Our medium-term management plan, PLAN 05, came to the end as of March 31, 2006 and we immediately embarked upon a new medium-term plan, PLAN 08 that covers the three years from fiscal 2006 to 2008.
This new medium-term management plan was created based on the results of PLAN 05, whose primary goals were to strengthen our profitability and improve our financial condition. Under PLAN 08, we intend to switch to a growth track and make Iwatani financially robust. An overview of PLAN 08 follows.

[Medium-Term Management Vision]
We have set forth the following medium-term management vision, consisting of four parts, for achieving the objective of switching to a growth track. Under this management vision, our aim is to enter a new growth stage.

1. Energy
We will increase competitiveness by moving forward with structural reforms in our core energy business and by placing particular emphasis on expanding and strengthening downstream operations.

2.Gas
In our industrial gases business, which goes back to our very founding, we will improve our profitability by strengthening our air-separation gases business, while further enhancing our business base as a leading hydrogen company.

3.Value Creation
We will create value through initiatives like the development of high-value-added businesses that span raw material supply and processing in both domestic and overseas markets, and the pursuit of unique business models that allow us to exercise our expertise and capabilities.

4.CSR
We will reinforce corporate governance by redoubling compliance efforts and aim to be a company that excels in environmentally conscious management and is indispensable for society.

[Management Indicators]
Over the three-year period spanning 2006-2008, we will strive to achieve the following quantitative objectives.
(a) Consolidated ordinary income of \20billion
(b) Consolidated ROA (Return on Assets) of at least 4.5% for the fiscal year ending March 2009
(c) Ratio of interest-bearing debt to total assets reduced to 43% or less in the fiscal year ending March 2009

[Basic Management Policies for Achieving Objectives]
1. ROA Improvement by Strengthening Profitability in Each Segment Area

• Continue to position the energy and general household products segment and industrial gases and machinery segment as core operations and make strategic investments to further structural reforms and generate higher profits.
• In the materials and electronics segment, aim for even greater profit growth by strengthening our high-value-added processing business and developing our unique business model in both domestic and overseas markets.
• Improve management efficiency by consolidating the operations of affiliates, and strengthen operating structures.

2. Reduce the Ratio of Interest-Bearing Debt to Total Assets

• Improve turnover of total assets to make Iwatani financially robust.
• Make balanced, selective investments in businesses with high earnings potential.

3.Develop Technologies that Apply New Gas, New Energy

• Continue to strengthen initiatives aimed at commercialization of "New Gas, New Energy," which refers to hydrogen energy, ozone, and other business opportunities with tremendous growth potential.

In the first fiscal year (ending March 2007) of our new medium-term management plan, we will continue to strengthen and advance development of our LPG business as a general energy business by building up downstream operations through structural reforms and by taking other measures, as well. In our industrial gases business, we will expand and strengthen our air-separation gases business, and create an even stronger business foundation as a leading hydrogen company. Specifically, we will expand our capacity to supply air-separation gases and launch Japan's first full-scale supply of liquid hydrogen for industrial uses by bringing HydroEdge Co., Ltd. on line. Hydro Edge will use a process employing LNG-cryogenic-heat to extract (with air-separation technology) and liquefy hydrogen. We will further strengthen our efforts in the hydrogen energy business by pushing forward with development of supply technology for fuel cell cars and other applications and proceeding with initiatives like participation in a large-scale LPG reformation / household fuel-cell cogeneration pilot project. Finally, in the materials and electronics segment, we will proceed with the development of high-value-added businesses spanning raw materials supply and processing in both domestic and overseas markets, and redouble overseas business development efforts focusing primarily to China and Western Australia.