ENEX REPORT 2023 ITOCHU ENEX Group Integrated Report

ENEX REPORT 2023
ITOCHU ENEX Group Integrated Reporthttps://www.itcenex.com/en/

Published October 2023

ENEX REPORT 2023 Contents
History ......................................................................................................... 2
Our Mission . ............................................................................................... 4

The Best Partner
for Life and Society

Message from the President ................................................................. 6

Value Creation at the ITOCHU ENEX GroupStrengths of the ITOCHU ENEX Group ............................................. 12
Value Creation Process ......................................................................... 14–with Energy, with the Car, with the Home–

Strategic Direction: Sustainable Expansion of Foundations . .. 16
Boosting Capital by Deepening Relationships With Stakeholders .... 18

For over half a century, the ITOCHU ENEX Group has continuously
supplied energy products, centering around petroleum and LP gas, to ourFinancial & Non-financial Highlights ............................................... 20

Looking Back on Past Medium-term Management Plans

New Medium-Term Business Plan “ENEX2030” ............................ 24

customers across Japan. No matter how society and people’s lives maychange, we aim to continue to be the company of choice for our customers
in the community as a constant, indispensable partner.

Message from the CFO .......................................................................... 28

Our Strategy for Creating Value

Strategy by Business ............................................................................. 32
Home-Life Division . ........................................................................... 36

Car-Life Division .................................................................................. 38

Industrial Business Division ............................................................ 40
Power & Utility Division .................................................................... 42

Efforts to Support Sustainable Growth

Sustainability at the ITOCHU ENEX Group .....................................44

Human Resource Utilization ............................................................... 50
Employee Round-table Discussion:“Expand and Connect With On-site Capabilities” . ...................... 54

System for Supporting Sustainable GrowthManagement Team ................................................................................ 58

Initiatives for outside officers . ........................................................... 60

Corporate Governance ......................................................................... 62

Risk Management and Internal Control .......................................... 67

Compliance .............................................................................................. 68

IR Activities ............................................................................................... 69

Financial Data & Company Information

Financial Summary for 11 Years ........................................................ 70
Company Information .......................................................................... 72
About the cover design

The photos above the center show the Group'sbusinesses, facilities, and employees working there, andthe photos below the center show scenes from people's
daily lives. The cover shows that the energy services
provided by the Group are connected to aspects ofpeople's lives.

Editorial Policy“ENEX REPORT 2023” is an integrated report covering financial and non-financial
information, including sustainability activities, prepared with reference tovarious guidelines. Its purpose is to communicate the Group’s business activities
and strategies implemented in pursuit of sustained growth.

Note on Forward-Looking Statements

Forward-looking statements in this report, including outlooks for futureGroup business performance, are made by our management team based on
the information available at the time of publication. Actual results may differ
considerably from projections for various reasons, including fluctuatingexchange rates, market trends, and economic conditions.
PeriodOrganizations
Publication Date

Covered April 2022 – March 2023. Note: Includes certain
activities that fall outside this period.

Covered ITOCHU ENEX CO., LTD. and ITOCHU ENEX Group
companies
October 2023

Origin of the company name

The meaning behind the logo

founding, the company name was changed from Itochu Fuelthe letter “e” to connect the blue earth and bright red sun. The

In July 2001, on the occasion of the 40th anniversary of its
Corporation to ITOCHU ENEX CO., LTD.

The “E” in ENEX stands for energy, end consumers, andecology, while “NEX” stands for “NEXT,” as in the next
generation, or the future.

The corporate mark, newly established in October 2005, overlaps
theme is reverence for nature and the commitment to cherishing

limited resources. While the “e” logo represents “energy” and “ecology,” italso embodies our commitment to valuing customers (end-consumers), andsymbolizes communication that connects people to each other and to society.

1Our History

ITOCHU ENEX Group Continues toTransform Together With Society

Electric power

In the more than 60 years since its inception, the ITOCHU ENEX Group has overcome all kinds

Mobilityof difficulties by anticipating the needs of social structures and customers, and using these

insights for the flexible transformation of its business portfolio and continuous expansion of

8%

its business foundations.

We will overcome the unprecedented changes in the business environment that we are
currently facing by providing a variety of energy services for people's lives and30%

industry, while maintaining and expanding our businessfoundations and taking on new challenges.

FY201429%

5.5billion¥

FY2011

Changes in businessﬁelds and net proﬁt¥

FY2002

1.2billion

20%

Gas

3.9billion

¥

71%

7%
FY202213.8billion

¥

65%

54%

Petroleum

16%

1961～

2001～

2004～

2014～

2022～

Developing sales channels andexpanding products

From a fuel trading firm to anenergy trading firm

The second inception: Becoming
an integrated energy company

The challenge of further growth
and transformation starts

Accelerating the evolution of
the business portfolio

In 1961, our previous incarnation, Itochu Fuel
Corporation, was established. In order todirectly sell petroleum products nationwide,
we worked hard to develop new sales channels
and establish new service stations, andexpanded into LP gas and auto gas businesses.
Although our business was badly hit by thetwo oil crises during the 1970s, we continued
to trade honestly and fairly, earning strong
trust from our customers. At the same time, wetook action to expand sales and entered new
territories such as asphalt and high-pressure
gas sales.

Around 2001, the petroleum industry
was undergoing rapid changes, as seen
in intensified sales competition due toderegulation and the restructuring of primary
distributors. Against this backdrop, thecompany, with 40 years of business experience,changed its name to ITOCHU ENEX Co., Ltd.
and established a new corporate philosophy.
We have taken the leap from a fuel trader to anenergy trader with the idea that even if the formand delivery methods of energy change, we willcontinue to aim to create a prosperous society
centered on energy. We pursued selection andconcentration of businesses and reinforced ourclean energy initiatives.

The petroleum and LP gas industries were
facing a difficult business environment, marked
by soaring energy prices and intensifiedcompetition from electric power and city gas.
The Company laid out a basic policy of evolving
into an integrated energy company withenergy, automotive, and home solutions as
its core. In addition to strengthening our sales
infrastructure in the Kyushu area, we took steps
to further expand our revenue base, including
developing systems for the promotionof trading, solar, and EV businesses, andreinforcing our diesel fleet sales to transportbusinesses. We entered the electric power
retail business in 2010 and the heating supply
business in 2012.

In 2014, we issued a new Medium-term
Business Plan with the slogan “Moving!”, whose
message was to “move now for the future.”
The plan was executed over seven years
while changing its sub-focuses. We explored
new markets and radically overhauled our
traditional approaches in operations to adapt
to rapid changes in the external environment.
We expanded our business portfolio by entering
the car dealership business in 2014 and thehousehold electric power retail businessin 2016, and also made forays overseas byleveraging the knowledge gained through ourexisting domestic businesses.

In order to respond to the dizzying changes
in the environment surrounding our Group,
we implemented the medium-term businessplan called “SHIFT! 2022,” maintained andexpanded existing businesses, and expanded
environmental products such as selfconsumption solar power and renewablediesel, resulting in an increase in profits foreight consecutive terms. We have formulated
an eight-year medium-term business plancalled “ENEX2030,” to start in FY2023.
We are accelerating new initiatives. For
example, in July 2023, we held a launching
ceremony for Japan's first LNG (liquefied
natural gas) bunkering vessel, and are steadily
moving forward with efforts to commence
supply in 2024.

[Strengths we have built up]
Diverse products
and businessmodelsSales capabilities
rooted in thecommunity
Diverse customer
base in thecommunity
Relationships witha wide range ofbusiness partners

A refueling station in Fukuoka during
the Itochu Fuel Corporation era

Advertisement created withthe company name change

Changes in the social landscape●●Around 1960
A period of rapid economic growth after
the war called the “Iwato Boom”

1970s
Crude oil prices soar due to two oil crises

2 ENEX REPORT 2023●●

Intensified sales competition andrestructuring of primary distributors due
to deregulation
Global warming

Office building in Harumi where the headquartersof Tokyo Toshi Service CO., LTD. is located●

Soaring energy prices and intensifiedcompetition from electric power and city
gas

OSAKA CAR LIFE GROUP CO., LTD. engaged in
car dealership business●

Declining birthrate and aging population,
consumer awareness, and increased
interest in energy conservation andefficiency

Japan's first LNG bunkering vessel scheduled
to begin supply in 2024●●

For details, see P.12-13

Rapid changes in the composition andstructure of global energy

Increased opportunities to move toward
a decarbonized society3Mission

Stable supply of energy

Expand and Connect

Our group considers the stable supply of energy, which isessential to people's lives, to be a critical mission. In LP gas
sales, we are working to strengthen infrastructure functions
to ensure safe and secure delivery of energy without
interruption through security operations such as checking
supply facilities and equipment. We also offer products
and services that are rooted in the local community, suchas operational support for CS*1 that deliver kerosene to thehomes of elderly people in depopulated areas.

Our Business Model as an Energy Trading Company
The ENEX Group has built up a strong customer base by striving to provide a stablesupply of energy throughout the country. In addition, by diversifying our products inline with changes in social structure and needs, we have succeeded in expanding anddeepening our customer base. As the energy industry undergoes major changes to thebusiness climate, we aim to expand profits by flexibly changing and solving social issues.
Petroleum

Gas

Electric power

ExpandingConne
ITOCHU ENEX Group’s Disaster
Response Network present
throughout the country

Expanding Our…Sales branches…LP gas core ﬁlling stations…CS with emergency generators

1,610
CSs

Disaster response

4 ENEX REPORT 2023

Our Group is diversifying the products and services we
handle while staying ahead of changes in society andcustomer needs. We are making efforts to flexibly respondto changes in the business environment around ourcompany by offering renewable diesel*2 and GTL fuel*3,
which are alternative fuels to diesel oil, selling AdBlue®*4,
which renders nitrogen oxides (NOx) harmless, andstudying the practical application of marine ammonia fuel.

*1 CS: Car-Life Stations. Multi-service refueling stations operated by our Group.
*2 Renewable diesel: A next-generation biofuel with the potential to greatly contribute to reducing greenhouse gas emissions as an alternative fuel to conventional diesel,
mainly for trucks and buses.
*3 GTL fuel: A low environmental impact alternative to diesel refined from natural gas that can be used for vehicles such as construction machinery and heavy machinerythat do not run on public roads.
*4 AdBlue®: High-grade urea solution. AdBlue® is an environmental product that detoxifies nitrogen oxides (NOx) when sprayed on the exhaust gas emitted by the diesel
engines of trucks and buses.
🄬Registered  trademark  of  Verband  der  Automobilindustrie  e.V.(VDA)

Our Products
For details, see here
https://www.itcenex.com/en/csr/social/disaster-prevention/

cting

Hazardous
materials
engineers

Customer Base

Approx.

Number ofaﬃliated CSs
operating nationwide

Kizuna Net Center (Miyagi Prefecture) is designed
to be an energy supply base in the event of adisasterDiversification of productsHouseholds
receivingLP gas/city gas

In order to ensure the stable supply of energy, we arepromoting the creation of bases that can contribute todisaster prevention for local governments and the people
in local communities.
We are building a system that connects disaster-stricken
areas with the rest of the country based on sales branches
across the country, one that enables the entire company

1.5

millionhouseholds

Retailelectric powersales volume

2,700

2,262,000
MWhResident baseservicestations

136 locations
to support disaster-stricken areas. In addition, we havedeveloped a network to provide a stable supply of energy
in the event of a disaster, including LP gas core filling
stations and disaster response stations, as well as humanresources who can join forces as members of the Groupand swiftly respond to everything from disaster prevention
to recovery.

Emergency
community
tanks

8 districts

LPG
installationengineers

Approx.

1,500

Disaster
response
networkDisasterprevention
specialists

Approx.

250(humanresources &facilities)

LP gas corefilling stations

Disasterprevention
agreements

Sales branches
across thecountry

7 municipalities

13 locations

11 branches

5Message from the President

Through creativity andour ability to take action,
we will enhance our “comprehensive strength”
and create mechanisms for new business.
Representative Director, President and Chief Executive Officer

Tomofumi Yoshida

Empowerment
One of the things I felt while working at ITOCHU ENEX from

foster the comprehensive strength that will allow them toprevail as a team.

In order to achieve this, one management concept I

2022 is that even though ITOCHU ENEX is a subsidiary ofpractice is the “delegation of authority,” or put differently,

in the origins of ITOCHU and the mindset of the ITOCHU

power or authority,” but also to “enhance abilities.” When

ITOCHU Corporation, the way employees work is rooted
Group in the past. There are various criteria for evaluating
a company, but one of the criteria for determining

whether a company is good or not is whether it competes
with its “comprehensive strength” and how it uses thatcomprehensive strength.

One good thing about ENEX is that our employees deliver

energy safely and stably at worksites all over the country
on a daily basis, and as a comprehensive strength, that

contributes to how well the company as a whole is regarded.
In order to enhance this comprehensive strength, I believethat it is crucial that we develop the abilities of individuals,
encourage those individuals to get to know each other,cooperate together, and be grateful of one another. This will

6 ENEX REPORT 2023

“empowerment.” To “empower” means not only to “giveI run a business company, mentor subordinates, or try to

double our profits, I always put this “empowerment” at thecenter. Once a risk management system is established, Idecide the scope of the delegation of authority and grant

it. Employees then think and decide for themselves within
the given scope. As a result, the people to whom theauthority has been delegated will enjoy their work, growon their own, get to own the results of their efforts. Even if

they make mistakes, they will learn many things from thosemistakes, and want to try again. Creativity and the ability totake action are paramount. We will create mechanisms for
new business by adding new functions to our businesses,
without being constrained by fixed notions.

7

Message from the President

Strengthening on-site capabilities

have remained high, and this has spurred moves totake steady steps to explore and cultivate the seeds of new

Established in 1961 as a result of the splitting up of thetrend toward a decarbonized society. In Japan as well,growing new businesses and making them profitable. By

former Itochu Sekiyu K.K., we have focused on the last mileof the supply chain and have endeavored to expand sales

channels for petroleum products such as gasoline and LP
gas. During that time, we have consistently pursued our
mission to deliver energy safely and stably as “The Best
Partner for Life and Society,” which is also our current
management philosophy.

Our company has adhered to the “reliability andsincerity” stated in the company motto shortly after its

establishment, and has cultivated relationships of trust withrectify our dependence on fossil fuels and accelerate thethe public and private sectors are working together toaim for the simultaneous realization of decarbonization,
stable energy supply, and economic growth through GX(green transformation). Under these circumstances, withconsiderable effort and a little bit of luck, I can see on the

distant horizon our company growing to about 10 times its
current size, but to do so, all Group employees must join
forces and double our comprehensive strength.

business partners and the community while maintaining

Endless change

faced difficulties due to soaring purchase prices during

I have written down many sages' words in my lifetime, andput the customer first. Through this consistent approach,change.” It has the meaning of “continuing to change

close community ties. Even when our business partners

the oil crises, we always took a long-term perspective andwe have built relationships that can be described asprosperous coexistence with our business partners andlocal communities, and our networks that provide a stablesupply of energy have become irreplaceable assets.

among them there is the phrase senpen banka, or “endlessaccording to the environment without fixating your mind

on one place.” Going forward, this attitude toward endlesschange is what we will need in the company.

During SHIFT!2022, the medium-term management plan

Through our businesses, I have a strong sense thatthat ran through fiscal 2022, the efforts of each and every

thoroughly spread through the ranks of our employees.

and quantitative targets were achieved. Unfortunately,

our mission to “continue to deliver energy to society” hasOn many occasions I have seen them take action on

their own initiative and judgement, without being issued
instructions, which I call “on-site capabilities.” The on-site capabilities of our employees, who enabled us to gain
the assets that we have, are our strength. Since then, themarket has faced repeated environmental changes, such as
fierce and constant sales competition due to deregulation,member of the Group had paid off, and almost all qualitative
the strategic new investments did not go as planned. Oneof the reasons for this is that we lacked the ability to carryout investments. Improvement in this area is now one ofour major issues. In the newly formulated medium-term

management plan, ENEX2030, we adopted the slogan “To

Create Driving Force of Life.” This “driving force” embodies
my strong hopes for the company. Energy is the powerbusinesses. Differentiation is the most important thing for

exploring services that only ENEX can provide and initiatives
that are closely connected with the community, making

investments, and building on successful experiences, thepower of our company will gradually grow. In addition to

the substantial operating cash flow that will be generated
by fiscal 2030, we will apply financial leverage throughoptimal fund procurement, set a new and strategic

investment budget of 210 billion yen in addition to capitaland maintenance investments, and accelerate investments
during the second half of the plan.

In this plan, we have not specifically indicated what

areas we will focus on, neither externally nor internally. In
this business environment where the future is uncertain,even if we were to formulate a medium-term action plan,
it is difficult to imagine that things would proceed asplanned. For this reason, we plan to make investments
in a meticulous and bold manner according to thecircumstances at the time, without deciding on the targets,fields, or durations of investments ahead of time. Flexibly

adapting to future changes in customer needs, repeatedly
undergoing “endless change” ourselves is how the Group
has always created business, and will continue to do sogoing forward. We believe that the employees who interact
with customers should play a leading role. As such, themedium-term management plan incorporates the idea thatthe on-site capabilities of such employees will become ourdriving force.

source that drives machines, and it also has the power

Slow and steady wins the race

provide the driving force that energizes people’s lives.

There is a saying, “Slow and steady wins the race.” We must

portfolio by taking on various challenges such as enteringof eight years, running until fiscal 2030, and we have set a

and that is why we have positioned the first step, ENEX2030

and car dealership business, and overcoming rough seas

On that basis, we have divided the roadmap into two-year

growing global interest in environmental conservation,and intensifying competition that transcends the barriers
between energy sources due to liberalization. However,each time, we have been ahead of the curve, diversifying our
the clean energy business, retail electricity business,
together with society and our customers.

However, an even more turbulent market environment

awaits us in the future. Against the backdrop of the

protracted situation in Ukraine, global energy prices

8 ENEX REPORT 2023

to motivate our customers in their daily lives. We want to
ENEX2030 was designed with the long-term time frame

net income target of 20 billion yen or more in fiscal 2030.
stages. For example, we will build up stable earnings bystrengthening existing businesses through such means as

expanding our trading area and growing the customer baseof the electric power business. At the same time, we willachieve transformation in a rapidly changing environment,'23-'24, as a stage in which we carefully solidify our footing
and aim to secure revenue sources. While continuing tostrengthen our on-site capabilities, we will put in place aninvestment advancement system aimed at creating new
businesses, as well as strengthen our organization andhuman resources to facilitate evolution. When I see our9Message from the President

employees working with vigor and enthusiasm, I get ain unprecedented ways. We want our employees to create

136 disaster response stations, and a disaster response

employees will work together to hone their minds, skills andhappiness of not only our business partners and society,without being bound by the framework of energy, anda result, we have a system in place that can respond rapidly

is our Group's mission to overcome the current difficulties

strong sense of the company's tradition of pursuing the
but also our employees. The company's mission is tocontribute to society, and in order to do so, it is mostimportant that our employees enjoy their work and derivehappiness from it. As a consequence, we aim to run thecompany in a way that pleases our shareholders andbusiness partners.

We will enhance the on-site capabilities of ouremployees, the greatest asset of the Group, and enhance
the comprehensive strength of the entire group, but as I
suggested at the beginning of this message, that comes
down to the abilities of individuals and how well thoseindividuals function as a team. That, I believe, is what leads
to comprehensive strength.

How to improve individual abilities? We can broadly

think of learning as being divided into two types. First,

there is “book learning,” where one learns in the classroom
or from textbooks. Next, there is “street learning.” Thisconsists of OJT (On-the-Job Training), where employees

their own businesses that are preferred by customers,
to that end, we will set up mechanisms for utilizing
investments.

In the future, as part of the creation of a system

to actively invest in the Group, we will support ouremployees in acquiring the necessary know-how forbusiness investments. In this way, we plan to increase
the number of employees who can proactively searchfor seeds of investment, in addition to the trading wehave conventionally been engaged in. The Investment

Strategy Development was established in April 2023. Asa group of investment professionals, this organization

will analyze, formulate, execute, and review projects, andwill be responsible for large-scale domestic and overseas
investment projects. In the fields in which we haveknowledge, we intend to carefully select projects basedat our company alone but also at the entire Group, we

becoming professionals. This leads to group strength, or

put differently, teamwork. The first step in teamwork is for

The ENEX2030 medium-term management plan clearly

even a small amount of synergy is created and even a small

In recent years, SDGs and ESG have become a global trend,

employees to express gratitude to each other.

In this sense, communication is an important factor

in improving on-site capabilities. We will break down

the barriers separating the four business divisions andintroduce systems whereby they can teach each otheruseful information and techniques, earn together, and beevaluated together. I am convinced that if each and every
employee pays close attention to the lifestyles of ourcustomers, we will be able to contribute to solving problems

10 ENEX REPORT 2023

continue to contribute to our customers.

The world around us will continue to change rapidly

into effect, confirming the safety of our customers. The

and not wait for us. Therefore, I pledge to all of you that I

struck. Rather than simply contributing to society in theopportunities in the market, that I will do everything in mycheck was complete just three hours after the earthquake
conventional sense, I think that in terms of deepening trustwith local communities, initiatives like these are essential

for simultaneously creating social and economic value overwill do what I can as soon as possible, that I will not misspower to make the most of my intuition for winning, andthat I will use my body, mind, and luck to their fullest.

To employees, I hope we can enjoy working together

the long term.

going forward.

services to society no matter the circumstances, all Groupyou to look forward to our future growth.

In order to fulfill our mission of delivering energy andTo our stakeholders, including our shareholders, I wantconsolidated management.

do or how they earn money. Next, employees cooperateamount of profit is earned, ideally the third step is for theeven before the BCP (Business Continuity Plan) was put

together to further strengthen our on-site capabilities andare committed to improving the efficiency of GroupIn conclusion

with each other because by doing so, synergy is created. If

the epicenter voluntarily made rounds to business partners

been with us for 60 years. To that end, our Group will work

human resources and facilitating cooperation not only

individuals to get to know each other. It is important for

employees to be able to talk about what kind of work they

Tohoku region in March 2022, employees in areas close to

together with the customers who, over generations, have

We have 31 main Group companies, and in order toacting within the scope of the authority they have been

individual employees study and gain experience, graduallyseismic intensity of upper 6 on the scale occurred in theinvestment risks.

enhance our comprehensive strength by bolstering

delegated. From this book learning and street learning,in times of disaster. When an earthquake with a maximum

bodies and push forward with their work. I believe that iton investment criteria while keeping an eye on diversifying

learn from senior staff and customers as they work, orlearn the job themselves by thinking for themselves andnetwork that connects various business infrastructures. As

lays out non-financial targets along with financial targets.

and the demands on companies are increasing. As we are in
an industry that has a particular responsibility to deal withthe problem of global warming head on, we must take steps
without fail. Promoting the active participation of womenis also an important issue for our company, but rather thanresponding to external demands in a perfunctory manneror blindly riding the tide, we will proceed with substantive

initiatives based on judgments as to whether they will leadto an increase in corporate value.

