Adastria : Notice Concerning Partial Amendments to the Articles of Incorporation in Connection With the Transition to a Company With an Audit and Supervisory Committee

April 17, 2024

(Translation)

To Whom It May Concern,

Company name	Adastria Co., Ltd.
Representative	Osamu Kimura, Representative Director and President
	(Securities code: 2685 TSE Prime Market)
Inquiries	Itsuo Iwakoshi, Senior Executive Officer, General
	Manager of Administration Division
	(TEL: [phone])

Notice Concerning Partial Amendments to the Articles of Incorporation in Connection

With the Transition to a Company With an Audit and Supervisory Committee

At a meeting held today, the Adastria Co., Ltd. ("Adastria" or "Company") Board of Directors resolved to submit a proposal for Partial Amendments to the Articles of Incorporation to the 74th Ordinary General Meeting of Shareholders scheduled to be held May 23, 2024.

1. Purpose of Amendments to the Articles of Incorporation
   As disclosed on February 16, 2024, the Company will transition to a company with an Audit Committee to improve corporate governance further by delegating authority for important business decisions from the Board of Directors to individual directors, speeding the pace of decision-making and strengthening the supervisory function of the Board of Directors.
   Therefore, the Company is preparing necessary changes for the transition, including new provisions concerning members of the Audit and Supervisory Committee and the Audit and Supervisory Committee, the deletion, etc., of provisions regarding members of the Audit & Supervisory Board and the Audit & Supervisory Board, etc. Other changes include changes in the number of articles due to additions and deletions and integration of plain text.
2. Details of Amendments to the Articles of Incorporation
   The pages following provide details of the amendments to the Company's Articles of Incorporation.
3. Schedule

Scheduled date of the general meeting of shareholders to amend the Articles of Incorporation May 23, 2024 (Thursday)

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Scheduled effective date of the amendments to the Articles of Incorporation

May 23, 2024 (Thursday)

	End
	(Underlined parts are amended.)
Current Articles of Incorporation	Proposed Amendments
Article 4 (Method of Giving Public Notices)	Article 4 (Method of Giving Public Notices)
Public notices of the Company shall be given	Public notices of the Company shall be given
electronically. However, if electronic public	electronically. However, if electronic public
notices cannot be given due to an accident or	notices cannot be given due to an accident or
other unavoidable reason, public notices shall be	other unavoidable reason, public notices shall be
published in the Nihon Keizai Shimbun.	published in the Nihon Keizai Shimbun.
Article 5 (Organizational Bodies)	Article 5 (Organizational Bodies)
The Company shall have the following	The Company shall have the following
organizational bodies in addition to the General	organizational bodies in addition to the General
Meeting of Shareholders and the Directors:	Meeting of Shareholders and the Directors:
(1) Board of Directors;	(1) Board of Directors;
(2) Audit & Supervisory Board Members;	(2) Audit and Supervisory Committee;
(3) Audit & Supervisory Board; and	(Deleted)
(4) Accounting Auditor	(3) Accounting Auditor
Article 18 (Number of Directors)	Article 18 (Number of Directors)
The authorized number of Directors of the	The authorized number of Directors who are not
Company shall be not more than twelve (12).	Members of the Audit and Supervisory
	Committee of the Company shall be not more
	than twelve (12).
(New)	2 The authorized number of Directors who are
	Members of the Audit and Supervisory
	Committee of the Company (hereinafter referred
	to as the "Members of the Audit and Supervisory
	Committee") shall be not more than five (5).
Article 19 (Election of Directors)	Article 19 (Election of Directors)
The Directors of the Company shall be elected	The Directors of the Company shall be elected
by a resolution passed by a majority of the votes	separately for the Members of the Audit and
of the shareholders present at a General Meeting	Supervisory Committee and for the other

