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Message from the President

Hiroshi Sato

Contributing to the Environment through Monozukuri is KOBELCO's Mission

For over a century, we've been playing a supporting role in industry and society through monozukuri.

The Kobe Steel Group has been playing a supporting role in industry and society through monozukuri, or manufacturing, ever since its foundation in 1905. Our products and services provide original added value to a wide range of industries. In the materials field, we supply iron, steel, welding, aluminum and copper products. Our machinery businesses cover industrial machinery, construction machinery, natural resources, engineering and environmental solutions. Wholesale power supply, real estate development and electronic materials round out our diverse fields of business.

As part of our operations, we make every effort to reduce our environmental impact. We are working to harness untapped resources and energy sources, as well as provide a broad array of products and technologies to help resolve issues facing society. We believe our mission is to ensure that all of our stakeholders trust us and that our monozukuri contributes to society and the environment.

That is why we established the MONODZUKURI (Production System Innovation) Planning & Promotion Department at our corporate headquarters in fiscal 2010. With this department taking the lead, we are committed to sharing expertise and information on advanced initiatives, promoting exchange between manufacturing facilities, and actively bringing together the wide-ranging knowledge and skills that we have within the Kobe Steel Group.

As well as a special feature entitled "Contributing to Society Through Monozukuri," this report also outlines products and activities aimed at preventing disasters and creating energy, which are major priorities now more than ever. I hope you will enjoy reading about some of our unique initiatives.

Our medium- to long-term business vision, KOBELCO VISION "G," is one of the cornerstones of our contribution to society.

We set out KOBELCO VISION "G" as a medium- to long-term business vision in fiscal 2010, with the aim of creating new value and expanding global growth. The "G" has numerous different meanings, including "group," "global" and "growth."

Under KOBELCO VISION "G," our three-pronged aim from fiscal 2015 to 2020 is to establish Kobe Steel as a corporate group that has a presence in the global market; maintains a stable profit structure and a strong financial foundation; and prospers together with its shareholders, business partners, employees and society. To make this vision a reality, we are determined to contribute to society from a more global perspective as one of our basic policies.

We're committed to strengthening compliance in our CSR activities.

We believe that compliance is an essential concept that underpins all of our efforts to fulfill our corporate social responsibilities (CSR). As well as complying with regulations related to our business activities, we are also committed to fostering and reinforcing a groupwide organizational culture that is highly sensitive to compliance, based on common sense and decency.

With a history dating back over a century, we have continued to change with the times. Our driving motivation has always been to create new value through monozukuri, or our manufacturing expertise, and to make a difference in society and the environment as a result.

I hope this report will familiarize you with some of our activities in that respect.

Hiroshi Sato

Hiroshi Sato

President, CEO and Representative Director

Kobe Steel, Ltd.

The Kobe Steel Group's Corporate Philosophy

1.

We provide reliable technologies, products and services that satisfy customers.

2.

We support each employee in developing his or her abilities, while respecting mutual cooperation within the Kobe Steel Group

3.

Through continuous efforts for innovative change, we aim to enhance our corporate values.

Helped along by tremendous support from all of our stakeholders, here at the Kobe Steel Group we have continued to hone our skills and technologies and provide products and services that meet the needs of the general public, in an effort to contribute to social development. We have also created an environment in which individuals respect one another. Fostering group harmony and working together toward a common goal, we have promoted the further development of society and the improvement of our employees' lives. In spite of the constantly changing environment that surrounds the company, we remain committed to taking on new challenges, while responding to changes quickly and effectively.

The above Corporate Philosophy reflects this sense of determination. We will continue to ensure that all Kobe Steel Group employees adhere to our philosophy as we grow hand in hand with society.