For example, we have 11 sales branches nationwide,11

Value Creation at the ITOCHU ENEX GroupStrengths of
the ITOCHU ENEX Group
Since its establishment, the Group has consistently pursued its mission of providing a stable supply ofenergy, synergistically maintaining and expanding our customer base and diversifying the products weoffer. In doing so, we have built up unique strengths that lead to the enhancement of sustained corporate value.
We aim to further bolster our strengths as we continue to operate our businesses based on ourmanagement philosophy of being “The Best Partner for Life and Society.”

Sales capabilities rooted

Diverse products andin the community

business models

Our position as an energy trading company allows us
to curb investments in manufacturing facilities, andalso means we are not tied to our own products. Basedon our mission of “delivering energy,” we are able toflexibly provide a variety of energy products to meetneeds on a one-stop basis. For example, in the electric
power business, in addition to electricity generated
at power plants owned by the Group, we also haveprocurement channels from major electric powercompanies. Furthermore, by creating alternative energy
sources and various new businesses, our businessmodel allows us to sustainably increase our corporate
value even in a rapidly changing business environment.

The Group operates businesses that are rooted in thelocal community. Each community has social issues

that are different from metropolitan areas. The Grouphas created new businesses and solidified our customer
base through sales activities that are closely connectedto the local community and that respond carefully tothe needs identified in the field. Against the backdropof changes in the social structure, such as the declining
birthrate and aging population, we view increasingly
diverse social issues as new business opportunities
and are working to further strengthen our on-site
capabilities.

Virtuous cycle of strengths

4Expanding Our Products

1

Diverse products
and businessmodelsSales capabilities
rooted inthe community

Relationships witha wide range ofbusiness partners

Diverse customer
base in thecommunity

32Connecting
Expanding Our Customer Base

Relationships with a wide
range of business partners

1
2
3
4

Strengthening sales
capabilities rooted
in the community

Expanding our diverse
customer baseby community
Building relationships
with a wide variety ofbusiness partners
Diversifying various
products andbusiness models

Relationships of trust with thelocal community will further
strengthen our sales capabilities.

Diverse customer basein the community

In addition to the wide range of sales channels we

Our Group has built a sales network with 1,610 Car-energy trading company to collaborate with a variety

to approximately 3,000 business locations nationwide

have built, we are leveraging our flexibility as anof business partners, including major companies in avariety of industries and local governments. We arebuilding win-win relationships in everything frompetroleum and LP gas to clean energy and a variety ofservices that support daily life, enabling us to provide
products and services that meet the needs of each
community.

Life Stations nationwide, and delivers corporate energy
and gas to 1.5 million homes. This customer base is

an important foundation that provides the Group withstable earnings and allows us to discover new business
opportunities. In addition to thorough and sincere

customer service, we strive to deepen relationshipsof trust by providing a variety of products in each

community and by collaborating with partners, and areworking to further expand and deepen our customer
base.

12 ENEX REPORT 2023

13

Value Creation at the ITOCHU ENEX Group

Value Creation Process
As a “The Best Partner for Life and Society,” the Group continues to contribute to solvingsocial issues by quickly grasping the needs of each region through feedback from the field.
By continuing to strive to resolve issues, we will expand our customer base, increase
profits, and leverage these for the sustainable enhancement of corporate value.

Corporate

The Best Partner for

Input
Prioritysustainability issues–with Energy, with the Car,

Philosophy

Life and Society
with the Home–

OutputService area●

Environment●

Water and wastewater
management

For details, see P.44-53

Waste treatment

Response to climatechangeBiodiversity conservation●

Petroleum

Exploration anddevelopment of
products

Response to climate change●

Customers (consumers)●(Materialities)●

Outcome

Gas

●

●

●

Strengthening
and expansionof the customer
base

Electric power

Mobility

Strategies by businessFor details, see P.32-43

For details, see P.44 & P.47-49

Access to energy●●●

Energy security

Declining birthrate and aging
population

Decrease in convenience of living
due to depopulation●●

Decrease in the working
population

Protection of human rights

Exploring
needs

Diverse products
and businessmodelsSales capabilities
rooted inthe community●

Relationships witha wide range ofbusiness partners

Diverse customer
base in thecommunity●

Home-Life Division●

For details, see P.36-37●●

Car-Life Division

Human resource
utilization●

For details, see P.38-39

Stablesupply●GovernanceFor details, see P.45 & P.50-53

Corporate governance●Improving capital efficiency●

Aggressive management

14 ENEX REPORT 2023

For details, see P.40-41

Commitment as a partner able tocontribute to local governments andcommunities

Strengthening trust and partnerships
as a business partner
Synergy through the Group’s
networks and expertise

Offering products and services thatmeet partners’ needs and sharing
information

Creating opportunities for business
partners to provide feedback
Status and direction of businessactivities by the Group

Building trust as business partners
and lasting partnerships
Pursuit of mutual profit throughbusiness

Cooperation to foster innovation

Promoting eco-friendly procurement
practices●●

Contributing to the development ofprosperous communities; creating
new communities
Initiatives to conserve theenvironment and biodiversity

Initiatives to foster the next
generation; support for people withdisabilities
Supporting employees’ activities tocontribute to society as citizens

Environment

Establishing transparent andeffective governance●

Maintaining
and expanding
foundations

Environment enabling selection of
products and services that serve
needs

Local communities●

Industrial Business Division

Supply of reliable, safe products andservices

Suppliers●

For details, see P.4-5 & P.44

Disaster prevention abilities(readiness) and maintenance ofinfrastructure in disasters

Business partners●●

SocialStable supply system for energy andrelated services●

Power & Utility Division
For details, see P.45 & P.58-66

For details, see P.42-43●●

Initiatives contributing to therealization of a decarbonized society
Reduction of our own environmental
impact as a ENEX Group

Protection of the global environment;
environmental management

15

Next-generationenergyValue Creation at the ITOCHU ENEX Group
Ammonia

Strategic Direction:Newbusinesses

Sustainable Expansion of Our Foundations

HydrogenThe ITOCHU ENEX Group has developed its enterprises centered on essential businesses

Allianceswith othercompanies

such as petroleum and LP gas, which are important as social and life infrastructures.
We have created a virtuous cycle of accumulated strengths, while adapting
to changes to the times and the external environment to flexibly andUnder our newly formulated Medium-term Business Plan,“ENEX2030,” we will provide a variety of energy
services and take on the challenge ofMobility

further growth and transformation.

Asphalt

Electric power

Gas

Expansionof OurFoundations

Auto gas

Industrial
EnergyPetroleum

Gas
Petroleum

Petroleum●●

Stable customer base (1,610 affiliated CS locationsdelivering industrial energy to approximately 3,000
business sites)

Connections and sales networks built between sales
outlets and business partners

Gas

●

●

Stable customer base (gas delivered toapproximately 1.5 million households)

A sales network established by Group companies
nationwide

Expansion of
Our Foundations

RenewabledieselTruckbusiness

Transition
to cloud forcore
systems

MobilityCarsharingCardealershipbusiness

Auctionbusiness

Storagebatteries

Smartphone
refueling
Asphalt

Auto gas
LPWA

Industrial
gas

Ship fuelPetroleum

Gas

Industrial
energyCreating new foundations
Connecting foundations digitally

Utilizing the foundations we have independently built in
the petroleum and gas businesses, we have expanded into
peripheral businesses such as related services, and createdsynergies with our new forays into the electric powerbusiness (electric power retail business from 2010) and themobility business (in 2014 with the car dealership business).

Electric power●●

Approximately 324,000 Group electric power sales contracts
19 heating supply districts in the Kanto area

Mobility●●

16 ENEX REPORT 2023

Electric power
Heating
supplybusiness

Unique Foundations

The reason our Group has been able to provide a safe andstable supply of energy for over 60 years is because wehave built a unique foundation that organically combines
networks with customers, infrastructure, and business
partners. Even though the petroleum and gas markets
are shrinking, we are working on M&A and active sales
development in the LP gas business, etc., in order tofurther strengthen and maintain these foundations.

Agrivoltaics
sharing

GTL fuel

Adblue®

Overseasbusinesses

nimbly expand and change our business foundations.

Industrial
gas

GHG
visualization
support108 car dealership outlets
532 car rental outlets

Connecting foundations with electric power
We are making full use of our uniquefoundations to create new businesses, including
environment-related businesses.
In addition, we are utilizing the sales expertise
we have developed in Japan to go forwardwith overseas expansion, quickly detectingchanges in the times and external environment,
and expanding our base in a variety of areas.
In doing so, we are studying how to create
new foundations while continuing to flexiblytransform.

Connecting our foundations
with electric power●●

Expanding new businesses byconnecting petroleum, gas,
mobility, and other businesses
with electric power

Taking advantage of our ability
to access diverse industries, wehave formed alliances with various
companies (e.g., electricity sales
collaboration with Nissan MotorCo., Ltd.)

Connecting our foundations
digitally●●

Connecting existing businesses
digitally to explore efficiency and newservices (e.g., streamlining automaticmeter reading and delivery by utilizing
LPWA*, smartphone refueling thatallows payments for car refueling, etc.
to be made using a smartphone)
Reorganizing the customer base of
our various businesses and providing
services in tune with customer needs* LPWA: An LP gas central monitoring system thatcan remotely monitor the remaining amount ofLP gas and centrally monitor it.

17

Value Creation at the ITOCHU ENEX Group

Boosting Capital by Deepening Relationships

With Stakeholders

The ITOCHU ENEX Group regards constructive communication with stakeholders as the basis forsustainable growth, and strives to deepen relationships with a wide range of stakeholders.
Stakeholders

Customers(consumers)

Business
partners

Suppliers

Local
communities

Shareholders/investors

Employees

Environment

18 ENEX REPORT 2023

Main relevant
capitalImportance of stakeholders

Social capital

As “The Best Partner for Life and Society” laid out in our Corporate
Philosophy, we have made it our mission to not only stably
supply energy, but also promptly and attentively provide ourcustomers with the diverse services they need. We strive to create
an environment where customers can rationally and confidently
choose better products and services.

Social capital

Production capitalIntellectual capitalSocial capital

Production capitalIntellectual capitalSocial capital

Financial capital

Human capitalIntellectual capital

Natural capital

We endeavor to offer better services by working toward two-way
dialogue with our business partners, in addition to appropriately
managing any information related to them and securely
protecting confidential information. We believe that dialogue withour business partners will become increasingly important as theenvironment surrounding our Group changes significantly.
We promise to ensure that our business will always be conductedin a fair manner. This means that we will do business based onfair and free competition; will procure fairly; will strictly observe
rules and regulations on commercial transactions; and will refrainfrom unfair conduct, including price fixing and cartel agreements.
We seek to grow together with our suppliers by maintaining andreinforcing our mutual trust.
Based on our Corporate Philosophy of being “The Best Partner
for Life and Society,” we strive to contribute to society as agood corporate citizen through our business activities. With our
vision to develop the environment, people, and communities
in ways that foster the next generation, we are working todeepen communication and mutual understanding with local
communities and engaging in activities pass on a sustainable
society to the future generations.

We strive to continuously provide and explain the informationnecessary for investment decisions in a timely, fair, accurate, andclear manner and be rated appropriately by our shareholders andinvestors. We value two-way communication and are engaged invarious activities to ensure that requests and opinions are sharedwith the management in order to improve the Group’s operations.
Since its founding in 1961, the ITOCHU ENEX Group has always
considered its people to be its greatest asset. Human resources
are at the center of the Group’s value creation and are thedriving force of sustainable growth and medium- to long-term
enhancement of corporate value. Accordingly, the Group seeks
to provide a pleasant and rewarding work environment for all
employees.
As a company dealing in various forms of energy, we believe
one of our most important challenges is to achieve sustainablegrowth through careful consideration of how to achieve harmony
between a better global environment and our lifestyles. Throughour ongoing business activities, we are conscious of the global
environment, strive for environmental conservation, and actively
engage in environmentally-friendly businesses.

Relationship tocorporate value

Initiatives to deepen relationships (increase capital)
●
●

●

●
●

●
●
●
●

●

●
●
●

●

●
●

●

●

●

●
●

●
●

●
●

●

●
●

●
●

Offering products and services through branches and Group companies nationwide

Maintaining supply via LP gas core filling stations and resident base service stations (disaster
response stations)
Disaster response network to connect disaster-stricken areas and other areas nationwide(offering company-wide support for affected areas)
Solutions tailored to society’s needs, including eco-friendly products and services●●

Initiatives rooted in local communities, such as CS operations in depopulated areas andmeal delivery services for the elderly
Strategic alliances and sustained collaborations with companies in a variety of industries●

Running “ENEX Meetings” for training and exchange with business partners

Holding exchange meetings, informal conferences, and product seminars in each region
Distribution of web communication tools for LP gas/CS business outlets

Holding and participating in exchange meetings, informal conferences, and various eventsin each region
Sales promotion through our own campaigns and events

Regular face-to-face meetings, and discussions to explore new opportunities

●

●

●

Promoting the use of environmentally-friendly products among consumers and business
partners
Holding events for food education, fire education, and hands-on job experiences related toour businesses
Actively participating in and supporting community events; holding cleanups

Activities for fostering the next generation through co-sponsored sports events, assistancefor persons with disabilities (Golf, soccer and basketball teams, etc.)
Running a volunteer activity support system to develop reliable human resources who willcontribute to society

Opportunities to actively communicate with shareholders and investors(General meeting ofshareholders, financial results briefing, individual interviews with institutional investors, etc.)

Business management emphasizing maintenance of a healthy financial structure and capitalefficiency
Enhanced content for investors through appropriate disclosure of information, our website, etc.
Sustainable growth based on our Corporate Philosophy, for example by achieving our
Medium-term Business Plan targets
Promotion of “ENEX EARLY BIRD” working style reforms

Systematic training schemes, overseas on-the-job training programs, and graduate school
admission program for working professionals

●

●

●

●

●

●

Initiatives to improve health literacy, respond to mental health issues, and prevent harassment
Utilization of human resources and improvement of systems and in-house environment
based on the Diversity Statement

Job satisfaction surveys to ascertain employees’ perceptions, satisfaction levels, and theiropinions on programs/systems
Identification of climate change response as an important issue and disclosure of our Action Plan

Providing various environment-related products and services and studying new efforts(alternative fuels, renewable energy, storage batteries, electric vehicles, and heating supply
systems)
Eco-office activities: energy saving and transition to green energy at business offices

Compliance with environmental regulations and environmental management systems (ISO
14001), and promoting activities on environmental protection and biodiversity conservation

●

●

●

Expanding profit
opportunities by
expanding thecustomer baseTapping needs thatwill lead to new
business
Expansion ofcustomer basethrough stable supplyof energy
Creation of new
business models
through alliances

Stable supply ofenergyProviding new
products byprocuring diverse
products
Tapping needs thatwill lead to new
business
Sustainabilityof businesses incommunities

Fostering a sense oftrust through disaster
response
Realization ofmanagement rooted
in a medium- to longterm perspective

Upgradingmanagement throughcommunication

Expanding thecustomer base bystrengthening on-site
capabilities
Creation of new
business models

Ensuring
sustainability by
responding toenvironmental risks
Expansion of clean
energy and electric
power businesses

Corresponding
important issues

●

●

●

●

●

●

●

●

●

●

●

●

Response to
climate change

Access to energy

Response to
climate change

Access to energy

Response to
climate change

Access to energy

Response to
climate change

Access to energy

Corporate
governance

Human resource
utilization
Corporate
governance

Response to
climate change

19Value Creation at the ITOCHU ENEX Group

Financial & Non-financial Highlights
Note: The values in non-ﬁnancial data are non-consolidated basis

Financial
Net proﬁt / ROE (return on equity)

Net proﬁt(100 million yen)

ROE (return on equity)
(%)

200

12

9.7

9.6

100

9.3

9

138

132

122

121

116

9.4

9.2

100

6

50

3

0

2018

2019

2020

2021

2022

Net interest-bearing debt / Net DER

Net interest-bearing debt

(100 million yen)
200
100

Net DER(Times)
0.15

0.13
154

0.10

100
50

59

0.05

0.05

0

0

▲52

▲50

▲0.05

▲0.04

▲100
▲150
▲200

0

▲174

2018

2019

▲0.13

2020

EPS/ PER*

▲179

2021

EPS (left axis)

(Yen)

140

▲0.12

116.9

2022

▲0.10
▲0.15

PER (right axis)(Times)122.5

14

Non-financial

Total assets / ROA (return on assets)
Total assets(100 million yen)
5,000
4,000

3,744

3,000

3.1

4,470

4,083

3,877
3.2

ROA (return on assets)
5

4,330

4

3.1

3.1

3.1

2

1,000

1

0

0

2019

2020

2021

2022

Shareholders’ equity / Equity ratio

Shareholders’ equity(100 million yen)
1,600
1,400
1,200

1,223

1,000

32.7

1,443

1,362

1,283
33.1

800

32.3

35.3

400

0

0

(%)

50

30

10

200

2018

2019

2020

BPS/ PBR*

2021

BPS (left axis)

(Yen)

1,400

1,206.9

1,278.3

2022

0

PBR (right axis)

1,355.4(Times)
1.4

12

1,200

10

1,000

8

800

6

600

40

4

400

0.4

20

2

200

0.2

0

0

120
100
80

102.4

107.8
10.13

8.71

60

0

106.8

2018

8.79

7.90

2019

2020

2021

9.21

2022

* EPS (earnings per share) = Net proﬁt / Number of shares outstanding* PER (price-earnings ratio) = Share price (end of the period) / EPS (earnings per share)

20 ENEX REPORT 2023

1,083.4

1,136.9

1.2
1.0

0.82

2018

0.90
0.74

2019

2020

0.80

2021

0.83

2022

0.8
0.6

0

* BPS (book value per share) = Shareholders’ equity / Number of shares outstanding* PBR (price-book value ratio) = Share price (closing price at the end of the period) /BPS (book value per share)

641

121

644

134

663

529

523

136

Percentage of female
employees

(%)

25.0

661
134

525

20.9

18.8

2018

2019

2020

2021

(Years)
20

17.1

16.1
12.6

17.8

17.1
12.5

22.5

20.0

17.5

17.6

Average length of service (by gender)

15

642

508
20.6

20.2

200

20

600

113

Employees(female)

400

40

33.4

800

528

Equity ratio

1,530

Employees(male)(People)

600

3

2,000

2018

(%)

Number of employees (by gender) /Percentage of female employees

12.0

12.1

2022

Male

15.0

FemaleNumber of female managers /Percentage of female managers
Number of female managers(People)

9

9

8

7

7
6
4
3

3.9

2
1

1

0.5

0

2018

2019

2020

2021

2022

Number of users of childcare
leave system (male)(People)100

Number of users of childcare
leave system (female)

100

100

Returning rate afterchildcare leave

(%)

100

100

6

4

60

10

40

8

0

2018

2019

2020

2021

Number of days used as paid leave /Percentage of paid leave utilization

Number of days usedas paid leave(Days)
25
20

84.0

86.4

83.0

84.2

16.8

17.3

16.6

16.8

15

0

2022

Percentage of paid
leave utilization
(%)

88.9

100

17.8

80
60

10

40

5

20

0

6

5

2018

2019

2020

2021

2022

0

20

4

1
1
2018

2019

100
80

8

10

5

0

Number of users of childcare leave system (by gender) /Returning rate after childcare leave

3

10

4

2

1.5

1.1

1

(%)

3

3

2

15

12.3

5

3.1

5

20

18.2

Percentage of female managers

2020

2021

2022

0

Average overtime hours per month*(Hours)
20

15

15.51
13.50

10

9.58

8.54

8.07

2021

2022

5

0

2018

2019

2020

* As a general rule, overtime work after 8 p.m. is not allowed.

21

Value Creation at the ITOCHU ENEX Group

¥12.2

2019

2020

billion or more

the ENEX Group has steadily grown its profits by formulating medium-

Looking Back on
Past Medium-Term Business Plans
¥12.1

¥20.0

In order to respond flexibly to changes in society and the environment,
term business plans every two years. In order to achieve further growth
going forward, we will create value unique to the Group by responding
nimbly to changes in the business environment.

¥13.8

¥13.2

billionbillionbillionbillion

Net proﬁts over time

2021

2022

2030

(target)Names ofMedium-TermBusiness Plans

Basic Policies

ENEX2030
Promoting Growth Strategies
1. Maintaining and deepening therevenue base
2. Developing overseas businesses
and peripheral areas
3. Creating new businesses●●

Main measures●●●

Quantitativeplan & results
Net profit

Quantitative plan&
results

ROE
Substantive
operating cash
flows*
Consolidated
payout ratio
Amount ofinvestments

Unfinished tasks

22 ENEX REPORT 2023

Evolving the Organizational BaseStrengthening collaboration with other industries●

Reorganization of Group companies

Expansion of our environmental business●

Strengthening our renewable energy businessStart of new overseas on-the-job training systemPlan¥11.8 billion
9.0％
or more¥20.0 billion
or more40%
or more−2019

Results

Evaluation

9.6％

○

¥36.5 billion

○

41.2％

○

¥22.3 billion−¥12.1 billion

Maintaining andexpanding thecustomer base

1. Strengthening Groupmanagement
2. Human resource strategies tosupport growth
3. Promoting innovation

○

Plan

¥11.0 billion
9.0％
or more¥20.0 billion
or more40%
or more2020

Results

Evaluation

9.2％

○

¥32.9 billion

○

46.4％

○

(2-year total)

×¥12.2 billion¥43.0 billion ¥41.0 billion(2-year total)○* Substantive operating cash flows: “Operating cash flows” – “fluctuations in working capital”
Note: T he FY2020 plan is a revised plan based on the impact of COVID-19(ROE is excluded from the revised plan, but is listed as a reference value)

Considering the increasingly prominent environmental issues and COVID-19,
which was spreading on a global scale, we realized that we needed to step up agear and further accelerate.

