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Cosmo Oil Co., Ltd.Cosmo Oil Co., Ltd.Presentation for the Consolidated Presentation for the Consolidated MediumMedium--Term Management PlanTerm Management Plan

((for April 2003 to March 2006)for April 2003 to March 2006)

February 28, 2003February 28, 2003

Keiichiro OkabeKeiichiro OkabeChairman and Chief Executive OfficerChairman and Chief Executive Officer

All Right Reserved. Copyright © 2003 ,COSMO OIL CO.,LTD. http://www.cosmo-oil.co.jp

Table of Contents

1. Management Policy2. Goals for the Consolidated Medium-Term Management Plan 3. Capital Investment Plan 4. Management Strategy:

(1) Oil Refining and Marketing Businesses・Marketing Strategy・Supply Strategy・Administration (Human Resource Management and SAP)

(2) Oil Exploration and Production Business(3) Electric Power Generation and LNG Businesses(4) Affiliated Company Businesses(5) Value Creation, Rationalization and Profit Improvement (6) Financial Position Enhancement(7) Brand Value Improvement and Legal Compliance System

Establishment


11．Management Policy – Recognizing Business Environment

"Structural changes in demand""Excess capacity issues"

"Environmental investment" “Abolition of the Japan National Oil Corporation"

“Structural reform (by accelerating the selection process) ""Energy sector deregulation"

Challenges to meet during the new medium-term management plan

Economic slowdown, de-industrialization

Uncertain financial environment

← Growing awareness of

← CSR management

← Growth of electric power generation and gas businesses

Develop the Consolidated MediumDevelop the Consolidated Medium--Term Term Management PlanManagement Plan


1．Management Policy –Vision for the Consolidated Medium-Term Management Plan 2

While ensuring its symbiosis with the environment and society, the Cosmo Oil Group is committed to making effective use of its management resources to create maximum corporate values for the Group.

Maximize customer satisfaction

Oil refining and marketing businesses

Enhance competitive advantage and profitable growth

Comprehensive energy companyEnhance electric power

generation & LNG businesses

Oil exploration and production business

Enhance oil development in Middle East and Australia

Environmentally-advanced company

Affiliated companies’ businesses

Enhance competitive advantage and profitable growth


1. Management Policy –Build up and Expand Profitable Growth Structure for the Cosmo Oil Group 3

Oil exploration

and production

Oil refining and marketing

Affiliated companies

Conventional


¥10 bn

Long-term image○Expand electric power generation and

gas, oil development, new energy and affiliated company businesses to build a system that would help achieve profitable growth even in a situation where oil refining and marketing businesses may be shrinking.

Achieve about 60 billion yen in combined ordinary income

Oil exploration

Andproduction

¥9 bn

Electric power generation

(gas)Oil development


Oil refining and marketingCirc. ¥40 bn

Oil refining and marketing

Electric power generation (gas)

¥3.5 bn

Electric power generation

(gas)

New energy FY2005

○Expand existing businesses and build the bases for electric power generation and gas businesses

* 3.5 billion yen in ordinary income from the electric power generation & gas businesses and about 40 billion yen in ordinary income from the oil refining and marketing businesses partly overlap.


2．Goals for Medium-Term Management Policy –Profit and Index Goals –① 4

＜＜Goals for FY2005＞＞

Operating Income 66 billion yen

Ordinary Income 60 billion yen

Net income 31 billion yen

ROE 12.4%

430560

660

390490

600

170 240 310

12.4%8.2%

10.8%

0

200

400

600

800

1000

FY 2003 FY 2004 FY 20050.0%2.0%

4.0%6.0%

8.0%10.0%

12.0%14.0%

OperatingIncome

Ordinary Income

Net income

ROE

(Unit: ¥100 million)


2. Goals for Consolidated Medium-Term Management Policy –Profit and Index Goals –② 5

＜＜Goals for FY2005＞＞Interest-bearing debt (IBD) 520 billion yenShareholders’ equity 250 billion yenInterest-bearing ratio 42.0%Shareholders’ equity ratio 20.3%

522053405470

250022302030

43.7% 42.4%44.8%

20.3%18.2%16.6%

0

2000

4000

6000

FY2003 FY2004 FY20050.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Interest-bearing debt(IBD)

Shareholders’ Equity

Interest-bearing ratio

Shareholders’ equityratio

(Unit: ¥100 million)


