Corporate Governance Guideline
Chapter 1 General Provisions
1. Purpose
2. Basic philosophy
3. Revised/abolished

Chapter 2 Relationship With Shareholders
1. Ensuring shareholder rights
2. General meeting of shareholders
3. Protecting shareholder rights
4. Dialogue with shareholders
5. Related-party transactions
6. Cross-shareholdings

Chapter 3 Relationships With Stakeholders Other Than Shareholders
1. Ensuring positive and smooth relationships with stakeholders other than shareholders

Chapter 4 Information Disclosure
1. Information disclosure standards

Chapter 5 Corporate Governance Structure
1. Institutional format
2. Board of directors(1) Role of the board of directors(2) Membership structure(3) Board of director operations(4) Board of director evaluations
3. Audit and Supervisory Committee(1) Role of the Audit and Supervisory Committee(2) Ensuring the effectiveness of audits conducted by the Audit and Supervisory Committee 4. Criteria for theselection of candidates for directors
5. Dismissal of representative directors and directors
6. Compensation, etc., for directors(1) Compensation, etc., of directors who are not members of the Audit and Supervisory Committee(2) Compensation, etc., of directors who are members of the Audit and Supervisory Committee
7. Support system and training policy for directors and members of the Audit and Supervisory Board
Attachment (1)Basic Policy for Constructive Dialogue With Shareholders
Attachment (2)Criteria for Appointing Independent Directors

Corporate Governance Guideline
Chapter 1 General Provisions
1. Purpose
・The purpose of these guidelines is to describe the basic approach to corporate governance of Adastria Co.,
Ltd. (the “Company”). These guidelines encompass the Company’s aims to achieve sustainable growth andenhance corporate value over the medium to long term through effective corporate governance based on theAdastria basic philosophy.
2. Basic philosophy
・Guided by our corporate philosophy that says, “Be a person needed, Be a company needed,” the Company
pursues our mission of Play fashion!, endeavoring to enrich lives and create happiness through fashion. To
respond flexible to the needs of our customers and changes in the environment, as well as to contribute to
the enrichment of lives and diverse values around the world, we strive for excellence in corporate
governance that fosters quick decision-making.
3. Revised/abolished・The board of directors shall decide whether to revise or abolish these guidelines.

Chapter 2 Relationship With Shareholders
1. Ensuring shareholder rights
・The Company shall take appropriate measures to ensure the rights of shareholders are secured and exercisedeffectively. The Company shall give consideration to the equal treatment of all shareholders, including
minority and foreign national shareholders.
2. General meeting of shareholders
・The Company views the general meeting of shareholders as the highest decision-making body in ourorganization. The Company shall ensure a sufficient period for shareholders to exercise their rights, andfoster an environment in which shareholders can exercise their voting rights in an appropriate manner.
・The Company shall take appropriate measures to enable shareholders to exercise voting rights effectively at
the general meeting of shareholders, providing appropriate information to shareholders to assist in making
appropriate decisions.
3. Protecting shareholder rights
・The Company shall provide sufficient explanations of capital policies and other matters that may have asignificant impact on the interests of shareholders.
4. Dialogue with shareholders

・In accordance with the Basic Policy on Constructive Dialogue With Shareholders (Attachment 1), theCompany shall foster an understanding of Company management strategies, etc., and engage in appropriate
actions based on an understanding of shareholder perspectives.
5. Related-Party Transactions
・In the event that a director engages in competing transactions or conflicts of interest, he or she shall obtain
the approval of the board of directors in accordance with laws and regulations and the Rules of the Board ofdirectors, and shall report such transaction appropriately to the board of directors as a material fact.
・In accordance with the provisions of the Auditing Standards for Members of the Audit and Supervisory
Committee, directors who are members of the Audit and Supervisory Committee shall monitor confirm thepresence of any facts that violate the duties of directors involved in such transactions.
6. Cross-shareholdings
・If the Company engages in cross-shareholdings of publicly traded shares, the Company shall disclose its
policy on such shareholdings, including the policy and approach to reducing said shareholdings. TheCompany shall provide explanations on the purpose of such shareholdings and details of how the Company
verifies the appropriateness of such shareholdings.
・Further, the Company shall formulate and disclose specific standards to ensure appropriate responses to theexercise of voting rights with respect to cross-shareholdings.
・In the event a company that holding Company shares as cross-shareholdings indicates its intention to sellsaid shares, the Company shall take appropriate action to the extent such action does not hinder such sale(e.g., suggesting such trade would results in a retaliatory reduction in business transactions, etc.). Inaddition, the Company shall not engage in transactions with strategic cross-shareholdings that are
detrimental to the Company or the common interests of Company shareholders.