Expanding our trading
area by acquiring LP gas
business operators

Strengthening thecustomer base by gaining
electric power customers

Quantitativeplan & results
Net profit
ROE

Substantive
operating cash
flows
Consolidated
payout ratio

Deepening theenvironment &energy businesses
●

●

Plan

¥30.0 billion
or more40% or more

Investment Plan
& ResultsPlan(two-year total)

Capitalexpenditures¥20.0 billion

New and strategic
investments

Expanding theimplementation of renewablediesel and broadening the
AdBlue® value chain

Start of collaboration with
Smart Solar Corporation,
construction and operationof LNG bunkering vessels
2021

Results

Evaluation

9.4%

○

¥12.5 billion ¥13.2 billion
9.0%
or more¥40.0 billion

Cultivating nextgeneration humanresources¥33.8 billion
41.1％

●

●

Enhancing lateralcollaboration throughcross-functional
approaches

Plan

Results

Evaluation

9.3%

○

○

¥13.0 billion ¥13.8 billion○¥30.0 billion
or more○2021 results¥12.7 billion¥9.5 billion

9.0%
or more40% or more
2022 plan¥9.4 billion¥7.3 billion¥37.3 billion
40.8％

●

●

Cultivating overseas
business personnel
through overseas on-thejob training
2022

ENEX2030 ’23-’24●

Strengthening on-site
capabilities
Developing aframework formaking investments
Strengthening theorganization andhuman resources

○

○

○

Details onnext page

Results
Evaluation(two-year total)¥22.1 billion¥16.8 billion

×○

Although our goals for progress for new investments have not been achieved, theplan has been achieved in terms of profitability and efficiency by strengthening
on-site capabilities. The challenge for the future is to accelerate investment.

23

Value Creation at the ITOCHU ENEX GroupNew Medium-Term Business Plan ENEX2030

Business
portfolio
evolution

In April 2023, the Group announced its new medium-term business plan, ENEX2030, covering the eightyear period from FY2023 to FY2030.

Under ENEX2030, with the slogan “To Create the Driving Force of Life,” we will strengthen our on-site capabilities,
and further expand our customer base and improve profitability in existing businesses. We will also accelerate

Visioninvestment, aiming to make new and strategic investments worth ¥210 billion during this period.

Providing a range of services
for lives and industry

To begin with, in the two years spanning FY2023 and FY2024, we will strengthen our on-site capabilities
and revenue base, thereby building a framework for achieving our growth strategies.

ENEX2030 “To Create Driving Force of Life”¥20 billion
or moreAccelerating investments
Making new and strategic investment of ¥210 billion

Implementing
investment
strategies

Developing
a frameworkfor promoting
investment

Net proﬁt

Accelerating
investments

For the two years aimed at realizing the 2030 vision,
we will cautiously solidify our immediate footing,and secure sources of revenue

Strengthening on-site capabilities
ENEX2030 ’23-’24

・Enhancing our customer base and improving proﬁtability of existing businesses

・Improving Group communication, building comprehensive strength, and strengthening on-site capabilities

ENEX2030 ’25-’26

ENEX2030 ’27-’28

ENEX2030 ’23-’24

Positioning

To pursue the 2030 vision, we will
strengthen our on-site capabilities andrevenue base, thereby building a framework
for achieving our future growth strategies.

1
2
3

Major Initiatives
Strengthening
on-site capabilities

Advancing a framework formaking investments

Strengthening the organizationand human resources

24 ENEX REPORT 2023

ENEX2030 (2030)

ENEX2030 ’23-’24 Management Targets
Financial indicators
Net proﬁt

Substantive operating
cash ﬂows(FY2023/FY2024)

each ﬁscal period

Progressive dividends

ROE¥13.5 billion¥60.0 billion(of which capital expendituresare ¥16 billion)

ENEX2030 ’29-’30¥35.0 billion

8～9%(FY2023/FY2024)

ENEX2030 Management Targets

Returns to shareholders
Dividend policy

Progressive dividends

Strong focus onconsolidated dividend
payout ratio of

40% or moreFinancial indicators
Net proﬁt¥20.0 billion
or moreROE

9.0%
or moreSubstantive operating
cash ﬂows

Non-ﬁnancial indicators
GHG emissions¥45.0 billion

Percentage offemale hires(Compared with FY2018 Scopes 1 and 2)

or moreNew and strategic
business investments

Percentage offemale managers

Rate of childcare leave taken
by male employees¥210.0 billion

50% reduction or more
10%

30%

80%

or more25

Value Creation at the ITOCHU ENEX GroupNew Medium-Term Business Plan ENEX2030 ’23-’24
In pursuit of the 2030 vision, over the two years spanning FY2023 and FY2024,
we will strengthen our on-site capabilities and revenue base,and build a framework for achieving our growth strategies.

1
2
Awarenessof theenvironment

34Marketconditions

5
6

1
●

Concerns about a global economic slowdown

Concerns about rising interest rates and uncertainty in the stock market
both in Japan and overseas●●

Rising costs due to progressive global inflation

Accelerating transformation to a carbon-neutral society

Uncertainty over energy supply and demand and price trends in theinternational market●

Based on our judgement that the business environment surrounding our Company isuncertain, we are focusing on solidifying our immediate footing.
At the same time, we regard change as an opportunity, and are engaged in active
business project discovery and development.

●

capabilities and revenue base, thereby building a

Positioning

Promoting delegation of authority to speed up on-site decision making
Implementing personnel policies to evaluate on-site efforts andperformance

Enhancing our ability to carry out investment projects (project analysis,composition, execution and review)
Establishing an “Investment Strategy Department” as a professionalorganizational unit for executing investments

Strengthening the organization and human resources

3

To pursue the 2030 vision, we will strengthen our on-site

Advancing our revenue model by bringing together the strengths of all
employees and improving comprehensive strength

Advancing a framework for making investments

2

Changes in market conditions and industrial structure that will lead tobusiness opportunities

Strengthening on-site capabilities●

framework for achieving our future growth strategies.

●●

Developing human resources who will be able to realize growth strategies
Implementing personnel, evaluation, and award systems to improve
employee motivation
Streamlining consolidated Group management

Shareholder returns
Dividends (right axis)(Billions of yen)18

The guideline is a consolidated
dividend payout ratio of
40% or more

Net proﬁt

16
14
12

10.41

10

8

6.47

6
4
0

Consolidated
payout ratio

7.47
5.50

40

11.56
42

44

12.17
44

13.83

48

50

13.50
52

(Forecast)

13.50
+α

52

(Forecast)(Yen/share)
80

70
60
50
40
30

32

20

22

24

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

32.4%

31.7%

45.2%

36.3%

34.8%

41.0%

41.0%

41.2%

46.4%

41.1%

40.8%

43.5%

Progressive dividends

This is a policy of keeping dividends
higher than the previous ﬁscal year andnot reducing them, regardless ofbusiness performance
More than theprevious year's
dividends

10

Note: The net proﬁt ﬁgure of ¥6.47 billion for FY2012 is calculated based on IFRS (¥5.58 billion with Japanese standards. The Company began applying IFRS in FY2013).
Note: In FY2020, a commemorative dividend of ¥6 was paid separately (the consolidated dividend payout ratio includes the commemorative dividend).

26 ENEX REPORT 2023

12.06

13.19

20

16

2

7.12

11.03

Progressive dividends with a strong
focus on consolidated dividend
payout ratio of 40% (two years)

2024

0

We have continued to maintain or increase dividends over the past 10 years

27Value Creation at the ITOCHU ENEX Group

Message from the CFO

We will steadilysolidify our footing
toward the goals of
ENEX2030.
Director and Executive Officer
Chief Financial Officer, Chief Information Officer,
and Chief Operating Officer,
Corporate Administration Division I

Yasuhiro Imazawa

Looking Back on the Previous medium-term
management planIn fiscal 2022, the final year of the medium-term
management plan SHIFT! 2022, the industrial business
saw a significant increase in profits. This absorbed thesignificant decrease in profits in the electric power andutility businesses due to shrinking profit margins in theelectricity retail business and a backlash to the one-time
unrealized gains in the previous fiscal year. Net profit
reached a record high for the eighth consecutive term. As
a result, we were able to achieve most of the quantitative
targets set for the two-year period of the plan.
Qualitatively, we have made steady progress based on
our basic policy of “maintaining and expanding bases.” The
number of LP gas customers of the Group increased by
13,000 to 565,000 during the period of the current mediumterm plan due to the acquisition of LP gas companies, etc.,
realizing expansion of the commercial area. In our electric
power business, digital technology was used to increase
the number of customers of the Group by 81,000 to 334,000
during the period of the medium-term management plan. In
the environment and energy field, in addition to expanding
the implementation of renewable diesel, we worked to

28 ENEX REPORT 2023

strengthen our stable supply system by growing the value
chain of AdBlue®, and continued to promote the solar power
generation business.
At the same time, some strategic investments that would
contribute to future growth were not achieved for thesecond consecutive year. The inflow of overseas funds andthe soaring prices of renewable energy-related assets havecontinued against the backdrop of the depreciation of theyen. In light of the cost of capital envisioned by the company,
many businesses were deemed to be overvalued, and as aresult, we were unable to proceed from the previous fiscal
year with strategic investments as planned. Furthermore,
it is true that our investment system was not sufficient, so
we still face the issues of improving our on-site capabilities
and investment systems. Based on these achievements
and reflections on the previous medium-term management
plan, the Group has formulated the new medium-term
management plan: ENEX2030 (FY2023-FY2030).

Background of the new medium-term
management plan ENEX2030
While the Group's revenue exceeds 1 trillion yen, the net
profit is 13.8 billion yen, indicating that the structure of

the Group is such that it is still centered on trade-based
businesses. Our financial position continues to be sound,and despite receiving a very high credit rating from Japan
Credit Rating Agency, Ltd. (long-term issuer rating: AA-,domestic CP rating: J-1+), we are unable to use that rating
to take advantage of financial leverage. As a result, capital
has accumulated, and in recent years, our net DER has been
negative and our PBR has been below 1. We recognize that
effectively utilizing this situation for strategic investment
and shareholder returns as well as raising capital efficiency
are issues for the Group.
To date, we have diversified our business portfolio byinvesting the cash generated stably by our core businesses,
centered on the home-life business and the car-lifebusiness, in areas such as electric power and mobility. In theelectric power business, having a variety of procurement
sources, including procurement from major electric powercompanies in addition to in-house power generation, has
ensured the stability of supply and earnings even thoughmany new business operators have withdrawn due tosoaring energy prices, and is one of our strengths.
On the other hand, many of the Group's businesses
involve fossil fuels, and because it is expected that theseenergy sources will be reduced as part of efforts to solve theclimate change problem, we must create new businesses
through strategic investments. However, since suchinvestments take a certain amount of time to produce
results, we felt that it was necessary to indicate our longterm direction in order to gain the understanding of ourshareholders and investors. Therefore, in the previous
medium-term management plans, the plan period was set
to two years, and the basic policy was to set targets that
could be reliably achieved, but it was decided that ENEX2030
would present an eight-year, medium- to long-term roadmap
extending to FY2030. Backcasting from the medium- to longterm goals, we have divided the plan into steps of two-year
intervals and clarified the scenarios. Each step will continue
to aim to reliably achieve management targets.
Cash flows

Cash ﬂows from
Cash ﬂows from
Cash ﬂows fromoperating activities
investment activities
ﬁnancing activities
Free cash ﬂows
Substantive operating cash ﬂows*(Billions of yen)

50
40
30

28.1

20

40.2 40.1 40.0
36.5

▲10
▲20
▲30
▲40
▲50

▲

1.4

31.6
20.8

▲

0.1

▲

▲

2019

2020

26.2

24.5

Under ENEX2030, we aim to create even more diverse
energy services in areas where we can effectively utilize
the knowledge and assets of our existing businesses. In
particular, as we have the theme of “creating the driving
force of life,” we plan to expand our area from B2B to B2C,
as it puts us closer to our individual customers, utilizing DX.
Through the evolution of such business models, we aim toachieve a net profit of 20 billion yen or more, substantive
operating cash flow of 45 billion yen, and ROE of 9.0% ormore as management targets for fiscal 2030. To achieve this,we plan to invest 210 billion yen or more in new strategic
investments over eight years.
The first two years of ENEX2030 (2023-24) will bepositioned as a stage to solidify the foundations for 2030,
and as such we will promote the “enhancement of on-site
capabilities,” the “evolution of the investment system,”and the “strengthening of the organization and humanresources.” The next two steps (FY2025-26 and FY202728) are positioned as the “implementation of investment
strategy” stage and the “investment acceleration stage,”
but the specific policies are intentionally not specified.
Decarbonization is an irreversible trend, but amid
growing geopolitical risks, it is necessary to carefully
consider the path to reducing demand for fossil fuelsfrom the perspective of energy security. As for alternative
energy sources, numerous variables such as policy,
technology, and geopolitical factors are involved, making
it difficult to foresee which renewable energies will
become mainstream, whether it is hydrogen, ammonia, orother sources. With such an extremely uncertain future,
if we invest too much capital in a specific business, wewill incur a large loss if and when we are forced to correct
the trajectory. Our company does not adhere to fixed
strategies. Instead, it creates businesses flexibly according
to circumstances. Being a downstream energy trading
company that can freely choose what sales channels andCash allocation

▲

3.2

IN

Substantive
operating cash ﬂow
cumulative total of¥280 billion
or more19.1 ▲17.6▲

OUT

New and strategic
investments of¥210 billion
or moreCAPEX(capital & maintenance investments)

▲

37.7

2021

FY2023-FY2030

34.8 37.3

32.9

26.7

10
0

33.8

Quantitative targets and a roadmap

2022 (Fiscal year)

Fundraising¥70 billion

Shareholder returns*Substantive operating cash ﬂows: [Cash ﬂows from operating activities] ‒ [Fluctuation in working capital, etc.]

29

Message from the CFO

Value Creation at the ITOCHU ENEX Group

Next-generation core system
Concept behindconstruction

External
environment

1. Focus on people and data

Sustainability

2. Sturdy framework

3. Flexible peripheral
systems

New businesscreation

ENEX itself

The main objectives are
to improve operationaleﬃciency and employee
productivity, and tostrengthen information
security and risk
management throughdigitalization.

New sales
systemIT

Streamlining
operations

Improving employee
productivity

PrimeMarketmerchandise to sell, this is our optimal strategy and why
we do not detail our policies.

Basic policy of ENEX2030 '23-'24
ENEX2030 '23-'24 is positioned as a two-year period tofirst solidify the foothold for the vision of 2030, so the
management targets are not based on the assumptionthat they will exceed those of the previous mediumterm management plan, and are set at figures that can beachieved with a high degree of certainty. Of course, we aim
to exceed these targets. Over the next two years, we plan
to invest 60 billion yen, including 16 billion yen in CAPEX(capital expenditure), out of the 35 billion yen in substantive
operating cash flow generated each fiscal year.
Looking ahead to the next stage and beyond, as we

Share price/net profit/PBR
Share price (left axis)

(Yen)

1,700

1,100

900

PBR 1.0

1.0 1.0

1,500

1.0
0.7

0.7
7.1

5.6

PBR (right axis)

As of the end of July 2023

1.2

1,900

1,300

Net proﬁt (Billions of yen)

10.4

11.0

11.6

12.1 12.2
0.9

0.8
7.5

13.2

13.8

(Times)13.5
1.0

0.8 0.8

1.0
0.8
0.6

0.7

5.5

0.4

700

0.2

500
300

1.2

0

12 13 14 15 16 17 18 19 20 21 22 23 (Fiscal year)

30 ENEX REPORT 2023

(Planned)

Internal
environment

Group companies

Sales support
systemDiversity

Aim of construction

Streamlining ofexisting business

Management
policyFoundations

Sales support
system

ENEX Bridge
Companywide
database

Human
resources

New sales
systemNew expense settlement system
New accounting system

Environment& energy

Consolidated accounting system

Data security

Strengthening
risk management

Systemchallenges
Agingsystems
IT slums

Delays indigitalizationbuild a foundation for the purpose of improving our onsite capabilities, one thing we are devoting resources to is
the creation of a foundation of a system for investments.
Under the newly established Investment Strategy
Department from fiscal 2023, we aim to develop investment
professionals and have them practice. In addition,
regardless of whether they are in a sales department
or a managing department, we have started training ininvestment courses held in-house by inviting outside
lecturers for highly-motivated employees, and we plan
to train and increase the number of investment specialist
employees to around 10% in fiscal 2023. By strengthening
company-wide investment literacy in this way, we will invest
in large-scale projects at the head office, while delegating
authority for small-scale projects and establishing a systemthat allows these investments to be executed on-site.
However, delegation of authority and risk management
are two sides of the same coin, and we will strengthen ourrisk management system so that we can respond to thediversification of risks associated with the creation of new
businesses.
DX will be an important theme in strengthening of onsite capabilities. In July 2023, as the first phase, the nextgeneration core system used as a common platform by
24 major group companies was successfully migrated
to the cloud. We will also build a sales and customer
management platform for the entire Group going forward,
and in January 2025, we plan to begin operations of thesales support system and robust data system as part ofthe second phase. In the process of shifting our focus to
B2C, this system promotes the efficiency of sales activities,
discovers business opportunities from the consumer's
perspective through data sharing between businesses.
We expect that it will also be useful for the developmentof new services for consumers via the utilization ofdata. In addition to this system, we will enhance thecomprehensive strength of the entire Group by supporting

Group companies through business infrastructures suchas Group finance and risk management functions. At
the same time, we intend to proceed without hesitationin exiting inefficient assets that remain below the costof capital, and to improve the efficiency of our whole
portfolio in conjunction with various measures.
While building a foundation for improving profitability
over the medium term, at the same time we hope to
improve capital efficiency by bolstering shareholder
returns. We have continued to increase our dividends overthe past decade. For the past five years, we have aimed
for a consolidated dividend payout ratio of 40% or more.
During ENEX2030 '23-'24, we remain highly conscious of theconsolidated dividend payout ratio of 40% or more, andhave adopted a new policy of implementing a “progressive
dividend” in which the amount of the dividend will either
maintained or increased, but not be reduced, regardless ofthe performance in individual fiscal years.

Meeting the expectations of stakeholders
We recognize that ESG-related initiatives are just as
important as financial matters in achieving the goals of
ENEX2030. In particular, in our global warming measures,
which will have a major impact on the sustainability of theGroup, we have set a target of reducing Scope 1/Scope 2
GHG emissions by 50% compared to fiscal 2018 levels by2030. Just like our financial targets, we have set targets that
we can achieve. We would like to steadily implement thisthrough the utilization of alternative fuels and renewableenergy. As for Scope 3, we will continue to make slow but
steady efforts through cooperation with our stakeholders,
including those in our supply chain. In addition, the Grouphas expressed its support for the recommendations of the
TCFD (Task Force on Climate-related Financial Disclosures).
We will identify the risks and opportunities that climatechange poses to our business activities, disclose scenario
analyses, and make efforts to strategically address climatechange. Going forward, we will continue to conduct reviews
and promote appropriate disclosures.
Promoting women's empowerment will be an extremely
important theme for the Group as it develops businesses
in the B2C realm. The target of 10% female managers
by fiscal 2030 may seem low at first glance, but it is anachievable figure calculated based on the ratio since
FY2010 when we started full-scale recruitment of new
female graduates. Although we are already aiming for a
50% female employment rate, we have set a target of morethan 30% after accounting for the retention rate. These
are conservative figures that can be achieved with a highdegree of reliability after forecasting the medium-term
demographics within the company, and the policy is tofurther increase them in FY2030 and beyond.
In this chaotic business environment, rather thansurrendering itself to major trends, the Group will
respond flexibly according to the situation, and meet the
expectations of shareholders, investors, business partners,
and society. While doing so, we will make steady progress
toward the goals of ENEX2030. I would like to ask all our
stakeholders for their continued support.

31

Strategy by Business

Our Strategy for Creating Value

HOME-LIFE DIVISION

CAR-LIFE DIVISION

We support secure, comfortable, and rich lifestyles
by delivering LP gas, electric power,
and a variety of smart energy solutions.
●Service Area

●Net Proﬁt

Gas●Business Flow

ElectricPower

LP Gas●Main Products

billonProcurement

and Services

Filling●●¥2.7

We cater to every need related to “car life,”
aiming to build a society
where people can live in comfort with cars.

Procurement from primary
distributors

At ﬁlling stations, ﬁlling
services are provided as
appropriate according to thesales format, such as sales incylinders, bulk sales and sales
in trucks.

●

Procurement from primary
distributors

LP gas sales businessWe sell LP gas to customers all over Japan.
We deliver to 1.5 million households
domestically.

lifestyle-related devices,●●

Wholesale to sales bases
across Japan●

RetailSales to households and forcommercial and industrial use inevery region of Japan by Group
companies and distributors
Supply to LP gas vehicles(taxis and buses) at auto gas
stations

販

Wholesale● Wholesale to sales bases

across Japan●Service Area

smart energy devices, renovations,home lithium-ion power storage systems

Wholesale

Procurement

Lifestylerelated
devices

LP gas, kerosene, city gas, electric power,●●Net Proﬁt

Petroleum Electric Mobility
Power●Business Flow

Energyfor
Automobiles●

Sales to households and forcommercial and industrial use
in every region of Japan byGroup companies anddistributors

billonProcurement●Main Products

and Services●

Wholesale to sales bases across Japan●

Procurement from Nissan Motor Co., Ltd.

electric power, automobiles,

Retail●Sales to general consumers at CS●

Operation of large CS for trucks●

CS operation support

RetailProcurement

Car
Dealerships

Gasoline, kerosene, diesel oil,lifestyle- and car-related products
and services

Wholesale

Procurement from primary distributors

売Retail¥4.5●

Sales to general consumers by NISSANOSAKA SALES CO., LTD.

LP gas primary distribution
business

Lifestyle-related services

Automotive energy sales business

Car dealership business

Truck businessWe have made an investment worth
20% of the shares in Japan Gas Energy
Corporation, an LP gas primary distributor,
and are building a business foundation tocover everything from import procurement
to wholesaling and retailing.

We support comfortable and secure
lifestyles through the sale of various
equipment essential for living (including
household appliances and equipment
related to combustion, kitchens, airconditioning, etc.).

At approximately 1,600 affiliated CS*
locations nationwide, we offer various
kinds of energy (gasoline, kerosene, diesel
oil, automobile lubricating oil, etc.).

Group company NISSAN OSAKA SALES CO.,LTD. is one of the largest Nissan Motoraffiliated dealers in Japan and is the only
Nissan Motor-affiliated dealership in Osaka
Prefecture, selling new and second-handcars and offering service and maintenance.

ENEX FLEET CO., LTD. a Group company,
operates Fleet CS, mainly for trucks andbuses. The company has also entered thetruck body alteration business, expanding
its truck peripheral business.

