Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility
for this translation or for direct, indirect or any other forms of damages arising from the translation.

Corporate Governance Report
Last Update: September 27, 2023
ENVIPRO HOLDINGS Inc.
Tomikazu Sano
President, Representative Director
Contact: Corporate Planning Dept.
Securities Code: 5698
https://www.envipro.jp/
The corporate governance of ENVIPRO HOLDINGS Inc. (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile andOther Basic Information

1. Basic Views
The ENVIPRO Group, as a company engaging in the resource recycling business using metal scrap and waste,
will strive to strengthen and enhance its corporate governance, always respecting corporate ethics and legal
compliance in its activities while also ensuring sound, transparent and efficient corporate management, inorder to secure the trust of all stakeholders and achieve sustained improvement of its corporate value.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code][Supplementary principle 1.2.4 Creation of an infrastructure allowing electronic voting]
The Company sends the notice of the General Meeting of Shareholders well in advance as well as disclosing
an English translation of the reference materials of the notice on its corporate website. The Company, however,has not yet introduced an electronic voting platform as the Company considers it not particularly necessary
because the shareholding ratio of foreign investors is presently low in the Company. The Company will study
the possibility of its introduction depending on the future state of the shareholding ratio of institutional
investors and foreign investors and other factors.
[Disclosure Based on the Principles of the Corporate Governance Code][Principle 1-4 Strategic shareholdings]
The Company strategically holds shares in a company which it considers will contribute to the improvementof the Group’s corporate value in the medium to long term, in order to maintain and expand business
relationships and strengthening business alliances and ties in the medium to long term. A major acquisition of
a company’s shares as strategic shareholdings is decided by the Board of Directors on a case-by-case basis,and the Board of Directors makes a decision by carrying out an overall assessment of the merits brought bystrengthening the relations with the company, the amount of investment, and other factors, and judging
whether the acquisition will be conducive to the improvement of the Company’s corporate value. After aninvestment is executed, the state of the strategic shareholdings is reported to the Management Committee asappropriate, while the results of the monitoring of the performance etc. of the company in which the Company
holds strategic shareholdings are reported to the Board of Directors for assessment once a year. Going forward,
the Company will reduce its strategic shareholdings in stages to the minimum necessary. While the Company
will continue to hold those strategic shareholdings that are held for appropriate purposes and carry benefits
and risks justifiable relative to the cost of capital, the Company will sell other strategic shareholdings after-1-

determining details of how to divest. In fiscal 2023, the Company will continue to hold shares in one company
which the Company engages in a business alliance as strategic shareholdings.
The Company will appropriately exercise its voting rights relating to strategic shareholdings by judging
whether the proposal in question will be conducive to the maintenance and improvement of the Group’s
corporate value and the improvement of shareholder value based on dialogues between the department (orGroup company) in charge of the strategic shareholdings and the company in which the Company holds
strategic shareholdings, as well as assessments by the Company’s finance department and other relevant
departments. The Company will not exercise its voting rights to affirm any proposal, whether from thecompany or its shareholder, that might damage the Group’s corporate value and shareholder value.
In addition, going forward the Company will reduce its strategic shareholdings and sell in stages those sharesof which strategic shareholdings have diluted in value.
[Principle 1-7 Transactions with a related party]
If the Group engages in a transaction with a director or a major shareholder of the Group, the Board of
Directors will deliberate the contents of the transaction and the appropriateness of its terms and conditions
and decide whether the transaction should be executed, regardless of the value of the transaction, in order toprotect the interests of minority shareholders. In addition, if the Group has engaged in a transaction with adirector or a major shareholder of the Group, it will be assessed in audits by the Audit and Supervisory
Committee whether the transaction was executed based on appropriate job authorities and decision, in orderto ensure the appropriateness of the transaction.
[Supplementary principle 2.4.1 Ensuring diversity in the Company]
The Company has promoted female, foreign national, and mid-career employees to managerial positions toensure diversity in its human resources. The Company works to actively promote mid-career employees
including female and foreign national employees to managerial positions by assessing their skills, experiences,and other factors in a comprehensive manner. With respect to the promotion of female employees in particular,
the Company has set the following targets with the aim of advancing the promotion of female employees tomanagerial and director positions:
By June 2024:
Increase the number of female employees in managerial positions by 1.5 times,
compared with that as of the end of June 2021
By June 2026:
Increase the number of female employees in managerial positions by 2.0 times,
compared with that as of the end of June 2021
By June 2028:
Percentage of female at managerial positions 20%[Principle 2.6 Roles of the corporate pension fund as asset owner]
The Company does not have a corporate pension fund system.
[Principle 3.1 Enhancement of disclosure](i) The Company’s corporate philosophy and management strategy are disclosed on its corporate website
and in briefing materials on financial results, business reports, etc.
(ii) The Company’s basic views on corporate governance are disclosed in the Corporate Governance Report.
(iii) In determining the remuneration system etc., for management executives and Directors, the Company
makes it a basic policy to appropriately link the Company’s performance and each Director’s duties andperformance, with the aim of improving shareholder value and the Company’s performance in themedium to long term. With regard to remuneration for Directors, the total amount is determined by aresolution of the General Meeting of Shareholders, and then the remuneration for each Director isreported to the Board of Directors after deliberation by the Appointment and Remuneration Committee,
a voluntary advisory organization including Independent Outside Directors, in order to increase theobjectivity and transparency of the procedures. The Board of Directors respects the report from thecommittee and delegates authority to determine remuneration, etc., to the Representative Director andPresident.
(iv) In selecting management executives and appointing Director candidates, the Company appoints
candidates who have a wealth of experience, deep insight, and a high level of expertise that are relevantto the positions of the Company’s management executives or Directors. The appointment is determinedby the Board of Directors after deliberation by the Appointment and Remuneration Committee, avoluntary advisory organization including Independent Outside Directors, in terms of appropriatenessetc., in order to increase the objectivity and transparency of the appointment procedure. The appointment-2-

