[Translation]

Corporate Governance Report
Last Updated: April 2, 2021

ENECHANGE Ltd.
Yohei Kiguchi, Representative Director and CEO
Contact: Takuya Sugimoto, Executive Officer / CFO+81-3-6774-6709
Securities Code: 4169
https://enechange.co.jp/
The corporate governance of ENECHANGE Ltd. (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Attributes and Other
Basic Information

1. Basic Views
With the mission of “Changing Energy for a Better World,” the main focus of business for the Company
group (the “Group”) are those domains that contribute to the axes of energy revolution, or the “4Ds ofEnergy”: Deregulation, Digitalization, Decarbonization, and Decentralization. As a group of “energy tech”
companies specialized in the energy field, we are developing businesses that leverage mutual synergies
through the use of energy-related data and promoting digital transformation (DX) in the “4Ds of Energy”
with an aim to achieve a unique position as a data platform in the energy field.
To fulfill this mission, the Group conducts corporate activities while ensuring that all Directors andemployees comply with laws, regulations, and the Articles of Incorporation, and perform their duties under
the ENECHANGE Group Charter of Corporate Behavior to enhance management efficiency andtransparency, achieve sustainable growth, and maximize corporate value.
[Possibility of non-compliance with the Principles of Japan's Corporate Governance Code]
The Company is fully compliant to the five General Principles of the Corporate Governance Code.

2. Capital Structure
Foreign Shareholding Ratio

30% or more

[Status of Major Shareholders]Name

Number of Shares Owned(Shares)Yohei Kiguchi

Shareholding Ratio(%)

1,143,360

19.78

B Dash Fund 2 Limited Liability Partners

600,000

10.38

Energy Station Company Limited

599,850

10.38

Ippei Arita

478,014

8.27

Daiwa Securities Group Inc.

450,000

7.78

EPCO, Ltd.

300,000

5.19

Daiwa Energy & Infrastructure Co. Ltd.

270,000

4.67

1

[Translation]
BNY GCM CLIENT ACCOUNT JPRD AC
ISG (FE-AC)

176,800

3.06

NOMURA INTERNATIONAL PLC A/CJAPAN FLOW

140,000

2.42

Custody Bank of Japan, Ltd. (Securities
Investment Trust Account)

136,200

2.36

Controlling Shareholder (except for Parent)—

Parent Company (Listed Stock Market)

N/A

Supplementary Explanation
1. The above list of major shareholders is based on the list of shareholders as of December 31, 2020.
Number of Shares Owned by Yohei Kiguchi includes the number of shares lent through over-allotment.
2. As of January 5, 2021, we confirmed that B Dash Fund 2 Limited Liability Partnership no longer belongs
to the category of major shareholders and submitted an extraordinary report (change in major shareholders)on January 13, 2021. Subsequently, on January 15, 2021, B Dash Fund 2 Limited Liability Partnershipsubmitted to the Kanto Local Finance Bureau a change report of a large shareholding report stating that itheld 347,500 shares (6.01% of outstanding shares) as of January 7, 2021 due to a change in the shareholding
ratio.
3. In the large shareholding report submitted by Asset Management One Corporation on March 5, 2021, it isstated that the company holds 347,400 shares (5.93% of outstanding shares) as of February 26, 2021, but weare unable to confirm the actual number of shares held as of December 31, 2020. Therefore, this information
is not included in the above list of major shareholders.
4. On March 31, 2021, Daiwa Daiwa Energy & Infrastructure Co. Ltd. Submitted to the Kanto Local
Finance Bureau a change report of a large shareholding report stating that it held 228,200 shares (3.89% of
outstanding shares) as of March 25, 2021 due to a change in the shareholding ratio.

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange
Mothers

Fiscal Year-End

DecemberType of BusinessInformation & Communication

Number of Employees (Consolidated) at Endof the Previous Fiscal Year

Less than 100

Net Sales (Consolidated) for the Previous
Fiscal Year

Less than 10 billion

Number of Consolidated Subsidiaries at Endof the Previous Fiscal Year

Less than 10

4. Policy for Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholders—

5. Special Circumstances Which May Have Material Impact on Corporate Governance—2

[Translation]

II. Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Supervision in Management
1. Organizational Composition and Operation
Organization Form

Company with Corporate Auditors[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation

8

Term of Office Stipulated in Articles ofIncorporation

One year

Chairperson of the Board

President

Number of Directors

6

Appointment of Outside Directors

Appointed

Number of Outside Directors

4

Number of Independent Officers Designatedfrom among Outside Directors

4Outside Directors’ Relationship with the Company (1)NameAttribute

Minoru Takeda

From another company

Aki Mori

From another company

Shinichiro
Yoshihara

From another company

Kenichi Fujita

From another company

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

🞅

* Categories for “Relationship with the Company”* “🞅” when the director presently falls or has recently fallen under the category“△” when the director fell under the category in the past
* “⬤” when a close relative of the director presently falls or has recently fallen under the category“▲” when a close relative of the director fell under the category in the pasta. Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryb. Non-executive director or executive of the parent of the Company
c. Executive of a fellow subsidiary of the Company
d. Party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the Company or an executive thereof
f. Consultant, accounting professional, or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a director
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a
corporation)h. Executive of a client or supplier of the Company (which does not correspond to any of d., e., or f.) (thedirector himself/herself only)
i. Executive of a corporation to which outside officers are mutually appointed (the director himself/herself
only)
j. Executive of a corporation that receives a donation from the Company (the director himself/herself only)3