* An abbreviation of Car-Life Station, these are multiservice refueling stations produced by the Company.

City gas sales businessElectric power retail business

Overseas businesses

Consulting support for CS

Electric power retail business

Overseas businesses

The Group supplies city gas in Kyushu andsome areas in the Kanto region.

Group companies deliver electricity tocustomers nationwide under the Group’s“e-koto Denki” service system.

We operate LP gas sales businesses mainlyin Southeast Asian countries,
where future growth is expected.

We support sales outlets through ourconsulting service with our experience andexpertise in operating CS.

We offer a service called “Nissan car +Nissan Osaka e-denki,” developed jointly
by NISSAN OSAKA SALES CO., LTD. and
ENEX LIFE SERVICE CO., LTD.

Through acquisition of a 25% share of IP&E
Palau, Inc., we entered the petroleum
product import, wholesale, and sales
business in the Pacific region. ENEXFLEET
Vietnam Co., Ltd. operates a car wash andcar care business in Vietnam.

32 ENEX REPORT 2023

33

Our Strategy for Creating Value

Strategy by Business

INDUSTRIAL BUSINESS DIVISION

POWER & UTILITY DIVISION
We operate electric power-related anddistrict heating businesses in pursuit of energy conservation,
comfort, and economic efficiency.

From asphalt and marine fuel to environmental products,
we deliver various forms of energy that support
the foundations of industry and distribution.
●Service Area

●Net Proﬁt

Gas

Petroleum Electric
Power●Business Flow

Industrial
EnergyIndustrial
Materials

billonProcurement

Procurement from primary distributors●

Import of asphalt from overseas●●

Import from overseas

Import of AdBlue® raw materials fromoverseas and manufacture at domestic
partner plants
Procurement from other domestic
companies

Asphalt sales businessWe supply asphalt as an industrial material
to our customers, using our nationwide
sales network and our own supply network.

●Main Products

and Services●●

Storage at Group sites

Rental of storage tanks for petroleum andchemical products

Storage at Group sites

import/export of petroleum products,

Retail●●●●●Asphalt, marine fuel,terminal tank rentals, industrial gas,
AdBlue®, GTL fuel, renewable diesel,and recycling of incinerated ash

Wholesale

●
●

¥5.9

●
●

Supply of marine fuelSupply of industrial gas

Electric power retail solutions andindustrial waste disposal solutions forcorporate users
Sales of asphalt, mainly to road
construction companies
Wholesale of AdBlue®

Recovery of coal ash discharged fromthermal power plants for sale as roadmaterial●Service Area

●Net Proﬁt

Electric Mobility
PowerPower Source Development●

Development with a focus on
renewable energy throughinvestment funds and similar
means

●

●

Establishment of heating
supply plants

Power generation (solar power, hydroelectric power,
coal-ﬁred power, natural gas-ﬁred power), steam,
district heating, comprehensive energy services,
power supply and demand management,
asset management business, car rentals

Production and Procurement

Facility Development

Districtheating
supplyand Services

billon●Business Flow

ElectricPower●Main Products¥1.0

Procurement of power
through alliances with major
electric power companies in
addition to power generationfrom our own power sources

Supply and Demand Management●

Optimization of supply anddemand balance and trading
utilizing market transactions
and derivative transactions

Production●

Production of hot and cold water for air conditioning inheating supply plants

Wholesale and RetailElectric power sales throughalliance partners in diﬀerent
industries● Bundled sales of electric
power to the customer base of
the ENEX Group● Sales of electric power tocorporate customers●

Supply●Supply to multiple buildings ina district

Environmental product sales andservice business

Marine fuel sales business

Power generation businessElectric power retail businessDistrict heating supply service
business

We pioneer and sell next-generationenergy sources, including AdBlue®, which
decomposes and detoxifies exhaust gas fromdiesel vehicles, GTL (Gas to Liquids) derived
from natural gas, renewable diesel made fromwaste cooking oil, liquefied natural gas, etc.

We sell marine fuel and marine lubricatingoils at major ports in Japan and overseas.
We also operate a supply business formarine LNG fuel in cooperation with Kyushu
Electric Power Co., Inc., Nippon Yusen
Kabushiki Kaisha, and Saibu Gas Co., Ltd.

Leveraging our good mix of power
generation facilities (solar, hydro, coalfired, and natural gas-fired), we operate
a power generation business that seeks
to achieve both economic efficiency andenvironmental sustainability.

Together with Group companies ENEX
LIFE SERVICE CO., LTD. and Oji-ITOCHUENEX power retailing Co., Ltd., we operate
electric power sales networks in various
areas to serve diverse customers.

Group company Tokyo Toshi Service CO.,LTD. produces hot and cold water for air
conditioning in its heating supply plants
and supplies the water to buildings via local
pipelines.

Industrial gas sales businessPetroleum product trading businessTerminal business

TERASEL Solar Service Business

Biomass power generation business

Overseas businesses

We sell industrial gases (oxygen, nitrogen,argon, sterilization gases, etc.) used in
all kinds of fields. We also provide a gas
container pressure inspection service andrelated supplies.

As the core of the ITOCHU Group's domestic
petroleum product trading, we engage
in petroleum product imports/exports
and domestic sales (domestic supply anddemand adjustment transactions).

We have two facilities that can store
petroleum and chemical products, withwhich we can respond to customer needs
efficiently and quickly.

This is a flat-rate service enabling customers
to use electric power generated by our solar
power generation system installed on theirpremises for their own consumption. It
reduces CO2 emissions and energy costs.

Together with Oji Green Resources Co., Ltd.,
we operate a biomass power plant that uses
forest resources and agricultural residues asfuel. We will continue to work towards thedevelopment of power sources that contributeto the realization of a low-carbon society.

We established two companies, ITC ENEXSoutheast Asia Co., Ltd. and ITC ENEX
(Thailand) Co., Ltd., in Bangkok, which
operate solar power and renewable energy
businesses.

34 ENEX REPORT 2023

35

Our Strategy for Creating Value

Strategy by Business

HOME-LIFE DIVISION

FY2022 initiatives

We aim to provide added value inthe form of new products andservices by leveraging our nationwide
customer base.
Director and Senior Managing Officer
Chief Operating Officer, Home-Life Division

Kyosuke Wakamatsu

Social issues and needs

In the future, it is expected that the declining
birthrate, aging population and resulting decreasein the number of households will only continue inJapan. As a result, the domestic LP gas market isshrinking, and a major issue is how we can leverage
our customer base and sales network that enable us
to deliver gas throughout the country.
We recognize that there is a demand formechanisms and systems that utilize the disasterresistant strengths of LP gas to provide a stablesupply of energy in the event of emergencies. In
addition to providing energy, we aim to realize asociety where people in the community can live withpeace of mind by offering a variety of lifestyle-related
services.

Strengths●●

A stable customer base spread across the country
and a sales network established by Group
companies
An integrated logistics system from upstream(import terminals) to downstream (ordinary
households nationwide)

Issues●●Providing added value in the form of new products
and services amid shrinking domestic LP gas
marketMeeting the increasing demands of the spread of IT,
digitalization, and DX (digital transformation)

Strategies by product/businessLP gas sales business
Lifestyle-related
services
New businesses

36 ENEX REPORT 2023

In addition to furthering M&A projects and efforts to acquire new customers, we will thoroughly
strengthen our LP gas security operations, develop a customer database, and simultaneously
pursue better sales promotion and operational efficiency to expand our business.
We will promote smart energy devices such as household storage batteries, and facilitate
cooperation and synergies with other divisions. We will consider developing new
subscription options for LP gas customers.
We will consider alliances with a wide variety of companies to strengthen our businessnetwork from the perspective of the living environment, disaster response, security, andcircular economy.

In FY2022, we continued with M&A and proactive sales
activities in the Kanto and Chugoku/Shikoku areas, whichallowed us to steadily increase the number of LP gas direct
sales customers, increasing by about 8,000 households
from the previous fiscal year to about 565,000 households.
In addition, we have been promoting the installation of
LPWA devices. With our acquisition of certification asa Gold Security Certified Operator (First Class LP Gas
Distributor), we have re-examined our business bases, andas a result have expanded our sales areas. Gold Security
Certified Operator certification can be acquired by LPgas distributors that have been certified as working to
implement advanced security systems to ensure consumer
safety, such as introducing a centralized monitoring
system. With the acquisition of this certification, we havealso streamlined our operations. Furthermore, we havebeen promoting the digitalization of our core businesses.
For example, we have established IO (integrated
operation) centers nationwide to expand the CRM(customer relationship management) system, advance theimplementation of SFA (sales force automation) for fieldsales staff, and digitize customer contact points and the
movement of sales staff. In addition, we have been working
on new businesses such as a hot water heater quick assist
service and meal delivery service.

Strategies and priority areas going forward

We will continue to actively bolster our LP gas customer
base, which is an important asset of the Division and oneof the strengths of the Group as a whole. In addition toacquiring new customers, we aim to improve customer
satisfaction by re-examining and analyzing the existingcustomer database. We will also promote further quality
improvement and digitalization of security operations,which are essential to our business operations. In addition,
we want to go forward with the creation of new businesses
in different fields, without being constrained by existing

Net Profit (Billions of yen)
3.0

Plan

2.5

Performance

2.6 2.7

2.7

2.8

2.5 2.5

2021

2022

2023

2024 (Fiscal year)

2.0
1.5
1.0
0.5
0

businesses. With the social environment undergoingdrastic changes, we recognize the need to earnestly workon the transition to a decarbonized society in the future.
As such, we will focus on initiatives that contribute to the
reduction of CO2 emissions, such as the sale of carbon
neutral LP gas, which began in the previous fiscal year. In
addition to making our organization a flexible and strong
one that is not afraid of change or crisis, we will strengthen
our systems so that we can respond quickly and flexibly tofuture industry restructuring and business alliances withother industries.

Expand and Connect

A Group company started a meal delivery service
for the elderly

In April 2023, ITOCHU ENEX HOME-LIFE NISHI-NIHON CO., LTD., a Group

company, started a meal delivery service for the elderly. As the makeup ofJapanese society increasingly comprises the very elderly, this is a service
that provides prepared meals delivered by hand to the elderly in thecommunity, making it possible to confirm their safety and engage in valuablecommunication. This is one of the new initiatives that can take advantage of

our LP gas customer network, and we would like to consider developing newservices rooted in local communities like this in the future.

37

Our Strategy for Creating Value

Strategy by Business

CAR-LIFE DIVISION

FY2022 initiatives

We will transform our portfolio
and aim for a strong organizational
structure that can respond to thedemands of a decarbonized society.
Director and Managing Officer
Chief Operating Officer, Car-Life Division

Tsukasa Motegi

Social issues and needs

With the move toward a decarbonized society, theconsumption of petroleum products is expected tocontinue to decline. The challenge is how to create
centers that can supply not only petroleum products
but also EVs and FCVs (fuel cell vehicles). Meanwhile,the development of “resident base service stations”
with in-house power generators, intended to function
as disaster response centers, is proceeding under
the leadership of the Agency for Natural Resources
and Energy. With the Group’s 136 disaster response
stations equipped with emergency power generators
to maintain refueling functions, we have establisheda system that can contribute to the local community
in the event of an emergency. I believe that it is
our mission to transform Car-Life Stations into
comprehensive energy bases that can respond to thevarious needs of the community, including, but notlimited to, needs in times of disaster.

Strengths●●

Stable customer base and sales network centeredon Car-Life Stations (CS) nationwide
Automotive business network centered on car
dealers and car auctions

Issues●●Responding to a decarbonized society, EVs, andhybrid vehicles
Creation of new peripheral businesses in the
petroleum business and mobility business, anddevelopment of new fields and new areas byleveraging the customer baseStrategies by product/businessPetroleum wholesale
business
Petroleum retailbusiness
Mobility business

38 ENEX REPORT 2023

In addition to growing the customer base of the Division, we will expand the business tomake car accessory sales one of the pillars of earnings.
In the fleet business, we aim to expand the fleet network through new store openings
and business alliances, build mobility-related businesses, and develop services
specialized for specific areas.

We will study business alliances such as M&As to rebuild our car dealership network andexpand our mobility business, and focus on highly profitable trucks and construction vehicles.

In the petroleum product sales business, ENEX FLEET
CO., LTD., Kokura Enterprise Energy Co., Ltd., and Enex
Petroleum Sales Nishi-Nihon Co., Ltd. were merged in
April to form the new ENEX FLEET Co., Ltd. By optimally
allocating the management resources of the threecompanies, we will promote efficiency by expanding
the scale of the businesses, and further accelerate theexpansion of the scope of the mobility-related businesses
we are focusing on. In addition, we launched an online
shop called the “Ene Store,” which sells car accessories.
Aiming to improve productivity by streamlining operations,
we made the transition to online orders and invoices, andotherwise promoted operational efficiency through theuse of IT and digital technology.
In the mobility business, we are investing in storesin the car dealership business and expanding the truck
purchase and sales business centered on ENEX FLEET CO.,LTD. Furthermore, we have fully entered the car auction
business and are expanding the foundations of our truck
value chain.
In addition, we are exploring new businesses using test
stores. In Vietnam, we have continued to grow ENEXFLEET
Vietnam Co., Ltd., which operates a car care business.

Strategies and priority areas going forward

We will continue to expand the petroleum business andmobility business, which are the two pillars of this Division.
In the petroleum business, we will maintain and expand
our customer base while expanding the scale of our car
accessory sales business and developing area-specificservices that leverage that customer base. In addition, we
will consider business alliances to expand the fleet refueling
network and develop services that take advantage of thecharacteristics of each area. In the mobility business, we will
focus on bolstering car auctions as well as car purchases
and sales. The mission of this Division in a decarbonized

Net Profit (Billions of yen)
5.0

Plan

4.5
4.0
3.5

Performance

3.8

4.2

4.2

4.5

4.3

4.7

3.0
2.5
2.0
1.5
1.0
0.5

0

2021

2022

2023

2024 (Fiscal year)

society is to transform into a strong organizational structurethat does not rely solely on fuel sales. In order to expand themobility business domain for that purpose, it is essentialthat we undergo digital transformation (DX). To that end,
we will actively study the creation of new mechanisms.
As we expand our peripheral businesses, opportunities
to engage in M&As are increasing, so we will also promote
the development of human resources with all kinds ofspecialized knowledge.

Expand and Connect

Efforts at Car Enex Yugawara

In December 2021, Car Enex Yugawara, a Car-Life Station, was renovated to test
a new model of service center where customers can use and obtain Rakuten
Points in a variety of ways. This initiative seeks to link customers visiting theoutlet for “real-world” services with the virtual world of various online services
such as enrolling in electric power plans or insurance. Over this trial, we havebeen able to see customer trends through the use of the point economic zone*,and we will continue to hold events that match these trends in order to acquire
new customers, including those of the younger generation.

* Point economic zone: Giving consumers special points that can be used across multiple partner companies and services encourages further consumption of partnercompany services and functions to corral many consumers in the same commercial zone.

39

Our Strategy for Creating Value

Strategy by Business

INDUSTRIAL BUSINESS DIVISION
We will ramp up the construction of various
systems to pursue multiple goals at thesame time, as well as our core business andnew businesses for the next generation.
Executive Officer
Chief Operating Officer, Industrial Business Division

Hirofumi Chimura

Social issues and needs

While there is a demand for reducing environmental
impact, economic rationality is also an important
point for each industry to continue their businesses.
Under these circumstances, as a division that handles
a wide variety of products, we realize that we must
offer products that are suited to each customer's
needs. At the same time, we offer products such asasphalt for which we can expect a certain level ofdemand in the future, and have businesses such as
the tank terminal business that will have the samefunctions of storing and delivering even if the type offuel changes. I believe that the mission of this Division
is to stably supply what customers want and need,with a wide range of options in anticipation of futuredecarbonization needs.

Strategies by product/business
Asphalt sales business
Ship fuel sales businessTerminal business
Environmental products
and new businesses

40 ENEX REPORT 2023

Strengths●●

Comprehensive solutions consisting of diverse
products such as asphalt, industrial gas,
environmental products, automobile fuel cards forcorporate customers, etc.
Solutions and sales know-how in environmentrelated businesses such as AdBlue®, renewablefuels, and GTL fuels

Issues

●●Accumulation of knowledge and expertise on newtechnologies and new products, and the creation offunctions and human resource systems
Partnerships through collaboration andcooperation with other companies when
considering further business development

Asphalt is a cyclical resource that can be reused repeatedly, and since a certain level ofdemand will continue in the future, we will focus on stable supply.

We will propose a wide range of options so that we can supply the optimal fuel according
to the ship size and route, while also considering environmental products.
Even if the fuel changes due to decarbonization, we will continue to perform the role of storing
fuel and delivering it when needed, and will expand our tank capacity according to demand.
Utilizing the knowledge and expertise gained through existing businesses, we will study
potential niche peripheral businesses.

FY2022 initiatives

In FY2022, we advanced our environment-related
business. We are developing a supply system for arenewable diesel gaining attention as an alternative fuelto diesel oil, and working on various implementation
projects, such as the first use of it in Japan as ship fueland its adoption for passenger buses. In addition, it has
been adopted on a trial basis as a CO2 reduction measurein the construction work and transportation for the Expo
2025 Osaka, Kansai scheduled to be held in 2025, anddemonstration tests for the Expo have begun. We haveincreased our supply bases for AdBlue® to 26 nationwide.
AdBlue® is an environmental product that detoxifies
nitrogen oxides (NOx) when sprayed on the exhaust gas
emitted by diesel engines. Furthermore, leveraging theenergy handling know-how that the Group has garneredso far, we have started full-scale deployment of GHG
emissions “visualization” support services together with
the Bank of Yokohama, Ltd. and Zeroboard Inc. In our
existing businesses, we have bolstered our foundations.
For example, we decided to increase the numberof asphalt tanks, decided to invest in industrial gas
container inspection equipment, and constructed ship
fuel refueling ships.

Strategies and priority areas going forward

With the pursuit of multiple goals as at the same time
as a guiding principle for our division, our policy is toexpand both core businesses as well as new businesses
that will be relevant for the next generation. Currently,
there is still room for growth in core businesses suchas asphalt, ship fuel, AdBlue®, terminal operations,industrial gas, and corporate refueling cards, which oursales departments are working on. Meanwhile, amid thetrend toward decarbonization, new needs are emerging,and I think this is an opportunity to address them. I think
there are opportunities right next to the perimeter of

Net Profit (Billions of yen)
6.0

Plan

Performance

5.9

5.5
5.0
4.5
4.0
3.5
3.0
2.5

3.3
2.6

2.8

3.1

3.6

2.0
1.5
1.0
0.5

0

2021

2022

2023

2024 (Fiscal year)

existing businesses. The key is to expand our businessareas beyond existing boundaries by focusing on ourcore businesses and carbon-neutral fields, including
next-generation fuels. To that end, I believe that a senseof organizational unity is important. We will strengthen
cooperation not only for each product, but also for eachregion and each field. To develop structures to meetour 2030 goals, we will strengthen our ability to collectand analyze information, improve efficiency throughdigitalization, and secure and train human resources.

Expand and Connect

The Group forms a capital and business alliance agreement with
OpenStreet Co., Ltd.

In April 2023, we concluded a capital and business alliance agreement with OpenStreet
Co., Ltd. (hereinafter “OpenStreet”). OpenStreet provides a platform for micro-mobility

sharing services, such as a bicycle sharing service that utilizes electric bicycles, in orderto solve urban transportation issues and promote regional revitalization. Throughthis capital and business alliance, we will explore the possibility of cooperation andcollaboration with OpenStreet's micro-mobility sharing service, which is excellent interms of environmental performance, and try to find ways to leverage this partnership for
new businesses that make use of our group's business foundations and customer base.

41

Our Strategy for Creating Value

Strategy by Business

POWER & UTILITY DIVISION
We will provide services that meetthe needs of the times, advocating forboth decarbonization and economic
efficiency.
Executive Officer
Chief Operating Officer, Power & Utility Division

Fumiya Tanaka

Social issues and needs

All kinds of events are occurring in the world,
but recently there has been a sudden increasein opportunities to think about energy and foodstability. It is also true that changes are occurring in
our peaceful lives that have been taken for granted
until now, and we are starting to feel anxious. In
this environment, I believe that the mission of this
Division is to contribute to the stability of people's
lives by promoting renewable energy power
generation that is not affected by changes in theworld’s energy situation, storage batteries that adjust
for the supply and demand of electricity, and demand
response efforts. We will provide services that matchthe times, as the era of consumption is transitioning
to the era of energy conservation and the sharing
economy.

Strengths●●

Integrated system covering everything from power
generation (solar, hydro, coal-fired, and natural gasfired) to supply and demand adjustment and power
sales

Networks and connections with regional businesses
that have strong customer bases

Issues●●Ability to respond flexibly to system changes andchanges in the supply and demand environment,
and efforts to realize a low-carbon society

Providing added value in electric power retail andservices, maintaining market competitiveness, andexpanding overseas electric power-related businesses

Strategies by product/businessElectric power sales
business
Power generation andsupply/demand business
New services

42 ENEX REPORT 2023

We aim to further expand the Group's customer base by promoting digital transformation
while utilizing electric power as a product that bundles our customer bases in petroleum,gas, and mobility.
We will strike a balance between reducing the costs of electric power procurement andsupply and enhancing environmental value while pursuing more sustainable generation
businesses using solar power and storage batteries, all the while boosting our ability toadjust for supply and demand.
We will study the creation of new services, including a service that make saving electricity andreducing electricity costs fun and convenient, and services that combine TERASEL products.

FY2022 initiatives

In FY2022, we strived to maintain and expand the customer
base of each Division that the Group has built up to date.
To this end, we launched three services in what we callthe TERASEL Series: “TERASEL Denki,” which is an electric
power sales service for households, “TERASEL Solar,” which
is a solar power service for businesses, and “TERASEL Car
Share,” an EV car sharing service. In the electric power retailbusiness, the number of Group electric power customers
has increased to approximately 320,000 thanks to efforts
to gain customers using digital technologies, and we willcontinue to expand our customer base.
Driven by the principle of pursuing both decarbonizationand economic efficiency, we have also advanced initiatives
that are environmentally conscious. A new hydroelectric power
plant in Joetsu and a biomass power plant in Tokushima havestarted commercial operations. At a coal-fired power plant in
Hofu, we conducted a demonstration experiment aimed at
reducing CO2 emissions and improving efficiency by co-firing
carbon-neutral woody biomass with coal.
We are also promoting the implementation of solar
power generation services for self-consumption, andhave introduced them in various places such as home
improvement stores and logistics facilities.