of a Director who is an Audit and Supervisory Committee member is subject to the consent of the
Appointment and Remuneration Committee.
(v) The Company discloses reasons for the appointment of each Outside Director and other Director
candidates. If an Outside Director or other Director candidate is considered as not fulfilling his or her
duties, the Appointment and Remuneration Committee may deliberate his or her dismissal.
[Supplementary principle 3.1.3 Sustainability initiatives]
The Company discloses its sustainability strategy. The Company also discloses its investment in humancapital, its sustainability initiatives, the impact of climate change risks, and business opportunities in the
Company, etc., in its annual securities report and sustainability report, which are published annually.
[Supplementary principle 4.1.1 Matters to be decided by the Board of Directors, the Management Committee,
its ringi (collective authorization system), etc.]
The Company has set detailed and specified standards, based on the level of importance, for submission for
deliberation and reporting regarding the matters to be decided by the Board of Directors, the Management
Committee, its ringi (collective authorization system), etc. The decision on matters other than the matters tobe determined by the Board of Directors is delegated to Representative Director and President, Directors, etc.,
based on its rules of job authorities.
[Principle 4.9 Independence standards and qualifications for Independent Outside Directors]
The Company has established and disclosed Criteria for Appointing Outside Directors. In accordance withsaid criteria, the Company appoints a person who satisfies the criteria for determining the independence ofIndependent Outside Directors as an Outside Director.
[Supplementary principle 4.10.1 Appointment and Remuneration Committee]
The determination of remuneration for Directors and the appointment of Directors are deliberated by the
Appointment and Remuneration Committee, a voluntary advisory organization including independent Outside
Directors, in terms of appropriateness etc., in order to increase the objectivity and transparency of theprocedures.
[Supplementary principle 4.11.1 Ensuring the effectiveness of the Board of Directors and the Board ofAuditors]
The Company appoints Director candidates in accordance with the following policy and procedure:<Standards for the appointment of Directors>
1. Director candidates shall, regardless of gender, nationality, or other personal attributes, meet the following
standards:- Be well versed in each of the Company’s businesses- Possess knowledge on legal affairs- Possess knowledge in finance and accounting- Possess knowledge in other areas necessary for the management of the Company- Understand and practice the spirit of the Company’s corporate philosophy and management principle
and be able to contribute to achieving the Company’s sustained growth and improving its corporate value
in the medium to long term
- Be able to contribute to strengthening the function of mutually checking and supervising Directors’
activities and ensuring the effectiveness of the Board of Directors.
2. Two or more Outside Directors shall be appointed in order to ensure that the deliberation by the Board of
Directors directly reflects the interests of general shareholders. The majority of Directors who are Audit
and Supervisory Committee members shall be Outside Directors.
3. Outside Directors shall meet the requirements for Outside Directors stipulated under the Companies Act
and the independence standards stipulated by financial instruments exchanges.
<Process of the determination of Director candidates>
1. Representative Director and President shall formulate a proposal of Director candidates based on thestandards for the appointment of Directors and submit the proposal to the Appointment and Remuneration
Committee.
2. The Appointment and Remuneration Committee shall deliberate the proposal of Director candidates andreport the results to the Board of Directors.

-3-3. The Board of Directors shall deliberate the proposal and determine Director candidates based on the reportfrom the Appointment and Remuneration Committee, provided that the determination of the candidates
for Directors who are Audit and Supervisory Committee members shall be subject to the consent of the
Audit and Supervisory Committee.
The Company discloses specialties of Directors (skill matrix) in the reference documents for the General
Meeting of Shareholders and its securities reports.
[Supplementary principle 4.11.2 Concurrent positions of Directors]
Outside Directors and Directors put time and effort in their work as Directors to the extent necessary toappropriately perform their roles and duties and limit the holding of concurrent positions to a reasonable level.
The concurrent positions held by Directors are disclosed in the Company’s securities reports and the noticeof the General Meeting of Shareholders.
Securities report and the notice of the General Meeting of Shareholders: https://www.envipro.jp/ir/[Supplementary principle 4.11.3 Analysis and assessment of the effectiveness of the Board of Directors]
The Board of Directors discusses the way it should be in the future on a regular basis at the Board of Directors
meeting, analyzing and assessing its effectiveness and deliberating the results at the Board of Directors
meeting. In the assessment, it has been confirmed that constructive discussions are held at the Board of
Directors meeting, with Outside Directors expressing their opinions and asking questions, that the Board of
Directors meeting is operated appropriately, and that the Board of Directors functions effectively.
In addition, the Board of Directors discusses the results of surveys and respondents’ opinions. Based on these
discussions, the Company will continue to work on the enhancement and continuous improvement of theeffectiveness of the Board of Directors.
[Supplementary principle 4.14.2 Training policy for Directors and Corporate Auditors]
The Company provides Directors appointed from within the Company with an opportunity to fully learn about
the roles and duties that Directors are expected of when they assume the position. The Company also bears
Directors’ expenses for training programs, seminars, etc., that are relevant to each Director and necessary to
perform their work.
[Principle 5.1 Policy for constructive dialogue with shareholders]
Corporate Planning Dept. takes charge of the Company’s dialogues with shareholders, with overall
responsibility assumed by the person in charge of information handling. Corporate Planning Dept.,
Accounting and Financial Dept. and Human Resources Dept. meet regularly to discuss disclosure andpresentation of the Company’s financial results etc., based on their respective expert viewpoints andcollaborate to appropriately address dialogues with shareholders. The Company takes measures to help
shareholders deepen their understanding of the Company’s management strategy and business environment,such as disclosure on its corporate website. Opinions from shareholders and analysts are shared at theManagement Committee, reported to the Board of Directors as needed, and used extensively for the reviewof the Company’s management strategy etc. The Company takes measures to prevent leakage of insider
information as it engages in dialogues with shareholders, such as setting rules relating to insider trading.
In addition, the Company has established its disclosure policy, which is disclosed on its corporate website.

