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Governance

Basic stance on corporate governance

As a publicly traded company, Ceres has established a system to maximize its corporate value from a long-term perspective as a basic corporate governance goal. It aims to enhance its management organization in order to improve management efficiency and strengthen compliance.
Ceres belongs to an internet-related industry where the market landscape is changing rapidly. We recognize that some of the most important management issues are ensuring the flexibility of the business, while at the same time increasing our transparency and integrity, and in addition securing trust from our shareholders, customers, users, employees, and other stakeholders. We will ensure thorough information management and fulfill our responsibility to stakeholders by disclosing relevant information without delay. In addition, in order to strengthen compliance, we are proactively taking measures such as strengthening our internal auditing system as well as improving leveraged service quality by strict adherence to the rules outlined under the Privacy Mark system. We will continue to take a sincere approach to improving our internal systems.

Corporate governance reports

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Basic policy for establishment of internal control system

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Corporate governance system

Summary of Board of Directors' effectiveness assessment results

Ceres conducts effectiveness assessments of its Board of Directors in accordance with the Corporate Governance Code established by the Tokyo Stock Exchange and discloses summaries of the results in order to enhance the effectiveness of the Board of Directors, build a more comprehensive corporate governance structure, and increase corporate value over the medium to long term.

About the summary of Board of Directors' effectiveness assessment results for the fiscal year ended December 2023

Nomination and Remuneration Advisory Committee

Ceres established the Nomination and Remuneration Advisory Committee on March 24, 2020, which is composed of a majority of Independent Outside Directors, as an optional advisory body to the Board of Directors.
The purpose of the Nomination and Remuneration Advisory Committee is to enhance the corporate governance system by strengthening the independence, objectivity, and accountability of the Board of Directors' functions regarding the nominations and compensation of directors, etc. The Committee deliberates on the following items in consultation with the Board of Directors and reports to the Board of Directors on the contents of such deliberations.

(1) Draft proposal for the general meeting of shareholders regarding the appointment and dismissal of directors
(2) Draft proposal for the appointment and dismissal of Representative directors and executive directors with specific titles
(3) Other matters deemed necessary by the Board of Directors regarding the appointment and dismissal of directors, the appointment and dismissal of representative directors and executive directors with specific titles
(4) Draft proposal for the general meeting of shareholders regarding remuneration for directors, etc.
(5) Draft policy for determining the details of cash remuneration and non-cash remuneration for individual directors (excluding Directors who are Audit & Supervisory Committee Members)
(6) Other matters deemed necessary by the Board of Directors regarding remuneration for directors, etc. The members of the Ceres Nomination and Compensation Advisory Committee are as follows. Chairman: Satoshi Takagi, President and Representative Director; Committee Members: Hitoshi Tada, Outside Director; Yoshindo Takahashi, Outside Director (Audit & Supervisory Committee Member)

	Committee Name	All Committee Members	Full-time Committee Members	Inside Directors	Outside Directors	External Experts	Other	Chairman
Any committee equivalent to Nomination Committee	Nomination and Compensation Advisory Committee	3	0	1	2	0	0	Inside Directors
Any committee equivalent to Compensation Committee	Nomination and Compensation Advisory Committee	3	0	1	2	0	0	Inside Directors

Skills matrix

The expertise and experience of the directors are as follows.

	Independency	Corporate Management	Sales and Marketing	IT and DX	Finance and Accounting	Legal Risk Management	SDGs and ESG
Satoshi Takagi		●	●	●	●		●
Tetsuya Nozaki		●	●	●			●
Yasuhiro Kobayashi		●			●	●	●
Yusuke Shiga		●	●	●			●
Hitoshi Tada	●	●	●		●	●	●
Kana Chitose					●	●	●
Yoshindo Takahashi	●	●		●	●	●	●
Masataka Uesugi	●	●				●	●

Independent outside directors

Name	Attributes	Relationship with Ceres
Name	Attributes	a	b	c	d	e	f	g	h	i	j	k
Hitoshi Tada	Came from another company
Yoshindo Takahashi	Came from another company								●
Masataka Uesugi	Lawyer

a. An executive director of a listed company or its subsidiary
b. An executive or non-executive director of the parent company of a publicly traded company
c. An executive director of a sister company of a publicly listed company
d. A person whose major business partner is a publicly traded company or an executive director thereof
e. A major business partner of a publicly traded company or its executive director
f. A consultant, accountant, or legal professional who receives a significant amount of money or other property from a publicly traded company in addition to executive compensation
g. A major shareholder of a listed company (if the major shareholder is a corporation, its executive director)
h. An executive director (only the person himself/herself) of a business partner (which does not fall under d, e, or f) of a listed company
i. An executive director (only the person himself/herself) of a place with which the Outside Directors have a reciprocal appointment relationship
j. An executive director (only the person himself/herself) of a place where the listed company makes donations
k. Other