Chapter 3 Relationships With Stakeholders Other Than Shareholders
1. Ensuring positive and smooth relationships with stakeholders other than shareholders
・The Company shall strive to maintain and improve positive and smooth relationships with stakeholders toachieve sustainable growth and enhance corporate value over the medium to long term. Stakeholders
include including customers, employees, business partners, and local communities.
・The Company shall establish a mission and vision based on our corporate philosophy to express our basic
stance and a guideline in conducting management activities. The Company shall also establish values and agroup code of ethics as a code of conduct for officers and employees.
・The Company shall establish an appropriate internal reporting (whistle blowing) mechanism for employees,etc., operating this mechanism in an appropriate manner.

Chapter 4 Information Disclosure
1. Information disclosure standards
・The Company shall disclose information in a timely, appropriate, and fair manner with the aim of engaging
in fair and transparent management.

・To maintain and improve the trust of shareholders and other stakeholders, the Company shall disclose
corporate information in an appropriate manner to ensure transparency. Corporate information includes
financial information such as financial position and operating results, as well as information onmanagement strategies and risk management.

Chapter 5 Corporate Governance Structure
1. Institutional format
・The Company has been formed as a company with an Audit and Supervisory Commitee. Under this format,
the Company shall ensure that the board of directors exercises its supervisory function appropriately andthat the Audit and Supervisory Committee exercise its audit function appropriately.
・The primary responsibility of the board of directors is to supervise the execution of business and makeimportant decisions on matters such as basic management policies.
・The Company shall create the following system to strengthen the supervisory function of the board ofdirectors and to increase the speed and efficiency of decision-making.
‐In accordance with the provisions of the Companies Act, the Company shall establish a system to ensure
prompt business execution by delegating authority to representative directors under certain criteria,
subject to a basic framework that certain important executive decisions shall be subject to priordeliberation by the Executive Council as described below.
‐ The Company shall adopt an executive officer system, under which executive officers execute business inaccordance with basic management policies, plans, and strategies as determined by the board of directors.
In addition, the Company shall establish an Executive Council as a body to share information anddeliberate on important matters in connection with the execution of duties by executive officers.
2. Board of directors(1) Role of the board of directors・The board of directors shall make decisions on basic management policies and important matters, etc., aswell as supervise business execution to ensure appropriate conduct by management.
(2) Membership structure
・The board of directors shall consist of a diverse range of directors with different backgrounds, expertise,and experience to ensure an appropriate balance.
・The board of directors shall include at least two outside directors and outside directors shall make up at least
one-third of the board as a means to strengthen the monitoring and supervisory functions of the board and toachieve highly transparent management.
(3) Board of director operations
・The Company shall prepare an annual schedule of the board of director meetings, determining in advancethe agenda items to be discussed and reported.
・An appropriate amount of time and opportunities for discussion shall be secured to ensure that necessary
and sufficient deliberations are conducted at board meetings.
・Directors may request additional information from relevant departments of the Company to makeappropriate decisions.

・The chairperson of the board of directors shall endeavor to improve the quality of discussions at board
meetings, to operate the meetings effectively and efficiently, and to foster an environment conducive to thefree, vigorous, and constructive discussions.
(4) Board of director evaluations
・The board of directors shall analyze and evaluate the effectiveness of the board as a whole by conducting anannual questionnaire on the role, composition, and operation of the board. A summary of the results shall be
disclosed by the Company.
・The board of directors shall strive to improve issues identified through said analysis and evaluation, aiming
improve the function of the board of directors further.
3. Audit and Supervisory Committee(1) Role of the Audit and Supervisory Committee
・The Audit and Supervisory Committee shall audit the execution of duties by directors, serving as a legallyindependent organization with the authority to investigate the Company's business operations and assets.
・The Audit and Supervisory Committee shall determine audit policies and other matters related to the dutiesof the directors who are members of the Audit and Supervisory Committee, and shall hold discussions andmake decisions related to the formation of audit opinions.
(2) Ensuring the effectiveness of audits conducted by the Audit and Supervisory Committee
・Directors who are members of the Audit and Supervisory Committee shall audit the execution of duties byCompany directors. Directors who are members shall perform such duties by attending board of director
meetings and other important meetings, by holding regular meetings with representative directors, etc., andby inspecting important approval documents, etc., in accordance with audit policies, audit assignments, etc.,
as determined by the Audit and Supervisory Committee.
・The Audit and Supervisory Committee shall strive to enhance the effectiveness of audits by establishing anenvironment and systems for reporting to the Audit and Supervisory Committee.
・The Audit and Supervisory Committee shall conduct systematic and efficient audits in cooperation with theInternal Audit Department and other related departments within the Company, as well as with the financial
statement auditor.
・Auxiliary employees who are independent from executive officers shall be assigned to support theoperations and audit-related work of the Audit and Supervisory Committee.
4. Criteria for the selection of candidates for directors
・The Company shall select directors from among individuals suitable for supervising Company managementfrom the perspective of contributing to the creation of sustainable corporate value.
・The Company shall select outside directors from among individuals who have the necessary qualifications,experience, and knowledge to monitor and supervise management and to provide advice.
・The Company shall appoint independent outside directors whose independence is recognized in accordancewith the criteria for appointing independent directors (Attachment 2).

