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New Consolidated Medium-Term management Plan
The oil industry is changing significantly. In Japan, oil demand is decreasing and black oil, including heavy fuel oil, is being replaced with white oil including gasoline, that is to say there is a change in the oil demand structure. In addition, the Kyoto protocol increases the importance of environmental measures. Overseas, the oil demand structure is also changing greatly, for example, the energy market is expanding and the balance of oil demand is getting tight. With these circumstances in mind, the Cosmo Oil Group started the New Consolidated Medium-Term Management Plan from FY2005.
Basic policies
The plan's basic policies are 1) to establish a stable management infrastructure, and 2) to move to the growth strategies. The first policy means that we changed our goal from the previous one of "rationalization" to the establishment of a stable business infrastructure, as well as the shift to corporate structure that can endure the risks of changes of the business environment. One of the most important elements of this policy is the "Enhancement of CSR (Corporate Social Responsibility) Promotion, " and we drew up a"Consolidated Medium-Term CSR Management Plan "separately. The second policy means that we respond to the changes in oil demand structure by making a strategic capital investment in order to make our refineries more sophisticated and competitive, and by expanding our expanding such as oil development, petrochemicals manufacturing, and export. The Plan's most salient feature is to boost the strategic investments and financial structure . We will implement the plan steadily to aim at the sustainable growth.
In FY2005, the first year in which the plan was implemented, we achieved the operating income targets due to an increase in the earnings of affiliates , foreign exchange gains, and dividends received.
Consolidated Group Earnings Target/Indicator
| Fiscal 2007 Earnings Target |
| Operating income |
88 billion yen |
| Ordinary income |
82 billion yen |
| Net income |
41.2 billion yen |
| ROE |
13.6% |
| Fiscal 2007 Financial Target |
| Interest-bearing debt |
428 billion yen |
| Shareholders' equity |
320 billion yen |
| Debt dependence ratio |
32% |
| Shareholders' equity ratio |
24.1% |
Consolidated Medium-Term CSR management Plan
Cosmo Oil Group aims to generate profits as a corporate entity and to fulfill our social responsibility. We believe that a good balance between the two goals will let "Sustainable Growth" come true through our management philosophy of "Harmony and Symbiosis" and "Creating Future Values." To share and implement this policy throughout the group, we included "strengthening CSR" in the Consolidated Medium-Term management Plan initiated in FY2005, and started the three-year Consolidated Medium-Term CSR management Plan to make it a reality.
Basic policies
Different companies or departments have different relationships with society. Accordingly, the CSR plan is basically site-based, but it sets up five policies common to the group: 1) improving the awareness of CSR, 2) reinforcing risk management and internal audit function, 3) strengthening safety control, 4) taking a sophisticated approach to the environment, and 5) protecting human rights and implementing personnel-related measures. Since FY2005, we have promoted CSR management in accordance with these policies, but then we were faced with the accident and incorrect procedures in 2006. With our deep regret for all the trouble, we have just started identifying issues to address and reviewing drastically such matters as safety control, compliance, and initiatives that aim to integrate CSR into our corporate culture. We will describe the results in the next report.
Action of the Consolidated Medium-Term CSR Management Plan
| (1) Improving the awareness of CSR |
We have prepared a textbook for the corporate action guidelines and actively conducted training in human rights and compliance. |
| (2) Reinforcing the governance system including the risk management and the internal audit function |
In July 2005 we set up the risk management committee, and started drawing up a company-wide business continuity plan for the measures against emergency including a disaster. |
| (3) Strengthening safety control to support the infrastructure of business activities |
In order to build up a safety control system governed from a group-wide point of view, in addition to raising the level of safety through a self-security approach, we have implemented activities with the four goals: (1) establishing a company-wide safety control system, (2) identifying, evaluating, and reducing the potential risks, (3) reinforcing our risk management system, and (4) training our employees systematically. In FY2005, we conducted joint training among the departments and strengthened the risk management system. |
| (4) Taking a more sophisticated approach to the environmental activities |
In order to contribute to the formation of a globally sustainable society and to reduce environmental risks, we have implemented activities with the following five aims: (1) prevention of global warming, (2) pollutants and waste management, (3) soil environmental preservation, (4) environmental preservation action, and (5) environmental communication. In FY2005, as one of the Global Warming prevention measures, we achieved 13.5% cut of unit energy consumption (target: 10.9% cut) in the refineries. We started addressing biodiversity problems through the environmental contribution activities and the Eco Card Fund project. |
| (5) Protecting human rights and personnel affairs |
In order to establish a corporate culture in which any employee can give full play to his/her creative and innovative abilities within the company, we have established activities with the six goals: (1) human rights, (2) respect for diversity and equal opportunity, (3) health and safety, (4) education and ability development, (5) welfare, and (6) guarantee and creation of employment. In FY2005, we enhanced our various systems, improved the working environment according to the results of stress checks for new mental health care, and enriched training in human rights and increased the frequency of the training. |
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