Artience : Corporate Governance Report

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artience Co., Ltd. CORPORATE GOVERNANCE Corporate Governance Report Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Last Update: April 2, 2026 artience Co., Ltd. Satoru Takashima, Representative Director, President Contact: General Affairs Department Securities code: 4634 https://www.artiencegroup.com/en/ The corporate governance of artience Co., Ltd. (the "Company") is described below. Basic Views on Corporate Governance, Capital Structure, Corporate Attributes, and Other Key Information Basic Views The artience Group ("the Group") reaffirms that it is a global corporate group whose main business is the chemical manufacturing industry, and that it has the potential to have a significant impact on society and the environment. The Group believes that it must build good relationships with all stakeholders, and work to maintain and improve them. To do so, the Group recognizes that constantly analyzing and evaluating its own activities and practicing balanced management from the perspectives of people, society, the environment, and the economy is an important issue for fulfilling our corporate social responsibilities. Enhancement of corporate governance through continuous reform is one of the pillars of the Group's sustainability management. The Group will continue to incessantly reform and validate management resources and risk management, and build and maintain effective corporate governance. The Group will adapt flexibly to changes in the business environment and work to achieve resilient corporate management that contributes to the sustainable growth of the Group. The Company's thoughts on each item of corporate governance are posted in its Basic Policy on Corporate Governance, which is published on the Company's website. Basic Policy on Corporate Governance: https://www.artiencegroup.com/en/corporate/sustainability/governance/corporate-governance/index.html #qa_1_1 Reasons for Non-compliance with the Principles of the Corporate Governance Code The Company is implementing all of the principles under the Corporate Governance Code. Updated Disclosure Based on each Principle of the Corporate Governance Code 【Principle 1.4 Cross-Shareholdings】 The Company holds shares of companies as it deems necessary for policy reasons as part of its management strategy, including business alliances, the maintenance and strengthening of business relationships and the stable procurement of raw materials. Each year, the Board of Directors examines the economic rationality of holding each individual listed shares held from a medium- to long-term perspective, and the Company sells shares whose holdings have become less meaningful. As a result of the verification, even if it is determined that there is significance in holding a share, if it will contribute to improving the capital efficiency of the Group, the Company proceeds with the sale after carefully discussing with the issuer. The Company sold 13.1 billion yen in shares during the period of the previous medium-term management plan (FY2021 to FY2023) and plans to sell more than 20.0 billion yen in shares during the period of the current medium-term management plan (FY2024 to FY2026). Based on this plan, the Company sold shares worth approximately 14.1 billion yen between FY2024 and FY2025. Voting rights in relation to listed shares held will be exercised in an appropriate manner on a case-by-case basis, taking into account whether or not the relevant proposal will help to enhance the corporate value of the issuing company over the medium to long term, whether or not it will contribute to the profits of all shareholders, including the Company, and the qualitative and overall impact it will have on the Group in terms of management and business. Where an issuing company has special circumstances, such as the occurrence of significant damage to its corporate value or a serious compliance violation, or where there is a concern that an issuing company may damage the corporate value of the Company as its shareholder, judgment over whether or not to approve will be made carefully by collecting sufficient information through dialogues with the issuing company or by other means. 【Principle 1.7 Related Party Transactions】 The Group will carry out all transactions, including related party transactions, in accordance with its own internal regulations, having sought necessary approvals in line with the importance and nature of the relevant transaction. Transactions whereby the related party is a major shareholder, or equivalent, will be subject to the same terms and conditions as transactions with third parties, to ensure that transactions are carried out legitimately. 