2. Capital Structure
Foreign Shareholding Ratio

Less than 10%-4-[Status of Major Shareholders]Name / Company NameWINDELIGHT Inc.
Fumikatsu Sano
The Master Trust Bank of Japan, Ltd. (trust account)
USS Co., Ltd.
Tomikazu Sano
Akiko Ishii
Yutaka Ishii
Custody Bank of Japan, Ltd. (trust account)
Isamu Nakada
JAPAN SECURITIES FINANCE CO., LTD.
Controlling Shareholder (except for Parent
Company)
Parent Company

Number of Shares Owned
10,204,000
2,679,222
1,336,700
715,200
660,068
402,620
397,540
289,400
179,800
167,200

Percentage (%)
34.35
9.02
4.50
2.41
2.22
1.36
1.34
0.97
0.61
0.56

―――
None

Supplementary Explanation―

3. Corporate Attributes

Fiscal Year-End

Tokyo Stock Exchange
Prime Market
June

Type of Business

Iron & Steel

Listed Stock Market and Market Section

Number of Employees (consolidated) as of the
End of the Previous Fiscal YearSales (consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of the
End of the Previous Fiscal Year

From 500 to less than 1000
From ¥10 billion to less than ¥100 billion
From 10 to less than 50

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder―――

5. Other Special Circumstances which may have Material Impact on Corporate Governance
None

-5-

II. Business Management Organization and Other Corporate Governance Systems
regarding Decision-making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Company with Audit and Supervisory Committee

Organization Form
[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office Stipulated in Articles ofIncorporation15
1 yearChairperson of the Board

President

Number of Directors

11

Appointment of Outside Directors

Appointed

Number of Outside Directors

6

Number of Independent Outside Directors

6Outside Directors’ Relationship with the Company (1)NameAttribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

Keiji Miyaki
From another company
From another company
Hiroko Nomura
From another company
Keiji Imajo
OthersKiyoshi Shinohara
Tax Accountant
Hiroshi Kamiya
Tomoya Shiraishi
From another company* 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 of the Company or its subsidiaries
b. Non-executive director or executive of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A 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, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as a director/auditor
g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is alegal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f)(the director himself/herself only)
i. Executive of a company, between which and the Company outside directors/auditors are mutually appointed(the director himself/herself only)-6-

j. Executive of a company or organization that receives a donation from the Company (the director
himself/herself only)
k. Others

Outside Directors’ Relationship with the Company (2)NameMembershipofSupervisory
Committee

Designationas
Independent
Director○

Keiji Miyaki○

Hiroko Nomura○
Keiji Imajo-7-

Supplementary
Explanation oftheApplicable
Relationship

Reasons of Appointment
Mr. Keiji Miyaki has been
appointed as Outside Director
because he is capable ofproviding valuable advice on
the Group’s management
strategy from a global
perspective based on his broad
knowledge and experience inmanagement strategy gained
through his service as therepresentative of foreign
affiliated consulting
companies.
Mr. Miyaki has also been
designated as Independent
Director because the Company
considers that a conflict ofinterest is unlikely to arise
between Mr. Miyaki and theCompany’s generalshareholders.
Ms. Hiroko Nomura has been
appointed as Outside Director
because she is capable ofproviding valuable advice on
the Group’s management
strategy based on her
extensive knowledge andexperience regarding diversity
in organizational management
as a journalist and university
professor.
Ms. Nomura has also been
designated as Independent
Director because the Company
considers that a conflict ofinterest is unlikely to arise
between Ms. Nomura and theCompany’s generalshareholders.
Mr. Keiji Imajo has been
appointed as Outside Director
because he is capable ofproviding valuable advice on

NameMembershipofSupervisory
Committee

Designationas
Independent
Director

○

○

○

○

○

○

Supplementary
Explanation oftheApplicable
Relationship

Reasons of Appointment
the Group’s management
strategy by drawing on his
knowledge and experience
gained through serving as an
executive manager andinvestment officer of listedcompanies.
Mr. Imajo has also been
designated as Independent
Director because the Company
considers that a conflict ofinterest is unlikely to arise
between Mr. Imajo and theCompany’s generalshareholders.
Mr. Kiyoshi Shinohara has
been appointed as Outside
Director because he is capableof providing valuable advice
on the Group’s management
strategy based on his wideranging experience ingovernment administration.
Mr. Shinohara has also been
designated as Independent
Director because the Company
considers that a conflict ofinterest is unlikely to arise
between Mr. Shinohara and theCompany’s generalshareholders.
Mr. Hiroshi Kamiya has been
appointed as Outside Director
as the Company considers that
he is capable of performing theduties as Outside Director
appropriately because he iswell versed in finance andaccounting as a certified
public tax accountant and has
considerable insight and broad
experience.
Mr. Kamiya has also been
designated as Independent
Director because the Company
considers that a conflict ofinterest is unlikely to arise
between Mr. Kamiya and theCompany’s generalshareholders.
Mr. Tomoya Shiraishi has been
appointed as Outside Director
because he is capable ofKiyoshi Shinohara

