ARE Holdings Corporate Governance Policies
This has been translated from the Japanese original and is for reference purpose only. In the event of any
discrepancy between the Japanese original and this translation, the Japanese original shall prevail.

- ARE Holdings Corporate Governance Policies ＜table of contents＞Chapter-I: General Provision
1. The Asahi Way

2. Basic Policies for Corporate Governance

3. Establishment, Revision and Abolishment

Chapter-II: Relations with Shareholders and others
1. Securing the Rights of Shareholders

2. General Shareholders Meeting

3. Dialogue with Shareholders

4. Basic Strategy for Capital Policy

5. Prevention of Related Party Transactions

6. Cross-Shareholding Strategy

7. Anti-Takeover Measures

Chapter-III: Proper Disclosure
1. Basic Policies for Information Disclosure
2. Enhancement of Disclosure in English
3. Supervision by Board of Directors for Proper Disclosure

Chapter-IV: Stakeholder Relationships
1. Corporate Ethics
2. Relationships with Communities and Activities on Environment
3. Relationships with Customers and Trading Partners
4. Relationships with Employees
5. Whistle-blowing System
6. Role of Asset Owner

Chapter-V: Corporate Governance Structure
1. Organization Design and Basic Framework

2. Board of Directors – Roles -3. Board of Directors – Composition –4. Board of Directors – Operation and Securing Effectiveness -5. Audit and Supervisory Committee

6. Directors and Outside Directors

7. Securing Proper Audit by Accounting Auditors
8. Procedure of Nomination and Dismissing of Directors
9. Determining Procedure of Compensation for Directors
10. Support for Directors
11. Policies of Training for Directors

Annex Document
Annex Document -1: The Asahi Way
Annex Document -2: Environmental Policies
Annex Document -3: A Key Principle for Internal Control System
Annex Document -4: Independence Criteria for Independent Directors
Annex Document -5: Nomination Policies and Dismissal Criteria for Directors and Key Management Candidates
Annex Document -6: Compensation Policies for Directors and Key Management
Annex Document -7: Training Policies for Directors

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ARE Holdings Corporate Governance Policies- ARE Holdings Corporate Governance Policies –Chapter-I: General Provision
1. The Asahi Way
ARE Holdings, Inc. (hereinafter referred to as “Company”) and our affiliates (hereinafter collectively
referred to as “Group”) establish the Asahi Way which is a value to be shared by the Group
employees and contains Our Credo, Our Corporate Values, Our Employee Principles and The Ten
Codes (Annex Document - 1). The Directors and Group management will take the lead in practicing
the Asahi Way and will familiarize all Group employees with it through key employees and the internal
portal sites. In accordance with the Asahi Way principles, we have established “ARE Holdings
Corporate Governance Policies” for the purposes of Groupʼs sustainable corporate growth andincreased corporate value over the medium- to long-term and will continuously endeavor to enhance
our corporate governance by implementing the policies.

2. Basic Policies for Corporate GovernanceTo establish corporate governance and have it work effectively is a corporate social responsibility andcontributes to more efficient and transparent management as well as to sustainable corporate value
growth. We will build our corporate governance that will respond to the confidence of shareholders,business partners, employees, local communities and other various stakeholders so as to fulfill oursocial mission and responsibility as a listed company. Also, we will develop a top-management
composition and a framework for business operations that will promptly respond to the management
environment changes with emphasis on compliance aiming at sustainable corporate value growth.
Specifically, we will endeavor to enhance corporate governance by:(1)

respecting the shareholdersʼ rights and securing equality;(2)

committing to constructive dialogue with shareholders;(3)

understanding various stakeholdersʼ interests and emphasizing a suitable balance among
stakeholders;(4)

disclosing corporate information properly and maintaining transparency;(5)focusing on prompt and efficient business operations by the Board of Directors; and(6)building a mechanism where Independent Outside Directors assume appropriate roles (by thecomposition of the Board of Directors, establishment of voluntary advisory committee, and soon) and enhancing functions to supervise the Board of Directors in its business operation.

3. Establishment, Revision and Abolishment
The “ARE Holdings Corporate Governance Policies” shall be established, abolished and revised inimportant aspects with a resolution at the Board of Directors meeting.

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ARE Holdings Corporate Governance Policies

Chapter-II: Relations with Shareholders and others
1. Securing the Rights of Shareholders(1) We will protect the rights of shareholders, promote them to exercise their rights and endeavor
to secure the substantial equality of all shareholders.
(2) Regarding the rights of minority shareholders, we will establish internal rules setting forth theprocedures for minority shareholders to exercise their rights and the manner to identify suchshareholders, so as to secure the exercise of their rights.
(3) We will endeavor to develop an environment where the information will be disclosed proactively
to all shareholders, including minority shareholders and foreign shareholders, and where theycan exercise their voting rights accordingly.

2. General Shareholders Meeting
From a standpoint of shareholders, we will develop an environment where the shareholders can
exercise their rights properly at the General Shareholders Meeting.
(1) A convocation notice of General Shareholders Meeting will be dispatched no later than about
three weeks prior to the date of meeting. Before that, the convocation will be publicly announcedon TDnet or our website about four weeks prior to the date of meeting.
(2) Proposals to be discussed at the General Shareholders Meeting shall be disclosed on our website
and TDnet promptly after a resolution at the Board of Directors meeting.
(3) A convocation notice translated into English (the entire text) will be posted on our website.
(4) We will hold the General Shareholders Meeting not on so-called “concentrated day” but about
seven business days prior to the concentrated day.
(5) We will use a system where shareholders who cannot attend the meeting can exercise theirvoting rights by sending a voting form by mail or internet. Moreover, institutional investors may
use with prior application the “Electronic Voting Platform” operated by ICJ Inc. as a means toexercise their voting rights electronically and participate in the General Shareholders Meeting.
(6) If the ratio of dissenting vote exceeds a certain level, we will analyze the reason and evaluate
whether or not any action is required.
(7) The right to vote at the General Shareholders Meeting shall be held by those who are registeredor recorded in the list of shareholders as of the base date. Substantial shareholders, including
institutional investors holding the stock in the name of a trust bank, etc., will not be permitted
to attend the General Shareholders Meeting and to exercise a voting right or ask questions, inprinciple. However, if such substantial shareholders holding the stock desire to exercise theirrights as a shareholder at the General Shareholders Meeting, we will consult with such trustbank, etc. If such investor desires to observe the proceedings of the General Shareholders
Meeting, we will permit the investor to do so within the venue after having taken certain
procedures.