3. Capital Investment Plan (on acquisition basis) 6

Capital Investment Capital Investment –– 111 billion yen111 billion yen●Address excess capacity issues and environmental regulations

Combine investment to meet environmental requirement (10-ppm requirement) and refining capacity reductions to consider intensive, or strategic reductions for future development⇒Make a decision to build new equipment at 3 refineries and improve one refinery by June

(Unit: ¥100 million)Breakdown by DevelopmentMedium-Term Plan

(3-year cumulative goals)Strategic investment 586

Self-service SS investment 147Competitive supply enhancement 37Oil exploration and production 193(Including Abu Dhabi Oil exploration) (163)Electric power generation and gas 169Other 40

Environmental management, maintenance & upgrading inv estment 524

Total capital investment 1,110

% of strategic investment to total amount 52.8%

Depreciation and amortization 793

Description

Marketing 174Open new SSs, modify, maintain and upgradeexisting SSs, etc.

Supply 304Environmental management, maintenance &upgrading, etc.

Oil explorationand production 193 Abu Dhabi Oil exploration expenses, etc.

Electric powergeneration & gas 169

IPP, PPS, dispersed power system supplybusiness, wind energy

Other 270 Systems, distribution, etc.

Total 1,110

2003-05combined


4. Management Strategy

Let us explain our management strategy for each business segment

(3)Electric power

generation (gas) (2)Oil

exploration and production

New energy

(4) Affiliated companies

(1) Oil refining and marketing


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy -① 7

●●Improve customer satisfactionImprove customer satisfaction

1. Promote business models (networking Auto B-cles, opening more self-service SSs, etc.)Build the Auto B-cle network to provide car-life solutions

for customers

2. Make Cosmo The Card more convenientTool for loyal customer marketing

→ Increase the sales share from the card business in total sales and increase its profitability

Increase brand values (= Improve profitability)Increase brand values Increase brand values (= (= Improve profitability)Improve profitability)

●●Promote innovation of the distribution Promote innovation of the distribution structurestructure

1. Enhance direct selling and sales of Cosmo-owned marketing companies – Diversify functions depending on sectors

a. Enhance and expand marketing companies in the retail sector

b. Enhance sales directly to large industrial fuel demanders

c. Improve an organization to sell to smaller industrial fuel demanders

2. Innovate dealer distribution structureHelp them achieve a minimum requirement of NAVI Index 5


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy –② 8

(1)(1) Enhance retail business Enhance retail business ––Increase marketing companiesIncrease marketing companies’’ share in total Cosmo automobile fuel oil share in total Cosmo automobile fuel oil (gasoline and diesel fuel for (gasoline and diesel fuel for SSsSSs) from 23% in 2002 to 44% in 2005 ) from 23% in 2002 to 44% in 2005 ((¥¥14 14 bnbn))

①Hardware-related a. Intensive investment (by opening 50 new SSs per year (¥9.3 bn) and by improving 27 SSs per year)

b. Establish the network of 600 Auto B-cles②Software-related a. Implement loyal customer marketing

(¥4.7 bn) b. Maximize the performance of Cosmo the Card

(2) (2) Enhance industrial fuel sales Enhance industrial fuel sales ––Increase the combined share of direct sales and marketing companIncrease the combined share of direct sales and marketing companies in total ies in total Cosmo industrial fuel oil sales from 13% in 2002 to 18% in 2005Cosmo industrial fuel oil sales from 13% in 2002 to 18% in 2005 ((¥¥2.4 2.4 bnbn))

①Direct selling (to large industrial fuel demanders) (¥1.2 bn) a. Acquire fuel demanders for co-generation

b. Build and use the jet fuel marketing network in Southeast Asia

②Sales by marketing company (to smaller industrial fuel demanders and wholesalers) (¥1.2 bn) a. Acquire local demanders

FY2002 FY2005 % increase

% of sales to total sales from channels invested(4 items combined) 16 29 13 (Incl. % of sales to total automobile fuel sales) (23) (44) (21)

●Promote Innovation of the Distribution Structure –Enhance direct selling and sales of Cosmo-owned marketing companies