Net Profit (Billions of yen)
4.0
3.5

Performance

3.9

3.7

3.5

3.7

3.0

2.7

2.5
2.0
1.5

1.0

1.0
0.5

0

Strategies and priority areas going forward

The stated universal mission of this division has been toachieve both decarbonization and economic efficiency.
A considerable amount of time has passed since people
began to call for a decarbonized society and a reductionin the environmental burden. That said, we cannot adopt
everything that is good for the environment. We must workfor the benefit of the companies and customers who haveadopted our Group’s products and services. We recognizethat it is important to come up with the best solutions that
can achieve a balance of both. Regarding storage batteries
and demand response, we will strengthen our efforts
together with solar power generation.

Plan

2021

2022

2023

2024 (Fiscal year)

Electric power is a relatively new product for the Group,
but it is essential to people’s lives and will not disappear in the
future. The Group aims to provide a stable supply of electric
power while taking advantage of its strengths, including
the ability to use electric power to connect the customer
base that it has cultivated so far, the ability to deliver energy
through an integrated system from power generation andsupply/demand adjustment to sales, and the fact that theGroup as a whole has various products and services. We will
also consider various business alliances and M&As to achieve
the targets of the medium-term management plan.

Expand and Connect

Investment in and conclusion of business allianceagreement with Informetis

In June 2023, the Company decided to invest in and form a businessalliance with Informetis Co., Ltd. (hereinafter “Informetis”). Informetis

uses its cutting-edge and unique AI technology (household applianceseparation and estimation technology*) to analyze the usage status

and identify the models of individual home appliances and electricalPower distribution panel

Wi-Fi

Precision
power
sensors

Accurately measurespower and current

Data sent
to cloud AIAIdeviceseparation
technology

7:45
9:14
Finished CleaningcookingTime
7:04
Finished
washing

8:14
Microwave
x 3 times

See when you haveused your appliances

equipment, forecast demand, etc. It provides services such as advanced power use visualization, optimal control of energy, andmonitoring for ordinary households. We will study the possibility of offering new services and solutions by fusing our Group's
customer base and knowledge of the electric power business with Informetis' unique technologies.

* Household appliance separation and estimation technology: A technology that separates power waveform data using an AI algorithm and “visualizes” power consumption by device

43Under the Corporate Philosophy, “The best partner for life and society—with Energy, withEfforts to Support Sustainable Growth

the Car, with the Home,” the ITOCHU ENEX Group has delivered a stable supply of energy andservices to the benefit of all for more than half a century. To address the rapid transition toward

Sustainability
at the ITOCHU ENEX Groupa decarbonized society, the Group swiftly began taking action in environmental, next-generationenergy, and other businesses. In 2021, we formulated our Sustainability Policy and identified

material issues to be given priority (shown below). The entire Group is accelerating efforts to solvethese sustainability issues over the medium to long term.

Material Issues for the Group

Sustainability Policy

The ITOCHU ENEX Group has a mission of delivering energy

and will aim to improve our corporate value while contributing to

the development of a rich life for people and a sustainable society.

1

Contributing to a carbon
neutral society throughour business2

Contributing to richcommunities througha stable energy supply

3

Establishinga governance system

stakeholders can rely on

Importance for stakeholders

and services as a “The Best Partner for Life and Society”

Water andwastewater
management
Biodiversity

Quality andproduct safety

Tax transparency

Sales practices
and product labeling

●

Major
opportunities●●●

Major risks
Relevant
SDGs

●
●

●

44 ENEX REPORT 2023

Creation of opportunities to construct infrastructure
for hydrogen and other new energy sources
Rising demand for renewable energy and creation of
new business opportunities
Expansion of markets where businesses have thepotential to solve social issues
Weakening of the existing energy businesses

Reduction of demand for fossil fuels due to theregulation of businesses' greenhouse gas emissions,
etc.

Alternative fuels
Renewable energy● Electric vehicles● Energy solutions for storage batteries / household products● Other environmental businesses● Reduction of environmental
impact within the organization
For details, see P.48-49● Environmental management●

Areas ofinitiatives

Expansion of the alternative fuel market and increaseof sales opportunities accompanying the risingdemand for alternative fuels

Risk management
for serious
accidents
Customer privacy
Data security

Human Resource Utilization
Corporate Governance

Identifying issues relevant to us from among
evaluation criteria from ESG evaluation bodies(including FTSE, MSCI, SASB, SDGs, and GRI)

STEP

Setting the Group's priority of the 31 identiﬁed issues
from the perspective of stakeholders (society) basedon the evaluation weight of ESG evaluation bodies, etc.

STEP

Members of the Sustainability Committee and thedivisions devoted to sustainability discuss theidentiﬁed issues and set the order of priority for the
ENEX Group2
3

Involvement inproduct reuse andwaste recycling
Physical impacts
from climatechangeLegal andpolitical impacts
Anti-corruption

Setting priority from external perspective

Setting priority for us

Identifying materialities

STEP

4

A matrix was used to evaluate the two axes of priority,
namely priority for stakeholders and priority for the
ENEX Group, and four issues of particularly highimportance were identiﬁed as materialities. The
appropriateness of the issues is scrutinized by theManagement Advisory Conference before approval isgiven by the Board of Directors

Corporate Governance

Human resource strategies to generate
diverse values

Offering energy to everyone
Expansion of business supported by the trust of thelocal community and the entire supply chain● Provision of an environment in which customers
can choose from diverse forms of energy, including
alternative energy● Entry into regions where access to energy isunderdeveloped● Retainment and acquisition of customers bystrengthening the disaster-resilient supply structure● Earning the trust of customers and the creationof new businesses through the stable supply ofenvironmentally-friendly resources and materials

Labor practices(compliance withlabor laws)

Access to energy

Human Resource Utilization

Access to energy

Contribution to the realization of acarbon-neutral society

Waste andhazardous material
management

Response to climate change

Importance for the ITOCHU ENEX Group

addition, the Sustainability Committee will manage the progress of initiatives related to material issues.

Response to climate change

Supply chain(environmentand human rights)

Identifying issues

STEP

1

Materialities

Resilience ofbusiness model

Data security

these issues, we will contribute to the creation of a sustainable society and strive to further enhance our corporate value. In

Materialities

Sustainableprocurement

Compliance

Material Sustainability Issues (materialities)

Based on our Sustainability Policy, we have identified priority sustainability issues (materialities). Through initiatives to address

Process for Determining Materialities

Clear, effective and fair decision-making●●●

Loss of customer base due to deteriorated
relationships with local communities●●

Instability of business due to insufficient energy
procurement

Relationships with local communities
Disaster prevention initiatives● Business continuity (BC) measures● Disaster mitigation measures in collaboration withother companies● Comprehensive cooperation with communities● Access to energy
・Stable supply of energy and services
For details, see P.4-5
・CS (Car-Life Stations)

By creating a rewarding work environment, we will
increase labor productivity, improve health andmotivation, acquire talented human resources, andstrengthen our ability to respond to changes andbusiness opportunities

Lower labor productivity, flight of talented humanresources, loss of business opportunities, higher
health-related costs, and other risks resulting from a
failure to appropriately respond

●
●

●
●
●
●

Diversity, equity and inclusion●

By establishing a robust governance system, we
will improve the transparency of decision-making,respond appropriately to changes, and establish afoundation for stable growth

Risks of business discontinuity associated with thedysfunction of Corporate Governance and internal
controls, unexpected losses, and other risks

Corporate Governance・Strengthening the functionality of Board of Directors
・Increasing stakeholder engagement
・Operating committees appropriately
・Enhancing Group governance・Enhancing risk management●

Health and safety

Human resource development
Social contribution activities●

For details, see P.50-53

For details, see P.58-66

Sustainability at the ITOCHU ENEX Grouphttps://www.itcenex.com/en/csr/

45

Sustainability at the ITOCHU ENEX Group

Efforts to Support Sustainable Growth

Sustainability Governance
The Company established the Sustainability Committee
in 2021 to deliberate and monitor the sustainability issuesof the Group as a whole from a long-term perspective. In
FY2022, discussions were held mainly on climate changerelated matters (seven meetings were held). An Executive
Director serves as the chairperson of the Sustainability
Committee, and important issues are mainly discussed
at the Management Advisory Conference, reported to theBoard of Directors as appropriate, or approved by the Boardof Directors as necessary. In addition to attending meetings

Risk managementof the Board of Directors and Management Advisory
Conference meetings, the chairperson also serves aschairperson of the Risk Management Committee, reflecting
the perspective of sustainability in business strategy andcompany-wide risk management. We are building a systemfor each organization to swiftly implement sustainability
measures, where heads of functional departments areappointed as members of the committee, and the generalmanagers of sales divisions participate as necessary.

Governance system for sustainability (as of April 2023)

Audit & Supervisory
Board (Members)—Contribution to the realization of a carbon-neutral society—

Board of Directors(Directors)

President andChief Executive Oﬃcer

GovernanceCommittee

The Group has set medium- to long-term CO2 emissions reduction targets for 2030 and 2050, and through its

businesses, contributes to the red uction of CO2 throughout society and to the realization of a decarbonized society.

Medium- to long-term targets of our Group: CO2 emissions reduction targets

Scope1 + Scope2(Own GHG emissions)*

Chairman

Corporate Planning
Department

2030 ▶

Management Advisory
Conference

50% reduction 2050 Carbon neutral

Audit Department
Corporate Administration
Division I
Finance & General
Accounting Department

CFO

Sustainability Committee

CIO

Risk Management
Committee

CCO

Internal Control
Committee

Sustainability Promotion
Oﬃce

We will contribute to the reduction of GHG emissions throughout society through the
reduction of supply chain emissions and through our businesses, aiming to offset CO2 to zero.
*Scope: Non-consolidated + consolidated subsidiaries, with the target standard year of 2018.

Efforts in our group's businesses to achieve our targets

Disclosure Committee

Environmental Business & Management

Corporate Administration
Division II

Future society & living by

Human Resources &General Aﬀairs Department

Alternative fuelDivisions/Group companies

An advisory body to the Management Advisory Conference
that deliberates on policies and initiatives related tosustainability, such as climate change, and considers
information disclosure
Chairperson: Executive Director

46 ENEX REPORT 2023▶

Contribution to Scope 3 and to society as a whole

Investment Strategy
Department

Sustainability Committee

to the Board of Directors as necessary. In addition, while
delegating discretionary powers to each business division
to facilitate prompt decision-making, we have implementeda system in which projects are screened in a projectdeliberation council based on the scale and conditionsof business projects. When considering importantinvestments and loans, an ESG due diligence checklist is
used to conduct impact assessments of environmental
risks, including climate change, as well as human rights,
labor environments, and health and safety.

Response to climate change

General Meeting of Shareholders
Independent
Auditors

Under our company-wide risk management system, theRisk Management Committee, an advisory body to theManagement Advisory Conference, identifies and evaluatesrisks that could have a major impact on management andbusiness as priority risks. The Sustainability Committee
plays a central role in discussing and monitoring bothclimate change risks and opportunities, conducts
deliberations on both strategy formulation and individual
business management, and discusses these chiefly at theManagement Advisory Conference. It also makes reports

Risk Management Committee

An advisory body to the Management Advisory Conference
that identiﬁes and analyzes risks that have a signiﬁcant
impact on management, implements countermeasures,works to prevent risks from occurring or materializing, andmakes those risks known to others
Chairperson: Executive Director

Energy saving

Renewable energy

Recycling and OtherGTL fuel / renewable diesel / hydrogen / ammonia / LNG /carbon neutral LP gas / SAF (sustainable aviation fuel) /e-fuel (environmentally-friendly synthetic fuel)Heat supply / high-efficiency equipment for LPG / smart
devices / sales of EVs / infrastructure development for EVs/ EV car sharing / use of waste batteries / micro mobility
Hydroelectric power generation / solar power generation/ biomass power generation / PPA (solar power purchaseagreements) / agrivoltaics / storage battery-related

Incinerated ash recycling / support for visualization of CO2 / AdBlue® /research into soybean cultivation using CO2 / environmental
management ISO 14001 / reduction of own environmental impact /blue carbon / efforts at disaster prevention and mitigation47

Sustainability at the ITOCHU ENEX Group

Efforts to Support Sustainable Growth

Changes in Scope 3 emissions by categoryDisclosure based on the TCFD recommendations
We recognize the importance of climate-related financial
information disclosure and have expressed our support
for the TCFD* recommendations. In addition, based on
the philosophy embodied by the TCFD recommendations,
we identify the risks and opportunities that climatechange poses to our business activities, and perform
disclosures on governance, strategy (2°C/4°C scenario
analyses/financial impact assessments), risk management,
indicators, and targets, which are the core elements ofclimate-related financial information disclosure. Goingforward, we will continue to view climate change as a

new business opportunity as part of our management
strategy, and will continue to strengthen our efforts. In
addition, we will review our disclosures based on the TCFD
recommendations as appropriate and will continue to makeappropriate disclosures in the future.

* TCFD refers to the “Task Force on Climate-related Financial Disclosures,” which wasestablished by the Financial Stability Board (FSB) in response to a request fromthe G20 to study how to disclose climate-related information and how financial
institutions should respond.

Disclosure based on the TCFD recommendations

https://www.itcenex.com/en/csr/environment/climatechange/

Energy type
Kerosene
Diesel oil
Gasoline
Heavy oil

Scope1Coal
GTL
LP GasCity gas

Scope 1 total
Heat
Electricity

Scope2

Non-fossil certificates
Use of in-house power generation(Unit: thousand t-CO2e)

FY2018(base year)

FY2019FY2020

FY2021

0
2

1

0

1

3

2

1

3

4

4

4

30

760
−
2

20

31

716
−
2

17

2

26

742
0

2

57

2

24

664
1

2

29

FY2022

77

65

67

63

△3

△3

△2

76

Scope 1 and 2 total

893

75

846

0

△0

△0

63

65

62

△2

793

FY2030 emissions target
Reduction rate for FY2030 target

3,282

3,487

CO2 emitted during the fuel procurement process
for our power plants

128

113

95

76

53

CO2 emitted during business trips and commuting
by employees

107

103

64

98

103

2

2

2

2

2

18,834

18,033

17,383

17,195

17,961CO2 emitted when driving our chartered trucks

CO2 emitted during the use stage of sold gasoline, etc.

Note 6: Regarding the revision of GHG emissions data: In FY2023, we revised the scope of calculation of GHG emissions data, etc. from FY2018 to FY2021.

Independent Practitioner’s
Assurance Report

23,32422,227

20,97921,44622,173

ESG-Related
External Assessments

MSCI ESG Ratings

These are ratings issued by MSCI, an U.S.-based financial
services provider, on ESG investments. We have continued
to receive a rating of AA since March 2021.

Note: ITOCHU ENEX Co., Ltd.’s use of data from MSCI ESG Research LLC or affiliatedcompanies (MSCI), and the use of the MSCI logo, trademarks, service marks,
and index names do not constitute support, endorsement, or sales promotionof ITOCHU ENEX Co., Ltd. by MSCI. MSCI’s services and data are assets of MSCI
and its information providers. They present current conditions and do not
represent guarantees. The MSCI name and logo are trademarks of MSCI.

FTSE Blossom Japan Sector Relative Index
This is a representative ESG index adopted by Japan's
Government Pension Investment Fund (GPIF). It was
selected in June 2023.

△1

Note: F TSE Russell (a registered trademark of FTSE International Limited and Frank
Russell Company) shows that, as the result of a third-party investigation, theCompany has met the requirements for inclusion in the FTSE Blossom Japan
Sector Relative Index, and has become a component of the index. The FTSE
Blossom Japan Sector Relative Index is broadly used in the creation andevaluation of sustainable investment funds and other financial products.

566

447

73％

Note 1: I n calculating GHG emissions, our Group refers to the non-consolidated company and consolidated subsidiaries (for Scope 1 and 2, companies with 10 or fewer employees
are excluded).
Note 2: GHG emissions are calculated using the GHG protocol developed by WRI (World Resources Institute) and WBCSD (World Business Council for Sustainable Development).
Note 3: Energy-derived CO2 is included in the calculation of GHG emissions.
Note 4: Fractions less than 1,000 t-CO2e are rounded off.
Note 5: Deloitte Tohmatsu Sustainability Co., Ltd. undertook an assurance engagement of data indicated with .

48 ENEX REPORT 2023

3,399

0

−

896

3,976

35

78

Scope 2 total

Scope 3 total

4,252

CO2 emitted during the mining, importing, andrefining stages of fuels sold by the Group

2

505

−

Category 11

FY2022

1

728−

Categories 6
and 7

FY2021432

833
0Category 4

FY202028

771−

Scope3Category 3

FY20192817−

Category 1

FY2018(base year)

Note 1: The scope of Scope 3 calculations is limited to categories that have a large impact on our businesses.
Note 2: Regarding the revision of GHG emissions data: In FY2023, we revised the scope of calculation of GHG emissions data from FY2018 to FY2021.

Changes and progress in GHG emissions
Changes and progress in Scope 1 and 2 emissions by energy type

Category(Unit: thousand t-CO2e)

Note: The Independent Practitioner’s Assurance Report is also posted on our website.

Independent Practitioner’s Assurance Reporthttps://www.itcenex.com/en/csr/environment/climatechange/thirdpartyassurance.pdf

Nikkei SDGs Management Survey

This is an index that rates and evaluates companies’ efforts
toward the Sustainable Development Goals (SDGs) called for by
the United Nations. We have received a total rating of 3.5 stars.
49

Efforts to Support Sustainable Growth

Human Resource Utilization

Human Resource Utilization— Efforts to Support Diverse Value Creation —We want to create new value required by society and people's lives, meet the needs of our customers, anddeliver the bounty of energy to everyone by improving access to energy. We believe that the key to thisdriving force lies in strengthening our human resources strategy and organizational foundations, and assuch, we consider the utilization of human resources to be an important management strategy.

Basic
Philosophy

Since its founding in 1961, the ITOCHU ENEX Group has always considered its people to be its
greatest asset. Human resources are at the center of the Group’s value creation and are thedriving force of sustainable growth and medium- to long-term enhancement of corporate
value. We respect diverse values and aim to be a rewarding company where our humanresources can thrive, and are implementing the following human resources strategy.
(a) Fostering a rewarding work environment in which employees share common goals andcontribute from their respective standpoints(b) Securing and providing opportunities where diverse human resources can play active roles
regardless of nationality, gender, age, etc.
(c) Formulating and promoting human resources development plans that respect theindividuality and respective roles of each employee

Bolstering the comprehensive strength of
our Group employees

In FY2021 we launched cross-functional teams to tap intosynergies that transcend divisional and product boundaries
and to discover “chemical reactions” and seeds for creating
new businesses. These teams form connections between
ITOCHU ENEX and other Group companies, with the aimof fostering solidarity as members of the same corporategroup and creating innovation.
In addition, we hold cross-functional training for over 300
employees of the Company, allowing them to get to know
the businesses and people of other departments, taking
steps towards creating a foundation for finding new seeds,
and implementing ongoing personnel exchanges.
Furthermore, in FY2022, we began participating in aregional problem-solving training program, where we use
our past experience and skills to solve problems faced by
local governments and local companies, while encountering
different values and perspectives and gaining new ideas
and insights.

Diversity

https://www.itcenex.com/en/csr/social/diversity/

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2014

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2015

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2016

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2017

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2018

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Declaration of Diversity & Inclusion
We promote diversity and inclusion throughout the Company. We
respect the diversity of ages, nationalities, genders, disabilities,
values, workstyles, and other attributes of our employees, accept thedifferences among them, acknowledge their individual characteristics,
promote various initiatives leveraging those things as our strengths
to bring about further change to ensure that all of our employees areable to fully demonstrate their capabilities and personal qualities andremain “The Best Partner for Life and Society.”

Diverse human resources help the company growIn order to achieve sustainable growth, we believe that
it is important to respect the diversity and values of ouremployees and utilize them as strengths, so we hirea variety of human resources and provide them with
opportunities to flourish.
In FY2021, we established the “Challenge Promotion
Program” as part of the development of young employees.
In this program, we select talented young employees as
managers and supervisors to provide opportunities forthem to gain management experience and grow. In FY2022,
we began to promote employees in area positions that
do not require transfers to management and supervisory
positions. In September 2022, we held a roundtablediscussion among female executives and female leaders
to discuss ideals for what a leader should be, which is justone of the ways that we have created an environment that
accepts diverse values and allows people to develop their
50 ENEX REPORT 2023

2013

●

Diversity Promotion

Based on the basic approach behind ourhuman resources strategy, we will continue
to actively promote the creation of ahealthy organization and culture in orderto create a company where all employees
can work freely and with peace of mind,
and find work more rewarding.

Changes in Our Group’s Diversity

potential based on their abilities.
We are also working to expand employment
opportunities for people with disabilities. Through IBUKI(Startline Co., Ltd.), a service which provides indoor
agricultural jobs to people with disabilities, seven staff
members with disabilities are working at the farm (as of April
2023). The herbal tea made at this farm is also distributed
to employees. In addition, our original calendars featuredesigns drawn by people with disabilities, supporting theindependence of artists who are actively working despite
their disabilities.
We will focus on developing human resources with acomprehensive perspective, regardless of attributes, andcontribute to corporate growth and value enhancement.

HR-related data
https://www.itcenex.com/en/csr/social/health-management/okj2b50000001g9a-att/20230710en.pdf

2019With the objective of implementing improvements andreforms by ascertaining issues at the organizational level,
the Company conducts a job satisfaction survey once every
two to three years to gauge attitudes and satisfaction andcollect feedback on Company measures and programs. We
also hold monthly meetings with the employee union, anduse the insights gained to craft personnel system reforms
and human resource development programs that contributeto sustainable growth for both the Company and its people.
We strive to make the most of each employee’s abilities,
which will ultimately lead to increased productivity.

