Corporate Governance
Basic Stance on Corporate Governance
At JSW, we believe we must earn the trust of all our stakeholders, including our shareholders, clients andemployees, not merely to raise our enterprise value, which comprises both the Company’s economic value
and its value to society in the broader sense, but to make possible our very existence.
We have, therefore, designed a set of management structures to ensure an effective system of corporate
governance, and strive to facilitate appropriate disclosure of corporate information so as to achieve the levelof management transparency demanded by investors today.

An Outline of Our Corporate
Governance System
The Company employs the traditional statutory auditor
system, comprising eight directors (one of whom is anoutside director) and four statutory auditors (hereafter,“corporate auditors”), of whom two are outside
auditors.
The term of office of directors is one year, and wehave adopted the corporate officer system andseparated the decision-making and oversight functions
from the executive functions performed by thecorporate officers. In this way, we have taken steps to
speed up management decision-making and enhance
the performance of both oversight and executivefunctions.	In principle, the Board of Directors’ meeting isconvened once a month. At the meeting, decisions andreports are made on matters of importance to themanagement of the Company, including basic
management policies and matters stipulated by legalstatute. Board of Directors’ meetings are also attended
by senior executive officers and those of higher rank,
and are positioned as an oversight body with respect tothe performance of their duties by the directors andcorporate officers.	In addition, an Executive Board composed of four
representative directors and other directors designatedby the President meets once each week, with one
outside director and one corporate auditor also inattendance (corporate auditor chosen by rotation), todiscuss and make decisions on matters of management
importance and other matters of importance to the14

performance of their duties by the directors andcorporate officers, as well as to discuss, report, andmonitor matters relating to overall management of theCompany.	In addition to these bodies, the ManagementCouncil, consisting of directors, corporate auditors, theheads of operating divisions, plant general managers
and managers at corporate headquarters, and otherpersons with executive responsibility, convenes once amonth in principle. The Management Council analyzes
the business environment, monitors the progress ofbusiness plans, and ensures that knowledge is widely
shared among the Company’s management and isreflected in their decisions and that risk management
and compliance are rigorously observed.
The Board of Corporate Auditors consists of four
corporate auditors, of which two are outside corporate
auditors with one serving full-time. The Company’s
corporate auditors attend meetings of the Board ofDirectors, the Executive Board, the ManagementCouncil and other important meetings. They also pay
regular inspection visits to the Company’s plants andkey offices and to major Group subsidiaries once
during each half of the fiscal year, as a general rule.
Meanwhile, they receive important reports fromrespective divisions when needed and exchange views
with directors and key employees. Based on these
efforts, they express their views to management from an
objective and neutral point of view, and exercise strict
oversight with regard to the execution of Company
directors’ duties.

Our Internal Controland Risk Management System
JSW regards it as a management issue of crucial
importance to have an effective internal control system
in place to ensure the correct performance of business
operations. We are, therefore, working to improve oursystem of internal control in line with our Basic Policy
on Internal Control Systems resolved at the meetings ofthe Board of Directors, in addition to the Regulations
Regarding the Promotion of Internal Control Activities(one of the Company’s internal regulations). In
addition, we will respond to social changes and work toachieve a more appropriate and efficient system byproperly reviewing internal control issues andresponses.
The points below delineate the fundamental
stance adopted by the management of JSW toward theissue of internal control, and highlight the progress wehave achieved thus far in strengthening the Company’s
internal control system.
1. Improving the internal control system
In addition to setting up a specialist unit dedicated tosupervising the Company’s internal control system,
the Internal Control Committee holds meetings onan ad hoc basis, as deemed necessary.
2. O bservance of legal regulations and theCompany’s Articles of IncorporationJSW does not limit compliance to the prevention ofillegal acts and the observance of legal regulations
and the Company’s in-house rules, but instead views
compliance in the broader context of general social
responsibilities and upholds a wide variety of rules
and regulations. The key to success for complianceactivities lies in having directors and corporate
officers take the initiative in setting an example andpracticing truthfulness, while raising employee
awareness on compliance issues through educationand training.
JSW has established a department responsiblefor internal audits to ensure that the Company’s
overall operations observe all laws and regulations,as well as in-house rules. In addition to periodicaudits, this department conducts spot audits, asdeemed necessary. The results of these audits arereported to the president and relevant parties
including, as appropriate, the Board of Directors, theExecutive Board, the Management Council and theCorporate Auditors.
We have also created a system comprisinginternal and external routes for reporting anddiscussing compliance violations when discovered,
which guarantees anonymity and protection fromreprisal.
The Company has clarified in its Corporate Codeof Conduct its policy of strict opposition to theactivities of criminal organizations or individuals
and it takes firm action to eliminate these anti-social
forces through the establishment of a single
dedicated office for the communication of relevant
information and the management ofcountermeasures.
3. Safeguarding and management of information
The Company appoints a director or corporate
officer to the task of ensuring the safeguarding andmanagement of information. In accordance withrules and regulations governing the management ofdocuments and information, the Company storesand manages important information related to theexecution of directors’ and corporate officers’ duties
including the minutes of important meetings andwritten requests for management decision approval(ringisho), and other important documents as written
documents or as electronic records held for
safekeeping.
Further, directors and corporate auditors are able
to access and view or copy this information asneeded.
The Company also discloses financial andimportant management information in a timely andappropriate manner.
4. Risk management
At JSW, directors, corporate officers and employees
who concurrently serve as the managers understandand evaluate the risks involved in carrying out theirduties in their divisions, and accordingly respond to15