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy –③ 9

● A large share of sales from Cosmo The Card in total sales

● A large share of loyal customers in total customers

● Have publicly certified engineers posted at stores

● One-to-one marketing using the database


● Improved convenience through cashless transactions

● Reasonable prices * Larger sales volume ⇒ greater profit contribution


● Improved convenience through cashless transactions

● Reasonable prices * Larger sales volume ⇒ greater profit contribution

Self-service focus to meet customer

needs

Self-service focus to meet customer

needs

Specialty stores = professional service focus

to meet customer needs for car care

Specialty stores = professional service focus

to meet customer needs for car care

Cosmo The Card

Auto B-cle Self-service SSs

＜＜Establish a business model based on Establish a business model based on CosmoCosmo The CardThe Card＞＞CosmoCosmo The Card is an integral part of the important sales infrastructThe Card is an integral part of the important sales infrastructure for Cosmo Oil ure for Cosmo Oil SSsSSs..

Change into a business model that will meet needs

of loyal customers(Cosmo The Card

cardmembers )

Core businesses


● A large share of loyal customers in total customers

● Have publicly certified engineers posted at stores

● One-to-one marketing using the database


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy –④ 10

(2) Self-service SSsIncrease the number of self-service SSs to 710 in FY2005, accounting for 16% of total SSs(% of self-service SSs to total SSs) – 6% in FY2002 to 16% in FY2005

No. of Auto B-cles Self-service filling & Auto B-cle SSs 398Self-service filling & car wash SSs 107

No. of general self-service SSsGeneral self-service SSs 205

(2) Self-service SSsIncrease the number of self-service SSs to 710 in FY2005, accounting for 16% of total SSs(% of self-service SSs to total SSs) – 6% in FY2002 to 16% in FY2005

No. of Auto B-cles Self-service filling & Auto B-cle SSs 398Self-service filling & car wash SSs 107

No. of general self-service SSsGeneral self-service SSs 205

●Improve customer satisfaction – Promote a business model – 1

＜Goals for the number of Self-service SSs to open＞

FY2002 FY2005 IncreaseNo. of self-service SSs 320 710 390

% to total 6% 16% 10%


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy –⑤ 11

●Improve customer satisfaction – Promote a business model – 2

FY2002 FY2005 Increase Auto B-cle Key 67 100 33　No. of SSs Satellite 361 680 319

Total 428 780 352

(1) Build the Auto B-cle networkEstablish Auto B-cles as dominant SSs network in individual geographical areas to secure competitive advantages by meeting car care demand

Full-service Self-service

25 75250 430275 505

①Goals to open SSs

Breakdown

Item UnitKey

stationsSatellitestations Total

No. of SSs 53 197 250 -Automobile fuelsales in volume (KL/month) 429 228 271 107

NV Index － 5.2 6.5 6.1 10.2

F Index % 124% 114% 116% 88%Gross profit from

car care business(1,000 yen/

month)3,766 2,318 2,625 1,597

Share of card sales againsttotal sales % 45% 32% 34% 21%

Auto B-cle OrdinarySSs

②Competitive advantages of Auto B-cles

Notes: The number of SSs above as of November 30, 2002


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy –⑥ 12

Achieve SS NAVI Index 5 Help special dealers achieve SS NAVI Index 5 or less by developing unique car

care businesses and offering packaged car care products to Cosmo The Card cardmembers, especially car care loyal customers.

[Examples of packaged car care products]Auto B-cle car cleaning (premium car wash by hand, etc.)Auto B-cle oil change (quick lubricating oil supply, etc.)Auto B-cle car inspection Auto B-cle quick repairAuto B-cle tire change

●Promote innovation of the distribution structure – Innovate the special dealer structure

＜SS NAVI Index Goal＞

FY2002 FY2005 ChangeSS NAVI Index value to achieve 7.6 5.0 ▲2.6

(Improve special dealer profitability

by ¥11 billion)


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy –⑦

13

●Improve Customer Satisfaction – Make Cosmo The Card more convenient

Tool for loyal customer marketing→Increase the share of sales from the card business to

total sales and improve its profitability

Cardmember Acquisition Goal

FY2002 FY2005 IncreaseNo. of cardmembers in force(10,000 cards) 222 372 150

Competitive advantages of Cosmo The CardCosmo The Card

“Eco” cardmembersCosmo The Card

cardmembers Cash members

Monthly auto fuelpurchase volume (L/month) 109.5 100.3 55.8High-octane gasoline ratio (%) 31.8 22.4 17.9Value creation (Yen/L) 18.1 11.0 7.2