3. Dialogue with Shareholders

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ARE Holdings Corporate Governance Policies
For the purpose of promoting constructive dialogue with shareholders, Group will explain its visionand management policies, the basic policy regarding the business portfolio and the status of thereview of such portfolio, including the medium-term business plan aiming at the sustainablecorporate growth and increased corporate value over the medium- to long-term, in anunderstandable manner so as to gain support from the shareholders.
(1) IR activities will be controlled by the Representative Director and conducted by a Director in
charge of the corporate function and the IR division. If requested by an individual shareholder,
the Representative Director, a Director, including Outside Director, and the IR division will meetand respond to the request, if needed. The IR division will play a central role to facilitate the IR
activities in affiliation with internal relevant divisions.
(2) The medium-term business plan and the quarterly financial result will be announced
electronically on TDnet or our website promptly after resolution by the Board of Directors. The
medium-term business plan will contain specific basic policies, including the management
resources allocation, as an important theme together with the quantitative targets (e.g.
consolidated sales, consolidated operating profit, ROE and dividend ratio), in consideration of
our capital cost.
(3) At the end of the medium-term business plan, we will explain our analysis of difference between
targets and results for each business segment at a financial results briefing, a summary of which
will be posted on our website, etc.
(4) For domestic institutional investors, we will hold a briefing for medium-term business plan,
financial results, etc., which will be supplemented by subsequent questions and answers. Also,
we will give an opportunity for such investors to understand our business if needed.
(5) The Representative Director and a Director in charge of the corporate function will have dialogue
with overseas institutional investors no less than once a year in Europe, U.S.A. and Asia. Also,
we will have positive dialogue with institutional investors who visit our office.
(6) Matters known through dialogue with shareholders and investors will be immediately reported
to the Executive Directors. In particular, important suggestions and indications by institutional
investors, who are shareholders, will be reported promptly to all Directors, and also reported at
the Board of Directors meeting if necessary, to be reflected in the management following
discussions. All other matters will be reported, as appropriate, at the Board of Directors meeting
to which all Directors attend, so that shareholdersʼ opinions may be made known.
(7) Internal relevant divisions, including corporate planning, general affairs, finance, accounting,legal, business and other divisions, will work together and cooperate with each other in
preparing IR documentary materials and reporting the shareholdersʼ opinions obtained from
dialogue with them.
(8) We will endeavor to grasp the shareholder composition for the purposes of positive IR activities
and effective transmission of information.

4. Basic Capital Policy(1) We will always be conscious of the maintenance and growth of the shareholdersʼ value and will
set targets for the sales, profit and return on equity (ROE).
(2) We aim at keeping the shareholder equity ratio necessary to maintain a sound financial strength4

ARE Holdings Corporate Governance Policies
in preparation for management environment changes.
(3) We will announce the standards of dividend ratio and provide a stable return to shareholders.
(4) In the event of a change of control or a capital policy causing a large dilution, the Board of
Directors will evaluate and discuss the use of capital and impact on ROE, EPS, etc. carefully. The
contents thereof will be explained to the investors and shareholders as needed.

5. Prevention of Related Party Transactions(1) Transactions of high importance with our Directors, Groupʼs Officers and their close relatives
and main shareholders (who directly or indirectly hold the voting rights equal to 10% or moreof all voting rights) will be escalated to the Board of Directors after an objective andcomprehensive understanding of information, so that the detail of transactions and thereasonability of conditions may be deliberated.
(2) We will semiannually prepare a written confirmation for survey on whether or not any suchtransaction exists and will report all important facts, if any, to the Board of Directors.
(3) Terms of related party transactions will be decided on the condition that they are the same as
those of third party transactions.

6. Cross-Shareholding Strategy(1) We may hold cross-shareholding relationship if we consider that the shareholding contributes tothe maintenance or increase of Groupʼs corporate value by enhancing and building a business
relationship.
(2) Based on our capital costs, we will deliberate every year whether or not it is reasonable to holdcross-shareholding relationship after having considered the medium- and long-term economic
reasonability and future prospect. If reasonability of cross-shareholdings is lost, we will promptly
sell them.
(3) We will exercise the voting right for the cross-shareholding after having considered
comprehensively whether or not we can expect the increase of corporate value of the issuer in
addition to whether or not the proposal is consistent with our cross-shareholding strategy.
(4) In the case that the Company holding our stock as cross-shareholding (“cross-shareholder”)
shows the intention to sell the stock, we will not hinder the sale by suggesting a reduction of
the transaction.
(5) We do not conduct transactions that harm the interests of the Company or shareholders, suchas continuing the transaction with “cross-shareholder” without sufficiently verifying the
economic rationality of the transaction.

7. Anti-Takeover Measures(1) No defense measures will be taken against acquisition.
(2) In the event that our stock is subject to a takeover bid, we will take the following actions.
① We will request the takeover bidder, etc. to explain specific measures to increase Groupʼs
corporate value after the change of control.
② We will explain to the shareholders the specific measures to further increase Groupʼs corporate
value so as to gain their support.

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ARE Holdings Corporate Governance Policies③ We will not unreasonably prevent the shareholders from accepting the takeover bid from astandpoint of respecting their rights.

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Chapter-III: Proper Disclosure
1. Basic Policies for Information Disclosure
In order to gain support of various stakeholders, including shareholders, we will make sufficientconsiderations to achieve the proper information disclosure.
(1) When disclosing the information, we will endeavor to use plain and specific expressions so as toconvey the information accurately to various stakeholders.
(2) In addition to the statutory disclosures, we will proactively disclose information considered to
be important for various stakeholders, including non-financial information, on our website, etc.
(3) We will never transmit any insider information (i.e. unannounced important facts) to outsiders
so as to secure the fair disclosure. The period between the day after the quarterly closing day
and the date of financial report shall be defined as “silent period” during which we have torefrain from dialogue relating to financial information.
(4) We will issue annually and announce on our website our “Integrated Report” containing
information, including Groupʼs outline, description of business segments, topics in the current
year, results of environmental activities, in order to facilitate the information disclosure to various
stakeholders.

2. Enhancement of Disclosure in English(1) Given the shareholder composition and from a standpoint of enhancing the information
disclosure in English to overseas shareholders and stakeholders, we will:・produce and disclose on our website necessary information in our disclosure documents in
English, such as the convocation notice of the General Shareholders Meeting, the summary offinancial results, Integrated Report;
・disclose the documents in English on TDnet, such as the convocation notice of the General
Shareholders Meeting, the summary of financial results, major press release; and・provide the information on the English website with approximately the same contents as on
the Japanese website.

3. Supervision by Board of Directors for Proper Disclosure(1) From a standpoint of assurance of fair information disclosure, the Board of Directors will confirm
all timely disclosure matters as well as all other important matters disclosed and released.

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Chapter-IV: Stakeholder Relationships
In order to achieve sustainable corporate growth and increased corporate value over the medium- tolong-term in accordance with its corporate philosophy called the Asahi Way, Group will fulfill its
responsibility as a corporate citizen by meeting each stakeholderʼs expectations.

1. Corporate Ethics(1) Consciousness and actions for “legal compliance” are very important norms and, by practicing
the Asahi Way, the Directors and management will exercise their leadership to establish a
corporate culture where the positions and rights of stakeholders are respected and the ethics
for sound business activities are complied with.
(2) We will develop the rules and manuals for compliance and, when educating and communicatingwith all Group employees, will always exert efforts to make them conscious of legal compliance.