Hiroshi Kamiya

Tomoya Shiraishi-8-MembershipofSupervisory
Committee

Name

Designationas
Independent
Director

Supplementary
Explanation oftheApplicable
Relationship

Reasons of Appointment
providing valuable advice on
the Group’s management
strategy by drawing on his
knowledge and experience
gained through serving as adirector of listed companies
and representative ofinvestment companies.
Mr. Shiraishi has also been
designated as Independent
Director because the Company
considers that a conflict ofinterest is unlikely to arise
between Mr. Shiraishi and theCompany’s generalshareholders.

[Supervisory Committee]
Committee’s Composition and Attributes of Chairperson
All Committee
Members
Supervisory
Committee

Full-timeMembers3

Inside Directors
0Appointment of Directors and/or Staff to
Support the Supervisory Committee0

OutsideDirectors

Chairperson
3Outside Director

Appointed

Matters Relating to the Independence of Such Directors and/or Staff from Executive Directors
The Company has appointed independent support employees.
Cooperation among Supervisory Committee, Accounting Auditors and Internal Audit Departments
The Audit and Supervisory Committee, the accounting auditors, and Internal Audit Office, which is theCompany’s internal audit department, meet regularly to exchange information and have discussions about theCompany’s audit system, audit plans, and progress of audits and collaborate to ensure proper implementationof audits and enhance its internal control.
[Voluntary Establishment of Nomination/Remuneration Committee]
Voluntary Establishment of Committee(s)Corresponding to Nomination Committee or Established
Remuneration Committee
Committee’s Name, Composition, and Attributes of Chairperson

Committee’s Name

Committee
Corresponding
toNomination Committee
Appointment and Remuneration
Committee-9-Committee
Corresponding
toRemuneration Committee
Appointment and Remuneration
Committee

All Committee Members

55

Full-time Members

00Inside Directors

22

Outside Directors

33Outside Experts

0

0

Other

0

0

Inside Director

Inside Director

Chairperson
Supplementary Explanation―[Independent Directors]
Number of Independent Directors

6

Matters relating to Independent Directors―[Incentives]
Incentive Policies for Directors

Performance-linked Remuneration and Share Options

Supplementary Explanation
The Company has implemented these incentives in order to help boost Directors’ drive and eagerness toimprove the Company’s performance.

Inside Directors, Outside Directors, employees,
subsidiaries’ directors, subsidiaries’ employees, andothersEligible Recipients of Share Options
Supplementary Explanation

The Company grants share options to the Group’s Directors, employees, advisors, etc., in order to boost theirdrive and eagerness to improve the Company’s performance. The number of share options to be granted isdetermined in view of their position and contribution to the Company’s performance in the past as well as theCompany’s expectations about their future contributions.

[Director Remuneration]
DisclosureofIndividual

Remuneration

Directors’

No Individual Disclosure

Supplementary Explanation- 10 -

The Company does not disclose individual Director’s remuneration because there is no Director who is paid
remuneration, etc., of 100 million yen or more in total. Directors’ remuneration is disclosed in aggregate
amount.
Policy on Determining Remuneration Amounts
and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods<Description of the policy on determining the amounts of and the calculation method for Directors’
remuneration >The Company has its policy on determining the contents of remuneration etc. for individual Directors, which
was resolved at the Board of Directors meeting held on February 12, 2021. President and Representative
Director Mr. Tomikazu Sano, by considering the assessment of Directors’ individual duties, performance, etc.,
formulates an original proposal of the amounts of and the calculation method for remuneration for Directors(excluding Directors who are Audit and Supervisory Committee members) and for Directors who are Audit
and Supervisory Committee members, respectively, subject to the upper limits of the total amounts of theirrespective remuneration that were resolved at the General Meeting of Shareholders. The proposal is thendeliberated by the Appointment and Remuneration Committee, a voluntary advisory organization including
Independent Outside Directors, in order to increase the objectivity and transparency of the procedure.
Afterward, the proposal is deliberated by the Board of Directors with regard to the policy on Directors’
remuneration etc., their determination process, and the results of the Committee’s deliberation, and thendelegated by the Board of Directors to President and Representative Director Mr. Tomikazu Sano for final
determination. The details of the delegated authority are the determination of specific remuneration amounts
for individual Directors, and the reason for delegating this authority is the assessment that delegating it to the
President and Representative Director, who has a comprehensive understanding of the overall business, isreasonable.
Remuneration for Directors who are Audit and Supervisory Committee members is determined at an
appropriate level based on the discussion by Directors who are Audit and Supervisory Committee members
as Directors who are Audit and Supervisory Committee members are responsible for auditing Directors’
performance of duties as an independent organization delegated by shareholders.
In determining the contents of remuneration etc., for individual Directors, the Appointment and Remuneration
Committee reviews the original proposal from multiple perspectives, including consistency with the policy
on determining the amounts of Directors’ remuneration, and the Board of Directors basically respects theCommittee’s report and considers that the original proposal is consistent with the policy.
<Resolution of the General Meeting of Shareholders regarding Directors’ remuneration etc.>
It was resolved at the 8th General Meeting of Shareholders held on September 28, 2017 that the amounts ofremuneration for Directors (excluding Directors who are Audit and Supervisory Committee members) should
not be more than 500 million yen per year (of which not more than 30 million yen for Outside Directors,
provided that these amounts do not include salaries paid to Directors concurrently serving as employees fortheir work as employees). The number of Directors at the time of the resolution was seven.
It was resolved at the 8th General Meeting of Shareholders held on September 28, 2017, that the amounts ofremuneration for Directors who are Audit and Supervisory Committee members should not be more than 30
million yen per year. The number of Directors who were Audit and Supervisory Committee members at thetime of the resolution was three.
Apart from the above-mentioned Directors’ remuneration, the Company has introduced a restricted sharebased remuneration system, which was resolved at the 9th General Meeting of Shareholders held on
September 27, 2018. It was resolved at the meeting that the amounts of restricted share-based remuneration
for Directors (excluding Directors who are Audit and Supervisory Committee members) should not be morethan 25 million yen per year (of which not more than 5 million yen for Outside Directors) and that the amountsof restricted share-based remuneration for Directors who are Audit and Supervisory Committee members
should not be more than 5 million yen per year. The number of Directors (excluding Directors who are Audit
and Supervisory Committee members) was seven and the number of Directors who were Audit andSupervisory Committee members was three at the time of the resolution.

