Independent Auditors’ Report

Consolidated Subsidiaries and Equity-method Affiliates
As of March 31, 2006

Main Consolidated Subsidiaries
CompanyBusinessCapital(¥ million)

Equity ownedby Tokyo Gas(%)

FY2005 Net sales(¥ million)[% of outside sales]

Operatingincome(¥ million)

Tokyo Gas Urban Development Co., Ltd.

Real estate leasing, management andbrokerage

11,440100

31,946 [31.8]

4,610Tokyo Gas Toyosu Development Co., Ltd.

Real estate leasing and management

5,000

100

747 [32.4]

232

ENERGY ADVANCE Co., Ltd.

Energy service, district heating andcooling

3,000

100

33,341 [92.4]

3,171

and consolidated subsidiaries as of March 31, 2006 and 2005, and the related consolidated statements ofGastar Co., Ltd.

Production and sale of gas appliances

2,45066.7

27,407 [41.9]

1,540income, shareholders' equity and cash flows for the years then ended, expressed in Japanese yen. These consol-Tokyo LNG Tanker Co., Ltd.

LNG and LPG transportation and chartering of carriers

1,200

100

10,235 [22.5]

965

Toyoko Engineering Co., Ltd.

Gas facilities construction and gasappliance sales

1,025

100

19,793 [43.2]

34

To the Board of Directors of TOKYO GAS CO., LTD.
We have audited the accompanying consolidated balance sheets of TOKYO GAS Co., Ltd. (a Japanease corporation)idated financial statements are the responsibility of the Company’s management. Our responsibility is to independently express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those

Tokyo Gas Energy Co., Ltd.

Sales of LPG

1,000

100

22,569 [81.9](298)

standards require that we plan and perform the audit to obtain reasonable assurance about whether theTokyo Gas Chemicals Co., Ltd.

Sales of gas for industry and chemicals

1,000100

15,639 [65.0]

688

financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence sup-Park Tower Hotel Co., Ltd.

Hotel “Park Hyatt Tokyo” management

1,000100

9,095 [99.7]

534

porting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting

KANPAI Co., Ltd.

Gas facilities construction and gas
appliance sales

96710043,046 [35.9]

31Chiba Gas Co., Ltd.

Supply of gas in Yachiyo City, Narita Cityand surrounding cities

480

100

12,489 [99.7]

917

TG Credit Services Co., Ltd.

Financing and leasing related to gas
equipment and construction

450

100

9,510 [55.6](359)

Tokyo Oxygen and Nitrogen Co., Ltd.

Production and sale of liquefied oxygenand nitrogen400542,109 [43.2]

182

TG Information Network Co., Ltd.

Information processing services, softwaredevelopment and sales of computerequipment

400

100

12,003 [25.1]

826

As discussed in Note 15(1) to the consolidated financial statement, subsequent to March 31, 2006, TOKYO GASTsukuba Gakuen Gas Co., Ltd.

Supply of gas in Tsukuba City

280

100

6,099 [97.8]

433

Co., Ltd. decided to acquire treasury stock.

TG Enterprise Co., Ltd.

Group financial administration business200100659 [32.3]

212

Tokyo Gas Engineering Co., Ltd.

Comprehensive engineering services witha particular focus on energy-related work

100

100

31,656 [70.0]

586Tokyo Gas Customer Service Co., Ltd.

Periodic safety checks, meter and billing
services

50

100

7,577

[1.4]

428

TG IT Service Co., Ltd.

Operation of Tokyo Gas systems andnetworks

50100

8,956

[1.1]

190

KANPAI LIVING SERVICE Co., Ltd.

Sales, installation and repair of gas appliances, expansion and reconstruction work

50

100

6,264 [68.5]

92

GAS MALAYSIA SDN. BHD.

Supply of gas in Malaysia

RM42.8 million

20

principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the consolidated financial position of TOKYO GAS Co., Ltd. and consolidated subsidiaries as ofMarch 31, 2006 and 2005, and the consolidated results of their operations and their cash flows for the years thenended, in conformity with accounting principles generally accepted in Japan.
Without qualifying our opinion, we draw attention to the following.

The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended
March 31, 2006 are presented solely for convenience. Our audit also included the translation of yen amounts into
U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in Note 1 to theconsolidated financial statements.

Tokyo, Japan——Notes: 1. Gas Malaysia Sdn. Bhd. is an equity-method affiliate.
2. The scope of consolidation was expanded in April 2004 and now includes 54 companies at the end of March 2006.
3. 1RM nearly equals ¥31.24.

June 29, 2006
Other Subsidiaries
Miho Gas Co., Ltd., Shoei Gas Co., Ltd., Washimiya Gas Co., Ltd., Tochigi
Gas Co., Ltd., Toyoko Living Co., Ltd.,Tokyo Kiko Co., Ltd., Tokyo Gas Yokosuka Power Co., Ltd.,
Dining Art Systems Co., Ltd., Living Design Center Co., Ltd.,Tokyo Gas Bay Power Co., Ltd., TG Showa Co., Ltd.,
East Japan Housing Evaluation Center Co., Ltd.,Tokyo Carbonic Co., Ltd., Japan Super Freeze Co., Ltd.,TG Telemarketing Co., Ltd., Green Tech Tokyo Co., Ltd.,Tokyo Gas Auto Service Co., Ltd., Tokyo Gas Remodeling Co., Ltd.,

62

Urban Communications, Inc., Tokyo Gas Techno-Service Co., Ltd.,Tokyo Gas Building Service Co., Ltd., Toeki Service Center Co., Ltd.,Showa Bussan Co., Ltd., Tosetz Co., Ltd.,
Kanpai Customer Service Co., Ltd., Toyoko Customer Service Co., Ltd.,Showa Unyu Co., Ltd., Tokyo Plant Service Co., Ltd.,Tokyo Rare Gases Co., Ltd., Tokyo Auto Gas Co., Ltd.,
Kanpai Tech Co., Ltd., Tachikawa Urban Center Co., Ltd.,Tokyo Gas LPG Terminal Co., Ltd., Nagano Toshi Gas Co., Ltd.

63