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Announcement on Making Sogo Energy a Wholly-Owned Subsidiary of Cosmo Oil via a Simplified Share Exchange

August 04, 2015

Cosmo Oil Co., Ltd. Corporate Communications Dept. Public Relations Office

Cosmo Oil Co., Ltd. ("COSMO") and Sogo Energy Corporation ("Sogo Energy") resolved, at its Board of Directors' meeting held on August 4, 2015, to make Sogo Energy a wholly-owned subsidiary of COSMO by way of a share exchange to be made on September 1, 2015, and concluded a Share Exchange Agreement, as described below.

Because the Share Exchange will be implemented through a simplified share exchange (kani kabushiki kokan) procedure for making a consolidated subsidiary of COSMO to a wholly-owned subsidiary of COSMO, some items and details have been partially omitted in the disclosure.

1. Purpose of the Share Exchange

Sogo Energy has become a consolidated subsidiary of COSMO (holding 99.97% of total shares issued) in January 2013 through the acquisition of shares owned by Sojitz Corporation (holding 97.0% of total shares issued), and the shares owned by oil companies and banks (holding 2.7% of total shares issued).
For further enhancement of group management in step with organizational restructuring regarding the transformation to a Holding (HD) Company, COSMO will make Sogo Energy a wholly-owned subsidiary by exchanging shares of Sogo Energy owned by minority shareholders with the shares of COSMO.

2. Outline of the Share Exchange

(1) Schedule of the Share Exchange

Board resolution:	Tuesday August 4, 2015
Conclusion of agreement:	Tuesday August 4, 2015
Effective date of the Share Exchange:	September 1, 2015 (planned)

(Note)
The above schedule may be subject to change if necessary.
Since this share exchange constitutes a simplified share exchange as stipulated in Article 796, Paragraph 2 of the Companies Act, obtaining approval at COSMO's general meeting of shareholders is not required.

(2) Method of the Share Exchange

This is a share exchange where COSMO will become the wholly-owning parent company of Sogo Energy.

(3) Descriptions of Allocation concerning the Share Exchange (Share Exchange Ratio)

	Cosmo Oil Co., Ltd. (Wholly-owning parent company)	Sogo Energy Corporation (Wholly-owned subsidiary company)
Share Exchange ratio	1	3
Number of shares to be delivered under the Share Exchange	Shares of COSMO: 6,000 shares(tentative)

Note:

1） Allotment ratio of shares

COSMO will allot 3 shares of COSMO for each share of Sogo Energy held by the minority owners.

2） The number of shares to be delivered in the Share Exchange:

The number of COSMO shares to be delivered will be 3 times the number of Sogo Energy shares held by the minority shareholders of Sogo Energy. COSMO will use its treasury shares for all the COSMO shares to be delivered in the Share Exchange.

3） Grounds for Calculating the Share Exchange ratio:

The value of COSMO shares is calculated by market price method because it is a listed company, and the value of Sogo Energy shares is calculated based on its net assets and business because it is an unlisted company. The share exchange ratio was agreed through discussion between COSMO and Sogo Energy.
As premise for calculating the share exchange ratio, no significant increases or decreases in profit or no significant changes in valuation of assets and liabilities from the latest financial statements are anticipated in both company's financial forecasts.

4） Results of the calculation, the method for calculating and the basis for calculation by third party institutions:

For the above reason in 3), no calculation of share exchange ratio was conducted by any third party institution.

5） Treatment of Share Options and Bonds with Share Options in accordance with the Share Exchange

Neither COSMO nor Sogo Energy have issued any stock acquisition rights or corporate bonds with stock acquisition rights

3. Description of Party to Share Exchange

Wholly-owning parent company in the Share Exchange(As of March 31, 2015)

(1) Company Name	Cosmo Oil Co., Ltd.
(2) Registered Office	1-1-1, Shibaura, Minato-ku, Tokyo
(3) Name and Title of the Representative	Keizo Morikawa, President, Representative Director, Chief Executive Officer
(4) Primary Business	Integrated Oil Business
(5) Paid-in Capital	107,246,816,126 JPY
(6) Date of Establishment	April 1, 1986
(7) Number of Issued Shares	847,705,087 shares
(8) Accounting Period	March 31
(9) Major Shareholders and Shareholding Ratio	20.76% Infinity Alliance Limited
	4.59% Royal Bank of Canada Trust Company (Cayman) Limited
	4.43% Japan Trustee Services Bank, Ltd.
	3.71% Mizuho Bank, Ltd.
	2.32% The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	2.19% The Kansai Electric Power Co., Inc.
	2.08% Mitsui Sumitomo Insurance Co., Ltd.
	1.86% Aioi Nissay Dowa Insurance Co., Ltd.
	1.86% Sompo Japan Nipponkoa Insurance Inc.
	1.76% Cosmo Oil Client Stock Ownership
(10) Operational Results and Financial Conditions for the Most Recent Fiscal Year (FY2014: Apr2014.-Mar.2015)
Consolidated Net Assets (in million yen)	207,520
Consolidated Total Assets (in million yen)	1,428,628
Consolidated Net Assets per Share (in yen)	197.39
Consolidated Net Sales (in million yen)	3,035,818
Consolidated Operating Income (in million yen)	▲38,447
Consolidated Ordinary Income (in million yen)	▲49,640
Consolidated Net Income (in million yen)	▲77,729
Consolidated Net Income per Share (in yen)	▲91.77

Wholly-owned subsidiary company in the Share Exchange (As of March 31, 2015)

(1) Company Name	Sogo Energy Corporation
(2) Registered Office	2-14-32, Akasaka, Minato-ku, Tokyo
(3) Name and Title of the Representative	Satake Yuji, President, Representative Director, Chief Executive Officer
(4) Primary Business	Sales of petroleum products and energy products, Operating service stations etc
(5) Paid-in Capital	500,000,000 JPY
(6) Date of Establishment	March 15, 1958
(7) Number of Issued Shares	7,938,000 shares
(8) Accounting Period	March 31
(9) Major Shareholders and Shareholding Ratio	Cosmo Oil Co., Ltd.　　　　　　　　　　　　　　　　　　　　　　　　　　 99.97％
(10) Operational Results and Financial Conditions for the Most Recent Fiscal Year (FY2014: Apr2014.-Mar.2015)
Net Assets (in million yen)	4,863
Total Assets (in million yen)	22,262
Net Assets per Share (in yen)	612.66
Net Sales (in million yen)	164,904
Operating Income (in million yen)	265
Ordinary Income (in million yen)	219
Net Incom (in million yen)	40
Net Income per Share (in million yen)	5.13

4. Status After Share Exchange

There are no changes to company name, business, location of head office, representative, capital and fiscal year end for both companies after the Share Exchangel

5. Future Outlook

This share exchange will not have a material impact on COSMO's consolidated business performance because it concerns a share exchange of a wholly-owned subsidiary of the Company.

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