- 11 -

<Basic policy>
The basic policy regarding Directors’ remuneration, etc. is as follows:- It should be commensurate with the Directors’ duties and roles- It should serve not only as remuneration based on short-term performance but also as an incentive that
contributes to the overall improvement of corporate value in the medium to long term
- It should ensure sharing awareness concerning profits with shareholders- It should be at an effective remuneration level to continually secure excellent human resources- It should have the flexibility to adapt to changes in the market, industry environment, and strategic
objectives- It should contribute to fostering sound corporate practices and a strong corporate culture<Composition of remuneration>
Directors’ remuneration, etc. consists of basic remuneration, performance-linked remuneration, and restricted
share-based remuneration.
a. Basic remuneration
The basic remuneration is calculated for each Director based on his or her past career and achievements,
duties, and roles, and comprises capability-based pay, position-based pay, and role-based pay.
b. Performance-linked remuneration
The performance-linked remuneration is remuneration paid to Directors (excluding Directors who are Audit
and Supervisory Committee members as well as Outside Directors). The amount of the performance-linked
remuneration is determined based on profit attributable to owners of parent for each fiscal year, in order tohelp boost their drive to improve the Company’s performance and corporate value.
June 2022
June 2023

Target: 1,950 million yen; Actual result: 3,111 million yen
Target: 2,030 million yen; Actual result: 1,236 million yen

c. Restricted share-based remuneration
The restricted share-based remuneration is remuneration paid to Directors. The amount of the restricted sharebased remuneration is determined to be within the range of approximately 5% to 10% of the sum of the basic
remuneration and the performance-linked remuneration, in order to provide an incentive for Directors tocontribute to improving the Company’s corporate value as well as to share profits with shareholders.
<Remuneration level>
The remuneration level is determined based on an analysis that objectively compares the levels of
remuneration and the linkages of remuneration to performance by using data from an outside research
institution’s surveys on directors’ remuneration in order to ensure that the remuneration level will serve as anincentive for Directors to contribute to improving the Group’s corporate value.
<Future policy for the Directors’ remuneration system>
The Company's Appointment and Remuneration Committee engages in discussions and decision-making
regarding the Directors’ remuneration system with the goal of improving corporate value in the medium tolong term.
As a future policy, the Committee has decided that it is important to prioritize a medium- to long-term
perspective over pursuing short-term profits. Specifically, it is planned to reduce short-term performancelinked remuneration and focus on initiatives such as advancing a medium- to long-term strategy centeredaround the concept of “Lead a Circular Economy,” as well as building an organizational and personnel
structure. Additionally, it is recognized that the Company’s most important management theme is to achievesustained growth by fostering a strong corporate culture based on sound corporate practices.
The Committee will continue to engage in ongoing discussions regarding the Directors’ remuneration systemwith the aim of improving corporate value.
[Supporting System for Outside Directors]
Corporate Planning Dept. supports Outside Directors. The Company contacts Outside Directors via e-mailabout once a week. Agenda items for the Board of Directors meeting are distributed and sufficient information
is provided in advance to Outside Directors, while briefing is also provided as needed. The Company has- 12 -