2. Relationships with Communities and Activities on Environment
We recognize that our business activities are important activities directly contributing to thesustainability of the earth and society. We will practice the “unification with business” inenvironmental activities such as the contribution efforts for SDGs, positive promotion of ISO14001
activities, the measures against global warning and those for energy saving.
(1) With recognition that it is one of the important risk management activities for Group to respondto the social and environmental problems through its environmental activities and regional andsocial contribution activities, the Board of Directors will supervise Groupʼs activities and will
positively and actively address concerns as important management topics.
(2) We established the “Environmental Policies” (Annex Document - 2), which will be madeknown to all Group employees and all people working for the organization and will be announced
to outsiders on the website together with the description of environmental activities and theenvironmental performance.
(3) We will be positively engaged in the regional and social contribution activities as follows in orderto create an environment where all Group employees can be engaged in the regional and social
contribution activities.
・Participation in a forest project called “Mori no Project” sponsored by Kobe Association of
Corporate Executives
・Taking part in the ”Suma Beach Cleaning Project”
・Installation of the “welfare-purpose vending machine (yume no chokinnbako)” by The Nippon
Foundation(4) We will participate in the social contribution by recycling precious metals used and no longer
necessary for dental treatments. Also, we are positively engaged in other social contributions
through business activities, including providing financial support to various associationsʼactivities as stated below with the income from precious metal recycling and other businesses.
・Support and aid to the 8020 campaign of the 8020 Promotion Foundation
・Participation in the medical support activities by Japan Cleft Palate Foundation as a cooperative

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company・Participation in the “TOOTH FAIRY” project promoted under the cooperation of The Nippon
Foundation and Japan Dental Association as a cooperative company
・Support to Medecins du Monde Japon (Doctors of the World Japan), a specified non-profit
organization

3. Relationships with Customers and Trading Partners
The Group will endeavor to increase customer satisfaction by supplying products and services which
respond to a wide variety of customer needs sensitively with a motto of “customers first”. Also, Groupwill endeavor to maintain a fair and healthy relationship with trading partners to fulfill social
responsibilities cooperatively.
(1) In order to supply products and services which will give more reassurance and satisfaction to
our customers, we will endeavor to continuously improve the framework for quality control andquality assurance, including the quality management system, and to maintain and improve thequality.
(2) By securing the “prohibition of acts impairing fair competition” and “prohibition of provision andreceipt of inappropriate profit” set forth in the Asahi Way, we will endeavor to maintain therelationship based on fair business transactions and corporate ethics.

4. Relationships with Employees
Because of the recent increase in Group companies, diversified personnel of various backgrounds are
now working in Group. Toward sustainable corporate growth and increased corporate value, we will
respect diversified personnel and respond to them appropriately. Also, we present the measurable
goals for ensuring diversity in the promotion to core human resources, as well as disclosing theirstatus.
(1) To globally inculcate the Asahi Way which is a value to be shared by all Group employees, wewill post it on our website and internal portal sites and will endeavor to develop an environment
where it is always accessible. Also, we will provide new employees with an introductory training
when they join us together with Group companies and, after that, will continuously keep all
Group employees informed of the Asahi Way.
(2) We will provide all Group employees with an opportunity to participate in the training to obtainskill and capability required to be a professional who has expertise in addition to an opportunity
for personnel development training for each tier.
(3) In accordance with the diversity and inclusion principle, we will operate the recruitment,
assessment and other relevant systems appropriately, so that a wide range of personnel may
work exercising their characteristics and abilities irrespective of gender, age, race, nationality,
religion, disorder and so that there is no inequality by reason of personal attribute.
(4) We will develop various frameworks to facilitate active participations by women and will promotea workplace environment where women can work and exercise abilities more.
(5) We will be committed to achieving an appropriate work life balance of employees by respecting
diversified working styles and increasing the productivity during work hours by efficient work.

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5. Whistle-blowing System(1) We will establish and operate “Asahi Hot Line (i.e. whistle-blowing system)” to discover any
illegal or unreasonable act or any other problem within Group at an early stage and to takeactions for settlement.
(2) We will widely announce Asahi Hot Line to all employees by posting it on the top page of theinternal portal site or by other means.
(3) An outside independent law office will act as a contact for whistle-blowers and will accept evenanonymous reports. For the matters reported, we will survey and take corrective measures bygiving consideration to the human rights and privacy protection of reporters and those for whom
a report is made.
(4) The Board of Directors will supervise the status of the operation of this system and, if any
problem occurs, will take a leadership role in resolving the problem.

6. Role of Asset Owner
In order to demonstrate the functions expected as an asset owner, the asset management committee
which composed by the head of finance department and the head of human resources department,
manages the operation of corporate pension funds, in collaboration with a specialized externalorganization.

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Chapter-V: Corporate Governance Structure
1. Organization Design and Basic Framework(1) By adopting a company with an Audit and Supervisory Committee as a form of organization
under the Companies Act and appointing two or more Independent Outside Directors, we will
enhance the function to supervise the business operations, to give advice and to supervise theconflict of interest and, by appointing and empowering the Executive Directors, will speed up
the business operations.
(2) We will establish a Compensation Committee and a Nominating Committee (the majority ofwhich are Independent Outside Directors) as an advisory body of the Board of Directors in orderto further enhance corporate governance by securing transparency, fairness and objectivity indetermining the amount of compensation of Directors and appointing and dismissing the
Directors and key management candidates.
(3) Important matters delegated to the Executive Directors will be deliberated and decided at the
Executive Committee of each group company. Other matters for business operations will bedeliberated and decided at the Groupʼs key company management meeting and the businesssegment management meeting. Details will be set forth in the internal rules.

2. Board of Directors – Roles The Board of Directors assumes responsibility for achieving the efficient and effective corporate
governance under the entrustment of shareholders and for achieving Groupʼs sustainable growth andincreased corporate value over the medium- to long-term.
(Basic Roles)(1) The Board of Directors will deliberate and decide important managerial matters regarding themanagement basic policies, management strategies, business portfolio, medium-term
management plan, annual plan, investment plan and other strategic directions.
(2) The Board of Directors will make decisions regarding proposals by the management for business
operations without excessive risk avoidance after diversified and positive considerations from an
objective viewpoint, and whether or not such decision contributes to a sustainable increase of
corporate value. Also, it will support the senior management in making and realizing a decision
after approval.
(3) By appointing the majority of Independent Outside Directors, the Board of Directors will enhance
the function to supervise the business operations, to give advice and to supervise the conflict ofinterest and will build a system to reflect the stakeholdersʼ opinions. Also, it will evaluate andsupervise the business operations appropriately through a decision for appointment anddismissal of Directors and key management candidates, advice for the senior managementʼs
personnel change, and so on.
(4) Regarding the decision for business operations delegated to the Directors, the Board of Directors
will receive a report from the relevant division or Officer in accordance with the internal rules
and will check the consistency with strategic directions.
(5) The Board of Directors will make an expeditious management judgment by utilizing the Articles

