KUBOTA CSR Report 2010

KUBOTA CSR Report 2010Earth...We protect the environment of this beautiful earth.Life…We support the prosperous life of human forever.We Kubota promise above as a business group that challenges global problems of food,water, and environments.KUBOTA Corporation

Basic ConceptWinning Customer SatisfactionThe Kubota Group seeks to win customer satisfaction andconfidence by working to ensure product safety and offeringproducts, technologies, and services that meet customer needs.Conducting Corporate Activities Basedon Compliance with Legal Regulationsand Ethical PrinciplesThe Kubota Group conducts its corporate activities whileobserving the letter and spirit of legal regulations applicableto its business operations, in accordance with social ethicalprinciples and good conscience.Respecting Human RightsThe Kubota Group bases its activities on the UniversalDeclaration of Human Rights, respects human rights, and doesnot violate human rights. Moreover, the Group respects theprivacy of individuals and works to protect personal information.The KUBOTA Group views our “Corporate Mission Statement,” which indicates the posture of thecompany, and our “Management Principles,” which declares the mission of the company, to be thefoundations behind company activities. A “Charter for Action” consisting of 7 items is also providedas an indicator of the corporate actions necessary for accomplishing the “Management Principles.”In commemoration of KUBOTA’s 120th anniversary, we adopted a new “KUBOTA Group Slogan”to communicate our determination to contribute to global society in the areas that concern all ofhumanity: “food,” “water,” and the “environment.” All KUBOTA Group members, both domestic andoverseas, are committed to joining efforts and taking concerted actions to achieve this goal.(For more detailed information, please refer to “Celebrating the 120th anniversary of the company’s foundation”on p.7.)Creating a Safeand Vibrant Work EnvironmentThe Kubota Group maintains a safe and healthy workingenvironment and works to improve workplace conditions. Inaddition, the Group respects the diversity and creativity ofits employees and promotes a vibrant work environment.The Kubota Group SloganFor Earth, For LifeEarth...We protect the environment of this beautiful earth.Life…We support the prosperous life of human forever.We Kubota promise above as a business group that challenges global problems of food,water, and environments.Corporate Mission Statement Work for the development of society by drawing on all our capabilities and know-how tooffer superior products and technologies Build today and open the way to tomorrow, with the aim of bringing prosperity to theCompany and happiness to employees Challenge the unknown with creativity and courageManagement PrinciplesThe Kubota Group contributes to the development of society and the preservation of theearth’s environment through its products, technologies, and services that provide thefoundation for society and for affluent lifestyles.Charter for ActionPreserving the Natural EnvironmentThe Kubota Group aims to create a society wheresustainable development is possible on a global scale andconducts its operations with concern for preserving thenatural environment.Achieving Symbiosis with Internationaland Local SocietiesThe Kubota Group respects the culture and customs of allcountries and regions and seeks to build relationships oftrust through communication with local societies, while alsoworking to be a good corporate citizen.Fulfilling Responsibilitiesfor Improving Management Transparencyand AccountabilityThe Kubota Group makes appropriate and timely disclosure ofcorporate information and fulfills its responsibilities fortransparency and accountability in corporate activities.In Editing the CSR Report 2010This report was compiled in order to report on the CSR activities ofthe KUBOTA Group in an easy to comprehend manner. The CSRReport 2010 reviews the missions of the KUBOTA Group, whichcelebrates its 120th anniversary this year, and focuses on corporateactivities in the areas of food, water, and the environment, amongother issues of material importance for the KUBOTA Group.Published in the milestone year of the group’s 120th anniversary, theCSR Report 2010 devotes space to introducing the KUBOTA Group’ scorporate attitude, which has remained unchanged over the years,and the missions to be pursued into the future. In the “Commitment byTop Management” section, the president talks about his enthusiasmfor CSR management in an interview by employees.This year’s report features two special opening articles—one concerning“water” and the other concerning the “environment”—following a specialarticle on “food,” highlighted in the CSR Report 2009. The special report on“water” focuses on the KUBOTA Group’s initiatives to contribute to theimprovement of water resources/infrastructure around the world, while thereport on the “environment” summarizes discussions held with externalexperts on the responsibilities of manufacturers in preventing global warming.The content on corporate activities touches on three (economic,social and environmental) perspectives and is composed in line withour Charter for Action. The Economic Report introduces KUBOTA’snew products and corporate activities, from the perspective of howthese have contributed to society.The Social Report presents the KUBOTA Group’s activities andachievements in terms of the priority issues for FY2010 andmedium-term goals (p.23), while the Environmental Report highlights thegroup’s environmental efforts under the New Medium-TermEnvironmental Conservation Plan (p.35). The Social Report also focuseson the PDCA cycle, providing information on corporate activities. Themark New! indicates activities newly launched by the KUBOTAGroup. Significant progress achieved indicates activities that haveachieved outstanding progress compared to the previous year.The CSR Report 2010 highlights various comments from externalexperts and employees so that feedback from different perspectives willbe incorporated into the future CSR activities of the KUBOTA Group.Information on the CSR activities of the KUBOTA Group is given bothin this report and on the official website. For more detailed informationnot shown in this report, please visit our website at:http://www.kubota.co.jp/english/c-data/csr/2010.htmlScope of the CSR Report 2010The CSR Report covers the entire KUBOTA Group, in principle.Economic ReportThe Economic Report contains data on the consolidated accountingthat was performed based on U.S. accounting standards.Fiscal year 2010: 105 consolidated subsidiary companies and 19affiliates accounted for under the equity-method.Social ReportThe Social Report covers social activities carried out byKUBOTA Corporation and some of its affiliates.Environmental ReportThe Environmental Report contains the results of environmentalactivities carried out by KUBOTA Corporation itself as well as 70domestic and 35 overseas consolidated subsidiary companies.Period covered by this reportThe content of this report focuses on activities during fiscal 2010 (April 2009to March 2010). Some portions may include information on recent events.Data in the Environmental Report are aggregate totals of domestic (April 2009to March 2010) and overseas activities (January 2009 to December 2009).Referenced guidelinesEnvironmental Report Guidelines (Fiscal Year 2007 version), Ministryof the Environment (Government of Japan)Sustainability Reporting Guidelines Version 3.0, GRI (Global Reporting Initiative)Publication datesThis issue August 2010Next scheduled issue August 2011Previous issue September 2009: “CSR Report 2009”NOTES: The laws and government and municipal offices and organs, etc.,mentioned in this CSR Report indicate Japanese law and agencies, etc., unlessotherwise indicated. The term “domestic” as used in this CSR Report refers to theareas comprising the country of Japan, while “overseas” indicates countries andregions outside of Japan.INDEXBasic Concept(The KUBOTA Group Slogan/Corporate MissionStatement/Management Principles/Charter for Action)In Editing the CSR Report 2010Commitment by Top ManagementInterview with the PresidentCelebrating the 120 th anniversary of thecompany’s foundationSpecial Report 1Contributing to the Improvement of GlobalWater Resources and InfrastructureSpecial Report 2Contributions toward the Prevention of ClimateChangeThe Fundamental Principlesof KUBOTA’s CSR ManagementFundamental Ideas on CSR ManagementRaising CSR Awareness among EmployeesEconomic ReportKUBOTA Group ProfileSpecial Topics(Food/Water/Environment)Social ReportSummary of the Fiscal 2010 Social Report,Priority Issues for the Next Fiscal Year andMedium-Term GoalsKUBOTA’s response to the asbestos issueWinning Customer SatisfactionConducting Corporate Activities Based onCompliance with Legal Regulations and EthicalPrinciplesRespecting Human RightsCreating a Safe and Vibrant Work EnvironmentAchieving Symbiosis with International andLocal SocietiesFulfilling Responsibilities for ImprovingManagement Transparency and AccountabilityEnvironmental ReportBasic PolicyThe New Medium-Term EnvironmentalConservation PlanKUBOTA Group Business Activities andEnvironmental LoadsEnvironmental ManagementStopping Climate ChangeWorking towards a Recycling-based SocietyChemical Substance ControlsConservation of BiodiversityIndependent Review on the Environmental ReportList of information available on KUBOTA’s websiteComments on the CSR Report

Commitment byTop ManagementInterview with the PresidentContributing to thewell-being of societythrough corporateactivitiesKUBOTA’s managementprinciples have remainedunchanged since itsestablishment and chart aclear course to the future.Hiroyuki HaraEnvironmental Protection DepartmentHaruka TakeuchiDiversity Promotion OfficePersonnel DepartmentGiven that the corporate activities of the KUBOTA Groupdirectly contribute to the betterment of society, theoutcomes of its CSR activities serve as an importantmanagement indicator for the group. During an interviewby employees of CSR-related departments, President YasuoMasumoto, who has launched a group-wide policy tofurther strengthen CSR, talks about the significance ofCSR for the KUBOTA Group and the future vision of thecompany, which has just celebrated the 120th anniversaryof its establishment.(The interview was held on April 5, 2010 at the head office of KUBOTACorporation.)Promoting CSR management to betteraddress food, water, and environmentalproblemsNagamine: At the CSR Planning Department, we begantwo major programs in the last fiscal year with therecognition of the necessity of raising CSR awarenessamong all employees to further promote CSR management.One of the programs, which has so far been participated byabout 6,000 employees, aims at encouraging all KUBOTAemployees to read our CSR report. The other programconsists of a training session aimed to help develop ideasfor social contribution initiatives, and this was joined byabout 600 employees.Yasuo MasumotoRepresentative Director,President & CEO of KUBOTA CorporationTomoko NagamineCSR Planning DepartmentI believe that, through these programs, participants now have abetter understanding of CSR, which covers such extensiveareas that its big picture is often hard to see. Thus, what I wouldlike to ask you, Mr. Masumoto, is this: What does CSR mean toKUBOTA in the first place? Or, why is it necessary for theKUBOTA Group to emphasize CSR management?Masumoto: What do you think made KUBOTA look towardCSR?Nagamine: I think compliance efforts were the startingpoint.Masumoto: That’s right. Initially, we aimed at enhancingcompliance with laws and regulations, and over time, theterm “CSR” was introduced to replace “internal control.” Thisis because KUBOTA assumes an especially importantresponsibility for society, due to the nature of our corporateactivities.There is no doubt that food, water, and environmentalproblems will impose serious threats to humanity in the 21stcentury, and I take pride in KUBOTA’s ability to find solutionsto these three major problems using state-of-the-arttechnologies.Taking the water problem as an example, how many peoplein the world do you think can access safe and sanitary tapwater?Hara: Very few.Masumoto: Yes, very few people. Aware of this fact, 40 to50 years ago, KUBOTA set out constructing waterworks inCambodia, Laos, and other locations. In doing so, KUBOTAmade a really impressive contribution: it directly served as aprovider of water service.Once water becomes accessible, the contamination issuehas to be addressed, as a next step. If KUBOTA can launchadditional efforts to cope with this contamination issue,perhaps we can be helpful in settling various problems thatthreaten people around the world, and if it becomespossible, we may say that the implementation of ourcorporate activities itself serves the purpose of CSRmanagement. What do you think?Nagamine: I feel that CSR has now become a new socialindicator. I think that CSR management aims at “building acompany with a dream that contributes to the well-being ofhumanity and that facilitates personal growth,” as you oftenmention, Mr. Masumoto.Developing innovative and environmentallyfriendly technologies and products throughefforts to become the leading company inenvironmental management rankingsHara: Active in environmental areas, KUBOTA is working tobecome the top company in terms of environmentalmanagement rankings. We, at the Environmental ProtectionDepartment, are also committed to our environmentalpreservation efforts.To be specific, during FY2010, we formulated the NewMedium-Term Environmental Conservation Plan, underwhich we began activities to steadily reduce CO2 and otherenvironmentally harmful substances, in a phased manner. Inrelation to this, I would like to ask you, Mr. Masumoto, toshare your view with us concerning the strengthening ofenvironmental preservation efforts—one goal of themanagement policy.Masumoto: I encourage you to achieve the highest positionin the environmental management rankings, as this cannotbe done using a lukewarm approach. If we are fullydedicated to achieve this goal, I am sure we can develophighly attractive environmental technologies, and if we canapply such technologies to our corporate activities, thenKUBOTA will be able to better contribute to environmentalpreservation and become a more appealing company.Therefore, I think it is important for you to change yourviewpoint a little, and try to work on relevant departments todevelop environmentally friendly products, instead of simplytrying to achieve the numerical targets set in theMedium-Term Environmental Conservation Plan.For example, why don’t you urge R&D personnel to developagricultural machinery that can cut CO2 emissions by 50%,compared with conventional products? Accumulation ofsuch efforts will eventually bring about opportunities that canchange the way agriculture is practiced. Haven’t you everthought in such a way?Hara: We, too, are considering conducting such in-depthactivities. However, instead of requesting R&D personnel toreduce CO2 emissions by 50% in a leapfrog fashion, wethink it is better to set a more realistic target and ask them toachieve it, like conquering a smaller mountain beforechallenging a larger one.Masumoto: Even if you conquer a number of smallmountains, you will never be able to reach the summit of Mt.Everest. I am of the opinion that if you are a climber, youshould aim for Mt. Everest right from the beginning. Evenwhen you climb a mountain of 100 meters, you should atleast have the 8,000-meter peak of Mt. Everest in your mind.You must set your sights on the highest goal. If you are onlycontent with conquering a 100-meter mountain, then youcan never go beyond it. The way you set your target isimportant.I would like to emphasize that you should set your goalstremendously high. If all the employees could succeed inclimbing the highest mountain, then KUBOTA would havetremendous strength.Promoting the diversity management that isindispensable for the growth of KUBOTA as atruly global companyTakeuchi: The promotion of diversity management isupheld in the management policy of the 120th business termof KUBOTA, and as the first step, the Diversity PromotionOffice was established to create a workplace environmentwhere female employees are fully supported and can play aleading role in the company.Commitment by Top ManagementInterview with the President

Commitment by Top ManagementInterview with the PresidentDuring FY2010, we implemented training sessions targetingeach job class and workplace, and provided about 2,700employees with opportunities to think about the meaning ofdiversity. We also formulated a network of femaleemployees, called K-Wing, to assist female employees indeveloping their career.I would like to hear the president’s view concerning diversitymanagement.Masumoto: I remember that the Personnel Departmenthas been working to increase the number of femaleemployees. What was the outcome last year?Takeuchi: In the last fiscal year, 23 out of 105 newly-hireduniversity graduates were female. Female employeesaccount for more than 20% of all newly hired employees.Masumoto: I believe that KUBOTA will change for thebetter when females make up 50% of all its employees,becoming a more appealing company in the process. Thus,please continue efforts toward the recruitment of femaleemployees. Is there any insufficiency in KUBOTA’s supportprograms for female employees, such as childcare leaveand reduced work hour programs?Takeuchi: No. KUBOTA’s support programs are far moresubstantial than the legal requirements.However, some female employees express concerns overwhether or not they can continue developing their careerafter they return to work after maternity leave, or theysometimes feel sorry for the trouble they may be causingtheir coworkers when taking such leave. In this light, I thinkthere should be an improved system to assist femaleHiroyuki HaraEnvironmental Protection DepartmentKUBOTA CorporationMr. Hara joined KUBOTA in 1999and was assigned to the Water &Sewage Engineering Department.He has been with the EnvironmentalProtection Department since 2007,where he is working to improvethe quality of effluent using hisexpertise in environmental preservationand water treatment.Yasuo MasumotoRepresentative Director,President & CEO of KUBOTA CorporationBorn in 1947. Graduated in 1971 from Department ofPrecision Mechanics, Faculty of Engineering, KyotoUniversity, and joined KUBOTA Tekko (now known asKUBOTA) the same year. Rose to position of GeneralManager of Construction Machinery ManufacturingDepartment at Hirakata Plant, Director of UtsunomiyaPlant, and General Manager of Farm MachineryDivision, before being appointed a Director in 2002.Appointed Managing Director in 2004, ExecutiveManaging Director in 2006, Executive Vice Presidentand Director in 2008, and Representative Director,President & CEO in 2009.workers balance work, childrearing, and their private life.Masumoto: If we are to promote female employees inearnest to achieve greater diversity, we should be able topositively offer jobs and posts in the fields where femaleemployees can play a leading role.Perhaps it is necessary to re-examine conventionalpractices that have been taken for granted, as well as theexisting rules.Takeuchi: What do you think of recruiting employees withdiverse backgrounds, as a global company?Masumoto: When I went abroad, I was often asked whyJapanese companies do not leave management to localpersonnel. European and American companies, whenestablishing subsidiaries in foreign countries, will leavemanagement to local personnel without hesitation, becausethey feel that those who are familiar with the local marketsare most suitable for managing such companies.In this regard, KUBOTA is still at an early stage concerningits global business development.For this reason, we must place greater importance on therecruitment and promotion of global personnel. In employingforeign students studying in Japan, we should consider, atall times, what we should do to ensure that they will fullydemonstrate their abilities and play an important role,instead of merely providing them with opportunities to workin Japan.Haruka TakeuchiDiversity Promotion OfficePersonnel DepartmentKUBOTA CorporationMs. Takeuchi joined KUBOTA in2005 and since 2009 has servedas a planner and operator of K-Wing,Kubota Women’s Initiative DiversityNetwork & Group.Conducting in-depth risk management toensure that the KUBOTA Group around theworld will make it routine to do what isobviously necessaryNagamine: For four years now, KUBOTA has beenconducting risk management, led by indirect departments ofthe head office, to avoid material management risks. Lastyear, we surveyed the level of compliance awarenessamong employees and found that the level had improvedsignificantly from five years ago. In January 2010, weintroduced external lawyers to add to the internal points ofcontact, as part of our efforts to enhance the internalreporting system. What do you think of the in-depth riskmanagement in place at KUBOTA?Masumoto: In conducting risk management, you usecheck sheets, don’t you? However, with check sheets, wecan only address standard questions. Check sheets are notsuitable for assessing items that are hard to describe inquantitative terms. Therefore, there can be some latentproblems, even if a perfect score is achieved as a result ofrisk auditing.Hara: Yes. We are inclined to use simple “yes/no” questionsonly.Masumoto: Even if the number of risk items identified onthe check sheets is reduced, it may be because risk auditinghas not covered all of our routine procedures. Therefore, weshould explore ways to assess risks in a manner that betterreflects reality. Furthermore, it is also necessary to considerhow we should conduct risk auditing on a group-wide basis.This issue is especially important for our overseas businessbases.Nagamine: In your opinion, what is the most importantpoint in risk management?Masumoto: The purpose of conducting risk managementis to make it routine to do what is obviously necessary. Weshould prevent our risk management system from becominga mere formality and unable to serve its original purpose.Tomoko NagamineCSR Planning DepartmentKUBOTA CorporationMs. Nagamine joined KUBOTA in1993. After taking charge ofrecruitment and training in thePersonnel Department, she wastransferred to the CSR PlanningDepartment in 2008, where shehas been responsible for auditortraining.On the occasion of celebrating its 120 thanniversary, the KUBOTA Group hasrenewed its determination to contribute tofinding solutions to the food, water, andenvironmental problems that are affectingthe entire globe.Nagamine: Lastly, I would like to ask you, Mr. Masumoto,to share your view on the new slogan, which the KUBOTAGroup adopted on the occasion of its 120th anniversary.Masumoto: I think our new slogan, “For Earth, For Life,” isa very good one—it perfectly matches our managementprinciples and really represents our desire to contribute tothe improvement of social development and the globalenvironment. It is our responsibility to put the slogan “ForEarth, For Life” into practice. I am sure we will become amore valuable company by further developing our businessin a manner that can improve conditions surrounding food,water, and the environment.Nagamine: The issue of corporate quality control is now afocus of attention. What do you think about this issue?Masumoto: Any company that has taken on atechnology-first attitude and forgotten to act and think from acustomer point of view is bound to fail. Companies, ifgrowing arrogant, will never change for the better.KUBOTA is no exception. Quality holds the key to thesurvival of all manufacturers, including KUBOTA. Corporategroups that lack confidence in the quality of their productshave no value in society.Nagamine: You place special importance on the e-Project*in an effort to increase KUBOTA’s worldwide presence in theareas of food, water, and the environment. Thus, please tellus your views on global-scale social contribution.Masumoto: If we are to promote social contribution on aglobal scale, we should enhance the visibility of KUBOTA inthe first place. In other words, it is necessary for us toachieve tangible results in our social contribution efforts invarious parts of the world. I hope that KUBOTA’s proprietarytechnologies will promote these social contribution effortsand eventually bring success in business, thereby creating avirtuous cycle that leads to the development of both societyand KUBOTA.Years ago, KUBOTA was implementing a greening project,which was one of the earliest industrial efforts toward therealization of a low-carbon society. I hope that such aninitiative will be revived.Nagamine: Thank you very much for your time today.* The e-Project is one of the initiatives that the KUBOTA Group hasundertaken in its efforts to contribute to society. For more details, pleasesee pp.31–32 of this report.Commitment by Top ManagementInterview with the President