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Marketing Strategy –⑧ 14

Industrial Fuel Direct Selling Department –Selling products by separating growing profit from meeting the demand

Industrial Fuel Direct Selling Department –Selling products by separating growing profit from meeting the demand

●Promote Innovation of the Distribution Structure –Enhance direct selling and sales of marketing companies

＜＜Growing profit Growing profit ＞＞ (1.2 billion yen)(1.2 billion yen)1. Middle distillates – Increase sales by 300,000 kl from the FY 2002 sales plan by

actively selling fuel for co-generation2. Jet fuel – Build a filling system in Southeast Asia to increase sales to increasing

Asian flights 3. LSC heavy fuel oil – Increase the share of electricity generators and users to whom

Cosmo directly sells in total sales.

＜＜Meeting demandMeeting demand＞＞HSC heavy fuel oil:

a. Respond to decreasing demand for HSC heavy fuel oil due to wider adoption of IPP throughout Japan

b. Flexibly meet the demand environment in Japan by striking the balance among electricity generators, general fuel demanders and ship fuel oil sales.


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Supply Strategy -① 15

(1) Identify the appropriate size of production and improve the high quality supply system

(2) Streamline operations to enhance Cosmo’s competitive advantages

(3) Reduce unit cost by increasing value-added production

(4) Build a system to optimize demand and supply management

(1) Continued decrease in demand for fuel oil

(2) Shrinking margins from refining in Japan

(3) Need for new investment for environmental management

Increase Cosmo’s competitiveness by reducing unit cost by 820 yen / kl (from the FY2002 level)

•Through further additional value creation: +430 yen•Through cost reduction by rationalization: ▲390 yen

＜Understand Business Environment and Identify Challenges to Meet＞


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Supply Strategy -② 16

① Enhance Functions of Sakaide Refinery and Review to Optimize Capacity

1. 1. Enhance functions of the Sakaide RefineryEnhance functions of the Sakaide RefineryPosition the refinery as a comprehensive energy supply facility.Work with Shikoku Electric Power Co., Inc. to jointly establish a new LNG terminal within the site of the refinery in order to conductthe gas energy business in the future.

2. 2. Review the 4Review the 4--refinery production systemrefinery production systemIn order to improve efficiency in investment to meet an environment requirement (10 ppm) (by building new equipment at 3 refineries and upgrading one existing refinery for example), we will review the current production system based on 4 refineries by considering reduction in a certain amount of capacity at the refineries. The review process will be completed by June-end 2003.


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Supply Strategy -③

17

Reduce refining costs by 11.4 billion yen to improve competitiveness (Unit cost: down ¥390/kl)

1. Save energy (fuel and electricity)2. Reduce repair costs3. Reduce payroll costs

②－2. Improve Competitiveness of the Supply Department –Streamline operations

Rationalization effect (¥100 million)

Rationalization – Total variable costsRationalization – Total f ixed costs

Total refining cost reduction 114

3282

Cost reduction goal(vs. FY2002)


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Supply Strategy -④ 18

②－2. Improve Competitiveness of the Supply Department –Streamline Operations

Implement the MediumImplement the Medium--Term Management Plan to further strengthen the current Term Management Plan to further strengthen the current competitive advantages offered by refiningcompetitive advantages offered by refining

Variable costs for refining exclude in-house fuel costs

Refining Costs

0500

1000150020002500

1998 2000 2002 2005 (plan)

Fiscal year

yen/klVariable costsFixed costs

* Comparison of refining costs between Cosmo Oil and thenational average in FY2001

National average Cosmo Oil Variance in unit cost2,490 2,088 ▲ 402 yen/kl

Refining costs


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Supply Strategy –⑤ 19

③ Improve Values Added to Supply– Improve yields and profitability

Plan to achieve added values worth 11.9 billion yen (430 yen/kl)Plan to achieve added values worth 11.9 billion yen (430 yen/kl) as as a benefit from implementing necessary programsa benefit from implementing necessary programs

13 5051 180

Yields of middle distillates 8 30Profit improvement programs 47 170(Manufacturing process improvement, etc.)

