Progress of the Measures Promoted by the Kobe Steel Group to Prevent Recurrence of the Misconduct

May 9, 2019
Kobe Steel, Ltd.

We once again deeply apologize for the considerable trouble we have caused to our customers, suppliers, shareholders and many others concerning the misconduct at Kobe Steel, Ltd. ("Kobe Steel," "We," or the "Company") and its group companies (collectively, the "Kobe Steel Group" or the "Group").

Kobe Steel made public a report entitled Report on Misconduct in Kobe Steel Group (the "Report") dated March 6, 2018 on the facts revealed in the Independent Investigation Committee's investigation, analyses of the causes of the misconduct, and measures to prevent recurrence. To implement the various measures raised in the Report, Kobe Steel's President as the leader launched a Project for Restoring Trust in April 2018. Various subcommittees and task forces were formed to serve as implementation units for the preventive measures, and concrete actions are currently being carried out.

The Company established the Independent Quality Supervision Committee, which was comprised of external experts, as an advisory body to Kobe Steel's board of directors to monitor the progress of the Company's preventive measures. The Committee has reflected objective feedback in the preventative measures. The Independent Quality Supervision Committee concluded its duty upon submission of its final opinion on March 28, 2019, and the responsibility and duty have been succeeded by the newly-established Quality Management Committee.

We will maintain our commitment with a stance on "quality first" and continue our efforts to prevent the future reoccurrence of the misconduct under the Quality Management Committee.

This update provides the latest progress of the measures to prevent reoccurrence of the misconduct following the previous update announced on March 29, 2019.

We plan to announce the progress of the measures biannually via our website.

【Progress of the Measures to Prevent Recurrence of the Misconduct (Summary): Details are described in the supplementary material.】
【The underlined portions below are the updates from the March 29, 2019 announcement.】

1. Governance - Building the Quality Governance System

2. Management - Ensuring Quality Control

3. Process - Strengthening of Quality Control Processes

In order to promote the points below, we established the KOBELCO Quality Guidelines of the Kobe Steel Group. The Guidelines went into effect on May 1, 2018.

Corrections and improvements at each location will be continuously monitored, and we will confirm actual application of the Guidelines through quality audits at each location.

Previous Announcement on Progress of Measures to Prevent Recurrence of Misconduct

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