Corporate Governancerisks within the scope of their authority as stipulated
by regulations and the system for management
decision approval (ringi system).
Moreover, key risk factors are discussed atmeetings of the Board of Directors or of theExecutive Board.
The Company has established regulations forrisk management and defined a Companywide risk
management system. With respect to risk based onfunctions such as safety and hygiene, environmentalmanagement, information security, and security
export controls, the relevant division in charge of
those risks sets up committees or creates regulations
for managing each of those risks across divisionboundaries and then appropriately manages them.
Moreover, a director or corporate officer of theCompany has been placed in charge of risk
management, and is accordingly tasked with
monitoring such matters in collaboration with thedepartment responsible for internal audits andreporting to the Board of Directors or the Executive
Board.	Risk managers are assigned within each divisionat the headquarters, within each business unit, andat each plant. These risk managers ascertain theappropriateness of existing measures and work toidentify everyday risks. In the case of critical risk
situations, a crisis management headquarters isestablished to provide the appropriate response. In
this way, we are addressing risks under both ordinaryand extraordinary circumstances.
5. Ensuring efficient performance of duties
To ensure rapid decision-making and the flexible
and efficient performance of management duties, thepresident has been made the chief executive officer,
and directors have been put in charge of theperformance of duties in key departments within
headquarters and business units. Under theirleadership and supervision, the corporate officers
appointed by the Board of Directors perform theduties delegated to them.
Moreover, the directors and corporate officers
discuss, decide and report important matters inmeetings of the Board of Directors and the Executive

16Board.	At JSW, Companywide goals applicable among
directors, corporate officers and employees andincorporated into the Company’s Medium-Term
Management Plan and business plans are establishedat Board of Directors’ meetings. Meanwhile, eachdirector and corporate officer develops concretemeasures for achieving these goals, while duties aresegregated in line with in-house regulations andspecific measures are planned and implemented.
Furthermore, directors and corporate officers
conduct reviews of the results and provide periodic
progress reports, as well as impromptu reports atmeetings of the Board of Directors, the Executive
Board and the Management Council.
6. Ensuring appropriate management conduct at
Group companies
The Company encourages its subsidiaries to follow
its Vision, Management Philosophy and Corporate
Code of Conduct, and also create their own systems
of internal controls. In addition, the Company
supports the autonomy of their management.
The Company has drafted regulations
concerning the operation and management of its
subsidiaries and has clarified the system ofmanagement responsibility and leadership for them.
Moreover, the Company is creating a system
whereby reports and notifications can be maderegarding subsidiaries’ decisions on important issues
and other matters of concern, and data can becollected. At the same time, the Company is careful
to ensure a certain amount of management
independence of its listed subsidiaries.
JSW dispatches its officers and employees as
directors and corporate auditors to Groupsubsidiaries. Also, to ensure our subsidiaries’ strict
adherence to all laws and regulations, as well as
in-house company regulations, we request that thesecompanies conduct in-house audits, either periodicor spot audits, through the departments in charge ofeach subsidiary, and also by a department responsible
for the internal auditing of subsidiaries. We also
directly audit operations and provide guidance for
improving internal controls of subsidiaries.

7. A
 ppointing staff to assist corporate auditors, andensuring the independence thereof
The Company appoints staff from among its
employees to assist the corporate auditors in theperformance of their duties, upon request. The
opinions and consent of the corporate auditors
themselves are sought with respect to theappointment and dismissal of the said staff and allother personnel-related measures such asperformance evaluation and compensation packages,
and no action is taken without the corporate auditors’agreement, so as to ensure the independence of thecorporate auditors’ assistants from the influence ofthe directors and corporate officers of the Company.
8. S ystem for submission of reports to the corporate
auditors by the directors and employees of theCompany
At JSW, corporate auditors attend the Board ofDirectors, the Executive Board, the Management
Council, and other managerial meetings whereimportant matters are discussed, decided andreported. Corporate auditors are guaranteed
opportunities to attend these meetings.	In keeping with the ringi system, corporate
auditors are also shown the records of management
decision approval (ringisho) for their perusal.
Moreover, the corporate auditors may request reports
from directors, corporate officers or employees at any
time they deem necessary.
9. E nsuring effective performance of audits by thecorporate auditors
We provide an environment in which directors,
corporate officers and employees of the Company canrecognize the importance and benefits of audits
performed by corporate auditors, thereby enablingthem to give the highest priority to cooperating withcorporate auditors in their duties as far as possible.
The corporate auditors can request thecollaboration and cooperation of the Company’s
Internal Audit Division, other head office divisions,and all other divisions of the Company in theperformance of audits.
We provide an environment that enables

corporate auditors to enlist close collaboration withaccounting auditors and the Internal Audit Division.
We also provide an environment that allows
corporate auditors to employ the services of legal
advisors and other outside experts at their own
discretion.
10. System for ensuring the reliability of financial
reports
The Company follows basic internal control policies
for financial reports and evaluates the effectiveness ofinternal controls for financial reports. Such findings
are accordingly reported to the Board of Directors andthe Executive Board and discussed in their meetings.

Policy Regarding Large-Scale
Purchases of Company Shares
By resolution of the meeting of the JSW Board ofDirectors held on September 10, 2007, the Company
instituted a set of rules to be obeyed and procedures tobe followed by any party seeking to purchase the sharesissued and outstanding of the Company. These rules
and procedures were adopted under the name ofMeasures against Large-Scale Share Acquisitions(takeover defense measures). Subsequent to thisresolution, a partial amendment of these measures waspresented at the Company’s 82nd Regular General
Meeting of Shareholders held on June 27, 2008, and theagenda item was approved and updated. After that,necessary amendments were made and then approvedby shareholders at the Company’s 85th Regular General
Meeting of Shareholders held on June 24, 2011.

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