[Translation]k. OtherOutside Directors’ Relationship with the Company (2)NameMinoru Takeda

Aki Mori

Designation as
Independent
Officer🞅🞅Supplementary Explanationofthe Relationship

Reasons for Appointment—

Outside Director Mr. Minoru Takeda
has abundant knowledge andexperience in the energy industry as
well as experience as a corporate
manager at global companies. With abelief that his knowledge andexperience will contribute tostrengthening the management andgovernance of the Company, theCompany has appointed him as
Outside Director.
Although Mr. Minoru Takeda owns
30,000 shares of the Company stock,he has no personal, business or otherinterest relationships with theCompany. In addition, he satisfies
the requirements for an independent
officer as provided for by Tokyo
Stock Exchange, Inc., and theCompany’s independence criteria.
There is no risk of conflict of interest
with general shareholders, andaccordingly, the Company has
designated him as an independent
officer.

—

Outside Director Mr. Aki Mori hasabundant knowledge and experiencein the energy industry as well as
abundant management experienceand knowledge and experience incapital markets through his work at
an investment banking firm and his
duties as CFO of a listed company.
With the belief that his knowledge
and experience will contribute tostrengthening the management andgovernance of the Company, theCompany has appointed him as
Outside Director.
Although Mr. Aki Mori owns 30,000
shares of the Company stock, theCompany has designated him as anindependent officer as he has no
personal, business or other interest
relationships with the Company, andtherefore there is no risk of conflictof interest with general shareholders.

4[Translation]

Shinichiro
Yoshihara🞅Mr. Shinichiro Yoshihara is
Representative Director and
CFO of EPCO, Ltd. The
Company has a business
relationship with EPCO, towhich it outsources part ofits call center operations.
There are no other personalor interest relationships
between EPCO and theCompany.
EPCO has invested in the
Company since June 2015,
immediately after its
establishment, and Mr.
Yoshiyuki Iwasaki,
Representative Director and
CEO of EPCO, served as
Outside Director of theCompany until June 2017.
EPCO was therefore
classified as an “otheraffiliated company” in thepast. We recognize that
there is no problem in termsof Mr. Shinichiro
Yoshihara’ independence
from the Company because
EPCO is no longer
classified as an “otheraffiliated company” and theCompany’s scale ofoutsourcing its call center
operations to EPCO is at
the same level in terms offunctionality and economic
conditions as compared tothat to other third party
contractors. Accordingly,
we have registered Mr.
Shinichiro Yoshihara as anindependent officer.

Outside Director Mr. Shinichiro
Yoshihara has abundant knowledge
and experience in the energy industry
as well as experience as
Representative Director and CFO at
a listed company. With a belief that
his knowledge and experience would
contribute to strengthening themanagement and governance of theCompany, the Company has
appointed him as Outside Director.
Although Mr. Shinichiro Yoshihara
owns 30,000 shares of the Company
stock, he has no personal, business orother interest relationships with theCompany. In addition, he satisfies
the requirements for an independent
officer as provided for by Tokyo
Stock Exchange, Inc., and theCompany’s independence criteria,
plus there is no risk of conflict ofinterest with general shareholders.
Accordingly, the Company has
designated him as an independent
officer.

(Significant concurrent
positions outside theCompany)
Representative Director and
CFO of EPCO, Ltd.

Kenichi Fujita🞅Outside Director Mr. Kenichi Fujita
has abundant knowledge andexperience in the energy industry,and he also has experience inperforming high-level roles in a
global corporation. With a belief that
his knowledge and experience willcontribute to strengthening the—5[Translation]
management and governance of theCompany, the Company has
appointed him as Outside Director.
Mr. Kenichi Fujita has no personal,
business or other interest
relationships with the Company. In
addition, he satisfies therequirements for an independent
officer as provided for by Tokyo
Stock Exchange, Inc., and theCompany’s independence criteria,
and there is no risk of conflict ofinterest with general shareholders.
Accordingly, the Company has
designated him as an independent
officer.
Note: The number of shares Minoru Takeda, Aki Mori, Shinichiro Yoshihara own is based on the list ofshareholders as of December 31, 2020.
Voluntary Establishment of Committee(s)Equivalent to Nominating Committee orRemuneration Committee

Not established[Corporate Auditors]
Establishment of Board of Corporate Auditors

Established

Maximum Number of Corporate Auditors
Stipulated in Articles of Incorporation

5

Number of Corporate Auditors

3

Cooperation among Corporate Auditors, Financial Auditor and Internal Audit Department
The Board of Corporate Auditors exchanges information with the Internal Audit Office on the status ofinternal audits and other matters as necessary. In addition, the Board of Corporate Auditors regularly meetsas a combined group with the General Manager of the Internal Audit Office and Financial Auditor to share
information and exchange opinions on the presence of audit-related problems and issues.
Appointment of Outside Corporate Auditors

Appointed

Number of Outside Corporate Auditors

3

Number of Independent Officers Designatedfrom among the Outside Corporate Auditors

