cash provided by (used in) investing activities			(45,087	)			(70,507	)
Financing activities
Proceeds from long-term debt			88,685				77,173
Repayments on long-term debt			(26,566	)			(41,148	)
Increase (decrease) in short-term debt, net			(61,988	)			(3,182	)
Repayments of capital lease obligations			(17,902	)			(20,378	)
Sale (purchase) of treasury stock, net			157				(2,791	)
Dividends paid			(17,431	)			(21,904	)
Other, net			(3,199	)			(1,481	)
Net cash provided by (used in) financing activities			(38,244	)			(13,711	)
Effect of exchange rate change on cash and cash equivalents			(2,999	)			1,027
Net increase (decrease) in cash and cash equivalents			1,124				(24,794	)
Cash and cash equivalents, beginning of year			90,563				102,010
Cash and cash equivalents, end of period		¥	91,687			¥	77,216

The accompanying Notes to Quarterly Consolidated Financial Statements are an integral part of these statements.

Notes to Quarterly Consolidated Financial Statements (Unaudited)

1. Basis of Quarterly Financial Statements and Summary of Significant Accounting Policies

Basis of Quarterly Financial Statements

(1) Komatsu Ltd. (“Company”) and consolidated subsidiaries (together “Komatsu”) prepare the accompanying quarterly consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

(2) The Company and its domestic subsidiaries maintain their books of account in conformity with accounting principles generally accepted in Japan, and its foreign subsidiaries generally maintain their books of account in conformity with those in the country of their domicile. The accompanying consolidated financial statements reflect certain adjustments, not recorded in Komatsu’s books, to present them in conformity with U.S. GAAP. These adjustments are made mainly in connection with accounting for liability for pension and other retirement benefits, derivative financial instruments, and recognition of certain accrued expenses.

Summary of Significant Accounting Policies

Komatsu adopted the FASB Accounting Standard Codification ^TM (“ASC”) 105, “Generally Accepted Accounting Principles” (Formerly the Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification ^TM and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No.162”) in September 2009. ASC 105 prescribes that FASB Accounting Standard Codification ^TM (“Codification”) is the single official source of authoritative U.S. generally accepted accounting principle, doing away with the previous four-level hierarchy.

The financial statements that adopted ASC 105 should follow the Codification in place of legacy accounting pronouncements. SFAS No. 168 is superseded by ASC 105. The adoption of ASC 105 did not have a material impact on our consolidated result of operations and financial condition.

Starting in the fiscal year which began April 1, 2009, Komatsu adopted ASC 805, “Business Combinations”. ASC 805 establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired or gain from a bargain purchase. ASC 805 also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. The adoption of ASC 805 did not have a material impact on our consolidated results of operations and financial condition.

Starting in the fiscal year which began April 1, 2009, Komatsu adopted ASC 810, “Consolidation”. ASC 810 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. ASC 810 also establishes disclosure requirements that clearly identify and distinguish between the controlling and noncontrolling interests, and requires the separate disclosure of income attributable to controlling and noncontrolling interests. Previously reported amounts have been reclassified accordingly.

Excluding the above, there is no material change for Summary of Significant Accounting Policies stated in annual report for the year ended March 31, 2009.

2. Supplemental Cash Flow Information

Additional cash flow information and noncash investing and financing activities for the six months ended September 30, 2009 and 2008 are as follows:

		Millions of yen
		Six months ended				Six months ended
		September 30, 2009				September 30, 2008
Additional cash flow information:
Interest paid		¥	5,141			¥	7,260
Income taxes paid (refunded)			(149	)			74,390
Noncash investing and financing activities:
Capital lease obligations incurred		¥	9,066			¥	22,338

3. Inventories

At September 30, 2009 and at March 31, 2009, inventories comprised the following:

		Millions of yen
		September 30,				March 31,
		2009				2009
Finished products, including finished parts held for sale		¥	274,838			¥	328,643
Work in process			121,880				128,345
Materials and supplies			39,732				50,369
Total		¥	436,450			¥	507,357

4. Investment Securities

Investment securities at September 30, 2009 and at March 31, 2009 primarily consisted of securities available for sale.