【Principle 2.4 Ensuring Diversity, Including Active Participation of Women】 From the perspective of the Group's Corporate Philosophy of people-oriented management, the Group recognize diversity, equity and inclusion (DE&I) as one of the top priority issues to be addressed to strengthen the Group's human capital. The Group have promoted DE&I to create a workplace environment where diverse values, thoughts, and ideas are respected regardless of gender, age, nationality, disabilities or other characteristics, where all employees can engage fully in their work. The Group launched the Diversity Promotion Project in FY2021, and implemented initiatives such as analyzing the current status of diversity, holding discussions on diversity with the leadership team, and providing diversity training for management. Established in FY2023, the Human Resources Department DE&I Promotion Office (D&I Promotion Office at the time of its establishment) has now taken over the role of this project. Among the many DE&I issues that need to be addressed, the Group have focused specifically on promotion of the active participation of women because our ratio of women in managerial positions was around half the national average ratio in all industries. Providing equal opportunities for all of employees based on their individual needs is essential to help each employee reach his or her full potential. On promoting diversity through our activities to date, the Group have recognized that consideration of equity is extremely important, and the DE&I Promotion Office is now playing a central role in accelerating initiatives to instill DE&I across the Group. 【Supplementary Principle 2.4.1 Ensuring the Diversity in Promotion to Core Positions】 The promotion of active participation and advancement for women is one of the most important issues for strengthening the Group's human capital, and the Group aim to be a Group where many female employees can play active roles. As specific KPIs/targets for the Group's materiality and as targets set under our General Employer Action Plan pursuant to the Act on the Promotion of Women's Active Engagement in Professional Life (Women's Active Engagement promotion Act), the Group have set ourselves the targets of maintaining the percentage of female new graduates hired in Japan at 30% or higher and increasing the percentage of managers in Japan that are women to 10% by FY2030. Specific measures for achieving these targets include system reforms to promote the appointment of women to key positions, career development training for female candidates for managerial positions, the creation of mechanisms to support a smooth return to work after childcare leave, and seminars for officers and all employees aimed at improving literacy on women's health. On the basis that a change in men's mindset is also essential in order to promote women's active participation, the Group have also implemented initiatives such as holding awareness-raising seminars to encourage male employees to take childcare leave and recommending under the new system that male employees who take childcare leave take at least 10 days' leave, in principle. The Group's percentage of managers in Japan that are women is 6.2% (as of January 1, 2026), and the percentage of male employees who took child care leave or similar is 98.4% (2025). The Group's percentage of female new graduates hired in Japan in FY2025 was 45%. 【Principle 2.6 Roles of Corporate Pension Funds as Asset Owner】 The Company has transitioned from the defined benefit corporate pension plan operated in the past to the current defined contribution pension plan. The Company has already stopped making contributions to the defined benefit corporate pension plan except for employees who have reached a certain age but uses a contract-type defined benefit corporate pension plan to manage corporate pension plan assets in order to secure resources for stable beneficiary payments. The assets are managed by diversifying them appropriately after listening to opinions from the asset management consultant and asset management organizations, to secure investment earnings on a long-term basis. In addition, management of the assets is entrusted to multiple asset management organizations, and each organization is left to select individual investment destinations and exercise voting rights, so as to prevent a conflict of interest between beneficiaries of the corporate pension and the Company. Information about the management status is obtained regularly from each management organization, and details are shared by the Asset Management Committee, which is composed of executives in charge of personnel and managers from personnel and finance departments, and management status is monitored. Further, managers and persons in charge from the personnel department, which is the department in charge, cooperate with asset management consultants to ensure appropriate asset management and participate in pension management seminars and similar sessions hosted by asset management organizations, as part of their efforts to strengthen their expertise. 【Principle 3.1 Full Disclosure】 Company objectives (e.g., business principles), business strategies and business plans; Details of the Company's Corporate Philosophy and Management Plan are published on the Company's website for reference. Any changes in the Company's management plans are communicated at an appropriate time through financial results briefing sessions or similar, and the Company discloses relevant materials together with a video and a transcript of Q&A on the Company's website (*The video is in Japanese only.) Corporate Philosophy: https://www.artiencegroup.com/en/corporate/info/philosophy.html Management Plan: https://www.artiencegroup.com/en/corporate/info/strategy.html Basic views and guidelines on corporate governance based on each of the principles of the Code; Details of the Company's basic position on corporate governance are included under Section I-1. (Basic Views) of this report. The Company's Basic Policy on Corporate Governance are published on the Company's website for reference. Basic Policy on Corporate Governance: https://www.artiencegroup.com/en/corporate/sustainability/governance/corporate-governance/index.html #qa_1_1 Board policies and procedures in determining the remuneration of the senior management and directors; The