JSW Integrated Report 2022

OUR P H I L O SO P H Y

CONTENTS

The corporate philosophy of JSW Group, starting with the Purpose
PURPOSE

Material Revolution™,(Japanese Trademark Registration Number 6650455)

making the world sustainable
and prosperous.

How We Create Value

Foundations for Creating Value

2 At a Glance
4 Our History of Creating Value
6 Message from the President
12 	JSW Group Value Creation Process
14 Special Feature		 Comprehensive capabilities that enable us to take on“

30	Response to Inappropriate Conduct inQuality Inspections
34 Promotion of ESG Management		34 Sustainability Management		
36 Environment				
36 Response to Climate Change				
38 Environmental Management				
40 Reduction of Environmental Impact		
41 Social				
41 Talent Development Strategy				
43 Human Rights				
44 Occupational Health and Safety				
45 Supply Chain Management				
45 Local Communities
		
46 Governance				
46 Corporate Governance				
52 Management Team				
54 Message from an Outside
Director				
55 Risk Management				56 Compliance				
57 Digital Transformation Promotion				
57 Information Security

singlehandedly everything from the development of corematerials to provision of the world's finest final products”

16 Materiality (Important issues)
18	Progress of the Medium-Term Management
Plan JGP2025
20 Strategy by Business		
20 Plastics Machinery Business		
22 Injection Molding Machinery Business		
24 Industrial Machinery Business		
25 New Businesses		
26 Material and Engineering Business28	Financial and Capital Strategy:
Message from the CFO

VISION

Benefiting all stakeholders by developing andimplementing industrial machinery andnew materials that solve social issues.
VALUE CREATION PROCESSJSW Group will further refine its core competence,develop industrial machinery and new materials that solve social
issues, and supply them to the world,
thereby simultaneously creating social value andenhancing sustainable corporate value.

Data
58
60
61

Key Data
Corporate Data
Stock Information

For details on the Value Creation Process, see p. 12-13

Editorial Policy

Reporting Period

Referenced Guidelines

Note on Forward-Looking Statements

Since fiscal 2021, The Japan Steel Works, Ltd. has been
publishing an integrated report to inform all stakeholders of its
initiatives for sustainably creating social value and enhancing
medium-to-long-term corporate value.
We hope that this report provides readers with deeper insightApril 1, 2021–March 31, 2022 (“Fiscal 2021” or “FY2021”)• International Integrated Reporting Framework, IFRS Foundation

Note: C ertain activities and information are included from outside
this reporting period.

• Guidance for Collaborative Value Creation, Japan’s Ministry of

The performance forecasts included in this report are judgments
based on the information that was available to JSW at the time
the report was prepared and are subject to underlying risks anduncertainties. Actual results may differ significantly from these
forecasts due to a variety of factors.

into JSW Group from both financial and non-financial
perspectives.

The Japan Steel Works, Ltd. and Group companies

Reporting Scope
Note: T hroughout this report, “JSW” refers to information relating
to The Japan Steel Works, Ltd., and “JSW Group” refers to
information relating to The Japan Steel Works, Ltd. and its
consolidated subsidiaries.

Economy, Trade and Industry• Environmental Reporting Guidelines 2018, Japan’s Ministry of

the Environment• GRI Sustainability Reporting Standards, Global Reporting

Initiative

JSW Integrated Report 2022 1

How We Create ValueAt a Glance

Industrial Machinery
Products Business
Segment

Material andEngineering Business
Segment

Business
Segments

80.1%

18.7%

Industrial Machinery Products
Business Segment

Material and Engineering
Business Segment

New
Businesses

Our Industrial Machinery Products Business Segment comprises three sub-segments:(1) Plastic Production and Processing Machinery, (2) Molding Machines, and (3) Other
Machinery, and operates from three bases: the Hiroshima Plant, the Yokohama Plant, andthe Meiki Plant.
With a lineup of plastic production and processing machinery and plastic injection
molding machines for a variety of applications, we offer many products that command ahigh market share, such as our separator film manufacturing equipment for lithium-ion
batteries. In this segment, which accounts for nearly 80% of JSW Group’s net sales, we areworking to further expand the scale of our business, especially in the mainstay plastic
processing machinery market.

Our Material and Engineering Business Segment comprises two
sub-segments: (1) Steel Castings and Forgings and (2) Engineering
Services, and is operated by Japan Steel Works M&E, Inc. (Muroran
Plant), which was established as an operating subsidiary in April 2020.
In steel castings and forgings, we are either the world’s only
manufacturer or have a high market share for products such as large
shaft materials for power plants, pressure vessel components fornuclear power plants, and large components for pile-driving machines
used in the construction of offshore wind farms. With the shift torenewable energy, we are working to strengthen our earnings basethrough business structure reform.

We have narrowed down our
new businesses to the threefields of photonics,
composite materials, andmetallic materials.
We are working to achieve
profitability in each field
through the supply of
products: in photonics,
materials for semiconductors
and optical devices such assynthetic quartz and gallium
nitride (GaN); in composite
materials, lightweight andhigh-strength materials foraircraft and automobiles
such as carbon fiber
reinforced plastic (CFRP)
products; and in metallic
materials, materials forvarious electronic devices
such as titanium copper.

New Businesses

1.2%

Hiroshima Plant

Yokohama Plant

Japan Steel Works M&E, Inc.
(Muroran Plant)

Meiki Plant

Production
Bases

Net Sales¥213.7billion

Plastic Production and Processing Machinery

Molding Machines

Steel Castings and Forgings• Pelletizers• Film and sheet manufacturing equipment• Twin-screw extruders• After-sales services• Plastic injection molding
machines• Magnesium injection
molding machines• Blow molding machines• After-sales services• Parts for reactors(shells, heads, etc.)• Parts for steam generators• Clad steel plates

FY2021

New Businesses• Rotor shafts• Turbine casings• Die steel• Steel rolls for steel manufacturing

Photonics
Composite materials• Metallic materials••

Semiconductors andElectronic Devices

Shell flanges for pressure vessels

Integrated rotor shaft for power generation

Clad steel plates

Steel rolls for steel manufacturing

Plastic injection molding machines
Pelletizers

Other
Machinery

Plastic Production
and Processing
Machinery20%

Products

29%

Twin-screw extruders

Molding
Machines

31%

Vacuum laminators

Defense equipment• Excimer laser annealing systems• Defense equipment• Railway products• Hot press devices

Plastics

Mobility• Design and analysis• Welded structures• Inspection and survey• Hydrogen-related products, etc.

Mobility
Components
Design and analysis• Vacuum laminators• Deposition systems• After-sales services

Electronic Parts
Excimer laser annealing systems

Markets

High-Performance
Batteries

Aircraft Components

Engineering and Other Services
Magnesium injection molding
machines

Other Machinery

2 JSW Integrated Report 2022

Cameras andSensing Devices

Electronic
Devices

Defense

Welded structures

Power Generation
Equipment

Hydrogen pressure accumulator

Renewable Energy

Infrastructure

New Businesses

JSW Integrated Report 2022 3

Our History of Creating Value

1907

Founding (pre-war)

Post-war recovery

1970s

2000s

Rapid economic growth

Preparation for a new era

2022

•D
 ecarbonization-related demand• Development ofdefense industry• Transition tocommercial business• Increasing energy demand• Accelerating adoption ofelectronics in industry

Launch as anational project

Growth based on a
portfolio of technologies

Becoming a comprehensive company
in materials and mechatronics

Toward establishing a new
future vision for JSW

In 1907, The Japan Steel Works was established in
Muroran, Hokkaido, as a joint venture between threecompanies: Hokkaido Colliery Steamship Company andtwo U.K. firms: Sir W.G. Armstrong, Whitworth & Co.,
Ltd., and Vickers, Sons & Maxim, Ltd. By manufacturingarmaments as a national project, the company
contributed to the development of the defense industry.
Purchasing Hiroshima Seisakusho Co., Ltd., in 1920,
JSW established a Hiroshima factory (now known as theHiroshima Plant) to expand the armaments business.

After the Second World War, the focus of our businessunderwent a major shift to commercial products. Utilizing thetechnology cultivated through the manufacture of armaments,
we began in earnest to produce large steel castings andforgings, such as rotor shafts for power generation and pressure
vessels for oil refineries, and plastic processing machinery,such as injection molding machines and plastic extruders.

We focused on creating new added value in response tomarket changes such as increasing energy demand and theaccelerating adoption of electronics. Among the actions taken
were the manufacture of ultra-large components (pressure
vessels and rotor shafts) for nuclear power plants, a switchfrom hydraulic to electric injection molding machines, and theintroduction of magnesium molding technology.

To contribute to a society that is demanding products thatare friendly to the global environment, we manufactureand supply separator film manufacturing equipment forlithium-ion batteries, molding machines for large plastic
parts for automobiles that excel in weight reduction, allmanner of resin processing machines adapted to serving aplastic resource recycling society, and pressure vessels forhydrogen storage to support the hydrogen economy.

Social issues
and needs

Phases in
our history1945(electric vehicles, use of hydrogen energy)• Increasing LCD demand with thegrowing use of smartphones•P roblem of marine plastic pollution

Meiki Co., Ltd.

Plastic injection molding machines
Expansion of materials

Magnesium injection molding machines

Mechatronics technology

Excimer laser annealing systems

Expansion of product range
Expansion to secondary
processing equipment

Separator film manufacturing equipment for lithium-ion batteries

Film and sheet manufacturing equipment

Plastic extruders
Barrel processing
technologies
Lineage oftechnologies
and their
provision tocustomers andmarkets

Extruders for material and chemical recycling

Artillery production technologies
Manufacturing
technologies

Material manufacturing
technologies

Rotor shafts for power generation

High-pressure cylinders, reaction towers(e.g., for fertilizer)

Pressure vessels for oil refining
Manufacturing
Pressure vessels for use in nuclear power generation
technologies
Pressure vessel manufacturing
Artificial crystals
and high-pressure technologies
Pressure vessel technologies

Pressure vessel manufacturingand high-pressure technologies
Hydrogen handling technologies

Research on hydrogen in steel

Gallium nitride (GaN)
single-crystal substrates
Hydrogenpressure vessels

Hydrogen storage alloys

Special steel technologies
Material manufacturing
technologies

Thick plate rolling

Clad steel plates and pipes

Net sales

4 JSW Integrated Report 2022

JSW Integrated Report 2022 5

Message from the President“Material Revolution™,” making theworld sustainable and prosperous.

Toshio Matsuo
Representative Director & President
The Japan Steel Works, Ltd.

enabling separate functions to be performed to ensure
mutual checks and balances. In terms of specific measures,in June 2022, in order to strengthen the independence of thequality assurance functions of M&E, a change was made byconsolidating the quality assurance functions into a Quality
Management Department and placed under the directcontrol of the M&E president. Furthermore, in September
2022, the Quality Management Office was established as
an organization at Company headquarters, headed by the
director in charge of quality management and staffedwith the quality assurance managers from each plant,
to consolidate information on quality throughout thecompany and ensure thorough management. Efforts
are now underway to restructure the system so that it isessentially impossible to engage in inappropriate conduct
due to safeguards such as the separation of production
management functions of product departments, where

Compliance Month and strengthen education and training
sessions related to quality compliance in order to fostera serious attitude toward compliance. At the same time,
I believe that it is essential that this be accompanied by aclimate of openness that makes it possible for individuals tocall out that which they feel does not make sense. I will work
to revamp the Company culture by making a point of being
more involved in the workplace to use diverse opportunities
to both communicate the messages from top management
and listen to what employees have to say.
M&E possesses world-class technology and production
facilities, including some of the world’s largest production
facilities, such as a 14,000-ton large press, and stateof-the-art facilities such as a 150-ton ESR (electroslag)
melting furnace – in fact, M&E is the sole owner in Japan ofsuch technology and facilities. M&E supplies a wide rangeof products that support social infrastructure, including

authority had previously been concentrated.
Regarding the role of our own corporate culture andclimate, I recognize that there are employees who feel thatthe act of taking on challenges is not valued and that more
importance is placed on avoiding failure. I believe that it
is crucial for individuals to take on challenges and takeownership of the resultant failure as an asset, and that only
by overcoming aversion to it can we grow. I am committed
to transformations that make for a company culture that is
so open that supervisors who receive reports of failure canhonestly thank their charges who made the effort to try.
In addition, we will of course continue to observe a Quality

large cast and forged steel components used in power
generation and steelmaking, clad steel plates used in natural
gas extraction, desalination and petrochemical industries,
and pressure vessels used in oil refineries. As part of JSW
Group, M&E will carry through its commitment of achieving
reform of its quality assurance system and corporate culture
to regain the trust of customers and fulfill its responsibility tosociety by supporting the global infrastructure industry withadvanced technology.
p. 30 Response to Inappropriate Conduct in Quality
Inspections

Establishing a Purpose, Material Revolution™
In Response to Inappropriate Conduct in Quality Inspections by
Our Subsidiary
In May 2022, the Company made a public announcement
after the discovery that inappropriate acts, including falsification,
fabrication and misstatement of product inspection results,
had taken place at its subsidiary, Japan Steel Works M&E,
Inc. (hereinafter “M&E”). Given the high level of trust people
have in our products, this betrayal of that trust leaves us
with a sense of shame. We offer a wholehearted apology
to our customers and other stakeholders for any possible
disturbance we have caused them. It is with the utmost
seriousness that we accept the findings of the report ofthe investigation received in November 2022 by a special
investigation committee consisting of external attorneys,
and the Group is united in our efforts to make reforms thatregain the trust that has been lost.
Reforms will be implemented in terms of both structure
and culture. Whereas products of the Industrial Machinery
Products Business Segment tend to be assembled frommany parts, M&E’s products consistently remain a block
6 JSW Integrated Report 2022of steel from the beginning to the end of the manufacturing
process. Due to this product characteristic, the divisions
involved have been limited and authority tends to beconcentrated, a situation that appears to have triggered
the improper conduct. The concentration of authority in agiven department makes it difficult for a system of checks
and balances to function, a matter that we consider to be agroup-wide governance issue, rather than a problem limited
to M&E. As described below (see p. 11), we will continue
to strengthen governance of the Group, including theestablishment of a system of mutual checks and balances,
as a Materiality related to the management foundation.
Regarding this particular instance of inappropriate
conduct, we will reform the system so that no single
department manages everything from specifications
and delivery dates to even customer relations, in order
to transform the organizational structure so that it canguarantee quality from a company-wide perspective byWhen assuming the position of representative director& president in April 2022, I was given pause to think
once again about The Japan Steel Works’ very reason
for existence. When the Company was founded in
1907, society’s need for the finest state-of-the-art steel
was the key to Japan’s modernization, a demand theCompany responded to through continuous technologicaldevelopment. Then, after the Second World War, theCompany wasted no time in starting to focus on plastics
as a lightweight material to further develop, and in 1950
developed plastic extruders of our own, which were
integrated into Japan’s first petrochemical complex in
1958. Since that time, the Company continued to develop
technologies and equipment to meet the growing demandfor plastics, supporting Japan’s path from post-war
reconstruction to rapid economic growth, and achieving

PurposeMaterial Revolution™
“Material Revolution™,” making
the world sustainable and prosperous.

significant growth.
As I looked back on the work done, I reached theconclusion that the Group’s reason for existence has
consistently been its commitment to continue to resolve
social issues by striving for the innovation of materials andmaking for a more sustainable and prosperous society. Thisapplies equally to our current work with magnesium, carbon
fibers and gallium nitride (GaN) in that these too are materials
that will contribute to the realization of a carbon-neutral andsuper-smart society in the future. So the direction of theCompany remains unchanged.
After assuming the position of president, I communicatedthese personal views of mine to the Board of Directors,
and after about six months of repeated discussions, weestablished the Purpose and Vision that constitute the new
philosophy system for JSW Group that was announced
Benefiting all stakeholders by developing andVisionimplementing industrial machinery and newmaterials that solve social issues.

JSW Integrated Report 2022 7

in November 2022. The Purpose will serve as the criterion
for judgment and action for the Group to rally around as acohesive unit in response to future changes in the existing
business environment that are difficult to predict. It will also
help prevent the recurrence of inappropriate conduct byensuring that all officers and employees of the Group share
the Group’s reason for being and reaffirm the responsibility
they bear in providing society with products that are of thehighest quality.
In our march toward realizing this Purpose and Vision,
we will utilize the core competency we have developed
over the years to provide society with the unique value weoffer. The core competencies of the Group are technologies
for melting, mixing and solidifying, as well as machineelement technology and precision control technology. In thedevelopment of plastics processing machinery, we havemelted materials in the equipment, mixed them uniformly,
and solidified them into the desired shapes, technologies
to which we have added machine element technology andprecision control technology in order to respond to thediverse needs of customers in a wide range of industries.
Also, we have manufactured high-quality crystals for a wide
range of applications by adding precision control technology
to technologies for melting and solidifying raw materials incontainers. By further refining our core competence anddeveloping and implementing industrial machinery and newmaterials that resolve social issues – something we call the
Value Creation Process – we will continue to create social
value and enhance our corporate value on asustainable basis.

Contribution to a Low-Carbon Society
As there is continued anticipation of long-term expansion of
the electric vehicle (EV) market, demand for related industrial
machinery is expected to continue to increase. Demand
for separator film used in automotive lithium-ion batteries is
expected to double in the industry by 2025. In light of thesetrends in demand, the Group is moving ahead to jump-startplans to increase the production capacity of film and sheet
production equipment for lithium-ion battery separators, withthe aim of establishing an annual production capacity of 50
lines by the end of March 2023 and 60 lines by the end of
March 2024.
In addition, demand for highly recyclable and lightweight

Identifying Materiality to Promote the Creation of the Foundationfor Business Expansion
The Group’s results for fiscal 2021 showed an increase inboth revenue and profit, with revenue of ¥213.7 billion (+8.0%
year on year), operating profit of ¥15.4 billion (+51.2% year onyear) and net profit attributable to shareholders of the parent
company of ¥13.9 billion (+102.3% year on year). We expect
sales to reach a record high in fiscal 2022, as well as the finalyear sales plan envisioned in our medium-term management
plan JGP2025 (hereinafter referred to as Medium-termManagement Plan) in fiscal 2023. With the aim of further
increasing the corporate value of our group, we have set thegoal of growing into a ¥500 billion business group as the visionof what we hope to be in 10 years’ time, and will continue tobuild our corporate foundation to achieve this goal.

In November 2022, we identified and announced six
issues of Materiality (key issues) as themes that should beprioritized in order to realize our Purpose. In identifying them,sustainability of the Group has been pursued by establishing
as guiding perspectives of “creating value and solving social
issues through JSW Group’s businesses” and “bolstering
JSW Group’s management foundation for sustainablegrowth.” The issues of Materiality singled out as leading
to the creation of value and the resolution of social issues
through the Group’s business are the realization of a plasticresources-recycling society, contribution to a low-carbon
society, and contribution to a super-smart society.

Realization of a Plastics-Resources-Recycling Society
The first Materiality set forth is the realization of a plasticresources-recycling society. Plastic has relatively low
CO2 emissions and is used in all types of fields, including
automobiles, household appliances and medical equipment,
making it a material that provides support for a more
prosperous world. The amount of plastic used in the worldcontinues to increase and is forecast to reach 800 million
tons by 2040, about double the current level, and then 1.2
billion tons by 2060.
Against this backdrop, the Group aims to achieve
further growth in the plastics-related business, not only
through involvement in the manufacture of plastics, butalso by providing machinery that facilitates the recyclingof resources in the march toward a circular economy.
The Group is moving forward with the development of

8 JSW Integrated Report 2022

its own manufacturing and processing technologies forbiodegradable plastics and biomass plastics, as theirproduction methods and molding and processing conditions
differ from those of conventional plastics. In November
2022, our development system was strengthened withthe completion of the Technology Development Centerfor chemical recycling in the Hiroshima Plant. Throughthe development of extruders for material and chemical
recycling, injection molding machines for recycled plastics
and other machinery, we will continue to promote the threeR’s (Reduce/Reuse/Recycle) + Renewable (renewable
resources) to contribute to the realization of a plasticresources-recycling society. We believe this will help reduce
CO2 emissions and maintain biodiversity.

magnesium alloy parts is expected to increase in line withthe reduction of the weight of automobiles. Whereas diecasting methods of production had been the norm, theGroup was the first in the world to develop and offer the
supply of magnesium injection molding machines thatmake precise use of the thixotropic phenomenon to moldmagnesium under low-energy and low-environmental-impact
conditions by means of injection molding. In November
2022, we launched large magnesium injection molding
machines capable of molding larger parts. We are engaged
in initiatives to increase production capacity with a view tofurther utilizing magnesium alloys, such as for application

investment in response to the shift to EVs. That accounts

in large automotive parts. In addition, we will promote thefor the July 2022 establishment of our overseas production

development and diffusion of industrial machinery for thebase for injection molding machines in Poland, following

social implementation of lightweight materials such as

those in China and the U.S., with full-scale operations

cellulose nanofibers and plastics reinforced with carbon

expected from 2023 onwards. At this production base, infibers, thereby contributing to the realization of aaddition to supplying small and medium-sized machines,

low-carbon society.

which are in demand in a wide range of fields such as

We will also continue to channel efforts into expanding

containers, medicine and electronics, we will build a systemsales of electrically powered injection molding machinesthat can supply large machines to the automotive industry

that offer superior energy-saving and environmental

with quick delivery times. Though the Company alreadyperformance. Currently, demand for electrically powered

boasts the top share relative to other Japanese injection

injection molding machines is growing rapidly in Europe

machine manufacturers in the European market, there is stillas there is an increased move toward carbon neutrality

room for increasing our share among the larger field that

as well as the onset of surging electricity prices. It is also

includes overseas manufacturers as well. We will furthera region where car manufacturers from various countries

increase our sales volume in the European market by 2025

have established manufacturing bases and there is capitalin response to the strong demand there.

JSW Integrated Report 2022 9

Contribution to a Super-Smart Society
As demand for electronic devices such as PCs andsignificant energy savings. Under Strategic Innovation

smartphones is expected to further expand with theProgram for Energy Conservation Technologies, a project

acceleration in digital transformation, there will be increasedby the New Energy and Industrial Technology Development

demand for all-encompassing personal connectivity to

Organization (NEDO), the Group started demonstration

networks and high-speed, high-capacity communications

experiments in 2020 to mass-produce gallium nitride crystals

such as 5G/6G.

by applying the technology already possessed to crystallize

The Industrial Machinery Business of our group handles

synthetic quartz crystals under high temperatures and highexcimer laser annealing systems, vacuum laminators,pressure. Then, in May 2021, we started operations of ahot presses, and ECR deposition systems as equipment

large-scale demonstration facility that led to the successful

involved in the manufacture of devices and semiconductors

production of 4-inch gallium nitride substrates. Furthermore,that make up this kind of digital infrastructure. Our strength

we accelerated efforts to ship samples during fiscal 2022,

lies in our technical capabilities to realize customers' needs

and we will contribute to the realization of a super-smart

into manufacturing equipment by utilizing our abundantsociety through mass production.

experience and advanced technological capabilities,
especially in precision control technologies such as precisiontransport and precision positioning.
And the Group’s new businesses promote the

I tell our employees that they need the power of dreams,
enthusiasm and persistence as they work toward realizing
the Purpose and further business growth. While the Group’s

development of energy-saving materials such as gallium

employees do indeed possess the power of dreams andnitride substrates for mass production, surface acoustic

enthusiasm, I feel that they lack persistence due to thewave (SAW) devices used in smartphones and all manner ofinclination to rest on their laurels once a measure of growthbonded substrates that are used in optical communications

has been achieved. Many of the Group’s products take aand optical modulators.

long time from initial development till reaching the market.

Gallium nitride is attracting attention as a material for laser

And many of the businesses we are currently offering have

diodes, high-frequency devices and high-voltage power

not been able to see the light of day until years of hard work

semiconductors because it offers lower resistance andwere first achieved. I believe that it is important to continue

higher-speed operation than silicon, which is the current

our efforts with persistence to establish the new businesses

mainstream material, not to mention its ability to achievethat will propel the Group to its next stage of development.

Promoting ESG Management and Strengthening Our Management
Foundation in the March toward Sustainable Growth

The Materiality we have set forth for “bolstering JSWGroup's management foundation for sustainable growth” are“human capital improvement and diversity and inclusion,”“investment in the future with innovation management,” and“governance reinforcement of JSW Group.”
We will give top priority to “human capital improvementand diversity and inclusion” for the creation of innovations
for further growth and strengthening of our managementfoundation as we work toward new value creation. A lackof diversity would both hinder innovation and make foran organization that runs the risk of taking on a form ofhomogeneity that breeds subservience and misconduct.
We will accelerate our investment in people as we movetoward the acquisition and development of diverse humanresources. At the same time, we will build a corporate
culture of openness and psychological safety so that we
make the most of our human resources.
With regard to “investment in the future with innovation
management” the Group will strengthen its R&D systemand production capacity, leverage M&A as well to expand
its business and promote digital transformation in orderto further enhance its competitive advantage. The growthof the Industrial Machinery Products Business Segment,
currently the very core of the Group, is the result of many
years of investment. We are compelled by a strong sense ofurgency to invest in the new precisely because we are now
enjoying favorable performance. To do otherwise would mean
missing the opportunity to both refine our core competence

meeting bodies has been discontinued and their roles haveto further enhance our technological advantage and utilize

been clarified. At the same time, there has been the newdiversity to create innovation, the very pillars we will need toestablishment of a Liaison Council of Outside Officers todevelop new business for the next stage of growth.

report to and brief outside officers. Through this council,

The ability to invest in people and invest in the future

more animated discussions at Board of Directors meetings

is contingent on the kind of “governance reinforcement

and other supervisory bodies will make it possible forof JSW Group,” which includes the quality assurance

deliberations in greater depth to take place.

system described at the beginning of this section. We will
In order to focus more on value creation through businesses

director in charge of promoting ESG was launched in April

fundamentally review conditions reflective of insufficientand to strengthen the management foundation for sustainable

2021. And in April 2022, the ESG Promotion Office wascooperation between divisions, overly concentrated authority

undergoing significant change, the direction in which we

growth, we are promoting ESG management, which is a basic

established to promote company-wide ESG activities.

in particular product divisions and inadequate of corporate

should proceed is evident. Our newly established Purpose,

policy in our Medium-term Management Plan. Recognizing

With the ESG Promotion Office and the ESG Promotion

control having been proven effective. In doing so, we will

Vision, Value Creation Process and Materiality providethat ESG activities are an important management issue, we

Committee in central roles, cooperation between Headgo beyond mere quality assurance to promote reforms thata massive compass to guide us. As we work toward

are engaging in diverse initiatives in each of the areas of the

Office divisions, business divisions, plants, and Group

strengthen head office functions such as internal control and“Material Revolution™,” making the world sustainable andenvironment, social and governance through means suchcompanies has been deepened and ESG activities are being

risk management, strengthen cooperation between divisions

prosperous,” the entire Group will coalesce as one to work

as production activities with environmental conservation ineven more actively promoted. In the area of dealing withand establish functions for mutual monitoring.

together on reform initiatives that regain the trust that has

mind, the development of environmentally friendly products,

the environment, in June 2022, we expressed our support

the nurturing of human resources that contribute to building

Though the environment in which the Group operates is

As for the management structure, the number of inside

been lost and prevent the recurrence of improper conduct

for the TCFD (Task Force on Climate-related Financial

directors has been reduced by one, and three out of eight

so that we continue to fulfill our responsibility as a suppliera sustainable society, and the establishment of a transparent

Disclosures) recommendations. As we analyze and study

directors have been outside directors, increasing the ratio

to our customers. And we will make a point of reporting tomanagement system.

the impact of climate-related risks and profit opportunities onof outside directors from 33.3% to 37.5%. In addition, toupdate on the steady progress we make.