Celebrating the 120 th anniversaryof the company’s foundationChallengeWe will continue to tacklenew challenges.Our business field is ever-expanding, from Japan to the world, with emphasis shifting from the competitiveness ofeach product to combined corporate strength.We will alwaysprotect ourcorporateDNA.KUBOTA’s corporate DNA hasbeen passed on consistentlythroughout its 120-year history.With this DNA, which hasremained unchanged over theyears, we will globally advanceourselves toward futuregenerations.eepOne of the philanthropicworks initiated by thefounder of KUBOTAEstablishment of a localelementary schoolIn 1911, Japan suffered aserious economic recession. Inthe area where KUBOTA waslocated, many people lost theirjobs and lived in poverty.Educational opportunities werenot sufficiently available, andchildren had no hope fortomorrow. Out of the desire tohelp these people, the founderof KUBOTA established anelementary school, in cooperationwith the local government.Whenever he met them, hespoke with children who had nochoice but to work to earnmoney for their families, and hegently encouraged them to go toschool. His repeated encouragementhelped motivated these childrentoward achieving educationalgoals.Source: Booklet “KUBOTA no hanashi”(Anecdotes of KUBOTA)Corporate Mission Statement Work for the development of society by drawing on all our capabilities andknow-how to offer superior products and technologies Build today and open the way to tomorrow, with the aim of bringing prosperity tothe Company and happiness to employees Challenge the unknown with creativity and courageIt was with the desire to protect peoplefrom cholera and other infectiousdiseases that Gonshiro Kubota, thefounder of KUBOTA, set about thedevelopment of iron pipes to advancesystems to provide clean water.The iron pipes that were used in those days were all imported products, and it wasconsidered impossible to manufacture water pipes domestically. While other companiesabandoned development one after another, Gonshiro Kubota worked enthusiastically andtirelessly for years. Then, in 1900, he finally succeeded in mass producing Japan’s firstwater pipes. Products that can help national development cannot be created without totaldedication and hard work.- Our products should not only be technically excellent, but also useful for the good of society.- We must create products with our heart and soul, and ensure that commodity value in aproper sense is embodied in each of our products.- Having firm confidence in achieving one’s goals separates winners from losers.- There is no such thing as a definite success formula. All we have to do is simply pursue our goalto the end, pleasantly and persistently.At KUBOTA, we have been always faithful to the “spirit of manufacturing,” represented bythese remarks. Today, we are offering a variety of products to the world to contribute tosolving current problems regarding the areas of food, water, and the environment.There is one thing that has never changed throughout our history—our commitment to thevery basic principles of manufacturing. We have never departed from them, not even for amoment.KUBOTA has continued to successfully pinpoint the needs of the times,whilst manufacturing and offering products in response to suchneeds, and by doing so, has contributed to the development ofsociety.Since its establishment in 1890, KUBOTA’s corporate activities havealways been aimed at social contribution. This tradition is deeplywoven into the corporate DNA of KUBOTA.This DNA will remain unchanged and will be passed down to future generations.KUBOTA celebrates the 120th anniversaryof its founding in 2010.Management PrinciplesThe Kubota Group contributes to thedevelopment of society and the preservation ofthe earth’s environment through its products,technologies, and services that provide thefoundation for society and for affluent lifestyles.The KUBOTA Group SloganFor Earth, For LifeKUBOTA’s history of success in overcoming social challengesThe 120 years of KUBOTA is a history of unceasing efforts to find solutions to social problems.Early days ofestablishment Prewar period Postwar period High economic growth PresentIn those days, Japan waspressed to introduce cleantap water to prevent thespread of infectious diseases.KUBOTA succeeded inproducing iron waterpipes for the first time inJapan, which marked thebeginning of KUBOTA’shistory as a leadingmanufacturer. Today, safeand sanitary water isaccessible at all times inJapan.Against the backdrop ofaccelerated modernizationin prewar Japan, KUBOTAbegan manufacturing waterservice-related equipment,such as pumps andvalves, as well as machinetools and engines, whichnow constitute an importantpart of KUBOTA’s corebusiness.During the postwarreconstruction period, KUBOTAlaunched innovative agriculturalmachinery, such as tractorsand combine harvesters,freeing farmers from hardlabor and reducing foodshortages.When Japan entered itsperiod of high economicgrowth, KUBOTA contributedto the creation of amore comfortable andpleasant living environmentthrough its constructionmachinery and buildingfoundation piles. Thisperiod also saw theemergence of certainenvironmental problems.KUBOTA played a leadingrole in solving theseKUBOTA’s missions in its 120 th yearHumankind can use only 0.01% of the totalvolume of water on Earth. Considering theincreasing trends in population, water shortagewill eventually become a greater threat to theworld.KUBOTA will contribute to finding globalsolutions to this problem by supplying its ironwater pipes, pumps and other exceptionalproducts, as well as its comprehensivewater-related technologies, which have beenaccumulated through its involvement in waterservices in Japan.Today, KUBOTA isexpanding its presencenot only in Japan, butalso worldwide. KUBOTAis now making concertedefforts on a global scaleto address the food,water, and environmentalproblems that threatenall of humanity.Food, water, and the environment hold the key to the future survival of humanity. KUBOTA will continue itsefforts to address these critical issues without being limited by time or national borders.Mission FoodSince the beginning of the 20th century, theglobal population has grown from 2.5 billion tomore than six billion. Against this backdrop, itis conceivable that a serious food shortagecould arise on a global scale.KUBOTA will contribute to finding solutions tothis problem, not only for Japan, whose foodself-sufficiency rate continues to decline, butalso for the entire world, by supplying qualityagricultural machinery, such as tractors andcombine harvesters, and by applyingagricultural technologies developed throughits research on Japanese paddy agriculture.Mission WaterEarth...We protect the environment of this beautiful earth.Life…We support the prosperous life of human forever.We Kubota promise above as a business group that challenges global problems of food,water, and environments.problems, by developingwastewater treatmentand waste disposal facilitiesutilizing the technologiesand experience it hasaccumulated throughits involvement in waterservices. In addition,KUBOTA began thediversification of its businessoperations to cater tothe newly emerging needsof Japanese society.Mission TheenvironmentToday, environmental changes and destructionare seriously threatening the entire globe. It isour responsibility to save the world and futuregenerations from any environmental crisis.KUBOTA will contribute to find solutions toglobal environmental problems through itsstate-of-the-art equipment, plants, andtechnologies for waste recycling and effluentpurification (the technology of which is derivedfrom its water services).Celebrating the 120 th anniversary of the company’s foundation

Special Report 1Contributing to the Improvementof Global Resources and InfrastructureAs a company with tremendousknowledge of water and water resources,KUBOTA is committed to fulfilling itsresponsibility to society.Water pipeline(Libya)Sewage treatment plant(Spain)Sewage treatment plant(UK)Water intake facilitieson Dead Sea(Jordan)Wastewater treatmentplant (Saudi Arabia)KUBOTA contributesto the improvementof global water resourcesand infrastructure.Water pipeline (UAE)Sewage treatment plant (UAE)Wastewater treatmentplant (Vietnam)Seawater desalinationplant (UAE)Sewage treatment plant(China) (Pilot plant)Wastewatertreatment plant(Vietnam)The responsibility ofbeing the only generalmanufacturer ofwater-related productsin the worldKUBOTA is engaged in an entire range ofwater services, from water purificationthrough to wastewater treatment. KUBOTA’sstrength lies in its ability to develop waterbusinesses in an integrated manner, bycombining its ductile iron and other pipes,pumps, and valves with state-of-the-artwater treatment technologies. With this“water engineering” ability, KUBOTA hascontinued its global contribution to thedevelopment of water-related infrastructure.In doing so, KUBOTA is supporting thehealthy circulation of the Earth’s valuablewater resources. Today, people around theworld suffer problems concerning suchresources. Thus, KUBOTA hopes to workfor the improvement of water resourcesand infrastructure by offering its productsand technologies to an increasing numberof countries and regions.Ductile iron pipesPumpsValvesSubmerged membraneunitsWastewater treatmenttanks (Johkasou)Sewage treatment plant (USA)Sewage treatment plant(USA)Special Report 1 Contributing to the Improvement of Global Water Resources and InfrastructureIn 1893, KUBOTA embarked on the production of Japan’s first iron pipes for water services. Since then,KUBOTA has been steadily expanding its scope of water-related products, such as valves and pumps. The watertreatment technologies amassed over years of efforts also led KUBOTA to the sewage treatment field. Today,KUBOTA boasts being the only general manufacturer in the world that offers products for both water andsewage services.Water is the source of life, and water services are essential for society.Against the backdrop of the growing importance of water resources, KUBOTA is taking on an even greaterresponsibility.Production of ductile ironpipes (India)Waterworks pumpstation (Sri Lanka)Waterworks pump station(Malaysia)Deep tunnel sewagesystem (Singapore)Waterworks pumpstation (Indonesia)Water purification plant(Cambodia)KUBOTA GROUP CSR Report 2010KUBOTA GROUP CSR Report 2010

Special Report 1KUBOTA’scommitment tocontributingto the solutionof global waterproblemsContributing to the Improvement of Globaland InfrastructureJapanResourcesIn Japan, there is a pressing need to renew aging water pipes, enhance the earthquake-resistanceof pipes, and disseminate advanced water supply technologies. To meet these needs, KUBOTAprovides solutions to the entire process of water service management with its products andknow-how. To be specific, KUBOTA has developed next-generation earthquake-resistant waterpipes, and has been involved in the renewal of water pipes, starting from the planning anddesigning stage, through to plumbing work, and up to themaintenance and management stage. In this way, KUBOTA hasmade extensive contribution to the improvement of the quality ofJapanese water services.OverseasKUBOTA’s water-related productsWater intake pumpThe Earth is often referred to as a “watery planet.” However, of all the water on theEarth, only 0.01% is actually available to us. Today, the world faces the serious threatof water shortage, stemming from population increase, growing industrial demandfor water, water pollution, and global warming.Especially, the Middle East, Africa, and the northern part of China are constantlysuffering from water shortage, while newly emerging economies in Asia and otherregions, such as India and Vietnam, are pressed to develop water and sewageinfrastructure in response to rapid economic and population growth.With more than century-long experience in water-related business behind us,KUBOTA is striving to offer solutions to the water problems of Asia and the rest of theworld through a variety of approaches.Supplying safeand clean waterDevelopment of a water service systemin a manner to cater to specific local needsOffering comprehensive support to the renewal of aging water pipesSupplying safe and clean water throughKUBOTA’s proprietary water technologiesIn newly emerging economies in Asia, rapid growth of urban populations andindustrialization have given rise to serious water problems, such as pollution anddrought. On a daily basis, these countries also face water leakage problems andstolen water resources. KUBOTA, besides offering its ductile iron pipes, pumps,and valves to the markets of these countries, will cooperate with localmanufacturers to develop and supply water-related products with quality andspecifications better tailored to local needs. In addition, KUBOTA will positivelyengage in water management and water supply services, taking advantage of itsstate-of-the-art technologies amassed over years of involvement in water andwater infrastructure, to ensure that safe and clean water will be available toeveryone.Ceramic membranefiltration systemWastewatertreatment tankButterfly valveWaterworks systemdeveloped in cooperationwith KUBOTA in PhnomPenh, Cambodia.Resilient seatedgate valveNext-generationearthquake-resistantwater pipe that can lastfor 100 yearsGENEXPromotingtheRecyclingof WaterResourcesKUBOTAproposes aninnovative way ofwater recyclingutilizing itssubmergedmembranetechnologyImproving WaterInfrastructureDeveloping local water service infrastructure through useof a wastewater treatment plantIn many parts of Asia, untreatedwastewater flowing into rivers and otherwater sources causes serious waterpollution, due to lack of sewagetreatment plants. To cope with thesituation, KUBOTA is introducingwastewater treatment tanks to theseareas as part of its wastewatertreatment plant initiatives. KUBOTA’swastewater treatment tanks incorporatea consistent sewage treatmentmechanism combined with thecompany’s advanced know-how in thearea of water treatment. Because thesetanks can be installed easily and yetdemonstrate high water treatmentefficiency, they can perfectly serve theneeds of plants and hospitals insparsely populated areas, as well as inresidential areas still underdevelopment. KUBOTA will remaincommitted to improving waterresources/infrastructure for the peopleof Asia.Submergedmembrane unitToday, sewage and wastewater treatment is attracting greater attention as aneffective way to recycle circulating water resources. KUBOTA’s submergedmembranes are used extensively around the world as an innovative means ofwastewater treatment. This product is highly evaluated for its efficiency inwater treatment, outstanding durability, its simple processing system, and itsease of maintenance. In China, for example, KUBOTA’s submergedmembranes are expected to contribute to solving serious environmentalproblems affecting aquatic areas, caused by rapid economic growth.Additionally, KUBOTA will expand the scope of its activities to further promotethe recycling of water resources by offering its submerged membranes to awider range of users and by constructing and operating wastewater andsewage treatment plants utilizing these submerged membranes.KUBOTA’s submergedmembranes employed at asewage treatment system ina refuse-incinerating powerplant in ChinaSewage sludgeconcentratorKUBOTA’s wastewater treatmenttank installed at a hospital in HoChi Minh City, VietnamSewage sludge incineratorMembrane unitLarge-scale wastewatertreatment tank,KM-SG-NPKUBOTA’sVISIONMessage fromthe Officer in ChargeSince its inception, KUBOTA has beenpromoting the development oftechnologies and products in theareas of water and the environment,with a view to enhancing living standardsand protecting the global environment.Currently, we are making dedicatedefforts to offer higher-quality iron pipes,valves, pumps, and submergedmembranes, and to improve our waterpurification, sewage, and industrialwastewater treatment technologies, sothat we will be able to provide “totalwater solutions” for the good of society.However, recently, the threats of watershortage and environmental pollutionare increasingly growing seriousworldwide. In response to this threat,KUBOTA has embarked on newprojects to address overseas waterproblems.For example, we began production ofwater pipes in cooperation with theTATA Group in India, to cater to therapid increase of demand for water inIndia and the Middle East.In China, we are going to produce andsupply pumps to facilitate developmentof water and sewage systems. As well,in China, we are promoting business inthe area of water engineering, focusingon the “reuse of sewage and industrialwastewater” and “sludge incinerationfor effective sewage sludge treatment.”At KUBOTA, we will continue ourconcerted efforts toward theimprovement of global water resourcesand infrastructure through ourtechnologies and products.ValveWe are committedto contributing tohealthy globalwater resources byacceleratingdevelopment ofour corporateactivities thatcover the entirewater circulationprocess.MembraneWaterengineeringIron pipePumpWastewatertreatmenttankSpecial Report 1 Contributing to the Improvement of Global Water Resources and InfrastructureRainPumpEvaporationHirokazu NaraRepresentative Director and Senior Managing Executive OfficerGeneral Manager of Water & Environment Systems ConsolidatedDivisionKUBOTA CorporationWater purification plantDuctile iron pipeSewage treatment plantSewage sludgedehydrator

Special Report 2Contributions toward the PreventionofStakeholder DialogThe responsibility of KUBOTA asa manufacturer for preventing climate changeAs a company involved extensively in the fields of food, water, andthe environment, KUBOTA recognizes the need for considerationof the environment, especially the prevention of climate change, asan important theme that should always be borne in mind whencarrying out corporate activities. The following is a report on adiscussion among experts in corporate environmental activities,who offered valuable advice to the KUBOTA Group.Concerning the approach that KUBOTA should taketoward the 2020 target announced at the COP 15Sesaki: The COP 15 Conference was held in Copenhagen inDecember 2009, where the Japanese governmentannounced a highly ambitious target: to reduce Japan’sgreenhouse gas emissions by 25% by 2020. How shouldmanufacturers, industries, or Japanese companies at large,act in response to this announcement?Miki: I think the most important thing for Japanesecompanies is to demonstrate how they can best contribute toachieving this target through their technologies and products.How far each national government can commit to reducingCO2 emissions depends on the availability of technologiesthat contribute to CO2 reduction, such as photovoltaic andwind power generation. KUBOTA has continued efforts toachieve challenging targets. Thus, why don’t you take thegovernment’s target of a 25% reduction as your own ambitioustarget and explore how you can take up the challenge?Funahashi: Speaking of the announcement of the Japanesegovernment to target reducing greenhouse gas emissions by25% by 2020, we should not forget that this is not a final goal,but just a step toward a higher goal. I think that KUBOTA– Proposals to the KUBOTA Group –should be able to draw up a scenario that can show one wayin which you can meet this target. In this light, I think youremphasis on food, water, and the environment, as part ofyour core business, is just the right choice. Perhaps, the COP15 Conference offered a good chance for you to renew yourawareness of CSR and environmental issues.Miyazaki: If a company makes a commitment to preventclimate change on an individual level, the financial aspectshould be fully taken into consideration. It makes no sense ifsuccess in reducing CO2 emissions leads the company tobankruptcy. Therefore, in this age of environmental concern, Ithink you need a strategy that can turn the growing interest inthe environment into a business opportunity. Looking atKUBOTA’s product mix from this perspective, I am sure that,though the target of a 25% reduction is a tough one, it willbring you some sort of chance to achieve further growth.Promotion of corporate activities in a manner that cancontribute to the prevention of climate change andthat can help support developing countriesSesaki: While growing environmental concern can beconsidered a chance for business development andeconomic growth on one hand, we are also expected torespond to the request of developing countries for technicalsupport on the other. Considering this connection, let me askyou this: In what manner should KUBOTA expand itsbusiness into developing countries?Miki: When advancing into developing countries, it isimportant to consider what you can do in cooperation withlocal people. Developing countries hope to introduceKeisuke SesakiGeneral Manager,Environmental ProtectionDepartment,KUBOTA CorporationMasayuki YukutaGeneral Manager,CSR Planning Department,KUBOTA CorporationThe dialogue was held on March 3, 2010 at the head office (Hanshin Office) of KUBOTA Corporation.advanced technologies and have them take root in localindustries, not just to purchase equipment only. Therefore,when developing your business overseas, you should act andthink as if you were a local company. If you fail to do so,developing countries will think you are only interested inselling your products to them. My advice, therefore, is thatyou should transfer technologies to developing countries in amanner that will enable them to locally manufacture anddistribute products with less environmental impact. I am suredoing so will serve the interests of both KUBOTA anddeveloping countries.Funahashi: You can never extend meaningful support todeveloping countries only by transferring machinery to them.This is because they don’t know how to make the best use ofthe machinery provided. Thus, when selling machinery todeveloping countries, you also have to show them in whatmanner the machinery can be used to serve their interest. Inother words, you must be able to offer know-how whenselling products to developing countries. By offering bothproducts and the various possibilities behind them, you canhelp developing countries foster sustainability. If KUBOTA candraw up such a scenario on its own, then KUBOTA candifferentiate itself from competitors, I think.Miyazaki: In a broader sense, what has been said can bereduced to the creation of added value based on the principleof co-existence. Namely, though short-term returns cannot beignored, we should rather seek long-term returns, so that wecan achieve co-existence. In the case of KUBOTA, you canplay a leading role in introducing advanced agriculturaltechnologies to developing countries, for one thing. Bytraining agricultural personnel locally and introducingNobuyuki MiyazakiProfessor,International Christian UniversityProfessor Miyazaki currently serves as theVice Chairperson of the SustainableManagement Forum of Japan and theDirector of the Japan Corporate SocialAccounting and Reporting Association.Yasuki FunahashiCEO,Fuluhashi EnvironmentalInstitute Co., Ltd.Mr. Funahashi was a member of theIndustrial Structure Council of the Ministry ofEconomy, Trade and Industry (2008). He isnow working with many companies andadministrative agencies in the areas ofenvironmental management and CSR.Yutaka MikiChief Researcher,The Japan ResearchInstitute, Ltd.Mr. Miki specializes inconsulting for globalwarming and the field ofrenewable energy.environmentally friendly, high-performance and safeagricultural machinery to developing countries, you can makequite a meaningful contribution in terms of both agricultureand water, for which you will become highly appreciated bylocal people.Yukuta: So we should be able to support the self-help effortsof developing countries. This also means that we should be acompany rooted in the local community. The keywords thatoften appear in the remarks of the president of KUBOTA are“globalization” and “CSR.” Your advice provides us with veryimportant clues to deepen the understanding of the truemeaning of these keywords. I understand that what weshould bear in mind is to not have a short-term perspective,but a long-term one; not to act in haste, and, moreimportantly, to work in cooperation with local people.Miki: I think that if KUBOTA maintains such an attitude, youwill eventually help foster the ability of developing countries toreduce CO2 emissions on their own. And this is a moremeaningful achievement than simply selling high-performance,made-in-Japan products that emit less CO2 to developingcountries. If this positive attitude of KUBOTA takes root indeveloping countries, then local industries can achieve CO2reduction in their own way.Promotion of technologies to reduce CO2 emissionsfrom products in use and the importance ofinformation disclosureSesaki: Today, growing attention is paid to carbon footprints(CFP: the total amount of greenhouse gas emissions over thelife cycle of a product from manufacturing to disposal). DoSpecial Report 2 Contributions toward the Prevention of Climate ChangeThe KUBOTA Group places emphasison the reduction of CO 2 emissionsfrom its business sites.At the KUBOTA Group, we have been taking positive measures to reduce CO2emissions from our business sites, especially from our production sites. To bespecific, we have been striving for a reduction of energy consumption by settingup divisions responsible for efficient energy management and by introducingenergy efficient production equipment. However, against the backdrop ofgrowing concern over climate change, further efforts are called for regarding areduction of greenhouse gas emissions across society. At KUBOTA, we reducedCO2 emissions from our domestic production sites by about 24% in FY2009 fromthe FY1991 level. In FY2010, we also launched new measures across the entireKUBOTA Group, including overseas affiliates, to achieve the target of a 10%reduction in CO2 emissions by FY2013 from the FY2009 level. We give firstpriority to the reduction of CO2 emissions through our group-wide environmentalpreservation measures and expedite efforts to prevent climate change.KUBOTA’s CO2 reduction targetto be achieved by FY2013CO2 emissions CO2 emissions (KUBOTA production plants)CO2 emissions per unit of sales(kiloton-CO2)120076.7100080060040020051.548.3 49.0 46.4544 513 515 552 536Target52.0 51.346.8001991 2005 2006 2007 2008 2009 2010 2013 (FY)CO2 emissions per unit of sales=CO2 emissions/consolidated net sales(FY1991: Non-consolidated net sales)*For FY1991, CO2 emissions from KUBOTA production plants werecalculated.575478425 390 398 391 415 334(t-CO2/100 million yen)8051870605040302010CO2 reduction measures taken during FY2010Energy conservation by means Improved pointsof product improvementTo facilitate energy conservation,we improved yield rates andreduced processing steps byleaving the sockets of iron pipes(fittings) unprocessed.Model of a casting mold After the casting processOther energy conservation measuresAs a means to reduce energy consumption at business sites, we replaced fuelsused for burners to heat molten metal and improved the combustion efficiency ofmelting furnaces in the casting production process. We are also encouraging theintroduction of higher-efficiency equipment, as well as eco-friendly cars, such ashybrid vehicles, for company use.Eco-First CommitmentIn May 2010, KUBOTA made an “Eco-First Commitment” pledge tothe Minister of the Environment to carry out environmentalpreservation measures on a group-wide basis, and was officiallyapproved as an “Eco-First company” by the Japanese Ministry of theEnvironment. The “Eco-First Program” was introduced in April 2008by the Japanese Ministry of the Environment, which seeks toencourage the environmental preservation activities of leadingcompanies by requiring them to commit to the Minister of theEnvironment in undertaking voluntary environmental protectioninitiatives, such as climate changeprevention measures. We will check theprogress of our environmental efforts underthis program and report the results to theMinistry of the Environment, while alsodisplaying them on our website.

