Environmental Management Sustainability Report 2006

Relations with Shareholders and Investors

The Kobe Steel Group places high priority on returning profits to shareholders, and strives to boost the corporate value of the Group as a whole through fostering growth over the medium- to-long term. We aim to make prompt disclosure of appropriate information to all stakeholders, including our shareholders and investors, and to increase management transparency by making a wide range of information publicly available.

Returns to Shareholders

Believing that medium- to long-term growth of corporate value leads to shareholders' profits, Kobe Steel believes in continuous, stable payment of dividends. It decides its dividend on the basis of each period's results, the dividend payout ratio and so on, as well as takes into overall consideration the need for investment funds for future growth and the status of the balance sheet. In distributing profits in accordance with business results, we regard 15% to 25% of consolidated net profit as the yardstick for the dividend payout ratio. Based on this policy, the dividend for FY2005 was 6 yen per share, representing an increase of 3 yen over the previous period. (dividend payout ratio 23%)

Business Reports (in Japanese)

Information Disclosure

To maintain the trust and support of shareholders and investors over the long term we take very seriously our responsibility to provide information, and are working hard to make timely and appropriate disclosures of corporate information and financial data. Information disclosure is made in strict observance of statutory disclosure standards and based on stock exchange rules for the timing of disclosures. It is our aim to have the company's business conditions and activities widely understood for an accurate appraisal of corporate value, through the active, prompt and ongoing issuing of disclosable information relevant to investment decisions, even in cases where the timing rules do not apply.

Annual Reports (in English and Japanese)

Shareholdings

Shareholdings by Type of Ownership Total number of shares issued: 3,115,061,100

Communication with Shareholders and Investors

	Communication with Shareholders

Shareholders' meetings are seen as the forum for direct communication with shareholders. To encourage as many as possible to attend, the date is carefully chosen so as not to conflict with other major shareholders' meetings and notification is sent out well in advance. Since the June 2003 Shareholders' Meeting, it has been possible for shareholders to exercise their vote via the Internet.

	Communication with Institutional Investors

Briefings on financial results are given four times a year for institutional investors and securities analysts in Japan, to give them a better understanding of management policies, operating results and financial position. For those overseas, a range of investor-relations (IR) activities includes regular visits to institutional investors by management teams. The company's IR staff work to maintain ongoing communication with institutional investors and securities analysts by responding to requests for information and by paying individual visits.

Announcement of medium-term business plan to analysts

	Communication with Individual Investors

For individual investors, publications such as Business Reports (in Japanese) sent out to shareholders, and a wide range of other information such as annual reports, financial statements, and this Sustainability Report is available on the company's website (http://www.kobelco.co.jp). To increase public understanding of the company's activities, we have, for example, made videos of messages from members of senior management accessible on the Kobe Steel website and also on the websites of online securities companies, and other portal sites since FY2005. The Kobe Steel Group will continue to strive for greater information disclosure and quality improvements in communication. By promoting IR activities we hope to maintain the trust of shareholders and investors for many years to come.