Based on the aim of promoting ESG activities smoothly

matters such as our own business activities and earnings,

strengthen the function of management monitoring andI wish to offer thanks to all of our stakeholders for theand effectively in a company-wide and cross-organizational

we are working to expand our information disclosure in line

improve the effectiveness of the Board of Directors, thecontinued guidance and encouragement you provide.

manner, a ESG Promotion Committee chaired by thewith the TCFD disclosure framework.

practice of outside directors participating in executive-side

10 JSW Integrated Report 2022

JSW Integrated Report 2022 11

JSW Group
Value Creation
Process

Material Revolution™

PurposeBenefiting all stakeholders by developing andVisionMaterial Revolution™,materials that solve social issues.

making the world sustainable and prosperous.

Capitalimplementing industrial machinery and newBusiness Model

Outputs

Outcomes

As of March 31, 2022

Financial capitalM anufactured
capitalMelting, Mixing,
and Solidifying
Technologies

M a n ufact

Human capitalJ SW Group employees: 5,329• 
Non-consolidated JSW
employees: 1,767• Engineering career-track
employees (non-consolidated):807• 
Training facilities for skills
transfer: 2

uri•Machine Element
Technology
Precision Control
Technology

ng

T

ec

hn

olo

Resolution ofSocial Issues• Industrial Machinery• New Materials

hnologyTec apital investment:C¥4,903 million• 
Plants: 3 locations• 
Test centers: 3 plastic
machine locations, 6 molding
machine locations• 
Sales locations and Group
companies covering major
market regions in Asia, North
America and Europe
•

ign
es
D

Ma
ter
ial
CompetenerceCo hareholders’ equity:S¥146,765 million• 
R&I rating: A (stable)•

Sustainable
society ontribute to the expansion of ourCcustomers’ business opportunities•
Resolve issues faced by ourcustomers•Contribute to reducing
environmental impact•

Employees

Prosperous society work environment with job
Asatisfaction and excitement•Growth as a highly skilled
professional(resolution of social issues such as thehealth of people, medical care, food,and energy)•

Plastics
MachineryBusiness partners

Mitigating climatechange reat all business partners fairlyTand impartially, and always
conduct transactions in good faith•
Build partnerships to create
corporate value•

Injection Molding
Machines

Shareholders andinvestorsgyMedium-to-long-term enhancementof corporate value•Stable shareholder returns•

Other
MachineryIntellectual capital esearch and development
R
expenses: ¥4,909 million• 
Patents held: 948 in Japan,
667 overseas

Customers

Creation ofsocial value•

Material andEngineering
Services

Realization of a plastic-resource-recycling society
Contribution to a low-carbon society• Contribution to a super-smart society• ong-term and stableL
relationships with customers• Good relationships with local
communities around plantsN atural capital

Human capital improvement and diversity and inclusion
Investment in the future with innovation management• Governance reinforcement of JSW GroupNew
Businesses••

Solving the waste plastic problem(formation of a circular economy) evelopment of recycling and wasteDtreatment businesses• 
Shift away from fossil-fuel-derived plastics• 
Conversion to biodegradable plastics•

Carbon neutrality by 2050
 dvancement of lithium-ion and otherA
storage batteries• 
Expansion of nature-derived energy• E xpansion of hydrogen and ammonia businesses• 
Decline of the natural gas business• U ncertain trends in nuclear power generation•

 nergy and resource conservationEin production activities (reduction of
CO2 emissions)•
Reduction of CO2 emissions throughour products and businesses•

Bolstering JSW Group’s management foundation forsustainable growth nergy consumption: 2,878 TJ
E• 
Water intake: 16.91 million m3

 ontribution to the local economyCthrough employment andprocurement

Global environment••

12 JSW Integrated Report 2022•

Creating value and solving social issues through JSWGroup’s businesses•

The Environment
in Which JSW
Operates

Local communities

MaterialityS ocial relationshipcapitalSustainableenhancement ofcorporate value

Advancement toward digitaltransformation, AI, and IoT
 ransformation of our business models andTwork styles• 
Full-scale investment in related infrastructure•

Low birthrates and aging
populations in developed
countries•

Global population growth•E xpansion and diversification of consumption,
especially in emerging countries

 hrinking domestic market, shrinking
Sworkforce

JSW Integrated Report 2022 13

capabilities that enable us to take on singlehandedly everything fromSpecial Feature: “Comprehensive
the development of core materials to provision of the world’s finest final products”
that handles all ultra-high speed and high-precision movements ofthe screw, such as rotation, forward movement, and braking.
In addition to research, development, and design of magnesium
injection molding machines, our production facilities, manufacturing
and processing technologies, and technicians at our manufacturing
sites possess the manufacturing technology to take on everythingfrom casting, machining including welding, assembly, inspection,and test operation.
Furthermore, not only does MG Precision facilitate application
development and user-oriented improvements, but also
contributes to implementation in automobiles, home appliances,and other products through contract molding.
This is how we combine our core competence with our strengths
in material design technology and manufacturing technology to
go beyond just developing processes, designing equipment anddesigning control systems, to achieve the material developmentof core components that are manifested as end products,
manufactured using the Group's own production facilities andproduction technology. The greatest strength of the Group is
our comprehensive capabilities that enable us to takeon singlehandedly everything from the developmentof core materials to provision of the world's
finest final products.

Melting, Mixing, andSolidifying Technologies

Liquid phaseTIn-house production of key components and equipment using production equipment, manufacturing/processing technology,
and skilled workers at our own manufacturing sites• 
Manufacturing technology that takes on everything from conceptualization, research, development, and design to machining,assembly, inspection, and test operations• 
MG Precision Co., Ltd., provides contract molding of magnesium parts (automotive parts, etc.). Customer feedback is used to
inform equipment development
Providing society with magnesium injection molding machines that meet the demands of the market
•

hn

Co
olo

re C

gy

o m p eten

Magnesium injection molded
product

Ultra-high speed shot system

Tie barMagnesium alloy chips
Die
HeaterhnologyTecng

Manufacturing TechnologyecSolidifying

Magnesium in semi-molten state

Ma
ter
ial

Machine Element
Technology
Precision Control
Technology

uriJ SW’s own original injection control system that realizes
ultra-high speed injection and rapid braking• High-performance dedicated controllers that maximize easeof use•MixingMagnesium alloy chips

Melting, Mixing,
and Solidifying
Technologies

M a n ufact

Mold clamping devices with maximized highrigidity and light weight

Solid phase

Screw stirs and homogenizes magnesium alloy•

Precision Control Technology

Solid phase Liquid phase

Melting

Machine Element Technology
J SW’s own original machine structure based on accumulated
expertise in plastic injection molding machines• 
Cylinders made of heat-resistant alloys developed by JSW• Screws for dedicated use on magnesium alloys developed
by JSW• 
Mold clamping device with maximized high rigidity andweight reduction achieved through numerical analysis

Thixomolding Process
Magnesium alloy chips are heated in a cylinder to a semi-molten state andstirred and homogenized by rotating a screw. The screw then conveys forward at
an ultra-high speed the magnesium alloy, which is made to flow easily by utilizing
the phenomenon that decreases the viscosity when shear stress is applied(thixotropy) to inject it into a mold, where it is cooled and molded into shape.

ign
es
D

The industrial machines and new materials which are the final
products of JSW Group are created by combining its corecompetence−i.e., technologies for melting, mixing, and solidifying
and machine element and precision control technologies−with thematerial design technology and manufacturing technology that it
has cultivated over many years. To explain about this, we will use
a magnesium injection molding machine as an example.
Magnesium is a material that is even lighter and stronger thanaluminum. Its adaptation for in-vehicle parts makes for better fuelefficiency. It is also highly recyclable, which is why it is a material
that has started to be used in earnest. Magnesium alloy is melted
inside a cylinder at temperatures exceeding 600°C, mixed byrotating a screw, and then poured into a mold in a manner similar
to a syringe by advancing the screw at ultra-high speed and thencooled to solidify it.
The greatest feature is thixomolding, a process that was
introduced from the United States. We have put this process
to practical use by making full use of our core competence, thetechnologies of melting, mixing, and solidifying. The cylinder andscrew, which are the core components, are made with heatresistant alloys we developed independently by material design
technology, a strength of the Group. Our core competence ofmachine element technology is utilized in the equipment structure,
while our precision control technology is utilized in the controller

Rotating device

PistonScrew

Material Design
TechnologyceNozzleCylinderFixed Platen

Movable Platen

Screw and cylinder materials(JSW-developed materials that can be used regularly attemperatures exceeding 600°C)

Display meter panel
ECU case• Console• 
Head-up display
etc.
•

MG Precision Co., Ltd.

•

Automobiles

CamerasIndustrial
machines

Magnesium
injection molding
machines

Materials

Magnesium alloy
injection molded
products

PCs, tablets

Socialimplementation••

Smartphones

Automobiles
Home appliances, etc.

 ightest weight practical metal with excellent
Lrelative strength• Excellent recyclability• 
Excellent dimensional accuracy and mechanicalproperties relative to die-cast products•

Hiroshima Plant, The Japan Steel Works

14 JSW Integrated Report 2022

MG Precision Co., Ltd.
(molding and machining of magnesium parts)

JSW Integrated Report 2022 15

Materiality (Important issues)
We identified six issues (i.e., Materiality) as themes that should be prioritized in order to realize our Purpose at the Board of
Directors meeting in November 2022.

Materiality

value and solving social issues through JSW Group’s businesses” and “bolstering JSW Group’s management foundation
for sustainable growth.”
activities in order to resolve the issues.

Realization of a
Plastic-ResourcesRecycling Society

Materiality Identification Process
Comprehensive identification of social issues drawn from megatrends andinternational frameworks and guidelines

1: Important materiality candidates

STEP

2

STEP

The materiality candidates which were narrowed
down were broadly categorized into the areas of“creating value and solving social issues throughJSW Group’s businesses” and “bolstering JSWGroup’s management foundation for sustainablegrowth.” The materiality candidates were scoredvia internal questionnaire thereby identifying themore important materiality candidates.

Social needs

Scoring of materiality candidates to identify
the more important ones

Affinity with our business

Creating value and solvingsocial issues through JSWGroup’s businesses: Important materiality candidatesDegree of importance to stakeholders

STEP1) The value chain as a whole was observed to comprehensively single out the materiality candidates and create
a long list of those candidates.
–R egarding Materiality from the viewpoint of investors (i.e., issues pertaining to the non-financial factorsthat are linked to the management foundation), a cluster of materiality candidates was extracted bycrosschecking with matters such as the criteria used by ESG assessment organizations.
–R egarding Materiality from the viewpoint of multi-stakeholders, a cluster of materiality candidates was
extracted from criteria deemed important to the medium-to-long-term business model of JSW Group while
also taking into consideration resources such as the United Nations Environment Programme FinanceInitiative’s (UNEPFI) Impact Radar.
2) Materiality candidates were narrowed down and shortlisted based on an importance assessment.

4
STEP

5

16 JSW Integrated Report 2022

Contribution toa Super-Smart
SocietyMultiple discussions about Materiality were held at the management level over a period of ahalf year, including participation by outside directors, as work was done to confirm the level ofimportance to JSW Group’s business and management foundation

Finalized the Materiality and received approval from the Board of Directors

Related SDGs

Renewable• 
Contribution to the greater use of non-fossil-fuelAs JSW Group aims to be an unprecedented generalderived plastics– Twin-screw extruder (TEX)
manufacturer of plastic processing machinery in the
Reduceworld, it is extremely important to supply society• 
Reduce the amount of plastic usedwith all manner of plastics processing machinery– Plastics processing machinery for cellulosethat not only makes plastics but also realizes 3Rs +nanofiber reinforced plastics
Renewable, a goal which is indispensable for resource– Injection molding machine for foamed plastics
recycling.
Since JSW Group can leverage its core competence • Contribution to the reduction of marine plastic waste– All manner of plastics processing machinery forto the maximum, it can demonstrate our strength inbiodegradable plastics
the development and creation of plastics processing
machinery that meets the demands of society. This is Recycle•
Contribution to the spread of recycling as a practicealso a high-priority business expansion opportunity for– TEX for material and chemical recycling
JSW Group.
– Injection and blow molding machines forrecycled plastics
The realization of a low-carbon society is one of themost important challenges faced worldwide. Products
created by JSW Group’s industrial machinery andproducts equipped with its new materials havecontributed to the reduction of CO2 emissions. The
demand for such products is expected to increase
further in the future, which makes it a matter of highimportance for the Group.
In addition, responsibilities of the Group include
the reduction of energy consumption of its industrial
machinery products and the curbing of CO2 emissions
from the operations of its manufacturing sites.

Zero CO2 emissions• 
Contributions to the popularization of electricvehicles (EVs)– Film manufacturing equipment for use in lithiumion battery separators– Lightweight on-vehicle parts (e.g., magnesium
injection molding machines, etc.)
Reduction of CO2 emissions• 
Reduction of energy consumption by industrial
machinery products• 
Reduction of CO2 emissions resulting from businessactivities

The super-smart society is expected to resolve social
issues in all fields, including medical care, food, theenvironment, energy, and disaster preparedness.
In order to realize a super-smart society, it willbe essential to build a 5G/6G-compatible digital
infrastructure capable of processing massive
amounts of data at high speeds and with low energy
consumption.
The industrial machinery and new materials of JSW
Group are incorporated into the key components ofthe devices that make up the infrastructure, and could
potentially be indispensable to the realization of asuper-smart society. This is also considered to be ahighly important business expansion opportunity for
the Group.

Infrastructure equipment that is higher performanceand more energy saving• 
Higher performance and more energy-saving ofarithmetic and memory devices– Equipment involved in the manufacture ofelectronic devices– Gallium nitride (GaN) substrates
Input/output terminals that offer higher
performance• 
Increased performance of smartphones, tablets,PCs, etc.
– Equipment involved in the manufacture of displays
and electronic components– Substrates for SAW devices

Bolstering JSW Group’s Management Foundation for Sustainable Growth
Human Capital
Improvement andDiversityand Inclusion

Grouping of similar and more important materiality candidates in the areas of “creating value
and solving social issues” and “bolstering the management foundation”

3
STEP

Contribution to
a Low-Carbon
Society

Degree of influence on management

Bolstering JSW Group’s
management foundation forsustainable growth

Examples of initiatives

Creating Value and Solving Social Issues through JSW Group’s Businesses

In order to make the world sustainable and prosperous, we evaluated Materiality from the stated viewpoints of “creating

Recognizing the importance of the identified Materiality, JSW Group practices effective management and business

Reasons why considered to be ofhigh importance

Investmentin the Futurewith Innovation
Management

GovernanceReinforcement of
JSW Group romotion of the acquisition and development ofPdiverse human resources
Acquisition: Proactive recruitment of core humanresources, including executive-level personnel
Improvement of compensation to acquire
human resources with strong expertise
Development: Early identification and selection ofyoung high-performers•

The diversification and expansion of our humancapital, including the human resources capable ofdriving the Group’s growth, generating innovation,and creating value, is a matter of the highest priority
and importance for strengthening JSW Group’s
management foundation.

In order for JSW Group to continue contributing tosociety in the future, it is essential to maintain andstrengthen its technological superiority by refining its
core competence and expanding its business.
Innovation is another essential factor forsustainable growth. It is important to promote digitaltransformation which supports data-based, rapid
decision-making, business model innovation, and thecreation of new value.
For the sustained growth of JSW Group, it isimportant not only to further strengthen complianceand governance, but also to engage in dialogue
with customers and investors as well as employees,
business partners, and other stakeholders.
In addition, supplying society with industrial
machinery and new materials of high quality andsuperior reliability is the very foundation of JSW
Group's business and important to the further
strengthening of its quality assurance structure andsystem.

 trengthen core competence by boosting R&D
S
systems• 
Increase production capacity and expand businessthrough M&A• Completion of goals of the digital transformation
promotion plan• trengthening complianceS– Expansion of compliance lines in Japan andoverseas• Strengthening of Group governance– Review of reporting lines• 
Promotion of stakeholder engagement• 
Strengthening of quality assurance structure andsystems•

JSW Integrated Report 2022 17

Progress of the Medium-Term Management Plan JGP2025
Based on the position of the current medium-term
management plan JGP2025 as an important five-year period
for laying the foundation for “growing to a business scale of
300 billion yen” from fiscal 2026 onward, we are promoting
activities that move us “towards the unprecedented generalmanufacturer of plastic processing machinery in the world,”
the first of our basic policies.
Despite fears that demand for plastics processing
machinery would decline due to the shift away from plastics,
in fiscal 2021 the trend toward carbon neutrality, including

New Developments

the accelerated shift to EVs and continued demand formore fuel-efficient automobiles (due to vehicles being
made of lighter weight from the use of plastics), resulted inrobust demand for plastics processing machinery. To takeadvantage of this opportunity, in fiscal 2021 we started work
ahead of schedule to strengthen our production system forfilm and sheet production equipment for separators, andalso opened a base in Europe to boost our injection molding
machine production and service offerings.

JGP2017

Expansion of the production network for film and sheet
production equipment
As expectations increase in the shift toward replacing conventional automobiles
with EVs, demand for lithium-ion batteries is increasing significantly at a rate
quicker than anticipated. This has been accompanied by demand for film and sheet
manufacturing equipment for separators that is expected to double by 2025 fromits 2021 level. For this reason, we have started to boost the manufacturing capacityof our equipment ahead of schedule.
Estimated number ofEVs (PHEVs + EVs) manufactured

JGP2020

From April 2015 to March 2018

From April 2018 to March 2021

Advancing toward top global &niche corporate group

JSW forecast

JGP2025

From April 2021 to March 2026

Building foundations for the solid growth of
JSW Group in the next ten years(Thousands of units)

Towards the unprecedented general manufacturer ofplastic processing machinery in the world

50,000

Basic Policy

30,000

Towards the unprecedented general manufacturer of plastic
processing machinery in the world• Continuing to expand production capacity (60 lines/year) of film
and sheet production equipment for manufacturing separators forautomotive batteries, for which demand for use in electric vehicles(EVs) is expected to increase significantly• 
Expand the target market for film and sheet production equipment forcapacitors (electronic components) and other applications• 
Opened Recycling Technical Center (RTC) at Hiroshima Plant to work
on chemical recycling (November 2022)• 
Developed a world-standard twin-screw extruder that is currently
being made available in Chinese and Southeast Asian markets• Completed development of and launched in November 2022 largesized magnesium injection molding machines (clamping force of 3,000tons), for which demand is expected to increase as there is increased
demand for lighter weight automobiles• 
Established a production and service base for injection molding
machines in Europe, expecting full-scale operation from 2023

20,000

Separator film production capacity(billion m2)
30

Market based (2020 forecast)Market based (2021 forecast)
Policy based (2020 forecast)
Policy based (2021 forecast)20

40,0000Basic Policy/Achievements [] and Issues [ ]Basic Policy/Achievements [Increase profitability of existing businessesImproved productivity and reduced cost of film and sheet
manufacturing equipment and injection molding machines throughcapital investment
Advanced the Muroran Plant restructuring project

Optimization of management resources and strengthening of alliances
Expanded plastic processing machine complex (absorption typemerger of Meiki Co., Ltd.; acquired GM Engineering Co., Ltd. as a subsidiary) stablishment of Japan Steel Works M&E, Inc. (spun off theE
Material and Engineering Business Division)B egan collaboration with Tsukishima Kikai Co., Ltd. and establisheda joint venture with JX Nippon Mining & Metals Corporation

Foster new products and businesses and make themcompetitive as soon as possible
Reorganized the Research and Development Headquarters
General delays in fostering new businesses

Strengthening of after-sales services (stock-based business)Establishment of parts centers in Japan and Europe, constructionof dedicated service center
Start operation of remote maintenance system
Acceleration in exploration and development of new businesses
Commercialized hydrogen-related business and transferred toJapan Steel M&E, Inc.
Promoted early commercialization of profitable businesses byfocusing on photonics, composite materials, and metal materials
Yet to create new core businesses
Insufficient for further expansion of plastic processing machinerycomplex

Reinforce Group management and promote alliances
Although progress made in small-scale business acquisitions,further need to strengthen alliances

FY2015Net Sales(Billions of yen)

Operating income(Billions of yen)

Operating income ratio
ROE

FY2016FY2017] and Issues [ ]JGP2017

FY2018

Final year targets

223.3

212.4

212.9

220.0

Net Sales

14.4

12.3

21.3

13.0

Operating income(Billions of yen)(Billions of yen)

FY2019FY2020JGP2020
Final year targets

220.1

217.5

198.0

260.0

24.2

18.7

10.2

30.0

6.5%

5.8%

10.0%

6.0%

Operating income ratio

11.0%

8.6%

5.2%

11.5%

– 13.5%– 4.6%

9.6%

8.0%

ROE

16.3%

7.2%

5.1%

14.0%

Business Weighting (Net Sales by Segment)
Industrial Machinery Products Business(Billions of yen)

Material and Engineering Business

Make constant profit in the Material and Engineering Business• 
Promote review of product portfolio for high profitability in cast andforged steel products
Create new core businesses• 
Further enhance the product lineup in the electronic device-related
equipment business by developing and launching products such as
next-generation semiconductor-related equipment• 
Began operation of large-scale demonstration equipment for the mass
production of gallium nitride (GaN) substrates, and continued efforts toship samples throughout fiscal 2022
• 
Completed and started operation of one of the world’s most advanced
copper alloy material production facilities
Implementation of ESG management• 
Established a new ESG Promotion Office to strengthen initiatives• 
Announced endorsement of the TCFD (Task Force on Climate-related
Financial Disclosures)• 
Established JSW Group corporate Philosophy, starting with Purpose• 
Identified Materiality as priority issues to be addressed to realize the
PurposeApprox.
2 times

10

2021

2025
* JSW estimate

Considering lead time, by 2025
market demand is expected to be
80-100 lines/year andorders received 50-60 lines/year.

10,00002020 2021 2022 2023 2024 2025

2020

2030 (Year)

JSW response* JSW researchWorking ahead of the original schedule,
Positive terminal

Anodeestablish a 50-line system by March 2023
establish a 60-line system by March 2024

Negative terminal

CathodeSeparator

Lithium-ion battery structure

The separator is a plastic film that plays
an important role in preventing contact
between the cathode and anode whileallowing lithium ions in the electrolyte
to pass through.

Established a production and service base for injection molding
machines in Europe
Electric injection molding machines consume 67% less power than hydraulicinjection molding machines (by JSW comparison). Since the electrification rate of
injection molding machines in Europe is less than half that of Japan, this percentage
is expected to increase in the future. This is why we opened a base in Europe toboost our production and services there. We aim to expand our market share,
focusing on large-size machines, a particular strength of ours.
Electrification rates of molding machines

European market share

Units made in Japan Electrification rate of small/medium-sized machines
Units made in Japan Electrification rate of large-size machines
Units made in Europe Electrification rate of small/medium size machines
Units made in Europe Electrification rate of large-size machines

100%

50%

JSW share
2-3%

Electrification rate is
expected to increase in
the futureMarket size of
10,000 units/year in
Europe as a whole

0%
2010

2012

2014

2016

2018

2020 (Year)* JSW research

JSW response
Production and service base established near Warsaw, Poland (total area: 3,350 m2)

150.0
121.9
100.0
77.3

112.9
97.6

113.9
105.0

130.1

144.3
118.3

170.2

173.6

171.4

156.3

66.2

74.8
51.2

50.0

40.8

41.2

42.8

FY2021 Results

FY2025 Plan

Change from
FY2019Net Sales(Billions of yen)

213.7

270.0

+ 24%

Operating income(Billions of yen)

15.4

27.0

+ 44%

Operating income ratio

7.2%

10.0%

+ 1.4PP

ROE

9.6%

10.0%

+ 2.8PP

171.1

126.3

88.2
67.6

159.3

38.5

40.0

2020

2021

0
2009

2010

18 JSW Integrated Report 2022

2011

2012

2013

2014

2015

2016

2017

2018

2019

(FY)

Power consumption (kWh)200.0

67% less than hydraulic type(by JSW comparison)
Contributed to a tremendous
reduction in power consumption(CO2 emissions reduction)
Hydraulic type

Electric type

JSW Integrated Report 2022 19Strategy by Business

Plastics Machinery BusinessBusiness Overview
The Plastics Machinery Business Division manufactures,
sells and provides maintenance services for an array ofplastic production and processing machinery (pelletizers,
twin-screw extruders, and film and sheet manufacturing
equipment, spinning extruders, etc.) used in various upstream
and downstream processes in the manufacture of plastic
products. The plastic raw materials and film products
manufactured using our machinery and equipment are used

Operating Environment
in key components of a variety of products, including IT
products such as 5G smartphones, personal computers,
tablet devices and keyboards; electronic materials such as
capacitors, condensers and semiconductor products as well
as home electric appliances; lithium-ion batteries; automotive
parts; food packaging film and containers; and catheters andother medical instruments.