119 430Total

Hardware-related

Software-related

Benefit unitprice(¥ /kl)

Benefit v alue(¥100 mil)

Build and enhance new and existinggasoline facilitiesIPP operational effect

Added value improvement program


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Supply Strategy –⑥ 20

Use SAP, which will be fully deployed by the end of FY2003, for responsive supply-demand management

④ Build the Supply Chain Management (SCM) System

＜System building and reorganization based on the platform of the basic SAP system＞

Crude oil procurement & distribution

Tanker operations Storage Production Logistics

System building + reorganization

Sales

Optimize entire operationsOptimize entire operations

①Responsive operations for demand-supply management by using real-time information gained from the SAP system

②Improve values added to production through the best mix of product-out with market-in③Low cost operations ⇒ Strike balance among tanker operations, inventory management and local

supply


4. Management Strategy –(1) Oil Refining & Marketing Businesses – Administration 21

Cosmo Oil Human Resource Plan – About 400 employees cuts in the Group

March 2003 March 2006 Reduction

　Group – total 3,979 3,591 ▲ 388Oil business –

total 1,795 1,511 ▲ 284Transfers –

total 2,184 2,080 ▲ 104

Employees in the Cosmo Oil Group above are defined as employees working for the oil business and employees transferred to subsidiaries (including those who have their employers changed through transfer)

・Improve efficiency in operations <effective use of the SAP system and intensive operations of routine work>

→Refocus human resources onto the value added sectors

About 350 employees expected to leave the company by reaching the retirement age from Feb. 2003 to Jul. 2006


4. Management Strategy - (2) Oil Exploration and Production Business 22

Current status of production at oil exploration and production companiesinvested by Cosmo Oil

B/D 16,000 14,000 23,000 7,000As of 2001 Start from Oct. 2004

Cosmo Oil 51.1% 20.3% 35.0% 51.0%Abu Dhabi Oil 0.0% 25.8% 0.0% 0.0%Other private-sectorbusinesses 31.1% 10.2% 65.0% 0.0%Japan National OilCorporation 17.8% 43.7% 0.0% 49.0%Total 100.0% 100.0% 100.0% 100.0%

Interest valid until Dec. 2012 Dec. 2012 March 2018 ―

United PetroleumDevelopment Co.,Ltd.

Como Oil AshmoreLtd.

Crude oilproduction volume

Investment ratio

Abu Dhabi OilCo.,Ltd.

Mubarraz OilCo.,ltd

Cosmo Oil Ashmore in Australia is expected to start commercial production in October 2004, which will enhance oil development capability at Cosmo Oil.

* Mubarraz Oil and UPD above are accounted policy for under the equity method.


4. Management Strategy –(3) Electric Power Generation and LNG Businesses 23

○Start operations at Sakai LNG Terminal (scheduled for 2005)

LNG BusinessLNG Business

Organize the base for the LNG business

○Promote sales at LNG Chubu Co.

○Start feasibility studies (FS) with Shikoku Electric Power Co., Inc. to build a new LNG power plant within the site of Sakaide Refinery

○ Launch the IPP business in YokkaichiStart electricity supply service to Chubu Electric Power Co., Inc. in FY 2003 (at an output of 200,000 kw)

○Gain access to the renewable energy (wind power) market by taking the opportunity of the RPS program implementation・Implement feasibility studies (on wind blowing conditions, environmental impact assessment, system

design, etc.)・ Efforts toward building a wind electric power plant

○ Expand dispersed power system supply businessElectricity worth 10,000 kw is supplied to new customers already acquired during the 2001-02-end period

Electric Power Generation BusinessElectric Power Generation Business

○Gain access to the PPS marketStart the PPS business by using surplus electric power generated at refineries

Goals:

Supply 350,000 kw(including IPP at Yokkaichi)to earn 3.5 billion yen in ordinary incomeby FY2005-end


4. Management Strategy - 24(4) Affiliated Company Businesses

●Change affiliated companies’ earnings structuresto improve their profitability

(Unit: 100 million yen)Ordinary Income

FY2005Abu Dhabi Oil Co.,ltd. 90

　Major affiliated companies Cosmo Petroleum Gas Co.,ltd. 11Cosmo Oil Lubricants Co.,ltd. 16Cosmo Engineering Co.,ltd. 9Cosmo Trade and Service Co.,ltd. 9Cosmo Matsuyama Oil Co.,ltd. 10ERP Consulting Co.,ltd. 3Sub total 58