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of Incorporation which provides that some of the matters for resolutions at the General
Shareholders Meeting may be delegated to the Board of Directors.
(Appointment of Executive Directors)(1) The Board of Directors will appoint the Executive Directors from among Directors, clearly
determine their duties and delegate authorities of the business operations to them in accordancewith the internal rules.
(2) In accordance with the business plan, etc. determined at the Board of Directors meeting, theExecutive Directors will decide the measures in each business field or each territory for which
they are responsible and will be engaged in the business operations.
(3) Directors not engaged in the business operations will supervise the management effectively by
performing the function to supervise the business operations, to give advice and to supervise
the conflict of interest as the Audit and Supervisory Committee member.
(Matters for Resolutions, etc.)(1) The following matters will be resolved at the Board of Directors meeting (details of which will
be set forth in the internal rules).
①Matters relating to the General Shareholders Meeting; ②matters relating to the Directors; ③
matters relating to the organization and operations; ④matters relating to shares; ⑤mattersrelating to the accounting documents and dividends/retained earnings; ⑥matters relating toimportant business operations; and ⑦other important matters relating to the management.
(2) The decision-making for business operations relating to other matters will be delegated to the
Executive Directors and the management, in principle, for more expeditious and flexible business
operations and more effective supervision by the Board of Directors.
(Medium-term Business Plan)(1) The Board of Directors will deliberate and develop a three-year medium-term business plan ofGroup. It will develop the basic policies, including the management resources allocation as animportant theme, together with the quantitative targets (e.g. consolidated sales, consolidated
operating profit, ROE and dividend ratio).
(2) The management and the Group companies will draw up measures to achieve such plan andexert their best efforts for the achievement. The Board of Directors will act and support as muchas possible so that the entire Companyʼs target will be achieved.
(3) At the end of the plan, the Board of Directors will analyze the difference between results andtargets for each business segment, business field and Group company, which will be explained
to the shareholders through a briefing and electronic media and will be reflected in the next
medium-term business plan, etc.

(Sustainability Initiatives)(1) The Board of Directors will develop the Groupʼs sustainability initiatives in order to achieve bothbusiness growth and solutions for the issues our societies face, and will disclose the details andthe status of those initiatives, based on the fact that the Group's business activities directly

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contribute to sustainability.
(Internal Control and Risk Management)(1) The Board of Directors will establish “A key principle for internal control system” (Annex
Document - 3) to facilitate prompt business operations under the appropriate internal control.
(2) We will establish a “group audit organization” as a framework to understand and assess therisks for business activities and to enhance the countermeasures from a standpoint ofappropriately controlling potential risks existing in the business execution process, businessstructure, etc. of Group and will establish compliance and endeavor to prevent risk exposure.
(3) The Board of Directors will appropriately supervise the development and operation of internal
control and risk management systems by receiving reports on the status of risk management,
results of internal audit, problems for the status of business operations, and so on.
(4) The Board of Directors will promptly improve the reported problems, etc. by instructing a
responsible division to remedy such problems.

3. Board of Directors – Composition (1) The Board of Directors is operated by diversified personnel of an appropriate size, consisting of
the Executive Directors who are familiar with the fields of businesses, technology andmanagement and the Outside Directors who have the diversified expert knowledge necessary
for the corporate management.
(2) We will select a person of superb personality and knowledge as a Director candidate irrespectiveof gender, nationality, work experience, age and any other personal attribute. The Executive
Directors will consist of persons who are able to understand the Companyʼs business well andto make decisions and who have achieved good business performance. The Outside Directors
who are also the Audit and Supervisory Committee members will consist of persons who havediversified expert knowledge of finance, law, management, etc. in terms of achieving an
optimum combination of knowledge and experience as an Outside Director in a supervisory
position. Moreover, we will develop and disclose a “skills matrix” that lists the knowledge,
experience, abilities, etc. of each director.
(3) The basic policy for the size is that the Board of Directors has Directors in a number suitable for
an effective, substantial and active discussion at the meeting and that the majority of directors
are Independent Outside Directors.
(4) A Director may concurrently serve as an Officer of no more than four listed companies, including
the Company. We will annually disclose how many and what companies each Director
concurrently serves as an Officer for in a convocation notice of General Shareholders Meeting,securities report, etc.
(5) The Outside Directors will attend the meeting of the Board of Directors to fulfill their roles andresponsibilities as a Director. Also, they will attend management meetings and other executive
meetings of the Group companies as many times as possible and will endeavor to secure thenecessary time and labor to collect information and state opinions freely from an independent
standpoint.

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4. Board of Directors – Operation and Securing Effectiveness (Operation of the Board of Directorsʼ Meeting)(1) The Board of Directorsʼ Meeting will be held regularly no less than once every three months andfrom time to time when needed.
(2) If no resolution is required, the status of business operations will be shared and exchange of
opinions will be conducted.
(3) All Directors including Outside Directors will actively exchange opinions freely concerning
important subjects, such as Groupʼs management strategies and business plan.
(4) For the purpose of active discussion at the meeting, the time allocation for discussion will bedecided depending on the agenda and the relevant documents will be distributed one week
before, in principle.
(5) The Outside Directors will actively give constructive opinions and advice freely from an objective
and diversified viewpoint by utilizing their own specialized knowledge and abundant experiences
and will propose improvements if needed. All Directors, including the Representative Director,
will always be sure to establish an atmosphere where they can actively exchange opinions freely.
(6) Before a fiscal year starts, an annual schedule of meetings will be notified to the Directors, which
will be basically scheduled so that all Directors can attend. A convocation notice for the individual
meeting of the Board of Directors will be dispatched to each Director no later than three days
prior to the date of meeting.
(7) The general affairs division will draft the minutes of meetings four days later, in principle, andwill request all Directors to make corrections, if any, and distribute the final minutes within 10
days.
(Evaluation of Effectiveness)(1) The Board of Directors will analyze and evaluate the effectiveness of the entire Board anddisclose the summary of results annually from the fiscal year ended March 2017.
(2) The following main categories will be analyzed and evaluated in terms of the effectiveness ofthe entire Board.
(a) Discussion of corporate strategies and other broad directions(b) Environmental development supporting appropriate risk-taking(c) Fulfillment of highly effective supervision(d) Appropriate communication with shareholders, etc.
(e) Composition of the Board of Directors(f) Operation of the Board of Directors meetings(3) Questionnaire survey sheets with evaluation items for each of the above six categories will be
distributed to all Directors and their answers will be collected. Based on the aggregate results,
discussions for analyses and evaluations will be held at the Board of Directors meetings. The
summary of their results will be disclosed on our website.