●●

Regional problem-solving training

Reforming awareness and fostering a
corporate culture where the Company andemployees work together

●

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2020

●

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2021

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2022

●

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2023

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Percentage of female employees: Approx. 10%
Start of new personnel system reforms

Published a special feature on diversity in the Group
internal newsletter and administered questionnaire
on topics such as promotion of women
Change in job classification system

Reforms made to various workplace programs(universal access to 20 days of paid leave per year,
10 days of pregnancy leave added as a new benefit,
extension of the use of shortened working hours,
clarification of staggered work hours, reemployment
program for employees who left due to spouse’stransfer)
Acquired Kurumin Mark 2015

Held the first Enex Family Day (children of employees
visit the workplace)
Launched Enex Early Bird working style reforms

Approved by the Tokyo Metropolitan Government as
a TOKYO Workstyle Reform Declaration Company
Introduced Casual Day

Participated in trial of a shared-use satellite officewith childcare facility
Introduced support program for sports activities
Implemented mentor training
Acquired Kurumin Mark 2018

Conducted job satisfaction survey

Recruited nine foreign nationals at Group companies
Started new overseas on-the-job training program
Established the Diversity Promotion Office
Percentage of female employees: 20%

Introduced system for taking paid leave by the hour
Hired six employees through IBUKI, a facility forpeople with disabilities
First female Outside Director appointed

Start of staggered workday schedules and teleworkenvironment (COVID-19 measure)
Employee roundtable discussion on working styles
Career design seminar held
Life plan seminar held

Diversity-related subject matter added to rankbased training
First female outside Audit & Supervisory Board
memberDiversity Statement formulated

Launched the Challenge Promotion Program topromote junior employees
Conducted the second job satisfaction survey
Acquired Kurumin Mark 2021

Quantitative target set for female representation in
management: 30% by FY2035

Start of promotion of employees in area positions tomanagerial positions
Added LGBT content to rank-based training
Diversity promotion meeting

Opened a recreation and training center with theaim of strengthening human resource development
and fostering a sense of unity

51

Human Resource Utilization

Efforts to Support Sustainable Growth

Human Resource Development

Overseas on-the-job training program

We operate a systematic skill development program
to cultivate multi-talented human resources who
can play active roles in Japan and overseas. This is a
career development, education and training programin which employees learn while engaging in selfreflection so that they can carve their own path, rather
than all employees following the same path.

Qualities we seek in our human resources
Individuals who think independently and creatively,
act boldly, and achieve as partners to society

ITOCHU ENEX training system diagram for FY2023 (as of April 2023)
By hierarchy

Executives
Executive
candidates

New section manager training

Grade 3 training
Grade 2 training

3rd year training
New hires

Divisional

Overseas
on-the-job
training

Graduateschool forworking
professionals

Area B grade training

Divisional
OJT & Oﬀ-JT

Area A grade training

New employee year-end training
New employee mid-year training
Onboarding
General education/other programs

For all
employees

Recreation and training center Karuizawa LABO

52 ENEX REPORT 2023

Cross-functional training

Correspondence education system

Diversity training

Qualiﬁcation lump sum payment systeme-learning

English learning support system

Life plan seminar

Strengthen human resource development throughout the GroupIn order to foster bottom-up management not only in ourcompany but the entire Group, in addition to traditional
OJT, we hold study sessions led by our business staff withthe aim of improving management literacy in areas such

Management training(Training by rank for executives)

Grade 4/Area S Grade training

Generalemployees

Selective training

Since FY2018, we have been focusing on developing global
human resources who can develop and operate overseas
businesses, in addition to improving their language skills
and cross-cultural responsiveness. To date, a total of 20
people have participated in training in eight countries:
the United Kingdom, Indonesia, the Philippines, South
Africa, the United States (Guam), Thailand, the United ArabEmirates (Dubai), and Singapore. We will continue to actively
develop global human resources who can contribute to ouroverseas business expansion.

Challenge support system

We have a variety of educational programs in place, including
training tailored to each role, from new hires and mid-career
employees to executives, as well as correspondence courses toencourage voluntary learning. We will contribute to the growth of
the Company by pursuing individual strengths and increasing thevalue of human resources.
Additionally, in FY2023, we established a recreation and training
center.
With the aim of further strengthening
our human resources base, we willfurther promote the growth andsuccess of our group's human resources
by providing a place to learn, grow,and foster a sense of unity while living
under the same roof in an environment
Many of our group's employees are
separate from daily work.
already training at Karuizawa LABO.

as IT, finance, and legal affairs. We will continue to develop
human resources who will support the growth of our entire
Group.

Supporting the Health of the Company, Employees, and Their Families
By implementing the Enex Early Bird
working style reforms, the ITOCHUENEX Group is building up a systemthat promotes employee health, values
personal lifestyles, and empowers
diverse human resources to utilize
their talents. We will create a better
company, a rewarding place to work, anda company to be proud of with regard tofamilies and society for each and every
employee, and create an environment
ENEX EARLY BIRD
where employees and their families canworking style reforms
maintain and improve their health, one
where employees can work with peace of mind.
We carry out health management practices designed
to enable each employee to work with vitality, feeling both
motivated and fulfilled. By improving employee motivation,
we seek to energize our organization and maximize our
performance.

●

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Health Promotion Measures

Commitment by the
President to healthmanagement

Building a system to tackle
health promotion as amanagement issue
Lifestyle-related disease
prevention measures

Measures to address healthissues specific to womenCancer and disease
prevention measures;support for balancing
treatment and work

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Measures to improve healthliteracy
Health management of
employees posted overseas

Vitalization of communication
Measures to prevent
presenteeism

Mental health measures

Infectious disease prevention
measures
Expansion of welfare benefits
Children's education fundMeasures to encouragesmoking cessation

Health Management and Occupational Safety and Healthhttps://www.itcenex.com/en/csr/social/health-management/53

SPECIAL FEATURE

Efforts to Support Sustainable Growth

Employee Roundtable Discussion

On-site capabilities at the ITOCHU ENEXGroup

Taki: When I hear about ENEX Group's on-site capabilities, I
have an impression of a lot of people that get really involved.
I have the impression that the Company operates in a waythat is close to its customers, and that the employees who
work together get along and have close relationships witheach other. I also think that one of the characteristics of ourGroup is that we are able to conduct sales activities tailored
to areas across the country, catering to the climate andcharacteristics of each region.
Kawata: I have the impression that we value our customers
very much. I believe that many of our employees have astrong sense of wanting to “make better suggestions” and“be more helpful'” to customers, rather than just sellingthem products and services.

Oguni: I work in the Administration Department, so I don't
have direct contact with customers, but I do have sales staff
who are in front-line contact with customers, staff who work
on-site at factories and other sites, and staff who deliverproducts. People in various positions naturally work with astrong awareness of what is required at each “site,” and thisis the strength of our group's “on-site capabilities.”

SPECIAL FEATURE
Employee Roundtable Discussion

Expand and Connect With On-site Capabilities
In the medium-term business plan “ENEX2030,” “on-site capabilities” is one of the key phrases.
We held a roundtable discussion with the four recipients of the FY2022 Group Awards,
who work in the “field” in their divisions, and discussed the realities of working in the field.

Yuri Kawata

Shinya Taki

Home-Life Division
ITOCHU ENEX HOME-LIFE SHIKOKUCO., LTD., Kochi Branch, Kochi Office

Car-Life DivisionInternational Auto Auction Co., Ltd.
(Seconded)

Responsible for opening/closing
valves, surveys, managing equipment
and alarm expirations, and sales
duties such as new customer
development

Responsible for presenting proposals
to corporate customers
for the utilization of auto auctions

———

———

Received an Individual
Encouragement Award for proactive
sales of LP gas

54 ENEX REPORT 2023

———
———

Received an Individual
Encouragement Award for sales
proposals involving a vehicle
purchase scheme

Haruko Oguni

Industrial Business Division
ITOCHU INDUSTRIAL GAS CO., LTD.
Section Chief, Administration
Section, Administration Department———

Kawata: In this medium-term business plan, one of the key
phrases is “on-site capabilities,” and I'm glad that the focus
is on work sites in the field. It motivates me to work evenharder.

Power & Utility Division
ENEX LIFE SERVICE CO., LTD.
Section Chief, Electric Power
Customer Service Section 2,
Customer Service Department———

Responsible for all operations related
to existing customers, including
contract changes, billing operations,and call center operations

Received an Individual
Encouragement Award for playing acentral role in a management-related
task force

Received the Business Improvement
Award for improving operations suchas those related applications to forelectricity contracts———

Yuri Kawata

Oguni: Those sites are where the company's profits are
generated, and I think that “on-site capabilities” have been
and will continue to be an important force.

What is expected of our Group

Taki: When I'm actually in the field, I feel that customers
look to me as someone they can talk to if something
happens. I currently work in a department that deals withcars, and there are many different ways to “sell cars.” We
are not limited to the products of a single ENEX division. We
can combine them with the products of other divisions andGroup companies, and have many service examples to draw
upon, so we are able to offer multiple options to suit eachcustomer. I believe this is our strength and also what ourcustomers want.
Kawata: When I make proposals to cultivate newcustomers, I am often asked for information by owners who
are wondering what kind of business they should do next. I
like the fact that the ITOCHU ENEX Group allows us to share
information from a broad perspective.
Oguni: That is only possible because we have a network.
On the other hand, although I know a lot about my own
company, I sometimes don't know the details of what othercompanies or departments are doing, so I think it would begreat if we could share more information.

Taki: Even now, there is information sharing within theareas, such as gas and petroleum businesses collaboratingin the same area. However, I have a strong impression that itis only partial.

Miyuki Matsuzaki

Responsible for all administrative
tasks other than human resources,
such as accounting, legal affairs,
general affairs, system-related
matters, etc.

———

Matsuzaki: I also work in the back office, but I have many
opportunities to see people who have transferred fromother departments, and I get the impression that many ofthem are working self-motivated and proactive. Of course,
there are many different types of employees, and eachgroup company has a different culture, but even if their
methods or thought processes are different, they have incommon the fact that when they work, they are thinking,“What kind of service does the customer need?”

I have a strong desire to offer better
solutions to our customers.

I would like to take on challenges in new
areas while involving various people
without being constrained by existing
businesses.

Kawata: I feel that strongly. I think there are many successstories outside of the department where you work that canbe utilized, so I think if you can strengthen your network
within the Group, you will be able to come up with evenbetter proposals.

Shinya Taki

55

SPECIAL FEATURE

Efforts to Support Sustainable Growth

Employee Roundtable Discussion

grow a new business, right?

There is a sense of unity as part of the
ENEX Group, and it is an environment
where it is easy to consult with others
about anything.
Haruko Oguni

Future challenges

Kawata: Currently, there are many jobs that require me tostay within Kochi Prefecture, where I am engaged in sales
activities. However, there are projects that are gradually
spreading from Kochi to other prefectures in Shikoku, so I
would like to increase the number of cases like this. I would
like to work in a way that creates a foundation that allows
the sales offices of the entire Group to collaborate in doing
business.
Taki: What kind of initiatives would that involve, forexample?

Kawata: I think it would be great if we could successfully
integrate people and systems. We still have on-site
capabilities, but even though everyone is working hard,
there are inevitably differences in abilities. I think there
is also the fact that if the person in charge changes, thebusiness will be lost. Therefore, I believe that our foundation
will be more stable if we connect with our customers not
only through our individual personalities but also as acompany. Of course, just because we're connected througha system doesn't mean we don't have to work hard on thefront lines, but I would like to work on creating mechanismsthat will further strengthen our relationships with ourcustomers.
Taki: I would definitely like to create a stronger sales
foundation using mechanisms like that and our sales
capabilities. I also have a strong desire to try new things.
In addition to existing businesses, there are ways to utilize
the infrastructure we have, and even if it is completely
unrelated, if it is needed by society, it is better to take on
the challenge with the expectation that it will grow as abusiness. I would like to involve all kinds of people to takeon challenges in new fields, even if they’re not extensions of
our existing businesses.
Kawata: It sounds like fun. I get excited just hearing about
it. Taki-san, you actually leveraged your own experience to
56 ENEX REPORT 2023

Taki: We supported a business that purchases and sells cars
by matching car purchasing companies I met at auction
sites and members of a co-op with which I had done
business in the department I was previously assigned to. I
believe that we were able to solve customers' problems andalso contribute to solving the social issue of people having
to give up their driver's licenses. Our Group's strength lies
in our ability to develop businesses like this. This was in
Hokkaido, but next we plan to expand to Kyushu and Osaka.
Matsuzaki: So, you can expand nationwide. That kind ofmove is unique to our Group.

Kawata: The reason we come up with ideas like this one
is because we seriously think about our customers. I don't
think you would have gotten any insight from a customer'scomment if your day-to-day work had just been routine
tasks.
Taki: You’re right. Additionally, I have a strong desire to do
new and interesting things.

Oguni: Working on new businesses is very important.
There are limits to existing business, so we need to findsomething new. At my company, we are constantly looking
for new businesses, and there are some cases like Takisan's that we came up with on our own, and examples ofbusinesses that we created based on concerns we heard
directly from customers. For example, a customer to whom
we provide pressure testing for industrial gas containers
started a warehousing business because they were having
trouble finding a place to store unused containers. That is agreat example of discerning customer needs, and now thebusiness is slated to expand further from there.
Matsuzaki: How quickly does a new business get moving?

Oguni: It takes some time. Before an idea can be put into
motion, an investment plan must be formulated andstringent internal reviews are conducted to ensure thatthe return is commensurate with the invested funds, so
the process is a long one. However, I think we need tothink outside the box and take on new challenges that ourcompany cannot do alone, even if it means collaboratingwith other departments.

Kawata: It's really exciting to take on new challenges.
However, I also believe that we must work hard to improvethe efficiency of our day-to-day operations.

Matsuzaki: Last year, our company saw a significant
increase in the number of applications in our electricity
retail business, but this has increased the workload andcosts of our back office, so we feel the need to streamline
operations. We have thought about and implemented
ways to reduce the workload as much as possible, but in
FY2023 we would like to further reduce the workload while
also trying to increase the productivity of our employees.
We also want to create efficient mechanisms that will
ensure that the efforts of our employees who are striving
to increase productivity are not wasted. To this end, we will
also focus on system development.

Advantages of the Group and a comfortable
work environment
Oguni: How do you all feel about working at ENEX Group?

Matsuzaki: My company has introduced working fromhome on a trial basis. Is it difficult for sales people to workfrom home?
Taki: It's more like going straight to the work site andthen straight home, but it still saves time. There are few
restrictions such as having to go into the office.

Oguni: I think it's important to have a comfortable work
environment, regardless of where you work. Last year, we
conducted a survey of all employees in order to create avision for the company, and many of them said they wanted
the company to be a place where they can feel motivated.
Matsuzaki: That's very important. As mentioned in themedium-term business plan, I would like to see a system inplace to reward employees for their hard work.

Taki: My impression is that the Group is full of really nicepeople. I get the impression that there are many people
who are easy to talk to and want to work together tostimulate each other. It's a very flat relationship. I believethat the existence of such relationships between people ona daily basis allows us to move quickly when tackling new
businesses.
Kawata: I feel the strengths of our Group when developing
new projects. For example, recently, due to the rise inelectricity costs, there has been an increase in the numberof homes that use both gas and electricity instead of allelectric homes. I believe that the Group's investment
capabilities are a strong asset as the products we handle
are gaining momentum.

Oguni: You can make proactive moves. It's been more than
10 years since I joined this company, and when I first joined,even though it was called the “Enex Group,” we were on
different floors, and it felt like a separate company. But now
the office is the same, and it's an environment where it's
easy to ask for advice if you have a problem. We also have aproject team made up of people with various experiences,and we often meet to see if we can start new businessprojects.

Matsuzaki: The sense of unity within the Group is amazing.
Our company is entrusted with electricity business-related
tasks such as provider switching and billing services fromvarious companies within the Group, so we experiencea wide variety of things. For example, we handle both
corporations and individuals, so we have a wide range ofcustomers. In each job, you gain insights that you can apply
to your own work.
Taki: I hope to continue to take on new challenges byleveraging the various strengths of the Group.

Our goal is to create better working
environments and efficient systems.
Miyuki Matsuzaki

57

System for Supporting Sustainable GrowthManagement Team

Note 1: Shares of the Company’s common stock owned as of May 18, 2023
Note 2: Independent Independent indicates a Board Member registered with the Tokyo Stock Exchange as an independent officer

Note 3: Board of Directors meeting attendance denotes number of times attended/number of times held during FY2022(For Mr. Yoshida, Mr. Imazawa, and Mr. Morikawa, attendance refers to the regular general meetings of shareholders in andafter June 2022, the number of meetings is eight.)(As of June 14, 2023)

Directors

Audit & Supervisory Board Member

Representative Director
and Chairman

Representative Director,
President and Chief
Executive Officer

Kenji Okada

Shares of the Company owned: 176,709
Board of Directors meeting attendance: 11/11● Significant concurrent positions outside the Company:
None
●
●

Director andExecutive Officer

Chief Financial Officer,
Chief Information Officer,
and Chief Operating Officer,
Corporate Administration
Division I

Yasuhiro Imazawa has worked for ITOCHU
Corporation for many years, mainly in Finance,
Accounting, Risk Management, and Audit areas.
Possessing a wealth of business experienceand broad expertise in management, he wasappointed as a new Director of ITOCHU ENEX CO.,LTD. in June 2022, and holds the post of Chief
Operating Officer for Corporate Administration
Division I.

Shares of the Company owned: 9,641
Board of Directors meeting attendance: 8/8● Significant concurrent positions outside the Company:
None
●
●

Director

Director

Director

OutsideOutsideOutsideShares of the Company owned: 48,150● Board of Directors meeting attendance: 8/8● Significant concurrent positions outside the Company:
Director of Nagatanien Holdings Co., Ltd.
●●

Shares of the Company owned: 23,204● Board of Directors meeting attendance: 11/11● Significant concurrent positions outside the Company:
Representative Attorney, Shi-Go-Roku Law Office Auditor,
The Shinkumi Federation Bank Emeritus Professor,
Aoyama Gakuin University

Representative Director,
President and Chief
Executive Officer

Tomofumi Yoshida
●

●

●

●

●

Shares of the Company owned: 16,823● Board of Directors meeting attendance: 10/11● Significant concurrent positions outside the Company:
Board Member, Characters Culture Promotion
Organization (Public Interest Incorporated Foundation)
Director, Junshin Hiroo Gakuen
Director, Picture Book Culture Promotion Association(Incorporated Nonprofit Organization)●

Director and Senior
Managing Officer

Kyosuke Wakamatsu
●

●
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Director and Managing
Officer

Tsukasa Motegi

Yasuhiro Imazawa

●

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●

●

●

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●

Knowledge of other industries

●

●

●

●

58 ENEX REPORT 2023

●

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Director andExecutive Officer

●

●

●

●

●
●
●

Director

Director

Ichiro Saeki

Motoyo Yamane

●

●

●

●

●

●

●

●

Shares of the Company owned: 16,610
Board of Directors meeting attendance: 11/11
Significant concurrent positions outside the Company:
Auditor, Enex Asset Management Co., Ltd.

Audit & Supervisory
Board Member

Masako Iwamoto
OutsideIndependent

In addition to Shozo Tokuda’s expertise as acertified public accountant and his extensive
experience in corporate accounting, he has
profound knowledge gained at auditing firms.
Based on this knowledge, from an objective andexpert perspective, he has been appointed as an
Audit & Supervisory Board Member and provides
advice for the management of the Company aswell as proper oversight of the execution of theCompany’s businesses.

As an attorney, Masako Iwamoto has specialized
knowledge and extensive experience in corporate
legal affairs. She has also acquired deep insightduring her tenure as an outside officer at Achilles
Corporation. Based on this knowledge, froman objective and expert perspective, she has
been appointed as an Audit & Supervisory Board
Member and provides advice for the managementof the Company as well as proper oversight of theexecution of the Company’s businesses.

●

●

●
●

Shares of the Company owned: None
Board of Directors meeting attendance: 11/11
Significant concurrent positions outside the Company:
None

Audit & Supervisory
Board Member
Director

Takuya Morikawa
●

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●

●

●

●

●

●

Independent

Outside Directors

Human resources and labor
International mindset

Shares of the Company owned: 919● Board of Directors meeting attendance: 8/8● Significant concurrent positions outside the Company:
Outside Director, Asanuma Corporation
Representative Director, President and Chief Executive
Officer, Wakiprintpia Co., Ltd.
Advisor, Netsquare Co., Ltd.

●●

Outside●Directors

Shares of the Company owned: 2,106
Board of Directors meeting attendance: 11/11● Significant concurrent positions outside the Company:
Outside Director, Pan Pacific International Holdings
Corporation
Audit & Supervisory Board Member, Tokyo Toshi Service
CO., LTD.

Since joining the Company, Shuji Katsurayama
worked mainly in LP gas and heat supply
businesses, and held the post of Representative
Director of a Group company. Having extensive
business experience in the Company and Group
companies, as well as rich expertise in business
management, he was appointed as an Audit &Supervisory Board Member in June 2022.

●

Shozo Tokuda

Takuya Morikawa has long engaged in a wide
range of business activities in the stationery andoffice equipment industry, including businessstrategy, overseas business, and the launch of
new businesses. Through these activities, hehas gained business experience and a wealth ofknowledge on business management. He wasappointed as a Director in June 2022 and provides
advice for the management of the Company aswell as proper oversight of the execution of theCompany’s businesses.

●

Isao Kubo has many years of experience inmanagement planning and operations related toauditing at ITOCHU Corporation. After working
as a Managing Executive Officer and General
Manager of the Internal Audit Division, he becamea Director, Senior Managing Executive Officer,
CSO, and General Manager of Corporate Planning
Division at FamilyMart Co., Ltd. He has extensive
knowledge of business management and has
been appointed as an Audit & Supervisory Board
Member of the Company.

Audit & Supervisory
Board Member

Takuya Morikawa

Motoyo Yamane worked in the broadcasting
industry for many years, where she was involvedin the operation of organizations and thedevelopment of human resources. She also has
sat on various expert committees related tosocial contribution and cultural activities andhas advanced insight into society and culture in
general acquired through these activities. She
has been appointed as a director of the Company
based on this knowledge and diverse perspectives
she has developed throughout her career.

Finance and accounting●

Shares of the Company owned: 16,220● Board of Directors meeting attendance: N/A● Significant concurrent positions outside the Company:
Director of OSAKA CAR LIFE GROUP CO., LTD.
Director of NISSAN OSAKA SALES CO., LTD.
Director of ENEX FLEET CO., LTD.
●

Ichiro Saeki has specialized knowledge in his
capacity as an attorney and a university professor,
and extensive experience with corporate legal
affairs. He also acquired broad knowledge ofbanking and finance during his tenure at the The
Nippon Credit Bank (currently, Aozora Bank, Ltd.).
Based on this broad knowledge, he provides
advice for the management of the Company aswell as proper oversight of the execution of theCompany’s businesses from an objective andexpert perspective.

Sales and marketing

Legal and complianceMotoyo Yamane

Tsukasa Motegi has worked mainly in ourpetroleum-related businesses since joining
the Group. He previously held the post ofRepresentative Director in Group company
ENEX FLEET CO., LTD. He currently serves as
Chief Operating Officer of the Car-Life Divisionat ITOCHU ENEX CO., LTD., utilizing his extensive
business experience across the Company andGroup companies and broad expertise in business
management.