Company believes the executive remuneration system is an important part of its corporate governance and has established the five polices below based on this understanding. The Company will also ensure that the system adopts an objective perspective through the Nomination and Remuneration Advisory Committee which is chaired by an Outside Director Remuneration should be at a level that reflects economic conditions and corporate performance. Remuneration should be at a level that enables the Company to attract and retain talent to increase its corporate value. The remuneration system should embody the Company's Corporate Policy, reflect its medium- and long-term management strategies and strongly inspire sustainable growth. Remuneration should adopt the performance-linked system and inspire the achievement of the disclosed performance forecasts. Remuneration should be designed to be fair and rational from the perspective of accountability to the stakeholders. It should be determined through an appropriate process that increases fairness and transparency. For more information, see II-1. (Director Remuneration, Disclosure of Policy on Determining Remuneration Amounts and the Calculation Methods Thereof) of this Report. Board policies and procedures in the appointment/dismissal of the senior management and the nomination of director candidates; When a candidate for Director is nominated, the following matters (a) to (d) are determined comprehensively by President and Director in charge of personnel affairs. The President nominates candidates for the posts of Directors and Audit and Supervisory Committee Member. The nomination of candidates for the post of Director is discussed by the Nomination and Remuneration Advisory Committee, which is attended by three independent Outside Directors, and candidates for Directors who are members of the Audit and Supervisory Committee are approved at the meeting of the Audit and Supervisory Committee concerning submission of the proposal for the appointment to the General Meeting of Shareholders, before they are determined through deliberation and a resolution at a meeting of the Board of Directors. (a) Criteria for nomination of Chief Executive Officer In accordance with the Company's Corporate Policy, the Company nominates the Chief Executive Officer, based on a comprehensive assessment of: the nominee's ability to balance short-term, medium-term and long-term perspectives and to make sophisticated management decisions; the nominee's familiarity with the Group's business gained through experience serving as an executive director; and the nominee's awareness of the need to strictly enforce the law and corporate ethics. Appointment and nomination of candidates for Executives and Directors who are not members of the Audit and Supervisory Committee In accordance with the Company's Corporate Policy, the Company nominates candidates for Executives and Directors, based on a comprehensive assessment of: their expected ability to contribute to the further development of the Group and related industries as a whole; their ability to accurately identify issues in their division and work with other Executives to resolve those issues; and their awareness of the need to strictly enforce the law and corporate ethics. Appointment and nomination of candidates for Directors who are members of the Audit and Supervisory Committee In accordance with the Company's Corporate Policy, the Company nominates candidates for Audit and Supervisory Committee Members, based on a comprehensive assessment of: their ability to audit Directors' performance, prevent violations of the law and the Company's articles of incorporation before they occur, and maintain and improve sound management and public trust in the Group; and their ability to conduct audits from a neutral, objective perspective, and contribute to ensuring sound management. Appointment and nomination of candidates for Outside Directors Taking the Company's criteria for independence for independent officers into consideration, the Company nominates candidates for Outside Directors, based on a comprehensive assessment of: their extensive expertise and experience in fulfilling leadership roles in areas such as management, legal affairs, finance and accounting, personnel and labor relations, and the chemical industry; and their ability to get to the heart of issues affecting the Group, adequately share their opinions with management, and provide guidance and supervision. Concerning the removal of an Executive, consultation will be sought from the Nomination and Remuneration Advisory Committee in light of the criteria for removal stipulated in the Rules on Disciplinary Actions against Directors. Explanations with respect to the individual appointments/dismissals and nominations based on iv). The reasons for the nomination of candidates for Directors are already available on the Company's website for reference of the Notice of the Annual General Meeting of Shareholders. Notice of the Annual General Meeting of Shareholders: https://www.artiencegroup.com/en/corporate/ir/stock-information/generalmeeting.html Reasons for the nomination of Outside Directors are also stated in II-1. (Directors, Outside Directors' Relationship with the Company) of this Report. 