　Major marketing subsidiaries – total 34　Other affiliated companies – total 6

Grand total 187

　Oil exploration and production company

Major affiliate


4. Management Strategy –(5) Benefits of Value Creation, Rationalization and Profit Improvement Expected to Be Brought by the Entire Consolidated Medium-Term Management Plan

25

List of Value Creation and Rationalization – Expected earnings improvement on an ordinary income basis by using FY2002 level as the base

FY2003 FY2004 FY2005　Oil businesses Supply 36 56 76

Sales 11 13 13Logistics 4 9 28Administration, etc. 21 39 94

Sub total 72 117 212Supply 17 49 80Sales 40 40 128New businesses, etc. 14 34 66

Sub total 70 124 274　Total 142 241 485

　Oil exploration and production

Expected earnings improvement 30 25 20

　Other affiliates Expected earnings improvement 30 45 60

　Medium-Term Plan – Grand total 202 311 565

Rationalization

Created value


4. Management Strategy –(6) Financial Position Enhancement – Cosmo Oil’s interest-bearing debt reduction plan

Actual and prospective reductions by March 31, 200326

495.0billion yen

As of March 31, ‘03

(estimate)




634.2billion yen


598.6billion yen

548.1billion yen

485.0billion yen

◆Actual and prospective asset liquidation and disposal(Unit: ¥100 million)

Description 99-'00 Actual 01-'02 ActualAccelerated collection of accounts

receivable due to shortened 200 -Liquidation of accounts receivable - 210

SS securitization 336 -Disposal of negotiable securities 53 70Sales of employee dormitories 62 40

Sales of unused land after closure of distribution terminals (DTs) and SSs 279 40

Total 930 360Cumulative total - 1,300

Original goal: ¥200 billion

Variance: ¥70 billion


4. Management Strategy –(6) Financial Position Enhancement – Consolidated interest-bearing debt reduction plan

27

(Cosmo Oil alone: ¥495 bn)

Free cash flows

(Cosmo Oil alone: ¥23.6 bn)

Asset disposal

Dividend

(Cosmo Oil alone: ¥11.4 bn)

(=) 521.9 billion – Balance of interest-bearing debt

(Cosmo Oil alone: ¥472 bn)

Goal for interestGoal for interest--bearing debt reduction on a consolidated basis bearing debt reduction on a consolidated basis –– 520 billion yen520 billion yen●Reduce debts financed by free cash flows ●Make further debt reductions possible by sales of post-Yokohama Refinery and Kobe Dt sites, etc.

* Major unused land excluded in the current medium-term plan, such as sites of the demolished Yokohama and Kobe facilities

Balance of interest-bearing debt at the beginning of the new

Medium-Term Plan(estimate for March 31, 2003)

Goal for balance of interest-bearing debt at the

end of the Plan (estimate for March 31, 2006)

¥558 billion –Consolidated interest-bearing debt amount

(-) 10.8 bn –Due to disposal of a part of the Yokohama site, etc.

(-) 38 bn – Financed from consolidated cash flows

(+) 12.7 bn – Due to consolidated dividend payment(assumed at 6 yen per share)


4. Management Strategy –(7) Brand Value Improvement and Legal Compliance System Establishment

28

Aim at maximizing corporate values

Advance the Cosmo brand Establish the corporate vision and code of ethics

Highly profitable growth company (after successful

implementation of the Plan)

● Established at the time of the implementation of the current medium-term plan

● Establish a risk management system including legal compliance as soon as possible

● Improve integrated brand management including SS trademarks, visual identity (VI), advertising & publicity, etc.

● Implement the Blue Earth 21 Medium-Term Environmental Plan. Grow Cosmo into the brand of choice because of its environmentalism

Further improve investor relations (IR)

Information disclosure

Maximize corporate

values

● Eliminate cross-share holding practices with financial institutions and other corporations due to the introduction of a new regulation on banks’ holding stocks of other companies for investment scheduled for September 2004

● Feedback from the market (analysts, investors, etc.)


Cautionary Statement Regarding Forward-Looking Scenarios

This presentation contains statements that constitute forward-looking scenarios. While such forward-looking scenarios may include statements based on a variety of assumptions and relating to our plans, objectives or goals for the future, they do not reflect our commitment or assurance to the realization of such plans, objectives or goals.

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