The cost, gross unrealized holding gains and losses, and fair value for such investment securities by major security types at September 30, 2009 and at March 31, 2009 are as follows:

		Millions of yen
						Gross unrealized holding
		Cost				Gains				Losses				Fair value
September 30, 2009
Investment securities available for sale:
Marketable equity securities		¥	25,144			¥	20,130			¥	85			¥	45,189
Other investment securities at cost			15,838
Current portion of other investment securities at cost			93
		¥	41,075

		Millions of yen
						Gross unrealized holding
		Cost				Gains				Losses				Fair value
March 31, 2009
Investment securities available for sale:
Marketable equity securities		¥	24,112			¥	13,419			¥	465			¥	37,066
Other investment securities at cost			16,788
Current portion of other investment securities at cost			101
		¥	41,001

Other investment securities primarily include non-marketable equity securities. The fair value of other investment securities was not estimated as it was not practicable to estimate the fair value of investments and no significant events or changes that might have effected the fair value of those investments were observed.

Unrealized holding gains and losses are included as a component of accumulated other comprehensive income (loss) until realized.

Proceeds from the sales of investment securities available for sale were ¥74 million and ¥147 million for the six months ended September 30, 2009 and 2008, respectively.

Net realized gains or losses from sale of investment securities available for sale during the six months ended September 30, 2009 and 2008 amounted to gains of ¥252 million and losses of ¥1,311 million, respectively. Net realized gains or losses from sale of investment securities available for sale during the three months ended September 30, 2009 and 2008 amounted to gains of ¥317 million and losses of ¥647 million, respectively. Such gains and losses were included in other income (expenses), net in the accompanying consolidated statements of income.

The cost of the marketable securities and investment securities sold was computed based on the average-cost method.

 5. Stock Option Plan

The Company intends to transfer treasury shares to directors and certain employees and certain directors of subsidiaries under an agreement granting the right for them to request such transfers at a predetermined price. The purchase price is the amount calculated by taking the average of the closing prices applicable to ordinary transactions of shares of the Company on the Tokyo Stock Exchange on all days for a month immediately preceding the month in which the date of grant of the right falls and multiplying by 1.05, provided that the exercise price shall not be less than the closing price of the shares of the Company on the Tokyo Stock Exchange on the date of the grant.

Based on the resolutions of the shareholders’ meeting on June 22, 2007 and the Board of Directors on July 14, 2009, the Company issued 239 rights of its share acquisition rights to directors during the year ending March 31, 2010. The Company also issued 403 rights of its share acquisition rights to certain employees and certain directors of subsidiaries during the year ending March 31, 2010 based on the resolutions of the shareholders’ meeting on June 24, 2009 and the Board of Directors on July 14, 2009. The options vest 100% on each of the grant dates and are exercisable from September 1, 2010.

Komatsu recognizes compensation expense using the fair value method in accordance with ASC 718 “Compensation — Stock Compensation”. Compensation expenses during the six months ended September 30, 2009 and 2008 were ¥103 million and ¥94 million, respectively, and were recorded in selling, general and administrative expenses. Compensation expenses after tax during the six months ended September 30, 2009 and 2008 were ¥61 million and ¥56 million, respectively. Compensation expenses during the three months ended September 30, 2009 and 2008 were ¥103 million and ¥94 million, respectively, and were recorded in selling, general and administrative expenses. Compensation expenses after tax during the three months ended September 30, 2009 and 2008 were ¥61 million and ¥56 million, respectively.

6. Equity

The changes in the carrying amount of equity attributable to Komatsu Ltd. shareholders, equity attributable to the noncontrolling interests and the total equity in the accompanying consolidated balance sheets for the six months ended September 30, 2009 and 2008 are as follows:

		Millions of yen
		Komatsu Ltd.
		shareholders’				Noncontrolling
Six months ended September 30, 2009		equity				interest				Total equity
Balance, beginning of year		¥	814,941			¥	33,393			¥	848,334
Cash dividends paid to Komatsu Ltd. shareholders			(17,431	)			—				(17,431	)
Cash dividends paid to the noncontrolling interest			—				(1,727	)			(1,727	)
Other changes			260				1,514				1,774
Comprehensive income:
Net income			8,198				3,652				11,850
Other comprehensive income(loss), for the period, net of tax
Foreign currency translation adjustments			(10,953	)			564				(10,389	)
Net unrealized holding gains on securities available for sale			4,274				—				4,274
Pension liability adjustments			1,782				—				1,782
Net unrealized holding gains on derivative instruments			761				623				1,384
Total comprehensive income			4,062				4,839				8,901
Balance, end of period		¥	801,832			¥	38,019			¥	839,851