・In selecting candidates for the board of directors, the Nomination and Compensation Advisory Committee,
acting as an advisory body to the board of directors, shall deliberate on matters related thereto and report tothe board of directors, which shall then make a decision.
・The Audit and Supervisory Committee shall make decisions regarding the selection of candidates for
directors who are members of the Audit and Supervisory Committee after having evaluated the eligibility,independence, and likelihood of the individual to complete a term of office.
5. Dismissal of representative directors and directors
・In the event that a representative director becomes subject to standards for dismissal as determined by theboard of directors, the Nomination and Compensation Advisory Committee shall deliberate said dismissal,
after which the board of directors shall make a decision.
・After deliberations by the Nomination and Compensation Advisory Committee, the board of directors makedecisions regarding the dismissal of directors which are then submitted to the general meeting ofshareholders.
6. Compensation, etc., for directors(1) Compensation, etc., of directors who are not members of the Audit and Supervisory Committee
・Compensation, etc., for directors who are not members of the Audit and Supervisory Committee shall be
determined by the board of directors after deliberation by the Nomination and Compensation Advisory
Committee, acting as an advisory body to the board of directors. Such compensation shall be determinedwithin the scope approved at a general meeting of shareholders.
・Compensation, etc., for directors (excluding outside directors) who are not members of the Audit andSupervisory Committee shall be based on a compensation package in which a certain percentage is linked tobusiness performance. The details of the compensation package shall contribute to the sustainable
development of the Company by securing superior management personnel.
(2) Compensation, etc., of directors who are members of the Audit and Supervisory Committee
・Compensation, etc., for directors who are members of the Audit and Supervisory Committee shall consist ofa package separate system from compensation, etc., for directors who are not members of the Audit andSupervisory Committee, and shall be determined by consultation among the Audit and Supervisory
Committee based on deliberations of the Nomination and Compensation Advisory Committee, acting as anadvisory body to the board of directors. Such compensation shall be determined within the scope approved
at a general meeting of shareholders.
7. Support system and training policy for directors
・The Company shall endeavor to establish a system and environment sufficient for directors to fulfill theirroles and responsibilities effectively.
・Directors (including outside directors) possess the knowledge and experience necessary to make appropriate
management decisions, etc. However, the Company shall pay for continuing education and training,
including participation in outside seminars, that contribute to the collection of further information andimprovement of their knowledge.

・The Company shall provide opportunities for newly appointed outside directors to acquire knowledge of theCompany's management strategies, financial position, and other important matters.

Attachment (1)Basic Policy for Constructive Dialogue With Shareholders
1. The Company shall engage proactively in dialogue to build positive relationships with investors, including
shareholders, through the department responsible for investor relations. In addition, the Company shallstrive to understand the shareholder composition and engage actively in investor relations activities.
2. The department in charge of investor relations shall be responsible for dialogue with shareholders, and thedirector in charge of investor relations shall oversee such dialogues. Other directors or executive officers
may attend to individual requests from shareholders as necessary.
3. The department in charge of investor relations shall take the lead in coordinating with related departments
to engage in dialogue with shareholders in a rational and smooth manner.
4. The Company shall hold presentations on financial results and medium- to long-term management plansfor institutional investors. For individual investors, the Company shall provide explanations of themanagement situation, etc., at shareholder roundtable meetings after the conclusion of general meetings ofshareholders, management reporting meetings, etc.
5. Presentation materials and videos of financial results briefings, management briefings, etc. shall be
published on the Company's official website.
6. When formulating and announcing management strategies and plans, the Company shall present basicpolicies, including capital policies, as well as qualitative and numerical targets and strategies for achieving
said strategies and plans.
7. The opinions and questions obtained through dialogue with investors shall be reported to the board ofdirectors and the Executive Committee in a timely manner. These opinions shall be reflected in themanagement of the Company to ensure the sustainable enhancement of corporate value.
8. The Company shall manage insider information appropriately in accordance with internal regulations.

Attachment (2)Criteria for Appointing Independent Directors
For the Company to designate a director as an independent director, said director may not be subject to any of
the following conditions.
1. A person who is an executive, non-executive director, or members of the Audit and Supervisory Board theCompany or any group company
2. A person who has been an executive, non-executive director, or members of the Audit and Supervisory
Board of the Company or any group company in the past (10 years) 3. A person who is an executive of amajor shareholder or any such corporation or organization holding 10% or more of the total voting rights ofthe Company 4. A person who is a major Company business partner or an executive at a major Companybusiness partner
5. Consultants, accounting experts, legal experts, etc., who receive significant compensation or otherfinancial benefits from the Company any group company other than compensation as an officer, or in thecase of a corporation or organization, a person who an executive at said corporation or organization
6. A person who is financial statement auditor of the Company or any group company, or an employee of said
financial statement auditor 7． Any person who has been subject to any of 1. through 6. above in theprevious year
8. Spouses or relatives within the second degree of kinship of persons subject to any of 1. through 7. above
9. Persons other than those listed above that may cause substantial conflicts of interest with the Company's
general shareholders on a regular basis