3

Outside Corporate Auditors’ Relationship with the Company (1)NameAttribute

Atsushi Hioka

From another company

Keiko Yokoyama

Certified public tax
accountant

Peter Tam

Attorney at law

Relationship with the Company*
a

6

b

c

d

e

f

g

h

i

j

k

l

m

[Translation]* Categories for “Relationship with the Company”* “🞅” when the corporate auditor presently falls or has recently fallen under the category;“△” when the corporate auditor fell under the category in the past
* “⬤” when a close relative of the corporate auditor presently falls or has recently fallen under the category;“▲” when a close relative of the corporate auditor fell under the category in the pasta. Executive (a person who executes business; hereinafter, the same) of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaryc. Non-executive director or executive of the parent of the Company
d. Corporate auditor of the parent of the Company
e. Executive of a fellow subsidiary of the Company
f. Party whose major client or supplier is the Company or an executive thereof
g. Major client or supplier of the Company or an executive thereofh. Consultant, accounting professional or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a corporate auditor
i. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a
corporation)
j. Executive of a client or supplier of the Company (which does not correspond to any of f., g., or h.) (thecorporate auditor himself/herself only)
k. Executive of a corporation to which outside officers are mutually appointed (the corporate auditor
himself/herself only)
l. Executive of a corporation that receives a donation from the Company (the corporate auditor
himself/herself only)
m. OtherOutside Corporate Auditors’ Relationship with the Company (2)Name

Designation as
Independent
Officer

Supplementary
Explanation of
the Relationship

Reasons for Appointment

Atsushi Hioka🞅—

Mr. Atsushi Hioka has experience as acorporate auditor at a listed company
and knowledge of human resources andlabor. With the expectation that his
career and experience would bereflected in the Company’s auditing
system, the Company has appointed him
as Corporate Auditor. The Company has
comprehensively verified whether he isin a position to demonstrate objectivity
and neutrality and has determined that
he is independent as an Outside
Corporate Auditor.
The Company has designated him as anindependent officer since he has no
special interest relationships with theCompany, he satisfies the requirements
for an independent officer as provided
for by Tokyo Stock Exchange, Inc., andthe Company’s independence criteria,
and there is no risk of conflict ofinterest with general shareholders.

Keiko Yokoyama🞅—

Ms. Keiko Yokoyama has experienceand knowledge in accounting andfinance as a certified public accountant

7

[Translation]
as well as abundant experience incorporate auditing at auditing firms.
With the expectation that her career andexperience would be reflected in the
Company’s auditing system, theCompany has appointed her as
Corporate Auditor. The Company has
comprehensively verified whether she isin a position to demonstrate objectivity
and neutrality and has determined that
she is independent as Outside Corporate
Auditor.
The Company has designated her as anindependent officer since she has no
special interest relationships with theCompany, she satisfies the requirements
for an independent officer as provided
for by Tokyo Stock Exchange, Inc., andthe Company’s independence criteria,
and there is no risk of conflict ofinterest with general shareholders.

Peter Tam🞅

Mr. Peter Tam has knowledge incorporate legal affairs as an attorney atlaw licensed to practice under Japaneselaw, specializing in corporate legal
affairs. With the expectation that hewould make proposals as appropriate tostrengthen the corporate governance of
the Company, the Company has
appointed him as Outside Corporate
Auditor. The Company has
comprehensively verified whether he isin a position to demonstrate objectivity
and neutrality and has determined that
he is independent as Outside Corporate
Auditor.
The Company has designated him as anindependent officer since he has no
special interest relationships with theCompany, he satisfies the requirements
for an independent officer as provided
for by Tokyo Stock Exchange, Inc., andthe Company’s independence criteria,
and also there is no risk of conflict ofinterest with general shareholders.

—[Independent Officers]
Number of Independent Officers

7

Matters relating to Independent Officers
The Company has designated seven out of the seven Outside Directors/Corporate Auditors who qualify forthe independent officer designation as independent officers.

8

[Translation][Incentives]
Implementation of Measures to Provide
Incentives to Directors

Share options

Supplementary Explanation
In addition to a share option plan, which was introduced with the aim of further enhancing Directors’
motivation and enthusiasm toward improving the Company’s business performance, the Company has
introduced an incentive plan using a Trusted FMV Stock Option (which has a registered trademark inJapanese). The purpose of the incentive plan is to provide an incentive to current and future Group officers
and employees to improve corporate value over the medium to long term. The incentive plan is designed to
distribute stock option rights allotted to Mr. Hiroyuki Ueno, certified public accountant and certified public
tax accountant, to the Group’s officers and employees in accordance with their future achievements. This
plan differs from existing incentive plans that use stock option rights as it enables to determine the size ofthe distribution of such rights to the Group’s officers and employees at some future point based on future
performance evaluation, thereby making it possible to better reward the efforts of individuals. Also, it
enables the distribution of stock option rights to the Group’s officers and employees to be appointed andrecruited in the future according to the same standard to avoid excessive differences that may arise
depending on the timing of involvement in our business.

