Value Creation Management

OSAKA GAS Framework for standards Individual investment standard (NPV) 1. Setting a hurdle rate (WACC) which considers risk in each business 2. 3. 4. 1. 2. 3. Investment: NPV to be positive within 10 years Setting a yearly unit gross investment framework Applicable from November '00 Profit standards for OG business units (SVA; Shareholders' Value Added) - SVA = NOPAT – (interest bearing debt on book value + book value capital) X WACC By March 2003 all divisions from G2-G10 aim to have SVA>0 After a trial period in 2001, the standards will be introduced from year end March 03. 27 22

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