Special Report 2Contributions toward the Prevention ofKeisuke SesakiGeneral Manager,Environmental Protection Department,KUBOTA Corporationyou think that wecan add to ourcompetitiveness bydisclosing the amountof CO2 emissionsfrom our products inuse in developingcountries as well?Miki: In the case ofagricultural machinery,carbon footprints arealmost equal to theenergy consumptionof the product inuse. Accordingly, disclosure of carbon footprints has merit forusers, and helps to enhance your competitiveness, as well. Ialso think it will be highly welcoming for developing countriesif you work with them in building up the ability to gaincompetitiveness in this field. I think it is good for you todisclose the carbon footprint of your products, because bydoing so, you can offer more substantial support todeveloping countries.Funahashi: In the case of carbon footprints, every singlegrain of rice, tomato, or radish that is produced by use of atractor can be included in the calculation of the CO2emissions. If you can prove that KUBOTA’s agriculturalmachinery emits less CO2 per radish, each of your innovativetechnologies will have greater appeal when seen from abroader perspective. I think the good point concerning carbonfootprints is that fuel consumption and the amount of CO2emissions are calculated on such an all-inclusive basis.Miyazaki: In the future, agricultural and constructionmachinery will employ hybrid technology, which will lead to adrastic reduction in the amount of CO2 emissions of productsin use. It is regrettable that few companies incorporate suchimportant information in their corporate environmentalreports.Funahashi: KUBOTA should disclose information about itssuccessful implementation of environmental considerationand CSR efforts in developing countries, in a manner thatappeals to the public. By doing so, KUBOTA can enjoy agreater reputation and will attract an increasing number ofsupporters. It does no good to say that you are too modest toboast about your success—too much modesty is no longer avirtue in today’s society. You should widely communicate tothe public what you are successfully doing. At KUBOTA,dedicated technical development efforts are constantlyunderway, but such dedication is taken for granted internally,and KUBOTA employees are not aware of the value of suchefforts.Miyazaki: I examined the environmental reports of the Nikkei225 companies and found that most of these companies didnot disclose information concerning the environmentalimpacts given by their products in use. Manufacturers canmake a meaningful contribution to society by reducing theenvironmental impacts of their products in use. I think around90% of KUBOTA’s agricultural and construction machineryemits CO2 while in use, but it is very disadvantageous forKUBOTA not to disclose this information. KUBOTA canenhance its competitiveness by emphasizing that KUBOTA’sproducts emit less CO2 while in use. If KUBOTA can leadother companies in disclosing this information, I am sure youcan make a significant contribution to the good of society inyour own unique way.Social contribution through corporate activities: Whatcan corporate activities do to conserve biodiversity?Miyazaki: I think KUBOTA’s corporate activities are deeplyassociated with the national security of Japan, in a broadsense. Japan is faced with extremely low food and energyself-sufficiency rates, as well as a serious water problem. Inthis light, KUBOTAoccupies a veryimportant position inJapan.Yukuta: Our presidentoften says that food,water, and theenvironment are themost important issuesfacing the worldtoday, and now theMasayuki Yukutatime has come forGeneral Manager,KUBOTA toCSR Planning Department,KUBOTA Corporationdemonstrate itscompetence to the fullest extent, to prove that our proprietarytechnologies best serve the needs of today’s society and thatour corporate activities can directly contribute to thebetterment of society. This view is shared by all of us, and wetake pride in KUBOTA’s ability to do so.Miyazaki: Food and water issues are very importantbecause they expose us to especially huge risks. They havegreat importance, aside from their economic impacts.Sesaki: On the other hand, the environmental preservationactivities that we are carrying out to reduce environmentalimpacts will eventually lead to the conservation ofbiodiversity, we hope. At present, these activities are sort ofundertaken as philanthropic activities, separate from our corebusiness. Thus, I would like to seek your advice as to how wecan contribute to the conservation of biodiversity through ourcorporate activities.Miki: It is true that the conservation of biodiversity is a taskthat is most difficult to accomplish for any company. However,in the case of KUBOTA, you can address this task in theviewpoint of how your products or technologies cancontribute to conserving biodiversity. If you are too obsessedwith achieving “biodiversity” and have to force yourself totackle the task, your activities cannot be sustainable.Miyazaki: By enhancingagricultural productivity,we can eventually achievethe preservation ofnature on a globalbasis. Additionally, byincreasing the farmlandthat can be used for aprolonged period oftime, we can contributeto maintaining the globalenvironment andconserving biodiversity.Therefore, inmanufacturing agricultural machinery, KUBOTA should beaware that your agricultural machinery helps to enhanceagricultural productivity, which eventually results in globalenvironmental preservation.Miki: That is a very interesting view.Funahashi: I feel that KUBOTA should be more focused onthe issue of biodiversity than any other company. This isbecause most of KUBOTA’s corporate activities, such asoffering machinery to grow crops, are connected with natureand therefore directly affect biodiversity. Thus, KUBOTAshould look squarely at the direct impacts of its corporateactivities on biodiversity and assess such impacts honestly,without any evasiveness. I think this is very important.Expectations for the KUBOTA Group as a companythat can cater to the needs of societyFunahashi: Your e-Project (see p.31) is a very meaningfulattempt. I encourage you to upgrade this project by two,three, or more levels in a manner that can create an upwardspiral of positiveinfluence. Forexample, Japan isseriously affectedby the currentunemploymentproblem. I hopeyour e-Project willbe helpful in solvingthis problem bygenerating jobopportunities. In Yasuki Funahashiaddition, if KUBOTAis to remain aNobuyuki MiyazakiProfessor,International Christian UniversityCEO,Fuluhashi Environmental Institute Co., Ltd.desirable company from a global point of view, you shouldaddress the issue of biodiversity in the most serious mannerand explore how you can implement your business activitiesin accordance with the laws of nature. At KUBOTA, allcorporate activities are connected to the environment, CSR,and social contribution. Thus, what you should do is create ascenario that allows you to declare with confidence thatKUBOTA is a company with such value.Miki: Even if the amount of CO2 emissions from KUBOTAincreases, users of KUBOTA’s products can reduce CO2emissions by 50 or25%. If this fact isknown publicly, youcan convince societythat the amount ofCO2 emissionsreduces as a whole. Ifyou take pride incontinuing tomanufacture productsthat contribute to thereduction of Yutaka MikiChief Researcher,greenhouse gas The Japan Research Institute, Ltd.emissions, youshould make efforts to convince the public, moreenthusiastically, that the reduction of CO2 emissions fromKUBOTA’s users more than offsets the increase of the CO2emissions from KUBOTA.Miyazaki: KUBOTA invests a considerable portion of its profitin R&D and directs most of its R&D efforts to energyconservation and the reduction of environmental impactsfrom products in use. In this light, I think it is yourresponsibility, or accountability, to make public how far youhave succeeded in reducing environmental impacts fromyour products in use. Without fully disclosing suchinformation, you cannot convince investors of the significanceof investing such a huge amount of money for this purpose.By presenting the results of your efforts objectively innumerical terms, KUBOTA can take an additional stepforward.Sesaki: Today, we could learn a lot of things from differentperspectives. Thank you very much for your valuable advice.Special Report 2 Contributions toward the Prevention of Climate Change

The Fundamental Principlesof KUBOTA’s CSR ManagementFundamental Ideas on CSR ManagementRaising CSR Awareness among EmployeesAt the KUBOTA Group, we are performing management activities in a manner meant to heightenthe overall value of the company, while bringing satisfaction to our stakeholders and maintaining abalance among the company’s economic, social, and environmental value. In so doing, we aim toput into practice our management principle to “contribute to the development of society and thepreservation of the earth’s environment through our products, technologies, and services thatprovide the foundation for society and for affluent lifestyles.”Important points concerning the implementationof CSR managementTop management should clearly indicate their stancein regard to CSR management.A “system” used to implement CSR managementshould be integrated into the company’s management.For more detailed information about the mechanisms of compliance,corporate governance and internal control system in place at KUBOTA,please visit our website at: Ensuring thorough “compliance”We ensure the strict observance of laws, regulations, and corporate ethics, which underlies all of our corporate activities (e.g.,educational programs implemented by relevant departments in charge and internal reporting systems). Establishing “corporate governance”We objectively evaluate and check the decision-making process and contents concerning top management policies andmanagement issues (e.g., the Board of Corporate Auditors, Board of Directors, Board of Executive Officers, ManagementCommittee, Investment Council, and various strategy and other committees). Introducing and strengthening an “internal control system”We establish internal rules, carry out our duties in compliance with such rules, and check whether our corporate activities areperformed in a righteous manner according to these rules (e.g., development of internal rules/regulations and audits by relevantdepartments in charge).The service of external lawyers was introducedas new points of contact in KUBOTA’s internalreporting system.At KUBOTA, thorough compliance with rules and corporate ethics is ensured bymeans of an internal reporting system called the “KUBOTA Hot Line,” which isdesigned to encourage employees to report any illegal or unethical conduct bymembers of the KUBOTA Group that may come to their knowledge. In January2010, we introduced a service of external lawyers as new points of contact for theKUBOTA Hot Line to facilitate early detection and prevention of undesirableconduct.Instruction Report Instruction ReportConfirmationand investigationGeneral Managerof CSR PlanningDepartmentPresident, Corporate Auditors, General Managerof CSR Planning & Coordination HeadquartersCooperationExternal lawyers,etc.Reply Report Reply Report Reply ReportInformantCooperationConfirmationand investigationGeneral Managerof Human RightsAdvancementDepartmentRegional residentsRegional societySuppliersWe surveyed the level of compliance awarenessamong employees.In July 2009, we conducted a survey to measure the level of complianceawareness among 500 randomly selected KUBOTA employees in the samemanner as we did in 2003, and found that employee awareness improvedsignificantly since the last survey. We will continue our efforts to ensure fullcompliance with all applicable laws and regulations through variousawareness-raising programs, based on the candid comments that many of theemployees surveyedsubmitted to us.Various kinds of bookletsare available to offereasy-to-understandexplanations concerninghow a company and itsemployees should conductthemselves, as well aspoints to note regardingcompliance issues.NPOComplianceEconomicValueEmployeesAchieveCorporatePrinciplesSocialValueEnvironmentalValueCorporate governanceInternal control systemGovernments&control authoritiesCustomersFinancialorganizationsShareholdersand investorsEach and every employee should be involved in the implementation of CSR management. At KUBOTA, we arecarrying out various kinds of educational activities to ensure that all our employees are constantly aware of theimportance of CSR.We implemented a program to encourageemployees throughout KUBOTA to read our CSRreport.If we are to successfully implement CSR management, it is necessaryto ensure that each and every employee recognizes what societyexpects of us and what attitude the KUBOTA Group should take.Between July and September 2009, departments and business sitesacross KUBOTA implemented a program to encourage employees toread KUBOTA’s CSR report and conducted aquestionnaire survey on the report, which was joined by 5,872 employees in total.Excerpt from the questionnaire surveyconcerning the CSR Report 2009“Is the CSR Report 2009 easy tounderstand?”Very easy to understand Neither easy nor hardEasy to understand Hard to understandThe internal questionnaire survey concerning the CSR Reportincludes the question: “What do you think is most important for theKUBOTA Group?” Many of the answers to this question, not to mentionKUBOTA’s management principles and the KUBOTA Group slogan,correspond with the messages of the public who chose KUBOTA asthe winner of the Gold Prize.We organized a training session to develop ideasfor social contribution activities through ourcorporate activities.Between July 2009 and March 2010, weimplemented a training session throughoutKUBOTA’s business sites to “consider howwe can contribute to society through ourcorporate activities,” mainly for thoseemployees who had completed a course tolearn about CSR in the previous year. Thissession was attended by a total of 644employees, who actively joined in discussions and shared ideas aboutsocial contribution activities to be carried out on a department- orcompany-wide basis.Ideas presented during the training session to“consider how we can contribute to society throughour corporate activities” (in part)To make more effective use of our company cafeteria (e.g., to buy vegetables thatare not sellable due to less-than-perfect appearance, or to use leftover meals toproduce fertilizer or grow vegetables to offer to local residents for free)To organize a “Food Caravan” to teach children the importance of eating right orto send agricultural specialists to provide guidance on agricultural activities oroffer KUBOTA’s agricultural machinery for rentTo invite people visiting roadside stations to enjoy hands-on agricultural activities,by offering agricultural machinery for rent and providing guidance on agriculturalactivitiesTo develop a remotely controllable tractor to cater to the needs of the aging populationTo build a nationwide system that can offer KUBOTA’s septic tanks, pumps, andconstruction machinery for public use during times of disasterTo develop iron pipes that generate power using water flow, or an vendingmachine that generates electricity by means of wind power or through vibrationscaused by those walking nearbyTo display the amount of CO2 reduced and the amount of power generated byphotovoltaic systems on electric bulletin boards installed at factoriesTo encourage the recycling of resources at our factories (e.g., to use heat fromrooftops or cupolas to generate power or to circulate water within the factories forcooling purposes)KUBOTA was awarded the Gold Prize at the“Third CSR Plus Awards 2009,” as chosen by thepublic in an Internet poll.In November 2009, KUBOTA was awarded the Gold Prize in the“Company Recommended by the Local Community” category of theNippon Foundation’s CSR Plus Awards, by way of a public Internetpoll. The awarding of this prize indicates that KUBOTA’s determinationand efforts to contribute to societyin the areas of food, water, and theenvironment through our manufacturingactivities are highly appreciated bythe public. We also receivedmessages from 1,376 individualswho expressed their expectationsfor the role of KUBOTA.At the KUBOTA Group, we recognize it as materially important to contribute to society in the areas of food,water, and the environment through the group’s manufacturing activities and technologies.Excerpt from the internal questionnaire survey concerning theCSR Report 2009“What do you think is most important for the KUBOTA Group?”(Multiple answers allowed.)RankAnswer No. of answers %Contribution to society in the areasof food, water, and the environmentImprovement of manufacturing technologiesDevelopment of environmentally friendly productsEnhancement of R&D capabilitiesThe top four answers are shown.Keywords seen in “messages to the company” submitted bythe public who voted for KUBOTA in the Internet poll (multipleanswers allowed.)RankAnswer No. of answers %Support of food and agricultural issuesThe environmentWaterManufacturing, technologiesThe top four answers are shown.Messages submitted by the public who voted forKUBOTA in the Internet poll (in part)I hope KUBOTA will preserve paddy fields, Japan’s traditional countrysidelandscape. (Male, 50s, self-employed)Please teach children the importance of food and the significance of agriculture. I lookforward to your contribution to a better tomorrow. (Male, 30s, company employee)I am sure that in the future, the issues of agriculture and food will largely affectJapan and the world. I hope KUBOTA will achieve further development and makea greater contribution to these issues. (Female, 30s, housewife)About 70% of our body is water. Water is essential. Additionally, living is abouteating. I think KUBOTA protects what matters most important to us. (Female, 30s,housewife)Water is the source of all living things, and food sustains our lives. You are alsoworking for environmental preservation. I think KUBOTA is undertaking reallygreat projects. (Male, 60s, unemployed)While attention is directed to the reduction of CO2 emissions only, I think food andwater will become a more serious problem in the future. (Male, 20s, companyemployee)If companies support activities for the good of society, I think we can accept theproblems of low food self-sufficiency rates and environmental deterioration as ourown problems, and this will change our attitude. (Female, 40s, companyemployee)The Fundamental Principlesof KUBOTA’s CSR ManagementFundamental Ideas on CSR Management/Raising CSR Awareness among Employees