Top Commitment

Message from the Head of the Division
Towarda carbon-neutral society in 2050, needs for things such as lighter, more fuel-efficient automobiles, EVs (electric

As plastic products have many excellent properties,
including formability, insulation capacity, lightness, and costeffectiveness, we recognize the indispensable role the willcontinue to play in the world but are also cognizant that ourenvironment poses both opportunities and risks.
One key opportunity that can be sited is the accelerating
shift to EVs as the preferred type of automobile as we march
toward a carbon-neutral society. With the accompanying
increase in demand for lithium-ion batteries a tailwind forus, the manufacturer with the top share in the global market
for separator film production equipment, we are working tofurther expand our market share by increasing production
capacity. In addition, we will endeavor to strengthen our aftersales service. Extending the service life of our products asprocessing machines enables us to reduce the resultant CO2

emissions generated during manufacturing of the machines.
We believe that these are important activities that we can offer
in the march toward a carbon-neutral society.
On the other hand, a major risk to highlight here is the
problem of marine plastics and waste plastics that has comeinto focus. And yet, we believe that this issue can also be an
opportunity for us if we apply our core competence toward
solutions while also fulfilling our roles and responsibilities as acomprehensive plastics processing machinery manufacturer
that works to realize a plastic-resources-recycling society.
Over the medium to long term, we also anticipate thatdemand for separator film production equipment will shrink
due to the spread of solid-state batteries and other products.
In response to this, we are working to transition our film
production equipment into other fields.

vehicles)that contribute to decarbonization, and various equipment related to plastic recycling are heightening. With astrongdemand for plastics processing machinery in the global market in fiscal 2021, we saw orders double year-on-year toover
100 billion yen, a record high for us. In fiscal 2022, demand for lithium-ion batteries is expected to increase significantlyandahead of original estimates due to the worldwide shift to EVs, while demand for manufacturing equipment for separatorfilm
 used in batteries continues to grow, and we anticipate orders for large projects for pelletizers to exceed those receivedin fiscal 2021. At the same time, we recognize that there are ever growing expectations from society at large in our supplyof provide plastics processing machinery that realizes 3Rs + Renewable, an indispensable practice for the recycling ofplastics
resources. As an industry leader, we will promote the social implementation of plastic materials through the Material
Revolution™
while doing our part to protect the global environment and contribute to the realization of a sustainable,
prosperous,
carbon-neutral society that can coexist with the use of plastics.
Strategy and Measures for Growth
In the new medium-term management plan JGP2025, thePlastics Machinery Business is positioned as a business thatwill create profit and drive growth as JSW’s core business.
Specifically, with the aim of becoming a comprehensive
plastics processing machinery manufacturer, we will further
strengthen the competitiveness of our equipment and expand
our business through aggressive capital investment and bothcollaborations and alliances. At present, we are also working
to optimize sales prices.
We are also engaged in the promotion of energy
conservation through weight reduction by utilizing plastics,
as well as in the recycling of plastics. In November 2022, on

the premises of our Hiroshima Plant we opened the Recycling
Technical Center (RTC) to work on chemical recycling that
employs twin-screw extruders. We will work together with ourcustomers to expand our business value while contributing
to the realization of a low-carbon society not only throughthe realization of a carbon-neutral and plastic-resourcerecycling society, but also by reducing power consumption ofequipment and waste plastics generated through the startingand stopping of equipment operations. By leveraging thecomprehensive capabilities of JSW Group companies, we will
respond flexibly and quickly to changes in the global market.

• Cumulative original technology and knowledge• Lineup of plastic processing machinery to meet

S
Strengths

SWOT
Analysisdiverse needs• Production system that makes possible in-houseintegrated production of large equipment• Technical centers in Japan and overseas
equipped with a wide variety of testing
equipment

W
Weaknesses• Long delivery times due to production ofsmall-quantity orders with a high emphasis onlarge machines• EV market expansion (increased demand forlithium-ion batteries)• After-sales service market based on long trackO

record of deliveries• Advances in waste plastic recycling, emergenceof biodegradable plastics• Increasing full-scale investment in 5G/6G
Opportunities infrastructure• Expanding consumption particularly in emerging
economies

T
Threats• Shrinking demand for plastic due to shift awayfrom plastic• Shrinking demand for separator film due tospreading use of new types of storage batteries
such as solid-state batteries

Sources of Our Strength
The equipment handled by the Plastic Machinery Business
Division has been richly infused with the core competence
we have accumulated over many years. On their own, eachpiece of equipment exhibits excellent performance, but
combining the multiple machines and equipment we havecommercialized into a full production line leads to even higher
performance and efficiency. In addition, the connection weshare with customers who are industry leaders gives us ahead start in grasping the need to respond to developments

20 JSW Integrated Report 2022

such as the emergence of alternative materials and recycling,enabling us to quickly engage in the development of such.
Furthermore, with three technical centers around the world
as bases, our division is staffed by highly experienced experts
who respond to the various types of demand for plastics,
which leads to improved equipment performance and thecreation of new technologies and equipment.

TopicsEstablishment of the Recycling Technical Center (RTC) to work on
chemical recycling with twin-screw extruders

In November 2022, we opened the RTC in our Hiroshima
Plant.
We established a chemical recycling technologythat employs twin-screw extruders to transform waste
plastics, which would have otherwise been disposedof, converted into fuel, or recycled as materials, into
chemical raw materials using the kind of depolymerization
technology most represented by thermal decomposition.
The Recycling Technical Center is positioned as ademonstration facility for the proof of concept.
We are confident that this facility will be able tocontribute to the realization of a plastic-resource-recycling
society, a goal we have set forth as a Materiality.

JSW Integrated Report 2022 21Strategy by Business

Injection Molding Machinery BusinessBusiness Overview
At the Injection Molding Machinery Business Division, we
manufacture, sell, and provide maintenance services for equipment
such as plastic injection molding machines, magnesium injection
molding machines, and blow molding machines by combining thethree main capabilities—product (improvement), sales (proposal)and service (response) capabilities—to impress our customers.
Our plastic injection molding machines are electrically poweredwith excellent environmental performance and a wide range ofmachine sizes from 30 to 3,000 tons of clamping force.
Our extensive lineup of vertical injection molding machines andspecial molding machines accommodate most of the injection
molding processing fields and are capable of meeting a variety ofOperating Environment
customer needs, which is our strength. Just as our medium andlarge machines are highly acclaimed, we are channeling efforts
into providing small and ultra-large injection molding machines thatwill also successfully win acclaim. In addition, we are also working
toward meeting demand for larger parts made of magnesium alloy,
which are garnering attention for their contributions to making for
EVs that are lighter.
We boast the No. 1 spot in term of shipment amount of plastic
injection molding machines in Japan and the third largest market
share in terms of number of units. We are the top manufacturer
with magnesium injection molding machines that are one of kindand blow molding machines that maintain an over 80% share of thedirect blow molding machine market in Japan.

Top Commitment

Message from the Head of the Division
In the march toward realizing our Purpose, we are prioritizing engagement in the Materiality of “realization of a plastic-resourcerecyclingsociety” and “contribution to a low-carbon society.” While we already provide electric injection molding machines
withlow power consumption and injection molding machines compatible with recycled and biodegradable plastics, we are
expandingthe scope of our contributions. In addition, by stepping up our global reach, we will make the world sustainableandprosperous. In fiscal 2021, we made efforts toward boosting small machine production capacity in Japan and China and
expanded
our inventory to shorten supply times. As for ultra-large machines, we expanded our product lineup and startedsales
of new products. We successively developed and launched 1,300-ton and 3,000-ton magnesium injection moldingmachines.
In the area of technological development, we have been progressing forward by realizing Material Revolution™, ourGroup’s
Purpose, into outcomes such as a reduction in the defect rate of small optical parts through our own original process
control,development of a foam injection molding process for ultra-large machines, and development of a large magnesium
injection
molding machine for large magnesium parts. Endeavoring to provide products in line with our Purpose, we areengagedin activities with the goals of achieving the No.1 share in domestic volume and sales of over 85 billion yen by 2025,

andsales of over 100 billion yen and finding our place in the global top-five companies within the next decade.
• A full product lineup from small to ultra-large

S
Strengths

SWOT
Analysismachines, blow molding machines and special
molding machines• Extensive track record and supply capacity formedium and large machines for customers in
the automotive field• Safe and reliable customizable products andability to customize for the needs of eachcustomerW
Weaknesses• Low share in the market for small machines(precision molding field) and ultra-large machines• Delays in delivery times for sudden large orders• Increase in new capital investment with the shiftOto electric vehicles• Increased demand for energy conservation due

to soaring global energy costs• Expansion of needs for eco-friendly technologies
Opportunities (bioplastics, plastic reduction, effective use ofelectric power)T• Shrinking demand for plastics due to the shift

away from plastics• Performance improvements among Chinese

Threats

manufacturers with large production capacity

Sources of Our Strength
The Group is characterized by the way we continue to provide
safe, reliable, and highly customizable machines by continuous
improvement of the basic performance of injection molding
machines through periodic model changes (i.e., improvement
capability) and our flexibility in customizing to meet the individual
demands of customers (i.e., proposal capability). Our basic designof injection molding machines takes into account customization
as a given, which makes for a greater variety of how the injection
molding machine components–such as mold clamping units,
plasticizing units, and options–can be combined. Throughcollaboration with the Hiroshima Plant and Meiki Plant, as well aswith overseas production bases, we have realized a production
system that enables us to provide injection molding machinesthat meet the needs of our customers. An example of what thissystem has made possible is our extensive track record in andtremendous capacity to supply medium- and large-sized machines
for customers in the automotive field, a strength for which we areunrivaled. As we provide injection molding machines through an
22 JSW Integrated Report 2022

extensive sales network of 21 bases, 10 in Japan and 11 overseas,and provide after-sales service through our global service network(response capability), customers are able to use our machineswith assurance.
We wasted no time in putting into practical use thixomolding,a magnesium alloy technology introduced from the U.S., and areensuring safety and favorable environmental performance fromit as a molding process, while also achieving molded products(magnesium parts) with stable quality. We are also proactively
engaged in accommodating larger size moldings by utilizing
our expertise in large plastic injection molding machines, while
contributing to improved fuel efficiency by meeting the demand forlarger but lighter magnesium parts for EVs and other automobiles.
In addition, another strength of the Group is in having achieved
a high in-house production rate (through the vertical integration of
production processes) and enabling the supply of highly reliable
injection molding machines through close coordination between our
manufacturing processes.

Our strengths in the injection molding machine market are in thefields of home electric appliances, automobiles, and miscellaneous
goods and containers.
In the field of home appliances, as recent improvements in living
conditions in emerging countries have accelerated the popularizationof air conditioners, demand for these products is expected to triple
the current level by 2050. With air conditioner manufacturers acrossthe board actively investing in equipment to capture this market
with cutting-edge energy-saving technologies, many have adopted
our injection molding machines. Their use of our injection molding
machines with excellent environmental performance is contributing
to the production of eco-friendly products that have less impact on
the environment.
In the automotive field, due to the growing sophistication of a hostof driving support systems and subsequent increase in the amountof information provided to drivers, there is a trend toward the useof multiple and larger display panels. Magnesium alloys, which
are lightweight, high in specific strength and rigidity, and possess
superior heat dissipation, are increasingly used more as materials
for the frames and casings that hold in-vehicle panels in place.
Our magnesium injection molding machines are garnering attention
because they can produce thin-walled, dimensionally accurateparts with less environmental impact than those manufactured
through die casting methods. And there was a tremendous
response immediately following our announcement about largesize machines. Meanwhile, we are also working to optimize selling
prices in response to the labor costs and commodity prices that aresoaring on a global scale.

Global air conditioner stock, 1990-2050* Source: The Future of Cooling (IEA, May 2018)

Strategy and Measures for Growth
Continuing forward with our industry-leading medium- andlarge-size machines, we are proceeding with the medium-term
management plan JGP2025 and its aim of expanding the scaleof our business by stepping up our small and super-large-size
machine offerings. Regarding small-sized machines, in addition
to the reinforcement of production in China, we have more thandoubled our supply capacity by strengthening our inventory
systems in Japan, North America, China, and Europe to ensurea stable supply of injection molding machines on a global basis,
while partially switching to domestic production to stabilize thesupply chain.
As for our ultra-large machines, to expand the lineup of
space-saving two-platen type machines, we have launched a
3,000-ton machine, followed by a 1,800-ton machine and a
2,500-ton machine, which have been well received. In addition,
we are enhancing the options we make available by offering
customization such as foam injection molding machines.

TopicsThough the impact of the pandemic continues to impair ourview about what direction to take in terms of capital investment,
we are going forward with the assured implementation of
measures in our drive to be a top manufacturer of plastic
injection molding machines.
Our magnesium injection molding machines have been steadily
adopted in the automotive field, and we have been increasing
the size of our machines in response to market demand withthe successful release of 1,300-ton and 3,000-ton machines.
Our newly developed magnesium injection molding machine
has been preliminarily put to use at our group company, MG
Precision Co., Ltd., as equipment for verification of the proof ofconcept, and we are accommodating requests for prototyping
and contract molding of large magnesium automobile parts.
We expect to see the practical application of multiple newmagnesium automotive parts in succession.

Ultra-large magnesium injection molding machine
JLM3000-MGIIeL

We have begun sales of the JLM3000-MGIIeL (clamping force:
29,400 kN), the world’s largest magnesium injection molding machine
employing the thixomolding method. A revolutionary molding method
developed in the U.S., the thixomolding method is capable of producing
magnesium alloy parts with excellent characteristics such as specificstrength, rigidity, heat dissipation, and electromagnetic shielding,as well as easy recycling and environmental performance, with low
environmental impact. Actual instances of the practical application ofthis method are on the increase, primarily for casing components in theautomotive display panels of automobiles such as EVs.

JSW Integrated Report 2022 23Strategy by Business

Strategy by BusinessIndustrial Machinery Business

New Businesses
Top Commitment

Business Overview
With industrial machinery contributing to society as its core business, the Industry Machinery Business manufactures, sells, and provides
maintenance services for equipment related to the three fields of electronic devices, economic infrastructure, and lifestyle/culture. By
providing products such as excimer laser annealing (ELA) systems vacuum laminators, hot presses, ECR deposition systems and otherequipment for the production of semiconductors, displays, and electronic components, in the mainstay area of electronic devices,
we are contributing to the realization of a super-smart society that is expected to resolve social issues in all fields. In the economic
infrastructure field, we handle railway-related products, and in the lifestyle and culture field, we handle food extruders and starting gatesfor horse races. Our distinctive product lines provide the modal shift that contributes to the realization of a low-carbon society and toaddressing food shortages and environmental issues through meat substitutes.


The
New Business Promotion Headquarters will contribute to the realization of a low-carbon society and a super-smart societythroughthe speedy commercialization of three businesses: (1) the Photonics Business, whose core products are artificialcrystalgrowth and the processing of quartz, gallium nitride, and lithium niobate for the fields of optics, 5G/6G high-speed highcapacity
communications, and power electronics; (2) the Composite Materials Business, which includes lightweight, highstrengththermoplastic carbon fiber reinforced plastic (CFRP) products for the aviation, defense, and space industries; and (3) Metallic Materials Business, which manufactures copper alloy materials to upgrade copper foil used for connector parts.
the

Top Commitment

Message from the Head of the Division

Photonics BusinessIn order to make for a sustainable and prosperous society, a host of social issues need to be resolved. One of these isBusiness Overview

the realization of a super-smart society, the construction of which hinges on a digital infrastructure capable of processing

Crystals of artificial quartz and gallium nitride are manufactured with melting and solidifying technologies in a hightemperature, high-pressure environment using large autoclaves that utilize our manufacturing technology for large
forgings and castings, which can only be produced at Japan Steel Works M&E. Using our strengths in manufacturing
technologies for these single crystals and high-precision processing technologies such as cutting and polishing, we areengaged in the manufacture and sales of various optical application products and device materials.

largeamounts of data at high speeds but with low energy consumption. As our division’s industrial machinery in the field ofelectronic
devices is involved in the manufacture of key components of the equipment that makes up infrastructure, we seethis as an opportunity to make our contribution. In fiscal 2021, we introduced new models of vacuum laminators and ELA
systems
to the market. In fiscal 2022, we will continue to expand on our existing products and businesses, while leveraging
our core competence to expand our business through new products and new businesses.
• High market share and extensive track record as asupplier in specific fields

S
Strengths

SWOT
Analysis

Message from the Head of the Division• Technical capabilities (in our ability to develop anddesign) to realize customer needs into manufacturing
equipment, especially the precision transfer
technology and precision positioning control
technology required for electronic device
manufacturing equipment• Wealth of experience in after-sales service

W• Markets in which we have a proven track record arelimitedO

T
Threats• Exclusion from the market due to industrial promotion

policies in various countries (shrinkage of target
markets)• Price competition

Global Semiconductor Market
Logic devices

Digital infrastructure development is accelerating to accommodate a super-smart society anddriving the expansion of semiconductor demand. There is a demand for equipment that enables a more advanced manufacturing process. For example, the increasing demand for higher
resolution and lighter weight units is spreading to medium- and large-sized displays, which hasbrought about a critical need for new functions and lower manufacturing costs. In addition tothese changes in the specifications desired, for electronic devices in general demand for
manufacturing equipment is also likely to expand in step with the decentralization of manufacturingbases as a result of changes in social conditions such as economic security concerns.
Amid this situation, the Group sees price competition with its competitors as a risk. To avoid
this, we will continue to make efforts at providing high-value-added equipment by enhancing
processing capability and quality, as well as optimizing selling prices.

Under the JGP2025 plan, we will seek to expand ourmanufacturing equipment business related to electronic devices.
Regarding our current products, we will introduce new models
to the market that are compatible with flexible displays and highdensity packaging. As electronic devices are manufactured
through numerous processes, we will go beyond the current
practice of supplying individual pieces of equipment by adding
to the scope of our offerings equipment that is used in upstream
and downstream processes, thereby promoting expansion
through systemization. In moving ahead with this strategy, in fiscal
24 JSW Integrated Report 2022

High-grade single crystals are expected to be utilized in various fields inthe future in ways that leverage their optical and electrical properties. We
will continue to contribute to the cutting-edge needs of our customers withthe power of Material Revolution™ by not only improving the quality ofthe three single crystals and but also by further refining our high-precision
processing technology.

Composite Materials Business

Operating Environment

Strategy and Measures for Growth

Strategy and Measures for Realizing Profitability

The market for devices related to high-speed, high-capacity communications
is projected to grow at a rate of more than 10% annually in response toboth the growth of the 5G/6G and IoT markets and the rising demand for
power saving. Applications for gallium nitride in particular are expected
to be found in various fields, including high-brightness, high-power lasers
for energy conservation, high-speed switching devices, and high-energyefficiency power semiconductors.

Weaknesses• Growth in demand for all manner of electronic devices

related to the construction of digital infrastructure in
realizing a super-smart society• Increased demand for new equipment to accommodate thedecentralization of manufacturing sites in line with thestrengthening of the supply chain
Opportunities • Market demand for high definition and lightweightdisplays is expanding beyond smaller-type smartphones
to medium and large displays

Operating Environment

MemoryShipment Value(Trillions of yen)
100

AI, smart cities,
electric cars

75

Other

Autonomous
driving, robotics

5G infrastructure,
data centers,
high-performancecomputing, IoT

50

Smartphones

25

Business Overview
The aviation and automotive fields have been adopting CFRP to reduce CO2 emissions by improving fuelefficiency. In response, the Composite Materials Business is developing molding processing technologies
for CFRP products, obtaining material design technologies, and establishing a structure that includes
quality assurance.

Operating Environment

Strategy and Measures for Realizing Profitability

With climate change control driving the increased need for lightweightmaterials, the global thermoplastic CFRP market that was 1.4 trillion yen in2020 is expected to grow to 2.2 trillion yen in 2025 and 3.9 trillion yen* in
2035. The aircraft sector, which currently accounts for half of the market,
is also expected to grow steadily after containment of the COVID-19
pandemic.

We will expand this business with a focus on aircraft components by applying ourstandard compliance and quality management capabilities cultivated in production
activities that include the manufacture of production activities that include the
manufacture of defense equipment, and our expertise in manufacturing large
composite material products (wind turbine blades) developed in the wind
power generator business. Our aim is to make commercialization profitable
while realizing a sustainable society by offering composite-material productsthat promote weight and energy efficiency for a range of mobility categories.

Source: C arbon Fiber Composite Material (CFRP/CFRTP) Technical Application
Market Outlook 2020, Fuji Keizai Co., Ltd.

PCs

02001 2010 2020 2025 2030 (Year)
Prediction

Source: The Strategy for Semiconductors andthe Digital Industry (Summary), Ministryof Economy, Trade and Industry(June 2021)

2021 we established JSW Aktina System Co., Ltd., in Yokohama
as a measure to integrate and strengthen our manufacturing,sales, and maintenance systems in the display business, aswell as a dedicated service company in China. These havestrengthened our functions for quickly resolving customer issues.
In the area of new products and businesses, we will improve
our competitive advantage through technological innovations that
apply our core competence and promote business expansion
through M&A and other means that identify promising andgrowing markets.

Metallic Materials BusinessBusiness Overview
As communication speeds and capacities increase, there is a rising demand for titanium copper foils andother copper alloys used in various electronic devices to be thinner and more functional. In order to produce
copper alloy slabs of unprecedented cleanliness and quality, JX Nippon Mining & Metals Corporation and
JSW have jointly established Muroran Copper Alloy, Co., Ltd., and are engaged in business.

Operating Environment

Strategy and Measures for Realizing Profitability

The expansion of IoT and 5G/6G will fuel a
rapid increase in data traffic. As smartphones,
tablet devices and other telecommunication
devices evolve, expansion of the market is
expected for high-performance and highquality metal products.

Using the Group’s excellent melting and solidifying technologies to manufacture high-performance
metal products of the world's highest quality–products that are very clean and of high quality, with nodefects even when thinned to the level of copper foil–we aim to both contribute to the realization ofa super-smart society in which high-speed, high-capacity communications are indispensable, and to
make this into a profitable business.

JSW Integrated Report 2022 25

Strategy by Business

Material and Engineering BusinessBusiness Overview
Japan Steel Works M&E, Inc., which conducts the Materialand Engineering Business, was established as an operating
subsidiary in April 2020 through the merger of JSW’s Steeland Energy Products Business and wind power generator
maintenance service business with four JSW Group
companies. The Muroran Plant, where Japan Steel Works
M&E is based, has been involved in the development andmanufacture, mainly of large steel castings and forgings
for power plants, making full use of our core competence
accumulated over more than 100 years, and of pressure
vessels, various industrial machinery, thick plates, clad steel
plates and other products used in public infrastructure andvarious plants. And we will continue to provide a variety ofmaterials (M: Materials) that include not only steel but also
nonferrous metals and composite materials, and possess thereliability to meet the increasingly sophisticated and diverse
needs for materials.
In addition, we have established a one-stop service systemthrough technology (E: Engineering) that meets a wide rangeof customer needs by providing solutions that include design
and analysis, welded structure fabrication, construction
and installation, inspection, and maintenance, utilizing thetechnology and experience the Group has accumulated in the
manufacture of pressure vessels for oil refineries and their onsite installation work.

Top Commitment

Message from the Business Segment HeadWe
 offer heartfelt apologies to our customers, shareholders and other stakeholders for any inconvenience and concern
causedby the inappropriate conduct in quality inspections that occurred. Japan Steel Works was founded to providesocietywith the high-quality steel it demands. That mission remains unchanged for us. We will continue to make the worldsustainable
and prosperous by providing a stable supply of steel castings and forgings that offer world-class qualityandperformance.
 In the materials business, utilizing our technological capabilities and resources to provide new materials that addressincreasingly
complex energy issues, we will continue to contribute to the realization of a low-carbon society. Specifically, inaddition
to conventional large steel castings and forgings for thermal and nuclear power generation, we aim to demonstrateour advantageous position and expand orders for small and medium-sized steel castings and forgings such as invar
materials
for the renewable energy and IT fields, which are expected to grow in the future, by flexibly responding to high-mix

low-volume
production and short delivery times.
 And regarding the engineering service business, we will expand the scale of our business by maximizing the synergy
generatedwith the materials business by leveraging our manufacturing technologies cultivated in the material business andour relationships with stakeholders to respond to new social needs, such as those posed by Japan’s National Resilience Plan.

• Equipment and manufacturing technologies that

S

SWOT
AnalysisStrengths

enable the manufacture of large forgings andcastings• High quality and safety honed in electric power
and nuclear power products• Ability to provide one-stop engineering services• Inefficient capacity use and operations due tobuild-to-order manufacturing system (difficult tostandardize)• Since the equipment is intended for the
manufacture of large products, operations are
Weaknesses inefficient for small products and mass-produced
products

W

forging and heat treatment technologies as basic technologies
developed over many years to meet the stringent requirementsof the thermal power and nuclear power generation fields–
basic technologies that work powerfully to separate us fromthe rest.

With the launch of Japan Steel Works M&E, Inc., theservices previously offered by individual Group companies,
such as design and analysis, welded structure fabrication,
construction, inspection, and maintenance, have been
centralized to enable us to provide wide ranging engineering
services, a one-stop system to meet customer needs.

