Glimpse of Osaka Gas Group Our Energy Business

Glimpse of Osaka Gas Group

Our Energy Business Value Chain Liquefaction LNG carrier LNG terminal Power plant Distribution Gas field Plant network Customers School Gas Home Store Hospital Factory Office Large factory Upstream LNG Investment/ LNG Procurement Transport Import 7 . 8 Mt 8 from countries 8 carriers in fleet Electricity Regasification Power Business 3 45 Local Distribution Develop and Operate and maintain terminals Operate Over years of operation (29 tanks) 33 2. 9 61, 000 sites, Energy Marketing 7. 3 M customers 1. 6 GW GW km Cogeneration pipelines including 6 wind farms Residential use 2

Expanding Beyond Borders from 1990’s 3

Entering Downstream in Southeast Asia Supply natural gas and help customers reduce energy costs in Singapore, Thailand and… Energy saving technologies Headquarters Osaka THAILAND SINGAPORE INDONESIA 4

Set up 5 companies since 2013 100% OSAKA GAS SINGAPORE Subsidiaries of Japanese MEGA bank 51% 49% 51% ※ 1 100% OSAKA GAS THAILAND 60% ※ 2 70% NS-OG Energy Solutions (Thailand) 40% OSAKA GAS SINGAPORE Indonesia Office 30% ※ 1…PTT Public Company Limited ※ 2…PTT Retail Business Co. , Ltd. OGP Energy Solutions 5

Energy Business Value Chain in SE Asia Liquefaction LNG carrier LNG terminal Power plant Distribution Gas field Plant network Customers School Gas Home Store Hospital Factory Connect downstream with mid/upstream Large factory Office Electricity Upstream LNG Investment/ LNG Procurement Transport Local Energy Regasification Meet energy needs of Power individual market Distribution Marketing Business in the region Import Develop and Operate and 7 . 8 Mt 8 Own from countries 8 carriers 3 45 terminals Operate Over years of operation (28 tanks) maintain 33 2. 9 61, 000 sites, 7. 3 M customers 1. 6 GW GW km Cogeneration pipelines including 6 wind farms Residential use 6

Evolved into diversified energy business Local Gas Distributor (regulated) - supply manufactured gas - through pipeline - mainly to local household consumers Upstream Assets Diversified Businesses Group (deregulated) - produce, trade and supply various energies and provide life & business solutions - via various means - to industrial, commercial and household customers, inland abroad 7

Gas business must have been flexible Energy business has been always in transition We are equipped with the ability, including human resources management, to adapt to the changing environment

Gas business must have been flexible Energy business has been always in transition We are equipped with the ability, including human resources management, to adapt to the changing environment For the first time, we are faced with - shrinking population/workforce/energy demand - opening up of the entire energy market - shifting business field abroad Difficult to overcome with our traditional DNA We are reviewing whole strategy including HR management

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG Marketing capability to win the competition and create new demand has been key factor to survive

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG Marketing capability to win the competition and create new demand has been key factor to survive Lighting 12

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG Marketing capability to win the competition and create new demand has been key factor to survive Lighting Cooking Heating Water heating

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG Marketing capability to win the competition and create new demand has been key factor to survive Lighting Cooking Heating Water heating Gas appliances marketing/retailing Product Price Promotion Place 14

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG Marketing capability to win the competition and create new demand has been key factor to survive B to C Cooking Heating Water heating Commercial & industrial use Air-conditioning B to B Cogeneration 15

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG Marketing capability to win the competition and create new demand has been key factor to survive Cooking Energy saving Heating consulting/engineering Water heating Commercial & industrial use Packaging Air-conditioning Cogeneration Engineering 16

Market in transition Energy market in Japan has been growing with competition - firewood/charcoal - kerosene/fuel oil to meet ‘heat’ demand - electricity - LPG Marketing capability to win the competition and create new demand has been key factor to survive Mindset of ‘Customer First’ and skills for selling goods have been fostered among employees …on top of the public service responsibility 17

Feedstock changed New horizon 1972 First LNG arrived from Brunei 1975 Conversion project started (-1990) - 23 M appliances at 4. 4 M customers’ sites were adjusted or replaced - 2, 500 employees engaged Enhanced supply capacity gained by conversion enabled us to supply large industrial users 18