Economic ReportKUBOTA Group ProfileOutline of KUBOTA CorporationCorporate name:KUBOTA CORPORATIONHead office address:1-2-47 Shikitsu-higashi, Naniwa-ku, Osaka, JapanFounded:February 1890Established:December 1930Capital:¥84,070,280,304*Sales of the KUBOTA Group during FY2010 declined fromthe previous year to 930.6 billion yen.Domestic sales totaled 501.7 billion yen. In the Farm &Industrial Machinery segment, sales of tractors and farmmachinery increased, but the segment as a whole posteda revenue decline, due to a decrease in the sales ofengines and construction machinery. The Water &Environment System segment also showed a decline inrevenue, due to a decrease in the sales of pipe-relatedproducts, such as ductile iron pipes and plastic pipes, anda fall in revenue from environment-related products.Overseas sales declined from the previous fiscal year to429 billion yen. In the Farm & Industrial Machinerysegment, farm machinery and other products achievedsolid sales, especially in the Asian market, while sales oftractors, engines, and construction machinery dropped in(as of April 1, 2010)KUBOTA Group’s Performance Report for FY2010*Total number of shares issued:1,285,919,180*Number of shareholders:48,714*Number of employees:9,379 (full-time)*Total number of employees in the KUBOTA Group:24,778 (full-time)** as of March 31, 2010* FY2010 refers to the year ended March 31, 2010.Europe and the U.S. Accordingly, the segment posted asharp decline in revenue as a whole. On the other hand,the Water & Environment System segment achieved adrastic increase in revenue, backed by sharp growth inductile iron pipes and pumps. The Social Infrastructuresegment reported a drop in sales, especially in theindustrial castings, and the Other segment, as well,showed a decline in revenue. The ratio of overseas sales tototal sales declined from the previous year to 46.1%.Operating income decreased from the previous year to69.7 billion yen. Though a decrease in foreign exchangeslosses and valuation loss on other investments led to theimprovement of other revenue (expenses), net incomeattributable to Kubota Corporation dropped from theprevious year to 42.3 billion yen.KUBOTA Group domestic plants, offices and main affiliatesDomestic plants and officesMain domestic affiliatesKubota domestic agricultural machinery groupdealers 28Kubota Kenki Japan CorporationKubota Agri East Japan CorporationKubota Agri West Japan CorporationChugoku Regional Office(Hiroshima)Yamaguchi Sales Office(Shunan, Yamaguchi Prefecture)Kyusyu Regional Office(Fukuoka)Kumamoto Sales Office(Kumamoto)Minami-Kyusyu Sales Office(Kagoshima)Okinawa Sales Office(Naha)Overseas plants and officesMain overseas affiliatesNippon Plastic Industry Co., Ltd.(Komaki, Aichi Prefecture)Shiga Plant(Konan, Shiga Prefecture)Hirakata Plant(Hirakata, Osaka Prefecture)Head OfficeOkajima Business Center(Osaka)Hanshin OfficeFarm & Industrial MachineryNishi-Nihon OfficeHanshin Plant(Amagasaki, Hyogo Prefecture)Shikoku Regional Office(Takamatsu)Wakayama Sales Office(Wakayama Prefecture)Kyuhoji Business Center(Yao, Osaka Prefecture)Chubu Regional Office(Nagoya)Sakai PlantSakai Rinkai Plant(Sakai, Osaka Prefecture)Kubota Farm & Industrial Machinery Service Ltd.(Sakai, Osaka Prefecture)KUBOTA Group overseas plants, offices and main affiliatesKubota (U.K.) Ltd.Sales of tractors, construction machinery,engines, mowers and partsKubota Membrane Europe Ltd.(Sales of submerged membrane units in Europe)Kubota Europe S.A.S.Sales of tractors, construction machinery,engines, mowers and parts)Kubota (Deutschland) GmbH(Sales of tractors, engines, mowers and parts)Kubota Baumaschinen GmbH(Manufacturing and sales of construction machinery and parts)Tata Metaliks Kubota Pipes Ltd.Manufacturing and sales of ductile iron pipes,non-standard pipes and accessoriesKubota Agricultural Machinery (Suzhou) Co., Ltd.Manufacturing, sales and after-sales serviceof combine harvesters, tractors and other agriculturalmachinery and their componentsJiangsu Biaoxin Kubota Industrial Co., Ltd.(Manufacturing and sales of cast steel products)Kubota Construction Machinery (Shanghai) Co., Ltd.(Sales of construction machinery and parts)Kubota Engine (Shanghai) Co., Ltd.(Sales and after-sales service of engines and parts)Kubota Korea Co., Ltd.Sales of tractors, combine harvesters,rice transplanters and construction machineryHokkaido Regional Office(Sapporo)Tohoku Regional Office (Sendai)Natori Sales Office (Natori, Miyagi Prefecture)Farm & Industrial Machinery Higashi-Nihon Office (Saitama)Utsunomiya Plant (Utsunomiya)Tsukuba Plant (Tsukubamirai, Ibaraki Prefecture)Ryugasaki Plant (Ryugasaki, Ibaraki Prefecture)Keiyo Plant (Funabashi/Ichikawa, Chiba Prefecture)Tokyo Head Office (Chuo-ku, Tokyo)Kubota Environmental Service Co., Ltd. (Taito-ku, Tokyo)Kubota Air Conditioner, Ltd. (Chuo-ku, Tokyo)Yokohama Branch (Yokohama)Kubota Credit Co., Ltd.Kubota-C.I. Co., Ltd.Kubota Construction Co., Ltd.Kubota Matsushitadenko Exterior Works, Ltd.(Osaka)Kubota Tractor CorporationSales of tractors, construction machinery,mowers and parts Kubota Credit Corporation U.S.A.(Retail financing of sales products)Kubota Membrane U.S.A. Corporation(Sales of submerged membrane units in the U.S.A.)Kubota Engine America CorporationSales of engines, generators,and parts & accessoriesEconomic Report KUBOTA Group Profile(¥ billions)Revenues trends (by reporting segment) Domestic and overseas revenues trends Operating income and net income trendsFarm & IndustrialMachinery SegmentSocial Infrastructure Segment (FY) (FY)Water & EnvironmentSystem SegmentOther Segment(¥ billions) Ratio of overseas revenues to total revenuesDomesticOverseas(¥ billions)Operating incomeNet income attributable to Kubota Corporation (FY)Kubota España S.A.(Sales of tractors, mowers and parts)Dubai BranchBeijing OfficeKubota Agricultural Machinery India Pvt. Ltd.Sales of tractors, combine harvesters,rice transplanters and implementsMalaysia BranchSime Kubota Sdn. Bhd.(Sales of tillers, engines, tractors and parts)P.T. Kubota IndonesiaManufacturing and sales of small-scale diesel engines and parts,sales of ride-on cultivatorsSingapore BranchP.T. Metec SemarangManufacturing of vending machinesand their components on a contract basisKubota Vietnam Co., Ltd.Manufacturing and sales of tractors,combine harvesters and their implementsKubota Agro-Industrial Machinery Philippines, Inc.(Sales of engines, tractors, and tillers)The Siam Kubota Industry Co., Ltd.Manufacturing and sales of small-scale diesel engines and tillers, and sales oftractors, other agricultural machinery, and construction machinerySiam Kubota Tractor Co., Ltd.(Manufacturing of tractors and combine harvesters)Siam Kubota Leasing Co., Ltd.(Retail financing for tractor and combine harvester customers in Thailand)Siam Kubota Metal Technology Co., Ltd.(Manufacturing of castings for engines and tractors)Kubota Manufacturing of America CorporationDevelopment and manufacturing of tractor implements andmowers and small-scale tractorsKubota Industrial Equipment CorporationManufacturing of tractor implements, mountingof implements on tractors and assembly of tractorsKubota Metal Corporation(Manufacturing and sales of cast steel products)Kubota Tractor Australia Ply Ltd.Sales of tractors, construction machinery,engines, mowers and partsShin Taiwan Agricultural Machinery Co., Ltd.Sales of tractors, farm machinery, mowers,construction machinery, and agriculture-related productsKubota Canada Ltd.Sales of tractors, construction machinery, engines,mowers and parts

Economic Report (Special Topics)The KUBOTA Group will remain dedicated to contributing to society in the three areas that are critical tothe development of a sustainable society: food, water, and the environment.This section introduces new products and technologies that are attracting attention as possible solutionsto the problems that threaten today’s society in each of these areas.FoodWaterEnvironmentKUBOTA’s agricultural machinery helpsAsian countries promote agriculturalmechanization.KUBOTA developed a “hybrid standbypump” to mitigate damage from “guerilla”rain.Changing the fuel of sewage sludgeincinerators results in a reduction of bothCO2 emissions and treatment costs.In recent years, the need for agricultural machinery is rapidlygrowing in Asia.In Thailand, where the agricultural market is expandingdrastically, there were growing needs from rice farmers fortractors with greater water resistance and durability, whilesmall-scale farmers required more reasonably priced tractors. Inresponse to these needs, KUBOTA developed new tractormodels, L3008 and L3608, which are manufactured in Thailandwith locally procured parts. With enhanced user-friendliness,these models enjoy great popularity among local farmers andhelp in the promotion of agricultural mechanization in Thailand.In March 2010, KUBOTA also began manufacturing in Thailandconventional-type combine harvesters. KUBOTA plans toincrease local production capacity to 13,000 units a year andestablish a system to supply its products to Thailand and otherAsian countries in the future.In China, on the other hand, the national government isencouraging agricultural mechanization by offering subsidies topurchase agricultural machinery under the Laws of the People’sRepublic of China on Promotion of Agricultural Mechanization.In the Chinese market, which is undergoing rapid development,KUBOTA has been steadily increasing its share with its ricetransplanters and combine harvesters, which are renowned foroutstanding durability and substantial after-sale service. Withthe beginning of the production of tractors in China in 2010,KUBOTA is positioned to better satisfy the needs of the localgrowth market.The KUBOTA Group will take on greater responsibility for theenhancement of agricultural productivity in Asia. Aware of thisresponsibility, the KUBOTA Group is determined to continuededicated efforts to develop a substantial range ofhigh-performance products to contribute to the needs ofagricultural communities worldwide.Recently, Japanese urban areas are repeatedly hit by local, suddenheavy rain, known as guerilla rain, and it is urgently required thatappropriate measures be taken promptly to discharge rainwaterfrom low areas for flooding prevention. While some localgovernments are trying to address this problem by constructing anunderground pump station, the Pumps Division of KUBOTA hascatered to this need by developing a “hybrid standby pump” that candischarge water from a lower level than conventional standbypumps.A “standby” pump can be activated in advance regardless of waterlevels. Because of this capability, a standby pump can beginpumping water simultaneously with the rise of the water level, unlikeconventional pumps, which require several minutes before theystart pumping water after being activated.KUBOTA’s newly developed hybrid standby pump combines aconventional air-water discharge switching system, which ensuressteady operation control, with an air-water mixing discharge system,which allows users to pump water from lower level. UsingKUBOTA’s unique method, thispump boasts higher reliability,with its ability to cater to theneed of pumping water fromlower level.The pump’s durability has alsobeen improved drastically bythe employment of ceramicbearings supported by specialrubber, which do not requirewater supply. KUBOTA’s hybridstandby pump is expected tofully prove its effectiveness forpreventing damage by “guerilla”rain, which is said to take placeeven more frequently.KUBOTA’s Water & Sewage Engineering Department completed therenovation of a sewage sludge incinerator to achieve a reduction inboth CO2 emissions and operation costs by changing fuel from oil tonatural gas.The renovation was implemented at the second incinerator of theChubu Sewage Treatment Center in the city of Hamamatsu,Shizuoka Prefecture, which had used oil to incinerate sludge forabout three years since 2005, when it was first delivered by KUBOTA.Against the backdrop of the rise of oil prices, however, the pressureon the municipal government to reduce treatment costs mounted.Accordingly, they contacted KUBOTA, the developer of theincinerator, to consider the possibility of switching the fuel to a morestably-priced natural gas.In Japan, the task of changing the fuel of a sewage sludge incineratorwhile in operation had never been undertaken before. However,engineers from both the Hamamatsu municipal government andKUBOTA, as a result of repeated discussions, determined that thetechnical difficulties could be overcome and that CO2 emissions couldalso be reduced drastically by using natural gas instead of oil.The renovation began in January 2009, and the renovated incineratorbegan operation in August 2009. The Hamamatsu municipalgovernment formulated the “Action Plan of the Hamamatsu MunicipalGovernment to Prevent Global Warming” in 2008, and has sincebeen working to achieve the target of reducing emissions ofgreenhouse gases by 6% from the FY2006 level by FY2011. Kubotaestimates the renovation of the incinerator can contribute to a 25%reduction of CO2 emissions from levels before the renovation. Thus,the renovated incinerator is expected to help the city in achieving thetarget of its action plan and in reducing the treatment costs as well.This “circulating fluidized bed incinerator” is highly evaluated for beingsuperior to general sewage sludge incinerators in terms of energyefficiency and size. This is also an environmentally friendly facility,where incineration ash is recycled into cement-making material.The second incinerator of the Chubu Sewage Treatment Center in Hamamatsu,Shizuoka PrefectureSludgeCake feederMain burnerCombustion airGun burnerRiserHot cycloneDowncomerIncineration exhaust gas(including incineration ash)Loop sealEconomic ReportSpecial Topics (Food/Water/Environment)Distribution pipeDF-VHM hybrid standby pumpHu-BOMBA MAXVoiceKUBOTA’s prompt and enthusiastic attitude wasbehind the success of this ambitious project, whichis unprecedented in Japan.KUBOTA’s dedication and technical excellencesupported the spirit of “Yaramaika!”L3608 tractor, produced in ThailandDC-95 combine harvester,produced in ThailandPRO-588-I combine harvester,produced in China#AirDry operation Air-water mixing discharge Water discharge#AirOperation mode beforewater discharge begins#AirMasaki SaitoWater and Sewage DepartmentCity of HamamatsuThe renovation of the incinerator wasan ambitious project that had neverbeen undertaken in Japan before, andat the beginning, opposition wasraised from many people who fearedthat the incinerator might stopoperation during the renovation.However, thanks to the quick andenthusiastic response of KUBOTA toour request, we could convincerelevant parties of the necessity of therenovation.Motoi NasuWater and Sewage DepartmentCity of HamamatsuIn Hamamatsu, we have an oldsaying, “Yaramaika,” which means:“Let us be positive toward everythingand try anyway!” With their dedicationand technical excellence, KUBOTAsupported our belief that noimprovement could be achievedwithout introducing new technologies.

Social ReportReportingcorporateactivities byimplementingthe PDCA cycleSummary of the Fiscal 2010 Social Report,Priority Issues for the Next Fiscal Year and Medium-Term GoalsKUBOTA’s response to the asbestos issueKUBOTA is sincere in its acceptance of the grave fact that anumber of our employees and local residents around the oldKanzaki plant have contracted asbestos-related diseases, andwe are continuing to work with good intentions towards thedirect resolution of this problem from the standpoint ofclarifying our social responsibility as a corporate entity thatfor years manufactured products containing asbestos.Relief payments were made to 191 individuals up to March 31, 2010,pursuant to the “Rules for Relief Payments to Persons withAsbestos-related Diseases and Their Families around the Old KanzakiPlant.”The total number of KUBOTA employees (including retirees) withasbestos-related diseases, up to March 31, 2010, was 170 (144 deaths,and 26 currently under medical care).We offered financial support to clinical and basic research projectsconducted by the Hyogo College of Medicine and the Osaka MedicalCenter for Cancer and Cardiovascular Diseases.Charterfor ActionSignificant topicsWinningCustomerSatisfactionConductingCorporateActivities Basedon Compliancewith LegalRegulations andEthical PrinciplesRespectingHuman RightsCreating a Safeand Vibrant WorkEnvironmentAchievingSymbiosiswith Internationaland Local SocietiesFulfillingResponsibilitiesfor ImprovingManagementTransparencyand AccountabilityMain focusof activity Priority issues for FY2010 Activity in FY2010Communicationwith customersProduct safetyand superiorqualityThe ensuringof full legalcompliancePromotionof human rightsawareness-raisingEnsuringthat health andsafety managementis fully in placeCreationof a vibrantwork environmentContributing tolocal and internationalsocieties andenhancing social andcultural activitiesIR activities andthe provisionof corporate information Introducing a service call response support system to alldomestic agricultural machinery group dealers Enhancing the level of prior inspection and maintenanceservices in the domestic agricultural machinery sector Increasing the coverage of quality audits among overseasaffiliates and conducting on-the-spot audits Providing continued education on quality control andproduct safety Continuing to implement measures such as audits to ensurefull compliance with the Anti-Monopoly Act by divisions doingbusiness with the public sector Establishing measures to ensure full legal compliance bydivisions doing business with the private sector and by salescompanies (e.g. to prevent unfair trade practices) Establishing measures to ensure full compliance withoverseas competition laws Conducting on-the-spot inspections on import/exportcontrol and providing guidance at overseas affiliates Implementing in-depth education and giving instruction toensure full compliance with the Construction Business Lawby KUBOTA and its domestic affiliates Further enhancing the ability of affiliates to manageintellectual property risks Strengthening the overseas information security systems Expanding group-wide human rights awareness-raising Promoting specifically targeted accident preventionmeasures Enhancing occupational safety and health managementstandards at domestic affiliates Establishing risk control systems for domestic agricultural andconstruction machinery sales companies Establishing risk control systems for overseas affiliates Promoting “Health KUBOTA 21” activities Involvement in mental health care Promoting diversitymanagement Establishing an organization topromote diversity managementImplementing training sessions ondiversityPromoting personnel exchangesamong female employees Promoting social and cultural activities on a company-widebasis Promoting activities to serve the realities of localcommunities Supporting overseas affiliates in promoting social andcultural activities Conducting appropriate IR activities in a timely manner tobetter cope with the harsh business environment Promoting IR activities focusing on the vision of thepresident and on management policy Organizing accessible, friendly shareholders’ meetings Developing a corporate communication system Introducing a service call response support system to most of the domestic agriculturalmachinery group dealers Enhancing the ability to communicate with customers by sharing tools for inspection/maintenanceservices and communications on a group-wide basis Conducting on-the-spot quality audits at overseas manufacturing and sales companies Providing education on quality control and product safety for relevant departments Upgrading green procurement efforts by revising the guidelines, etc.(Please see the environmental report on the web.) Continuing to implement measures such as audits to ensure full compliance with theAnti-Monopoly Act by divisions doing business with the public sector Implementing measures (such as hearings) to ensure the full compliance of sales companiesand divisions doing business with the private sector to prevent fraudulent trading Implementing follow-up audits at purchasing divisions Offering prior consultations to ensure full compliance with overseas competition laws Conducting on-the-spot inspections of export control at 10 overseas affiliates in North America,Asia, and Europe Conducting audits and providing education, guidance, and support to ensure full compliancewith the Construction Business Law by KUBOTA and domestic affiliates Taking measures to prevent KUBOTA and domestic affiliates from infringing on theintellectual property rights of other companies Introducing an information security policy applicable to both domestic and overseas affiliatesof the KUBOTA Group Ensuring employee participation in training sessions concerning human rights(one time/person/year) Inspecting human rights awareness-raising measures taken at domestic and overseasbusiness bases and affiliates Promoting specifically targeted accident prevention measures Implementing safety and health audits (at domestic/overseas affiliates and domesticagricultural and construction machinery sales companies) Promoting a health promotion program (Health KUBOTA 21) Involvement in mental health care Establishing the Diversity Promotion Office in the Personnel Department on April 1, 2009 Implementing training sessions at business sites, training sessions targeting each job class,and joint training sessions with the Human Rights Advancement Department Setting up the K-Wing (an organization to assist female employees in developing theircareers and promoting personnel exchanges among them) and launching its activities Promoting the e-Project in a multifaceted manner and developing it overseas Continuing activities to contribute to local communities through KUBOTA’s rugby team,KUBOTA Spears Offering support to Kubota Canada Ltd. in implementing its 4-H program Organizing a number of IR meetings to strengthen IR information disclosure Promoting IR activities focusing on the vision of the president on management policy Organizing an open shareholders’ meeting (attended by more participants than anyother preceding meeting) Establishing a liaison meeting involving all personnel responsible for information disclosureacross KUBOTA Renewing the company’s official website to enhance convenience and offer more substantialinformation Implementing dialogue for the prevention of global warmingSelfevaluationPage Priority issues for the next fiscal year (FY2011) Medium-term goals25262728293031-3334 Establishing and operating a domestic agricultural machinery customer center Conducting questionnaire surveys with users on a continuous basis Continuously increasing the coverage of quality audits among overseas affiliates andconducting on-the-spot audits Providing continued education on quality control and product safety Developing green procurement into CSR procurement Building and developing a prior consultation system mainly for divisions doingbusiness with the private sector Expanding and continuing to implement compliance measures, such as hearings, forsales companies Developing a system for preventing international cartel formation Developing checklists for export control and internal rules for the 10 overseas affiliates,and implementing them on a trial basis Ensuring that KUBOTA and domestic affiliates are in fuller compliance with theConstruction Business Law Offering guidance in intellectual property risk management to overseas affiliates thatconduct R&D Promoting information security measures for overseas affiliates Expanding group-wide human rights awareness-raising Reducing the number of serious occupational accidents to zero Strengthening efforts focusing on building a safety system that can flexibly cope withchanging situations Strengthening measures for risk elimination Promoting measures to maintain and further improve health, both physical and mental Offering support to female employees in developing their careers Organizing training sessions and information exchange meetings through K-Wing Promoting activities to contribute to society centering on the areas speciallyemphasized by KUBOTA (food, water, and the environment), with the e-Project at thecore Encouraging the disclosure of IR information reflecting changes in the businessenvironment and related trends Organizing shareholders’ meetings in an easy-to-understand manner Establishing the Corporate Communication Department Providing timely information in a manner satisfactory to various stakeholders Beginning the official operation of the domestic agricultural machinerycustomer center and expanding its functions Enhancing prior inspection and maintenance services to satisfy customerneeds Strengthening quality management systems to better respond to theglobalization of business Ensuring full compliance with safety laws and regulations Preparing more detailed product safety checklists Implementing CSR more fully across the entire supply chain Establishing an organizational system that allows effective and constructiveoperation of measures to ensure compliance with the Anti-Monopoly Act, whileflexibly coping with amendments in laws or changes in the social risk environment,if any Implementing a security trade control system and internal rules in overseas affiliates thatare to be export-controlled, so that their export control is carried out on a routine basis. Ensuring that KUBOTA and domestic affiliates are in fuller compliance withthe Construction Business Law Promoting risk management for intellectual properties to better respond tothe globalization of business Promoting consistent, group-wide information security measures both athome and abroad Ensuring fuller implementation of human rights awareness activities acrossthe KUBOTA Group, including in overseas affiliates Creating a safe work environment by strengthening the PDCA cycle in termsof risk management Working to create a vibrant work environment where all members of theKUBOTA Group live a healthy and happy life Promoting diversity management to create a corporate system that allowsfemale employees to fully exercise their skills and abilities and develop ahighly creative organization, thus enhancing corporate value Promoting social contributions focusing on the fields of food, water and theenvironment Encouraging activities to contribute to the wellbeing of local communitiesoverseas Increasing the number of loyal shareholders by offering necessaryinformation in a timely manner Identifying problems by means of stakeholder dialogSocial Report Summary of the Fiscal 2010 Social Report,Priority Issues for the Next Fiscal Year and Medium-Term Goals* For the Charter for Action 5 “Preserving the Natural Environment,” please see the Environmental Report section (p.35).Exceeded target Reached target Portion of target not reached Target not reached