Operating Environment
Global energy demand is predicted to increase in every climatechange scenario considered by the International Energy
Agency (IEA) (see figure on the right). At the same time, thereliance on fossil fuel (coal, oil, and LNG) power generation
is projected to decrease and the reliance on renewableenergy sources such as wind power is projected to increase
sequentially, from the Stated Policies Scenarios (STEPS) to theAnnounced Pledges Scenario (APS) and Net Zero Emissions
Scenario (NZE). As for the impact on the Group’s business,
although new orders for large coal-fired thermal power plants
will decline, for the foreseeable future there will be deep-rooted
growth in gas turbine combined cycle power generation andreplacement demand for services. Amid the withdrawal ofcompetitors and industry reorganization, we anticipate that wewill be able to secure a steady level of operations and sales.
While fossil fuel power generation will decline as we approach
NZE, wind power generation and other renewables will growsignificantly, so we expect to see continued growth in thetarget markets for the Group’s products in those scenarios.

The core businesses of the engineering service business are
the installation of and repair work for manufacturing equipment
and repair work for the public infrastructure facilities. Businessis expected to continue and grow in both the private and public
sectors due to investment in the renovation and measures toextend the life of aging equipment.

Markets targeted by
M&E products

Source: Compiled by JSW using data from World Energy Outlook 2022,
International Energy Agency (IEA)

Strategy and Measures for GrowthFirst and foremost, by promptly acknowledging and rectifying
the inappropriate conduct for which we are responsible, we will
endeavor to quickly regain the trust of our customers.
On top of that, as a certain degree of demand is expected
to continue, we will place large steel castings and forgings
for power plants at the very center of our business, andstep up efforts to improve productivity and proceed withthe optimization of sales prices in order to achieve a stable
turnaround to profitability.
At the same time, regarding material products, we willchannel efforts into high-value-added functional materials
and rebuild a sound product portfolio by applying the special
melting, forging, heat treatment, and other differentiating
technologies that we have developed over many years.

Regarding the engineering service business, we will develop
this segment into a stable core business by providing
comprehensive one-stop engineering services for the entire
value chain, from sales of hydrogen-related products andwelded structure to plant construction and maintenance, in
response to the social need for carbon neutrality and demand
related to Japan’s National Resilience Plan. On the other hand,though the environment for orders continues to be toughamid intense competition, for clad products we will focus on
strengthening the unit’s revenue foundation by shifting to a
production system that is resilient to operational change, while
establishing a unique position within the market with a broad
product lineup.

• Adaptation to the hydrogen economy and naturalO

energy sources to become carbon neutral• W ithdrawal of competitors and industry

T

restructuring trends• Focus on infrastructure projects such as those in
Opportunities Japan’s National Resilience Plan

• Decline in coal, oil and LNG power generationand oil and gas industries due to adaptation to acarbon-neutral society

Threats

Sources of Our Strength
The Muroran Plant has the facilities and technology to
manufacture 670 tons of steel ingot, among the largest
capacities in the world. Steel ingots manufactured to matchthe size of the end product are forged and heat treated on alarge 14,000-ton press, and finished into their final shape withultra-large machine tools that have a maximum processing
weight of 400 tons.
In the clad products field, we can produce not only general
stainless clad steel plates but also special clad steel plates
such as nonferrous metal clad steel plates and double-sided
26 JSW Integrated Report 2022

clad steel plates, and we are one of the few companies
capable of handling integrated manufacturing from the
manufacture of steel plates to pipe-making. In fiscal 2020, ourrolling mill for wide and thick steel plates was converted toelectric power and heating furnace facilities were updated torealize a reduction in CO2 emissions and improve productivity.
The steel castings and forgings and clad steel products
made with this equipment are used in public infrastructure
and various manufacturing plants. We can single out special
melting technology for extra-large castings and forgings andTopicsContributing to the spread of offshore wind power generation:
Super large anvils for monopile pile driving machines

When a pile-driving machine is used to drive the columns (monopiles) that secure offshore windturbines to the seabed, a lid-like component called an anvil is fitted over the monopile, which isthen struck with a hammer (ram weight). In recent years, generators have been rapidly increasing incapacity as wind turbines accordingly become larger. The monopiles that support wind turbines arealso becoming larger in diameter, and the Group's large anvils, with external diameters of 6.5 meters
or more, account for 100% of the world market share. And anvils with an external diameter of 8
meters, a size not found elsewhere around the world, have already been put to practical use.
As indicated in the demand forecast above (see above chart), in all scenarios envisioned between
the present and 2050, offshore wind power generation is expected to grow significantly, and weanticipate strong demand for our Group’s products. We will contribute to society with the power ofMaterial Revolution™ by creating completely new products and services through the qualities that
set us apart from the rest–qualities that we have cultivated over the years.

JSW Integrated Report 2022 27

Financial and Capital Strategy: Message from the CFO
We will increase our corporate
value by upgrading our businessportfolio management andactively investing in growth while
ensuring financial soundness.

Hiroki Kikuchi
Director & Managing Executive Officer
CFO; in charge of Plastic Machinery Business Division, Injection
Molding Machinery Business Division, and Ordnance Business
Headquarters; in charge of Finance & Accounting Department
and General Manager of Corporate Planning Office

Net sales in fiscal 2021, the first year of the JGP2025 mediumterm management plan, increased 8.0% year-on-year to¥213.7 billion, mainly due to increased sales of injection
molding machinery in the Industrial Machinery Products
Business Segment and steel castings and forgings in the
Material and Engineering Business Segment. Operating income
increased 51.2% year-on-year to ¥15.4 billion, mainly due toa ¥7.7 billion increase in production, sales, and selling prices,
and a ¥4.8 billion reversal of the operating expenses recordedin the same period of the previous year that accompanied achange in the calculation method of retirement benefit liabilityof Japan Steel Works M&E, Inc., and a loss on valuation of
inventory assets. Variable expenses increased ¥6.8 billion
due to the soaring prices of semiconductors, metal materials,
transportation, energy, and other items. In order to cope withthis rapidly changing business environment, we recognize that
we have the urgent need to enhance profitability through the
optimization of selling prices.
Orders received were ¥268.3 billion, up 48.2% fromthe same period last year, due to growth in separator film
manufacturing equipment in the Industrial Machinery Products
Business Segment driven by accelerated EV production.
Another driver was robust growth in both plastic andmagnesium molding machines and in steel castings andforgings in the Material and Engineering Business Segment.
We expect net sales in fiscal 2022 to reach a record highdue to strong performance in orders received. And against
a backdrop of steady demand for EV-related products
principally, orders received in the Industrial Machinery
Products Business Segment have generally increased
in fiscal 2022. The measures taken under JGP2025 areprogressing favorably across the board, well toward achieving
the numerical targets for the final year of this medium-term
management plan.

Basic Financial Policy and Financial KPIs
JSW Group’s basic financial policy is “based on thepremise of ensuring sound finances, to proactively invest forsustainable growth to realize the enhancement of corporate
value.” We have positioned net sales, operating income andROE as KPIs, and set as quantitative targets for fiscal 2025
net sales of ¥270 billion, operating income of ¥27 billion, andROE of 10%.
While aiming to secure the minimum 8% ROE, which is
expected by institutional investors, we plan to increase theequity spread by further improving profitability, and raise theROE to 10% by the final year of JGP2025. As our level offinancial leverage poses no problem to the financial soundnessof the company, improvement of our net profit margin andtotal asset turnover ratio will be an important task that we willachieve through the managing of our business portfolio.
To ensure our financial soundness, we will set an equity
ratio target of 40% or more, and thereby maintain our current
creditor rating (R&I) of A or higher. Cash and deposits (¥106.2

28 JSW Integrated Report 2022

billion as of the end of fiscal 2022) will be maintained at the
optimal level of ¥55 billion, the equivalent of two months ofmonthly sales with funds for unexpected risks factored in, as
we pursue proactive investing.

Cash Flow Allocation
The cash flow allocation set by JGP2025 includes ¥105 billion
for growth investment (which represents the total of capital
investment, R&D investment, and M&A investment), resulting
in a cash outflow of ¥140 billion. At the same time, cash inflow
is expected to come out to about ¥30 billion due to ¥110
billion in income from business activities and asset utilizationthat includes the sale of cross-held shares and the use of
cash and cash equivalents. We also plan to reduce our crossheld shares to less than 10% of net assets.
Regarding capital investment, the plan is to makeaggressive investments for sustainable growth. This could go
beyond that which was initially planned due to our responseto the increasing demand for separators and other plastics
machinery, and our increasingly aggressive investment indigital transformation. In addition, should there be promising
M&A opportunities that could create greater value forshareholders, we are ready to flexibly take action with cashon hand and debt, even if the scope exceeds the planned
amount of ¥30 billion.
Income from Business Activities¥110 billion

Capital Investment¥45 billion

R&D Investment¥30 billion

Utilization of
Low-Profit Assets¥30 billion

Additional investment
Shareholder Interest-Bearing
M&A Investment (cash on hand and debt)
Returns Debt Repayment
in promising M&A¥30 billion¥20 billion ¥15 billion
opportunities

Cost of Capital and Business Portfolio Management
The Board of Directors deliberated and decided on a basic
policy in fiscal 2021 to upgrade our business portfolio
management. Specifically, there was the creation of a fourquadrant framework based on the two axes of ROIC andsales growth rates for each business. Once analysis andbusiness assessment were carried out to ascertain the current
situation, there were discussions and deliberations about
the ideal business portfolio to be achieved in 10 years' time,taking into consideration the marketability and competitive
advantage of each business.
Based on the business portfolio analysis, we will further
bolster our competitiveness by aggressively investing
resources in plastic production and processing machineryand injection molding machinery, which are positioned
in the upper-right quadrant of “high-priority investment
businesses” in the four-quadrant framework. We will promotecomplexification (i.e., enlargement of the business domain
through M&A Segment) in the Plastic Processing Machinery
Business to expand our product lineup.
In addition, based on the forecasted expansion of eachbusiness, we will aggressively invest resources in order todevelop into core businesses industrial machinery in thefield of electronic devices and the crystal business, which
has launched the operation of a large-scale demonstration
facility for the mass production of gallium nitride substrates.
Furthermore, we will also step up research and development
toward the creation of new businesses.
And based on our recognition of the importance ofcontinuing to create shareholder value through appropriate
resource allocation, we have established criteria for exiting
businesses and, in April 2022, began applying investment
adoption criteria for the verification of each investment projectthrough use of the NPV method.** NPV (Net Present Value) method: An indicator for showing how much value
can be derived from a given investment.

Four-Quadrant Framework(WACC)High

Sales Growth Rate

Perception of the Business Environment

B

Businesses with
Growth Potential

High-Priority

S Investment Businesses

GDP Growth Rate(global)C

Business toUndergo Profit
Structure Reform

A

Businesses to Consider
Renewed Growth

Low
Low

Return on Invested Capital (ROIC)High

Shareholder Return Policy
Our basic policy regarding the return of profits to shareholders
is to pay stable and continuous dividends and to improve thedividend payout ratio. In addition, in order to increase both
0 corporate value and shareholder value, we will continue toensure the stable profitability of our current businesses while
promoting capital investment and R&D investment for thegrowth of new businesses and products, while also striving to
improve the financial basics of the company.
As we aim for a consolidated payout ratio of 30% or more
and to pay consolidated dividends based on a dividendon equity (DOE) ratio of 2% or higher, we plan to pay total
dividends of ¥20 billion during the period of the JGP2025 plan.
Since DOE is derived by multiplying the dividend payout ratio
by ROE, we assume that if ROE exceeds 6.7%, the dividend
payout ratio of performance-linked dividends will be 30% ormore. We always aim to achieve a ROE of 8% or higher andadopt a paying policy of performance-linked dividends. As
we increase the transparency of dividend decisions in thismanner, a review of shareholder return criteria led to a yearon-year ¥22 increase in the annual dividend per share to ¥57
in fiscal 2021, and the dividend planned for fiscal 2022 is ¥58.
Over the medium to long term, we will continue to strive
for sustainable corporate value improvement by heightening
asset efficiency, optimizing cash allocation, and upgrading ourbusiness portfolio, which is undergirded by a strong
financial foundation.

JSW Integrated Report 2022 29

Response to Inappropriate Conduct in Quality Inspections
Background behind the Series of Instances of Inappropriate Conduct
Having received a report from an internal whistleblower in late February 2022, about quality inspections by Japan Steel Works
M&E, Inc. (hereinafter “M&E”), JSW Group conducted an unannounced internal inspection of M&E. In late March of the same year,
we confirmed that M&E had committed inappropriate conduct in the inspection of some products they had manufactured.
In response, after making a public announcement about the matter on May 9, a special investigation committee consistingof outside attorneys was established to conduct an investigation. On November 14, 2022, we received the results of thatinvestigation and made an announcement about the initiatives we would be implementing.

Analysis of the Causes
1 Inadequate organizational management system that made it difficult for a system of checks and balances tofunction
Authority was concentrated in the product division, which was in charge of planning and directing each process from specification coordination
with customers to manufacturing and quality confirmation of products. In addition, due to the very nature of materials manufacturing, which
involves only a limited number of divisions in the manufacturing process and is subject to direct or indirect involvement and guidance by the
product division, it is difficult for a system of checks and balances to function between processes. This contrasts to the situation at othermanufacturing plants engaged in machine manufacturing, where the series of manufacturing processes, such as design, machining, andassembly, are based on a division of labor, with process control by a production control division and at least a semblance of check-and-balance
functions in place among the processes.

2 Lack of awareness of the importance of quality compliance

Results of the Special Investigation Committee’s Investigation and theInappropriate Conduct Determined
From among the facilities investigated (at M&E, Hiroshima Plant, Yokohama Plant, and Meiki Plant), inappropriate conduct was
confirmed for products manufactured and shipped by M&E. No inappropriate conduct was confirmed at the Hiroshima Plant,
Yokohama Plant, or Meiki Plant.
The inappropriate conduct confirmed at M&E was independently investigated and confirmed by the Special Investigation
Committee. As a result of this investigation, inappropriate conduct was confirmed in the following product groups: power products,
nuclear energy products, cast steel products, forged steel products, steel Plate & Pipe products, and ordnance products.
A summary of the confirmed inappropriate conduct for each product group is shown in the table below. (Additional comments
below the table are supplemented by the Company.)
Regarding the affected products, we are reporting to and discussing with our customers sequentially.
The occurrence of problems in the product quality or performance owing to the inappropriate conduct has not been confirmed.
We take the facts and recommendations of the Special Investigation Committee with the utmost seriousness, and we will makecompany-wide and group-wide efforts to reform our systems and culture to prevent any recurrence, which will enable us to regain
the trust of all stakeholders.

There had been a tendency toward downplaying the process of quality assurance due to there being more importance placed on the final
quality of products and inadequate awareness of the fact that quality is created through the cumulative practice of adhering to each and every
specification and inspection requirement in the manufacturing process that has been agreed on with the customer. In addition, it was observedthat some individuals mistakenly believed that certain specification violations were acceptable as long as no quality problems were encountered
while practicing individual standards. There was also a tendency to try to solve problems by independently changing the definitions andinterpretations of regulations and specifications.

3 Overconfidence in experience and track record, and pressure to respond to customer requests and dialogue
M&E is seen as maintaining a strong commitment to perfection in terms of quality and on-time delivery. Against this background, M&E ended
up engaging in inappropriate conduct due to the justification at the individual and organizational levels of taking measures without sufficient
communication with customers in the event of the occurrence of quality problems.

4 Paper-based and manual inspection work processes and a chronic shortage of personnel
Paper-based management and manual record keeping create an environment in which there are occurrences such as the rewriting of inspection
results. In addition, the considerable volume of cumbersome manual work increased the workload and put a strain on human resources,
especially in responding to unexpected events, thereby triggering the omission of necessary operations in the name of efficiency.

Measures to Prevent Recurrence
Based on the analysis of the causes, and taking into consideration the recommendations from the Special Investigation Committee,
the Company has formulated the following measures to prevent recurrence of this inappropriate conduct. Having granted approvalof the overall approach, the Board of Directors will regularly monitor the progress and effectiveness of these measures.

Measures to Prevent Recurrence in the Company
Product groups

Products

Type of inappropriate conduct

Number of cases and times ofoccurrence1	
Establishment of a company-wide quality assurance system (new establishment of a Quality Management Office)For details, please refer to p. 32.
2
	Strengthen and raise awareness of the need for quality compliancePower products

Rotors, ring materials

Falsification, fabrication, or misstatement of inspection
results and analysis values

341 cases (1998-2021)

Nuclear energy
products1

Disc materials, headmaterials

Falsification of dimensional records, falsification or
fabrication of test results, false statements in inspections

20 cases (2013-2021)

Cast steel
products

Valve casing materials,
steam turbine casingmaterials

Falsification of inspection results, test results, andanalysis values

12 cases (2007-2022)

Forged steel
products

Rolls, forged steel pipes

Falsification or fabrication of inspection results, test
results, and analysis values

68 cases (2003-2020)

Steel Plate & Pipeproducts

Stainless clad steel plate

Falsification of inspection results and analysis values

2 cases (2017, 2020)

Ordnance
products2

Forged steel materials

Falsification of test results and analysis values

6 cases (2020)

1. Most of the cases were emergency measures that were triggered by sudden events that occurred in the manufacturing process, a finding that was confirmed in theinvestigation report by the Special Investigation Committee. There were circumstances that would not have otherwise been a problem if they had been reported toor discussed with customers, but they were covered up without reporting to or discussing about with customers, which constitutes a deviation from the procedural
specifications sought by customers.
2. There was no deviation from the specifications agreed on with final customers, but instead from the internal control values of M&E, whose customer is our Company(Hiroshima Plant).

30 JSW Integrated Report 2022

• Proper communication from top management	   Top management indicating the serious commitment to quality compliance will be an activity for raising awareness among theemployees who work under them. In addition, the president will hold lunch meetings with employees on a regular basis to promotedialogue and transition to a more open workplace culture.
• Establishment of a Quality Compliance Month	   In order to sustain an awareness of the importance of the lessons learned from the inappropriate conduct, May of each year will
be observed as Quality Compliance Month, which will entail activities such as education and training sessions pertaining to quality
compliance, as well as proper communication from top management.

3

Strengthen governance and internal controls• Strengthen internal audit functions	   Strengthening the internal audit functions of the head office Internal Auditor Office, internal control will be established in the quality
management process, including quality inspections by the Quality Management Office, and the status of operations will be audited asneeded.
• Strengthen the internal whistleblowing system	   Further awareness of the whistleblowing system will be promoted and the system with undergo further strengthening, including theestablishment of a new leniency system (punishment reduction) for internal voluntary reports.
• Review the structure of the Board of Directors	   The functions of the Board of Directors will be oriented toward monitoring. Regarding the composition of the Board of Directors, we will
move forward in ensuring diversity through means such as considering a reduction in the number of internal executive directors and anincrease in the percentage of outside directors.

Measures to Prevent Recurrence at M&E

For details, please refer to p. 33.

1	Strengthen the independence of quality assurancefunctions by deconcentrating authority in the productdivision2

Reform the workplace culture

3

Strengthen education pertaining to quality control

4

Digitalization of inspection operations5	
Appropriate allocation of management resources toquality control
6

Upgrade communication with customers

7	
Revision of standards for the storage of qualityrelated documents and data

JSW Integrated Report 2022 31

Details of the Main Recurrence Prevention Measures
Measures to Prevent Recurrence in the Company

Measures to Prevent Recurrence at M&E

Establishment of a company-wide quality assurance system

Strengthening the independence of quality assurance functions bydeconcentrating the authority of the product division

In order to strengthen the corporate monitoring and supervision of the self-contained quality assurance management systemin each division and plant, we established the Quality Management Office on September 16, 2022. This office is headed by
the director in charge of quality management to oversee the quality assurance functions in each division and plant. The Quality
Management Office is responsible for the following operations

1

 stablishment of company-wide quality policy and basic
E
quality action guidelines (figure on right)2

 uidance on consistency with the Company’s management
Gstrategy pertaining to the quality activity policies at eachbusiness and plant (including M&E)

3S
 upervision and assessment of quality assurance activities
at each division and plant (including independent audits)4

 uidance and recommendations for operationG
improvement based on the related assessments

5Implementation of company-wide education and training
related to quality assurance activities

6 ompany-wide horizontal deployment of information
Cthat should be shared: information on useful quality
improvement activities and problems at each division/plant7

 upervision of response to serious product accidents andS
quality irregularities at the time of occurrence8 eports to management on important quality assuranceR
activities of the entire company or each division/plant

In order to prevent interference with quality control operations by the product division, which is responsible for delivery dates andcosts, quality assurance functions will be integrated into the Quality Control Department, which will report directly to the presidentof M&E. This reorganization has been implemented as of June 1, 2022. In addition, by incorporating Quality Assurance Division
Directors into the parent company’s Quality Management Office for concurrent duty, there will be a system in place for ensuringpersonnel control. Moreover, the Quality Control Department now receives quality audits from the Quality Management Office.
These changes will strengthen the monitoring and supervision functions of the parent company.
For nuclear products, we will strengthen monitoring and supervision by third parties through means such as accepting witness
inspections by external inspection organizations. Though we already have witness inspection by external inspection organizations
for some matters, we will consider expanding this practice in the future as based on consultations with our customers.
In addition, functions related to delivery and cost management will be separated from the product division and reorganized, anda system will be established to appropriately verify and manage the personnel and facility capabilities of the plant of M&E.

Renewal of workplace culture
The report of the Special Investigation Committee suggests that the corporate culture within the Company is not conducive tobringing attention to internal problems. We will work to create an open workplace culture where individuals can point out mistakes
without fear, where such feedback is accepted, and where opinions can be freely expressed.
To this end, we will move forward with activities that raise awareness for fostering a culture of quality and safety, including senior
management sending the right kind of messages and gleaning feedback from employees through regular round-table talks, as wellas through actions such as holding regular workshops and study sessions on quality and compliance, along with the posting of
posters.
Also, since divisions where human resources remain unchanged are susceptible to the onset of peer pressure, we will also
promote personnel rotation across divisional boundaries in parallel with the review of business processes. The effectiveness ofthese actions will be verified through means such as internal attitude surveys.

General Meeting of Shareholders
Audit & Supervisory Board
Board of Directors
Executive Board
President

ESG Promotion
Office32 JSW Integrated Report 2022

Quality Management
Office(Quality Assurance Department General Manager, M&E)

(Ordnance Quality Assurance Department General Manager, Hiroshima Plant)* Concurrently serving as General Manager incharge (Muroran)(Quality Assurance Group Manager, Yokohama Plant)* Concurrently serving as General Manager incharge (Ordnance)(Quality Assurance Department General Manager, Meiki Plant)* Concurrently serving as General Manager incharge (Yokohama)* Concurrently serving as General Manager incharge (Meiki)(Quality Assurance Department General Manager, Hiroshima Plant)

Other organizations omitted* Concurrently serving as General Manager incharge (Hiroshima)

Corporate Planning
OfficeConcurrently serving as office staff:
each Quality Assurance Division Director(as indicated on the right)
Dedicated Office staff: 1
Deputy Office Manager: 1
Office Manager: 1 (director in charge of quality management)Internal Auditors
OfficeDigitization of inspection work
We will construct a digitalized inspection work system to prevent the kind of errors and omissions in inspection data that could be
due to intentional or negligent errors in the process of preparing inspection reports.
The Office of Digital Transformation (established on July 1, 2022) is taking the lead in the digitization of inspection operations at
plants, including those of M&E, with M&E aiming to begin partial operation during the second half of fiscal 2023.

Appropriate investment of management resources in quality control
Given that the lack of personnel and equipment necessary for quality control, including inspections, was a factor in the occurrenceof inappropriate conduct, we will increase the number of personnel needed, invest in education to train inspectors, and invest in
the necessary equipment and measuring instruments, including digitization.

JSW Integrated Report 2022 33

Sustainability Policies
The Japan Steel Works has continued to consistently resolve social problems by innovating materials for more than a century
since our founding in 1907, first in steel, then in the development of plastic that began after the Second World War and more
recently in crystals such as gallium nitride (GaN). With the belief that this is the very purpose for the existence of the Group,
we set forth as our Purpose Material Revolution™, making the world sustainable and prosperous. Furthermore, we identified
as Materiality six themes that should be prioritized in order to realize our Purpose. With these as the basis for decisions madeand actions taken in the Group’s business activities, the Group will coalesce as one to consider which industrial machineryand new materials to provide for which social issues, and then work towards realizing them to create social value.

Sustainability
Management

In addition, as stated in our vision, we believe that the Group’s corporate value will be enhanced by benefiting all
stakeholders by developing and implementing industrial machinery and new materials that solve social issues.
The simultaneous realization of this creation of social value and the sustainable enhancement of corporate value typify theconcept of sustainability to JSW Group.
In taking specific actions in our quest to realize sustainability for JSW Group, we will continue to hold ourselves to highethical standards in accordance with the Group Standards of Business Conduct.

Governance and Promotion System for Sustainability
Sustainability promotion activities are carried out by the ESG Promotion Committee, which was established in April 2021
and chaired by the Director in charge of Promoting ESG. In addition to considering strategies related to climate change, thecommittee also discusses all manner of ESG-related issues. The Board of Directors exercises appropriate oversight on the

Message from the Director in Charge of Promoting ESG

basis of input such as reports on the ESG Promotion Committee’s activities.

Having established JSW Group corporate Philosophy, starting with
Purpose, Materiality was identified as themes that should be prioritized inorder to realize our Purpose. By clarifying these, we were able to reaffirm
the challenges that need to be undertaken to realize the future and mission
we would like to realize, as well as the very purpose of theGroup’s existence.
In parallel, in June 2022, we announced our endorsement of the TCFD
and then in September 2022 established a Human Rights Policy andexpanded our Basic Procurement Policy. Companies are increasingly
expected to manage their operations in an ever more sustainable manner,and our Group is indeed one that is progressively organizing and building
a framework for sustainable management. Based on this framework,
we aim to further enhance our corporate value by fulfilling the host ofsocial responsibilities that are sought in companies and contributing to
the resolution of social issues through the provision of reliable products,
technologies and services that place importance on quality.

Junichiro Deguchi

In April 2022, the Company established the ESG Promotion Office as an organization dedicated to promoting ESG activities
on a company-wide basis. The ESG Promotion Committee plays a central role in the Group’s climate change response and
ESG-related activities, which are promoted through the ESG Promotion Office in cooperation with head office divisions,business divisions, plants and Group companies.