		Millions of yen
		Komatsu Ltd.
		shareholders’				Noncontrolling
Six months ended September 30, 2008		equity				interest				Total equity
Balance, beginning of year		¥	887,126			¥	30,239			¥	917,365
Cash dividends paid to Komatsu Ltd. shareholders			(21,904	)			—				(21,904	)
Cash dividends paid to the noncontrolling interest			—				(2,243	)			(2,243	)
Other changes			(500	)			2,037				1,537
Comprehensive income:
Net income			100,341				4,320				104,661
Other comprehensive income(loss), for the period, net of tax
Foreign currency translation adjustments			(4,998	)			(694	)			(5,692	)
Net unrealized holding gains(losses) on securities available for sale			(4,939	)			2				(4,937	)
Pension liability adjustments			(202	)			—				(202	)
Net unrealized holding gains on derivative instruments			865				—				865
Total comprehensive income			91,067				3,628				94,695
Balance, end of period		¥	955,789			¥	33,661			¥	989,450

7. Net Income Attributable to Komatsu Ltd. per Share

A reconciliation of the numerators and denominators of the basic and diluted net income attributable to Komatsu Ltd. per share computations is as follows:

		Millions of yen
		Six months ended				Six months ended
		September 30, 2009				September 30, 2008
Net income attributable to Komatsu Ltd.		¥	8,198			¥	100,341

		Number of shares
		Six months ended				Six months ended
		September 30, 2009				September 30, 2008
Weighted average common shares outstanding, less treasury stock			967,972,490				995,234,502
Dilutive effect of:
Stock options			373,447				987,725
Weighted average diluted common shares outstanding			968,345,937				996,222,227

		Yen
		Six months ended				Six months ended
		September 30, 2009				September 30, 2008
Net income attributable to Komatsu Ltd.:
Basic		¥	8.47			¥	100.82
Diluted			8.47				100.72

		Millions of yen
		Three months ended				Three months ended
		September 30, 2009				September 30, 2008
Net income attributable to Komatsu Ltd.		¥	3,435			¥	42,610

		Number of shares
		Three months ended				Three months ended
		September 30, 2009				September 30, 2008
Weighted average common shares outstanding, less treasury stock			968,033,505				995,216,076
Dilutive effect of:
Stock options			394,831				844,352
Weighted average diluted common shares outstanding			968,428,336				996,060,428

		Yen
		Three months ended				Three months ended
		September 30, 2009				September 30, 2008
Net income attributable to Komatsu Ltd.:
Basic		¥	3.55			¥	42.81
Diluted			3.55				42.78

8. Contingent Liabilities

At September 30, 2009 and at March 31, 2009, Komatsu was contingently liable for discounted and transferred receivables on a recourse basis with the financial institutions of ¥13,332 million and ¥14,480 million, respectively.

Komatsu provides guarantees to third parties of loans of the employees, affiliated companies and other companies. The guarantees relating to the employees are mainly made for their housing loans. The guarantees of loans relating to the affiliated companies and other companies are made to enhance the credit of those companies.

For each guarantee provided, Komatsu would have to perform under a guarantee, if the borrower defaults on a payment within the contract terms. The contract terms are from 10 years to 30 years in the case of employees with housing loans, and from 1 year to 10 years in the case of loans relating to the affiliated companies and other companies. The maximum amount of undiscounted payments Komatsu would have had to make in the event of default was ¥70,699 million and ¥65,478 million at September 30, 2009 and at March 31, 2009, respectively. The fair value of the liabilities recognized for Komatsu’s obligations as guarantors under those guarantees at September 30, 2009 was insignificant. Certain of those guarantees were secured by collateral and insurance issued to Komatsu.

Management of Komatsu believes that losses from those contingent liabilities, if any, would not have a material effect on the consolidated financial statements.

Komatsu is involved in certain legal actions and claims arising in the ordinary course of its business. It is the opinion of management and legal counsel that such litigation and claims will be resolved without material effect on Komatsu’s financial position.

Komatsu conducts business activities with customers, dealers and associates around the world and its trade receivables from such parties are well diversified to minimize concentrations of credit risks. Management does not anticipate incurring losses on its trade receivables in excess of established allowances.