Recipients of Share Options

Inside Directors / Outside Directors / Executive Officers /Employees / Subsidiaries’ directors / Subsidiaries’
employees / Other

Supplementary Explanation
The Company grants stock options to inside Directors, outside Directors, Executive Officers and employees
as well as Directors and employees of the Company’s subsidiaries to have them act with the shareholders’perspectives in mind and to motivate them to manage the company in a balanced manner from a medium- tolong-term perspective. In addition to Directors and employees of the Group, stock options are also granted
to external collaborators who contribute to the enhancement of the Group’s overall corporate value.
[Director Remuneration]
Disclosure of Individual Directors’
Remuneration

No individual disclosure

Supplementary Explanation
Since no Director was awarded remuneration, etc. of 100 million yen or more in total, individual
remuneration amounts are not disclosed. The total amounts of remuneration for Directors and Corporate
Auditors are disclosed, respectively. The specifics of the distribution to the recipients under the incentive
plan using the below-described Trusted FMV Stock Option is determined by the Evaluation Committee,
which comprises the Representative Director, the person responsible for the HR-related organization and thefinance-related organization, and at least two independent Outside Directors, in accordance with the Share
Delivery Guidelines.
Policy for Determining Remuneration Amounts
or Calculation Methods Thereof

Established9[Translation]
Disclosure of Policy for Determining Remuneration Amounts or Calculation Methods Thereof
The Company has established a policy for determining the remuneration amounts for Directors or
calculation methods thereof, and those details shall comprise basic remuneration and bonus components.
The upper limit for the amounts of remuneration for Directors shall be determined by resolution of thegeneral meeting of shareholders in line with the aforementioned policy, and payment shall be made withinthat scope. Basic remuneration is paid as consideration for the Director’s execution of duties andcorresponds to the Director’s position and the level of role contribution, and is determined by considering
industry standard levels and the Company’s operating results, etc. Bonuses are determined by considering
the Company’s operating results and each Director’s level of involvement in performance.
Note that the Company does not adopt a performance-linked remuneration system for the Directors’
remuneration.
On the other hand, in order to create incentive to further generate the Company’s shareholder value, or
prevent damage to it, and maintain trust in the Company by having the Directors share common value withthe shareholders of the Company, the Company has introduced (as previously mentioned) an incentive planusing a Trusted FMV Stock Option that was established with Representative Director and CEO Yohei
Kiguchi as the settlor, which is separate from the Directors’ remuneration. For the purpose of securingcommitment and incentive from Representative Director and CEO Yohei Kiguchi, the settlor, for creation ofshareholder value over the long term, stock option rights have been granted that are to be incrementally
made executable over a ten-year period from 2018. Due to these measures, the establishment of a new nonmonetary remuneration (including share remuneration or stock options) is deemed to be unnecessary at thispoint in time.
[Supporting System for Outside Directors and/or Corporate Auditors]
The Corporate Division is the point of contact for support and provides explanation on important mattersseparately. When a meeting of the Board of Directors is scheduled, the Division distributes materials andtakes sufficient time to provide explanations in advance.

2. Matters on Functions of Business Execution, Audit and Supervision, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System)[Current System]
1. Board of Directors
The Board of Directors consists of six Directors (including four Outside Directors), with a majority being
Outside Directors to ensure strong governance. The Board includes members with experience andknowledge in the energy field, as well as those with expertise and experience in management, finance,accounting, and other fields.
In principle, the Board of Directors meets once a month, with additional meetings held, as necessary. The
Board makes decisions on basic management policies and important business execution and supervises theexecution of duties by Directors and reports thereof. Three Corporate Auditors attend the Board of Directors
meetings to audit the execution of duties by the Directors.
The amount of remuneration for Directors is determined within the limit resolved at the general meeting ofshareholders through deliberation at the Board of Directors meeting held after the annual general meeting ofshareholders, comprehensively taking into consideration factors such as their achievements in the previous
fiscal year and expected contribution to operating results in the fiscal year under review. The amount for
Full-time Directors is determined based on the evaluation of and their performance in the previous fiscal
year, along with their current remuneration level and other factors. The amount for Outside Directors isdetermined by comprehensively considering previous achievements, expected performance, and otherfactors.
2. Board of Corporate Auditors

10

[Translation]
The Company adopts the Board of Corporate Auditors system. The Board of Corporate Auditors consists of
one Full-time and two Part-time Corporate Auditors, all of whom are Outside Corporate Auditors. The
Board includes members with expertise and experience in accounting, legal affairs, human resources, andother fields, thereby establishing a system that enables auditing from multiple perspectives.
In principle, the Board of Corporate Auditors meets once a month, with additional meetings held asnecessary. Full-time Corporate Auditor monitors the execution of duties by Directors by attending importantinternal meetings such as the Executive Committee, inspecting important documents, and conducting otheraudit procedures. In addition, the Board of Corporate Auditors strives to improve its auditing function bycollecting information through exchanging opinions with Representative Directors, Outside Directors,
Financial Auditor, and internal audit staff.
3. Executive Committee
The Executive Committee, attended by Directors (excluding Outside Directors), Executive Officers, General
Managers of each business division, and Full-time Corporate Auditor, meets once a week to confirm theprogress of business activities, share issues, and make executive decisions in a flexible manner.
4. Compliance and Risk Management Committee
To recognize the risks surrounding the Group and respond to them appropriately, the Company has
established the Compliance and Risk Management Committee, which consists of Directors, Corporate
Auditors, and General Manager of the Internal Audit Office. In principle, the Committee meets once aquarter to share information necessary for risk management of the Company and its subsidiaries andpromote compliance-related initiatives. In the event of a compliance violation, the Committee responds
swiftly, investigates the facts of the case, and proposes measures to prevent a recurrence.
5. Financial Auditor
The Company has entered into an audit agreement with KPMG AZSA LLC, which conducts audits in atimely and appropriate manner. There is no special interest between the Company and KPMG AZSA LLC
or its engagement partners engaged in the audit of the Company.
6. Internal Audit Office
The Company has established the Internal Audit Office as a department under the direct control ofRepresentative Directors to ensure the efficiency, legality, and soundness of the management of the entire
Group. However, as the Company is a small organization, it has no dedicated employee assigned to the
Office. To avoid self-auditing, multiple persons concurrently serve as internal audit staff and conduct audits
based on the audit plan. The Internal Audit Office conducts internal audits of all divisions and subsidiariesof the Group. The Office reports the results of audits to Representative Director and CEO and
Representative Director and COO as well as the audited departments after each audit, and also reports thestatus of audits to Corporate Auditors.
[Policies and Procedures for Appointing Executive Officers, and Nominating Director Candidates andCorporate Auditor Candidates]
The policies and procedures for appointing Executive Officers, and nominating Director candidates andCorporate Auditor candidates are as follows.
1. Policies and procedures for appointing Executive Officers
Executive Officers are, in principle, appointed each year from those among a group of executive candidates
in the Company’s position ranking system who have received a high evaluation, who are of sincere
character, and who have in-depth knowledge and excellent capabilities in a specialized field, or from those
who are existing Executive Officers, who have the necessary knowledge and experience to fulfill the duties.
The appointment procedure is as follows. The inside Directors select candidates, based on inside Director
recommendation in the case of individuals for new appointment or in light of performance evaluation in thecase of Executive Officers for reappointment, those candidates are discussed at the Board of Directors, andthe appointments are decided by the Board of Directors. The Company adopts a delegation-based Executive
Officer system and the term of office for Executive Officers is one year.