Board of Directors
Inside Directors

Supervise

Representative Director & Executive Vice President
In charge of Export Control Administration; In charge of Personnel Department; In charge of CSR & Risk
Management; In charge of Promoting ESG; In charge of Health & Safety Management and Environmental
Management; In charge of General Affairs Department; In charge of Material and Engineering Products Business

Environment

SocialGovernance

36 Response to Climate Change

41 Talent Development Strategy

46 Corporate Governance

38 Environmental Management

43 Human Rights

52 Management Team40 	Reduction of Environmental

44 Occupational Health and Safety

54 Message from an Outside Director

45 	Supply Chain Management

55 	Risk Management45 	Local Communities

56 	ComplianceImpactOutside Directors

Report

ESG Promotion Committee

Plan (target setting)
Check (monitoring)

Chair: Junichiro Deguchi, Director in charge of Promoting ESG
and Representative Director & Executive Vice President
Office: ESG Promotion Office
ESG Promotion Office(newly established on April 1, 2022)

Do (implementation of measures)
Action (review of activities)

Head Office
Divisions

Business
Divisions

PlantsGroup
Companies57 	Digital Transformation Promotion
57 Information Security
34 JSW Integrated Report 2022

JSW Integrated Report 2022 35

Response to Climate Change

Governance
The Board of Directors recognizes that it is one of the important subjects to respond to climate change issues and supervises theGroup’s efforts to address climate change issues in terms of both risks and opportunities. Specifically, when the Board of Directors
deliberates on management strategies and plans, its decisions are made based on risks and opportunities related to climatechange issues as necessary. For more information, see the pages on Sustainability Management (p. 34-35).

Impact on Operating Income: Minor: less than ¥100 million/year; Moderate: ¥100-1,000 million/year; Major: ¥1,000 million/year or more
Category

Type

Transition risks

Policies andregulations

36 JSW Integrated Report 2022

4°C

Major

—

—

Moderate

Introduction of border adjustment tax

Moderate Moderate
Minor

Increased procurement costs due to increased demand for steelmaking raw materials as a result of the shift from blast
furnaces to electric furnaces in the steel industry (CO2 reduction measures)

Moderate Moderate

Damage to our ESG evaluation and reputation due to delays in CO2 emission reduction measures at the productmanufacturing stage

Moderate Moderate

Acute

Increased costs incurred by the restoration of damaged production and supply chain facilities due to severe natural disasters
such as typhoons and torrential rains caused by extreme weather change

Minor

Minor

Chronic

Increased costs (capital investment) to cope with rising sea levels

Minor

Minor

Markets—

Financial “Opportunity” Impact Assumed for FY2030
Impact on operating income: Minor: less than ¥100 million/year; Moderate: ¥100-1,000 million/year; Major: ¥1,000 million/year or more
Category

Type
Markets

Opportunities

and renewal of production facilities) to non-fossil fuels.
In terms of opportunities provided by the below 2°C
scenario, we possess multiple product groups that could
potentially provide opportunities for us as environmental
regulations become stricter, such as manufacturing equipment
for separator film used in EVs and electrically driven injection
molding machines with superior energy efficiency. To increase
sales of those products, we are working to strengthen our
production system, expand product substantiality that meetmarket needs, and strengthen our technology. In addition,
we will promote resource efficiency by taking the opportunityof introducing carbon prices, such as electrification of
manufacturing facilities and promotion of the use of electricity
and non-fossil fuels derived from renewable energy.
Risks posed by the 4°C scenario include physical damage
to production facilities and other property caused by events
such as typhoons, torrential rains, floods and storm surges,
costs incurred by countermeasures, and consequences suchas the impact on business performance due to the shutdownof operations.
We asked an external organization to scrutinize the location
conditions of our main manufacturing bases, forecasted
changes in weather, existing disaster prevention facilities inand around the manufacturing bases, and damage records
in the past. As a result, it was confirmed that disasterprevention measures have been strengthened not only in the
manufacturing bases but also in the surrounding area suchas raising the embankment. In addition, as the estimatedamount of damage is expected to be covered by insurance,
the impact of physical risks (acute and chronic) on businessperformance is expected to be minimal by the middle of thiscentury. We will continue to monitor climate trends, and if
the tendency for intensifying disasters becomes even more
pronounced, we will consider parallel production of major
products at bases with stronger disaster tolerance.
Based on the above, we believe that our strategy for climatechange is resilient.

2°C

Introduction of carbon pricing (imposition of a carbon tax)
Cost of refurbishing/updating facilities and R&D to support a shift to the use of non-fossil fuels used in production facilities

Reputation

Strategy
We conducted a scenario analysis to evaluate how the risks
and opportunities of climate change affect our businessstrategy and to consider countermeasures. The assumptions
used for this scenario analysis are as follows. The target ofthe analysis is covering all businesses based on consolidated
financial statements, and the analysis time axis is fiscal 2030.
As for the based scenarios, IEA’s SDS scenario (Sustainable
Development Scenario) and IPCC’s RCP 2.6, etc., are used as“below 2°C scenario,” and STEP scenario (Stated Policies
Scenario) and IPCC’s RCP 8.5 etc. are used as “4°C scenario.”
As a scenario analysis process, we first identified the risks
and opportunities that climate change would bring, andextracted items that are expected to have a relatively large
impact on operating income from among various items. Next,
we collected objective external data necessary for estimating
the impact of these items, and estimated the impact as of fiscal
2030 based on the below 2°C scenario and the 4°C scenario.
Then, we considered countermeasures for the results of ourestimates with appropriate parameters. The extracted items
and the estimated degree of impact, and countermeasures forthem are as shown in the table on the right page.
The risks of the below 2°C scenario include, in addition toincreased costs due to the introduction of carbon pricing, adecrease in sales of products for coal-fired power stations,increased costs for the non-fossilization of fuel for production
facilities, and a decrease in sales due to reputation damage if
the company’s CO2 emissions reduction measures prove to
be insufficient.
In response, we are promoting the reduction of CO2
emissions at major manufacturing plants and are also
working on the introduction of renewable energy-derived
power, research, and development for the shift to non-fossil
fuels, and equipment refurbishment/renewal. Regarding thedecline in reputation, ESG Promotion Committee will continue
discussion with a view to accelerating the plan, as well as
ensuring the execution of plans such as increasing the amountof electricity derived from renewable energy and shifting (repair

Degree of impact

Details

Decrease in demand for thermal power related products due to the reduction in the construction of conventional thermal power plants

Technology

risks

While climate change has a great impact on the global environment, society, andeconomy, it is a long-term and highly uncertain problem. We, Japan Steel Works Ltd., considers a climate change as one of theimportant management issues, and in June 2022, we have expressed our endorsement for TCFD (Task Force on Climate-related
Financial Disclosures).
JSW Group analyzes and examines the impact of climate change as risks and profit opportunities on its business activities andis working for our disclosure of information in accordance with TCFD Disclosure Framework.
* TCFD: T ask Force on Climaterelated Financial Disclosures
See website for detailed report.
established by the Financial
Stability Board (FSB).
Climate change response: https://www.jsw.co.jp/en/sustainability/environment/climatechange.html

Financial “Risk” Impact Assumed for FY2030

PhysicalSupport for and Information Disclosure in Line with
the TCFD Recommendations

EnergysourcesResource
efficiency
Products andservices

Degree of impact

Details

2°C

4°C

Expansion of the EV market

Major

Major

Expansion of high-efficiency, energy-efficient power electronics market and 5G infrastructure market

Moderate Moderate

Increased demand for offshore wind turbines

Moderate Moderate

Increase in hydrogen stations for fuel cell vehicles

Minor

Tax relief after the introduction of carbon pricing on CO2 emissions from production facilities

Major

—

Reduction of CO2 emissions due to the introduction of photovoltaic installations (Scope 1, 2)

Minor

—

Minor

Expansion of products and services that contribute to the demand for the reduction of CO2 emissions

Major

Major

Response to the demand for plastic recycling, contribution to social implementation of non-fossil fuel-derived plastics andcoal alternatives

Minor

Minor

Response to the demand for nuclear power plants that emit less CO2 and are a stable source of electricity

Moderate Moderate

For more information on our measures to address each of the risks and opportunities, please see our website.

Risk Management
We have established rules regarding risk management and clarified the company-wide risk management system. The ESG Promotion
Committee and the Environmental Management Committee conduct the identification and assessment of risks related to climatechange. Important risks among those identified will be deliberated on by the Board of Directors or the Executive Board as appropriate.
For more information on the environmental promotion system, please see the Environmental Management pages (p. 38-39).

Indicators and Targets
The “Indicators and Targets” that measure and manage risks

CO2 Emission (Scope 1, 2) Reduction Plan and Renewable Energy
Introduction Planand opportunities related to climate change have set the(t-CO2/year)

following targets for a carbon-neutral decarbonized society.

250,000

239,854

CO2 emissions reduction target

By the end of FY2025 By the end of FY2030
45% reduction
60% reduction(compared with FY2013) (compared with FY2013)(%)
50

We are engaged in environmentally friendly business activities
that aim for improvement in terms of both “decarbonization

200,000

187,184

by products“ and ”decarbonization of production processes.”

161,913150,000

Regarding the CO2 emission reduction target, we have40

180,444 185,502

171,42530

initiatives underway from Scope 1 and Scope 2. As Scope 3
is being calculated, we are proceeding with efforts toward

100,000

20
95,942

setting publication and management indicators.
Target (by end of year)

Classification

Management Indicator

2025

2030

Reduction of CO2
emissions in production
activities (Scope 1, 2)CO2 emissions reduction
target(compared with fiscal 2013)45%
reduction60%
reduction

Promotion of theintroduction ofrenewable energy

Percentage of renewableenergy among all energy
used (Scope 1, 2)

25%
or more40%
or more50,00010
118,606

0

0
2013

2017

(benchmark year)

CO2 emissions (left axis)

2018

2019

2020

2021

2025

2030

Estimate Target(FY)

Percentage of renewable energy introduced (right axis)* In terms of the scope covered, the CO2 emissions calculation includes the totalof the head office and the Group's main manufacturing sites (Hiroshima Plant,
Yokohama Plant, Meiki Plant, Japan Steel Works M&E, JSW Aktina System).

JSW Integrated Report 2022 37

Environmental Management

Environmental Policy

Targets and Progress of the Medium-Term Environmental Plan
Achievement Level:

JSW Group is committed to being an environmentally responsible corporate citizen. We emphasize environmentally responsible
production and technology as means to support sustainable social development in harmony with ecosystems.

Action Plan
1

Priority Issues

Business sites set environmental policies, objectives andgoals in accordance with international standards with due
consideration of their operations and nearby communities.

	
Set appropriate objectives and targets to reduce2environmental impact, including on biodiversity.

	Provide society with products and services that contribute3
to environmental conservation.
( 1 ) Improve the social value of our products in terms of the		
environment, health and safety.
( 2 ) Provide products and services that reduce environmental		
impact by understanding environmental needs anddeveloping technologies.

( 1) Comply with laws, regulations and JSW Group agreements with	
external entities.
( 2) Prevent pollution and reduce and properly process waste with	
due consideration for impact on ecosystems.
( 3) Use resources more productively by saving energy and by saving	and recycling resources.
( 4) Require employees and on-site companies to understand and	abide by business site policies.

Environmental Management Structure

Maintain existing ISO 14001 certifications
Obtain new ISO 14001 certification ofdomestic manufacturing Group companies

30% reduction in CO2 emissions(compared with fiscal 2013)

29% reduction in CO2 emissions(compared with fiscal 2013)

60% reduction in CO2 emissions by the endof fiscal 2030 (compared with fiscal 2013)
45% reduction in CO2 emissions by the endof fiscal 2025 (compared with fiscal 2013)

Improvement of 1% or more in energy
usage intensity(year-on-year and average change in
intensity over 5 fiscal years)

0.1% worse than the previous year
0.8% improvement over average change
in intensity over 5 fiscal years

Improvement of 1% or more in energy usage
intensity (year-on-year and average change
in intensity over 5 fiscal years)

Promotionof Resource
Conservation andRecycling

Recycling rate of 95% or higher(excluding slag and refractories)

Recycling rate of 96%(excluding slag and refractories)

Recycling rate of 95% or higher(excluding slag and refractories)

Managementof Chemical
Substances

Improvement of 1% or more emissions
and transfers intensity of chemical
substances subject to the PRTR* law(year-on-year and average change in
intensity over 5 fiscal years)

3.1% worse than the previous year
0.1% worse than the average change in
intensity over 5 fiscal years

Improvement of 1% or more emissions andtransfers intensity of chemical substances
subject to the PRTR law(year-on-year and average change in intensity
over 5 fiscal years)

Legal or regulatory violations: 0

Legal or regulatory violations: 0

Legal or regulatory violations: 0

Treat low-concentration PCB waste by
the legal deadline (March 2027)

Progressing appropriately

Treat low-concentration PCB waste by thelegal deadline (March 2027)

Issuance of integrated reportIssuance of integrated report

Disclose environmental management
activities in an integrated report
Conduct training for employees

Climate Change
Measures

Recognizing the importance of conducting its business activities in harmony with both the international and local communities,
Management Committee, headed by the director in charge of environmental management, formulates group-wide annual
environmental management policies and action plans, and monitors and evaluates the progress of environmental management

Achievement
Level

Less than 80% achieved

Medium-Term Environmental Plan
(under JGP2025)
Fiscal 2025 Targets

Maintained ISO 14001 certification ofplants and Nikko-YPK Shoji

Compliance

JSW Group has been promoting environmental management activities throughout the Group since 1997. The Environmental

Fiscal 2021 Actual Results

80% or more achieved

Maintain ISO 14001 certification ofplants and Nikko-YPK Shoji

Environmental
Management

Shared Business Site Policies

 ystematically implement environmental initiatives andScontinuously promote environmental conservation.

Fiscal 2021 Targets

Fully achieved

Raising
Environmental
Awareness* PRTR: Pollutant Release and Transfer Register

activities. Each plant has its own environmental supervisory committee and works to promote environmental management
activities, as part of JSW Group’s unified approach to reducing its environmental impact.
Environmental Management Committee

JSW Plant Environmental Supervisory Committee
JSW Plants(Hiroshima, Yokohama, Meiki)

President

Chief Environmental
Management Supervisor(Director in charge ofEnvironmental Management)

Environmental
Management
Administrative OfficeEnvironmental
Management Supervisors(JSW Plant Managers)

Environmental
Management Officers(President,
Japan Steel Works M&E, Inc.)

Renewable Energy Use Initiatives

The fiscal 2021 environmental impact of the manufacturing

energy used, the Group has set the target at 25% or more byprocesses of the Industrial Machinery Products Business and

JSW plants
affiliated companies

the Material and Engineering Business is as indicated below.
JSW Group carries out quantitative assessments of inputs,

Environmental
Management Officers

Muroran Plant
M&E affiliatedcompanies

Head Office
General Manager,
Corporate Planning
Divisionsuch as energy and intake water, and outputs, such aswaste generated in manufacturing processes, carbon dioxide
and waste water, and applies those in its environmental

Materials

Business Site

and Nikko-YPK Shoji Co., Ltd. have obtained ISO

Hiroshima Plant

December 18, 1998

JQA

14001 certification, an international standard for

Yokohama Plant

September 4, 2006

JQA

environmental management systems.

Meiki Plant

March 4, 2005

JQA

Japan Steel Works M&E

December 18, 1998

LRQA

Nikko-YPK Shoji

February 7, 2005

JQA

* Certification bodies: LRQA (Lloyd’s Register Quality Assurance Limited), JQA (Japan Quality
Assurance Organization)

MANUFACTURING

2021 electricity derived from renewable energy sources wasintroduced as part of the purchased electricity at that plant.
renewable energy sources accounted for 0.8% of the Group's

Metals, rubber,
timber, etc.

Chemical
substances

7,228 tIntakewater

2,878 TJ

16.91 million m

3(of which 0.8% renewable energy)

Original Certification Date Current Certification Body

In April 2021, a solar power generation equipment wasenergy consumption in fiscal 2021.
In fiscal 2022, the Hiroshima Plant increased the percentage
of electricity derived from renewable energy sources in its

EnergyGroup companies Japan Steel Works M&E, Inc.

fiscal 2030.

The combined result of these two developments is that

INPUT

Business Site ISO 14001 Certification

the end of fiscal 2025 and 40% or more by the end of

installed at our Hiroshima Plant, and, in addition, from October

improvement activities.

Head OfficeEnvironmental
Management Division

JSW’s Hiroshima, Yokohama and Meiki plants andIn terms of the percentage of renewable energy sources in all

JSW Plants

Japan Steel Works M&E
Environmental
Management Supervisor

Business Activities andEnvironmental Impact

purchased electricity, and newly introduced renewable energyderived electricity for part of the electricity purchased at the
Yokohama Plant and Meiki Plant.

Industrial machinery products
Materials and engineering products

In addition, there is active rebuilding and expanding ofbuildings at the Hiroshima Plant with an aim to achieve

Total waste volume Waste emission volume

Recycling volume85,429 t

21,066 t

64,360 t

CO2 (Scope 1 + 2)

Chemical substances(amounts emitted and transferred)

Waste water

171,425 t-CO

226 t

16.91 million m

OUTPUT

2

JGP2025, and plans are in place to install solar power
generation equipment in all new buildings.
We will continue initiatives that work toward increasing theuse of renewable energy sources.

3

75% of total waste volume is recycled
38 JSW Integrated Report 2022

JSW Integrated Report 2022 39

Reduction of Environmental Impact

Policy and Initiatives for Water Resources

Talent Development Strategy

Intake Water Consumption

Japan Steel Works M&E, Inc. accounts for over 99% of the intake waterused by JSW Group. Although the Company uses industrial water andsea water in cooling, as it not only operates in a region with low water
stress but is also engaged in initiatives such as practicing water source
management for the industrial water it uses and recycling the coolingwater, we believe there is little impact on stakeholders.
In terms of waste water quality, we will continue to conduct strictwater quality management based on government ordinances.

(Million m3/year)

20
15

16.73

16.33

16.86

16.28

16.91

2017

2018

2019

2020

2021

10
5
0

Proper Management of Chemical Substances
At JSW Group, we manage chemical substances and other substances withenvironmental impact and are working to reduce emissions of hazardous substances.
Based on the PRTR Law, we report to local governments annually about our releaseand transfer of the substances that are subject to that law. Substances that are
subject to the PRTR law are used primarily in manufacturing processes, such as steel
manufacturing, welding, galvanization, cleaning and coating.

(FY)

In order for our Group to simultaneously realize sustainableenhancement of corporate value and creation of social value,
it is first and foremost important for us to acquire and develop
the right human resources for realizing the Purpose of Material
Revolution™, making the world sustainable and prosperous.
This comprises engineers, including those in our current
business divisions, who will contribute to strengthening ourcore competence, as well as corporate personnel who will
support our management strategy to spread far and wide
the value we provide to the world. In addition, it is necessary
Overview of Talent Development Strategy

Release and Transfer of PRTR Substances
FY2020

FY2021

Amountreleased (t)

50.1

65.1

Amounttransferred (t)

153.1

161.0

Total (t)

203.2

226.1

PurposeEngineers

Corporate personnel

Chemical recycling response

Already in use in a host of recycling fields, usage of our twin-screw extruders (TEX) is expected to expand, particularly in the field ofchemical recycling for waste plastics. As a typical example of chemical recycling with the use of TEX, it is possible to decompose
used acrylic resin and recover monomer, the raw material for new acrylic resin. Having opened the Recycling Technical Center (RTC)
at the Hiroshima Plant in November 2022, we are stepping up our efforts toward the spread of chemical recycling.

Non-fossil fuel-derived plastics and biodegradable plastics response

Though plastics such as non-fossil fuel-derived plastics that are not reliant on fossil fuels and biodegradable plastics that preventthe problem of marine plastic litter differ in terms of their respective raw materials, have their fundamental manufacturing process
of melting, mixing and solidifying raw materials is the same as that of general-use plastics. Utilizing the core competence we havedeveloped as a comprehensive plastics processing machinery manufacturer, we are developing and supplying all manner of plastics
processing machinery for the production of these environmentally friendly plastics, and supporting their social implementation.

Initiatives to Reduce Waste Emissions

40 JSW Integrated Report 2022

Global personnel

Acquisition

Talent development strategy

Development

Human capital

Acquiring and Developing Human Resources
Our Ideal Candidate Profile and Recruitment Activities

Plastic Resource Recycling Initiatives

Our Industrial Machinery Products Business is maintaining ahigh recycling rate through thorough implementation of thethree R’s of waste. Our Material and Engineering Business iscontributing to the realization of a recycling-oriented society
by utilizing internal and external steel scrap as raw materials.
Though waste emissions in fiscal 2021 ended up at almost
the same level as in the previous year partly due to increased
operations, efforts are being made to reduce waste generation“Material Revolution™,” making

Diverse humanresources

The Group has set forth “Material Revolution™, making the world sustainable and prosperous.” as the Purpose. In order toachieve a world that is both sustainable and prosperous, products that contribute to the reduction of environmental impact andresource recycling are indispensable, and the Group will continue to engage in the development and supply of such products.
As we aim to be a comprehensive plastics processing machinery manufacturer unparalleled across the world, the realization ofa plastic-resources-recycling society in support of a prosperous society is an extremely important issue for us, and we have duly
placed it at the forefront of the Group’s Materiality.
In addition, the Group will continue to work on reducing our direct waste emissions by applying reduce, reuse and recycle (thethree R’s) as a basic principle.

•

Material Revolution™
the world sustainable and prosperous.

Our Approach to Resource Recycling (Reduction of Waste Emission Volume)•for us to also go beyond these human resources to enhance
educational opportunities so that our employees are capableof success on a global scale.
This is why we will implement measures to acquire anddevelop diverse human resources that will contribute to theachievement of the vision sought by the Group, based on our
medium-term personnel plan and taking into consideration thecomposition of our human resources and our organizational
nature ascertained through engagement surveys.

by improving manufacturing processes and developing new
recycling methods.
Industrial Machinery
Products Business
Material andEngineering Business

Setting forth the following profile of our ideal candidates
to illustrate the requirements that will contribute to theimplementation of our management strategy and take on thechallenge of resolving social issues, we are focusing on the
recruitment of new graduates and experienced personnel thatmeet these requirements. In order to acquire human resourcesfrom a wide range of sources, we are currently engaged ina host of hiring activities, including referral recruiting throughreferrals from employees and direct recruiting that entails theproactive scouting of talented individuals.
Recruitment interviews in the selection process are
conducted using a combination of face-to-face and online
methods to ensure that we have the opportunity to match theCompany with fine and motivated individuals across the nation.

Ideal Candidate Profile

FY2020

FY2021

Waste emission
volume (t)

213

124

2. Has strong problem-solving capabilities

Recycling rate (%)

98.0

98.7

Waste emission
volume (t)3. Has firm independent views and standards

20,66920,943

Recycling rate (%)

72.3

72.2

1. Is eager to take on challenges

4. Is able to think logically
5. Is able to act with persistence

We also channel efforts toward offering internships toprospective new graduates, providing many opportunities
for them to gain a deeper understanding of our workplaceenvironment and culture. In recruiting engineers, on-thesite tours and interviews are conducted, while for those whocome from the liberal arts we take steps such as providing theopportunity to participate in group discussions with younger
employees who are principally in sales positions. This is how
we are endeavoring to give prospective employees a concrete
image of how we work and where they might perform
best within the Company, as well as to prevent the risk ofperceived incompatibility between new employees and theorganization after the former have been employed.
Based on an analysis of the composition of our current cropof human resources, we know that we now need to continue
to secure more diverse employees than ever before in orderto realize sustainable growth. To hire and secure highly skilled
and experienced personnel, we are taking steps such as
establishing a new compensation system.
Going forward, we will continue to focus efforts on an
activity structure that facilitates the recruiting of the corepersonnel and corporate personnel with high expertise whowill drive our business.

JSW Integrated Report 2022 41

Workplace Success for Diverse Human Resources

Training and Development
To develop human resources capable of generating innovationand creating value at our company, we not only train by job
level, from newly hired employees to management, but alsooffer selective training for younger employees with a view
toward developing human resources capable of success in the
global market. In addition to improving business skills such as
negotiating and presenting in English, this training also gives
participants the opportunity to learn styles of thinking that haveglobal resonance. We also strive to create an environment inwhich employees can learn the skills they personally want toacquire by providing a variety of learning opportunities, including
basic and specialized education required for work, language
education that includes overseas study, and self-development
support through an online learning platform.
Regarding the transfer to employees of the technical skills thatare the foundation of our core competence, we have establishedin-house training programs such as the Ginou-Dojo (Technical
Skills Dojo) (Hiroshima Plant) and the Hagane-Juku (SteelAcademy) (Japan Steel Works M&E, Inc. (Muroran Plant)), wherethe various know-how cultivated by skilled engineers over many
years of manufacturing is passed on to younger employees. In
addition, we have introduced a system to encourage and reward
the acquisition of official qualifications, as well as a system tocertify technical skills.

our growth in a process where the starting point is support for
the growth of the mid-level employees who drive the workplace
and take the lead in deploying business strategies. The results ofengagement surveys have shown that an initial focus on improving
the leadership and development skills of mid-level employees
leads to improved performance among all employees. In addition,by promoting the development of human resources who cantake the lead in achieving strategies without being constrained byprecedent, we will increase selective training with a view toward
tailoring employees for future promotion to senior management. To
this end, in addition to giving high performers fast-track promotion
to managerial positions and assigning them important missions
even if they are new, we actively provide opportunities such as
training and career programs that leverage job rotation.
In digital transformation training, we will categorize employees
according to their responsibilities and IT skills, and formulate
a training system based on this categorization in order toensure that the reskilling of employees is promoted and our
digital transformation activities assuredly lead to innovation. We
will then implement educational programs for each category,from improving basic literacy to training specialists, in order tomaximize the effectiveness of the programs.
We will focus on the development of corporate humanresources who will lead the planning and execution of
growth strategies on a global scale and the establishment ofmanagement systems necessary to achieve these strategies, andbegin work on formulating an education system for this purpose.