【Supplementary Principle 3.1.3 Sustainability Initiatives】 The Company has defined its basic strategy for promoting sustainability across the Group as "contributing to the improvement of environmental and social sustainability and achieving sustainable growth for the Group". By implementing and achieving various measures based on this policy, the Company aims to demonstrate the Group's economic value and social value and enhance its corporate value. (Sustainability Vision) In January 2022, the Group established the Sustainability Vision asv2050/2030 as practical long-term targets for 2050, in order to respond to recent global trends related to climate change, decarbonization, and SDG initiatives, as well as the social situation which requires that companies fulfill increasing demands for sustainability. Sustainability Vision asv2050/2030: https://www.artiencegroup.com/en/corporate/info/strategy.html #a03 (Materiality) With the abovementioned Sustainability Vision asv2050/2030 and the artience 2027/2030 GROWTH management plan, enacted in FY2024, as starting points, the Group identified the key issues it should address in its sustainability management initiatives in the period up to 2030, and formulated Group Materiality 2025-2030. Using this Group Materiality as a foundation, the Group will plan and execute diverse sustainability initiatives integrating financial and non-financial strategies. Group Materiality 2025-2030: https://www.artiencegroup.com/en/corporate/sustainability/strategy/materiality/ (Addressing Climate Change) The Group understands that responding to climate change is a material management issue with a huge impact on business activities. In November 2020, the Group expressed support for the Task Force on Climate-related Financial Disclosures (TCFD). Currently, the Group conducts activities for addressing climate change such as reducing CO2 emissions towards carbon neutrality in 2050 in accordance with its Sustainability Vision asv2050/2030. The Group also disclose information in accordance with the TCFD recommendations on the Company's website and in various reports. Information Disclosure Based on TCFD Recommendations: https://www.artiencegroup.com/en/corporate/sustainability/environment/climate-change/tcfd/index.html (Human capital and intellectual property initiatives) Regarding human capital, the Group sees employees as the source of value creation and sustainable growth, and its aim is that all its employees have a real sense of the Group's growth and their own personal growth through their contribution to wider society. In line with its key human resource strategies of "building mechanisms enabling self-directed career development", "fostering a climate that allows diverse human resources to thrive" and "creating safe workplaces", the Group is working on human capital value enhancement initiatives that will strengthen its management foundations including various development measures, DE&I and health and productivity management. Regarding research and development activities, in preparation for next-generation business development, the Group is concentrating the resources on two areas: the mobility and battery field, including lithium-ion battery materials for automobiles and laminate adhesives; and the display and advanced electronics field, including materials for liquid crystal display color filters, optical adhesives, and semiconductor materials. The Group's aim is to create a new group of businesses that will become pillars of revenue. In addition, looking ahead to 2030 and beyond, we have positioned environment, bio, and energy as next-generation businesses, and will strategically allocate resources to promote business expansion and creation. The Company also discloses information about such initiatives through various reports. Integrated Report 2025: https://www.artiencegroup.com/en/corporate/ir/archives/integrated-report/ Sustainability Data Book 2025: https://www.artiencegroup.com/en/corporate/sustainability/archives/sustainability-data-book/ Annual Securities Report (*Japanese only): https://www.artiencegroup.com/ja/corporate/ir/archives/annual-security-report/ 【Supplementary Principle 4.1.1 Scope of Delegation to Management】 In addition to matters that require a decision from the Board of Directors in accordance with the law or the Company's articles of incorporation, important management matters including the basic policy and strategic direction of the Group are submitted for approval by the Board of Directors in accordance with the Regulations of the Board of Directors. In addition, in order to transfer decision-making authority for the execution of business, decisions regarding the execution of business may be delegated to the Representative Directors in accordance with the Articles of Incorporation and the Board of Directors Regulations. Decisions regarding other important matters in relation to management are made by the Group Management Committee in accordance with the Regulations of operating the Top Management Committee. To ensure effective supervision by the Board of Directors, matters determined by the Group Management Committee are then reported to the Board of Directors. Operations relating to matters other than those submitted to the Board of Directors or the Group Management Committee are handled directly by the relevant Director in accordance with responsibilities determined by the Board of Directors. Such operations may also be delegated to a responsible Executive Officer. Even in cases such as these however, there are approval regulations in place for matters that can only be acted upon with approval from the Representative Directors, due to their importance or nature. 【Principle 4.9 Independence Standards and Qualification for Independent Directors】

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