11[Translation]
2. Policies and procedures for nominating Director candidates
To ensure appropriate supervision of management is provided and decision making for important businessexecution is performed as a Board of Directors of a company that aims to be a category leader in the energy
tech domain, in addition to appointing (in principle) internal Directors, multiple Outside Directors, whoform a majority, are appointed to enhance the management supervision function of the Board of Directors.
Placing importance on independence, Outside Directors are appointed, giving precedence to those whosatisfy the requirements for an independent officer as provided for by Tokyo Stock Exchange, Inc., and theCompany’s independence criteria, and who also have in-depth knowledge accumulated through theirexperience in their respective field that can be expected to contribute to the management of the Company.
The Representative Director and CEO takes note of the above policy, also considering diversity in
specialized fields, and creates a proposal for Director candidate nomination, and following discussion by the
Board of Directors, the matter is determined by resolution of the Board of Directors.
3. Policies and procedures for nominating Corporate Auditor candidates
To ensure the auditing and supervision of management is appropriately performed as Corporate Auditors ofa company that aims to be a category leader in the energy tech domain, Corporate Auditors are appointed
from those who have knowledge relating to the management of the Company or have advanced specialized
knowledge in their respective field, such as accounting, law, and human resources, and also possess a broad
range of experience. As a company adopting a Board of Corporate Auditors system, the Company appoints
entirely Outside Corporate Auditors for its Corporate Auditors. For Outside Corporate Auditors, theCompany, while placing importance on independence, appoints from those who satisfy the requirements for
an independent officer as provided for by Tokyo Stock Exchange, Inc., and the Company’s independence
criteria and whose advanced specialized knowledge and wealth of experience in their respective field can be
expected to facilitate appropriate auditing and supervision of the Company’s management. The
Representative Director and CEO takes note of the above policy and creates a proposal for Corporate
Auditor candidate nomination, and after discussion by the Board of Directors and obtaining consent fromthe Board of Corporate Auditors, the matter is determined by resolution of the Board of Directors.
[Outline of Liability Limitation Agreement]
The Company’s Articles of Incorporation stipulate that the Company may enter into agreements with
Outside Directors and Outside Corporate Auditors to limit their liabilities for damages to the Company to acertain extent, to enable such Outside Directors and Outside Corporate Auditors to fully perform their
expected roles and to invite capable human resources. In accordance with this provision, the Company hasentered into agreements with all Outside Directors and Outside Corporate Auditors to limit their liability fordamages under Article 427, paragraph (1) of the Companies Act. The outline of the liability limitationagreement is as follows.
• Liability limitation agreement for Outside Director
If an Outside Director is liable for damages to the Company pursuant to Article 423, paragraph (1) of theCompanies Act, the liability shall be limited to the minimum amount as stipulated in each item of Article
425, paragraph (1) of the Companies Act. The limitation of liability stated above is only applicable if theOutside Director has performed his or her duties in good faith and without gross negligence.
• Liability limitation agreement for Outside Corporate Auditor
If an Outside Corporate Auditor is liable for damages pursuant to the Company pursuant to Article 423,
paragraph (1) of the Companies Act, the liability shall be limited to the minimum amount as stipulated ineach item of Article 425, paragraph (1) of the Companies Act. The limitation of liability stated above is only
applicable if the Outside Corporate Auditor has performed his or her duties in good faith and without grossnegligence.

3. Reasons for Adoption of Current Corporate Governance System
As described above, the Company has established the Board of Directors, the Board of Corporate Auditors,
the Executive Committee, the Compliance and Risk Management Committee, and Financial Auditor, andhas also established the Internal Audit Office to audit day-to-day operations. The Company has adopted thecurrent system based on a belief that the mutual cooperation of these organizations will increase its
corporate value on an ongoing basis and ensure the effective functioning of its governance system.

12

[Translation]

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Energize General Shareholders Meetings and Smooth Exercise of Voting Rights
Supplementary Explanations
Early Notification of General
Shareholders Meeting

The Company strives to make a notification earlier than the statutory due
date.