Name	Audit & Supervisory Committee Member	Independent Director	Supplemental Explanation of Conforming Items	Reason for Appointment
Hitoshi Tada		●		Mr. Tada has served as a representative and officer mainly at financial institutions. He has abundant experience and insight in corporate management practices. We have elected him as an Outside Director because we believe that he will utilize his qualifications to strengthen Ceres's management supervision abilities. In addition, because he has no special relationship with Ceres and has no conflicts of interest with our management, it has been concluded that he has a high degree of independence and we have designated him as an independent director who is not likely to cause conflicts of interest with general shareholders.
Yoshindo Takahashi	●	●	Mr. Takahashi is an advisor at Executive Partners Inc., which provides management consulting services to Ceres. Still, we have determined that there is no problem in designating him as an independent director since he is not the consultant in charge of Ceres, and the transaction amount is insignificant, so he does not fall under the category of our major business partners.	Mr. Takahashi is appointed as an Outside Director (Audit & Supervisory Committee Member) based on our judgment that he can objectively supervise the relevance of management based on his experience and broad insight, mainly at financial institutions, and utilize his qualifications to strengthen Ceres's auditing abilities. In addition, since he has no conflicts of interest with our Management, it has been judged that he has a high degree of independence and we have designated him as our independent director who is not likely to cause conflicts of interest with general shareholders.
Masataka Uesugi	●	●		Mr. Uesugi is appointed as an Outside Director (Audit & Supervisory Committee Member) based on our judgment that he can objectively supervise the relevance of management based on his experience and broad insight, mainly at financial institutions, and utilize his qualifications to strengthen Ceres's auditing abilities. In addition, he has established a law firm, but it has no special relationship with Ceres and has no conflicts of interest with its management, so it has been judged that he has a high degree of independence and we have designated him as our independent director who is not likely to cause conflicts of interest with general shareholders.

Executive compensation

Executive compensation consists of a basic salary as a fixed kind of remuneration, restricted stock remuneration (non-monetary remuneration) as a medium- to long-term incentive for the purpose of continuously improving Ceres’s corporate value and sharing shareholder value, and bonuses as a short-term incentive.
For Outside Directors, only a basic salary as a form of fixed remuneration is paid in light of their roles and independence. In addition, at the Board of Directors meeting held on February 19, 2021, we established the Directors' Remuneration Policy, which includes a policy for determining the details of compensation, etc. for individual directors (excluding Directors who are Audit & Supervisory Committee Members). The outline of the policy is as follows.

Directors' remuneration policy

1. Basic policy on directors' remuneration policy

・ Decisions shall be made in accordance with the career, work experience, duties, responsibilities, etc. of each Director, taking into consideration Ceres’s business performance and business environment, etc.
・ Directors shall increase their motivation to continuously improve business performance over the medium to long-term in order to meet the expectations of shareholders, and to contribute to the improved value of the entire Group.
・ Aim for competitive compensation levels in order to secure diverse and talented staff who can put our corporate philosophy into practice.
・ Objectivity and transparency shall be ensured not only for the remuneration system for Directors but also for individual remuneration for each Director through deliberation and supervision of the Nomination and Compensation Advisory Committee, a voluntary advisory body which is composed of a majority of Outside Directors.

2. Basic structure of directors' remuneration

From the perspective of maintaining and improving corporate governance and putting basic policies into practice, remuneration for Ceres's Directors (excluding Directors who are Audit & Supervisory Committee Members and Outside Directors) consists of three types: (1) basic salary as fixed remuneration, (2) bonuses as short-term incentive remuneration, and (3) stock remuneration (pre-delivery type restricted stock) as medium- to long-term incentive remuneration. The ratio, etc. shall correspond to the position of the Director. Remuneration for Outside Directors shall be limited to basic salaries, which is a kind of fixed remuneration, in light of their expected roles.

3. Policy for determining the amount of each type of remuneration, etc.

(1) Basic remuneration (Fixed remuneration) Decisions shall be based on comprehensive consideration of the position, full-time or part-time status, career, past salary and remuneration levels, areas of responsibility and duties, and remuneration levels in the same industry, etc.

(2) Bonuses In light of the nature of short-term incentive remuneration and commonality with the interests of shareholders, the amount of basic remuneration for each director shall be determined according to the achievement status of the amount of consolidated net income (meaning net income attributable to shareholders of the parent company as shown in the consolidated statements of income, hereafter referred to as "consolidated net income"), which is resolved by the Board of Directors and announced around February each year as a performance forecast, taking into consideration the position of each director (excluding Directors who are Audit & Supervisory Committee Members and Outside Directors), the amount of basic remuneration for the applicable fiscal year, his/her contribution in the relevant fiscal year, the performance and growth rate of the business division in charge, and other factors.