Social ReportCharterfor ActionWinning Customer SatisfactionProduct recallinformationApril 8, 2009: Problems with a tractor’s rear reflectorJuly 8, 2009: Recall of MZ/SMZ-series tractorsNovember 16, 2009: Recall of ARN-series combine harvestersMarch 2, 2010: Recall of KL5150H tractorsMarch 2, 2010: Recall of MZ/SMZ-series tractors For more detailed information, please visit our website at:Reportingcorporateactivities byimplementingthe PDCA cycleCommunication with customersProduct safety and superior qualityCustomer satisfaction activitiesat KUBOTA’s machinery business divisionsService call response support system Kubota domestic agricultural machinery group dealers haveintroduced the “service call response support system” to quickly takeaction when problems arise with KUBOTA’s products at customersites. Failure of agricultural machinery during rice transplanting andharvesting seasons can cause serious disturbance to customers; thus,reliable measures have to be taken immediately. The service callresponse support system enables the sharing of customer informationbetween KUBOTA’s sales base and its sales and service personnel,from the receipt of a customer call to the completion of service. Toensure that effective and prompt action is taken without fail, we makeit a rule to “make initial contact to the customer within 30 minutes uponreceipt of the call and complete the required service within 24 hours,”in effort to enhance customer satisfaction. We have also introducedinspection and maintenance tools to offer explanations to ourcustomers that are easier to understand.Improving sales and service skillsAt KUBOTA, efforts are constantlyunderway to improve the skills ofemployees so that they can be trustedand appreciated by customers. Forexample, KUBOTA’s agriculturalmachinery business divisions andKubota Farm & Industrial MachineryService Ltd. jointly organize the annual“National Sales and Service SkillsContest” to encourage employees tocontinue efforts to improve their salesand service skills.National Sales and Service SkillsContest held in FY2010Improving prior inspection and maintenance services We have developed tools to facilitate machinery inspection andmaintenance proposals (which include inspection advice sheets,inspection and diagnosis check sheets, and a PR package forinspection and maintenance for exhibitions, etc.) common to theKUBOTA Group, especially domestic agricultural machinery groupdealers. These tools, combined with an inspection and maintenancelist (written proposals) developed by the sales companies, enable usto offer meaningful proposals to our customers that precisely cater totheir needs to ensure efficient and safe agricultural work.Self-evaluationSystems to more promptly offer services tocustomers were officially launched in the areasof agricultural machinery and iron pipes. We willensure more efficient operation of thesesystems.Customer satisfaction activities at KUBOTA’sPipe System DivisionImprovement of the customer service system Customer service (CS) groups at KUBOTA’s Pipe System Divisionhave introduced a sales information management system to ensurethat prompt action will be taken uponreceipt of orders or complaints fromcustomers (sales agencies). This systemallows the sharing of informationconcerning orders received and shipmentsbetween KUBOTA and its customers, andenhances work efficiency.Product exhibitionsIn order to introduce products that are more attractive and more useful,the KUBOTA Group actively holds product exhibitions and works toenhance communication with our customers.The 63 rd Machinery Dealers Meeting(January 19 to 20, 2010, at the KyotoInternational Conference Center)AQUATEC CHINA, an internationalexhibition of water treatment products(June 3 to 5, 2009, in Shanghai, China)Priority issues forthe next fiscal yearINTERMAT 2009, an internationalexhibition of construction machinery andbuilding materials (April 20 to 25, 2009 inParis, France)American Water Works Association’sAnnual Conference & Exposition (June 14to 18, 2009 in San Diego, USA)Establishing and operating a domestic agricultural machinerycustomer centerConducting questionnaire surveys with users on a continuousbasisStrengthening our quality assurance systemAt KUBOTA, a quality assurance system is in place in each of theconsolidated divisions and regular divisions to satisfy the diversifyingneeds of customers for pipes, agricultural machinery, and KUBOTA’sother products and services, thus maintaining high quality and productsafety.To enhance the efficiency of this system, we conducted a quality audit,in addition to the conventional ISO* 1 audit, at KUBOTA and itsdomestic affiliates. During FY2010, an on-the-spot audit was alsoconducted at major overseas affiliates. By conducting audits that suitlocal business practices by covering important items and employing anevaluation approach with corresponding criteria, we aim to furtherimprove our quality assurance activities.Stimulating quality improvements through smallgroup activitiesOn February 5, 2010, a screening meeting was held at the large hall ofour head office to select prize-winning groups nominated byKUBOTA’s business sites for their outstanding performance. About150 people from relevant divisions attended the meeting and listenedto the presentations of the nominated groups.In the Nationwide QC Circle* 2 Conference, the Oasis Circle of theTractor Section of the Tsukuba Plant, one of last year’s Gold Prizewinners, was awarded a prize for “inspiring the audience.”Presentation at a meetingat KUBOTA’s head officeProviding education on quality control andproduct safetyWe have continued to implement an educational program on qualitycontrol, including product safety, separately for different levels ofparticipants.Self-evaluationWe will strengthen the auditing system inresponse to the growth of overseas markets.Passing down manufacturing skills and buildinga culture of ingenuity through participation inthe National Skills CompetitionThe 47th National Skills Competition was held in Ibaraki Prefecturefrom October 22 to 26, 2009. In this competition, seven employeesparticipated from KUBOTA’s Sakai Plant and Hirakata Plant, fullydemonstrating their skills, developed under the guidance of senior staffat their respective plants. Competing with young selected workers fromother manufacturers, one of KUBOTA’s representatives laudably wona prize for good performance in the category of “machine assembling(finishing).”Prize winner, Takahiro Yabumotoof the Sakai PlantHis prize-winning workin the category of “machine finishing” (left)* Competitors must complete processing and assembly work within six hoursand 45 minutes, and must show that the machine works perfectly before a judge.Passing down manufacturing skills and buildinga culture of ingenuity through an internalvocational skills competition At KUBOTA, each business site actively organizes an internalvocational skills competition to pass down manufacturing skills andbuild a culture of integrity.At Sakai Plant, the annual Vocational Skills Competition was held onDecember 5, 2009, with the participation of 164 young employees in11 categories, putting their skillsand techniques to the test. Thisyear’s competition was the 10thcommemorative competition andwas joined for the first time byemployees representing overseasmanufacturing sites. During theaward ceremony, the hall wasfilled with excited cries andapplause each time the name ofa prize winner was called.Priority issues forthe next fiscal yearCompetitors at work (finishing process)For detailed information on the status of ISO9001 certification,please visit our website at:Continuously increasing the coverage of quality audits amongoverseas affiliates and conducting on-the-spot auditsProviding continued education on quality control and product safetyDeveloping green procurement into CSR procurementSocial Report Winning Customer SatisfactionFrontlineVoiceIn providing customer service, Itry to satisfy request fromcustomers as much as possible.Fusako NagaiCustomer Service GroupEastern Sales DepartmentTokyo Head Office, KUBOTA CorporationAs a member of the CS Group, I am in charge of the entire process, fromaccepting orders for ductile iron pipes and valves through to arrangingshipments and deliveries of orders to customers. In arranging shipments oforders, I obtain information about product availability from sales personneland sales companies in advance to prevent delays in delivery, and make earlyarrangements in cooperation with the plant and production personnel toensure orders are delivered to customers smoothly. What makes me mosthappy is the words of gratitude given by customers, such as “Thank youNagai-san, you are really helpful!” I will continue efforts to meet customerrequests as much as possible, while maintaining a positive attitude toward mywork, with an awareness of cost whenever arranging shipments.FrontlineVoiceI joined the 10th vocational skillscompetition representing China andwon the Gold Medal in thecategory of “semi-automaticwelding.”Zhu ErjianKubota Agricultural Machinery Suzhou (KAMS), ChinaAs a representative of KAMS, it is a greathonor for me to participate in the KUBOTAGroup’s competition. Whatever the result, Iwould have been happy to accept it. Thus, I amreally excited to win the Gold Medal. As mycolleagues will participate in the nextcompetition, I will do my best to support themas their “teacher”!Although this was KAMS’ first entry into thecompetition, KAMS representatives won GoldMedals in three categories.Notes*1 ISO stands for the International Organization for Standardization, whichdevelops international standards and is made up of over 140 member countries.While the majority of ISO standards are specific to individual industrial products,some provide standards for management systems, such as ISO9001.*2 The “QC Circle” is a small group within the same workshop that voluntarily conductsquality control activities. As part of company-wide quality control activities, this groupcontinuously carries on self-development and mutual development, while also striving forcontrol and improvement of the workshop utilizing quality control techniques, with all themembers participating.

Social ReportCharterfor ActionConducting Corporate Activities Based on Compliancewith Legal Regulations and Ethical PrinciplesThe KUBOTA Group conducts its corporate activities while observing theletter and spirit of legal regulations applicable to its business operations,in accordance with social ethical principles and good conscience.The ensuring of full legal complianceEnsuring thorough compliance andimplementing internal controlEnsuring thorough compliance is the very basic requisite for corporateactivities and one of the priority management goals of the KUBOTAGroup. At KUBOTA, we established an organization responsible forcompliance promotion—the CSR Planning & CoordinationHeadquarters—and assigned an executive officer in charge of theseheadquarters. We also set up the “Anti-Monopoly Act ComplianceCommittee,” to ensure KUBOTA employees are in fuller compliancewith the Anti-Monopoly Act, and introduced educational and auditingsystems tailored to the needs of respective divisions.In addition, we implement internal training and educational sessionson compliance risks, and invite external experts to offer advice to therelevant committees, divisions responsible for risk management, andcompliance personnel from respective divisions and affiliates.For more detailed information about the mechanisms of compliance,corporate governance and internal control in place at KUBOTA,please visit our website at:Promoting activities to ensure compliance withthe Anti-Monopoly ActIn FY2010, we continued the operation of the risk managementsystem built over past years and made it more firmly rooted across thecompany, while implementing risk management activities more flexiblyand efficiently in a manner to better serve the realities of our corporatesituation. To be specific, we took the following measures, paying closeattention to the amended Anti-Monopoly Act that came into effect inJanuary 2010.Divisions doing business with the public sectorAs part of the measures to prevent unreasonable restraint of trade,* 1we conducted internal audits on three levels—the division level,consolidated division level, and company-wide level—as we did inFY2009. With these audits, we aimed to ensure that bidding wasconducted through proper procedures and that no unnecessarycontact with competitors was made.Divisions doing business with the private sectorWith the enforcement of the amended Anti-Monopoly Act, more strictrisk management is required for the prevention of “unfair tradepractices.”* 2 In this regard, we conducted hearings at divisions doingbusiness with the private sector and at some of our sales companiesfor the purpose of identifying “risk points.” We also began to build aprior consultation system to strengthen measures to prevent illegalactivities.Divisions involved in materials procurementWe conducted follow-up audits to see how the divisions involved inmaterials procurement coped with the problems relating to theiroperations, which had been identified during the on-the-spot auditsconducted during FY2009.Prevention of international cartel formationWe took measures to address individual needs on a case-by-casebasis, such as offering prior consultation concerning the EUCompetition Law and other overseas competition laws.Self-evaluationWe will continue toprovide training/educationand more substantial priorconsultation services sothat we can cope with theamendments of relevantlaws more promptly.Priority issues forthe next fiscal yearViolation of the Construction Business LawKUBOTA Corporation assigned unqualified persons asfull-time management engineers to supervise constructionprojects that required the presence of qualified staff holdinga management engineer certificate, and was thus punishedunder the Construction Business Law We will enhance ourcompliance efforts to prevent this kind of problem fromrecurring again.Risks and departments in chargeRisk descriptionDepartment in chargeInternal control concerning reliability of financial reportingReliability of financial reportingFinance & Accounting Dept., Compliance Auditing Dept.Internal control concerning basic corporate functionsFair tradeLegal Dept.Environmental conservationEnvironmental Protection Dept.Safety and healthHealth & Safety Planning & Promotion Dept.Quality controlQuality Assurance & Manufacturing Promotion Dept.Labor managementPersonnel Dept.Information securityCorporate Planning & Control Dept.Intellectual propertyResearch & Development Planning & Promotion Dept.Internal control concerning complianceCompliance with equipment-related statutesEarthquake and other disaster response managementCompliance with the Construction Business LawHuman rights advancementSafe driving managementPrevention of illegal paymentClassified information managementProtection of personal informationImport and export controlCompliance with distribution-related statutesQuality Assurance & Manufacturing Promotion Dept.General Affairs Dept.General Affairs Dept.Human Rights Advancement Dept.General Affairs Dept.CSR Planning Dept.CSR Planning Dept.Legal Dept.Quality Assurance & Manufacturing Promotion Dept.Quality Assurance & Manufacturing Promotion Dept.Quality Assurance & Manufacturing Promotion Dept.Import/export compliance workshops andauditsSince FY2009, we have placed our domestic affiliates under theimport/export control of the KUBOTA Group, and have beenconducting workshops and audits for them. During FY2010, weevaluated the current export control situations of our overseasaffiliates using questionnaires to survey all the affiliates andon-the-spot audits for 10 companies. For domestic affiliates, weorganized workshops on basic knowledge of import/export control,amendments to relevant laws andin-house procedures. The workshops,which were held nine times with about 540employees participating, consisted ofrequisite, division-specific andcompany-wide seminars.Promoting measures to ensure compliance withthe Construction Business LawWe have been conducting audits in compliance with the ConstructionBusiness Law since FY2008 for each division of KUBOTA Corporationand since FY2009 for domestic affiliates. In FY2010, we expanded thecoverage of our audits to include some of our sales companies. Wewill continue our efforts to establish and enhance the KUBOTAGroup’s legal compliance system through auditing andtraining/educational activities.For information on other legal compliance activities,please visit our website at:Building and developing a prior consultation system mainly for divisions doing business with the privatesector to ensure full compliance with the Anti-Monopoly Act; and expanding and continuing toimplement compliance measures, such as hearings, for sales companiesDeveloping a system for preventing international cartel formationDeveloping checklists for export control and internal rules for the 10 overseas affiliates, andimplementing them on a trial basisEnsuring that KUBOTA and domestic affiliates are in fuller compliance with the Construction BusinessLawOffering guidance in intellectual property risk management to overseas affiliates that conduct R&DPromoting information security measures for overseas affiliatesCharterfor ActionFrontlineVoiceKUBOTAPersons responsible for humanrights awareness-raising andadvancement(each business site)Respecting Human RightsThe KUBOTA Group bases its activities on the Universal Declaration of Human Rights,* 1respects human rights and does not violate human rights.The KUBOTA Group Code of Conduct explicitly stipulates that “we do not discriminate or make violations of human rightsfor any reason whatsoever, and do not permit forced labor or child labor” (excerpt).Promotion of human rights awareness-raisingMoreover, the Group respects the privacy of individuals and works to protect personal information.Human rights advancement systemAt KUBOTA, group-wide efforts are underway to increase humanrights awareness among employees under the leadership of theHuman Rights Advancement Planning & Coordination Committee.Every year, we formulate a “risk management policy” for our humanrights advancement activities and use the PDCA cycle to promote thepolicy and audit/report the outcomes. We also conduct surveys todiscover how human rights awareness activities are carried out at ouroverseas affiliates, and based on the findings, offer guidance forimprovements and follow-up support as necessary.Human Rights Advancement Planning & Coordination CommitteeChairman: The Executive Officer of the CSR Planning & Coordination HeadquartersSecretariat: Human Rights Advancement DepartmentSelf-evaluationKUBOTAHuman rights leaders(each business site)Promoting human rights educationWe organize human rights training sessions ina well-planned manner so that each employeecan join at least one training session a year.Training sessions for KUBOTA officers, executives,and presidents of affiliatesTraining sessions for each business siteTraining sessions targeting each job classTraining sessions conducted during FY2010focused on the following themes.Power harassmentSexual harassmentSocial class discriminationWe also implement training sessions forpersons in charge of furthering humanrights, to enhance their ability.Training sessions for human rights leaders(including biannual fieldwork opportunities everyyear)Training sessions for persons in charge of consultationat the Sexual Harassment Consultation OfficeWe produce an internal textbook and othereducational tools so that employees can educatethemselves on human rights issues at any time.“Human Rights Issues and Us” internaltextbook“Human Rights Examination,” to measurethe level of understanding of human rightsissuesHuman rights information offered throughKUBOTA’s websiteAffiliatesPersons responsible for humanrights advancement(managers of general affairsdepartments)Human rights training session heldat KUBOTA’s plant in December2009Training session for human rightsleaders (fieldwork), held in March2010Training session for persons incharge of consultation at theSexual Harassment ConsultationOffice, held in November 2009No. of employees who joined human rights training sessions duringFY2010(Unit: no. of individuals)TargetGrouptrainingOutsidetrainingTotal(Total participants)All KUBOTA Affiliates Total In our effort to increase human rightsawareness, we implement human rightstraining sessions in various forms everyyear to ensure the participation of everyemployee in at least one session per year.At KUBOTA, each and everyemployee joins efforts to create apleasant work environment withan awareness of theimportance of human rights.Kaoru Shiromoto(Human rights leader)General Affairs SectionKyusyu Regional Office, KUBOTA CorporationPriority issues forthe next fiscal yearReportingcorporateactivities byimplementingthe PDCA cycleEnhancement of the Human RightsAdvancement Consultation OfficeWe offer consultation services, both internally and externally, toprevent human rights violations, and we take prompt measures ifhuman rights violations are detected.Company-wide consultation service:KUBOTA Hot Line (External lawyers are also available to assist.)Consultation office at each business site:Sexual Harassment Consultation OfficeAt these sites, we are taking various measures to increase theawareness of employees, such as putting up posters and distributingleaflets that call for the prevention of sexual harassment, in order tocreate a more comfortable work environment.Human Rights WeekWe implement various activities to increasehuman rights awareness among employeesduring Human Rights Week in December.We invited employees across the KUBOTA Groupto submit human rights slogans, and awardedprizes to those selected. We also encouragedemployees to enter the human rights slogan contestheld by the Corporate Report Association ofHuman Rights Issue in Osaka.Two KUBOTA employees were awarded prizes inthe “My Human Rights Message” contest organizedby the Human Rights Education Promotion Councilof Sakai City, Osaka.We participated in local human rights exhibitionsand street-level awareness-raising activities.We organized a human rights panel exhibition,where our special subsidiary,* 2 KUBOTA WorksCo., Ltd., sold vegetables, and a small-scalevocational training center * 3 sold handmadecookies. Awarding of a prize to the winner ofthe human rights slogan contestHuman rights panel exhibitionExpanding group-wide human rights awareness-raisingVegetables sold by KUBOTA’sspecial subsidiary and cookiessold by a small-scale vocationaltraining centerConducting harassment awareness surveysTo discover the realities of sexual and power harassment, weconducted a questionnaire survey across the entire KUBOTA Group.Based on the results of the survey, we will recommend improvementsto the current practice, while applying the results to enhance ourhuman rights training and consultation service.Also at our regional office, we organize human rights training sessions so that eachemployee can join at least one session a year; however, we could not achieve the goalof 100% participation in past years. In FY2010, however, we implemented five trainingsessions inviting lecturers both internally and externally, and finally achieved thisgoal. All employees of the KUBOTA Kyusyu Regional Office, including salesbranches, as well as many affiliate employees, joined at least one of these trainingsessions. Moreover, we are glad to report that these sessions were joined by notonly all the KUBOTA Group employees, but also by all temporary and secondedemployees. Thus, we achieved the goal perfectly. As a human rights leader, I willcontinue to do my best to increase human rights awareness.Conducting Corporate Activities Based on ComplianceSocial Reportwith Legal Regulations and Ethical Principles/Respecting Human RightsNotes*1 “Unreasonable restraint of trade” refers toacts or attempts by two or more companies to avoidcompetition by determining sales prices in advance.This practice is also called “cartel behavior.”*2 “Unfair trade practices”include, butare not limited to, tie-in sales and acts orattempts by manufacturers to fix the retailprice of distributors.Notes*1 The Universal Declaration of Human Rightswas proclaimed as a “common standard of achievementfor all peoples and all nations” to respect and assurehuman rights and freedoms. It was adopted by the 3rdGeneral Assembly of the United Nations in 1948.*2 A “special subsidiary” refers to a subsidiarythat meets certain conditions to count its employees withdisabilities toward the number of employees withdisabilities hired by the parent company, so that theparent company can fulfill its obligation to achieve therate of employees with disabilities required by law.*3 A small-scale vocational training center isan institution that aims to offer opportunities to peoplewho have difficulties in finding jobs or acquiring skills dueto disabilities, or for other reasons, to work and developvocational skills.