Scheduling AGMs Avoiding
the Peak Day

The Company holds an annual general meeting of shareholders in March,scheduling it for a date other than peak days and at the venue located withinwalking distance of both JR and metro stations so that more shareholders
can easily attend the meeting.

Allowing Electronic or
Magnetic Exercise of Voting
RightsThe Company regards exercise of voting rights via the internet as a matter tobe considered.

Participation in Electronic
Voting Platforms and Other
Efforts to Enhance the Voting
Environment for Institutional
Investors

The Company regards participation in the Electronic Voting Platform as amatter to be considered.

Providing Convocation Noticein English (Translated Fully or
Partially)

The Company regards posting of a convocation notice in English on its
website as a matter to be considered.

Other

The Company provides information via the internet to engage in aconstructive dialogue with shareholders as much as possible at the annual
general meeting of shareholders.
The Company has also developed an environment where shareholders who
are unable to attend the meeting in person can exercise their voting rights
more easily by allowing shareholders to exercise their voting rights inwriting.

2. IR Activities
Supplementary Explanations

Explanation byRepresentative

Preparation and Publication ofDisclosure Policy

The Company has created an IR site within its
corporate website and announces its disclosure
policy on the site.

Holding Regular Investor
Briefings for Individual
Investors

The Company will consider holding an investor
briefing for individual investors, taking into accountthe future composition of shareholders and otherfactors. The Company also intends to provide an
opportunity to have a dialogue via the internet anddisclose the details of the dialogue on its website.

Yes

Holding Regular Investor
Briefings for Analysts andInstitutional Investors

The Company holds a regular investor briefing foranalysts and institutional investors every quarter inwhich the CEO and CFO explain financial results,business performance forecast, future businessdevelopment, industry trends, and other topics. The
Company also provides an opportunity to have a
dialogue via the internet.

Yes

13

[Translation]

Holding Regular Investor
Briefings for International
Investors

The Company holds regular investor meetings inwhich the CEO and CFO explain financial results,business performance forecast, future businessdevelopment, industry trends, and other topics forinternational investors.

Posting IR Materials on
WebsiteThe Company has created an IR site within its
corporate website and releases IR materials on thissite.

Establishment of Department
and/or Manager in Charge ofIR

The Company appoints the Corporate Division tocarry out IR activities and the CFO is responsible forsupervising the activities.

Yes

3. Measures to Ensure Due Respect for Stakeholders
Supplementary Explanations

Provisions to Ensure Due
Respect for Stakeholders inInternal Rules, etc.

The Company carries out business activities with a belief that earning thetrust of shareholders, customers and other diverse stakeholders is key toexpanding its business. In response to a changing business environment, theCompany has improved its business management system so that the system
can ensure management efficiency while establishing a management systemthat enables swift decision-making and business execution. The Company
also intends to ensure that its compliance system works properly based on
sound ethics and strives to develop business to meet stakeholders’expectations.

Implementation ofEnvironmental Activities, CSR
Activities, etc.

The Company will actively work toward achieving the Sustainable
Development Goals (SDGs) through offering energy services as a platform
company in the energy business to create the sustainable energy future weneed to have by 2030. The details of specific initiatives are available on our
website (https://enechange.co.jp/en/sdgs/).

Formulation of Policies for
Information Provision to
Stakeholders

The Company intends to actively disclose information to stakeholders on its
website or by holding IR events such as financial results briefing.

Other

The Company announced its “Correspondence Guideline for Covid-19” inMay 2020. It has taken initiatives to help employees work more flexibly, so
employees with time constraints due to various factors, which includes
many female employees, can work more efficiently, which helps increase
the efficiency of overall business operations and productivity.

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[Translation]

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and Progress of System Development
The Company maintains its internal control system and risk management structure based on the Basic
Policy for Establishing Internal Control System developed by the Board of Directors. The overview of thepolicy is as follows:
1. System to ensure that Directors and employees of the Company and its subsidiaries execute theirduties in compliance with laws, regulations, and the Articles of Incorporationa. For Directors, the Company’s Rules on Officers stipulate that “they shall comply with laws, regulations,
the Articles of Incorporation, and resolutions by general shareholders meetings and the Board of
Directors” and “they shall always strive to behave in a disciplined manner from a compliance
perspective, comply with laws and regulations, and fulfill corporate social responsibilities.” For
employees, the Company’s Rules on Employment stipulate that “they shall comply with the Rules on
Employment, internal provisions, instructions, and notifications, and shall not violate, or take any actionthat would violate, any of these.”b. As the ENECHANGE Code of Conduct, the Company has put compliance provisions in place including
Compliance Rules and ensures that all Directors and employees comply with these provisions.
c. The Company has established the Board of Directors. In case of any violation of laws, regulations, theArticles of Incorporation, or other internal rules, the Board of Directors promptly grasps what has
happened and strives to deal with the violation.
d. The Company has established a whistleblowing system pursuant to the Rules on Whistleblowing, andprevents violation of laws, regulations, or the Articles of Incorporation.
e. When the Company becomes aware of a violation of laws, regulations, or the Articles of Incorporationcommitted by a Director or an employee, it takes disciplinary action against a Director in accordance with
the Rules on Officers or an employee in accordance with the Rules on Employment.
f. The Company has established the internal audit department independent from the departments executing
operations. The internal audit department performs internal audits in accordance with the Internal Audit
Rules, and reports Directors and Corporate Auditors any compliance violations found in internal audits.
g. The Company has put in place rules, manuals, and guidelines on accounting and financial closing
processes, as well as financial reporting, to ensure proper accounting practice and increase the reliabilityof financial reporting. In the meantime, the Company has established an internal control environment for
financial reporting and keeps the environment effective in which independent individuals fromaccounting duties evaluate such accounting procedures.
h. The Company has established a system to shut out any relationships with anti-social forces and takes afirm stance against any unreasonable demands from them.
2. System for retaining and managing information on the execution of duties by Directors of theCompanya. Pursuant to the Document Management Rules, the Company appropriately prepares, retains, provides,
receives, and disposes of important documents and records that contain information on the execution ofduties by Directors, including important documents on general management, documents on decisions andimportant meetings, and financial and accounting documents.
b. In the Document Management Rules, the Company has set out a retention period, a person responsible
for managing documents by type of document, and the methods of retaining and disposing of documents
and records (including electronic records; hereinafter, the same), and operates accordingly.
3. Rules and other systems for managing risks of losses in the Company and its subsidiaries
a. The Company’s Risk Management Rules have set out a system for managing different types of risks anda structure for maintaining the risk management system. Accordingly, the Company regularly, or asnecessary, identifies and evaluates such risks.
b. Pursuant to the aforementioned policy, Executive Officers identify and categorize company-wide risks
that are apparent or inherent in their respective responsible business divisions and report the identified or
categorized risks to the Executive Committee.
c. The Executive Committee evaluates the reported risks in the preceding paragraph and reports them to theCompliance and Risk Management Committee if it deems necessary.