appointed independent employees as staff dedicated to supporting Outside Directors who are Audit andSupervisory Committee members with their work. The Company provides sufficient information through suchmeasures as exchanging opinions about important matters etc. and reporting the current state of the Company’s
operations.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration
Decisions (Overview of Current Corporate Governance System)
1. Board of Directors and Directors
The Company’s Board of Directors consists of eight Directors (excluding Directors who are Audit andSupervisory Committee members) (of which three are Outside Directors) and three Directors who are Audit
and Supervisory Committee members (of which three are Outside Directors) and holds the Board of Directors
meeting once a month in principle. The Board of Directors decides important matters relating to theCompany’s execution of business and supervises Directors’ performance of duties. The Company has
appointed Outside Directors (excluding Directors who are Audit and Supervisory Committee members)
comprising a person who has experience as the representative of foreign affiliated consulting companies, auniversity professor with expertise in promoting diversity, and an executive manager of a listed company inorder to advance efforts to establish a system that will enable the Board of Directors to make management
decisions based on broader perspectives and supervise the management of the Company from the outside. The
Company has appointed three Outside Directors who are also Audit and Supervisory Committee members
comprising a person who has experience in government administration, a certified public tax accountant, anda person who has experience as a director of a listed company expecting that they are capable of supervising
the management of the Company from their respective expert viewpoints, and they are duly performing theirroles.
2. Audit and Supervisory Committee
The Company is a company with an Audit and Supervisory Committee. The Audit and Supervisory Committee
consists of three Outside Directors and assumes the role of auditing and supervision. The Audit andSupervisory Committee performs audits using the Company’s internal control system, and the Company has
put in place a system in which the Audit and Supervisory Committee can regularly receive reports from theCompany’s internal audit department about progress and results of internal audits and also can demand reports
from Directors and operating departments of the Company and Group companies as needed. In addition, theAudit and Supervisory Committee holds regular meetings with President and Representative Director toexchange views and maintain communication on issues that the Company should address, progress ofimprovement of the environment for auditing by the Audit and Supervisory Committee, and other importantmatters relating to audit.
The Audit and Supervisory Committee actively exchanges information with Internal Audit Office and the
Accounting Auditor to maintain close collaboration with them and enhance its audit function. The Audit andSupervisory Committee also collects information not only from Internal Audit Office but from internal control
departments to ensure a more thorough audit.
3. Internal Control Committee
The Group has established its Internal Control Committee, chaired by the Company’s President. This
Committee consist of four subcommittees: the Environment and Safety Promotion Committee, the IT
Promotion Committee, the Human Resources and Labor Reform Committee, and the Operations Reform
Committee. The Internal Control Committee identifies risks, formulates countermeasures, and builds andoperates the internal control system across the Group, including awareness-building activities. The Internal
Control Committee, which consists of full-time Directors, executive officers, and the Chair of the Audit andSupervisory Committee of the Company, as well as presidents of consolidated companies (excluding equitymethod affiliates) and chairs of subcommittees, convenes every month in principle to have the chair of eachsubcommittee report on important matters relating to compliance, matters relating to litigation and legal risks,and other matters that could have significant impacts on the management of the Group and to set policies andmake decisions on these matters.
4. Management Committee
The Management Committee consists of full-time Directors and Chair of the Audit and Supervisory
Committee of the Company. It may also include executive officers and department managers as well as Group- 13 -

companies’ directors, as required for matters to be deliberated. The Management Committee meets once amonth in principle to make decisions on important matters relating to the Company’s execution of businessand on timely disclosure.
The Management Committee also examines the management of each Group company and reviews matters tobe submitted to the Board of Directors of the Company and its subsidiaries as needed. In addition, theCompany has had each subsidiary appoint a person in charge of timely disclosure who manages thecommunication of facts which occurred, disclosed information, and matters relating to insider trading.
5. Sustainability Committee
The Sustainability Committee consists of the Company’s full-time Directors, executive officers, and somerelated department managers and meet once a month and seeks to promote the Company’s “sustainability
strategy,” a medium-term management plan that sets out the Company’s strategy for achieving sustainable
development for both the Group and society. As an organization assisting decision making by Representative
Director, it flexibly and actively discusses and examines the progress of efforts to promote the strategy andthe Company’s future directions, including new businesses and M&A, from a long-term perspective.
6. Internal Audit Office
The Company has established Internal Audit Office as its internal audit department, which consists of one
Executive Officer, one Office Manager, and two staff members. The Internal Audit Office is an organizationthat directly reports to the Representative Director and President and is separated from other operating lines
and strives to perform effective internal audits from an independent and objective standpoint in order tocontribute to ensuring sound and appropriate operations in the Company and each Group company. The
Group’s basic policy on internal audit is to study the actual state of operations and asset management of theCompany and its subsidiaries based on the Company’s “rules for internal audit,” confirm compliance withlaws and regulations, the articles of incorporation and internal rules, help prevent errors, omissions andmisconducts, and contribute to more rational, more efficient corporate management. Internal Audit Officeduly performs audits, receiving information etc. relating to internal control from internal control departments.
7. Appointment and Remuneration Committee
The Appointment and Remuneration Committee consists of five members, comprising one Representative
Director, one Senior Managing Director, and three Outside Directors who are Independent Directors, anddeliberates the selection of candidates for Directors (excluding Directors who are Audit and Supervisory
Committee members), remuneration and other matters as an advisory organization for the Board of Directors
before those matters are submitted to the Board of Directors.
The Appointment and Remuneration Committee holds a committee meeting three times a year and an
extraordinary committee meeting as needed.
The Company recognizes the succession plan for Representative Director as one of the Company’s mostimportant matters and will have the Board of Directors and the Appointment and Remuneration Committee
carefully deliberate this issue.

3. Reasons for Adoption of Current Corporate Governance System
The Company’s Board of Directors consists of eight Directors (excluding Directors who are Audit andSupervisory Committee members) and three Directors who are Audit and Supervisory Committee members.
Of the eight Directors (excluding Directors who are Audit and Supervisory Committee members), three are
Outside Directors, who contribute to transparent decision making and supervision of the Board of Directors
performance of duties. In addition, the Audit and Supervisory Committee, which consists of three Directors,
three of whom are Outside Directors, supervises the Board of Directors from a fair and neutral standpoint toensure that decisions are made in accordance with laws and regulations. The Company also has put in place
the Management Committee as an organization to ensure speedy execution of business and implement asystem for timely disclosure.
The Company has adopted the current corporate governance system in order to strengthen the management
supervision function as stated above.