9. Derivative Financial Instruments

Notional principal amounts of derivative financial instruments outstanding at September 30, 2009 and at March 31, 2009 are as follows:

		Millions of yen
		September 30,				March 31,
		2009				2009
Forwards and options:
Sale of foreign currencies		¥	22,450			¥	30,868
Purchase of foreign currencies			35,707				48,424
Option contracts (purchased)			1,061				1,011
Interest rate swap, cross-currency swap and interest rate cap agreements			230,139				226,754

Net foreign currency exchange gains (losses) in the accompanying consolidated statements of income for the six months ended September 30, 2009 and 2008 amounted to losses of ¥2,874 million and losses of ¥4,274 million, respectively. Net foreign currency exchange gains (losses) in the accompanying consolidated statements of income for the three months ended September 30, 2009 and 2008 amounted to losses of ¥4,645 million and losses of ¥9,810 million, respectively.

Fair values of derivative instruments at September 30, 2009 and at March 31, 2009 on the consolidated balance sheets are as follows:

Millions of yen

September 30, 2009

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

446

Deferred income taxes and other current liabilities

¥

—

Interest rate swaps, cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

339

Deferred income taxes and other current liabilities

972

Deferred income taxes and other assets

829

Deferred income taxes and other liabilities

—

Total

¥

1,614

¥

972

Derivative Assets

Derivative Liabilities

Undesignated derivative

Location on the consolidated

Estimated

Location on the consolidated

Estimated

instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

438

Deferred income taxes and other current liabilities

¥

524

Option contracts

Deferred income taxes and other current assets

17

Deferred income taxes and other current liabilities

—

Interest rate swaps, cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

3,957

Deferred income taxes and other current liabilities

1,095

Deferred income taxes and other assets

9,522

Deferred income taxes and other liabilities

1,688

Total

¥

13,934

¥

3,307

Total Derivative Instruments

¥

15,548

¥

4,279

Millions of yen

March 31, 2009

Derivative Assets

Derivative Liabilities

Derivative instruments designated

Location on the consolidated

Estimated

Location on the consolidated

Estimated

as hedging instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

278

Deferred income taxes and other current liabilities

¥

430

Deferred income taxes and other assets

8

Deferred income taxes and other liabilities

—

Interest rate swaps, cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

2,351

Deferred income taxes and other current liabilities

—

Deferred income taxes and other assets

5,709

Deferred income taxes and other liabilities

—

Total

¥

8,346

¥

430

Derivative Assets

Derivative Liabilities

Undesignated derivative

Location on the consolidated

Estimated

Location on the consolidated

Estimated

instruments

Balance Sheets

fair value

Balance Sheets

fair value

Forwards contracts

Deferred income taxes and other current assets

¥

1,016

Deferred income taxes and other current liabilities

¥

1,387

Option contracts

Deferred income taxes and other current assets

19

Deferred income taxes and other current liabilities

—

Interest rate swaps, cross-currency swap and interest rate cap agreements

Deferred income taxes and other current assets

766

Deferred income taxes and other current liabilities

980

Deferred income taxes and other assets

1,704

Deferred income taxes and other liabilities

3,058

Total

¥

3,505

¥

5,425

Total Derivative Instruments

¥

11,851

¥

5,855

The effects of derivative instruments on the consolidated statements of income for the six months ended September 30, 2009 are as follows:

Derivative instruments designated as fair value hedging relationships

Millions of yen

Six months ended

September 30, 2009

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in income

recognized in income

recognized in income

recognized in income

on derivatives

on derivatives

on hedged items

on hedged items

Interest rate swaps, cross-currency swap and interest rate cap agreements

Other income (expenses), net: Other-net

¥

2,549

Other income (expenses), net:  Other-net

¥

(1,157

)

Total

¥

2,549

¥

(1,157

)

Derivative instruments designated as cash flow hedging relationships

Millions of yen

Six months ended

September 30, 2009

Ineffective portion and amount excluded

Effective portion

from effectiveness testing

Amount of

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in

reclassified

reclassified

recognized in

recognized in

OCI on

from accumulated

from accumulated

income

income

derivatives

OCI into income

OCI into income

on derivatives

on derivatives

Forwards contracts

¥

856

Other income (expenses), net: Other-net

¥

685

—

¥

—

Interest rate swaps, cross-currency swap and interest rate cap agreements

184

Other income (expenses), net: Other-net

91

—

—

Total

¥

1,040

¥

776

¥

—

Derivative instruments not designated as hedging instruments relationships

		Millions of yen
		Six months ended
		September 30, 2009
		Location of gains (losses) recognized		Amount of gains (losses) recognized
		in income on derivatives		in income on derivatives
Forwards contracts		Other income (expenses), net: Other-net		¥	797
Option contracts		Other income (expenses), net: Other-net			—
Interest rate swaps, cross-currency swap and interest rate cap agreements		Cost of sales			(243	)
		Other income (expenses), net: Other-net			3,971
Total				¥	4,525