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[Translation]d. The Compliance and Risk Management Committee carefully deliberates on significant management
risks, and the Board of Directors takes appropriate actions against the risks as necessary.
e. The Internal Audit Rules have set out that the Internal Audit Office shall be given authority to perform
operational audits, financial audits, audits on subsidiaries and associates, and special investigations. In
such internal audits, the Internal Audit Office verifies and evaluates whether organizations, systems, andoperations are run and implemented efficiently in compliance with the management policy and otherrules and regulations, and provides advice based on the results of the verification and evaluation. In sucha way, the Company prevents frauds and errors, provides accurate information on controls, preservesproperty, and improves and enhances business activities.
4. System to ensure that Directors of the Company and its subsidiaries execute their duties efficiently
a. The Board of Directors holds a regular meeting once a month and an extraordinary meeting as necessary
to make swift decisions.
b. Directors make efficient decisions based on a business plan and a budget drawn up by the Board of
Directors and report the progress of budget execution at the Board of Directors.
c. The Board of Directors reviews the monthly business performance and develops measures for
improvement.
d. The Company has put in place the List of Segregation of Duties and Authority Rules, under which
Directors execute their duties efficiently, and amends these documents as necessary according to theactual conditions.
5. System to ensure proper business operations of the Group consisting of the Company and its
subsidiaries
a. The Company has established Rules for Management of Subsidiaries and Associates for the purpose of
ensuring smooth business operations and proper management of the subsidiaries.
b. In the Company’s important meetings such as the Board of Directors meetings, the subsidiaries’ directors
report operating results, financial position, and other important information.
c. The Company’s internal audit department performs an internal audit of how the subsidiaries execute andmanage business and establishes a system for ensuring the appropriate execution of business.
6. Matters concerning employees to assist duties of Corporate Auditors when they request theappointment of such employees, matters concerning the independence of the employees from
Directors, and matters concerning ensuring the effectiveness of instructions from Corporate
Auditors to employees
a. The Company appoints its employees to assist Corporate Auditors when they request the appointment of
the employees to assist with their duties.
b. Prior consent from the Board of Corporate Auditors is required for decisions about the appointment,
transfer, and other personnel matters of the employees who assist duties of Corporate Auditors.
c. When the Company appoints its employees to assist duties of Corporate Auditors, it informs the officers
and employees that the employees shall follow command and orders from Corporate Auditors.
7. System for Directors and employees of the Company and its subsidiaries to report to the Board of
Corporate Auditors, and system to ensure that such Directors and employees reporting to theBoard of Corporate Auditors are not treated unfavorably on the grounds of such reportinga. Directors and employees provide necessary reporting and information upon request from each of the
Corporate Auditors in accordance with provisions set out by the Board of Corporate Auditors.
b. Directors and employees report and provide information to Corporate Auditors as follows:• Reporting and providing information at the Board of Directors• Reporting and providing information when General Managers of each business division and otherindividuals are interviewed
c. The Company takes measures to protect employees in accordance with the Rules on Whistleblowing,
who have reported pursuant to the preceding two paragraphs, a and b, so that they will not be treatedunfavorably on the grounds of such reporting.
8. System to ensure effective auditing by Corporate Auditors
a. Corporate Auditors regularly exchange opinions and have mutual communication with Representative
Directors.

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[Translation]b. Corporate Auditors regularly exchange information and have mutual cooperation with Financial Auditors
and internal audit staff.
c. Corporate Auditors may seek opinions from an attorney-at-law, a certified public accountant, and otherexperts when they deem it necessary for auditing.
d. Corporate Auditors attend important internal meetings when they deem it necessary in addition to theBoard of Directors meetings, receive reports on important matters, and express their opinions.
9. Matters concerning procedures for advance payment or reimbursement of expenses incurred by
Corporate Auditors for the execution of their duties
When Corporate Auditors claim advance payment or reimbursement of expenses incurred by them for the
execution of their duties, the Company promptly makes payment to or reimbursement to the Corporate
Auditors for the expenses unless it deems the expenses unnecessary for the execution of their duties.