- 14 -

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
Early Notification of General
Shareholder Meeting
Scheduling AGMs Avoiding
the Peak Day
Allowing Electronic Exerciseof Voting Rights
Providing Convocation Noticein English
Other

Supplementary Explanations
The Company sends the notice of the General Meeting of Shareholders by
three weeks in advance.
The Company will ensure that the General Meeting of Shareholders should
be scheduled so that as many shareholders as possible will be able to attend
the meeting. The Company can avoid the peak day in scheduling the meetingas its fiscal year closes in June.
Shareholders can exercise voting rights on the Internet voting website that has
been designated by the shareholder registry administrator with whom theCompany has entered in a securities agency contract.
The notice of General Meeting of Shareholders (including reference
documents) is available in English translation on the Company’s corporatewebsite.
The notice of General Meeting of Shareholders etc., are available on the
Company’s corporate website.
The President, Representative Director makes presentation on the Company’sbusiness report and future growth strategy at the General Meeting of
Shareholders to help deepen shareholders’ understanding of the Company.

2. IR Activities
Supplementary Explanations
Preparation and Publicationof Disclosure Policy
Regular Investor Briefings
for Individual Investors
Regular Investor Briefings
for Analysts and Institutional
Investors
Posting of IR Materials on
WebsiteEstablishment of Department
and/or Manager in Charge ofIR

The disclosure policy is posted on the Company’s corporatewebsite.
The Company holds a briefing for individual investors oncea year and posts a video of the results briefing sessions on
our website twice a year.
The Company provides regular briefings for analysts, andalso meetings for institutional investors as needed.

Presentation byRepresentative

Yes
Yes

IR information such as financial results, earnings reports,
and IR schedules are posted on the Company’s corporatewebsite: https://www.envipro.jp/ir/
Corporate Planning Dept. is in charge of IR.

3. Measures to Ensure Due Respect for Stakeholders
Stipulation of Internal Rules
for Respecting the Position of
Stakeholders

Supplementary Explanations
The Company has stipulated its basic policy on disclosure in the disclosure
policy. The basic policy includes endeavoring to promptly provide
information for shareholders and investors based on the principle oftransparency, fairness and continuity, making disclosure in compliance with
the Financial Instruments and Exchange Act and the timely disclosure rules
established by the Tokyo Stock Exchange, and promptly and fairly disclosing
important corporate information that is expected to affect investors’- 15 -

investment decision, even if it is not required by laws and regulations or thetimely disclosure rules.

IV. Matters Relating to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
With regard to the internal control system, the Company divides necessary operations and management
functions and assigns designated department organizations to take charge of them and ensure compliance withvarious internal rules, in order to achieve the separation of authority and internal check in operations.
The Company also performs internal audits based on an annual internal audit schedule to monitor theeffectiveness of the internal check organizations. The Company’s basic views on the internal control system
is described in the following Internal Control Basic Policy. This basic policy was revised at the Board of
Directors meeting held on September 28, 2017, as required by the transition to a company with an Audit andSupervisory Committee.
“Internal Control Basic Policy”
ENVIPRO HOLDINGS Inc. has stipulated its internal basic policy as below to achieve four aims,“effectiveness and efficiency of business,” “reliability of financial reports,” “compliance with laws,” and“preservation of assets.” We shall endeavor to establish and operate its internal control systems more
effectively, through continuous evaluation of the implementation of the internal control systems under thispolicy as well as taking measures necessary for its improvement, and conducting consistent reviews of thispolicy responding to changes in the business environment.
a. Systems for ensuring compliance with laws and articles of incorporation in the performance of duties bydirectors and employees.
i We shall ensure that directors and employees completely comply with laws, the article of incorporation, andsocial norms, by organizing the system of the compliance with laws, educating, and training. And also, topractice them, we shall set company principle and regulations, organize manuals.
ii We shall pursue internal audit of both ENVIPRO HOLDINGS Inc. and all consolidated subsidiaries(hereinafter referred to as “our group”) by the internal audit division which is independent from any otherdivisions and directly controlled by President/CEO. We verify and evaluate the appropriateness andeffectiveness of each section’s internal control system, and ensure legality of the employees’ performance of
duties by encouraging these remediation.
iii We shall interdict any and all relationship with anti-social forces which threaten the order and safety of thecivil society, and respond to them in corporate-wide and uncompromising manner in close association withoutside experts such as police.
b. Matters regarding the retention and management of information regarding the executions of operations of
directors.
We shall record and retain information regarding the executions of operations of directors as documents orelectric media following the rules of management of documents and other regulations. Directors and audits
may peruse these documents anytime.
c. Regulations and other systems for risk management.
i As for risks about the perform operations of our group, we shall analyze and distinguish predicted risks at a
subcommittee of the internal control committee, and manage all risks of our group by affiliating with eachgroup companies comprehensively and inclusively.
ii In the case of management crisis which may influence the business of our group, we shallorganize a counter measures headquarters whose manager is President/CEO in the internal control committee,
minimize a loss of our group, and strive for restoration.
d. Systems for ensuring the efficient executions of operations of directors.
i The ordinary meetings of the board of directors shall be held once a month and extraordinary meetings shallbe held when necessary as basis of the system to assure efficient performance of directors. The procedure of
the board of directors and its limit of authority shall be stipulated in rules of the board of directors.
ii To assure effective business management by board of directors, we shall stipulate rules of organization andrules of allocation of business operations. And also we shall stipulate rules of job authorities for the purpose- 16 -

