Message from the Management
Company posts record profits amid
harsh business conditions

Masahisa Nagata
Representative Director &Chairman of the Board ofDirectors (right)

Ikuo Sato
Representative Director &President (left)

Business performance
The financial meltdown in the U.S. last September triggered a global economic downturn during thesecond half of the term under review, and the Japanese economy also slowed down. The yen’s rapid
appreciation against the dollar and the euro forced Japanese exporters to cut production, and businessperformance weakened. At the same time, companies curbed plant and equipment investments, andstocks declined further, leading to a deterioration in corporate performance on an unprecedentedscale. A worsening employment environment and sluggish consumer spending have resulted in a
protracted economic recession, with no prospects of a recovery in sight.
Against this backdrop, JSW achieved record sales, operating income, and ordinary income. The
Machinery Products segment was sluggish, but the Steel Products segment achieved a strongperformance. Consequently, sales in the reporting term increased 3% year-on-year to ¥227,113million (US$2,312 million). A rise in profits accompanied the growth in sales. In the Steel Products
segment, a steady flow of orders enabled stable operation rates and cost reductions through improved
productivity. We were also able to raise product prices to reflect the rise in raw materials prices. As aresult, operating income rose 13% year-on-year to ¥36,633 million (US$373 million) and ordinary
income increased 16% to ¥35,949 million (US$366 million), marking record profit levels. In
contrast, net income declined 8% to ¥16,034 million (US$163 million) as a result of losses on thevaluation of investment securities and the disposal of obsolete facilities accompanying investment innew equipment.
Orders received for the reporting term, on a consolidated basis, posted a 9% decrease from thepreceding term, to ¥240,420 million (US$2,448 million), due to a lackluster performance by the2Machinery Products segment, which more than offset a brisk performance in the Steel Productssegment.

Accomplishment in our medium-term management plan
We are in the final year of the revised medium-term management plan “J2008R,” which covers thetwo years of fiscal 2007 and 2008. The main targets of this management plan are the enhancement ofbusiness scale, the improvement of capital efficiency, and the promotion of CSR. To respond to thegrowing demand worldwide for energy, and especially the heightened need for clean energy, we areundertaking large-scale capital investment and working to raise production efficiency. During theterm, we took steps to improve the efficiency of assets and the soundness of our financial position.
We conducted inventory adjustments, and made efforts to achieve an early recovery of accounts
receivable and to secure advances. However, as explained above, there was a rapid deterioration in
our business environment from September onward, and total sales declined to slightly below thetarget, due to a significant sales decline in the Machinery Products segment. Meanwhile, we madeefforts to reduce production costs and cut fixed costs. In the Steel Products segment, sales and orders
received remained firm, pushing up the capacity utilization rate, causing the Company’s operating
income and ordinary income to exceed targets by a large margin. Net income also exceeded targets,
despite the registering of losses on the valuation of investment securities and the disposal of obsolete
facilities.

Numerical targets and results (Consolidated)(¥ billion)

Term ended March 31, 2008

Sales
OperatingincomeOrdinary
incomeNet
incomeNet interestbearing debt(assets), excluding
lease obligations

Term ended March 31, 2009

Targets
under J2008R

Results

Increase/(decrease)

Targets
under J2008R

Results

Increase(decrease)

217.0

220.8

235.0

227.1

26.0

32.4

29.0

36.6

25.0

30.8

27.5

35.9

13.0

17.4

14.5

16.0

10.0

(7.9)

3.8
1.8%
6.4
24.6%
5.8
23.2%
4.4
33.8%
(17.9)

14.0

6.4(7.9)(3.4%)
7.6
26.2%
8.4
30.5%
1.5
10.3%
(7.6)

Note: Amounts less than ¥100 million have been rounded down.

Taking into consideration the large-scale investment in equipment being undertaken at the Muroran
Plant and the need to ensure a sufficient level of retained earnings, we have decided to keep ourannual dividend at the previous year’s level of ¥12 per share, with ¥6 per share paid mid-term, and ¥6
per share to be paid at the term-end.

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Message from the Management
Forecasts for fiscal 2009
Steadily working toward achievement of fiscal 2009 targets
There are no signs that the global economy will recover any time soon, and demand trends in ourcustomer markets also remain unclear. For these reasons, we decided not to draft a new medium-term
management plan for fiscal 2009. Instead, we have set the following targets for the current term,
which will serve as the basis for the next term’s plan.