5. Audit and Supervisory Committee(1) The Audit and Supervisory Committee consists of the Directors who are also the Audit andSupervisory Committee members, the majority of which is Independent Outside Directors and

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the chair of which will be an Independent Outside Director. The Audit and Supervisory
Committee will have one or more full-time members. At least one of the Directors who are also
the Audit and Supervisory Committee members should have adequate knowledge of financeand accounting.
(2) The Audit and Supervisory Committee meetings will be held from time to time at least once
every three months and when needed.
(3) Main roles and responsibilities of the Audit and Supervisory Committee are as follows.
(Details will be set forth in the internal rules titled “Rules for Audit and Supervisory Committee”)① Audit of business operations by the Directors (especially the business operations by the
Executive Directors) and preparation of audit report② Decision of opinions for the personnel matters and compensation of the Directors (excluding
those who are also the Audit and Supervisory Committee members) which will be issued at theGeneral Shareholders Meeting③ Duties relating to the assessment, selection and dismissal, and non-reappointment, etc. of
Accounting Auditor
・Development of assessment criteria and assessment of the Accounting Auditor
・Decision of agenda to be submitted to the General Shareholders Meeting with respect to thissection④ Decision of audit policy, audit plan and methods, etc.
⑤ Instruction to the Audit Department⑥ Receipt of reports from the Accounting Auditor, Executive Directors, Audit Department, etc. andrequest for provision of information needed(4) The Audit and Supervisory Committee members who have specialized knowledge and abundant
experiences in the management, finance, monetary, law and other fields will attend the Boardof Directors meeting and will attend management meetings and other executive meetings ofthe Group companies as many times as possible and, by utilizing their own knowledge andexperiences, will endeavor to state opinions freely from an independent standpoint.

6. Directors and Outside Directors(Directors)(1) The Directors recognize their fiduciary responsibilities to shareholders and will fulfill their duties
for the sustainable increase of corporate value and for the common benefit of shareholders. To
this end, they will strive to be trained in the following matters. Also, they will endeavor to makestatements positively and actively carry out constructive discussion freely at the meeting.
① Knowledge required of a director of a listed company, practice of the corporate principles of the
Asahi Way, high sense of ethics and consciousness of compliance② Ability, which is necessary to fulfill duties, to collect information, vision, objective judgment andentrepreneur spirit that accepts risks(Outside Directors)(1) We will establish the “Independence Criteria for Independent Directors” (Annex Document– 4) and, given their backgrounds and relationship with Group, will appoint Independent Outside

15

ARE Holdings Corporate Governance Policies
Directors able to fulfill duties required of an Outside Director in a position independent from the
management of the Company.
(2) The Outside Directors will play a role to reflect the opinions of stakeholders including
shareholders in the Board of Directors by fulfilling their functions to supervise the business
operations, to give advice and to supervise the conflict of interest and by participating in the
Companyʼs important decision-making from an objective and diversified standpoint at the Boardof Directors meeting where they have voting rights, given their independent status and from a
position comprising a majority of the Audit and Supervisory Committee members.
(3) The Compensation Committee and the Nominating Committee where the Independent Outside
Directors account for the majority of members will be involved and will give advice or proposals
appropriately for very important matters, such as the determination of amount of compensationof Directors and senior management and the nomination of director candidates.
(4) The Head of Independent Outside Director will be elected from among the Outside Directors andsuch Head of Independent Outside Director will instruct the Audit and Supervisory Committee
Secretariat under his control to communicate with the management, obtain information fromthe inside and obtain information from an independent standpoint.

7. Securing Proper Audit by Accounting Auditors(1) The Accounting Auditor will play an important role to assure the reliability of information to bedisclosed and will assume responsibility of the shareholders and investors.
① In affiliation with the Audit and Supervisory Committee, the Accounting Auditor will secure asystem to enable the appropriate audit.
② The Accounting Auditor will secure independence and expertise.
③ The Accounting Auditor will comply with the quality control standards required for an
appropriate accounting audit.
(2) For the appropriate audit by the Accounting Auditor, the Audit and Supervisory Committee willtake the following actions.
① The Audit and Supervisory Committee will grasp and assess how the Accounting Auditor is
performing their duties through the progress of audit and the audit report, etc. When selecting
the Accounting Auditor candidates, the Audit and Supervisory Committee will assess from acomprehensive viewpoint after having checked the items of “criteria for selection of Accounting
Auditors.” Also, it will reappoint the Accounting Auditor after having checked the same items.
② The Audit and Supervisory Committee will check that the Accounting Auditor is independent andhas adequate expertise through the exchange of opinions with such Accounting Auditor and by
grasping the progress of audit.
(3) For appropriate audit by the Accounting Auditor, the Audit and Supervisory Committee willsecure an ample audit schedule and audit system by developing an annual audit plan in affiliation
with the Audit Department, the auditors of subsidiaries, the Audit and Supervisory Committee
Secretariat and the accounting, planning, internal audit and other relevant divisions and after
prior consultation with the Accounting Auditor.
(4) We will set time for a meeting of the Accounting Auditor and a Director in charge of the corporate
function on a quarterly basis and will set time for meeting of the Accounting Auditor and the16ARE Holdings Corporate Governance Policies
senior management including the Representative Director on an annual basis.
(5) We will secure the affiliation between the Accounting Auditor and the Audit and Supervisory
Committee through sharing results of the accounting audit and a quarterly review. The Audit
and Supervisory Committee will cooperate with the Audit Department to exchange necessary
information from time to time and check the progress of business operations and giveinformation and feedback required by the Accounting Auditor.
(6) If remedial measures are required, a relevant division will study and remedy as instructed by adirector in charge of the corporate function and will report the result of study and remedial
measures to the Board of Directors, Audit and Supervisory Committee and Audit Department.
The Audit and Supervisory Committee and the Audit Department will check the result of reportand recommend remedies if needed.

8. Procedure of Nomination and Dismissing of Directors(1) The Nominating Committee consisting of one Representative Director and two Independent
Outside Directors will make proposals to the Board of Directors with respect to the nominationand dismissal of the next Representative Director and the Director candidates in accordancewith the assessment of the candidates in terms of business performance and level ofachievement of targets and their quality as a director. The Board of Directors will deliberate andmake final decisions.
(2) The above process will make it possible to develop and supervise a succession plan with hightransparency, fairness and objectivity. In addition, succession development is planned with
sufficient time and resources.
(3) When submitting the proposals for election of Director candidates to the General Shareholders
Meeting, the “convocation notice of regular General Shareholders Meeting” contains the reasonof election of each Director candidate in addition to his/her background and position and job in
our company currently described. The “convocation notice of regular General Shareholders
Meeting” will be mailed to the shareholders and posted on our website.
(4) ”Nomination Policies for Directors and Key Management Candidates” is as per Annex
Document -5.
(5)

For other key management candidates, the Executive Directors will consider the election anddismissal according to the business performance, level of achievement of policy management,
ability, etc., and report the same to the Nominating Committee. The Executive Committee of
each group company will make final decisions by reference to the opinion of the Nominating
Committee, in order to secure the fair and transparent procedures the same as for the
Directors.

(6) Members of the Nominating Committee will be appointed by resolution at the Board of Directors
meeting on the assumption that Independent Outside Directors constitute a majority.