In human resource development during JGP2025, we arepromoting solutions to management issues and linking them to
Indicators

FY2019FY2020

FY2021

Training cost per employee (thousands of yen)

37.9

29.8

28.5

Number of participants in job level-specific training

234

285

277

Completion rate of job level-specific training (%)

93.2

98.6

98.9

Number of employees newly certified under The
National Trade Skill Test & Certification (NTSTC)

79

47

111

Training System

Group training

Other types of training

42 JSW Integrated Report 2022

Indicators
Percentage of Female New
Graduate Hires for Career-track
Positions (%)

FY2019FY2020

FY2021

8.5

10.0

15.0

Percentage of Women among
Section Managers (%)

7.8

7.8

8.7

Number of Employees Who Took
Childcare Leave

10

11

16

Percentage of Employees with
Disabilities (%)

1.90

2.21

2.46

Human Rights
Respect for Human Rights

SectionManagerTraining
Academic Qualifications and Study Abroad

Development Academy

Leadership Development Seminar

Basic Seminar

Overseas Placement Training

TOEIC English Program

Self-Development Support

Health and Safety

Intensive Training for Qualifications

OJT

Monozukuri Training (Technical Skills Dojo, Steel Academy)

Language Study Abroad

Mid-Level
Employee Training

Global Skills Training

New Employee
Training

Assistant Manager
Candidate Training

Quality Control Training

2nd-Year Training

Business Essay Writing

3rd-Year Training

Job-Based Training

5th-Year Training

Business Basics Training

Level-Based
Correspondence Training

CSR and Risk Management

Executive Seminar

General Managers

Section Manager
Candidate Training

work with childcare and nursing care. We are also moving
ahead in preparing a training program that supports selfdevelopment so that employees can improve their own skills
according to their ambitions. And regarding benefits offered,
the program is being upgraded in ways such as offering acafeteria plan that enables employees to choose the benefit
options they find necessary to meet their own various values
and needs.
In order to create added value through the diverse humanresources in our group, we will continue to conduct a wide
range of educational activities that encourage positivechanges in employee awareness with the goal of promoting
D&I. Furthermore, we will work to build a corporate culture of
openness that provides psychological safety.

Technical Skill
Global Personnel
Management andDevelopment,
Training
Engineer Training Leadership Training

Workplace/Frontline Capability Development

Section Managers
Assistant Managers

Employee Level

New Employees andGeneral Employees

Managerial Level

Business Basic Skills
Training

Dispatched training outside the company

The Group recognizes that the execution of its management
strategy hinges on the active participation of diverse humanresources that can bring about new added value through avariety of thinking styles and ideas.
Regarding the percentage of female employees among
managers, a major indicator of corporate diversity, currently
the female career-track employees, who are the main
candidates for promotion to management positions, aredisproportionately numerous among the younger to midcareer employees. The task of increasing this percentage
is expected to take some time. First, we will increase thepercentage of female employees by boosting the recruitmentof new graduates and experienced workers and implementing
retention measures. This will be followed by an increase in
the percentage of women in leadership positions of at leastassistant-manager level, which will lead to a steady increasein the number of female managers.
In addition, we are developing each of our human resource
systems to make for a work-life balance and employeefriendly workplace that enables one and all to be able to workwith full assurance. Specifically, having established the legally
mandated childcare leave and nursing care leave system,
which is reviewed in accordance with each revision to the law,
we have introduced telecommuting, staggered work hours,
and an hourly paid leave system to help employees balance

Section Manager
Initiation Training

Assistant Manager
Initiation Training

JSW Group respects internationally recognized codessuch as the International Bill of Human Rights and the ILO
Declaration on Fundamental Principles and Rights at Work.
We also promote efforts to respect human rights based oninternational guidelines such as the United Nations’ Guiding
Principles on Business and Human Rights.
In accordance with these, we have established The Japan
Steel Works Group Human Rights Policy, which clearlyprohibits discrimination, harassment, child labor, and forcedlabor; indicates our respect for basic labor rights; andexpresses our commitment to respecting all human rights inall aspects of our business activities.
In this context, JSW Group has focused on health andsafety activities and harassment prevention, with the primary
aim of ensuring that each and every employee can performtheir work in a healthy and pleasant environment where
they are respected as individuals and their human rights
are not violated. We have established internal and external

consultation hotlines and a resolution process through theHarassment Countermeasures Committee. We conduct fairhiring practices that respect the human rights of all individuals,
and have also established systems that support a favorable
work-life balance, foster a workplace environment that isinclusive of diverse personnel, and strive to provide equal
opportunities so that individuals can excel.
In the creation of our supply chain, we require that suppliers
share an understanding of human rights and legal compliance,
as appropriate, and continue to do due diligence in theconstruction of a framework conducive to human rights.
Recognizing that its business activities are extremely vast
in terms of the fields covered, involving a wide variety of
individuals, JSW Group will engage in dialogue with labor
unions and all other stakeholders, set priorities and address
them appropriately, and step up the monitoring of humanrights-related risks to prevent any direct or indirect negative
impacts on human rights.

For details on JSW Group’s respect for human rights and Human Rights Policy, please refer to the website.
Respect for human rights: https://www.jsw.co.jp/en/sustainability/social/diversity.html
JSW Integrated Report 2022 43

Occupational Health and Safety

Supply Chain Management

Policy for Health and Safety Activities

Approach to Supply Chain Management

In JSW Group, which operates primarily in manufacturing, ensuring the health and safety of employees has always been a toppriority. We consider our health and safety initiatives to be part of a corporate foundation and corporate culture rooted in anemphasis on human capital and respect for human rights.
We are carrying out these activities in accordance with the policy below, with the aim of maintaining and improving the health of
employees and preventing occupational accidents.

JSW Group has established The Japan Steel Works Group
Standards of Business Conduct, which states, among otherthings, that the Group will respect the human rights of all
people, conduct business transactions properly as basedon fair and free competition, and engage in responsible
procurement. In September 2022, The Japan Steel Works
Group Human Rights Policy was established to promoterespect for human rights in accordance with international
norms. Furthermore, in September 2022, we revised theexisting The Japan Steel Works Group Basic Procurement
Policy to have our suppliers achieve an understanding of andcooperate with the above standards and policies, and to
facilitate product procurement that takes into consideration
matters such as human rights, labor, health and safety, theenvironment, and information management in a mannerconsistent with the move toward a sustainable society. We

1

Basic Philosophy

 o fulfill our social responsibility, we have positioned health and safety as a vital part of our management policy, and work toTensure the health and safety of everyone involved in our business.
• We have established and operate an occupational health and safety management system, and prioritize health and safety inall of our business activities to foster workplaces where employees can work safely and with peace of mind.
•

2

Basic Policy(1) We will comply with health- and safety-related laws and regulations, as well as internal standards.
(2) We will establish a safety management system based on strong leadership from top management, the participation of
all employees, and the cooperation of the labor union as well as that of Group companies and partner companies, andthereby prevent occupational accidents and health problems.
(3) We will invest the resources necessary for effective workplace improvements.

Health and Safety Promotion Structure

The Japan Steel Works Group Basic Procurement Policy
The Japan Steel Works Group promotes procurement activities as follows based on The Japan Steel Works Group
Standards of Business Conduct and The Japan Steel Works Group Human Rights Policy.

The promotion structure for health and safety activities in JSW Group is as follows.
Companywide Health and Safety Council

Plant Health and Safety Committee

1

JSW Plants(Hiroshima, Yokohama, Meiki)

President

Companywide Healthand Safety Manager(Director in charge of Health &Safety Management)

Companywide Healthand Safety Management
Administrative Officealso formulated our Request to Suppliers, a document thatoutlines the specifics regarding our vision of how we hopesuppliers conduct business.
In moving forward, we will try to ensure thorough awarenessby our suppliers of this Code of Conduct, policies, andrequests, and promote activities so that we can keep trackof the status of sustainability initiatives of our major suppliers
and, if necessary, engage in dialogue with them to deepen
their understanding of the Group’s Basic Procurement Policy
and improve their initiatives. If necessary, we will continue
to strengthen our supply chain risk management andsustainability. To ensure that all suppliers in our supply chain
can continue to play indispensable roles within society, we
will share with them the Group’s policies and work together
to promote sustainable procurement practices that sustain
sound growth together through our business dealings.

JSW Plants

General Health and
Safety Managers

Health and
Safety Manager(JSW Plant Managers)

Labor unions
JSW plants affiliated companies

Japan Steel Works M&E
General Health and
Safety Manager(President, Japan Steel Works
M&E, Inc.)

Muroran Plant
Health and
Safety Manager

Fair and impartial procurement

	The Japan Steel Works Group complies with laws andinternational norms, treats all suppliers fairly and impartially, andalways conducts transactions in good faith.

M&E labor union
M&E affiliated companies

Head Office
Safety and Health
Department

Head Office
Labor union2

Relationship with suppliers based on trust	The Japan Steel Works Group aims to build partnerships tocreate corporate value by deepening mutual understanding withall suppliers and realizing optimal quality, prices, and delivery
through stable procurements with the following activities.
(1) Regular briefings on our procurement policy(2) Quality management checkups and guidance to eliminate
defects(3) Recognition of outstanding suppliers(4) Confidential management of sales and technology
information(5) Establishment of whistleblowing systems for suppliers

3

Supplier Selection Policy

	The Japan Steel Works Group places particular importance on
the following conditions in selecting suppliers toward building
stronger and more sustainable partnerships.
(1) Achieve legal compliance and fulfill social responsibility.
(2) Respect human rights and prohibit discrimination. Do not becomplicit in human rights violations.
(3) Apply fair working conditions and maintain a safe andhealthy working environment.
(4) Prohibit forced labor, child labor and discrimination in
employment.
(5) Recognize environmental problems and strive to solve andrespond to them.
(6) Conduct fair corporate activities under sound management.
(7) Have an appropriate level of quality, price, delivery time,etc., and make efforts to maintain and improve them

Request to Suppliers
We ask that our suppliers achieve an understanding of the following six items, cooperate with our own proactive efforts, and disclose information as necessary.
Please refer to our website for details.

Health and Safety Initiatives and Results
In JSW Group, we specify priority items for health and safety
activities each fiscal year, and the Group (as well as the labor
union) and suppliers of each plant work together on activities
aimed at achieving zero occupational accidents.
Our major sites have acquired certification for theiroccupational health and safety management systems, and areenhancing the effectiveness of their activities.
We plan to step up our initiatives and activities for improving
the physical and mental health of employees, and are currently
establishing the necessary framework and systems.

Frequency Rate of Accidents per Million Workhours
Muroran Plant
Meiki Plant

3
2.42
2

1

1.20

1.21

0.61

0.63

0.79

0

0

0.53
0

0.42
0

2017

2018

2019

1.02
0.81

0

Site

Certification

Date Acquired/Renewed

ISO 45001

August 12, 2022

Japan Steel Works
M&E

OSHMS

June 5, 2021

44 JSW Integrated Report 2022

Supply Chain: https://www.jsw.co.jp/en/sustainability/social/supplychain.html

Hiroshima Plant
Yokohama Plant
Manufacturing industry average

0.34

Hiroshima Plant

1. Compliance with laws and social norms; 2. Consideration for human rights and occupational safety; 3. Consideration for the environment;
4. Ensuring quality, price and delivery; 5. Efforts on conflict minerals; 6. Information security

1.21

2020

Local Communities

1.31

0.42
0.40
0

2021

(FY)

Note:	Frequency rate of accidents calculated from lost-worktime, serious and fatal
accidents during the fiscal year.
* Meiki Plant merged into The Japan Steel Works, Ltd. in fiscal 2020
Frequency rate of accidents at the Meiki Plant in fiscal 2020 due to theoccurrence of multiple lost-worktime accidents* Manufacturing industry averages are from the survey of occupational accident
trends (Ministry of Health, Labour and Welfare).

The Group recognizes that companies are also members of society and that they are expected to participate in various community
activities, including local communities, and contribute to local development. In addition to contributing to society through its
business, JSW Group also engages in socially responsible activities with the aim of realizing a better society and becoming acompany that is rooted in the local community. Please refer to our website for details regarding the activities we engage in, suchas cleanups, education, and community exchange.
Social Contribution Activities: https://www.jsw.co.jp/en/sustainability/social/socialcontribution.html
JSW Integrated Report 2022 45

Corporate GovernanceCorporate Governance Policies

Building a Stronger Governance System

Based on our Philosophy and the Standards of Business Conduct, the Group recognizes that it is essential to earn the trust of all•N ov. Formulated Corporate Governancestakeholders, including shareholders, customers, business partners and employees, in order to simultaneously create social value
and enhance sustainable corporate value. We therefore continue to strengthen corporate governance to ensure the transparency,

Policy of The Japan Steel Works, Ltd.
•F ormulated Policies in Relation to
Cross-Shareholdings•F ormulated Basic Policy for Officer
Nominations•F ormulated Criteria for
Independence of Outside Officers• Apr. Introduced

whistleblowing system•J un. Discontinued
retirement benefit systemfor officers

soundness and effectiveness of management.

Overview of Corporate Governance Structure
The Japan Steel Works, Ltd. (“the Company”) has adopted

strengthening supervision and improving business execution.

the structure of a company with an audit and supervisory

Audit & Supervisory Board members attend importantboard. The Board of Directors consists of eight directors

meetings including those of the Board of Directors, the(three of whom are outside directors) and the Audit &Executive Board and the Management Council. Once every

Supervisory Board consists of four Audit & Supervisory Board

fiscal half in principle they visit plants, sales locations andmembers (two of whom are outside Audit & Supervisory

Group companies, and receive reports on necessary

Board members).

information from each division. They also exchange opinions

The term of office for directors is set at one year. The

with directors, executive officers and other keypersons, andCompany has also introduced an executive officer system

based on these exchanges, advise management from anthat separates management decision-making and supervisoryobjective and impartial standpoint, while strictly monitoring thefunctions from business execution functions conducted byexecution of duties by directors.

executive officers, thereby speeding up decision-making,

2011

2006

Board of Directors
Auditing

Inside Audit & Supervisory
Board members

regarding directors

2016

2018

•F
 eb. Established Nomination

Maximum number of directors: 20 10
Term of office: 2 years 1 year
Note: At the 85th Annual General Meeting of
Shareholders held in June 2011, the numberof directors was reduced to 7 (from 13 in theprevious year).
•J un. Appointed first outside director(1 director)

Percentage of
Outside Officers: Inside: Outside

ReportingAccounting auditors
Cooperation

Outside Audit & Supervisory
Board members

Outside directors

Nomination
Advisory Committee
Remuneration
Advisory Committee

Auditing
Cooperation

Cooperation

1
6

Advisory Committee andRemuneration Advisory
Committee•M ar. Conducted evaluation ofBoard of Directors effectiveness(once a year since 2016)•J un. Appointed 2 outside directors

2

14.3%

2020

2021

2022

6

25%

•J
 un. Appointed 3 outside

directors• Apr. Established ESG

Promotion Office• Apr. Conducted evaluationof Audit & Supervisory Board
effectivenes•J un. Changed the numberof members on the Board of
Directors from nine to eight

3
6

33.3%

3
5

37.5%

• Business divisions• Plants

Information Security
Committee

Companywide Health and
Safety Council

Export Control
Administration Committee

Business execution organizations

Environmental Management
Committee

Directors with business execution
responsibilities and executive officers

ESG Promotion Committee

Management Council

Internal Control Committee

Internal Auditors OfficeAttendees(with voting rights)

Directors(5 inside, 3 outside)

Inside directors (5)Non-director executive officers (5)President (1)Director in charge of Personnel Department and Secretary Office (1)Outside directors (3)Observers/
Advisors(no voting rights)

Audit & Supervisory Board members(2 inside, 2 outside)

Inside Audit & Supervisory Board
member (1)Outside Audit & Supervisory Board member (1)Chairperson/
Committee Chair

President

President

Outside director

Objectives andAreas of Authority

Decides and reports on basic
management policies, matters stipulated
by laws and regulations, and otherimportant management matters, andmonitors the execution of duties bydirectors and executive officers

Meetings in FY2021

18

Composition

Attendees

Chairperson

 eliberates and decides on importantDmanagement matters and mattersthat have a significant impact on the
Company’s profit and loss
• Discusses and reports on basic
management policies and mattersrelating to overall management

As an advisory body to the Board of
Directors, deliberates on matters relating
to the remuneration of directors andexecutive officers, and reports the results
to the Board of Directors

46

5

5

Management Council

Audit & Supervisory Board

Liaison Council of Outside
Officers

Inside directors (5)Inside Audit & Supervisory Board member (2)Non-director executive officers (7)Business division directors and business division deputy directors,
general plant managers, Head Office division managers

Audit & Supervisory Board members(2 inside, 2 outside)• s an advisory body to the BoardAof Directors, deliberates on mattersrelating to the nomination and dismissalof directors, Audit & Supervisory Board
members and executive officers, andreports the results to the Board of
Directors• Consult on the succession planning forthe president, and report the results to
the Board of Directors•

Directors (3 inside, 3 outside)
Audit & Supervisory Board members(2 inside, 2 outside)

President

Inside Audit & Supervisory Board member

President

Objectives andAreas of Authority

Coordinates and reports on the following important management matters and shares
management information
1. Analysis of business environment, progress of business plans
2. Important matters relating to research and development
3. Matters relating to Group companies
4. Matters that have a significant impact on management including those relating tosales, production, funding, profit and loss
5. Other important management matters

Reports, discusses and makes
resolutions on important matters relating
to auditing; this does not preclude theexercise of individual Audit & Supervisory
Board members’ authority

Advance explanation of the resolution
matters and deliberation matters of
the Board of Directors, and report on
the status of operations and importantmanagement matters of the Company
and the Group

Meetings in FY2021

12

13

Newly established from FY2022• Group companies* The Liaison Council of Outside Officers was established as a venue to provide outside officers with advance explanations about the agenda for Board of Directors
meetings, and as a forum for outside directors and executive officers to verify, report on, and exchange opinions about business execution.

Nomination Advisory
Committee

Executive Board

Executive Board
President

Remuneration Advisory
Committee

Board of Directors

Monitoring

Business
execution

46 JSW Integrated Report 2022

stock-based compensation
plan for officers•J un. Amended Articles of Incorporation

Composition

Audit & Supervisory Board

Inside directors• Head Office divisions•J un. Introduced restricted• Apr. Introduced executive officer system

General Meeting of Shareholders

Decision-making

implement a policy for determining
the content of remuneration, etc., forindividual directors• Apr. Established ESG Promotion
Committee

Role and Composition of Governance Bodies

Corporate Governance Structure

Oversight/
Monitoring

2015

•M
 ar. Board of Directors resolved to

JSW Integrated Report 2022 47

Major Matters Discussed at the Board of Directors Meetings in FY2021• Medium-term management plan JGP2025• Feedback on IR/SR activities• Environmental activity initiatives • Evaluation of the effectiveness of the Board of Directors• Review of the rationality of cross-shareholdings • Business portfolio• Review of dividend policy• Report on the status of compliance line operations• Executive structure• Officers’ renumeration• Reorganization of Yokohama Plant• Status of operations of internal control systems• Market restructuring of the Tokyo Stock Exchange • Talent development strategy

Skill Matrix
JSW Group’s long-term vision is to be a company with job satisfaction and excitement for employees and growing to a business2

Officer Training	In order to deepen the understanding of the roles and responsibilities required of directors and Audit & Supervisory Board
members, the Company invites outside experts to lead study sessions as needed. The subjects covered in the fiscal 2021 study
sessions were as follows.
• May 21 ESG & SDGs Trends & Sustainable Management• Aug. 2 Recent Trends in SR/IR Activities and Issues to be Addressed by the Company• Nov. 4 Response to TCFD and Information Disclosure	In addition to the above, opportunities for inside officers to participate in external training, workshops, and programs are provided
as-needed on an ad hoc basis.

Evaluation of Board of Directors’ Effectivenessscale of 300 billion yen. In line with the medium-term management plan JGP2025, formulated in May 2021 and covering the five-

The Board of Directors continues to enhance its functions by conducting an annual questionnaire-based analysis and evaluation.

year period beginning fiscal 2021, we will promote business activities based on the following four basic policies: 1) Towards the

The following is a summary of the analysis and evaluation for fiscal 2021.

unprecedented general manufacturer of plastic processing machinery in the world, 2) Make constant profit in the Material andEngineering Business, 3) Create new core businesses, and 4) Implementation of ESG management.

1

From this perspective, we believe it is important to ensure that the Board of Directors has the diverse experience and capabilities
necessary for promoting JGP2025’s four basic policies. To that end, we have prepared a skills matrix as one selection criterion for
director and Audit & Supervisory Board member candidates.
For information on the skill matrix, please refer to p. 52-53.

Reasons for Appointment of Outside Directors
JSW believes that the function and role of outside directors in corporate governance is to strictly supervise the execution of duties
by directors and to make management judgments and decision-making from a neutral and objective standpoint with no conflict ofinterest with the Company, and from an independent standpoint with no risk of conflict of interest with general shareholders.
To that end, the Company has appointed three outside directors.
The roles expected of outside directors are stipulated in the Corporate Governance Policy.
For information on the Corporate Governance Policy of The Japan Steel Works, Ltd., please refer to the following.
https://www.jsw.co.jp/pdf/sustainability/governance/governance/GovernancePolicy_en.pdf

Succession Planning for the President and Procedures for Appointment and Dismissal
1
Formulation and Implementation of Succession Plan for the President
	With respect to the formulation and implementation of the succession plan for the president, the Nomination Advisory Committee
holds appropriate discussions, considering the qualities of the candidate, such as experience, ability and character, based on thecorporate philosophy of JSW Group and management strategies, and reports to the Board of Directors as necessary.

Questionnaire content
I.	Composition, discussion, and monitoring functions of
the Board of Directors
II. Performance of inside and outside directors
III.	Support system for directors and Audit & Supervisory
Board members
IV. Training
V.	Dialogue with shareholders (investors)
VI.	Self-evaluation by each director and Audit &Supervisory Board member
VII.	Management of the Nomination Advisory Committee
and Remuneration Advisory Committee
VIII.	Miscellaneous (pertaining to the Board of Directors ingeneral)2
Appointment Criteria and Procedures	The appointment of the president is decided by the Board of Directors after receiving a report from the Nomination Advisory
Committee based on the succession plan.
3
Dismissal Criteria and Procedures	Dismissal of the president is decided by the Board of Directors if circumstances make it difficult for the president to carry out hisor her duties.

Support for Outside Directors and Officer Training
1

Support for Outside Directors

	For the purpose of deepening their understanding of JSW Group, outside directors are provided with information on the Group’sbusiness, finances, organization and other topics at appropriate times after assuming office. In addition, the General Affairs
Division at the head office serves as the secretariat for the monthly meeting of the Liaison Council of Outside Officers, which
provides outside officers including Outside Audit & Supervisory Board members, with advance briefings on matters to be resolved
or deliberated at meetings of the Board of Directors, reports on the state of operations and important management matters of
the Company and its Group, and provides opportunities for question-and-answer sessions. They also attend the president's
report meetings at each plant twice a year where they are given the opportunity to observe work on-site and meet with plant
management. Moreover, outside officers also receive materials at least three days prior to Board of Directors meetings, separate
to the aforementioned advance briefings provided at meetings of the Liaison Council of Outside Officers.

48 JSW Integrated Report 2022

Analysis and Evaluation Methodology(1) During March 2022, an anonymous questionnaire wasadministered to all directors and Audit & Supervisory
Board members. In light of the June 2021 revision of the
Corporate Governance Code, the survey questions wererevised to focus on evaluations of the monitoring functionsof the Board of Directors. The planning of the subjects
covered and the collection and tabulation of the survey
results were outsourced to a third-party organization.
(2) The Board of Directors Secretariat recompiled and analyzed
the results of the questionnaire, comparing them withthe previous evaluations, identifying subjects given low
evaluations, confirming differences in evaluation by officer
type (i.e., inside directors, outside directors, inside Audit &Supervisory Board members, outside Audit & Supervisory
Board members) and by individual, and extracting
important comments from the open-ended responses.
(3) At the May and June 2022 Board of Directors meetings,
the board discussed its effectiveness from the perspectiveof improving the medium-to-long-term corporate value ofthe entire Group, based on the re-tabulation and analysis of
the results of the questionnaire by the Board of Directors
Secretariat and advice from a third-party organization.

2

Results of the FY2020 Analysis and Evaluation Results

and an Overview of the Resultant FY2021 Initiatives
	In response to the three issues identified in the fiscal 2020
effectiveness evaluation, the Board of Directors proceeded
forward with the following actions in fiscal 2021. As a result,the effectiveness evaluation for fiscal 2021 confirmed that
improvements have been steadily made for each of the issues
and that effectiveness has been generally ensured.
   (1) S ufficiently discussing management strategies forsustainable growth and enhancement of corporate value
over the medium to long term			 Subjects that merit discussion from a medium-to-longterm perspective were incorporated into the Board of

Directors meeting schedules as appropriate for the timingof broaching each subject. In addition to the types ofresolutions and reports normally included in the agenda, avenue for deliberation was established to provide a forum
for free discussion of medium-to-long-term strategies,
and sufficient time was reserved for discussion of theformulation of medium-term management plans andbusiness portfolio management.
   (2) Addressing ESG issues and reflecting them in management
strategies
			In the process of drafting the integrated report, ESG
issues were identified and deliberated on, and progress
was observed in terms of success in considering our basic
sustainability policy and talent development strategy.
   (3) P roviding the necessary training opportunities for officers
			 Inviting outside lecturers, study sessions were held as avenue for the acquisition of the knowledge that officers
need to fulfill their roles and responsibilities. In fiscal 2021,
a total of three sessions were held featuring subjects suchas sustainability management and TCFD disclosure.
3
	
Future Initiatives Based on the FY2021 Analysis and

Evaluation Results
 ased on the results of the effectiveness evaluation in fiscal
B
2021, the following have been identified as the major issues
to be addressed in fiscal 2022.
(1) Deeper discussions at the Board of Directors meetings towork toward sustainable growth for the Group			Since evaluation revealed the need for more extensive
discussions on important management issues such as
formulating the Purpose, the promotion of sustainability,
and assuring diversity, we will delve deeper into discussion
by systematically providing multiple venues for dialogue on
high-priority subjects.
   (2) Close scrutiny of the progress being made by the mediumterm management plan JGP2025 amid changes in thebusiness environment			 Since evaluations identified that the medium-term
management plan should be aligned in a timely fashion todeal with a rapidly changing business environment, the degreeof progress made by business-specific strategies will beclosely scrutinized and the plan will be revised as necessary.
   (3) U pgrading of risk management that includes a review of
the quality control system			 Since evaluations identified that it would behoove theCompany to further enhance its awareness of andsensitivity to risks and opportunities, the Company will firstwork on the review of the quality control system, which
is a top priority, and then establish a group-wide risk
management system.

