Summary Of Fisical Results Anunal Report Governance Consolidated Financial Data IR Calendar

Sumitomo Osaka Cement recognizes that a primary objective of corporate governance is to constantly strive to maximize corporate value by increasing management efficiency and securing soundness and transparency in every phase of business activities. The Company has positioned the fulfillment of these aims as its most important management issue. Each Organization’s Roles Sumitomo Osaka Cement adopts an auditor system. Sumitomo Osaka Cement recognizes such system in which directors knowledgeable in business operations make suitable management decisions through deliberations at the Board of Directors’ Meeting and promote operational efficiency and which enhances auditing functions of auditors. In addition, in June 2006, the Company introduced the Executive Officer System to separate managerial decision making and auditing functions from business execution functions, aiming to reinforce each function, accelerate decision making and clarify authority and responsibility. Through these measures, Sumitomo Osaka Cement is taking steps to improve operational efficiency. 　With the President at its chairman, the Board of Directors is composed of 10 directors, including one external director who provides an outside perspective to decision making. The Board of Directors’ Meeting is held once or more each month to determine important management matters and to receive reports regarding business execution conditions. 　The Board of Auditors is composed of five auditors, including three external auditors. The Board of Auditors’ Meeting is held once or more each month. The auditors conduct audits whether or not operations are being executed appropriately by directors and executives through participating in such important meetings, obtaining reports from directors, employees and accounting auditors (audit corporations). 　With regard to internal audits, the Company established the nine-member Internal Audit Department as an in-house organization to conduct audits in accordance with the Internal Audit Regulations. This department takes steps to coordinate with auditors. Compliance System Sumitomo Osaka Cement established a Compliance Committee chaired by the President for the purpose of raising awareness of compliance on the part of the Group’s directors and employees and diffusing it Groupwide. In addition, the Company established Compliance Committee Regulations to define the roles and responsibilities of the Committee. The Compliance Committee devises an annual compliance activity plan and controls the progress of the activities. Audits regarding compliance are conducted by the Internal Audit Department, which submits a report of the results to the Compliance Committee. The Compliance Committee then takes necessary measures, screening the results and submitting a report of the results to the Board of Directors and auditors. 　Furthermore, Sumitomo Osaka Cement has established a reporting system (Compliance Hotline System) with the aim of implementing measures to enhance compliance. This system is designed to receive reports from the Group’s employees? including part-time and temporary employees?regarding the efficacy of the Group’s compliance-related activities. These measures ensure effective compliance and fair business transactions are conducted within the Group. Risk Management System Chaired by the President, the Risk Management Committee strives to identify and evaluate the Group’s risks. In order to clarify the Committee’s roles and responsibilities, Sumitomo Osaka Cement formulated Risk Management Committee Regulations. The Committee prepares a risk management plan each year and monitors its implementation. Audits are conducted in connection with risk management, and the results are reported to the Board of Directors and auditors. Basic Policy Regarding Control of the Company At its Board of Directors’ Meeting held on May 14, 2008, Sumitomo Osaka Cement resolved a basic policy regarding parties who control the decisions on its financial and business policies, as well as countermeasures against the acquisition of its shares with a view of securing a ratio of voting rights of 20% or higher by a specific shareholder group (hereafter “the Plan”). The Plan was resolved as a measure to prevent certain parties, who are considered to be inappropriate in accordance with Sumitomo Osaka Cement’s basic policy, from controlling decisions on its financial and business policies. 　The Plan (valid for a three-year period) went into force with the approval of the majority of shareholders with voting rights at the 145th Ordinary General Meeting of Shareholders held on June 27, 2008. 　For details of the Plan, please visit Sumitomo Osaka Cement’s Web site (http://www.soc.co.jp, Japanese only).