With the mission of “Changing Energy for a Better World,” the Company group (the “Group”) is promoting Green Transformation (GX) towards achieving a decarbonized society (carbon neutrality), a global challenge. To realize a decarbonized society, effective methods include (i) decarbonizing the power grid, (ii) electrifying transportation, (iii) improving food, (iv) conserving nature, (v) purifying manufacturing, and (vi) removing carbon dioxide. The Group, under the mission of “Changing Energy for a Better World,” aims to become a category leader in the energy tech domain by developing businesses that contribute to (i) decarbonizing the power grid and (ii) electrifying transportation.

To fulfill this mission, the Group conducts corporate activities while ensuring that all Directors and employees comply with laws, regulations, and the Articles of Incorporation, and perform their duties under the ENECHANGE Group Charter of Corporate Behavior to enhance management efficiency and transparency, achieve sustainable growth, and maximize corporate value.

The Company has established the General Meeting of Shareholders, Board of Directors, and Board of Corporate Auditors as corporate bodies under the Companies Act.
The Board of Directors makes decisions on important management matters and supervises the execution of business duties by Directors. We have established the Board of Corporate Auditors because we believe that a system in which corporate auditors monitor the execution of duties by directors independently is an effective way to strengthen corporate governance. In addition, we have introduced an executive officer system to strengthen the decision-making and oversight functions of the Board of Directors and to separate and streamline business execution.

The Board of Directors consists of four directors to ensure strong governance. Each director has experience and expertise in the energy field, as well as expertise and experience in management, finance, accounting and other fields. The Board of Directors meets once a month in principle and on an ad-hoc basis as necessary to make decisions regarding basic management policies and important business operations, as well as to supervise and report on the execution of business by the Directors. In addition, three corporate auditors attend the Board of Directors meetings to audit the execution of duties by the directors. The Nomination and Compensation Committee, which is an advisory body to the Board of Directors, deliberates on the remuneration of Directors within the upper limit resolved at the General Meeting of Shareholders, taking into consideration the results of the previous year and the expected contribution to business performance in the current year. For full-time, internal directors, the amount of remuneration is determined based on the current remuneration and the evaluation and performance of the past year. For outside directors, the amount of remuneration is determined based on a comprehensive consideration of factors such as performance and expectations.

The Company adopts the Board of Corporate Auditors system. The Board of Corporate Auditors consists of one Full-time and two Part-time Corporate Auditors, all of whom are Outside Corporate Auditors. In principle, the Board of Corporate Auditors meets once a month, with additional meetings held as necessary. Full-time Corporate Auditor monitors the execution of duties by Directors by attending important internal meetings such as the Executive Committee, inspecting important documents, and conducting other audit procedures. In addition, the Board of Corporate Auditors strives to improve its auditing function by collecting information through exchanging opinions with Representative Directors, Outside Directors, Financial Auditor, and internal audit staff.

The Executive Committee, attended by Directors (excluding Outside Directors), Executive Officers, and Full-time Corporate Auditor, meets once a week to confirm the progress of business activities, share issues, and make executive decisions in a flexible manner.

To recognize the risks surrounding the Group and respond to them appropriately, the Company has established the Compliance and Risk Management Committee, which consists of Representative Directors, Chairman, Corporate Auditors, General Manager of the Internal Audit Office, and Senior Executive Officer / CFO. In principle, the Committee meets once a quarter to share information necessary for risk management of the Company and its subsidiaries and promote compliance-related initiatives. In the event of a compliance violation, the Committee responds swiftly, investigates the facts of the case, and proposes measures to prevent a recurrence.

The Company has established the Internal Audit Office as a department directly reporting to the Representative Director to ensure the efficiency, legality, and soundness of the management of the entire Group. Given that the Company is a small organization, the Internal Audit Office does not have dedicated personnel. The Head of the Internal Audit Office concurrently holds the positions of Head of the Legal and Human Resources Departments. An external collaborator, contracted as an internal audit assistant, conducts audits for departments other than the Legal and Human Resources Departments. To avoid self-auditing, the external collaborator is responsible for internal audits of the Legal and Human Resources Departments. This two-person team audits the status of the entire Group. Furthermore, according to the Internal Audit Regulations, the Head of the Internal Audit Office may appoint internal audit assistants with the approval of the Representative Director as necessary. The Internal Audit Office conducts internal audits based on an audit plan, targeting all divisions and subsidiaries of the Company, and reports the results to the Representative Director and the audited departments. It also reports the audit status to the Corporate Auditors.

The Company has established a voluntary Nomination and Remuneration Committee as an advisory body to the Board of Directors for the purpose of strengthening the independence, objectivity and accountability of the Board of Directors’ functions, further enhancing the Group’s corporate governance system by ensuring the transparency and objectivity of the evaluation and decision-making processes related to the nomination and remuneration of the Board of Directors. The Nomination and Remuneration Committee reports to the Board of Directors on matters such as the composition of the Board of Directors, individual nominations of Directors, and drafts concerning the composition, level, and maximum total amount of remuneration for Directors.

The committee currently consists of Representative Director/CEO Tomoya Maruoka, Representative Director/COO Tatsuya Sogano, Independent Outside Directors Aki Mori and Kana Bogaki. Chair of the committee is Aki Mori.

The company had an audit agreement with KPMG AZSA LLC, but as disclosed in the notice “Notice Concerning Change of Certified Public Accountants” dated July 29, 2024, KPMG AZSA LLC terminated the audit agreement on the same date and resigned as our company’s auditor. Subsequently, as disclosed on July 30, the audit firm Avantia was appointed as interim auditor at our company’s audit committee meeting held on the same day, and was formally appointed as our company’s auditor at the extraordinary shareholders meeting held on September 3, 2024. Currently, timely and appropriate audits are being conducted based on the audit agreement with this firm.

We have established governance by outside directors with management experience at listed companies in the energy industry. Each director is selected based on their expertise in their respective fields, including experience in the energy industry and finance-related fields.

The Company has established a policy regarding the determination of the amount of remuneration, etc., of officers and the method of calculating such amount, which consists of basic remuneration and bonuses. Based on this policy, the Company sets the upper limit of the total amount of remuneration for officers by a resolution of the General Meeting of Shareholders, and within this limit, the Nomination and Compensation Committee, an advisory body to the Board of Directors, deliberates and determines the amount to be paid based on the report of the Nomination and Compensation Committee. Basic remuneration is determined as compensation for the execution of duties by the Directors in accordance with their position and contribution to the Company’s business, taking into consideration such factors as industry standards and the Company’s business performance. Bonuses are determined in consideration of the Company’s business performance and the contribution of each director to the Company’s business performance.

The Company has not adopted a performance-linked compensation system for its officers.

Details of Remuneration for Auditing Certified Public Accountants, etc. in Fiscal 2023

In accordance with our compliance policy, we will always strive to improve trust in our company through fair, transparent, and free competition.

We will not engage in any form of corruption, whether directly or indirectly, including but not limited to bribery, kickbacks, inappropriate entertainment gifts, illegal political contributions, donations, and sponsorships.