9. Determining Procedure of Compensation for Directors(1) The Compensation Committee consisting of one Representative Director and two Independent
Outside Directors will make proposals for the total amount of compensation of each Director
excluding the Audit and Supervisory Committee Members and the basic system and level of17

ARE Holdings Corporate Governance Policies
compensation, which will be deliberated and decided at the Board of Directors meeting.
(2) For proposals by the Compensation Committee for individual assessment of Directors excluding
the Audit and Supervisory Committee members, we will make a decision comprehensively byconsidering the annual and medium-term business prospect, level of individual contribution,
dividend, balance with the compensation level of other companies, balance with thecompensation level of senior management and employees, past payment, compensation systemand so on.
(3) We will secure transparency, fairness and objectivity with the above process. The sameprocedures will be taken as needed for the assessment and compensation of key managementof Group companies according to the decision of the Compensation Committee.
(4) The Compensation Committee will review the assessment of Executive Directors semiannually
and, given the seasonality of performance, will conduct a comprehensive review once a year.
(5) The “Compensation Policies for Directors and Key Management” is as per Annex
Document -6.
(6) Members of the Compensation Committee will be appointed by resolution at the Board of
Directors meeting on the assumption that Independent Outside Directors constitute a majority.

10. Support for Directors(1) In the event of lack of information in hand when obtaining the information required to fulfill
duties, the Directors including Outside Directors may request a relevant division to provide theinformation and documentary materials. Upon request, such division shall promptly provide
appropriate information and documentary materials as requested.
(2) For the Board of Directors, its office division will play a main role to support and request to
relevant divisions.
(3) For the Audit and Supervisory Committee, its office which is a specialized division will support
in affiliation with the Board of Directors office division.
(4) The person belonging to the corporate function, which serves as the office division of bothcommittees, will provide support to the Nominating Committee and Compensation Committee
in collaboration with the Board of Directors office division and other sections.
(5) If considered necessary to fulfill duties, the Directors, including Outside Directors, will use theattorney, consultant and other outside professionals for careful consideration. The associatedexpenses shall be paid by the Company to the extent considered to be reasonable.
(6) The result of audit by the Audit Department and defects found in relation to the business
operations and progress of operations will be reported to the Board of Directors and the Audit
and Supervisory Committee, as the case may be. The relevant division will be instructed to
remedy the reported defects and will endeavor to promptly remedy the same.

11. Policies of Training for Directors
Details will be set forth in the “Training Policies for Directors” (Annex Document – 7)

18

Established on November 17th, 2015

ARE Holdings Corporate Governance Policies

Revised on May 24th, 2016
Revised on March 27th, 2018
Revised on October 25th, 2018
Revised on July 25th, 2019
Revised on April 1st, 2020
Revised on April 1st, 2021
Revised on October 1st, 2021
Revised on December 6th, 2021

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ARE Holdings Corporate Governance Policies

Annex Document - 1

The Asahi Way【 Purpose 】“Totally Committed to Protecting the Natural Environment and Conserve Resources”【 Our Credo 】
We conserve limited natural resources, preserve the global environment, and contribute to therealization of a sustainable world.
【 Our Corporate Values 】(1) Cooperation with stakeholders
We constantly seek to earn even greater trust from shareholders, customers, business partners,
employees, and local communities as we work to preserve the natural environment.
(2) Corporate governance with a balance of protective and proactive measures
We boldly promote growth strategies and business reform while securing transparency in decisionmaking and properly managing risk.
(3) No growth without profit
We realize long-term improvement of shareholder value by ensuring the entire group grows and is
profitable.
(4) Trusted corporate brandWe aim to be widely recognized as an exemplary corporate group and to build a brand that will be
trusted over many years.
(5) Addressing diverse risks
We strive to minimize risks and avert disasters by taking daily safety measures in workplaces and byconstantly working to prevent accidents.
(6) Highly motivated employees
We promote work-life balance for employees and continuously improve working environments andconditions.
(7) Strong sense of mission and high ethical standards
We strive to be an organization where employees take pride in their own work and executives maintaina strong sense of mission and high ethical standards.
(8) Being a company of good people
We value good employees over the long-term; our vision of a "good employee" is a person who is not
self-centered and who contributes to mutual prosperity and the development of the business.

20

ARE Holdings Corporate Governance Policies【 Our Employee Principles 】(1) Innovate and embrace challenges(2) Put safety first(3) Maintain high quality(4) Promptly report (especially bad news)(5) Build trust and connection【The AREHoldings Group Code of Conduct】(1) We comply with all laws and regulations(2) We respect the dictates of social norms and our own conscience(3) We treat everyone equally, regardless of age, gender, nationality, race, religion, or othercharacteristics(4) We refrain from conducting any political or religious activities in the workplace(5) We treat customers with sincerity(6) We practice fair competition and optimal decision-making when selecting business partners(7) We respect the confidential information obtained through our work and avoid disclosing it externally(8) We refrain from providing or receiving meals or gifts in pursuit of personal benefit(9) We act for the greater good, not for personal or affiliated partiesʼ gain(10) We focus on the actual sites, actual things, and actual facts

Revised on July 1st, 2023

21

ARE Holdings Corporate Governance Policies

Annex Document - 2

Environmental Policies
We will contribute to the environmental preservation of the earth and establish a sound material-cycle
society through the Companyʼs businesses on recycling of precious and rare metals and industrial waste
treatment.
(1) In all business activities we will strive to conserve resources and energy and reduce, reuse, andrecycle waste to minimize the environmental burden.
(2) We will promote the recycling of resources of precious and rare metals to achieve a more effective
use of the limited resources of the earth.
(3) We will adequately and safely perform our operations for the collection, transportation, andtreatment of industrial waste to prevent environmental pollution.
(4) We will prioritize a harmonious coexistence with nature and regional communities. We will strictly
follow the relevant environmental laws and regulations and other requirements which we recognize.
(5) We will establish environmental objectives and targets and periodically review them to continue
improving our activities.
(6) We will educate all our employees and increase their environmental awareness as members of thecommunity, promote their understanding of environmental preservation activities, and participate
in such activities.
These environmental policies shall be conveyed to all of our employees and all those working for theCompany and announced to the public as our commitment.

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ARE Holdings Corporate Governance Policies

Annex Document - 3

A Key Principle for Internal Control System
1. Key Principle
Taking corporate governance as one of the important matters for management, we will endeavor toenhance our compliance by taking various measures to fulfill a function to supervise the management,
disclosing corporate information appropriately and in a timely manner, improving the corporate ethics
and complying with the laws.

2. Development of a Framework for Internal Control Systems
For internal control, internal audit is conducted by the Audit Department according to the annual plan
for an effective inside check. The Audit Department checks the reasonability and effectiveness of internal
control and the status of compliance with laws, regulations and internal rules so as to advise andrecommend each division and promptly report to the top executive.
Also, the responsible person of each division conducts the internal audit according to the annual planand makes a report at the Internal Control Promotion Meeting, etc.
We have the following mechanism comprising a framework to ensure that the fulfillment of duties by
the Directors and employees is consistent with the laws and the Articles of Incorporation and aframework to secure the appropriateness of the businesses of our company and the appropriateness ofbusinesses of a corporate group consisting of the Company and our subsidiaries.