JSW Integrated Report 2022 49

Officers’ Remuneration

management measures to contribute to businessperformance, the restricted transfer period that had
previously been set at three years in line with themedium-term management plan term was changed to
five years in accordance with the five-year length of themedium-term management plan JGP2025.

The Company’s policy for determining the directors’ remuneration (the “policy for determining”) was resolved at the Board of
Directors meeting held on March 16, 2021, and was partially revised at the Board of Directors meeting held on March 23, 2022, withthe aim of improving incentives for achieving the medium-term management plan JGP2025. In accordance with the revision, theCompany revised a part of the officers’ remuneration system, focusing on the evaluation method related to variable remuneration.
(Outline of the revision of the policy for determining and review of the officers’ remuneration system)
As a result of the revision of the policy for determining and the review of the officers’ remuneration system, the variable
remuneration portion of annual remuneration, which previously consisted solely of remuneration linked to divisional performanceand results, was partially changed to be linked to company-wide performance. In addition, the percentage of fixed remuneration
was reduced for the representative director & president, and a portion of the bonus evaluation was changed from being linked todividends to incorporating individual performance results. These changes were designed to increase short-term incentives.

1
Basic Policy for Directors’ Remuneration
	The maximum amount of directors’ remuneration is decided
by resolution of the General Meeting of Shareholders. The
basic policy is to set remuneration that provides soundincentives for sustainably enhancing corporate value, at alevel corresponding to respective roles and responsibilities,
and that ensures fairness and transparency in remunerationrelated decision processes.
2
Procedures for Determining Directors’ Remuneration
	The directors’ remuneration is determined by the Board of
Directors after receiving a report from the Remuneration
Advisory Committee. However, the allocation of annual
remuneration by position and by individual and the allocationof bonuses by individual may be delegated to the president
by resolution of the Board of Directors. In this case, thepresident makes decisions in accordance with the content
of the report.
3
Composition of Directors’ Remuneration
	The composition and percentage breakdown of directors’
remuneration are as follows   (1) R epresentative director & president and representative
director & executive vice president			The composition shall be annual remuneration ((1) baseportion, (2) company-wide performance-linked portion)and stock-based remuneration.
			The president’s remuneration comprises an approximate
55:35:10 ratio of fixed remuneration ((1) base portion) :variable remuneration ((2) company-wide performancelinked portion) : stock-based remuneration. For the vicepresident, the approximate ratio is 60:30:10 of fixed
remuneration ((1) base portion) : variable remuneration((2) company-wide performance-linked portion) : stockbased remuneration.
   (2) Inside directors
			The composition shall be annual remuneration ((1) baseportion, (2) company-wide performance-linked portion, (3)divisional performance/results-linked portion), bonuses,
and stock-based remuneration. The approximate ratioof fixed remuneration ((1) base portion) to variable
remuneration ((2) company-wide performance-linked
portion, (3) divisional performance/results-linked portion,and bonus) to stock-based remuneration is 60:30:10.
   (3) Outside directors
			Outside directors, who are responsible for supervisory
functions, shall be paid only fixed remuneration (baseportion of annual remuneration) in consideration of
their duties.

35

10

Vice president

60

30

10

Inside directors

60

30

10

President

Outside directors

50 JSW Integrated Report 2022

55

100

(%)
Fixed
Variable
Shares4	Matters Relating to the Method of Calculation of
Directors’ Remuneration, Etc.
	The summary of each type of remuneration is as follows.
Variable remuneration is calculated by comparing actual
performance against the consolidated operating income,net income attributable to shareholders of the parent
company, and other indicators set forth in JGP2025 astargets for fiscal 2021, and multiplying the percentage ofachievement by the base amount of remuneration foreach position.
   (1) A nnual remuneration
		 1) Base portion
The base portion is fixed remuneration determined on
the basis of the particular position and the number ofyears the position has been held by the individual.
		 2) Company-wide performance-linked portion
The company-wide performance-linked portion isvariable remuneration that is determined on the basisof consolidated performance during each fiscal year. It
consists of a net income attributable to shareholdersof the parent company and a consolidated operating
income portion. This indicator was selected because of
its importance in terms of indicating how performance
directly links to the company-wide performance targets
in the medium-term management plan.
		 3) Divisional performance- and results-linked portion
The portion linked to divisional performance and results
is determined as variable remuneration based on theperformance evaluation of the division for which thedirector is in charge.
   (2) Bonuses			Bonuses are variable remuneration determined on thebasis of the performance evaluation of the division forwhich the director is in charge and the performance
results of each individual.
			The ratio of the performance evaluation portion for eachdivision and the performance evaluation portion for eachindividual is 50:50. However, directors in charge of head
office divisions receive only the individual performance
portion.
   (3) Stock-based remuneration
			Stock-based remuneration is granted in the form of
restricted transferable shares as remuneration for the
purpose of providing medium-to-long-term incentives
to increase corporate value and to further the sharingof value with shareholders. The number of shares tobe allocated shall be the number of shares obtainedby dividing the standard amount by position according
to the director’s position by the closing price of theCompany’s shares on the Tokyo Stock Exchange on
the day before the date of resolution by the Board of
Directors regarding the execution of the restricted stock
remuneration allocation agreement.
			In consideration of the period of time it takes

5	
Remuneration for Audit & Supervisory Board
Members, Etc.
	The remuneration of each Audit & Supervisory Board member
shall consist only of fixed remuneration (base portion ofannual remuneration) from the viewpoint of emphasizing
independence and objectivity with respect to management.

Group Governance
JSW Group consists of The Japan Steel Works, Ltd. and46 subsidiaries (33 consolidated, 13 non-consolidated). The
Group operates the Industrial Machinery Products Business,
Material and Engineering Business, and other businesses inJapan and around the world.
For Group companies, the JSW business division withprimary responsibility leads the formulation of management
policies and short- and medium-term management plans, andmonitors their progress. In order to enhance the effectivenessof these efforts, we assign full-time or part-time directors or
Audit & Supervisory Board members with the responsibilityof supervising and auditing the execution of duties at specificGroup companies, in principle, thereby ensuring that theexecution of duties by directors, etc., and employees at Group
companies comply with laws and regulations and the Articles
of Incorporation. In addition, regarding risks relating to specificfunctions, such as health and safety, environmental management,
and export control administration, each Group company
participates in the various committees formed by the relevant
divisions of the Company, or follows the regulations developedby the Company, and appropriately manages these risks.

In addition, each company in the Group appoints individuals
to be in charge of general affairs, accounting, and IT mattersrelated to internal control. The appointed individuals receive
guidance and training from the Internal Control Committee
Office and conduct self-assessment of implementation andoperation of internal control in step with risk assessment. The
status and results of the self-assessment of internal control
operations are reported to the Office and each company. In
response, the Internal Audit Division of the Company, which
also serves as the Office of the Internal Control Committee,
monitors the governance and risk management status of eachcompany by directly or indirectly auditing the status of eachcompany and the methods and results of self-assessments.
With regard to internal control over quality assurance
processes at Japan Steel Works M&E, Inc., the Company
is promptly implementing its reorganization, includingorganizational reforms to strengthen mutual checks andbalances among divisions and eliminate the concentration of
authority, moving ahead with operations and assessments
under the guidance and management of the Company.

Cross-Shareholdings
1

Policy on Cross-Shareholdings

The Company holds shares that it judges, through regular confirmation and review, to be necessary for policy
purposes, and that contribute to the Company’s businesses over the medium to long term in ways suchas maintaining and strengthening sound, ongoing relationships with business partners, forming businessalliances, and supporting the sound development of investee companies.
Each year, the Company confirms the purpose of individual cross-shareholdings and current transaction2
	Regular Confirmation and Review status, etc., and the Board of Directors verifies whether shareholdings are appropriate by comprehensively

considering the significance and purpose of the Company’s acquisition and holding of the shares, as well as
the safety, profitability, economic viability, risks and other factors associated with the shareholdings.

of Shareholdings

The Company makes decisions on the exercise of voting rights based on factors including the businessconditions of the investee company and its business relationship with the Company, having confirmed thedetails of each proposal from the standpoint of increasing the investee company’s corporate value over the
medium to long term and fulfilling that company’s social responsibilities.

3	
Policy on Exercise of Voting

RightsStatus of Holdings
Number of Listed and Unlisted Stocks Held; Market Value of
Cross-Shareholdings on Balance Sheet ÷ Consolidated Net Assets
Number of stocks held (left axis)
Market value of stocks ÷ Consolidated net assets (right axis)(Stocks)

100
80
60

(%)

90
28.3

40

88

50

85
69

21.6

15.5

16.9

20

40

62
12.3

0

30
20
10
0

2017

2018

2019

2020

2021

(FY)

Based on the Corporate Governance Policy of The Japan SteelWorks, Ltd., we regularly confirm and review the significanceof our policy cross-shareholdings, and we are gradually sellingshares whose significance has diminished.
In addition, setting forth in our medium-term management
plan JGP2025 the financial strategy of ensuring an appropriatebalance between investment in growth and shareholder returns
in order to sustainably increase corporate value, the Company
plans to reduce its cross-shareholdings to less than 10% of
net assets, and to allocate the funds obtained from the sale ofcross-shareholdings into areas such as investment growth andshareholder returns.
JSW Integrated Report 2022 51

Management Team (As of June 30, 2022)
Directors / Audit & Supervisory Board Members

NameToshio Matsuo

Junichiro Deguchi

Hiroki Kikuchi

Shingo Mito

Shigeki Inoue

Sadao Degawa

Yoshiyuki Nakanishi

Hisao Mitsui

Toru Nishiyama

Hiroyuki Shimizu

Fumihiko Tanizawa

Hiroshi Misawa

Title

Representative Director &President

Representative Director &Executive Vice President

Director & Managing
Executive Officer

Director & Managing
Executive Officer

Director & Managing
Executive Officer

Director

Director

Director

Audit & Supervisory
Board Member (Full-Time)

Audit & Supervisory
Board Member (Full-Time)

Audit & Supervisory
Board Member

Audit & Supervisory
Board Member

Apr. 1984 Joined the Company
Apr. 2013 Deputy General Plant
Manager, Hiroshima Plant
Apr. 2015 General Plant Manager,
Hiroshima Plant
Apr. 2016 Executive Officer
Apr. 2017 Managing Executive
Officer; Director of Injection
Molding Machinery Business
Division; In charge ofHiroshima Plant
Jun. 2017 Director & Managing
Executive Officer
Apr. 2020 Representative Director& Executive Vice President;
In charge of Export Control
Administration; In charge of
Plastics Machinery Business
Division, Injection Molding
Machinery Business Division,
Industrial Machinery Business
Division; In charge of Meiki
Plant
Apr. 2021 In charge of OrdnanceBusiness Headquarters;
In charge of Business
Development Office; Incharge of Hiroshima Plant andYokohama Plant
Apr. 2022 Representative Director& President (current position)

Apr. 1981 Joined the Company
Apr. 2013 Deputy General Plant
Manager, Muroran Plant
Apr. 2015	 Executive Officer;
Deputy Director of SteelBusiness Division
Oct. 2017 General Manager,
Personnel Department
Apr. 2018 In charge of CSR &Risk Management (current
position); In charge of Export
Control Administration;
In charge of Health &Safety Management andEnvironmental Management(current position); In charge of
Secretary Office and General
Affairs Department
Jun. 2018 Director & Executive
OfficerJul. 2018 In charge of General
Affairs Department (current
position); General Manager,
Secretary Office
Apr. 2019 Director & Managing
Executive Officer
Apr. 2020 Chief Information
Security Officer; In chargeof Office of Information
Technology; In charge of
Personnel Department
Apr. 2021 In charge of Promoting
ESG (current position)
Apr. 2022 Representative Director& Executive Vice President(current position); In charge ofExport Control Administration(current position); In charge of
Personnel Department (current
position)
Jun. 2022	 In charge of Materialand Engineering Products
Business (current position)

Apr. 1985 Joined Mitsui Bank
(currently Sumitomo Mitsui
Banking Corporation)
Apr. 2012 General Manager,
Nihonbashi-higashi Corporate
Business Office, Sumitomo
Mitsui Banking Corporation
Apr. 2015 Joined the Company
Jul. 2015 General Manager,
General Affairs Department
Apr. 2016 General Manager,
Secretary Office
Apr. 2018 Executive Officer
Jul. 2018 General Manager,
Corporate Planning Office(current position)
Apr. 2020 Chief Financial Officer(current position), In chargeof Finance & Accounting
Department (current position);
General Manager, Business
Development OfficeJun. 2020 Director & Executive
Officer
Apr. 2021 Director & Managing
Executive Officer (current
position)
Apr. 2022 In charge of Plastics
Machinery Business Division,
Injection Molding Machinery
Business Division, OrdnanceBusiness Headquarters(current position); In charge ofIndustrial Machinery Business
Division; In charge of Business
Development Office

Apr. 1984 Joined the Company
Jul. 2006 General Manager,
Personnel Department
Jul. 2011 Deputy General Plant
Manager, Hiroshima Plant
Apr. 2014 Deputy Director of
Machinery Business Division
Apr. 2016 Deputy Director of
Research and Development
Headquarters
Apr. 2017 Executive Officer
Oct. 2017 Deputy Director of
New Business Promotion
Headquarters
Apr. 2021 Director of New
Business Promotion
Headquarters (current position)
Jun. 2021 Director & Executive
Officer
Apr. 2022 Director & Managing
Executive Officer (current
position)

Apr. 1986 Joined the Company
Apr. 2015 Deputy General Plant
Manager, Hiroshima Plant
Apr. 2017 General Plant Manager,
Hiroshima Plant
Apr. 2018 Executive Officer
Apr. 2021 Managing Executive
Officer; Director of Industrial
Machinery Business
Division (current position),
General Manager, Business
Development Office (current
position)
Apr. 2022 Chief Technology
Officer (current position); In
charge of Quality Management(current position); In chargeof Intellectual Property
Department (current position);
In charge of Yokohama Plant(current position)
Jun. 2022 Director & Managing
Executive Officer (current
position)

Apr. 1977 Joined IshikawajimaHarima Heavy Industries Co.,
Ltd. (currently IHI Corporation)
Jun. 2009 Director and Executive
Officer, IHI Corporation
Apr. 2011 Director and Managing
Executive Officer,
IHI Corporation
Apr. 2012 Executive Vice
President, IHI Corporation
Oct. 2015 Executive Vice
President and Senior Executive
Officer, IHI Corporation(–Mar. 2016)
Apr. 2016	 Director, IHI
Corporation (–Jun. 2016)
Jun. 2016 Advisor, IHI Corporation(–Jun. 2020)
Outside Director, Nishishiba
Electric Co., Ltd. (–Mar. 2020)
Jun. 2018 Director, the Company(current position)

Apr. 1978 Joined Dainippon Ink
and Chemicals, Incorporated(currently DIC Corporation)
Apr. 2010 Executive Officer, DIC
Corporation
Jun. 2011 Director and Executive
Officer, DIC Corporation
Apr. 2012 Representative
Director, President and CEO,DIC Corporation (–Dec. 2017)
Jan. 2018 Chairman of the Boardof Directors, DIC Corporation(–Jan. 2021)
Jun. 2020	 Director, the Company(current position) Outside
Director, IHI Corporation(current position)
Jan. 2021 Director, DIC
Corporation (–Mar. 2021)
Mar. 2021 Executive Advisor, DIC
Corporation (current position)
Jun. 2021 Outside Director,
Shimadzu Corporation (current
position)

Apr. 1978 Joined Kao Soap Co.,
Ltd. (currently Kao Corporation)
Jun. 2006 Executive Officer, Kao
Corporation
Jun. 2010 Director and Executive
Officer, Kao Corporation
Jun. 2012 Director and Managing
Executive Officer, Kao
Corporation (–Mar. 2014)
Apr. 2015 Auditor, National
Institute of Technology and
Evaluation (–Jun. 2019)
Jun. 2020 Director, the Company(current position)
Outside Auditor, LiveDo
Corporation (current position)

Apr. 1982 Joined the Company
Sep. 2011 Deputy General
Manager, Corporate Planning
OfficeApr. 2015 Deputy General Plant
Manager, Muroran Plant
Apr. 2017 Executive Officer
Oct. 2017 Deputy General
Manager, Technological
Strategy Office
Apr. 2018 General Manager,
Internal Auditors OfficeJun. 2019	 Audit & Supervisory
Board Member (Full-Time)(current position)

Apr. 1984 Joined the Company
Oct. 1998 Houston Office
ManagerJun. 2008	 Nagoya BranchManager
Sep. 2015	 Deputy General
Manager, Corporate Planning
OfficeApr. 2017 Kansai BranchManager
Apr. 2019 Deputy Directorof Machinery Business
Division (Sales Management
Supervisor)
Apr. 2020 Representative
Director, President and CEO of
GM Engineering Co., Ltd.
Jun. 2022 Audit & Supervisory
Board Member (Full-Time)(current position)

Apr. 1976 Joined Mitsui Bank
(currently Sumitomo Mitsui
Banking Corporation)
Jun. 2003	 Executive Officer,
Sumitomo Mitsui Banking
Corporation
Oct. 2006 Managing Executive
Officer, Sumitomo Mitsui
Banking Corporation(–Mar. 2009)
Apr. 2009	 Senior Managing
Executive Officer, Sumitomo
Mitsui Financial Group, Inc.
Jun. 2009 Senior Managing
Director, Sumitomo Mitsui
Financial Group, Inc.
(–Jun. 2010)
Jun. 2010 Representative
Director, Executive Officer andExecutive Deputy President,
SMBC Friend Securities Co.,
Ltd. (currently SMBC Nikko
Securities Inc.) (–Mar. 2012)
Dec. 2012 Representative
Director, President andExecutive Officer, Horai Co.,
Ltd. (–Dec. 2019)
Jun. 2015 Outside Audit &Supervisory Board Member,
Sotetsu Holdings, Inc.
(–Jun. 2019)
Jun. 2019 Audit & Supervisory
Board Member, the Company(current position)

Apr. 1981 Joined The Mitsui Trustand Banking Company, Ltd.
(currently Sumitomo Mitsui
Trust Bank, Limited)
Jul. 2008 Executive Officer,
Chuo Mitsui Asset Trust andBanking Company, Limited.
(currently Sumitomo Mitsui
Trust Bank, Limited)Feb. 2011 Managing Executive
Officer, Chuo Mitsui Asset
Trust and Banking Company,
Limited.
Apr. 2012 Managing Executive
Officer, Sumitomo Mitsui Trust
Bank, Limited
Jul. 2012 Advisor, Sumitomo
Mitsui Trust Bank, Limited(–Sep. 2012)
Oct. 2012 Director and Vice
President, Sumitomo Mitsui
Trust Asset Management Co.,
Ltd. (–Mar. 2016)
Apr. 2016 Audit & Supervisory
Board Member, Sumitomo
Mitsui Trust Bank, Limited(–Mar. 2017)
Apr. 2017 Advisor, Sumitomo
Mitsui Trust Bank, Limited(–Jun. 2017)
Jun. 2017 Deputy Chairman of theBoard of Directors, Directorand Audit & Supervisory
Committee Member,
Sumitomo Mitsui TrustHoldings, Inc. (–Jun. 2019)
Jun. 2019	 Audit & Supervisory
Board Member, Sumitomo
Mitsui Trust Business Service
Co., Ltd. (–Mar. 2021)
Jun. 2020	 Audit & Supervisory
Board Member, the Company(current position)
Apr. 2021 Advisor, Sumitomo
Mitsui Trust Business Service
Co., Ltd. (current position)

3,946 shares

0 shares

255 shares

7,421 shares

18/18 (100%)

18/18 (100%)

18/18 (100%)

18/18 (100%)CareerNumber of shares of the Company held

17,733 shares

15,612 shares

9,347 shares

13,043 shares

Record of attendance at Board of Directors
meetings (FY2021)

18/18 (100%)

18/18 (100%)

18/18 (100%)

14/14 (100%)

Committee

9,003 shares—

Nomination Advisory Committee(Chair)Remuneration Advisory
Committee(Chair)2,426 shares—

0 shares

1,077 shares

18/18 (100%)

18/18 (100%)(Advisor)(Advisor)

Corporate Management
Finance and Accounting
Sales and Marketing
Manufacturing, Quality Control,
Technology and R&D
Skill Matrix

Environment
Personnel and Human Resource
Development
Legal, Compliance and Risk
Management
Information Systems and Digital
Transformation

Executive Officers

Takashi Iwamoto

Seiji Umamoto

Yoshitaka Sato

Shoji Nunoshita

Takeshi Shinmoto

Motoyuki Shibata

Masayuki Aoyama

Hidenao Kudo

Managing Executive Officer

Managing Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

Executive Officer

52 JSW Integrated Report 2022

JSW Integrated Report 2022 53

Message from an Outside Director
Risk Management

Promoting Fundamental
Reforms and Initiatives toAddress Challenges to Realize
the Purpose

Basic Approach
The Company and its Group companies have an important responsibility to minimize risks affecting the Group, ensure the ongoingdevelopment of the Group, and thoroughly fulfill their social responsibilities by appropriately and effectively managing various risks.

Sadao Degawa, Outside Director

Framework allying the Group Together as One to Enact Reforms thatR
Prevent Recurrence
I see the inappropriate conduct in quality inspections at Japan
Steel Works M&E, Inc. as an incident that should have nevertaken place, and as an outside director overseeing managementof the Group, I take it very seriously. I offer my heartfelt apology
for any inconvenience and concern this may have caused to ourstakeholders. In response to the findings and recommendations of
the Special Investigation Committee, we have conducted an analysis
that probes into even the background of the matter. We thenrepeatedly discussed preventive measures to ensure compliancewith all laws, contractual provisions, and internal regulations, as we
maintain and improve our delivery of products of unparalleled quality,
a tradition we have upheld since our founding. I too have mademany proposals for reform in my capacity as an outside director.
The Purpose and Materiality that were announced in November
2022 represent the very fruition of the thoughts and feelings thisincident provoked in all of us.
It bears noting here that, as the Special Investigation Committee
pointed out, in order to prevent a recurrence we must reform theorganization so that a system of checks and balances is put in place,while also cultivating a commitment to compliance through theeducation and training of our employees. Nevertheless, it will taketime for all employees to gain the proper understanding that enables
them to thoroughly act on these measures and for an accompanying
company culture conducive to such practices to take hold.
To accelerate reform, in addition to these measures, it will benecessary to incorporate the right kind of inspections into thebusiness process so that they are mandatory rather than performedat the discretion of individuals. Specifically, it would be a more
effective way forward to incorporate into the business process asystem in which there is planning of product inspection schedules,
inspection items to be covered, costs, and personnel assignments atthe time any and all product order are received, with accompanying
monitoring and follow-up. I believe that this practice should be begun
as early as possible in parallel with the establishment of the systemitself as well as reforms to the company culture.
Though the trust of customers and other stakeholders, not tomention the general public, can be lost in a moment, it takes a great
deal of time to gain that back.
I hope that this matter has served as a wake-up call for all officers
and employees of the Group, and provides an excellent opportunity
for the entire Group to rally together as one and promote theproper reforms.
 aking on Challenges with an Eye toward
T
Further GrowthWith the appointment of representative director & president Toshio
Matsuo in April 2022, many changes have taken place on thegovernance front.
In establishing the Purpose and Vision that were announced in
November 2022, the Board of Directors spent over six months
holding a variety of discussions about how to achieve consistency
with the history of the Company and management philosophy, while
maintaining a bird’s-eye view of the Group as a whole and basedon the perspectives required for consideration. Via the exchanges ofmany an opinion, I believe that we were able to arrive at a laudable
Purpose that well summarized the thoughts and feelings shared by
54 JSW Integrated Report 2022

the members of the Board of Directors.
The major changes in the organizational structure were
the discontinuation of participation by outside directors in the
Executive Board and the Management Council, the narrowing ofdown the number of bodies whose meetings they attend, andfurther clarification of the division of roles between execution andsupervision. As a result, there are now more opportunities for insidedirectors to speak at Executive Board of Directors meetings than
before, which has made for discussions that are more animated.
At the same time, the Liaison Council of Outside Officers was newly
established in April 2022. By offering all outside officers not onlya preliminary briefing about what is to be discussed at the Boardof Directors meetings, but also reporting to them on the details of
discussions by the Executive Board and Management Council,
and then having them hold discussions, the aim of this council is topromote a greater understanding of the status of business execution.
The outcome of this has led to the deepening of discussions at
Board of Directors meetings.
Regarding the composition of the Board of Directors, the numberof inside directors was reduced by one, and three of the eight
directors are now outside directors, increasing the percentage
of outside directors from 33.3% to 37.5%. At the same time, itwill be important to further increase the depth of the Board of
Directors from the perspectives of both skills and human resources.
Though bolstered global expansion will be essential for the Groupto achieve further growth, I feel that the organization is lacking inpersonnel with expertise in global marketing. Also needed is a boost
in personnel with skills in legal affairs, compliance matters, anddigital transformation, which seems to me to necessitate both therecruitment of candidates for executive positions from outside thecompany and the development of internal personnel.
Regarding management of the Board of Directors, I feel that there
are two issues that need to be addressed. The first is that insidedirectors currently also serve as executive officers, which makes
for comments that are skewed toward their respective areas of
responsibility. I believe that deeper discussions can be brought about
by increasing the number of directors who speak from a companywide management perspective. Another issue to tackle is the lackof discussion about risk. The response taken for the inappropriate
conduct can indeed be described as a part of risk management,
but there is also a separate need to discuss in greater depth thanat present the prospective risks and consideration of potential
countermeasures that accompany transactions with new customers
and in new countries and areas reached by business expansion.
By making all directors more strongly aware of working basedon a monitoring board model, we hope to strengthen our ability torespond to all risks, not just the instance of inappropriate conduct
dealt with this time.
The Group’s performance is currently solid. Beyond that, I hope
to see our efforts accelerate so rather than just sow the seeds of
new business, we germinate and see sprouting of the seeds ofbusinesses that will be new pillars for us over the next decade.
In order to realize the Material Revolution™ that is our Purpose
and create one-of-a-kind businesses unmatched by any othercompany, it is incumbent on us to pursue discussions that are selfdirected and animated. As an outside director, I will do my utmost to
provide support toward that end in ways such as offering advice andmonitoring management affairs.