(3) Stock remuneration (Pre-delivery type restricted stock) In addition to providing incentives for the sustainable improvement of Ceres’s corporate value, monetary claims are paid as remuneration to grant restricted stock for the purpose of further sharing value with shareholders.
The total amount of such stock remuneration shall be determined on the assumption that it does not exceed 20,000 shares and 2 million yen per year, taking into consideration the amount of consolidated net income of the group for the applicable fiscal year. In addition, the number of stock compensation grants for each individual and the amount of monetary claims to be paid for such grants shall be determined in consideration of the basic remuneration amount for eligible Directors (excluding Directors who are Audit & Supervisory Committee Members and Outside Directors. Hereinafter referred to as "eligible Directors") for the applicable fiscal year, the contribution of each eligible Director during the fiscal year, the performance and growth rate of the business department in charge, and trends in the price of Ceres's common stock.

4. Process of determining directors' remuneration, etc.

The amount of basic remuneration and bonuses among the directors' remuneration (excluding Directors who are Audit & Supervisory Committee Members) shall be determined individually by the President and Representative Director, who is delegated by the Board of Directors, after mutual evaluation of individual Directors, deliberation and formulation of draft proposals by the Nomination and Remuneration Advisory Committee, and determination of the total amount of each remuneration at the Board of Directors. With regard to stock remuneration (pre-delivery type restricted stock), the amount and the number of shares to be granted to each individual shall be determined by the Board of Directors after deliberation and formulation of a draft proposal by the Nomination and Remuneration Advisory Committee.

Individual disclosures are not made as there is no director whose total amount of consolidated remuneration, etc. is more than 100 million yen.
The total amount of remuneration, etc., by category of directors of the submitting company, the total amount of remuneration, etc., by type of remuneration, etc., and the number of directors subject to the remuneration are as follows.

	Total amount of remuneration, etc. (Thousand yen)	Total amount by type of remuneration, etc. (Thousand yen)				Eligible number of directors
	Total amount of remuneration, etc. (Thousand yen)	Basic Remuneration	Bonus	Restricted Stock Remuneration	Non-monetary compensation, etc.	Eligible number of directors
Directors (excluding Audit & Supervisory Committee Members) (Outside Directors)	203,021 (6,000)	155,850 (6,000)	30,000 (－)	17,171 (－)	17,171 (－)	6 (1)
Directors (excluding Audit & Supervisory Committee Members) (Outside Directors)	15,330 (9,300)	15,330 (9,300)	－ (－)	－ (－)	－ (－)	4 (3)
Total (including Outside Directors)	218,351 (15,300)	171,180 (15,300)	30,000 (－)	17,171 (－)	17,171 (－)	10 (4)

Note:
(1) The amount of remuneration, etc. above includes the remuneration paid for during the term of office of one Outside Director (Audit & Supervisory Board Member) who retired at the conclusion of the 18th Ordinary General Meeting of Shareholders held on March 29, 2023.
(2) Bonuses represent the amount of provisions for directors' bonuses.
(3) Restricted stock is granted to Directors (excluding Outside Directors and Audit & Supervisory Committee Members) as non-monetary remuneration. The above restricted stock remuneration is the amount recorded as expenses for the fiscal year.
(4) In addition to the above, the total amount of remuneration received by Outside Directors from subsidiaries is 2.4 million yen.

Policy on shareholdings including cross-shareholdings

Standards and concepts for classification of investment shares: With regard to the classification of investment shares held for pure investment purposes and investment shares held for purposes other than pure investment, shares held for the purpose of gaining profit from changes in the value of the shares or dividends on the shares are classified as investment shares held for pure investment purposes, and other shares are classified as investment shares held for purposes other than pure investment.
Since Ceres is engaged in the investment development business, investment shares for pure investment purposes are presented as operational investment securities and investment shares for purposes other than pure investment are presented as investment securities in the consolidated balance sheets.

Investment shares held for purposes other than pure investment: ・ Method to verify the policies and rationality of shareholdings, and details of the verification by the Board of Directors, etc. regarding the relevance of holding individual stocks

Investment shares for purposes other than pure investment are held for the purpose of maintaining and strengthening business alliances and transactions, and Ceres’s basic policy toward cross-shareholdings is to hold these shares in a limited manner after carefully considering the synergies gained from business alliances and information sharing with the target companies. In addition, Ceres will review decisions to continue holding stocks, and will seek to reduce the number of stocks held without a significant reason.

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