Priority Issues

Main tasks by segment• Cutting production costs
and reducing capital
investment expenses

Steel Products• Realizing further
technological superiority
to secure top market
shares in even moreproducts• Raising employee skilllevels• Investing resources instaff hiring and training,to create top-class workforce• Pursuit of CSR targets• Ensuring workplace andhigher product quality

1) Major equipment investment plans being undertaken at
the Muroran Plant will be tailored to comply with changes
in product segment demand.
2) Further expansion in sales of energy-related products suchas pressure vessels for power plants (both thermal andnuclear) and oil refineries.

Machinery Products
1) Acquiring further orders from emerging economies,
particularly China, for plastics manufacturing andprocessing and molding machinery.
2) Steps to expand sales and improve profitability of windturbine system business; also steps to expand sales of IT
equipment and speed up development in this field.

By segment, the Steel Products segment, with its substantial order backlog, is expected to continue
showing a strong performance centering primarily on sales of products in the thermal power
generation and nuclear power generation fields. Amid growing demand worldwide for energy and theglobal trend toward environmental load reductions, we expect to see a further expansion in orders forcomponents for thermal power plants, which are becoming larger in scale and more efficient, andalso nuclear power plants. Demand is also expected to be strong for pressure vessels for oil refineries.
Despite an increased burden for depreciation expenses accompanying plant and equipment
investment, we expect earnings to be on par with the previous year’s level as a result of an anticipatedincrease in sales and a rising capacity utilization rate accompanying a continuing upward trend inorders, which began in fiscal 2008.
In the Machinery Products segment, we expect further growth in wind turbine systemequipment due to the growing demand for clean energy. In contrast, sales are expected to weaken forplastics machinery, processing equipment and plastic injection molding machinery as a result of adecline in equipment investment by the automobile industry, the leading customers for thisequipment. Despite a persistent harsh environment for plastic injection molding equipment orders,given the trend among automakers and home electronic appliance makers to postpone equipment
investment, we are taking steps to win orders for plastics machinery and processing equipment from
China and other emerging economies. We thus expect to see a year-on-year rise in orders in thissegment.
Taking into account the considerations stated above, we forecast sales of ¥217 billion(US$2,209 million), operating income of ¥28 billion (US$285 million), ordinary income of ¥27billion (US$275 million), and net income of ¥15.5 billion (US$158 million).

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On June 29, President Masahisa Nagata was appointed Chairman of the Board of Directors, andmanaging director Ikuo Sato was appointed President. Under this new management lineup we willcontinue to fully utilize our proprietary technologies and pursue technological advances to remaincompetitive despite the current harsh conditions. We appreciate the ongoing support andunderstanding of our shareholders.
June 2009

Masahisa Nagata
Representative Director & Chairman ofthe Board of DirectorsIkuo Sato
Representative Director & President

TopicsEquipment investment at our Muroran PlantOur Muroran Plant is equipped with cutting-edge large-scaleequipment, such as a hydraulic press that can handle up to
14,000 tons, and a 100-ton ESR (electroslag remelting) furnace.
The plant manufactures a wide variety of products. In addition tolarge items, it produces small- and medium-sized cast andforged steel products, clad steel plates and clad steel pipes. At
the Muroran Plant, production of energy-related items for use inthermal and nuclear power plants and wind turbine systemfacilities is expected to total ¥132.5 billion (US$1,349 million) infiscal 2009, and demand is expanding rapidly. To respond toThe facility at our Muroran Plant currently undergoing
expansion (Steel ingot production plant)
this rapid growth, JSW is undertaking investments totaling ¥80billion (US$814 million), to be implemented in two stages. In thefirst phase we will invest a total of ¥50 billion (US$509 million) for plant construction, and have set aside
another ¥30 billion (US$305 million) in the second phase for additional equipment investment.
Through this series of investments, we will be able to expand our production capabilities for large
forged steel products from the second half of fiscal 2010. Thus, in fiscal 2010 we plan to raise production
capacity for forged steel products for nuclear power plants to approximately three times the fiscal 2007 level(specifically, to 12 units per year). Through such an expansion in production capacity, we are working to meetthe growing global demand for these products.

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