Trust Recovery Growth Vitalization - Marubeni

Interview with the President and CEO
Question 09
indicate the extent of Marubeni’s actual earnings power, have risen by around 21% since the fiscal year
ended March 31, 2004. Meanwhile, we have taken proactive steps to reduce and write off loss-making
businesses and problem assets, including the complete withdrawal from the Chandra Asri Project,
which had become a major cause for concern. We have now completed actions for dealing with
problematic business and large losses. Our decision to proactively replace portfolio assets over the last
two years was directly responsible for the sharply improved performance seen in the past fiscal year.
At this point, we are expecting all business segments to turn a profit in the fiscal year ending March 31,
2006, and for profitable subsidiaries to account for around 90% of all Group companies. Alongside
divisions involved in natural resource development, such as Energy and Metals & Mineral Resources,
two key earnings drivers during the year under review, we hope to see earnings growth from those
divisions we have prioritized for investment, namely Agri-Marine Products, Forest Products & General
Merchandise, and Utility & Infrastructure. Earnings growth should also emerge in the Industrial
Machinery & Information Business, the Plant, Power & Infrastructure Projects and other restructured
divisions. From the current fiscal year onward, unprofitable businesses will require less attention.
Moreover, benefits should start to appear from our investments in priority fields and regions, meaning
that, barring any radical external changes, we are undoubtedly on course to achieve our revised
earnings target.
Backed by stronger earnings power, we have posted record earnings for two years running.
Meanwhile, we are on track to accomplish all of the objectives outlined in the “V” PLAN, including
improving our financial standing. To return part of this profit growth to our shareholders, for the year
under review, we declared a cash dividend of ¥4 per share of common stock, ¥1 more than in the
previous year. We plan to raise this payout again in the fiscal year ending March 31, 2006, this time to
¥6 per share, including an interim dividend of ¥2 per share.
Could you describe some of Marubeni’s initiatives for strengthening
corporate governance and corporate social responsibility (CSR),
given the growing importance of both in recent years ?
Since unveiling the “V” PLAN, we have reduced the term of office for directors from two years to one
in a move to invigorate management further. In parallel, we made changes in how the Board of
Directors is chaired and have recruited people from outside the Group to serve on the Management
Remuneration Committee, among other actions. In one move, the Board of Directors has been
presided over by the chairman since April 2004, who has no business execution authority. This is a step
specifically designed to clarify and demarcate management’s business execution and oversight
functions. In June 2005, we welcomed aboard Marubeni’s first outside directors to improve management
soundness and transparency, as well as to reinforce the supervisory and oversight functions of
our representative directors. Previously, in April 2004, we launched the Internal Control System Project,
a Group-wide program aimed at ensuring the reliability of the Group’s financial reporting. Led by this
project, we have completed the documentation of operational processes and made other decisive
choices to upgrade our systems.