Independent

●

●

●

Shuji Katsurayama

OutsideIndependent●

ESG SDGs

Shares of the Company owned: 45,122
Board of Directors meeting attendance: 11/11● Significant concurrent positions outside the Company:
Director of ECORE CO., LTD.
●

Standing Audit &Supervisory Board Member

Isao Kubo

Independent

Representative Director
and Chairman

Business management

Chief Operating Officer,
Car-Life Division

Standing Audit &Supervisory Board Member

Tsukasa Motegi

Kyosuke Wakamatsu has worked mainly in the
LP gas business since joining the Group. His past
posts include Representative Director at Group
company ITOCHU ENEX HOME-LIFE TOHOKU CO.,LTD. and Chief Operating Officer for Corporate
Administration Division II. Endowed with extensive
business experience across the Company andGroup companies and wide expertise in business
management, he currently holds the post of
Chief Operating Officer of the Home-Life Division,
ITOCHU ENEX CO., LTD.

Skills Matrix of Directors and Audit & Supervisory Board

Kenji Okada

Chief Operating Officer,
Home-Life Division

Tomofumi Yoshida has worked mainly in areas
such as lifestyle materials, construction, logistics,
information, finance, and insurance at ITOCHU
Corporation. After serving as Representative
Director, he was appointed as Representative
Director and Executive Vice President of ITOCHUENEX CO., LTD. in June 2022, and Representative
Director, President and Chief Executive Officer
in April 2023. He has excellent management
skills cultivated through a wealth of businessexperience and broad insight into global business
management.

Ichiro Saeki

Yasuhiro Imazawa

Director and Managing
Officer

Kyosuke Wakamatsu

Tomofumi Yoshida

Kenji Okada has worked mainly in Finance,
Insurance, Logistics, and Realty areas at ITOCHU
Corporation. After serving as Representative
Director of TOCHU Corporation, he was appointed
as Chief Executive Officer of ITOCHU ENEX
CO., LTD. in June 2012. He was appointed as
Representative Director and Chairman of thecompany in April 2023. He is seeking to grow
the Company and improve productivity by bothleveraging the existing management structure andadvancing new initiatives, including renovationof business structures and internal systems, andexpansion into new business areas.

Director and Senior
Managing Officer●

Standing Audit &Supervisory Board
MemberShuji Katsurayama●

Audit & Supervisory
Board Member●●

Isao Kubo●●●

Shares of the Company owned: None
Board of Directors meeting attendance: 11/11
Significant concurrent positions outside the Company:
Representative Attorney, Iwamoto Law OfficeOutside Director, Member of Audit and Supervisory
Committee, ACHILLES CORPORATION

Standing Audit &Supervisory Board
Member●●●Outside Audit & Supervisory Board Members

●
●

●

●

●

●

●

Audit & Supervisory
Board Member

Shozo Tokuda

Masako Iwamoto

●

●

●

●

●

●

●

●

●

59

System for Supporting Sustainable Growth

Initiatives for outside officers

Aiming for Both Social Value and Economic Value Toward 2030

We run a variety of activities designed to increase outside officers’ understanding of the Group, with theOutside Director Takuya Morikawa

aim of boosting the effectiveness of management oversight functions, thereby leading to more energetic
discussion by the Board of Directors and a transparent governance system.

1

Visiting operating sites

Since FY2017, we have been conducting visits of operatingsites across the country for the purpose of facilitating
understanding the businesses of the Group and interactingwith on-site employees. In FY2023, the first visit was
conducted in the Osaka area in June. On-site visits are
an important opportunity for outside officers to deepen
their understanding of the Group's businesses by directly
experiencing the business circumstances and opinions of
employees.

Photo 1 Visit to NISSAN OSAKA SALES CO., LTD. a Group company
Photo 2 Company presentation at ENEX FLEET CO., LTD., a Group company

Briefings for outside officers

Outside officers are briefed on the agenda of each Boardof Directors’ meeting two business days in advance sothat they will be able to take part in the discussions with abetter understanding of the issues. During these sessions,the project owner for each agenda item gives a briefing andresponds to various questions from the outside officers.

Participation in Group Directors’ meetings

Outside officers also participate in the Group Directors’
meetings, where the presidents of our major Group
companies come together to discuss the initiatives of eachcompany, exchange opinions and interact. In FY2022, themeeting was held in-person for the first time in two years.
Videos related to the initiatives of Group companies wereshown, and questions and opinions were raised by outside
officers, making for a lively discussion.
Photo 3 Audit & Supervisory Board Member Iwamoto giving her
opinion at the FY2022 Group Directors’ meeting

60 ENEX REPORT 2023

2

3

4

5

Participation in financial results presentations
Financial results presentations are a valuable opportunity
to directly hear the opinions of investors, the media, andother stakeholders and as such, outside officers also attend(virtual participation).
Photo 4 Financial results presentation held in May 2023

Participation in management policy
presentations

Outside directors also attend the semi-annual
management policy presentations, where management
policies for the entire Company and each Division are
announced and shared. At the presentation in April 2023,
as the COVID-19 situation had stabilized, the numberof participants at the Kasumigaseki headquarters was
significantly increased to 100 people, and with theparticipation of staff stationed overseas who joined
virtually, there were about 150 participants.
Photo 5 Management policy presentation held in April 2023

Independent officers’ meetings

We hold independent officers’ meetings made up of
independent officers. These regular meetings bring theindependent officers together to discuss their independentviews and opinions.

Participation in the Medium-Term Business
Plan formulation

Corporate Governance
From the perspective of
raising the level of governance,
I feel that the Group is working
very seriously. Going forward,
I would like to deepen
discussions on governance asof 2030. The combination of abackcasting approach, asking such questions as, “What are
the challenges in achieving our ideals,” and a forecasting
approach that continues to improve based on the annual
evaluation of the effectiveness by the Board of Directors
enables the pursuit of our unique governance style. We
hope to decide on milestones every two years, set KPIs, andrun the PDCA cycle to get closer to our ideals for 2030.
■

For the purpose of deepening discussions on medium- tolong-term strategies, we report on the status of studies andexchange opinions on the Medium-Term Business Plan,
thereby providing opportunities for outside officers toparticipate in its formulation.

My roleMy own role is to assess whether the necessary materials
for judgment and judgment criteria are clearly specified,whether there is a Plan B or an exit plan, and whether
the timing is appropriate when members of executive
management make decisions. I also focus on supervisory
functions, such as whether there is a system in place for the
first report of important information to be promptly shared,
and whether information related to compliance in particular
is promptly shared with the members of the Board of
Directors.

■

New Medium-Term Business Plan ENEX2030
I feel that it was very good that we formulated a plan witha slightly longer span for the first time this time. The firstpoint that we are paying close attention to is expectations
for growth investments, specifically what business areas we
will invest in, and when and how much to invest, in order toaccelerate business growth. The second point is to create afoundation of human resources that support the growth of
the business.
In making ENEX2030 a reality, how will we generate thediversity and leadership that are essential for improving
corporate value? We recognize that it is important to foster
awareness that we are creating the next era's ENEX whilebalancing the pursuit of social value (solving social issues)and economic value (economic rationality).

■

Expectations (our reasons for existing)As “The Best Partner for Life and Society,” our Group's
mission is to pursue customer value centered on energy,
but at the same time it is incumbent upon us to seriously
attempt to find solutions to social issues. By supplying
the energy that is essential to enriching society and life,
and whether it is B2B or B2C, expanding our customer
base while exploring new forms of energy and new uses, I
hope that we can become an unrivalled and indispensable
presence for society and people’s lives.

■

Further empowerment of women in line with changes in thebusiness environment
Outside Director Motoyo Yamane

We are at a crossroads now.
Humankind’s fate in termsof what kind of energy it will
use and how it will use it tosurvive in the future will be
determined by the choices
we make now. At our Group,
which is an energy trading firm, we naturally feel a strong
sense of crisis. However, precisely because we have a senseof crisis, we also have high expectations for new businessdevelopment opportunities, and we are working out growthstrategies for the future.
At times like this, I am conscious of revitalizing theorganization so that we can fully draw out the free ideas,
motivation, and abilities of each employee. I believethat the key to the future of the Group, which has arelatively democratic corporate culture, is to further

empower women. From the standpoint of being the firstwoman outside director, I would like to contribute to
the creation of a work environment that is comfortablefor women. Occasionally, I have the opportunity to talkwith women leaders, and I am impressed by the fact that
there are women who are truly strong and active in work
environments that I thought were dominated by men.
However, the ratio of women in managerial positions iscurrently low, at just 4%. We are aiming for 10% by 2030,
but this will not be achieved through the efforts of womenalone. It is necessary to encourage male employees,
especially management, to change their mindsets. This
year, there is a training facility in Karuizawa where you canstay overnight. I believe that the ability of individuals todeepen their thinking and grow as human beings amid arich communication environment will be the strength that
the Group needs to overcome difficult times.
61

System for Supporting Sustainable Growth

Corporate GovernanceCorporate Governance System* (As of June 14, 2023)*Business execution, internal control, managerial monitoring and risk management system, etc.

General Meeting of Shareholders
Board of Directors
Composition

Meetings in FY2022: 11

Eight directors in total (including one woman); ﬁve
are Inside Directors and three are Outside Directors(ratio of Outside Directors: 37.5%)

Makes decisions on material matters and oversees the
Directors’ performance of their duties, in accordance withlaws and regulations, the Company’s Articles ofIncorporation, rules of the Board of Directors, and otherinternal rules. Each Director executes his or her duties basedon the roles deﬁned by the Board of Directors, and inaccordance with laws and regulations, the Articles ofIncorporation and internal rules.

Governance Committee
Composition

Meetings in FY2022: 10

Five members in total, comprising three
independent oﬃcers (all are Outside Directors) and
two Inside Directors

As a voluntary advisory committee to the Board of Directors,
the Governance Committee was set up to strengthen andenhance the eﬀectiveness of management oversight and thetransparency of decision-making by the Board of Directors. It
deliberates and examines the methods of selecting Directors
and Executive Oﬃcers, remuneration system, materialtransactions and actions with stakeholders (except
controlling shareholders), and other matters related to
Corporate Governance.

Special Committee
Composition

The Special Committee was formed on October 29, 2021, as avoluntary new advisory body to the Board of Directors. The
Committee consists of independent members, including
independent Outside Directors. It deliberates and examines
material transactions and actions involving conﬂict ofinterests between the controlling shareholders and theminority shareholders.
Meetings in FY2022: 20

To aid in the proper and agile decision-making on theexecution of duties, the Management Advisory Conference
has been set up as an advisory body to the President andCEO as well as to the Board of Directors. At meetings of theManagement Advisory Conference, deliberations are held on
the Group’s overall management policies and otherimportant matters concerning management.

62 ENEX REPORT 2023

Appointment and Dismissal

Auditing and Reporting

Board of Directors
Directors

Advising and Replying

ReportingGovernance Committee

Appointment and OversightSpecial Committee

Audit & Supervisory Board
Audit & Supervisory
Board Member

Audit

ReportingAppointment and Dismissal
Independent Auditors

Accounting Audit

Cooperation

Business Execution and Internal Control
ReportingPresident andChief Executive Oﬃcer
ChairmanManagement Advisory
Conference

Risk Management Committee

Meetings in FY2022: 1

Five independent oﬃcers in total (three Outside
Directors and two Outside Audit & Supervisory
Board members)

Management Advisory Conference

Appointment and Dismissal

CCO

Internal Control Committee

CFO

Disclosure Committee

CIO

Sustainability Committee

Audit Department

Internal Audit

ENEX Divisions/Group Companies

Response to Japan’s Corporate
Governance Code

The Company endorses the goal of “growth-oriented
governance” called for in Japan’s Corporate Governance
Code, issued by Tokyo Stock Exchange, Inc. (TSE). The
Company is taking measures aimed at ensuring soundleadership by senior managers and transparent andfair decision-making, and is addressing all items in the
Corporate Governance Code.

Corporate Governance System

The Company has a Board of Directors and Audit &Supervisory Board Members (Audit & Supervisory Board).
In accordance with laws and regulations, the Company’s Articles of Incorporation, rules of the Board of Directors
and other internal rules, the Board of Directors makes
decisions on material matters and oversees the Directors’
performance of their duties. Each Director executes hisor her duties based on the roles defined by the Board of
Directors, and in accordance with laws and regulations, theArticles of Incorporation and internal rules. To strengthen
the Board of Directors’ decision-making and oversightfunctions and increase the efficiency of business execution,
the Company has adopted an executive officer system. As
delegated by the Board of Directors and Representative
Directors, Executive Officers execute the duties assigned tothem based on decisions made by the Board of Directors.

Audit & Supervisory Board
Composition

Meetings in FY2022: 12

Four members in total (including three Outside
Members); two are Standing Members and two are
Non-Standing Members

In accordance with the regulations for the Audit &Supervisory Board and the standards for audits by the Audit& Supervisory Board Members, members attend important
meetings such as Meetings of the Board of Directors, andconduct interviews with Directors, etc. to check theappropriateness of the execution of duties by the Directors.
In addition, the Board formulates auditing plans, reports
audit results, reappoints accounting auditors, and approves
remuneration.

Risk Management Committee

Meetings in FY2022: 5

Internal Control Committee

Meetings in FY2022: 6

Disclosure Committee

Meetings in FY2022: 5

Sustainability Committee

Meetings in FY2022: 7

The Risk Management Committee deliberates on risk
management issues by identifying and analyzing risks that
could have a material impact on management, implementing
countermeasures, preventing the occurrence andmaterialization of risks, and promoting risk awareness. It
works to mitigate risk by continually bolstering risk
management (including investment reviews forcross-shareholdings and veriﬁcation of the necessity ofholding such shares).

To ensure that the internal control system is operating
appropriately, the Internal Control Committee reviews thedevelopment and implementation status of the internal
control system every six months for each item in the Basic
Policy. The results of Committee discussions are reported to
the Board of Directors, and a ﬁnal assessment is made on thedevelopment and implementation status of the internal
control system at a Board of Directors meeting.

As an advisory body to the Board of Directors and theManagement Advisory Conference on the disclosure of
information, the Disclosure Committee exhaustively andpromptly collects important corporate information acrossthe Group, and examines and deliberates the necessity of
disclosure, the accuracy, clarity, suﬃciency, fairness, andpositiveness of information, so that the required disclosuresof information can be made.

As an advisory body to the Management Advisory
Conference, the Sustainability Committee was set up in May
2021 to deliberate and monitor sustainability policy, issues,
and measures from a long-term perspective, and to
implement and drive Group-wide sustainability management
strategies.

63

System for Supporting Sustainable Growth

Status of Efforts by the Board of Directors
Number of proposals

We have established regulations regarding the submission of
proposals to the Board of Directors, Management Advisory
Conference, and other meeting bodies. Proposals at meetingsof the Board of Directors are submitted according to theseregulations. With more and more diverse proposals being
submitted to the Board of Directors, in recent years we havebeen promoting the delegation of authority, and dependingon the proposal, we are increasingly leaving it to individual
Divisions to decide. Discussions on important proposals havebeen increasing at Board of Directors meetings.

Deliberation time (annual general meeting time)
We provide opportunities for debate and briefings to
outside officers on proposals prior to their submission
to the Board of Directors so that they will be able to takepart in the discussions with a better understanding of theissues. At the Board of Directors meetings, participantspresent a wealth of questions and point things out. At
the same time, because we shorten explanation times by
having discussions in advance, we are also improving work
efficiency.

Appointment of Outside Officers(Proposals)
100

80

90
75

70

The Company seeks to enhance its corporate value by selecting individuals who have knowledge in specialized fields suchas management, law, accounting and energy, and who can be expected to contribute to the Company’s management andoversight of business execution from various perspectives.

77

60
40
20
0

2019

2020

2021

Formulation of the New Medium-Term Business Plan
● Investment projects of high importance (sales of wind
power generation, large-scale solar power generation,
etc.)

OutsideDirectors
25

20

20

18

15

15
10
5
0

2019

2020

2021

2022

Initiatives to ally with other companies● Corporate Governance● Information disclosure based on the TCFD
recommendations●

The Board of Directors then analyzed and evaluated its
effectiveness, drawing upon those opinions as well as
assessments and analyses by third-party evaluation
organizations, and deliberation and examination by theGovernance Committee.

Questionnaire

Evaluators

All members of the Board of Directors and Audit & Supervisory Board as of March 2023

Evaluation results
Issues64 ENEX REPORT 2023

11/ 11

MotoyoYamane10 / 11

Meetings of the Board of Directors held between April 2022 and March 2023 (a total of 11 meetings)
Questions and free-form questionnaires (anonymous to ensure transparency) related to “Board of Directors' operations (7items),” “Board of Directors' discussions (5 items),” “Monitoring functions (4 items),” and “Other (7 items)” were implemented.
Each item generally suggests a high standard, meaning that the operations of the Board of Directors of the Company as awhole are judged to be appropriate.
Deepen discussions on medium- to long-term management strategies and policies, improve management systems toencourage discussions, etc.

OutsideAudit &
Supervisory
Board
Member

8/8
FY2022 Attendance

Board ofDirectors

Audit &
Supervisory
Board

Isao
Kubo

11 / 1112 / 12

Shozo
Tokuda11 / 1112 / 12Name

Evaluation method

Outline of
implementation

IchiroSaeki

TakuyaMorikawa

20

Evaluation of the effectiveness of the Board of Directors

Subject of evaluation

FY2022 Board of Directors
Meeting Attendance(Hours)

Effectiveness Evaluation

The Company asked all Directors and Audit & Supervisory
Board Members to give their opinions based on their own
evaluation of the effectiveness of the Board of Directors
as a whole in FY2022, including the composition,
operation status, and support structure of the Board.

Name

2022

Major issues discussed in the Board of Directors’ meetings in FY2022●

Reasons for Appointment of Outside Officers

MasakoIwamoto11 / 1112 / 12

Reasons for Appointment

Ichiro Saeki has specialized knowledge in his capacity as an attorney and a university professor, and extensive
experience with corporate legal affairs. He also acquired broad knowledge of banking and finance during his
tenure at the The Nippon Credit Bank (currently, Aozora Bank, Ltd.). Based on this broad knowledge, he wasappointed because it was deemed he could provide advice for the management of the Company as well as
proper oversight of the execution of the Company’s businesses from an objective and expert perspective. The
Company believes that he meets the Standards for Independence stipulated by the Financial Instruments
Exchange and by the Company.
Motoyo Yamane worked in the broadcasting industry for many years, where she was involved in the operationof organizations and the development of human resources. She also has sat on various expert committees
related to social contribution and cultural activities and has advanced insight into society and culture in
general acquired through these activities. Based on this knowledge and the diverse perspectives cultivatedthrough her career, it was determined that she would be able to contribute advice regarding the Company's
management and appropriate oversight of business execution. The Company believes that she meets theStandards for Independence stipulated by the Financial Instruments Exchange and by the Company.
Takuya Morikawa has long engaged in a wide range of business activities in the stationery and office equipment
industry, including business strategy, overseas business, and the launch of new businesses. Through these
activities, he has gained business experience and a wealth of knowledge on business management. Basedon this, it was determined that he would be able to contribute advice regarding the Company's management
and appropriate oversight of business execution. The Company believes that he meets the Standards for
Independence stipulated by the Financial Instruments Exchange and by the Company.
Reasons for Appointment
Isao Kubo has many years of experience in management planning and operations related to auditing at
ITOCHU Corporation. After working as a Managing Executive Officer and General Manager of Internal Audit
Division, he became a Director, Senior Managing Executive Officer, CSO, and General Manager of Corporate
Planning Division at FamilyMart Co., Ltd. He has extensive knowledge of business management. Based on
this, it was determined that he would be able to contribute advice regarding the Company's management
and appropriate oversight of business execution. Because he does not meet the Standards for Independence
stipulated by the Financial Instruments Exchange and by the Company, he has not been designated as an
Independent Audit & Supervisory Board Member.

In addition to Shozo Tokuda’s expertise as a certified public accountant and his extensive experience incorporate accounting, he has profound knowledge gained at auditing firms. Based on this knowledge, from an
objective and expert perspective, it was determined that he would be able to contribute advice regarding theCompany's management and appropriate oversight of business execution. The Company believes that he meets
the Standards for Independence stipulated by the Financial Instruments Exchange and by the Company.
As an attorney, Masako Iwamoto has specialized knowledge and extensive experience in corporate legal
affairs. She has also acquired deep insight during her tenure as an outside officer at Achilles Corporation.
Based on this knowledge, from an objective and expert perspective, it was determined that she would be
able to contribute advice regarding the Company's management and appropriate oversight of businessexecution. The Company believes that she meets the Standards for Independence stipulated by the Financial
Instruments Exchange and by the Company.

Relationship with the parent company

Other special circumstances which may have material impact on Corporate Governance(relationship with parent company)
Our parent company, ITOCHU Corporation, holds 53.97%
of our voting rights, making us a consolidated subsidiary.
Our Company is the core company of the domestic sales of
petroleum products in the ITOCHU Group and the import/
export business originating from Japan. As a criticalbusiness partner, we promote the exchange of informationon the trade in petroleum products, market conditions fordomestic and foreign crude oil and petroleum products, aswell as business initiatives related to personnel exchanges,
electric power and environmental businesses, overseas
projects, etc. The Company's dependence on the parent
company for business transactions is fairly low, and mosttransactions are with general companies and consumers.
We recognize that there are no business restrictions
imposed by our parent company, and we believe that
we are in a situation where we can make independent
management decisions while ensuring independence andautonomy. Although there are some seconded employees
between the Company and ITOCHU Corporation andits corporate Group, three outside directors have been
designated as independent officers, and more diverse
opinions can be reflected in deliberations at the Board of
Directors meetings. As a result, independence is ensured
and independent management decisions are not hindered.
65

System for Supporting Sustainable Growth

Policies and Procedures on Determination of Remuneration for Directors
Basic Policy

Remuneration for Directors of the Company is designed
to attract talented human resources with the ability to
implement the Company’s Corporate Philosophy and to
motivate them to contribute to the sustained improvementof its corporate value. It is the Company’s basic policy
to determine remuneration paid to each Director at an
appropriate level based on his/her position and duties.

Remuneration System for Directors

Remuneration for Executive Directors comprises fixed basic
remuneration (monthly remuneration) and performancelinked remuneration that fluctuates according toperformance. Remuneration for Non-Executive Directors
comprises only fixed basic remuneration (monthly
remuneration) from the perspective of their roles andindependence.