of effective management of organization by defining fundamental duties and the limit of authority of the boardof directors.
iii We shall assure the efficient executions of operations of directors by stipulating other internal rules.
iv We shall stipulate rules of budget control to formulate and operate one-year budget and mid-term
management plan properly. Following the rules, the board of directors shall decide one-year budget and midterm management plan, and review and update the mid-term management plan generally once a year.
v Directors shall execute business effectively based on one-year budget and mid-term management plan which
are formulated by the board of directors, report the progress of the budget to the board of directors.
vi At the board of directors, our group reports progress states of operations and important matter, and realize
quick decision-making and perform operations.
e. Systems for ensuring the proper operation at the business group from our group.
i Our group centering on the committee of the internal control shall organize the system of conference about
internal control, information sharing, effective transmission of orders and requests.
ii Directors possess authority and responsibility of establishment and operation of the internal control whichassure justness of execution of business.
iii Internal audit department shall inspect each departments, report the results to President/CEO and the
director in charge, and if necessary lead improvement plans of internal control, aid and advise enforcement.
iv To assure effectiveness of the internal audit, following requests of internal audit department, President/CEO
may appoint internal auditors from each department except for the inspected department.
v About the perform operations by the group companies, we consolidate the final decision rules and ask ouradvance approval and report about business important matters based on the final decision rules, and also theadministration division confirms appropriateness the business by getting reports routinely about businessplans by the group companies.
f. Matters regarding employees assisting “Audit and Supervisory Committee” (hereinafter referred to as “theCommittee”), the independence of such employees from directors (excluding the member of the Committee),and ensuring the effectiveness of directions to such employees.
Employees who are taken orders or directions which are necessary for auditing operation by the Committee
shall not be ordered by directors (excluding the member of the Committee) and other employees about thoseorders or directions for an assist term that the Committee orders, and do the operations as a priority.
g. Systems of reporting to the Committee by directors and employees of our group and other systems regarding
reporting to the Committee, and systems to ensure directors and employees not having unfair treatment byreporting.
i The member selected by the Committee shall be assembled to the board of directors or other important
meetings, and shall be received the report important things about company management and operating
business and the state of the business performance.
ii The audit results by internal audit division shall be submitted to the Committee for their review.
iii The directors and employees may report to the Committee directly when they find material facts about ourgroup.
iv The system ensures directors and employees not having unfair treatment by reporting.
h. Other systems for ensuring the effective audit by Audit and Supervisory Committee members.
i The Committee shall stipulate standard and basic matters of inspection by the Committee and provide rulesof Audit and Supervisory Committee and rules of inspection by Audit and Supervisory Committee for the
purpose of smooth and effective enforcement of inspection by the Committee.
The Committee shall inspect and audit following those rules.
ii The Committee may execute hearing to directors and employees if necessary, and regular discussion
sessions among the President/CEO, internal audit department and accounting auditors shall be arranged.
iii When the member of the Committee requests advance payment or reimbursement of expenses (which islimited to the performance of duties by the Committee) arising from the performance of duties, ENVIPROHOLDINGS Inc. shall promptly settled the expenses unless it is determined that the expenses are notnecessary for the performance of the duties by the members of the Committee.

- 17 -

2. Basic Views on Eliminating Anti-Social Forces and the Progress of System Development
The Group has established the following “Basic Policy on Addressing Anti-Social Forces,” rejects any relation
with anti-social forces, and takes action against any unjust demand from anti-social forces in a dauntlessstance by collaborating with the police, corporate lawyers, and other outside expert institutions. The Company
ensures that all Directors and employees are fully aware of and fulfill this commitment under the policy.
“Basic Policy on Addressing Anti-Social Forces”
The ENVIPRO Group will address anti-social forces based on the following basic policy:
1. Response as an organization
The Group will take action against any unjust demand from anti-social forces as an organization as a whole,rather than leaving them only to a person or department in charge, while ensuring that its Directors andemployees facing unjust demands from anti-social forces remain safe.
2. Collaboration with outside expert institutions
The Group will establish close collaborative relations with the police, National Center for Removal of
Criminal Organizations, lawyers, and other outside expert institutions to prepare for unjust demands fromanti-social forces.
3. Rejection of any relation or transaction with anti-social forces
The Group will reject any relation or transaction with anti-social forces and refuse any unjust demand fromanti-social forces.
4. Legal action under civil and criminal laws against unjust demands from anti-social forces
The Group will take legal action under both civil and criminal laws against unjust demands from anti-social
forces.
5. Prohibition of backdoor deals and funding
Even if the Company receives unjust demands from anti-social forces on the ground of a misconduct in theGroup’s business activities or by a Group officer or employee, the Group will never engage in a backdoor
deal to conceal the fact. The Group will never provide funds for anti-social forces.

- 18 -

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

Not Adopted

Supplementary Explanation―

2. Other Matters Concerning to Corporate Governance System―――

The following is a schematic diagram of the Company’s corporate governance system.

- 19 -

Factswhichoccurred
Each Group
company
Internal Audit Office

Decisions
Each Group
company
Information

Financialstatement
information
Accounting and
Financial Dept.
Quantitative information
Qualitative information- 20 -

Timely disclosure

Investors

Stock exchange

Registration on TDnet (Timely
Disclosure Network)

Person in charge of information handling(Disclosure)Management Committee(Judging materiality of
the information inquestion and necessity of
disclosure

ReportBoard of Directors(resolution)

Collection and management of corporate
information by the person in charge of
information handling

Corporate
Planning
Dept.

[Outline of the Company’s timely disclosure system (schematic diagram)]