The effects of derivative instruments on the consolidated statements of income for the three months ended September 30, 2009 are as follows:

Derivative instruments designated as fair value hedging relationships

		Millions of yen
		Three months ended
		September 30, 2009
		Location of		Amount of			Location of		Amount of
		gains (losses)		gains (losses)			gains (losses)		gains (losses)
		recognized in income		recognized in income			recognized in income		recognized in income
		on derivatives		on derivatives			on hedged items		on hedged items
Interest rate swaps, cross-currency swap and interest rate cap agreements		Other income (expenses), net: Other-net		¥	1,268		Other income (expenses), net: Other-net		¥	241
Total				¥	1,268				¥	241

Derivative instruments designated as cash flow hedging relationships

Millions of yen

Three months ended

September 30, 2009

Ineffective portion and amount excluded

Effective portion

from effectiveness testing

Amount of

Location of

Amount of

Location of

Amount of

gains (losses)

gains (losses)

gains (losses)

gains (losses)

gains (losses)

recognized in

reclassified

reclassified

recognized in

recognized in

OCI on

from accumulated

from accumulated

income

income

derivatives

OCI into income

OCI into income

on derivatives

on derivatives

Forwards contracts

¥

1,590

Other income (expenses), net: Other-net

¥

759

—

¥

—

Interest rate swaps, cross-currency swap and interest rate cap agreements

202

Other income (expenses), net: Other-net

91

—

—

Total

¥

1,792

¥

850

¥

—

Derivative instruments not designated as hedging instruments relationships

		Millions of yen
		Three months ended
		September 30, 2009
		Location of gains (losses) recognized		Amount of gains (losses) recognized
		in income on derivatives		in income on derivatives
Forwards contracts		Other income (expenses), net: Other-net		¥	914
Option contracts		Other income (expenses), net: Other-net			(4	)
Interest rate swaps,cross-currency swap and interest rate cap agreements		Cost of sales			(161	)
		Other income (expenses), net: Other-net			4,908
Total				¥	5,657

10. The Fair Value of Financial Instruments

(1) Cash and Cash Equivalents, Time Deposits, Trade Notes and Accounts Receivable, Other Current Assets, Short-Term Debt, Trade Notes, Bills and Accounts Payable, and Other Current Liabilities

The carrying amount approximates fair value because of the short maturity of these instruments.

(2) Investment Securities

The fair values of investment securities available for sale for which it is practicable to estimate fair value are based on quoted market prices and are recognized on the accompanying consolidated balance sheets.

(3) Installment Receivables

The fair values of installment receivables are based on the present value of future cash flows through maturity, discounted using estimated current interest rates. The fair values computed on such a basis approximate the carrying amounts.

(4) Long-Term Debt

The fair values of each of the long-term debts are based on the quoted price in the most active market or the present value of future cash flows associated with each instrument discounted using the current borrowing rate for similar debt of comparable maturity.

(5) Derivative Financial Instruments

The fair values of derivative financial instruments, consisting principally of foreign exchange contracts and interest rate swap agreements, are estimated by obtaining quotes from brokers and are recognized on the accompanying consolidated balance sheets.

The carrying amounts and the estimated fair values of the financial instruments, including financial instruments not qualifying as hedge, at September 30, 2009 and at March 31, 2009, are summarized as follows:

		Millions of yen
		September 30, 2009								March 31, 2009
		Carrying				Estimated				Carrying				Estimated
		amount				fair value				amount				fair value
Investment securities, marketable equity securities		¥	45,189			¥	45,189			¥	37,066			¥	37,066
Long-term debt, including current portion			451,339				446,148				379,768				376,108
Derivatives:
Forwards and options
Assets			901				901				1,321				1,321
Liabilities			524				524				1,817				1,817
Interest rate swap, cross-currency swap and interest rate cap agreements
Assets			14,647				14,647				10,530				10,530
Liabilities			3,755				3,755				4,038				4,038