Annual Report 2013

Corporate Ethics Consultation Helpline Overview and Case RecordThe Cosmo Oil Group has set up internal and external helplines for consultationor reporting of legal or ethical problems concerning Group operations. Internalconsultation is available through the Corporate Ethics Consultation helplinelocated in the Corporate Ethics Promotion Offi ce and a consultation helpline formatters related to sexual or power harassment located in the PersonnelDepartment. A helpline has also been established to enable direct consultationwith external experts to ensure anonymity and avoid any adverse repercussionsfor the person seeking consultation. In fi scal 2012, nine consultation caseswere recorded.? Risk Management Measures and Business Continuity Plan RevisionsThe Cosmo Oil Group has established the Risk Management Committee underthe CSR Promotion Committee charged with companywide; 1) risk examinationand 2) categorization, 3) countermeasures consideration and 4) implementation,and 5) a monitoring and evaluation cycle implementation. Recent risk issuesencompass cyberterrorism, mental health, and new strains of infl uenza as well asearthquakes. The committee responds to and considers those risks together withrelated committees and departments to ensure that nothing is overlooked.Regarding the business continuity plan (BCP) in the case of an earthquake, weconducted a comprehensive review of our response to the Great East JapanEarthquake and made revisions to the Group’s Tokyo Earthquake BCP Manual.We also have a Tokai, East Nankai, and Nankai Earthquake BCP Manual.In addition, the Company conducted comprehensive BCP drills on March 5,2013, one based on a scenario of damage caused by an earthquake in the Tokai,East Nankai, and Nankai region and another on an earthquake in the Tokyometropolitan area. BCP drills will be an ongoing part of our risk managementactivities as we seek to further strengthen our preparedness framework for amajor disaster.INITIATIVES AIMED AT REINFORCING CORPORATE GOVERNANCE? Share Acquisition GuidelinesIn June 2006, the Cosmo Oil Group established share acquisition guidelines as aninternal standard for executives who own Company shares to encouragecontinued long-term increases in corporate value. The Group does not grantstock options to directors.? Basic Policy on Large-Scale Share AcquisitionAt the present time, the Cosmo Oil Group does not have a specifi c policy in placefor handling shareholders with multiple voting rights that would enable them tocontrol resolutions on the Group’s fi nancial and business policies. Nor has theCompany introduced measures for defending such attempts to gain control.However, we plan to examine whether such measures are required in order tomaintain and enhance shareholder value. We will do this by considering changesto laws and regulations, changes in the operating environment, the wishes ofshareholders, and cases of the introduction of such measures by other companies.? Ordinary General Meeting of ShareholdersIn Japan, there is a tendency for companies to hold their annual generalshareholder meetings around the same time. In order to encourage as manyCosmo Oil shareholders as possible to attend our meetings, the Group schedulesits annual meeting so that it does not clash with the majority of other meetings.In addition to introducing a system enabling shareholders to exercise their votingrights via the Internet, institutional investors are able to exercise their rightspromptly and accurately using our institutional investor electronic proxyvoting platform.