Social ReportCharterfor ActionCreating a Safe and Vibrant Work EnvironmentThe KUBOTA Group maintains a safe and healthy working environment and works to improveworkplace conditions. In addition, the Group respects the diversity and creativity of itsemployees and promotes a vibrant work environment.Reportingcorporateactivities byimplementingthe PDCA cycleEnsuring that health and safety management is fully in placeCreating a vibrant work environmentPromoting specifically targeted accidentprevention measuresUnder the five-year Long-Term Occupational Accident PreventionProgram, and pursuant to the annual health and safety guidelines, we arepromoting health and safety management activities, focusing especiallyon reducing to zero the numbers of: serious accidents (accidents that canresult in material damage); serious illnesses (occupational illnesses forwhich preventive measures should be reinforced); and workplaces atwhich environmental improvement is urgently required.Targets for the 8th Long-Term Occupational Accident Prevention Program(April 2008 - March 2013)Safety management: accidents that result in severe disabilities—zero;serious accidents—zeroHealth management: workplaces at which environmental improvementis urgently required—zero; serious illnesses—zeroTrends in the accident frequency rate* at plants resulting in missed days * Frequency rate is the number of injuries and deaths from occupational accidentsper one million work hours.* The averages for all industries and for the manufacturing industry in Japan inFY2010 are not available, as of May 2010.Trends in the number of worksites subject to legally required workenvironment assessment Self-evaluation *The number of worksites displayed in control classification 3 is the result obtained inmeasuring the work environments. Due to later improvements, there were noworksites that fell into control classification 3 as of the end of March in 2010.We are committed to creating apleasant work environment foremployee safety and mental/physicalhealth across the entire KUBOTAGroup.Priority issues forthe next fiscal yearImplementation of health and safety auditsIn order to further strengthen health and safety efforts across the entireKUBOTA Group, we are expanding the coverage of our health and safetyaudits year by year, which were conducted only at domestic plants andoffices in the past.(Audits have also been conducted at KUBOTA’s overseas productionsubsidiaries since FY2007, at the plantsand construction departments of thedomestic affiliates since FY2008, and atdomestic agricultural and constructionmachinery sales companies sinceFY2010.)Health and safety audit underwayPlants and offices that have acquired OHSAS18001 certificationTsukuba PlantAcquired in December 2000Keiyo Plant (Funabashi) Acquired in February 2002Keiyo Plant (Ichikawa) Acquired in February 2002Hanshin Plant (Mukogawa) Acquired in November 2003Hanshin Plant (Amagasaki) Acquired in April 2005Hirakata PlantAcquired in May 2007*For other plants or offices,we are constructing anOccupational Health andSafety Management Systemcentered on risk assessment.Health promotion activitiesWe are carrying out our health promotion program, “Health KUBOTA 21,”jointly with our health insurance union by assigning promotional staff ateach business site who are leadingworkplace-based activities thatemphasize the preventive care oflifestyle-related diseases.Convening the National Promotional StaffMeetingImplementing health-related eventsEasing stiff shoulders and low backInvolvement in mentalpain at a health seminarhealth careAt KUBOTA, various systems are in place to improve the mental health ofour employees, including:Simplified Occupational Stress Diagnostic SystemMental health clinicKUBOTA Health HotlineReturn-to-work Support Program* 1Reducing the number of serious occupational accidents to zeroStrengthening efforts focusing on building a safety system that canflexibly cope with changing situationsStrengthening measures for risk eliminationPromoting measures to maintain and further improve health, bothphysical and mental“Learning from experience” workshopPromoting diversity management* 1Letter of appointment givento 13 members ofthe K-Wing steering committeeTrends in the number of female employees hiredin the fast-track category Self-evaluation Significant progress has been madeby establishing an organizationresponsible for promoting this effort.At KUBOTA, we place special emphasis on employing personnel withdiversified backgrounds and enhancing the creative power of ourorganization, in anticipation of the further globalization of our corporateactivities and future declines in the workforce resulting from the fallingbirthrate and aging population. Domestically, we are working to build apersonnel system to ensure that female employees can demonstratetheir potential to the fullest.To be specific, we have continued efforts for the active recruitment offemale employees. We also set up K-Wing,* 2 a network of personnelexchanges to enhance the skills and motivation of female employees andassist them in developing their careers. To help KUBOTA employeesdeepen their understanding of diversity management, we implementtraining sessions targeting each job class and business site, and offerinformation about diversity management as a special topic in KUBTOAGroup’s internal magazines.As well, we are implementing action plans under the Next GenerationNurturing Support Measures Promotion Law,* 3 on a continuous basis, ineffort to enhance our work environment/conditions so as to helpemployees enjoy being at work while maintaining a balance between theirjob responsibilities and their children/private lives.Kubota Sun-Vege Farm Co., Ltd. In February 2010, Kubota Sun-Vege Farm Co., Ltd. was established witha view to “assist persons with disabilities in their self-support efforts toachieve symbiosis with local communities” and “utilize abandonedfarmland to promote the revitalization of agriculture in Japan.” With its 10disabled employees, the company will engage in the hydroponic cultureof vegetables, which will initially be sold for use at KUBOTA Groupcompany cafeterias.Field trials of hydroponic cultureOverview of Kubota Sun-Vege Farm Co., Ltd.Location of farmland:Shiraki, Kanan-cho, Minamikawachi-gun,Osaka Prefecture (rented land)Outline of farming facilities: Lot area: Approx. 3,500 m 2Plastic greenhouse area: Approx. 2,500 m 2Capital:10,000,000 yen* We will apply for special subsidiary status for this new company,following KUBOTA Works Co., Ltd., in which persons with disabilitiesengage in clean-up and printing activities.Talk with the PresidentIn August 2009, we began an event titled, “Talk with the President,” inwhich KUBOTA’s president speaks directly to young mid-careeremployees who were promoted to managerial positions during 2009. Thisevent was held 14 times, joined by about 140 employees in total. Eachsession consisted of a small group of about 10 people, and offered anideal venue for increasing awareness among young employees asnext-generation leaders, through the process of talking about individualdreams and the sharing of visions for the future. For more detailed information on “personnel policy and systems,”“implementing action plans under the Next Generation Nurturing SupportMeasures Promotion Law,” and “promoting diversity management,” pleasevisit our website at:Priority issues for Offering support to female employees in developing their careersthe next fiscal year Organizing training sessions and information exchange meetings throughK-WingSocial ReportCreating a Safe and Vibrant Work EnvironmentFrontlineVoiceHelping to create a healthy andvigorous corporate cultureTae Kataoka (Nurse)Health Management Office, Personnel DepartmentKUBOTA CorporationIn giving health guidance directly to employees, Iam exploring, together with employees, howbest they can promote their health so that theycan enjoy their work positively and in goodhealth. “Good health” is a very basic conditionfor working. I will continue my efforts tocommunicate the importance of maintaininggood health among KUBOTA employees andwill help to foster a corporate culture of mutualcaring, through various activities.Providing health guidanceFrontlineVoiceThe “Talk with the President”session gave me a newperspective and motivated meto aim high.Kaori TakeishiMaterials SectionElectronic Equipped Machinery DivisionKyuhoji Business CenterKUBOTA CorporationThough the participants in the session camefrom different divisions, the president gave usa lot of meaningful advice concerning topics ofinterest common to all of us. I was especiallyimpressed with his remark: “Do not confusewho our customers are. You must be awarethat employees of all internal divisions aremembers of KUBOTA.” This session inspiredme to do whatever I can to contribute toKUBOTA as a whole.Talk with the PresidentNotes*1 The Return-to-work Support Program was formulated in accordance with the instructions and guidelines provided by the Ministry of Health, Labour and Welfare. Tohelp employees smoothly return to work after absence due to illness and to minimize the risk of the recurrence of illness, we apply flexible work conditions in accordance with theadvice of our industrial doctor and in consideration of the physical conditions of the particular employee. For example, we set work hours and work load initially at a level that theemployee can reasonably manage and then gradually increase them.Notes*1 Diversity management refers to human resource management thataims to increase corporate competitiveness by taking advantage of thediversity of employees (differences in sex, age, and nationality, etc.), strivingto develop a highly creative organization, which eventually enhancescorporate value.*2 K-Wing is the acronym used forKUBOTA Women’s Initiative DiversityNetwork & Group. It provides a venuefor female employees to enhance skillsand motivation.*3 The Next Generation Nurturing SupportMeasures Promotion Law aims to develop awork environment that is more friendly to employeeswho are about to give birth to or who are raisingchildren—the leaders of the next-generation.

Social ReportCharterfor ActionAchieving Symbiosis with International and Local SocietiesThe KUBOTA Group respects the culture and customs of all countries and regions and seeks to buildrelationships of trust through communication with local societies, while also working to be a goodcorporate citizen.The KUBOTA e-Project For the latest information, please visit our “KUBOTA e-Project” website at:Reportingcorporateactivities byimplementingthe PDCA cycleThe Six “e”s of the KUBOTA e-ProjectIn 2008, the KUBOTA Grouplaunched the KUBOTAe-Project to open up thefuture of agriculture. DuringFY2010, we expanded thescope of this project, e.g., bybeginning activities toimprove overseas watereauSafe andresources/infrastructure andclean waterto better contribute to societyby addressing problems inthe areas of special social importance,namely: food, water, and the environment.Support for the restoration of abandoned farmlandNationwide, the amount of abandoned farmland totals 380,000 ha.Against this backdrop, KUBOTA extends support to the activities ofcommunity farms, production cooperatives, and citizens’ groups torestore abandoned farmland, by offering agricultural machinery andstaff to operate them.Achievements:emotionImpressivemoments in lifeearthFriendlinessto the EartheducationEducationon agricultureand waterecologyEnvironmentalpreservationeatSafe andwholesome foodFY2009:Support extended to 23 areas from Iwate Prefecture in the northto Kagoshima Prefecture in the south.FY2010:Support extended to 27 areas from Akita Prefecturein the north to Kagoshima Prefecture in the south.In February 2010, we established Kubota Sun-Veg Farm Co., Ltd., a companyengaged in the hydroponic culture of vegetables, to promote both the employmentof people with disabilities and the effective use of abandoned farmland. In thefuture, the company aims to sell its vegetables at roadside stations. (For moredetailed information, please see p.30.)Support for the production of bio-fuel cropsKUBOTA extends support to producers of bio-fuel crops, which aredrawing increased attention for their ability to contribute to theconservation of the global environment and the creation of arecycling-based society.FY2009:Support extended to five areas from Niigata Prefecturein the north to Kumamoto Prefecture in the south.Achievements:FY2010:Support extended to six areas from Niigata Prefecturein the north to Kumamoto Prefecture in the south.Promotion of local-brand agricultural products andcrops fresh from the farms that grew themTo promote the branding of local agricultural products and to increasetheir public recognition, we invite farmers to sell their agriculturalproducts at the Regional Brand Produce Corner at the exhibitions ofour dealers, and offer information about such products throughKUBOTA’s website and informational magazines, thus offeringopportunities to connect producers directly to consumers.eKUBOTA Active Agriculture Experience WorkshopIntended mainly for elementary school children, the Kubota ActiveAgriculture Experience Workshop aims to deepen understanding ofagriculture and promote the emotional well-being of children throughagricultural experience, such as rice transplanting, rice harvesting, andthe tasting of harvested crops.Achievements:FY2009:Workshop implemented in 19 areas from Hokkaido in the northto Miyazaki Prefecture in the south (joined by approx. 1,500 children)FY2010:Workshop implemented in 18 areas from Hokkaido in the northto Fukuoka Prefecture in the south (joined by approx. 1,200 children)Pupils of the KaminokawaMunicipal ElementarySchool in TochigiPrefecture enjoyed thehands-on experience ofrice harvesting. Theyalso visited KUBOTA’sUtsunomiya Plant.(September 29, 2009)Support for the KUBOTA “TERRA-KOYA”educational campKUBOTA lent its support to the KUBOTA TERRA-KOYA 2009educational camp, an experience-based summer youth camp heldbetween the 21st and 24th of July 2009 by BeGood Café, an NPOworking towards a sustainable society. Over four days and threenights, children were taught about the riches of Nature, the importanceof agriculture, and consequently the importance of the globalenvironment through programs such as Nature-observation in forestsand working in rice fields using the “aigamo” organic farming method.(This event began in 2007, and was participated in by 21 children.)Science and Environment AcademyAs part of our social contribution to the field of education, we organizethe Science and Environment Academy annually for junior high schooland high school students who are interested in science. The topic ofthe 42nd term academy (held on August 7 and 8, 2009) was“Preserving Water Resources: Learning from Mt. Fuji and ConsideringGlobal Water Problems.” After listening to a lecture by a specialist, theparticipating students observed how water quality was measured atthe Yamanashi Institute of Environmental Sciences, and then visitedthe Shingen Levee, a historical flood-control facility, and a pond fed byspring water from Mt. Fuji.(This year, a total of 78 students joined this event, which is sponsoredby Asahi Shimbun and the Asahi Culture Center. This event was firstheld in 1985.)Overseas water resources/infrastructure improvement projectIn FY2010, we launched a project to improve water resources andinfrastructure in areas of the world where people have difficultiesaccessing safe drinking water and water for daily use. For the first yearof the project, we donated three well pumps to Bijapur, India, throughthe Japan Asian Association & Asian Friendship Society, which is wellinformed of local situations in this area. We will continue to implementthis project to contribute to the improvement of water resources andinfrastructure in various parts of the world.“KUBOTA e-Day” Volunteer ProgramOut of our desire to preserve our beautiful water resources,which are indispensable for agriculture, we implement the“KUBOTA e-Day” volunteer program once a year, whenemployees of the KUBOTA Group from all over Japan engagein clean-up activities at rivers and in green areas. In FY2010,this program was carried out on July 5 (excluding someregions), with the participation of about 9,150 employees fromall over Japan.No.of participantsKyushu Region:About 900 participantsKashiihamakita Park, Fukuoka CityVoiceFY2009: Approximately 7,000 participants (about 400 locations)FY2010: Approximately 9,150 participants (about 390 locations) Towada City, Aomori PrefectureChugoku Region:About 500 participantsTsuyama City, Okayama PrefectureInspiring citizens to create a cleanand vibrant local communityZen IijimaFormer Mayor of Tsukubamirai City, Ibraki PrefectureLocation where water well drillingis scheduledTohoku Region:About 1,400 participantsShikoku Region:About 400 participantsTakamatsu Municipal Central ParkKansai Region:About 2,800 participantsOsaka Prefectural Yamadaike Park,Hirakata CityOn July 5, 2009, we conducted a clean-up ofFukuokaseki-Sakura Park and the riverside plaza forthe second time, which first began in 2008, with thecooperation of nearly 150 KUBOTA employees. I amextremely grateful for the participation of so manypeople despite the summer heat. Due to an increase inthe environmental awareness of our citizens, thevolume of waste (empty cans, bottles, andnon-combustible waste) thrown away at parks and inrivers in the city has significantly been reduced from thelevel of 20 years ago. However, there is still a long wayto go before we can achieve the goal of zero waste. Ihope KUBOTA will continue this meaningful program,as it will inspire and encourage many of our citizens tocreate a clean, waste-free, and vibrant community.Kanto andKoshinetsu Region:About 1,900 participantsFunabashi Sanbanze Bay ParkFunabashi City, Chiba PrefectureHokkaido Region:About 500 participantsMikasa Municipal Sports ParkAbout 50 membersof the KUBOTASpears Rugby ClubKamisu City, Ibaraki PrefectureChubu Region:About 700 participantsTsuruma Park, Nagoya CityClean-up of Fukuokaseki-Sakura Parkin Tsukubamirai CitySocial ReportAchieving Symbiosis with International and Local Societies

Social ReportCharterfor ActionAchieving Symbiosis with Internationaland Local SocietiesCharterfor ActionFulfilling Responsibilities for Improving ManagementTransparency and AccountabilityThe KUBOTA Group makes appropriate and timely disclosureof corporate information and fulfills its responsibilities for transparencyand accountability in corporate activities.Reportingcorporateactivities byimplementingthe PDCA cycleContributing to international society and enhancing social and cultural activitiesIR activities and the provision of corporate informationAssisting in the response to natural disastersThe KUBOTA Group offered assistance in response to the naturaldisasters that took place during FY2010, as follows.Earthquake in Sumatra, Indonesia, October 2009Assisted in recovery by providing monetary supportEarthquake in Haiti, January 2010Assisted in recovery by providing monetary support and relief suppliesEarthquake in Chile, March 2010Assisted in recovery by providing monetary supportA Haiti Red Cross volunteer with a one-month-old baby whose motherdied in the 2010 earthquake in Haiti(American Red Cross)Activities of the KUBOTA Spears rugby clubThe KUBOTA Spears rugby club plays in the Japan Rugby TopLeague and, as a demonstration of their intent to make a socialcontribution though rugby, the club is involved in various activitiesaround its home ground in Funabashi City, Chiba Prefecture.Members of the KUBOTA Spearscoach rugby to children rangingfrom elementary school pupils tohigh school students. They alsoprovide children with coaching intag rugby, as well as more mildtouch rugby recommendable forwomen.KUBOTA Spears members coachingchildren at Ichikawa Municipal OhnoElementary School in Chiba Prefecture(December 10, 2009)KUBOTA Spears organizes theFunabashi Rugby Festival at theirhome ground of Funabashi City,Chiba Prefecture, in order tointeract with local residents andrugby fans. This event is open toanyone. We look forward to yourparticipation.Self-evaluationWe have expanded the scope ofthe e-Project, which is positionedat the core of the KUBOTAGroup’s social contributionactivities.Supporting the activities of the Canadian 4-H ClubThe 4-H* Club, located in over 80 countries worldwide, carries outvarious educational activities geared toward youth, focusingespecially on agricultural education, through local volunteers. One ofKUBOTA’s overseas affiliates, Kubota Canada Ltd., has beenextending support to the activities of the Canadian 4-H Club incooperation with local dealers since 2008, for young peopleinterested in agriculture.* 4-H stands for Head, Heart, Hands, and Health.Supporting the Mainichi International ExchangeAwardsThe Mainichi International Exchange Awards honor internationalexchange, cooperation, and support activities inside and outsideJapan for the purpose of supporting international exchange on thegrassroots level and promoting international understanding. KUBOTAhas been a sponsor since the first award (in 1989).In 2009, at the 21st occasion of recognizing award winners, an awardwas granted to the Japan Association for Refugees, an authorizedNPO involved in activities to assist refugees in Japan to live incomfort within the Japanese community and to help completenecessary legal procedures. An award was also given to Mrs. KazukoKatagiri, a representative of the “Sawayaka Kikakushitsu forEducation and Environment” NPO, as well as to her husband, Mr.Shogo Katagiri, who both subsidized and constructedaccommodation and educational facilities, known as the Children’sHoliday Learning Home, for street children in India.(The awards are hosted by Mainichi Newspapers)Priority issues forthe next fiscal yearPromoting activities to contribute to society centering on the areas speciallyemphasized by KUBOTA (food, water, and the environment), with the e-Project atthe coreHolding general shareholders’ meetings in aneasy-to-understand mannerSince 2001, we have refrained from scheduling our generalshareholders’ meeting on what is known as “Concentrated Day,” theday on which the shareholders’ meetings of most Japanesecompanies are held, to ensure that our meeting is open andaccessible to as many shareholders as possible. In 2009, we held ourgeneral shareholders’ meeting on June 19, one week beforeConcentrated Day, and had a record high participation of 619shareholders. In the meeting, corporate information was offered toshareholders in an easily understandable format: graphs and productphotographs were displayed on large screens (one 200-inch screen,and two 150-inch screens), accompanied by professional narration.We also exhibited and gave explanations on our newest products atthe entrance of the meeting site and distributed the CSR Report anda booklet about our corporate activities titled “GLOBAL INDEX” to allthe participating shareholders to facilitate an understanding ofKUBOTA.Activities for shareholders/investors and externalevaluation of KUBOTA’s social responsibilityAt KUBOTA, we are actively communicating with our shareholders,investors, and securities analysts by promoting IR activities. As partof our efforts for fair and prompt disclosure of our corporateinformation, we post our IR information (e.g., securities reports,earnings releases, and annual reports) on our website so thatnecessary information is accessible by anyone at any time.Additionally, KUBOTA is included in the major SRI (SociallyResponsible Investment) indexes, such as the Dow JonesSustainability Indexes, FTSE4Good, and the Morningstar SociallyResponsible Investment Index. For more detailed information on KUBOTA’s IR and investor information,please visit our website at:Self-evaluationWe are committed to disclosingour corporate information moreeffectively, by promoting IRactivities and upgrading ourofficial website.Message from the Officer in ChargeKunio SuwaGeneral Manager of CSR Planning & Coordination HeadquartersExecutive Officer, KUBOTA CorporationWe are sure-footedly promoting CSR managementwhile introducing new programs.At the KUBOTA Group, we believe that the continued growth and survival of a company depends on whether or notthe company will remain respected by society. To continue garnering this respect, each and every employee needsto have greater CSR awareness and should take part in corporate CSR efforts. During FY2010, we launched aprogram to encourage all KUBOTA employees to read our CSR report. We think this program was successfullyimplemented, as many of the participants now consider CSR as their own responsibility. To achieve thoroughcompliance, we expanded the coverage of our internal control system to include KUBOTA’s affiliates, both domesticand overseas. As part of our efforts to contribute to society, we launched the KUBOTA e-Project in 2008 to open uppossibilities in agriculture. During the term under review, we strengthened this project by embarking on activities tosupport those with disabilities in their self-help efforts and to improve water resources/infrastructure. We will remaincommitted to promoting CSR management step by step.Providing corporate informationPR activitiesStarting from January 2010, KUBOTA aired a new TV commercial,titled “KUBOTA makes people smile.” By repeatedly showing smilingchildren holding rice and vegetables fresh from the farm in theirhands, the commercial symbolically implies that KUBOTA’s globalcorporate activities are the reasons for their smiles.Company profile DVDIn response to the increasing globalization of our corporate activities,we created a company profile DVD in 10 languages, based on theJapanese DVD produced in 2007, in order to communicateKUBOTA’s corporate principles and its extensive range of businessactivities to overseas customers and distributors.New official websiteWe have entirely renewed the top page and corporate site ofKUBOTA’s official website, this time placing emphasis on enhancingaccessibility and usability, as well as visual effects.We will develop design guidelines to increase the sense of unity inour website as a whole, including thecorporate site, and will manage andfurther improve the website in amore integrated manner, inaccordance with these guidelines.Priority issues forthe next fiscal yearEncouraging the disclosure of IR information reflecting changes in the businessenvironment and related trendsOrganizing shareholders’ meetings in an easy-to-understand mannerProviding timely information in a manner satisfactory to various stakeholdersSocial ReportAchieving Symbiosis with International and Local Societies/Fulfilling Responsibilities for Improving Management Transparency and Accountability