Mechanism of Internal Control System
A framework to ensure that the performance of duties by the Directors is consistent with the laws
and the Articles of Incorporation and a framework to secure the appropriateness of the businesses ofour company and the appropriateness of businesses of a corporate group consisting of the Company
and our subsidiaries(1) Framework to ensure that the performance of duties by the Directors, corporate
Officers and employees of the Company and our subsidiaries is consistent with thelaws and the Articles of Incorporation① The Board of Directors will establish the Asahi Way for the Directors and employees in order for
the Directors, corporate Officers and employees to comply with the laws, Articles of Incorporationand internal rules and to fulfill their duties.
② We will distribute the Asahi Way to the Directors and employees so as to keep them informed oflegal compliance. The Audit Department will make improvements and give guidance through thebusiness audit.
③ We will establish the Internal Control Promotion Meeting consisting of responsible persons ofvarious divisions as an organization that controls the entire compliance in order to promote theconstruction, maintenance and improvement of the internal control system.

23

ARE Holdings Corporate Governance Policies④ To promote compliance, the actual situation of compliance will be audited.
⑤ In order to respond appropriately to any legal violation or other doubtful act under the laws which
may be discovered by a Director or an employee, we will develop and operate a whistle-blowing
system.
⑥ We will never have any relationship, including business relationships, with anti-social forces which
threaten the social order and sound corporate activities. In the event of an illegal request, we willtake a firm attitude and respond to it organizationally in accordance with the laws and internal
rules.

(2) Framework for storage and management of information relating to business
operations by the Directors and a framework for report to the Company about thematters relating to the performance of duties by the Directors and employees ofour subsidiaries① We will appropriately control the manner of storing, disposing of and otherwise managing therecords and documents relating to the performance of duties and decision-making of the Directors
and will review the relevant rules from time to time when needed.
② The Directors, Audit and Supervisory Committee members and Accounting Auditor will always
have access to these information and documents.
③ We will manage our subsidiaries and they will report important matters to us.

(3) Rules and other frameworks for management for risk of loss in the Company andour subsidiaries① We will establish the risk management rules and build a risk management system in accordancewith such rules.
② In the event of an unexpected event, we will discuss and make decisions at the management
meeting, etc. and the responsible manager will inform such decisions to each division and plant.
Each division and plant will take prompt actions to prevent damage from expanding and will
arrange a system to minimize the damage.

(4) Framework to secure the efficient performance of duties by the directors of theCompany and our subsidiaries① The Board of Directors will hold a meeting regularly no less than once every three months andfrom time to time when needed in order to determine the management policies and otherimportant matters relating to the business strategies and to supervise the situation of business
operations by the Directors.
② In order to enhance the functions of the Board of Directors and improve management efficiency,
the Board of Directors will hold an extraordinary meeting from time to time when needed in order
to expeditiously make decisions on basic matters and important matters relating to the business
operations.

24ARE Holdings Corporate Governance Policies③ The Board of Directors will draft a medium-term business plan and a budget for each fiscal year
to set the business target and will supervise the progress.
④ Regarding the business operations according to decisions made by the Board of Directors, we will
establish the responsibility of the Directors for performance of duties and the procedures for
performance so as to ensure the efficient performance of duties. Each provision will be reviewed
from time to time when needed.

(5) Framework to secure the appropriateness of business of the corporate groupconsisting of the Company and our subsidiaries① We will build a system to manage our subsidiaries and will develop a system to report theirbusiness results, business activities and the like to our Board of Directors on a regular basis.
② A manager of the Company will serve as an officer of our subsidiary and will develop a system toobserve the appropriateness of such subsidiaryʼs business.
③ The Audit Department of the Company will conduct the internal audit regularly or when needed
and will develop a system to report the result of audit to the Board of Directors, the Audit andSupervisory Committee and the relevant divisions of the Company.

(6) Framework to appoint an employee who assists the duties of the Audit andSupervisory Committee of the Company, and the matters relating to the
independence of such employee from the Directors (except those who are Audit
and Supervisory Committee members) and the matters relating to the assuranceof effective instructions given by the Audit and Supervisory Committee to such
employee① We will assign an employee who assists the duties of the Audit and Supervisory Committee in the
Audit and Supervisory Committee Secretariat.
② Appointment and relocation of the Audit and Supervisory Committee Secretariat staff that assists
such Committee in performing its duties requires prior consent of such Committee.
③ The Audit and Supervisory Committee shall have the right to direct and order the Audit andSupervisory Committee Secretariat staff who assists the Committee in performing its duties toperform his/her duties.

(7) Framework where the Directors (except those who are Audit and Supervisory
Committee members) and employees of the Company and the Directors, corporate
Officers, employees and auditors of our subsidiaries or parties who receives areport from aforementioned persons report to the Audit and Supervisory
Committee of the Company, and other matters relating to reporting to the Audit
and Supervisory Committee① The Directors (except those who are Audit and Supervisory Committee members) and25

ARE Holdings Corporate Governance Policies
employees of the Company and the Directors, corporate Officers, employees and auditors of our
subsidiaries or parties who receive a report from aforementioned persons will promptly report
the important matters relating to, without limitation, the management, the accounting divisionand division in charge of compliance and awards and penalties to the Audit and Supervisory
Committee of the Company, in addition to the matters which conflict with the laws and Articles
of Incorporation and the matters which may remarkably damage the Company and our
subsidiaries.
② In order to grasp the important decision-making process and the situation of its business
operations, the Audit and Supervisory Committee members may attend important meetings inaddition to the Board of Directors meeting, access important documents relating to the business
operations and request a Director or an employee to explain the situation when needed.

(8) Framework to ensure that no person who reported to the Audit and Supervisory
Committee of the Company is treated disadvantageously by reason of the report
We will not treat any Officer or employee of the Company and our subsidiaries who reported to
the Audit and Supervisory Committee disadvantageously by reason of such report.

(9) Matters relating to the policies for settlement of expenses or debts associated withthe procedures for prepayment or reimbursement of expenses incurred for the
performance of duties by the Audit and Supervisory Committee members of theCompany (limited to the performance of duties of the Audit and Supervisory
Committee) and the performance of other duties
The Audit and Supervisory Committee members may request the company to repay the expenses
required for the performance of their duties (limited to the performance of duties of the Audit andSupervisory Committee).

(10) Other framework to ensure that the Audit and Supervisory Committee of theCompany conducts audits effectively
The Audit and Supervisory Committee, Accounting Auditor and Audit and Supervisory Committee
Secretariat will cooperate with each other in audit tasks and the Director and employees will assist
them in conducting audits efficiently.

3. Key policies to eliminate anti-social forces and the progress of system development
Group strictly prohibits all Officers and employees from having any relationship or doing any transaction
with anti-social activities or forces. Also, Group has a system to closely affiliate with outside expert
organs and to respond to any situation promptly.