2. Basic Views on Eliminating Anti-Social Forces and Progress of Related Efforts
1. Basic views on eliminating anti-social forces
The Company has established Regulations on Measures Against Anti-Social Forces, stipulating theelimination of anti-social forces. Accordingly, the Company ensures that it will not have any relationships
with anti-social forces including organized crime groups and that it will reject any engagement with antisocial forces with a firm stance if they demand it.
2. Progress of related efforts to eliminate anti-social forces
The Company has established Regulations on Measures Against Anti-Social Forces, prohibiting any contact
with anti-social forces. Part of the aforementioned basic views on eliminating anti-social forces isincorporated in the Basic Policy for Establishing Internal Control System in accordance with the Companies
Act of Japan. The Company also strives to prevent anti-social forces from interfering in its businessactivities and detect any suspicious signs early. For example, the Company checks in the course of day-today operations whether there is any information indicating that potential business partners or customers
have any relationships with an anti-social force before entering into a business relationship with them. If anyof the Company’s existing business partners or customers are found to be or suspected of being anti-social
forces, the Company will promptly dissolve the business relationships with them.

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[Translation]

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not adopted

Supplementary Explanation—

2. Other Matters Concerning Corporate Governance System
Please find the schematic depictions of the Company’s corporate governance system and administrative
flow of procedures for timely disclosure of information shown below.

18[Translation]

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[Translation]

Independence Criteria for Outside Directors
To ensure the independence of those who will serve as Outside Directors, thereby establishing a sound corporate
governance system, the Company has set out the independence criteria for Outside Directors as follows. The
Company shall deem an Outside Director to have independence from the Company and no conflict of interest withgeneral shareholders if the Outside Director is found not to fall under any of the following items as a result of aninvestigation conducted by the Company to a reasonably practicable extent.

1.

Executives of the Company

An executive of the Company or its subsidiaries (hereinafter collectively referred to as the “Group”)–

An “executive” shall mean an executive director, a corporate officer, an executive officer, other officer, an
employee, or any other related person who executes the business of a legal entity or organization.

2.

Major business associates(1)

A major business partner of the Group or an executive thereof–

A “major business partner of the Group” shall mean a party who has made payments to the Group in a total
amount that exceeds 2% of the Group’s annual consolidated net sales for the most recent fiscal year. If
consolidated accounting is not adopted by the Group, the annual non-consolidated net sales for the year of theCompany should be employed in place of the annual consolidated net sales for the year.

(2)

A party who considers the Group as a major business partner or an executive thereof–

A “party who considers the Group as a major business partner” shall mean a party who has received paymentsfrom the Group in a total amount that exceeds 2% of the party’s annual consolidated net sales for the mostrecent fiscal year. If consolidated accounting is not adopted by the party, the annual non-consolidated net sales
for the year of the party should be employed in place of the annual consolidated net sales for the year.

(3)

A major lender of the Group or an executive thereof–

A “major lender of the Group” shall mean a lender from whom the Group has borrowed an amount thatexceeds 2% of its consolidated total assets at the end of the most recent fiscal year. If consolidated accounting
is not adopted by the Group, an amount of non-consolidated total assets of the Company should be employedin place of consolidated total assets.

3.

Professional service providers(1)

A consultant, accounting profession such as a certified public accountant or a certified public tax accountant,or legal profession such as an attorney at law who receives a large amount of monetary consideration or otherproperty from the Group besides remuneration as an officer (if the recipient of such property is a legal entity,
partnership or any other organization, a person who is a member of such organization)–

Receiving a “large amount of monetary consideration or other property” indicates cases when: (1) the
professional service provider is an individual, and the total amount of such property received from the Group,
excluding remuneration as an officer, exceeds 10 million yen per year in the most recent fiscal year; or (2) the
professional service provider is a legal entity, partnership or other such organization, and the total amount ofsuch property received from the Group exceeds the higher of (a) 2% of the organization’s annual consolidated
net sales or total annual income, or (b) 10 million yen, in the most recent fiscal year. If consolidated
accounting is not adopted by the organization, the annual non-consolidated net sales for the year of theorganization should be employed in place of the annual consolidated net sales for the year.

(2)

A person who belongs to an audit firm appointed as Financial Auditor of the Group

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[Translation]
4.

Voting right holders(1)

A party who directly or indirectly holds 10% or more of the Company’s total voting rights or an executive
thereof(2)

A party of which the Group directly or indirectly holds 10% or more of the total voting rights or an executive
thereof5.

Parties receiving donation or grant

A person or a director of organization such as a legal entity or partnership that has received a large amount of
donation or grant from the Group or an executive thereof–

A “large amount of donation or grant” shall mean a donation or a grant at or in excess of 10 million yen per
year.

6.

Parties who have fallen under aforementioned items in the past

(1)

A party who has fallen under item 1. above in the past ten years(2)

A party who has fallen under the items 2. to 5. above in the past three years(3)

A spouse or relative within the second degree of kinship of an important person who has fallen under the items
1. to 5. above–

An “important person” shall mean an executive director, a corporate officer, an executive officer, or an
employee who executes important business such as a head of a business unit.

7.

Parties who may have a constant conflict of interest with general shareholders as a whole, even if the parties
do not fall under any of the aforementioned items.

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