Environmental ReportThe KUBOTA Group has made global environmental conservation a high priority goal of its CSR management,and is bolstering the standards of its corporate activities group-wide to ensure that greater consideration is givento the global environment in all aspects.Basic PolicyKUBOTA GroupEnvironment CharterDuring FY2010, we exceeded thetargets for “reducing CO2” and“reducing waste” set under the NewMedium-Term EnvironmentalConservation Plan, due to thesuccessful implementation ofstrengthened measures for CO2 andwaste reduction in this fiscal year. Wewill continue concerted efforts inthese areas into FY2011 and beyond,in order to achieve the final goals setfor FY2013. On the other hand, wefailed to achieve targets for FY2010 in“reducing CO2 during distribution,”“conserving water resources,” and“reducing PRTR-designatedsubstances.” This is mainly due to adecline in sales, which resulted inlower achievements per unit of sales.We also failed to achieve targets for“reducing chemical substances inproducts,” as our agriculturalmachinery and environmentalequipment still use some maincomponents that were difficult toreplace.We will remain committed toachieving the targets in all theseareas in FY2011 and beyond, byfurther reinforcing and refining ourenvironmental measures.12345The New Medium-Term Environmental Conservation PlanThe KUBOTA Group takes initiatives for the protection of the natural environment in all its activities.(1) By setting specific goals on its own initiative while remaining in compliance with all laws and regulations(2) By promoting initiatives at all levels of its operations, from product development to production, sales, distribution, and services(3) By taking a proactive stance toward securing the understanding of the importance of protecting the environment among itssuppliers and actively obtaining their cooperation(4) By promoting activities friendly to the natural environment and biodiversityThe KUBOTA Group adopted and has been promoting the Medium-Term Environmental Conservation Plan in order to put into practice thebasic policy of our corporate environmental management.In FY2010 the New Medium-Term Environmental Conservation Plan was launched on a group-wide basis.New Medium-Term Environmental Conservation Plan and Targets/Results for FY2010Issues1. Stoppingclimatechange2.3.The KUBOTA Group aims to create a society where sustainabledevelopment is possible on a global scale and conducts itsoperations with concern for preserving the natural environment.The KUBOTA Group works to protect the environment and create a symbiotic relationship with the community.(1) By participating in community beautification and environmental enlightenment activities in its role as a good corporate citizen(2) By engaging in business activities that take full account of environment protection in the community, including pollutionpreventionThe KUBOTA Group undertakes systematic initiatives to protect the environment.(1) By conducting environmental impact assessments, working to reduce environmental risk, and preventing environmental pollution(2) By working to solve environmental issues, including prevention of global warming, creation of a recycling society, and reductionof the release of harmful substancesThe KUBOTA Group implements a thorough program of environmental management.(1) By introducing environmental management systems and promoting initiatives in everyday operations(2) By proactively monitoring whether the “Plan, Do, Check, Action (PDCA)” cycle is functioning in environmental managementactivities(3) By promoting enlightenment and educational activities related to the environment and working to heighten awareness of theenvironmentThe KUBOTA Group is proactive in communicating its environmental perspective.(1) By issuing timely and easily understandable environmental information(2) By gathering environmental information from a broad range of stakeholders and reviewing as well as upgrading itsenvironmental protection activitiesWorkingtowardsa recycling-basedsocietyControllingchemicalsubstancesReduce CO2ActionsReduce CO2 during distributionReduce wasteConserve water resourcesReduce PRTR-designatedsubstancesReduce chemical substances in productsManagement IndicatorsCO2 emissions per unit of salesVolume of CO2 emissionsCO2 emissions per unit of salesWaste discharge per unit of salesPercentage of business sites that have achieved zero emissionsWater consumption per unit of salesRelease and transfer per unit of salesRatio of models with reduced RoHS-designated substancesBase FY200920051991 (KUBOTA production plants)200920051991 (KUBOTA production plants)2009200720092005-2009200520092005-Basic direction of corporate environmentalmanagementThe KUBOTA Group has established “Stop Climate Change,” “Work Towards aRecycling-based Society,” and “Control Chemical Substances” as the threebasic goals of our corporate environmental management, for building a societycapable of sustainable development on a global scale. We are also focusing onthe enhancement of the “Environmental Management System” and“Environmental Communication” as the foundation of our efforts toward thesegoals.TargetsFY2010EnvironmentalManagementSystemWork Towards a Recycling-basedSociety SustainableSocietyStop ClimateChange -1-0.2-16.7-1+11.1-24.4-1-6.8-2-9.940-1-21.0-2-30.125ResultsFY2010EnvironmentalCommunication-1.2-0.4-19.4-17.0-6.8-37.3+1.0%-4.9-6.0-13.645%+8.9%-12.3-0.5-26.924.2%Selfevaluation*Control ChemicalSubstances Message fromthe Officer in ChargeEisaku ShinoharaEnvironmentalmanagementpursued bythe KUBOTA GroupFuture Tasks and Actions to be Taken(reasons for failing to achieve targets for FY2010)To develop technologies that can reduce CO2 emissions during the production processTo promote further energy conservation by enhancing operational efficiency and reducingredundancyTo encourage introduction of higher-efficiency equipmentTo conduct real-time monitoring of energy consumption and the management ofperformance per unit of sales by visualizing production status(Reason for failure)CO2 emissions were reduced by 15.1% but the target was not achieved on a per unit ofsales basis due to the decline in sales.To more strictly encourage waste separationTo contract with recycling companiesSenior Managing Executive Officer incharge of Research & DevelopmentPlanning & Promotion Department andEnvironmental Protection DepartmentKUBOTA Corporation(Reason for failure)Water consumption was reduced by 8.5% but the target was not achieved on a per unit ofsales basis due to the decline in sales.(Reason for failure)PRTR-designated substances were reduced by 16.4% but the target was not achieved ona per unit of sales basis due to the decline in sales.(Reason for failure) Some of the major components of the machinery were difficult to replace.In April 2010, KUBOTA celebrated its 120th anniversary ofestablishment. Though today’s social situations are greatly differentfrom those of the early days of our inception, over the years we haveremained consistently and sincerely committed to contributing to thedevelopment of society and the preservation of the globalenvironment through our manufacturing activities.At the KUBOTA Group, we place the greatest importance onenvironmental conservation regarding our CSR management andhave continued concerted efforts to reduce the environmentalimpacts of our corporate activities.For example, in FY2010, we formulated the New Medium-TermEnvironmental Conservation Plan. Under this plan, we reinforcedmeasures to reduce CO2 emissions and other environmentalimpacts, and have been promoting them on a global basis. In May2010, we also made an “Eco-First Commitment” pledge to promotevoluntary environmental efforts to the Minister of the Environment,and were officially endorsed as an “Eco-First company.”Encouraged by this, we have renewed our determination to furtherpromote environmental management, focusing on the following twoobjectives.1. To take more active measures to reduce environmental impactssuch as CO2 emissions and waste discharge from the KUBOTAGroup’s business sites, in order to achieve the ultimate goals setin the New Medium-Term Environmental Conservation Plan2. To promote the development of technologies to enhance theenvironmental performance of our products, removeenvironmental pollutants and reduce environmental impacts,thereby contributing to the prevention of climate change, thecirculation of resources, and the reduction of risks pertaining tochemical substancesWe are firmly determined to achieving these goals by improving thelevel of our environmental management through our group-wideefforts and by fulfilling our social responsibility as a corporate citizenworking toward a sustainable society.FY2011-4-3.2-19.2-4+7.8-26.7-2-7.7-4-11.750-2-21.8-4-31.530TargetsFY2012-7-6.2-21.7-7+4.4-29.0-3-8.7-6-13.560-3-22.6-6-32.935FY2013-10-9.3-24.2-10+1.0-31.3-4-9.6-8-15.470-4-23.4-9-34.440Exceeded target Reached target Target not reachedEnvironmentalReport Basic Policy/New Medium-Term Environmental Conservation Plan

Environmental ReportKUBOTA Group Business Activities and Environmental LoadsThe numerical data and an overview of the environmental load resulting from the KUBOTA Group’s corporate activities both inJapan and abroad are shown below. We remain committed to further reducing the environmental load and improving oureco-efficiency by collecting and analyzing accurate data on the environmental load.EnergyHeavy oilGasolineKeroseneLight oilCoal cokeLPG/ButaneTown gas/LNGElectricityEco-efficiency indicatorCO2 emissionsWaste8.49PJ*823 kL5,123 kL19,051 kL8,199 kL38,170 tons1,149 tons26.563 million m 3503.40 GWh*PJ: 10 15 JChemical substances(PRTR-designated substances)Water (FY)INPUTService waterIndustrial waterGroundwaterChemical substances(PRTR-designated substances)5,507 tonsRecovery of used productsManufacturingCast iron pipes 2,412 tonsInternal recycling/reuseprocessesVinyl pipes 250 tons23,994 tonsCore productsPlastic sheets 78 tonsTractors, Combine harvesters, Rice transplanters,Outside resource recoveryEngines, Construction machinery, Ductile iron pipes,Pumps, Valves, Drainage pipes, Submerged61,862 tonsmembranes, Septic tanks, Shredders, Plastic pipes,Steel pipes, Cast steels, Electrical equipment, Vendingmachines, Air-conditioning equipment and othersDistribution CustomersRelease into the atmosphere(Data concerning business sites in Japanshown for the items marked with an asterisk.)CO2478 kiloton-CO2Energy related 470 kiloton-CO2From other sources 8 kiloton-CO2CO2 during distribution* 39 kiloton-CO2SOx*3.8 tonsNOx*49.5 tonsSoot and dust* 3.8 tonsPRTR-designated substances* 475 tonsRelease into water systems(Data concerning business sites in Japanshown for the items marked with an asterisk.)OUTPUT0.93 million m 32.69 million m 31.04 million m 3Total 4.66 million m 3(Data for business sitesin Japan)INPUTOUTPUTPublic water areaWater dischargeCODNitrogenPhosphorus*PRTR-designated substances*SewageWastewater dischargePRTR-designated substances*3.86 million m 315.4 tons10.2 tons0.25 tons33 kg0.99 million m 320 kgRaw materialMain raw materialsCementUsed ironNew pig ironFlat barsPolyvinyl Chloride Resin8 kilotons50 kilotons8 kilotons71 kilotons122 kilotonsRecycled raw materialsSteel scrap253 kilotonsWasteAmount of waste discharge 74,296 tonsLandfill waste 3,859 tons(industrial waste and general waste)* Including 120 tons, the landfill amount ofcompany’s own landfill site(Starting from FY2010, data for “Release into water systems” includes that of overseas business sites, excluding the items marked with an asterisk.)Eco-efficiency, which quantifies CO2 emissions and waste dischargeas an environmental burden, slightly improved from the previousyear’s level due to a reduction in both CO2 emissions and wastedischarge, while eco-efficiency in terms of the amount ofPRTR-designated substances released and transferred remainedunchanged from the previous year.*Eco-efficiency indicator for CO2=Consolidated net sales (million yen)/CO2 emissions(t-CO2) (KUBOTA Group)*Eco-efficiency indicator for waste=Consolidated net sales (million yen)/Waste discharge(100 kg) (FY2005–FY2006: KUBOTA Group in Japan; during and after FY2007: EntireKUBOTA Group)*Eco-efficiency indicator for chemical substances=Consolidated net sales (millionyen)/PRTR-designated substance release and transfer (kg) (KUBOTA Group in Japan)Environmental ManagementAt the KUBOTA Group, we are working to enhance our environmental management system to promote environmentally-friendlycorporate management. We are also working to enhance the standards of our environmental activities by checking our compliance withthe rules for environmental preservation activities and by providing educational programs to increase environmental awareness amongour employees.Promoting environmental managementEnvironmental management promotion systemAt the KUBOTA head office, the Environmental Protection Departmentassumes the responsibility for promoting the environmental preservationactivities of the KUBOTA Group, under the leadership of the director in charge.This department also works with the environmental management sections ofKUBOTA’s business sites and affiliates to preserve global and localenvironments.Compliance with environmental lawsTo ensure full compliance with applicable laws and regulations, the KUBOTAGroup has set internal targets for gas emissions, wastewater discharge, noise,and vibration for each business site at higher levels than what is legally required.If we fail to achieve any of these internal targets, we conduct an in-depthinvestigation to determine the cause and take corrective measures, even if thelegal requirements are met.As well, if we fail to meet legal requirements, we notify the competent authority ofthe fact without delay under the internal regulations of the KUBOTA Group, anddisclose the information of such failure publicly.During FY2010, there were no cases of failure in meeting material legalrequirements across the entire KUBOTA Group.Environmental educationIf we are to promote environmentally-friendly corporate activities, we have toincrease environmental awareness among all of our KUBOTA Group members.The first step in addressing environmental problems is to become aware of theproblems. At KUBOTA, we implement regular position-specific educationalprograms so that our employees can learn about environmental problems.Systematic and specialized education is also being carried out in order to makea satisfactory response to environmentalissues. We are aiming at improving ourabilities and at an increase in qualifiedpersonnel. All of this is tied to the assuredpractice of environmental conservation. Wewill continue our efforts to enhance ourenvironmental education qualitatively andquantitatively into FY2011.FrontlineVoiceEnvironmental management activities at P.T. Metec SemarangMohamad Saetori (left)Uzwar Handiansyah P.T. Metec SemarangEnvironmental training sessionP.T. Metec Semarang manufactures vending machines and relatedparts in Semarang City, Indonesia, and we are in charge of thecompany’s environmental management. We celebrated the company’s15th anniversary in March 2010. Since our inception, we haveconducted a variety of environmental activities while enhancing ourability to produce environmentally friendly products. During FY2010,we launched activities aimed at: enhancing energy efficiency byenlarging the diameters of our air pipes; recycling materials used in theproduction process, such as thinner;and reducing resource consumption byimproving the yield of steel productsand paints.In response to the growing concernover climate change and otherenvironmental problems, we willcontinue efforts to reduce environmentalimpacts in a well-planned manner, sothat we can be recognized as a“company more friendly to both peopleand the global environment.”Environmental auditingWe conduct annual “KUBOTA Group Environmental Audits,” pursuant to the“Environmental Risk Management Policy” established for each fiscal year,based on the “Environmental Risk Management Regulations andEnvironmental Preservation Rules and Guidelines” that were formulated by theinternal control system of the KUBOTA Group.The environmental audit of FY2010 focused on the “development andimplementation of operational/inspection procedures and standards ofenvironment-related facilities,” in addition to the matters covered annually, andcorrective measures were intensively implemented for all the inadequaciesidentified during the audits.Audit conducted at an overseas production siteAudit conducted at a product maintenance site For more detailed information on KUBOTA’s “Environmental management promotionsystem,” “Environmental risk management,” “Environmental education,” “Greenpurchasing and green procurement,” “Environmental accounting,” “ISO14001certification,” and “Environmentally-friendly products,” please visit our website at:Enhancing energy efficiencyby enlarging the diameters ofair pipesReducing resourceconsumption by improvingthe yield of steel productsPromoting recycling throughuse of a waste thinnerrecycling unitEnvironmentalReport KUBOTA Group Business Activities and Environmental Loads/Environmental Management

Environmental ReportStopping Climate ChangeAs a manufacturer, the KUBOTA Group has placed special emphasis on its production process in implementing measures toprevent climate change. To add momentum to our group-wide activities to reduce CO2 emissions from FY2010, we have set newmedium-term goals and are concentrating our efforts on their achievement.Reducing CO2 emissionsWorking towards a Recycling-based SocietyThe KUBOTA Group encourages recycling and reduction of waste to achieve zero emissions and contribute toward the formation ofa recycling-based society.Promoting the 3Rs (Reduce, Reuse, Recycle)Targets andresults inFY2010Themes of activities underthe New Medium-TermEnvironmental Conservation PlanCO2 emissions per unit of salesCO2 emissionsCO2 emissions duringdistribution per unit of sales FY2010 targetsA 1% decrease fromthe FY2009 levelA 1% decrease fromthe FY2009 levelA 1% decrease fromthe FY2009 levelFY2010 resultsA 1.2% decreasefrom the FY2009 levelA 17.0% decreasefrom the FY2009 levelA 1.0% increase overthe FY2009 level Self-evaluationTargets andresults inFY2010Themes of activities underthe New Medium-TermEnvironmental Conservation PlanWaste discharge per unit of salesRatio of business sites that have achieved the zero emissions goal(Zero emissions: a landfill ratio of 0.5% or less)FY2010 targetsA 2% decrease fromthe FY2009 level40% 45%FY2010 resultsA 6.0% decreasefrom the FY2009 level Self-evaluationCO2 emissionsTotal CO2 emissions amounted to 478 kiloton-CO2, down 17.0% from theFY2009 level, while CO2 emissions per unit of sales also declined by 1.2% fromthe previous year. Thus, we have achieved the target for CO2 reduction. In spiteof the significant decline in sales, we could still achieve a reduction in CO2emissions per unit of sales (CO2 emissions/Consolidated net sales), which ismainly attributable to a decline in production at our casting plants and theimprovement of the CO2 emission factors of the electric power companies.During FY2010, we improved the combustion efficiency of our melting furnacesand reduced the standby power consumption of production facilities, as ameans to reduce energy consumption.Trends in CO2 emissions and CO2 emissions per unit of sales(kiloton-CO2)CO2 emissions from non-energy sources (KUBOTA Group)CO2 emissions(KUBOTA non-production sites and affiliates) CO2 emissions (KUBOTA production plants)CO2 emissions per unit of consolidated net sales (FY2005=100) (KUBOTA Group)CO2 emissions per unit of sales (FY1991=100) (KUBOTA production plants)* Since FY2005, non-production sites and affiliates have been added to calculations. Thenumber of applicable business sites is being gradually increased.* CO2 emissions per unit of sales=CO2 emissions/sales(Consolidated net sales, Non-consolidated net sales)Report fromthe FrontCO2 emissions during distribution(amount of freight shipped and CO2 emissions)320 million ton-km of freight were shipped in Japan in FY2010 and the amountof CO2 emissions resulting from those shipments was 39 kiloton-CO2. The CO2emissions during distribution per unit of sales increased by 1.0% from theprevious year and the target was not achieved due to the decline in sales, whileCO2 emissions were reduced by 15.1%.At KUBOTA’s Hanshin Plant (Mukogawa), a truck laden with treated wastewater meandered through thepremises and sprinkled water extensively on all main roads between August 2 and September 25, 2009.This plant-wide sprinkling of water was begun as a means to further reduce the heat island effect,following an experiment conducted in July 2009, in which the effectiveness of the sprinkling of water inlowering temperature and generating a cool breeze was verified.On the plant premises, bitter gourd seedlings were distributed as part of events for the EnvironmentalMonth of June. These seedlings have now grown into “green curtains” in various parts of the plant andoften catch the eye of employees. These “green curtains” prevent buildings from being directly exposed tomidsummer sunlight, thus contributing to a reduction of cooling load and energy conservation. As well,the increase of green areas has proven helpful in reducing the heat island effect. As a result oftemperature measurement, a temperature difference of 1–3°C was observed between the sun-lit andsun-shaded surfaces of the bitter gourd-covered area. The bitter gourd is a popular vegetable, as wheneaten, it can help prevent heat fatigue during summer, which also added the appeal of the “green curtain”program to employees. The plant will continue to create bitter gourd “green curtains” to lowertemperatures and help employees overcome intense summer heat.(FY)Trends in total CO2 emissions during distribution andCO2 emissions per unit of salesCO2 emissions (KUBOTA affiliates in Japan) CO2 emissions (KUBOTA)CO2 emissions per unit of sales (FY2007=100)(kiloton-CO2) * CO2 emissions per unit of sales=CO2 emissions/consolidated net salesContributing to the prevention of global warming through use of “sprinkling water” andthe growing of “green curtains” at the Hanshin Plant (Mukogawa)(FY)For more detailed information on “Data concerning CO2 emissions” and “Conversion coefficients,” please visit our website at:Sprinkling of waterGreen curtainsWaste dischargeWaste discharge per unit of sales in FY2010 declined by 6.0% from theFY2009 level; thus, the target for the year was achieved. Total waste dischargeamounted to about 74,300 tons, down 21% from the previous year.We will continue efforts toward further waste reduction by conducting moremeticulous waste management.Zero emissionsThe zero emissions achievement ratios in FY2010 are: 55% for business sitesin Japan, 22% for overseas business sites, and 45% in total. Thus, the target forFY2010 was achieved. The landfill ratio in FY2010 improved significantly to3.2% (1.0% for business sites in Japan only) compared with 6.0% (forbusiness sites in Japan) in FY2009. This reduction in landfill ratio is attributableto the contracting of slag recycling companies and to greater efforts for theseparation of waste at each business site. We will continue our recycling effortsinto FY2011 and beyond.Trends in landfill ratios (FY)* Includes business sites in Japan only up to FY2009 and overseas business sites in FY2010.* Landfill ratio (%)=(Direct landfill disposal + landfill disposal after intermediate treatment) /(Valuable resources + waste discharge)Report fromthe Front3R Promotion Activities at the KUBOTA GroupThe Tochigi Plant of Kubota Air Conditioner Co., Ltd., which manufacturesair-conditioning equipment, takes positive measures toward environmentalpreservation. The plant places special emphasis on waste reduction, andworks toward maximizing recycling by strictly ensuring the separation ofwaste. As shown in the photographs on the right, the plant provides a wastestorage space divided into compartments for easy waste separation, andthe layout of the waste station is clearly signed so that employees can easilysee where to place their waste. As a result of these efforts, the plantachieved the zero emissions goal (landfill ratio of 0%) in FY2010.Trends in waste dischargeSales of valuable resources Recycling & reductionsLandfill disposal Discharge per unit of sales(kiloton) (FY)* Includes business sites in Japan only up to FY2006 and overseas business sites fromFY2007.* Discharge per unit of sales (FY2005=100)=waste discharge/consolidated net salesWaste recycling and treatment flow (ton/year)Total waste generationSales of valuable resources (metals etc.)Waste generation In-house reintegration and reuseIn-house intermediate treatment(dehydration etc.)Resource recyclingWaste discharges(outsourced waste processing)For more detailed information on “Data concerning recycling,” please visit our website at:Intermediatetreatment71,080Direct to landfill Waste reduction* Resource recyclingafter treatment* Final landfill disposal* * The amounts of waste reduction, resource recycling after treatment and final landfill disposalwere the result of surveys conducted by outside intermediate treatment companies.EnvironmentalReport Stopping Climate Change/Working towards a Recycling-based Society