Feedstock changed New horizon 1972 First LNG arrived from Brunei 1975 Conversion project started (-1990) - 23 M appliances at 4. 4 M customers’ sites were adjusted or replaced - 2, 500 employees engaged Enhanced capacity enabled us to supply Large industrial users 1978 New Business Development Office set up - industrial gas/engineering frozen food/restaurant chain real estate/housing/home centre security service/eldercare/sports centre developed 19

Feedstock changed New horizon 1972 First LNG arrived from Brunei 1975 Conversion project started (-1990) - 23 M appliances at 4. 4 M customers’ sites were adjusted or replaced - 2, 500 employees engaged Enhanced capacity enabled us to supply Large industrial users 1978 New Business Development Office set up - industrial gas/engineering frozen food/restaurant chain real estate/housing/home centre security service/eldercare/sports centre developed Cold energy of LNG, employees retired from gas works and conversion project were utilized as resources 20

HR management in the transition Shift of personnel - Gas works operator - Conversion technician - Sales-engineer Bill collector Safety inspector New business staff In-company recruiting - ‘Challenge’ scheme (1985 -) --propose new business plan --shifted to execute the plan - ‘Open Invitation’ scheme (1988 -) --shift to specified job Recruiting - professional skills sought in finance, legal, etc - new academic background sought in various technical jobs, R&D, engineering, etc 21

Long-term management principles -1970’s - Secure safety - Prevent public nuisance - Service First 　 Public utility 1975 - Strengthening R＆D capacity - Enhancing employees’ health Competitive 1981 business - Research & Development - Human Resources Development - Globalization - Computerization (1983 -) 22

Our Commitments Osaka Gas Group is committed to creating value primarily for customers, as well as for society, shareholders, and employees Value for Customers Osaka Gas Group is committed to providing services to meet customers’ expectations for improved comfort, convenience, economy and reliability in diverse field Value for Society Osaka Gas Group is committed to supporting sustainable development of society and environmental protection through business activities, mindful of compliance and transparency 23

Our Commitments (continued) Value for Shareholders Osaka Gas Group is committed to meeting shareholders’ expectations for stable, long-term growth and maximized corporate value, while maintaining its sound financial foundation Value for Employees Osaka Gas Group is committed to respecting individuality of employees and providing opportunities for them to pursue their careers and achieve self-development 24

Transformation undergoing Business Strategy 1. Differentiate ourselves by improved services to pursue total efficiency of providing gas, electricity and life & business solutions 2. Sail into ‘Blue Ocean’ beyond borders of Upstream Assets domain area and business Overseas businesses - Infrastructure - trading - Energy services X - Asia - North America - Oceania 25

Transformation undergoing Human Resources Strategy Principle Enhance workforce resilience to win competition Training Further brush up communication skills Upstream Assets - core competency of our strategic advantage in winning the competition - developed through long and close interactions with customers (trained on the job) 26

Transformation undergoing Human Resources Strategy (continued) Recruiting More ‘hunters’ like, ‘trading house’ directed & ‘Logical thinking ability’ as first requirement - for maiden voyage Upstream Assets to Blue Ocean - from diversified sources --foreign nationalities (in Japan) --local executives/managers (overseas) --experienced professionals (up/mid-stream businesses) 27

Transformation undergoing Human Resources Strategy (continued) Challenges Publicity to attract talented personnel - locally well-known, globally unknown - known only as ‘ye olde gas distributor’ - competing with global giants Upstream Assets Localisation of overseas workforce - Replace expatriates by locals - Skills transfer to locals Diversification and globalization of employment - new talent for new business with new terms - Japanese dominated HQ to be changed 28

Legacy still remains Traditional Japanese Employment System may still have its role to 29

Legacy still remains Traditional Japanese Employment System may still have its role to nurture loyal, motivated and resilient workforce Recruit of new graduates (in bulk) - not job choice, but company choice - not skill, but potential appreciated Long-term contract (with To. P clause) - trained and obtain skills at work site - growing-up through shift among different job Seniority-based wage (in part) - rewarded more by career development and post rather than salary itself 30

Legacy still remains (2) Other fringe benefits may also retain its value Employee share ownership scheme - asset formation for the employees - long & secure shareholders for the company Health development centre - annual health check with counseling/advice - reducing smoking, metabolic syndrome… Retirees’ association 　 - 5, 418 members with average 73 - many shareholders and customers of various Osaka Gas Group businesses - acting as PR agents for Osaka Gas 31

Thank you for your attention 32