Established on November 17th, 2015

26

ARE Holdings Corporate Governance Policies

Revised on October 25th ,201827

ARE Holdings Corporate Governance Policies

Annex Document - 4

Independence Criteria for Independent Directors

1. Outside Directors and Outside Director candidates of the Company must be independent and neutral
to whom none of the following conditions applies.
(1) Person who is currently an executing person (Note 1) of Group or who was an executing person ofGroup in the last 10 years(2) Person who was previously a director (except outside director) of Group(3) Party whose main business partner is Group or its executing persons as stated below① Business partner group (which refers to a party belonging to a consolidated group consisting of
direct business partners; this being applicable hereinafter as well) that supplies products orservices to Group, if the amount of annual trade between such business partner group and Groupexceeds either 50 million yen or 2% of the consolidated sales (or total revenue) of such business
partner group② Business partner group to whom Group owes debts, if the total amount of debts Group owes tosuch business partner group exceeds either 50 million yen or 2% of the consolidated total assetsof such business partner group(4) Groupʼs main business partners stated below or their business operators① Business partner group to whom Group supplies products or services, if the amount of annual
trade between Group and such business partner group exceeds either 50 million yen or 2% of theconsolidated sales of Group② Business partner group who owes debts to Group, if the total amount of debts such business
partner group owes to Group exceeds either 50 million yen or 2% of the consolidated total assetsof such business partner group③ Financial institution group (i.e. a party belonging to a consolidated group consisting of direct
borrowers) from whom Group borrows money, if the total amount loaned by such financial
institution group to Group exceeds 2% of the consolidated total assets of Group(5) Main shareholder of the Company (i.e. a party who directly or indirectly holds the voting rights
equal to 10% or more of total voting rights) or, if such shareholder is a corporation, its business
operator(6) Business operator of a party to whom Group or its director or corporate officer is a large
contributor (i.e. a party who directly or indirectly holds the voting rights equal to 10% or more of
total voting rights)(7) Party who receives a donation from Group or its director or corporate officer in an amountexceeding either 10 million yen per annum or 2% of the sales (or total revenue) of such party or
its business operator

28

ARE Holdings Corporate Governance Policies(8) Consultant, accounting professional including a certified public accountant, legal specialist
including attorney, and other adviser who receives money or other properties from Group or its
director or corporate officer in amount exceeding either 10 million yen per annum or 2% of thesales (or total revenue) of such party in addition to the executive compensation (or, if a party who
receives such money or other properties is a corporation, association or any other group, a person
who belongs to such group)(9) Person who belongs to the audit corporation that conducts a legal audit of our company(10) Business operator of any other company where an executing person of Group serves as an outside
director(11) Party to whom any of the items (3) through (10) above has applied in the last five years(12) Family member within the second degree of relationship with any of the persons stated below
and a stakeholder who lives with any of the persons stated below within the same household① Party to whom any of the items (1) through (7) above applies② Person specified in item (8) above who has a specialized qualification, such as a certified public
accountant, lawyer, etc.
③ Person specified in item (9) above who is a key business operator (Note 2) and has a specialized
qualification, such as a certified public accountant④ Business operator specified in item (10) above who is a key business operator⑤ Person to whom item (11) above applies
2. Independent Directors must satisfy the requirements specified in the preceding paragraph and, in
addition, must not be in any circumstance where they are reasonably considered to be unable tofulfill their duties in an independent neutral position.
3. Independent Directors shall endeavor to maintain their independence prescribed in these criteria until
retirement and, if they fail to maintain the independence prescribed in these criteria, shallimmediately notify the Company.

Established on November 17th, 2015

Note 1: The executing person means a director (except outside director), corporate officer and othersimilar officer and employee of a corporation or other association who operates its businesses.
Note 2: The key executing person means such executing person as a director (except outside director),
corporate officer, division manager, etc. who operates important businesses.

29

ARE Holdings Corporate Governance Policies

Annex Document - 5

Nomination Policies and Dismissal Criteria
for Directors and Key Management Candidates

Nomination policies:
Candidates should(1) have superb personality and a high sense of ethics(2) have a high level of consciousness of compliance(3) well understand rights and situations of diverse stakeholders(4) have excellent insight into business management with medium-long term perspectives(5) have wide experience and credentials in the area of domestic and/or international business
management, or have a high level of expertise required by Group(6) not have any interests nor any business relations within Groupʼs business fields which could exert
an influence on management decisions（”Independence criteria for independent directors” is defined in Annex Document - 4）(7) have a good understanding of the Asahi Way, and have a track record of practicing the values of itor agree to practicing them going forward.
Dismissal criteria:(1) In case of conducting contrary to public order and morals(2) In case of difficulties in continuing duties for health reasons(3) In case that corporate value is significantly impaired by deliberate or serious fault or negligence(4) In case that the qualifications stipulated in the nomination criteria are not recognized

Established on November 17th, 2015
Revised on October 25th, 201830

ARE Holdings Corporate Governance Policies

Annex Document - 6

Compensation Policies for Directors and Key Management
The Directors of the Company and the key management of Group (hereinafter referred to as “Group
Directors”) are responsible for increasing corporate value over the medium- to long-term. The
Compensation Committee consisting of one Representative Director and two Independent Outside
Directors will assess Group Directorsʼ (except those who are also the Audit and Supervisory Committee
members) motivation for their responsibility and the specific level of their contribution objectively andwill make consensus decisions.
(1) The purpose of the compensation system is to raise motivation for better business performance,
specifically consisting of the “base compensation,” “bonus” and “performance-based stockcompensation.”① The amount of base compensation is determined individually according to the job responsibilityof each Director.
② The total amount of bonus of the Group is determined by multiplying the Companyʼs
consolidated operating profit in the current year by a specific ratio. Then, it is distributed toeach Director according to the points based on each Directorʼs position and the level of therespective Directorʼs contribution to corporate performance.
③ Performance-based stock compensation is designed to serve as an incentive to medium- tolong-term enhancements in corporate value, and the number of stocks granted is linked withthe business performance achievement rate for “consolidated operating profit” in each fiscal
year and so forth.
The basic policy is to use consolidated operating profit, which is considered the most appropriate
management indicator for profits earned from the core business, as the indicator relating toperformance-based compensation (bonus and performance-based stock compensation) and tomaintain the proportion of overall performance-based compensation at around 30% to 70% of
the total when the target performance is achieved.
(2) We will determine the compensation system and the level of total amount with reference to thelevel for directors of other companies, balance with Group employees and so on and by placingemphasis on objectivity.
The determined matters will be reported to the Board of Directors to secure transparency.
The Directors who are also Audit and Supervisory Committee members will receive the basecompensation only.

Established on November 17th, 2015

Revised on July 25th, 2019

Revised on May 11th, 2021

31

ARE Holdings Corporate Governance Policies

Annex Document - 7

Training Policies for Directors
The Company will provide all Directors with training in accordance with the policies stated below.
(1) Description of training
Inside specialists and outside instructors will provide the opportunity to acquire knowledge,
information, etc. necessary for the directors to play their roles and fulfill their responsibilities.
① Basic knowledge of directors
 Responsibilities of directors
 Matters relating to the Companies Act and other laws concerning corporate management
and corporate governance, etc.
 Matters relating to compliance, including the prevention of insider trading, etc.
② Knowledge about the situation of Group The Asahi Way and our corporate history
 Matters relating to the business, organization, finance of each Group company andbusiness-related laws and regulations③ Knowledge and information about the environment surrounding corporate management
 Matters relating to the global trend and changes of the societies and economies
 Outside lecture and training about the topics(2) Timing of training New directors will be trained promptly after assuming their position.
 Training will be provided to all Directors as needed.
(3) Financial support

 The company will give financial support for the training approved by it.

Established on November 17th, 201532