Environmental ReportChemical Substance ControlsThe KUBOTA Group has continued concerted efforts to provide appropriate control over chemical substances and achieve thetarget for reducing them.Conservation of BiodiversityThe KUBOTA Group has launched various initiatives for the protection of the natural environment to ensure that our corporateactivities will pose no threat to regional biodiversity.Reducing PRTR-designated substancesPRTR stands for Pollutant Release and Transfer Register. The PRTR Law, or the Law Concerning Reporting, etc. of Releases to the Environment of Specific ChemicalSubstances and Promoting Improvements in their Management, is designed to improve management of specific chemical substances by identifying the amountof such substances released to the environment.Measures taken to reduce PRTR-designated substancesWe are working for the reduction of PRTR-designated substances by: replacing conventional products with alternative ones that do not contain these substances,introducing waste thinner recycling units, and improving the production process. In FY2010, we achieved a 16.4% reduction in the amount of PRTR-designatedsubstances released and transferred from the previous year, but the target was not achieved on a per-unit-of-sales basis because sales declined to a greater extent.Trends in the amounts of PRTR-designated substances releasedand transferred (Data on business sites in Japan)Targets andresults inFY2010ReleasesTransfersRelease and transfer per unit of sales (FY)* The data shows the total amount of the substances for which the annual handling quantityequaled one ton or more (0.5 tons or more for specific class 1 designations) at each businesssite and for which reporting is required under the PRTR Law (business sites in Japan only).* Release and transfer per unit of sales (FY2005=100)=total release and transfer/consolidatednet sales* The amount of release and transfer during FY2009 was corrected.Trends in the amounts of VOC released(Data on business sites in Japan)Reduction of chemical substances in productsTargets andresults inFY2010Themes of activities underthe New Medium-TermEnvironmental Conservation PlanReduction in release and transferof PRTR-designated substancesper unit of salesThemes of activities underthe New Medium-TermEnvironmental Conservation PlanRatio of models with reducedRoHS-designated substances*Measures takento reduce RoHS-designated substancesEU’s RoHS and ELV Directives and similar regulations of other countries andregions are intended for electrical/electronic equipment and automobiles, andare not applied to most of the industrial machinery offered by the KUBOTAGroup. However, we have been taking voluntary measures to reduce the sixRoHS-designated substances (lead, mercury, cadmium, hexavalent chromium,PBB, and PBDE) in a well-planned manner. The ratio of KUBOTA models withreduced RoHS-designated substances is 24.2% in FY2010, against the targetof 25%.* The ratio of the value of shipped products that contain RoHS-designated substances (lead,hexavalent chromium, mercury, cadmium, PBB, and PBDE) in an amount equal to or less thanthe threshold limits (except those products that use RoHS-designated substances for theapplications falling under the exemptions specified in the RoHS and ELV Directives) against thetotal value of shipped products (excluding plants, facilities, work, services, and softwaredevelopment) in FY2010.25%FY2010 targetsA 2% decrease fromthe FY2009 levelFY2010 targetsFY2010 resultsA 0.5% decrease fromthe FY2009 level Self-evaluation (FY)* VOC stands for Volatile Organic Compound.* The data shows the total amount of VOCs for which reporting is required under the PRTR Lawonly.For detailed information on the “Results of PRTR reporting” and “Groundwater management,” please visit our website at:Report fromthe FrontFY2010 results24.2%The REACH regulations* require manufacturers to register chemicalsubstances and provide information on “Substances of Very HighConcern” contained in their products.At the KUBOTA Group, the Product Chemical SubstancesManagement Committee was established in October 2009 with aview to building an internal mechanism to collect information on thechemical substances used in our products and provide appropriatecontrol over them, and during FY2010, an information system forchemical substances control was introduced. We will furtherstrengthen measures to meet the REACH regulations by fosteringcloser cooperative ties with the suppliers of various materials.*REACH stands for Registration, Evaluation, Authorization and Restriction ofChemicals. Self-evaluationResponding to the European REACHRegulationsPromoting activities friendly to the natural environment and biodiversityBiodiversity conservation principles incorporatedinto the Kubota Group Environmental Action GuidelinesAt the KUBOTA Group, various environmental measures have been underway,such as creating biotopes and green areas at business sites. To furtherencourage biodiversity conservation and sustainable use of the naturalenvironment, biodiversity conservation principles were newly incorporated intothe Kubota Group Environmental Action Guidelines in December 2009. Underthese guidelines, we will continue our efforts to provide appropriate control overthe environmental impacts of our corporate activities, in order to protect thediverse range of regional ecosystems.HighlightKomakichan and Hakomakichan attached to a rice transplanterFrontlineVoiceYoshihisa FujitaRice Transplanter EngineeringDepartmentSakai PlantKUBOTA CorporationProtecting ecosystems using KUBOTA’s rice transplanters with devices that reduce the use of agriculturalchemicalsFarmland, such as rice paddies and vegetable fields, providehabitat for a diverse array of flora and fauna and thus has hugeenvironmental importance. On the other hand, to ensure a stableharvest of agricultural products, agricultural chemicals, such asherbicides and pesticides, have to be properly applied. Due to thedifficulty in applying an appropriate amount of chemicals uniformlyover a vast expanse of farmland, special caution has to be used toprevent agricultural chemicals from reaching nearby areas, whilealso avoiding the problem of excessive agricultural chemicalsremaining on crops (residual chemicals), which results from afailure to uniformly apply such chemicals. Today’s agriculturalcommunity is responsible for providing appropriate control over theamount of agricultural chemicals used and the method of applyingthem, for the dual purpose of securing food safety and preservingthe environment.To cope with this task, KUBOTA, since the 1990s, came up with aI hope to contribute to labor efficiency inagricultural activities and the protectionof the beautiful rural environment.Rooftop garden atthe Hirakata TechnicalTraining Centerdevice (an herbicide applicator) that can apply the right amount ofherbicides during rice transplanting operation, as an optionalproduct for its rice transplanters. In response to risingenvironmental awareness and the growing demand for laborefficiency regarding agriculture, KUBOTA also launched on themarket a higher-efficiency herbicide applicator, known as“Komakichan,” and a device for the nursery box application offungicide and pesticide, known as “Hakomakichan.” In recent years,stricter standards have been set for the aerial application ofagricultural chemicals by means of radio-controlled helicopters,etc., as well for the control of the amount of chemicals to be usedper unit area and the type of chemicals used, requiring theagricultural community to put greater attention on the environmentand safety. With the above-mentioned products, KUBOTAcontributes to reducing the impacts of agricultural activities onecosystems and the natural environment, while promoting soundagricultural practices, in terms of both quality and the environment.The “Komakichan” herbicide applicatorUsing this applicator, the right amount ofherbicide can be applied without fail during therice transplanting process. This product iseffective in a number of ways, including:preventing excessive application of herbicides;reducing environmental impact; improvingeconomic performance; and saving labor.“Hakomakichan,” a device for the nursery boxapplication of agricultural chemicalsUsing this device, the right amount of fungicideand pesticide can be applied without fail duringthe rice transplanting process. Unlike theconventional method of the manual applicationof chemicals in a nursery box placed on theground, this device prevents the scattering ofchemicals and ensures their uniformapplication.It is tough work to apply agricultural chemicals manually across a vast ricepaddy. The work also entails the risk of adversely affecting the environmentdue to the scattering of chemicals, while accidental inhalation of chemicalscan cause health problems. KUBOTA’s devices are effective in variousways: they contribute to labor efficiency, let users know the correct amountof chemicals used, have less environmental impact, and reduce cost bypreventing the excessive application of chemicals.Recently, agriculture is attracting growing interest. I really hope that ourdevices will help both practicing and prospective farmers in theiragricualtural work, and contribute to protecting and preserving the habitatsof a diverse range of living creatures and beautiful rural environments.EnvironmentalReport Chemical Substance Controls/Conservation of Biodiversity

Environmental ReportIndependent Review on the Environmental ReportSince FY2005, our Environmental Report has beensubject to an independent review by a third party toensure the credibility and completeness of theenvironmental information contained within it. Theinformation in the KUBOTA CSR Report 2010 thathas been reviewed is given this review mark: ( ).As a result of this year’s review, the KUBOTA CSRReport 2010 has been determined eligible to usethe environmental reporting assurance andregistration mark of the Japanese Association ofAssurance Organizations for SustainabilityInformation (J-SUS) (http://www.j-sus.org/).* Thisindicates that the environmental informationcontained in the KUBOTA CSR Report 2010 isreliable enough to meet the eligibility criteria to usethe mark set by the J-SUS.(*The mark is shown on the back cover of thisreport.)On-site inspectionsOdawara Plant,Kubota-C.I. Co., Ltd.CSRManagementSocial ReportEnvironmentalReportTranslationThe following is an English translation of an independent assurance report prepared in Japanese and is for information and referencepurposes only. In the event of a discrepancy between the Japanese and English versions, the Japanese version will prevail.Mr. Yasuo MasumotoRepresentative Director, President & CEOKubota CorporationList of information available on KUBOTA’s websiteIndependent assurance report27 May 20101. Purpose and scope of our assurance engagementWe have performed certain assurance procedures, based on the engagement with Kubota Corporation (the“Company”), on the Company’s key environmental performance indicators. These comprise the environmentalaccounting data and the material environmental information 1 of the Company and its major subsidiaries for theyear ended 31 March 2010, that were reported in the Kubota Group CSR Report 2010 (the “Report”). Theassurance procedures are with respect to whether the key environmental performance indicators have beenmeasured and calculated accurately and whether material information has been fully disclosed in accordancewith the reporting standards for sustainability reports 2 .The preparation of the Report is the responsibility of the Company’s management. Our responsibility is to expressan independent opinion on the Key Environmental Performance Indicators.2. Outline of the assurance procedures performedWe have performed limited assurance procedures 3 in accordance with the 2003 International Standard onAssurance Engagements (ISAE) 3000: Assurance Engagements other than Audits or Reviews of HistoricalFinancial Information of the International Federation of Accountants (IFAC) and the 2008 Practical Guidelines forthe Assurance of Sustainability Information of the J-SUS. Therefore, our assurance engagement providesrelatively limited assurance compared to a reasonable assurance engagement.3. ConclusionBased on the assurance procedures performed, nothing has come to our attention that causes us to believe thatthe Key Environment Performance Indicators have not been measured and calculated accurately in accordancewith the reporting standards of sustainability reports, or material information has not been disclosed inaccordance with the 2009 Sustainability Reporting Assurance and Registration Criteria, in all material respects.4. IndependenceOur assurance is compliant with the Ethics Regulations of J-SUS and there is no financial interest between theCompany and us.Akihiro NakagomeRepresentative DirectorErnst & Young ShinNihon Sustainability Institute Co., Ltd.1 The scope of material environmental information is stipulated in the 2009 Sustainability Reporting Assurance and Registration Criteria ofthe Japanese Association of Assurance Organizations for Sustainability Information (J-SUS).2 The reporting standards refer to the 2007 Environmental Reporting Guidelines of Japan’s Ministry of the Environment, the 2006Sustainability Reporting Guidelines of the Global Reporting Initiative, and the 2009 Sustainability Reporting Assurance and RegistrationCriteria of J-SUS in the context of specifying the material subject to disclosure.3 We have mainly reviewed and assessed the Company’s procedures for the collection and aggregation of data, performed analyticalprocedures, as well as recalculated and reconciled them with the corroborating evidence on the quantitative sustainability information on atest basis. In addition, we have mainly made inquiries and reviewed related records to verify the qualitative information.The following information is shown on our website to supplement the KUBOTA CSR Report 2010.Information provided in this reportKyuhoji Business CenterFunabashi Office, Keiyo PlantThe Fundamental Principles of KUBOTA’s CSR ManagementProduct safety and superior qualityThe ensuring of full legal complianceCreating a vibrant work environmentContributing to international society andenhancing social and cultural activitiesEnvironmental ManagementStopping Climate ChangeWorking towards a Recycling-based SocietyChemical Substance ControlsIndependent Review on the Environmental ReportPageIR activities and the provision of corporate information 34KUBOTA Group Business Activities and Environmental Loads 371726273031-333839404143Supplementary information shown in the websiteStatus of ISO9001 Certification Compliance Corporate Governance Internal Control SystemFire drills Safe driving trainingActions taken to prevent the infringement of the intellectual property rights of other companiesPersonal information protectionCertificate of Commendation given by the Osaka Prefecture Organized Crime Prevention CenterEnhancement of information security measuresPersonnel policy and personnel systemPromoting action plans to the Next Generation Nurturing Support Measures Promotion LawPromoting diversity managementSupport for the “Voice of Japan-China Friendship: Japanese and Chinese Speech Contest”Support for “Rice Paddies and Water in Rural Hometowns: Child Paintings Exhibition”Support for the “Osaka Friendship Campaign,” a commemorative event for Disability WeekGroup blood donation by KUBOTA employeesAgricultural education provided at a Japanese school in IndiaMain contents of the website Data on production plantsTrends in major environmental indicatorsEnvironmental management promotion systemData concerning CO2 emissions Ratio of foreign shareholders Environmental risk management Environmental education Green purchasing / green procurement Environmentally friendly productsISO14001 certificationConversion coefficientData concerning resource recyclingResults of PRTR reporting / Groundwater monitoringCalculation standards of environmental performance indicatorsEnvironmental accountingComments on the CSR ReportReport on the 120th anniversary—a milestone yearKUBOTA celebrates its 120th anniversary in2010. The entrepreneurship with which KUBOTAwas founded 120 years ago already embracedthe style and concept of what is known today as“social enterprises,” which pursues corporatedevelopment while addressing and solving socialproblems. At KUBOTA, this attitude is at the coreof its CSR activities, and this fact is highlysignificant.Materiality for CSR activitiesThis year’s CSR Report is characterized byKUBOTA’s declaration to focus its CSR activitieson three areas of material importance, namely:food, water, and the environment. All of theseareas bear special global importance, in whichKUBOTA’s contribution is highly expected. Theseareas also concern KUBOTA’s core business. Inthis light, KUBOTA will be able to bettercommunicate to society that the spirit of CSR isbehind KUBOTA’s corporate activities, byemphasizing the socially contributing factors ofits corporate activities as “CSR activities.”Promotion of stakeholder dialogKUBOTA has made positive efforts to promotedialog with its stakeholders. Besides theinterview with the president by employees andthe discussion with experts, KUBOTA’s steadyefforts, such as encouraging all KUBOTAemployees to read its CSR report, deserve highrecognition. It is important how KUBOTA will usethe opinions collected from such dialog indesigning its future corporate activities.Environmental activities frommedium- and long-term perspectivesKUBOTA has made concerted efforts towardenvironmental preservation activities and hasachieved steady results, which is something thatshould be highly regarded. Considering that thereduction in production volume adverselyaffected various environmental indicators duringthe fiscal year under review, introduction ofIn response to the above commentsMasayuki Yukuta General Manager, CSR Planning Department KUBOTA CorporationAs in last year, this year we invited Professor Katsuhiko Kokubu of the Graduate School ofBusiness Administration, Kobe University, to comment on our CSR Report. He examined ourreport for two consecutive years and thus his comments come from a continuous perspective.KUBOTA takes his advice seriously and relies on it in designing measures to improve itscorporate activities.For 120 years, KUBOTA’s corporate activities have always aimed to contribute to society.Published in the milestone year of the company’s 120th anniversary, this particular CSR Reportis designed to renew the determination across the KUBOTA Group to preserve this tradition,which is deeply woven into the company’s DNA.We, at the KUBOTA Group, will remain committed to contributing to the development of societyand preservation of the global environment, so that we can continue to be a respected memberof society.May 25, 2010Professor Katsuhiko KokubuGraduate School of BusinessAdministrationKobe Universityindicators that are independent of changes inproduction volume or the CO2 emissioncoefficient is recommended. Additionally,evaluating the current environmental efforts inmedium- and long-term perspectives by settingtargets for 2020 or 2050 will be effective inbringing about innovations in KUBOTA’senvironmental activities. In this light, KUBOTAshould consider to introduce morecomprehensive, integrated numerical indicators,such as a resource productivity indicator.Introduction of the perspective of avalue chainBy specifying areas of importance and using thePDCA cycle in environmental and social areas,KUBOTA is implementing CSR activities in ahighly advanced manner. KUBOTA shouldintegrate all the areas of its activities and create avalue chain involving suppliers and customers aswell, in a systematic fashion. By developing aplan that allows KUBOTA’s value to be sharedglobally and explaining that plan to the public,KUBOTA will be able to achieve further successin its CSR activities.

As a leading company forenvironmentalperformance, KUBOTAhas made a promise toimplement environmentalconservation activities tothe Ministry of theEnvironment.We practice Green Purchasing.Our CSR Report 2010 has beendetermined eligible to use theenvironmental reportingassurance and registration markof the Japanese Association ofAssurance Organizations forSustainability Information(J-SUS).KUBOTA Corporation1-2-47 Shikitsu-higashi,Naniwa-ku, Osaka 556-8601 JapanInquiriesCSR Planning Dept.Tel: +81-6-6648-2447Fax: +81-6-6648-3862Natural energy was used to generate the electricity required for printing this report (1,700 kwh).This material was printed on FSC-certified paper, which indicates that the paper comes fromforests managed in a socially and environmentally responsible way.The ink used was a vegetable-based soy ink, which places a lower load on the environment.This report was printed using a waterless process, which does not use any dampening solutionthat contains alkaline developer or isopropyl alcohol.Issued in June 2010 Printed in Japan