The Group has established JSW Group Risk Management
Regulations, which clearly stipulate that the Company and Group
companies manage risks in accordance with their respective
management structures and division of duties, and that all
employees, from officers to general employees, are responsiblefor implementing appropriate and effective risk management inaccordance with their respective roles. In addition, the Company
has appointed a director in charge of risk management (CRO),
who oversees risk management of the Company and Group
companies while also assessing the internal control of eachmanagement structure. Also, to deal with risks by divisional
function, divisions such as those in charge of health and safety,
environmental management and export control management
are each conducting appropriate operations through steps suchas forming committees or putting in place regulations from acompany-wide, cross-sectional perspective.
Regarding the status of company-wide risk management, theInternal Control Committee (Chairperson: Director in charge of
Risk Management (CRO)) shares information on potential andemerging key issues, including the identification and evaluationof risks, and, when necessary, discusses risk responses andspecific initiatives, and gives instructions or guidance to relevant
departments as appropriate.
The Internal Audit Division, which also serves as the office of
the Internal Control Committee, directly or indirectly monitors
the management status of risks of each division (management
structures) and each committee, and reports to the Board of
Directors or the Executive Board. The main risks and the status ofinitiatives are duly disclosed in the annual financial report and on
the website.
In the event of a major accident, disaster or any other riskthat could cause serious damage to JSW Group, the Crisis

Management Headquarters, led by the director in charge of risk
management, is promptly established to offer response. As the
COVID-19 virus spread during the period from fiscal 2020 to fiscal
2021, a Crisis Management Headquarters was set up to provide
functions such as ascertaining the health status of employees,
establishing a telecommuting system and offering response to
those infected.
In fiscal 2021, it was revealed that inappropriate conduct inquality inspections by Japan Steel Works M&E, Inc. had takenplace (see p. 30 of this report). As this was the case of an
operational misconduct risk that manifested itself in the quality
assurance process, work will be done to prevent a recurrence bystrengthening operational processes and management systems toensure that operations are conducted in a proper andefficient manner.
In addition, in November 2022, a new corporate groupphilosophy system was established and six key issues wereidentified as Materiality that should be prioritized in order torealize our Purpose. Materiality comprises the two perspectivesof “creating value and solving social issues through JSWGroup’s businesses” and “bolstering JSW Group’s managementfoundation for sustainable growth.”
From these two perspectives, we will encourage awarenessthat there are both risks for the sake of sustainable growth thatshould be taken actively and risks that should never be taken,
even if for the sake of making profits. We will work to develop an
operational system and framework, as well as a culture of taking
risks, that give license to actively take the former type of risks
under appropriate risk management controls, while minimizing thelatter kind of risk. We believe that fostering this culture of taking
risks advisedly and renovating our corporate culture will also leadto the prevention of the recurrence of inappropriate conduct.

Risk Management Framework
Board of Directors and Executive Board
Reporting

Evaluation and auditing

Internal Audit Division

Indirect monitoring

Internal Control Committee(Chairperson: Director in charge of Risk Management)

Discussion and decision-making,instructions and guidance, information
sharing, etc.

Evaluation, corrective action, etc.

Various committees, etc.
Information sharing andreporting of processing results
Evaluation and auditing

Head Office divisions, business divisions and plants
Monitoring, evaluation and guidance
Self-assessments

Group companies

JSW Integrated Report 2022 55

The Group recognizes the importance of updating systems
that contribute to enhanced competitiveness in these rapidlychanging times. This is seen in developments such as the
improvement of operations through digital transformation andthe construction of system environments that enable datadriven decisions that are rapid and highly accurate.
The Group is offering and promoting a Digital Transformation
Promotion Project (D-Pro) in order to build toward thefollowing vision.
1* Relevant laws and regulations: Laws and regulations regarding the environment,
Industrial Safety and Health Act, Financial Instruments and Exchange Act, laws
and regulations regarding export control administration, laws and regulations
regarding competition, laws and regulations regarding bribery, and Whistleblower
Protection Act

2

The Company is implementing the following measures to further enhance compliance awareness.
• Regular training sessions at plants, sales locations (branches and sales offices), and domestic JSW Group companies are held
regularly by JSW’s legal department.
(In fiscal 2021, training was held at the Japan Steel Works M&E Muroran Plant and Kyushu Business Office)• Training sessions for Head Office business divisions are conducted (as needed) by JSW’s legal department.
(In fiscal 2021, training on the theme of confidentiality agreements was conducted at the New Business Promotion Headquarters)• E-learning for JSW employees and Group company officers and employees was offered to enhance compliance awareness andensure thorough risk management. (In fiscal 2021, held once with a 99% participation rate)• Harassment awareness videos, which are required viewing by managers (and can also be viewed by general employees), arestreamed on the company intranet, a development prompted by a revision to the whistleblowing rules.
• Diverse information and articles on compliance awareness raising are posted on the company intranet noticeboard, in posters and in
the company newsletter.
• E-learning was provided for employees of the Company and Group companies to ensure compliance with laws, regulations andinternal rules on export control administration (In fiscal 2021, held once with a 100% participation rate)• Internal mock examinations, preparatory courses for examinations and e-learning were provided to increase the number of current
employees who have passed the export control administration practical skills certification examination.

Whistleblowing System
JSW Group has formulated whistleblowing rules for the
purpose of strengthening and promoting compliancemanagement, and has established a system for the proper
handling of reports and consultations from employees andothers regarding potential organizational or individual violationsof laws and regulations that may have been committed
by employees or others associated with JSW or Group
companies. This enables JSW Group to promptly detect
potential violations of laws and regulations and take corrective
action, thereby minimizing risk and damage to the Group thatwould otherwise arise from such a violation. The inappropriate
conduct in quality inspections by Japan Steel Works M&E,
Inc., announced on May 9, 2022, (see p. 30 of this document)
was prompted by an internal report issued in late February
2022. The system is thus functioning effectively in accordancewith its purpose.
Anonymous reports and consultations are acceptedand disadvantageous treatment of persons who makereports or seek consultation is prohibited. In the event of
disadvantageous treatment received, the Company will
respond with appropriate measures, including disciplinary
action. In October 2021, the whistleblowing rules wereamended so that the contact point for whistleblowing waschanged to external specialists in order to ensure greater
56 JSW Integrated Report 2022

protection for the confidentiality of whistleblowers andindividuals with whom they consult, while also reducing thepsychological burden of whistleblowing. Furthermore, in orderto facilitate further awareness of the whistleblowing system toreach even Group subsidiaries as well, we display the manualon internal workplace bulletin boards and have distributed apocket version of the manual that employees and others canrefer to at any time.
The Whistleblowing Committee, chaired by the director in
charge of risk management, investigates reported cases, andif a problem is identified, the committee will take appropriate
action and implement corrective measures. During thisprocess, the office of the Whistleblowing Committee andAudit & Supervisory Board members share information as
appropriate, while the Audit & Supervisory Board members
monitor the progress made in individual cases and the statusof operation of this system. In principle, the Board of Directors
confirms proper operations of the whistleblowing system
twice a year, as based on reports from the Committee.
The number of reports made was 14 in fiscal 2020 and
31 in fiscal 2021, most of which were consultations about
workplace environment, including instances of harassment.
Reports were investigated by the Committee andappropriately addressed.

4Improve operational efficiency by digitizing
routine tasks, transitioning to paperless
operations and enabling remote work.
F acilitate digital transformation (i.e., business
transformation leveraged by digital technology)
to expand business through organizations for
digital transformation promotion.

Board of Directors

Progress reports twice a year

Management
Alignment of management
strategy with digitaltransformation and strategy

Corporate divisions
anttees d taskmim
D-Pro Office

Manufacturing management
digital transformation

Business management,
accounting, general affairs,
HR digital transformation

Office of Digital
Transformation

Business divisions
Sales and sales management
digital transformation

Affiliated companies,
overseas offices

Overall project management
Budget management• Progress management••coPromotion of Compliance TrainingIntegrate and revamp core systems to reduce
maintenance costs and promote value-enhancing
investments.

Digital Transformation Promotion Structure Chart

Sub

3

R
 econfigure the information network into a data
lake to facilitate data-driven management thatshares and analyzes data.

As of July 1 2022, the Office of Digital Transformation (seechart below) was established to promote D-Pro. Positioning
the period through fiscal 2025 as Phase 1, the office has
formulated an action plan that includes the renewal of thecorporate culture and is promoting activities ineach subcommittee.

fo
rce
s

to ensure quality compliance and prevent the recurrence of
inappropriate conduct.
Regarding compliance with codes such as laws andregulations, and internal rules, on a regular or as-neededbasis, the Internal Auditors Office audits the overall operationsof JSW, and reports the results to the representative director& president, as well as to the Board of Directors, the Executive
Board or the Management Council, and other relevant parties,
including Audit & Supervisory Board members. In fiscal 2021,
there were no violations of relevant laws and regulations* that
resulted in fines or penalties.

s
rce
fo

JSW Group has established its Standards of BusinessConduct and engages in business activities in compliance withethics, laws and regulations, and international rules in bothletter and spirit. The Group will continue to conduct businessactivities based on the understanding that compliance is not
only legal compliance, but also includes adherence to internal
rules and contracts, and is an important element for building a
relationship of trust with society as well as a fundamental driverfor increasing employee engagement.
In addition, the Board of Directors has decided on the Basic
Policy on Internal Control and is developing internal control
systems. Recognizing the importance of the proper operationof these systems, the Internal Control Committee regularly
reports on matters relating to internal control and its progress.
The Group will also review its Basic Policy on Internal Control

Digital Transformation PromotionSub
coCompliance

m

m

itte
e

s and taskDigital transformation for
information linkage
Consultancy,
IT vendor coordination

External partnercompanies

Plants

Office of Information Coordination and alignment ofsystem development, infrastructure
Technology
development, etc.

Information Security
Basic Approach
There is a continued increase in the importance of information and information systems in improving the efficiency of office work andproduction technology continues to increase, as well as speeding up decision-making. At the same time, threats such as information
destruction, leaks, and tampering and system destruction due to cyberattacks are increasing, and the risks associated with informationand information systems are on the rise. In this environment, in order to continue to maintain the satisfaction and trust of customers andto fully fulfill our role, we recognize that an important management challenge is to accurately identify information-associated risks andprotect both the information entrusted to us by customers and the information and systems necessary for us to do business.

Framework

Training

The Chief Information Security Officer (CISO), appointed byresolution of the Board of Directors, oversees information
security measures at JSW. Persons in charge of information
security management and information security administrators
are assigned at the Head Office and each plant. The Information
Security Committee, chaired by the CISO, comprehensively
discusses the status of information security incidents, recent
threats to information systems, the environment in which theCompany operates, and opinions and requests regarding theusability of various security measures, and conducts detailed
verification on a regular basis.
In addition, we are constantly working to maintain andimprove security while continuously evaluating the adequacyof countermeasures against various cyber-attacks based on
detailed analysis results from continuous monitoring data fromone of Japan's leading security vendors.

We conduct information security training (e-learning) for JSW
officers and employees to improve their security awarenessand literacy.

Participation Rate in Information Security Training (E-Learning)
Participation rate

Head Office ommittee members (each division)
CPersons in charge of information
security management• 
Information security administrators••

Each Plant ommittee members
CPersons in charge of information
security management• 
Information security administrators••

FY2020

FY2021100.0%

99.3%

100.0%

Evaluation by Third-Party Organizations
Diagnostic Assessments in Fiscal 2021
Assessment*

Results of evaluation

Information security risk
assessment—(Implemented with every major
system change)

Information leakage
communications assessment

Information leakage
communications assessment overallrating: A(no communications corresponding
to information leakage)

Structure of the Information Security Committee
Chair: Chief Information Security Officer (CISO)
Executive Office: Office of Information Technology, Head Office

FY2019* Assessments consist of intrusion inspections and vulnerability assessments ofcompany network systems, based on information security benchmarks andcarried out by security vendors with information security management system(ISO/IEC 27001) certification.
JSW Integrated Report 2022 57

Key Data
11-Year Summary(Millions of yen)

(FY)

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Net sales (consolidated)

221,368

220,653

188,719

194,674

223,301

212,469

211,700

220,153

217,527

198,041

213,790

Operating income

23,911

16,680

8,864

7,517

14,423

12,34020,57824,29018,70910,226

15,460

Profit before income taxes

20,30214,802

9,504(5,523)(22,049)(5,841)

14,892

29,317

14,154

12,96019,736

Profit attributable toowners of parent

12,591

8,281

5,527

(5,327)(16,600)(4,968)

10,712

19,966

9,310

6,893

13,948

Total assets

325,653

303,970

293,139

319,667

293,138

275,315

297,365

305,471

297,173

316,249

339,729

Net assets

128,613

134,368

139,268

138,234

111,340

107,587

118,600

129,827

132,492

141,985

151,083

0.12

0.02

0.00

(0.06)(0.10)(0.07)(0.23)(0.17)(0.18)(0.22)(0.32)

Operating cash flow

32,50723,735

11,54911,58019,721

12,023

26,712

1,092

18,95914,712

22,325Investing cash flow

(18,601)(5,832)(5,719)(2,675)(12,135)(13,580)(5,077)(1,334)(13,172)(3,243)(2,976)

Financing cash flow

(6,846)(15,259)(15,007)(2,964)

4,788(1,203)(2,457)(3,758)(6,164)2,767(2,860)Cash and cash equivalents at
end of the period

48,10750,97242,29749,15261,45858,671

77,87973,82074,47788,759105,799

R&D expenses

4,626

4,054

3,836

4,104

4,292

4,237

4,369

4,506

4,708

4,586

4,909

Capital investment

8,256

5,570

5,242

7,992

14,010

9,502

6,436

9,945

10,585

12,592

4,903

Depreciation

19,252

16,061

12,95011,008

10,669

7,858

4,097

4,424

5,733

6,040

6,183

Earnings per share (Yen)

33.93

22.33

14.92

(14.39)(45.32)(67.61) 1

145.77271.69126.6693.76

189.63

Dividend per share (Yen)

10.0

10.0

5.0

4.0

5.0

15.02

37.5

55.0

45.0

35.0

57.0

Consolidated dividend
payout ratio (%)

29.5

44.8

33.5

—

—

—

25.7

20.2

35.5

37.3

30.1

Operating income ratio (%)

10.8

7.6

4.7

3.9

6.5

5.8

9.7

11.0

8.6

5.2

7.2

ROE (%)

10.2

6.3

4.1

(3.9)

(13.5)

(4.6)

9.6

16.3

7.2

5.1

9.6

ROA (%)

3.8

2.6

1.9

(1.7)

(5.4)

(1.7)

3.7

6.6

3.1

2.2

4.3

Net D/E ratio

1. The Company conducted a 1-for-5 reverse common stock split effective October 1, 2016. Earnings per share for fiscal 2016 is calculated on the assumption that the reverse stock split occurred at start of the fiscal year.
2. The Company conducted a 1-for-5 reverse common stock split effective October 1, 2016. Dividend per share for fiscal 2016 in the table above is the total of the interim dividend of ¥2.5 and the year-end dividend of ¥12.5.
Taking into consideration the effects of the reverse stock split, the interim dividend would have been ¥12.5, resulting in a total annual dividend per share of ¥25.

Key Non-Financial Data
CO2 Emissions

Energy Usage
Scope 1

Fuel

(t-CO2)(TJ)

200,000

4,000

187,184 180,444 185,502

150,000

161,913

Female Employee Ratio (Non-Consolidated)

Scope 2

3,000

8.00

2,940

2,832

2,901

2,664

2,878

7.00

2019

2020

2021

* Terajoule

58 JSW Integrated Report 2022

3

7.99

2018

2019

2020

2021

(FY)

1.02

2019

2020

2021

(FY)

Note: Including employees seconded away from the Company;
not including employees seconded to the Company.

1.20
0.61

0.34
0
2018

Outside directors

Ratio of outside directors(Persons)

(%)

33

2017

0
2018

1.21

1.21

0.63 0.79
0.53

0

2019

0.42

0

2020

1.31

6
3

0.42
0.40
0
2021

33

38

22

2

2

3

3

7

7

6

6

Jul.
2018

Jul.
2019

Jul.
2020

Jul.
2021

20
3
10
5

0
(FY)

40
30

22

9

0.81

2017

Inside directors

12

2

7.04

1

Composition of the Board of Directors

15
2.42

7.38

6.00

2017

(FY)

7.97

6.50

0

0
2018

7.79

7.50

1,000

50,000Hiroshima Plant
Yokohama Plant
Manufacturing Industry Average

(%)

2,000

2017

Muroran Plant
Meiki Plant

171,425

100,000

Frequency Rate of Accidents per Million Workhours

Electricity

0
Jul.
2022

Note:	Frequency rate of accidents calculated from lost-worktime, serious
and fatal accidents during the fiscal year.
* Meiki Plant merged into The Japan Steel Works, Ltd. in fiscal 2020.
Frequency rate of accidents at the Meiki Plant in fiscal 2020 due tothe occurrence of multiple lost-worktime accidents.
* Manufacturing industry averages are from the survey ofoccupational accident trends (Ministry of Health, Labour andWelfare).
JSW Integrated Report 2022 59

Corporate Data (As of March 31, 2022)

Stock Information (As of March 31, 2022)

Company Information

Stock Status
The Japan Steel Works, Ltd.

Authorized Shares

200,000,000 shares

FoundedNovember 1, 1907

Issued and Outstanding Shares

74,373,265 shares

Incorporated

December 11, 1950

Shareholders

20,593Company Name

Head Office	Gate City Ohsaki-West Tower, 11-1, Osaki 1-chome,
Shinagawa-ku, Tokyo 141-0032, Japan

Major Shareholders

Share Capital¥19,799 million (As of July 22, 2022)

Number of Employees

5,329 (consolidated) 1,767 (non-consolidated)
Shares Held
The Master Trust Bank of Japan, Ltd.
14,990,700(Trust Account)

Nikko Kosan Co., Ltd.
23F, Gate City Ohsaki-West Tower, 11-1, Osaki
1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Phone: +81-3-5745-2130
Nippla Inc.
6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-0082, Japan
Phone: +81-82-847-5510

Japan Steel Works M&E, Inc.
4, Chatsucho, Muroran-shi, Hokkaido 051-8505, Japan
Phone: +81-143-22-0143
Nikko Unyu Co., Ltd.
4-1, Chatsucho, Muroran-shi, Hokkaido 051-8505, Japan
Phone: +81-143-22-7923
Nikko Truck Co., Ltd.
4-1, Chatsucho, Muroran-shi, Hokkaido 051-8505, Japan
Phone: +81-143-22-7923
Nikkou Muroran Service Co., Ltd.
4, Chatsucho, Muroran-shi, Hokkaido 051-8505, Japan
Phone: +81-143-24-2553

Sun∙Tectro, Ltd.
6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-0082, Japan
Phone: +81-82-824-3881

MNED Co., Ltd.
4, Chatsu-cho, Muroran-shi, Hokkaido 051-8505, Japan
Phone: +81-143-22-0620

Nikko Sekkei Co., Ltd.
6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-0082, Japan
Phone: +81-82-822-7653

Muroran Environmental Plant Service, Ltd.
3F, JESCO, 14-7, Nakamachi, Muroran-shi, Hokkaido
050-0087, Japan
Phone: +81-143-22-0005

MG Precision Co., Ltd.
6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-0082, Japan
Phone: +81-82-822-1305

Fine Crystal Co., Ltd.
9-1, Chatsucho, Muroran-shi, Hokkaido 051-8505, Japan
Phone: +81-143-22-7401

Just Co., Ltd.
2-1, Horikoshi 3-chome, Minami-ku,
Hiroshima-shi, Hiroshima 734-0052, Japan
Phone: +81-82-820-0123
Nikko Techno Co., Ltd.
6-1, Funakoshi-Minami 1-chome, Aki-ku,
Hiroshima-shi, Hiroshima 736-0082, Japan
Phone: +81-82-822-3232

Muroran Copper Alloy, Co., Ltd.
9-1, Chatsucho, Muroran-shi, Hokkaido 051-0006, Japan
Phone: +81-143-22-0690
JSW Aktina System Co., Ltd.
2-1, Fukuura 2-chome, Kanazawa-ku, Yokohama-shi,
Kanagawa 236-0004, Japan
Phone: +81-45-787-8462

3.22%
Foreign Corporations andForeign Individuals

11.12

TAIJU LIFE INSURANCE COMPANY

2,827,600

3.84

Sumitomo Mitsui Banking Corp.

2,200,032

2.99

BBH FOR MATTHEWS ASIA
DIVIDEND FUND

1,945,200

2.64

Sumitomo Mitsui Trust Bank, Ltd.

1,630,400

2.22

Yamato Rebuilt Co., Ltd.
4882-1, Kimagase, Noda-shi, Chiba 270-0222,
Japan
Phone: +81-4-7198-4556

Mitsui Sumitomo Insurance Co., Ltd.

1,564,800

2.13

Mitsubishi Heavy Industries, Ltd.

1,006,200

1.37

Nikko Tokki Co., Ltd.
2908 Shinjuku Mitsui Building, 1-1, Nishishinjuku
2-chome, Shinjuku-ku, Tokyo 163-0429, Japan
Phone: +81-3-5326-8672

JUNIPER

930,700

1.27

Tsukishima Kikai Co., Ltd.

922,900

1.25

Tahara Machinery Ltd.
2-1, Kagurominami, Inzai-shi, Chiba 270-1369,
Japan
Phone: +81-476-21-1991

Note: Shareholding ratios are calculated after deducting 804,074 treasury sharesfrom the total number of shares issued.

(Consolidated subsidiaries)
Nikko Kouki Co., Ltd.
2-1, Fukuura 2-chome, Kanazawa-ku, Yokohama-shi,
Kanagawa 236-0004, Japan
Phone: +81-45-701-7841

Securities Companies

20.38

8,184,500

Domestic
Nikko-YPK Shoji Co., Ltd.
24F, Gate City Ohsaki-West Tower, 11-1, Osaki
1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Phone: +81-3-5745-2131

Shareholding
Ratio

Custody Bank of Japan, Ltd.
(Trust Account)

Main Group Companies (As of October 1, 2022)

Classification of Shareholders
by Percentage of Shares Held
Individuals
and Others

13.26%

22.30%

Financial
Institutions

General Companies andOther Corporations

49.71%

11.51%

GM Engineering Co., Ltd.
Shin-Yokohama No.1 Building, 14-27,
Shinyokohama 2-chome, Kohoku-ku, Yokohama-shi,
Kanagawa 222-0033, Japan
Phone: +81-45-472-6819

Stock Price and Trading Volume

JSW AFTY Corporation
35-2, Hyoe 2-chome, Hachioji-shi, Tokyo
192-0918, Japan
Phone: +81-42-632-8840(Yen)(Thousand shares)

4,500

600,000(Non-consolidated subsidiary)
Fine Crystal Iwaki Co., Ltd.
2-6, Chubukogyodanchi, Iwaki-shi, Fukushima
972-8338, Japan
Phone: +81-246-68-6858

Stock price

Trading volume

4,000
500,000
3,500
400,000

3,000
2,500

300,000
2,000

Overseas(Consolidated subsidiaries)
S M Platek Co., Ltd.
687-2, Seonggok-dong, Ansan-si, Kyeonggi-do,
Korea
Phone: +82-31-488-3401
Japan Steel Works America, Inc.
1251 Avenue of the Americas, Suite 2390, New
York, NY 10020, U.S.A.
Phone: +1-212-490-2630

60 JSW Integrated Report 2022

1,500

200,000(Non-consolidated subsidiaries)
The Japan Steel Works (Singapore) Pte. Ltd.
17 Gul Lane, Singapore 629413
Phone: +65-6861-4511

Japan Steel Works Europe GmbHFriedrichstr.19,40217 Düsseldorf, Germany
Phone: +49-211-3116660

JSW Electromechanical Trading (Shanghai) Co.,Ltd.
304, Metro Plaza, 555 Loushanguan Road,
Changning District, Shanghai, China
Phone: +86-021-5206-7031

Japan Steel Works India Private Limited
611 Time Tower, MG Road, Sector 28, Gurgaon,
Haryana 122002, India
Phone: +91-124-469-4444

1,000
100,000
500
0

0
Apr.
2012

Apr.
2013

Apr.
2014

Apr.
2015

Apr.
2016

Apr.
2017

Apr.
2018

Apr.
2019

Apr.
2020

Apr.
2021

Apr.
2022

Note: T he Company conducted a 1-for-5 reverse common stock split and changed the number of shares per stock unit from 1,000 shares to 100 shares, effective
October 1, 2016. All stock prices and trading volumes in the graph above are shown taking into consideration the effects of the reverse stock split.

JSW Integrated Report 2022 61

Gate City Ohsaki-West Tower, 11-1,
Osaki 1-chome, Shinagawa-ku,
Tok yo 141-0032, Japan
https://www.jsw.co.jp/en/
Inquiries:
General Aﬀairs Department
Phone: +81-3-5745-2011