Message from the President

Shifting from a performancerecovery and expansion
phase to a period of profit
structure reconstruction

Ikuo Sato
Representative Director &President

Business performance
In fiscal 2010, the fiscal year ended March 31, 2011, Asia and particularly China as well
as developing countries experienced high rates of economic growth. Together with thisdriving force, the overall global economy entered a recovery trajectory. Meanwhile, turning
to conditions in Japan, the domestic economy showed signs of a partial favorable upswing
due to such factors as an increase in export activity to developing countries. However, amid
the sharp appreciation in the value of the yen and the rapid and prolonged increase in
crude oil prices, conditions in Japan were greatly impacted by the massive damage causedby the Great East Japan Earthquake that struck the nation in March 2011. Despite delays incertain shipments and other minor interruptions to its business activities, the JSW Group’semployees, operating bases and facilities were unaffected by the disaster. In this regard,
the impact on performance for the fiscal year under review was minimal. Looking ahead,however, at the future of the electric and nuclear power sectors, mainstay areas for theGroup’s operations, there is little room for complacency.	Under these circumstances, the JSW Group embarked upon its medium-term
management plan, “JGP2012,” that covers the three-year period from fiscal 2010 in May
2010. Under this plan, JSW’s business vision is to become a “company that creates change”

2with creative technology, and that contributes to the development of society. At the sametime, the Company has identified the goal of becoming the number one global monozukuri
company. In specific terms, JSW accordingly engaged in strategic development in each of its
business fields while promoting measures aimed at strengthening its financial position. In
addition to actively pursuing increased efficiency in the balance between inventory turnoverand notes and accounts receivable, JSW undertook cost-cutting measures including thereduction of variable costs and further rationalization of fixed costs in an effort to lower thebreak-even point. Despite these endeavors, the Company was buffeted by a drop in productprices in line with the strong yen and intensifying competition as well as such factors as theincrease in depreciation and amortization.
Taking into account each of the aforementioned factors, consolidated net sales infiscal 2010 increased 5.6% compared with the previous fiscal year to ¥212,929 million(US$2,560 million) on the back of growth in the Industrial Machinery Products Business.
From a profit perspective, orders and sales of industrial machinery increased. This was,however, more than offset by the upswing in depreciation and amortization relating to theSteel and Energy Products Business. As a result, operating income declined 11.5% year onyear to ¥28,495 million (US$342 million). In similar fashion, ordinary income slipped
6.7% to ¥29,168 million (US$350 million) and net income fell 5.7% compared with theprevious fiscal year to ¥16,532 million (US$198 million).
While orders received for the Steel and Energy Products Business were soft, results wereup in the Industrial Machinery Products Business. As a result, orders received in fiscal 2010
totaled ¥216,883 million (US$ 2,608 million), an increase of 3.4% compared with theprevious fiscal year.
With respect to the appropriation of profits, the Company remains committed tobolstering its internal reserves in order to fund the capital expenditure required to ensure
long-term and stable business as well as technology development and to strengthen its
financial position. At the same time, JSW will continue to promote the payment of stable
and sustained dividends to its shareholders. Taking these factors into consideration, theCompany has decided to pay an annual dividend at the previous fiscal year’s level of ¥12
per share for the fiscal year under review.

Forecasts for fiscal 2011
Looking ahead, Japan’s economy is projected to pick up on the back of the positive shift
in the global economy. Despite these favorable conditions, the future outlook remains
shrouded in uncertainty due to the inherent downside risks associated with the impacts of3

Message from the President
damage from the Great East Japan Earthquake. The JSW Group has positioned efforts tominimize the negative impact of a global-scale review of nuclear power policies as a key
management priority in fiscal 2011. In this context, plans are in place to revise its current
medium-term management plan and to formulate a new plan beginning the fiscal year
ending March 31, 2013.	On an individual business segment basis, orders received for power plant components
are expected to decrease. Orders received for plastics manufacturing and processing
machinery, on the other hand, are forecast to increase. Sales of pressure vessels for oil
refinery use are anticipated to decline. In addition to a projected upswing in sales of power
plant components and clad steel pipes for natural gas field pipeline use, results fromplastics manufacturing and processing machinery and from plastic injection molding
machines are expected to improve. Accounting for each of the aforementioned factors, netsales, operating income, ordinary income and net income are forecast to total ¥225,000million, ¥19,500 million, ¥20,000 million and ¥11,500 million, respectively, in fiscal
2011. However, as previously identified, JSW’s performance is susceptible to the impact
of fluctuations in global nuclear power generation plans. These plans are anticipated tochange with time, and accordingly the Company will continuously reassess and review its
numerical targets as and when required based on an analysis of conditions.	Despite substantial fluctuations in its operating environment, the JSW Group willcontinue to expand its growth platform by further upgrading and enhancing its proprietary
technologies while actively reconstructing its profit structure. As we work towardachieving our established goals, I ask for the continued understanding and support of allshareholders.
June 2011

Ikuo Sato
Representative Director & President4