Composition of Remuneration for Executive Directors (FY2023-)
Types of Remuneration

Monetary/Non-monetary
Monetary

Base Remuneration (Fixed Remuneration)

Bonuses (Performance-linked Remuneration)

Stock Remuneration (Performance-linked Remuneration)
Total

Percentage

Chairman/President

Other directors

29％

32％

MonetaryNon-monetary

Note: The above ratio represents remuneration when 100% of all targets for performance-linked remuneration are reached.

57％
14％

100％

63％
5％

100％

Composition of Director Remuneration (for Executive Directors)
Types of
Remuneration
Base
remuneration

Bonuses

Details of Remuneration

The Company determines the fixed monthly amount according to the position and responsibilities of each Director, taking into account thestandards of other companies based on the research of specialized external institutions.

The Company pays performance-linked bonuses to Executive Directors at certain times of each year as a short-term performance pay basedon a performance indicator and the level of goal achievement in the year.
● The performance indicator that is the basis for bonuses is the level of achievement of the target profit attributable to the Company's
Shareholders (consolidated) each year.
● The Company determines the amounts of bonuses by multiplying the base remuneration by a certain coefficient according to the levels ofachievement of company-wide performance, division performance, section performance, and a qualitative assessment.*

As medium- to long-term performance-linked remuneration, Executive Directors are provided with points according to net profit under the
Medium-Term Business Plan, the titles of the Directors, and the number of months in their term of office. At the time of their retirement, theyacquire a number of the Company’s common shares commensurate with the total number of points granted.
● The number of shares provided is the product of multiplying the number of points given by 1.0.
● Stock remuneration is adopted to motivate Directors to contribute to the improvement of the Company's medium- to long-term performanceand the increase of its corporate value.
●

Note: Of the above remuneration, for the bonuses and stock remuneration, which are linked to the Company's business performance, net profit (consolidated) attributable to theCompany's shareholders has been adopted as the indicator for evaluating the overall business performance of the Company. It was adopted to ensure the simplicity of theindicator, consistency with the numerical targets related to the Company's business management (or with the quantitative targets set in the medium-term business plan,
which apply to the performance-linked stock remuneration), and in light of the trends of other companies. Net profit in FY2022 is 13,832 million yen.

Policy, Etc. for Determining the Remuneration of Individuals
To flexibly determine the amount of remuneration for
individuals, Tomofumi Yoshida, the Representative Director,
President and Chief Executive Officer of the Company,
is delegated to determine specifics based on standards
established in advance. Changes made to the above
composition of remuneration, basic remuneration, and bonuses
require approval by the Board of Directors after consultation
with the Governance Committee. Changes in the stock
remuneration require approval at a Board of Directors’ meetingor a General Meeting of Shareholders, after consultation with
the Governance Committee. As for Director remuneration,
66 ENEX REPORT 2023

Risk Management

Risk Management Committee

Systems for Handling Emergencies

Risks related to businesses (annual securities report;
in Japanese)

Risk Management
https://www.itcenex.com/en/csr/governance/riskmanagement/

Amid an increase in various risks, the Risk Management
Committee plays the central role in risk mitigation, as
it deliberates on risk management issues, including
the identification and analysis of risks that could havea material impact on the Group’s operation, as well as
countermeasures, prevention of the occurrence andmaterialization of risks, and awareness-raising, while
continually bolstering risk management.

the Company has established a system in which theGovernance Committee receives one or more reports a year
on the overall distribution of remuneration for individual
Directors, ensures that such activities are conducted
appropriately in line with this policy, and guarantees theirobjectivity, fairness, and transparency. The Board of Directors
receives the results of deliberations and examinations,and reports on the appropriate remuneration of individual
Directors in line with this policy from the GovernanceCommittee, and the Company believes that the activities of
the Board of Directors are also in line with this policy.

The Company has established reporting routes that enable
it to quickly obtain accurate information and respond
appropriately when an accident occurs or a risk arises in
the Group. The Company has also developed an emergency
contact network that systematically connects Group
companies, business divisions, and officers (including thePresident), so that when an earthquake, typhoon, heavy
rain, or other natural disaster occurs, it will be able toquickly confirm the safety of Group personnel, ascertain
the level of damage to the Group’s facilities and clients, andsecure essential services.

https://www.itcenex.com/ja/ir/doc/security_report/

Internal Control

We have constructed, operate, and continuously improveon an internal control system to ensure that its operations
are conducted properly and in compliance with laws,
regulations, and the Articles of Incorporation. Our Group’●* The comprehensive qualitative assessment is performed by the Representative Director and President, taking into account the level of the goal
achievement of each Executive Director (progress in addressing issues in the areas of their responsibility, development of management executives,
thoroughness of legal compliance, etc.).

Stock-based
remuneration

Risk Management and Internal Control

s internal control system is outlined in the Basic Policy on
Internal Control System, which was revised on May 18, 2023.
Basic Policy on Internal Control System

https://www.itcenex.com/en/corporate/governance/control/Fire and Disaster Prevention/Business Continuity Plan (BCP)The Company has formulated a business
continuity plan (BCP) as a precaution against
possible major natural disasters. The BCP and
Disaster Response Headquarters, which is thecore organization of this plan, consists of the CEO(Director of the Disaster Response Headquarters),
heads of departments, and general managers.
In the event of a large-scale disaster, theHeadquarters leads Group-wide activities to
respond to the situation based on a plan that lays
out the people in the chain of command and how
to respond to specific circumstances. In addition,
the Company has in place a backup system totransfer the head office functions to Fukuoka andHiroshima. In FY2022, in addition to conducting
first-aid training at the head office and different
areas, we are working to improve the effectivenessof our BCP, including training linked to ouralternative centers of operation and training for
personnel in charge of continuing and promoting
BCM (Business Continuity Management)
operations.

Emergency rescue drills conducted at the head office and different areas

67

System for Supporting Sustainable GrowthCompliance

IR Activities

Promotion structure

The Company has taken steps to improve its
compliance system, including appointing a CCO,
establishing a department that oversees mattersconcerning compliance, and developing a complianceprogram. We have also appointed compliancemanagers/personnel in each division and Group
company, implemented compliance education andtraining, compiled a legal and regulatory compliancemanual, clarified responses to compliance incidents,
and developed a whistleblowing system. In addition,from each Director, Executive Officer, and employee
we have obtained a Declaration of the Group Code of
Conduct related to employee compliance with the Codeof Conduct.

Education in Compliance

President andChief Executive Oﬃcer
CCO
Compliance Oﬃce

To promote employee awareness of compliance, theCompany periodically prepares documents to be
distributed within the Group and shared on the intranet.

Compliance ProgramThis resource provides a straightforward
introduction to compliance promotion
activities, including objectives, systems,
incident/accident response, andwhistleblowing and consulting contact
points.

Compliance Case
Studies

These case studies provide easy-tounderstand examples and response
approaches for various major andminor compliance violations, including
misconduct, harassment, labor issues,complaints, legal and regulatory
violations, and information leakage.

Harassment
Guidelines

68 ENEX REPORT 2023

These guidelines set out prohibited
workplace behaviors with the aim of
ensuring that employees and officers of
the ENEX Group correctly understandthe issue of harassment, and of creatinga harassment-free workplace.

Cooperation

Consultation

Human Resources &General Aﬀairs Department
Consultation

Outside consultants(Lawyer/social worker, etc.)

Consultation

Division Compliance Managers/Personnel

Consultation

Group Company Compliance Managers/Personnel*1 Compliance manager: Compliance managers of the Company, one person from each division,
are appointed by the CCO. Additionally, at Group companies for which ITOCHU ENEX CO., LTD.
has over 50% ownership, in principle, the president of the Group company serves as thecompliance manager, also supervising subsidiaries for which that Group company has over 50%
ownership.
*2 Compliance personnel: Compliance personnel are appointed by the compliance managers, andare responsible for promoting awareness regarding compliance, serving as the point of contact
in the event of trouble, accidents, misconduct or complaints, and ensuring environmental
preservation and soil contamination prevention.

With the objective of maintaining and ensuring the universal
recognition of our compliance system, the Company holds
education and training in compliance for Group officers andemployees on an annual basis. In particular, the Company
conducts nationwide compliance rank-based training programs
as appropriate. Furthermore, through education and training
for compliance managers and personnel in each department
and Group company, the Company is enhancing their practicalability to respond to specific compliance incidents, thereby
continuing to strengthen the Group’s compliance system.

Promoting Awareness of ComplianceManagement Advisory
Conference

ENEX Group Awareness Survey

Incidents relating to accounting misconduct,
embezzlement, harassment, and labor issues at various
companies, organizations, and bodies are on the rise. The
Group conducts a compliance awareness survey of its
officers and employees to ascertain the state of complianceawareness and the penetration of the Corporate Philosophy
in order to help prevent misconduct and complianceincidents. The results are used as a guide for improving
compliance training and creating new initiatives.

Whistleblowing and Consulting Contact Points

The Group has established inside and outside whistleblowing
contact points to facilitate prompt reporting of violationsof laws and internal rules, other forms of misconduct, andconcerns about the potential for misconduct. As part ofcompliance training, the Group ensures that all employees
are aware of the system of whistleblowing contact points andthe protection given to whistleblowers. It has also a system inplace for responding appropriately to whistleblowing reports
and maintaining the transparency of those responses.
Additionally, the Group has made available an outside
consulting contact point for any employee or family member
associated with the Group. This consulting contact point canalso respond to issues concerning harassment, mental health,physical health and living circumstances. A system for providing
care for mental health and consultation on other issues ismaintained by specialists such as clinical psychologists, publichealth nurses and consumer affairs advisors.
The Group ensures the effectiveness of thewhistleblowing system through regulations that clearly
define the responsibilities of the various parties that handle
cases. These regulations prohibit unfavorable treatment,
including termination of employment, as a consequence ofwhistleblowing, and mandate confidentiality.

IR Basic Policy
https://www.itcenex.com/en/ir/policy/basicpolicy/

When disclosing information to and engaging in dialogue with stakeholders, our Group strictly complies
with relevant laws, regulations, and rules. It also emphasizes two-way communication through dialogue,
while striving to explain its the status of its businesses, management policies, and other information in atimely, fair, accurate, and clear manner and on an ongoing basis. In addition, Feedback from stakeholders,
including requests and opinions, is provided to management.

General Meeting of Shareholders

We hold a general meeting of shareholders every June. A videoof the day's events is available exclusively to shareholders. We
also publish shareholder newsletters as IR tools.

JCR (Japan Credit Rating Agency, Ltd.) Rating
In 2022, our JCR long-term issuer rating was upgraded from
A+ (stable) to AA- (stable), and our domestic CP rating was
upgraded from J-1 to J-1 plus. These ratings stayed thesame in 2023.
As of August 22, 2023
Issue

RatingOutlook

Issue

Maximum

RatingLong-term issuer rating

Dates

Attendance

FY2020 Results FY2021 Results FY2022 Results
June 16, 2021
13

June 21, 2022
22

June 14, 2023
34

Main IR activities

Financial results presentations
We hold semiannual financial results presentations for
institutional investors, analysts, and the media in May andNovember. Since FY2022, we have held presentations ina hybrid format of on-site and online sessions, and thequestions and answers received at the presentations are
made available on our
website. (Speakers haveincluded seven Directors in
addition to the President &CEO)
Presentations for individual investors
Starting in FY2021, we have been holding online
presentations for individual investor. Most recently, in July
2023, we released a newvideo that includes an
explanation of the new
medium-term business plan.
(Speaker: CFO)
Meetings withinvestors, etc.*

Financialresultspresentations
for institutional
investors, etc.
Presentations
for individual
investors

FY2020 Results FY2021 Results FY2022 Results
33 times

38 times

37 times

Twice yearly(94 in total)

Twice yearly(87 in total)

Twice yearly(86 in total)

0 timesOnce(1,559 viewers)

Once(1,592 viewers)* Persons dealing with investors: CFO, aide to the CFO, members of the Investor
Relations & Planning Section

Commercial paperAA-¥30 billion

StableJ-1+

JPX-Nikkei Index 400 and Mid and Small Cap Index
Both JPX-Nikkei Index 400
and Mid and Small Cap Index,
jointly compiled by JPX Market
Innovation & Research, Inc. and Nikkei Inc., are stock priceindexes indicating attractive companies for investment.
These are indexes that select companies engaged inmanagement marked by the efficient use of capital andconsciousness of investors.
The Company was selected as a constituent of the 2023
JPX-Nikkei Index 400 for the first time in FY2023, and wasselected as a constituent of the JPX-Nikkei Mid and Small
Cap Index for the sixth consecutive year.

Nikko Investor Relations’ Corporate Website Rankings
The All Japanese Listed Companies’
Website Ranking, provided by Nikko
Investor Relations Co., Ltd., ranks
the websites of all 3,926 listed
Japanese companies. This assessment of IR sites isbased on 169 objective evaluation items that measure
how well each website informs stakeholders in termsof understandability, user convenience, and amount of
information. Our website has received the highest rating,AAA, for four consecutive years since 2019.

GOMEZ IR Site Ranking 2022

BroadBand Security, Inc. provides GOMEZ
IR Site Ranking for the corporate websites of
3,797 listed Japanese companies, based on
241 evaluation items under the categories ofusability and proactiveness and foresight indisclosure, among others. We received a Silver Award again,
after our first in FY2021.
69

Financial Data

Financial Summary for 11 Years
JGAAPOperating Results by FY (millions of yen)
Net sales
Revenue

FY2012FY20131,430,745–

FY2018–FY2019–FY2020–

FY2021–

FY2022––

723,645

695,060

744,767

1,007,086

897,427

739,067

936,306

1,012,018

56,32857,862

71,18473,226

74,69770,931

67,31868,858

67,11568,06568,88913,726

Net profit attributable to ITOCHU ENEX’s shareholders–

FY2017

936,841

Profit from operating activities

Per share (yen)–FY2016

966,044

70,054

Net profit attributable to ITOCHU ENEX’s shareholders–

FY2015–Gross profit

Selling, general and administrative expenses

FY2014

IFRS

5,576
49.36

71,59911,875
7,124
63.05

85,72013,1005,503
48.71

89,562
16,384

93,604
19,67888,822
17,153

84,21017,851

86,41819,25786,88919,346

83,591
20,92989,556
21,368

7,469

10,405

11,025

11,55912,056

12,16813,194

13,832

66.10

92.09

97.63

102.40106.81

107.79116.89122.54868.69833.20862.30889.70960.37

1,028.57

1,083.37

1,136.89

1,206.88

1,278.32

1,355.37

Total assets

323,747

321,032

329,059

304,053

344,603382,621374,373

387,657

408,327

447,017

433,024

Net interest-bearing debt

23,02324,347

24,77016,841

18,293

20,132

15,385

5,937▲17,382

136,233▲5,216144,297▲17,886

39,95534,799

Shareholders’ equity
Cash dividends

Financial position at the end of FY (millions of yen)

16

40,903

Interest-bearing debt
Shareholders’ equity

105,970

Cash flows from operating activities

21,606

Cash flows at the end of FY (millions of yen)
Cash flows from investing activities

Cash flows from financing activities
Free cash flows

20

38,59894,144

17,53070 ENEX REPORT 2023

30,322

17,831

24,23925,403

28,106

40,214▲15,857▲26,196▲24,528

18,725

19,243

34,841

5,781

11,9930.22

Yearly sales volumes of main productsElectricity (GWh)

34,336

3,119

32.4

LP gas (thousand tons)

128,333

13,649Dividend payout ratio (%)

Diesel oil (thousand kl)

122,290

13,926

32.7

Kerosene (thousand kl)

116,104

4,974

Equity ratio (%)

17,459108,511▲3,441▲8,85925,18050

100,526▲13,4105,964

44

97,432▲18,458

5.8

Gasoline (thousand kl)

34,110▲14,7122.2

Note1: Revenue excludes consumption
tax, etc. (national and local
consumption tax ; same applies
below).
Note2: Based on IFRS since the fiscal year
ended March 2014.
Note3: As the Group began applying
IFRIC 21 (Levies) in March 2015,
the related main management
indicators, etc. for the fiscal year
ended March 2014 were adjusted
retrospectively.
Note4: The amounts are rounded off tothe nearest million.
Note5: Intermediary volumes have been
included in the electricity sales
volumes since the fiscal year
ended March 2021.

42,705

42▲16,673

1.8

Net interest-bearing debt – shareholder’s equity ratio (NET DER) (times)

41,02040▲20,410

ROA (%)ROE (%)

37,66532▲12,556

14,251Main indicators

40,95424▲25,047

17,880Cash and cash equivalents at the end of the period

22▲12,115▲1,195▲5,85026,69532,929▲125▲19,11340,08920,84250

14,127

152,961▲3,190▲17,625▲37,747

38,14532,01331,60920,82422,727

22,573

1.7

2.4

3.2

3.0

3.1

3.2

3.1

3.1

3.1

29.3

29.6

33.1

31.5

30.3

32.7

33.1

33.4

32.3

35.3

31.7

45.2

36.3

34.8

41.0

41.0

41.2

7.8

0.26

16,184▲9,059▲1,411

48

5.7

0.25

7.5

10.0

0.17

0.17

9.8

0.17

9.7

0.13

9.6

9.2

9.4

9.3

0.05

▲0.13

▲0.04

▲0.12

46.4

41.1

40.8

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

2,099

1,874

1,502

1,471

1,448

1,590

1,565

1,229

1,145

1,054

915

4,317

3,993

3,593

3,722

3,587

3,328

3,201

2,767

2,386

2,510

2,469

3,387

3,389

3,302

3,321

3,271

3,401

3,499

3,288

3,164

3,282

3,217

80

231

409

873

2,431

2,671

2,874

2,605

2,393

2,692

2,262

619

625

619

601

597

618

573

543

500

485

475

71

Company Information

Stock Information, Company Overview, etc. (as of March 31, 2023)
Shares and Shareholders

General Meeting of Shareholders

387,250 thousand

Authorized shares

116,881 thousand

Shares issued and outstanding

21,760Shareholders

100

Shares per trading unit

Principal Shareholders
Name

ITOCHU Corporation

Shares (thousand) Stake (%)

The Master Trust Bank of Japan,
Ltd. (trust account)

Custody Bank of Japan, Ltd. (trust
account)
Enex Fund
Nippon Life Insurance Company
ITOCHU ENEX Employee
Shareholding Association
STATE STREET BANK AND
TRUST COMPANY 505001
STATE STREET BANK AND
TRUST COMPANY 505223

THE BANK OF NEW YORK MELLON
140042DFA INTL SMALL CAP VALUE
PORTFOLIO

60,978
7,299

53.97
6.46

5,039

4.46

3,295

2.92

1,542

1.37

1,433

1.27

909

0.80

781

0.69

752
730

0.67

Notes: The above figures exclude treasury stock (3,896 thousand shares)

Shareholding Ratio by Owner

Financial instruments broker

1.2%

Treasury stock

0.65

Ordinary General
Meeting of
Shareholders

For Ordinary General Meeting of Shareholders:March 31 of each year
For year-end dividends:
March 31 of each year
For interim dividends:
September 30 of each year

Shareholder
registryadministrator

Stock Transfer Agency Business Planning Dept.,
Sumitomo Mitsui Trust Bank, Ltd.

Corporate Overview
Head officeaddress

Established

Paid-in capital
Main sites
Subsidiaries

Affiliates (equity
method applied)
Number of
employees
Stock exchange
listing
Securities code
Main financial
institutions

ITOCHU ENEX CO., LTD.

3-2-5, Kasumigaseki, Chiyoda-ku,
Tokyo 100-6028, Japan
¥19,877.67 million

Hokkaido, Tohoku, East Japan, Chubu, Kansai,
Chugoku & Shikoku, Kyushu
45

8133

Sumitomo Mitsui Trust Bank, Ltd.; Sumitomo
Mitsui Banking Corp.; Resona Bank, Ltd.; Mizuho
Bank, Ltd.; MUFG Bank, Ltd.

President andChief ExecutiveOﬃcer

Audit &
Supervisory
Board

Other domestic

ITOCHU ENEX HOME-LIFE HOKKAIDO CO., LTD.
ITOCHU ENEX HOME-LIFE TOHOKU CO., LTD.

ITOCHU ENEX HOME-LIFE NISHI-NIHON CO., LTD.
ITOCHU ENEX HOME-LIFE SHIKOKU CO., LTD.
ECORE CO., LTD.

ENEARC Co., Ltd.

Car-Life
Division

Planning & Administration Department
North Japan Sales Department

Chairman

East Japan Sales Department

West Japan Sales Department

ENEX FLEET CO., LTD.

ENEXFLEET Vietnam Co., Ltd.
KYUSHU ENERGY CO., LTD.

OSAKA CAR LIFE GROUP CO., LTD.
(NISSAN OSAKA SALES CO., LTD.)

Kyushu Sales Department

Retail & Supply Department
Administration Department

Industrial
Business
Division

Planning & Administration Department

ITOCHU INDUSTRIAL GAS CO., LTD.

Asphalt Department

Marine Fuels Department

Environmental Business Department
Supply & Terminalling Department

Energy Corporate Sales Department
Administration Department

Power &
Utility
Division

Planning & Administration Department

Power & Supply Management Department
Power Corporate Sales Department
Green Transformation Department
Administration Department

Evaluation by Society (as of August 31, 2023)

ENEX Electric Power Co., LTD.
Tokyo Toshi Service CO., LTD.
ENEX LIFE SERVICE CO., LTD.

Oji-ITOCHU ENEX power retailing Co., Ltd.
Enex Asset Management Co., Ltd.

ITC ENEX Southeast Asia Co., Ltd.
ITC ENEX (Thailand) Co., Ltd.

PT. ENEX TRADING INDONESIA

54.2%

Corporate
Administration
Division I

12.3%

Corporate
Administration
Division II

Banking

13.7%

72 ENEX REPORT 2023

Board ofDirectors

Administration Department

642 (non-consolidated basis, including 170
seconded to subsidiaries)
5,461 (consolidated basis)

Foreign

15.3%

GeneralMeeting of
Shareholders

Security System Department

22

Prime Market, Tokyo Stock Exchange (stock name:
ITOCHU ENEX)

Planning & Administration Department
Platform Management Department

January 28, 1961

3.3%

Individual

Home-Life
Division

Annually in June

Basis dates

Trade name

ITOCHU ENEX CO., LTD. Organization Chart (As of April 1, 2023)

See here for details
https://www.itcenex.com/en/csr/evaluation/

Finance & General Accounting Department
IT & Digital Department

Corporate Administration Department
Legal & Credit Control Department

Human Resources & General Aﬀairs Department
Investment Strategy Department
Corporate Planning Department
Audit Department73