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Current Articles of Incorporation	Proposed Amendments
of Shareholders where the shareholders holding	Directors, by a resolution passed by a majority
at least one-third (1/3) of the voting rights of	of the votes of the shareholders present at a
shareholders entitled to vote at the meeting are	General Meeting of Shareholders where the
present.	shareholders holding at least one-third (1/3) of
	the voting rights of shareholders entitled to vote
	at the meeting are present.
2 (Omitted)	2 (Not amended)
Article 20 (Terms of Office of Directors)	Article 20 (Terms of Office of Directors)
The terms of office of Directors shall expire at	The terms of office of Directors shall expire at
the conclusion of the Ordinary General Meeting	the conclusion of the Ordinary General Meeting
of Shareholders for the last fiscal year ending	of Shareholders for the last fiscal year ending
within one (1) year after their election.	within one (1) year after their election.
(New)	2 Notwithstanding the provision of the preceding
	paragraph, the terms of office of the Members of
	the Audit and Supervisory Committee shall
	expire at the conclusion of the Ordinary General
	Meeting of Shareholders for the last fiscal year
	ending within two (2) years after their election.
(New)	3 The term of office of a Member of the Audit
	and Supervisory Committee elected as a
	substitute to fill a vacancy shall expire at the end
	of the term of office of the retired Member of the
	Audit and Supervisory Committee.
(New)	4 A resolution for the election of a substitute
	Member of the Audit and Supervisory
	Committee elected under Article 329, paragraph
	3 of the Companies Act shall be valid until the
	beginning of the Ordinary General Meeting of
	Shareholders for the last fiscal year ending
	within two (2) years after his/her election, unless
	shortened by such resolution.
Article 21 (Representative Directors)	Article 21 (Representative Directors)
One or more Directors representing the	One or more Directors representing the
Company shall be elected by a resolution of the	Company shall be elected among the Directors
Board of Directors.	who are not Members of the Audit and

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Current Articles of Incorporation	Proposed Amendments
	Supervisory Committeeby a resolution of the
	Board of Directors.
Article 23 (Procedures for Convening Meeting	Article 23 (Procedures for Convening Meeting
of the Board of Directors)	of the Board of Directors)
Notice of a meeting of the Board of Directors	Notice of a meeting of the Board of Directors
shall be given to each Director and each Audit &	shall be given to each Director at least three (3)
Supervisory Board Memberat least three (3)	days prior to the date of the meeting. However,
days prior to the date of the meeting. However,	this period may be shortened if there is an urgent
this period may be shortened if there is an urgent	need to convene the meeting.
need to convene the meeting.
2 Subject to the unanimous consent of Directors	2 Subject to the unanimous consent of Directors,
and Audit & Supervisory Board Members, a	a meeting of the Board of Directors may be held
meeting of the Board of Directors may be held	without following the convening procedures.
without following the convening procedures.
(New)	Article 26 (Delegation of Business Execution
	Decisions to Directors)
	Pursuant to Article 399-13, paragraph 6 of the
	Companies Act, the Company may, by a
	resolution of the Board of Directors, delegate all
	or part of the decisions on the execution of
	important businesses (excluding the matters
	listed in the items of paragraph 5 of the same
	Article) to the Directors.
Article 26(Compensation, etc.)	Article 27(Compensation, etc.)
The compensation, bonuses and other financial	The compensation, bonuses and other financial
benefits of Directors received from the Company	benefits of Directors received from the Company
in consideration of the execution of their duties	in consideration of the execution of their duties
(hereinafter referred to as the "Compensation,	(hereinafter referred to as the "Compensation,
etc.") shall be determined by a resolution of a	etc.") shall be determined separately for the
General Meeting of Shareholders.	Members of the Audit and Supervisory
	Committee and for the other Directorsby a
	resolution of a General Meeting of Shareholders.

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Current Articles of Incorporation	Proposed Amendments
Article 27(Exemption of Directors From	Article 28(Exemption of Directors From
Liability)	Liability)
(Omitted)	(Not amended)
Chapter 5 Audit & Supervisory Board Members	Chapter 5 Audit and Supervisory Committee
and the Audit & Supervisory Board
Article 28 (Number of Audit & Supervisory	(Deleted)
Board Members)
The authorized number of Audit & Supervisory
Board Members of the Company shall be not
more than five (5).
Article 29 (Election of Audit & Supervisory	(Deleted)
Board Members)
The Audit & Supervisory Board Members of the
Company shall be elected by a resolution passed
by a majority of the votes of the shareholders
present at a General Meeting of Shareholders
where the shareholders holding at least one-third
(1/3) of the voting rights of shareholders entitled
to vote at the meeting are present.
Article 30 (Terms of Office of Audit &	(Deleted)
Supervisory Board Members)
The terms of office of Audit & Supervisory
Board Members shall expire at the conclusion of
the Ordinary General Meeting of Shareholders
for the last fiscal year ending within four (4)
years after their election.
2 The term of office of an Audit & Supervisory
Board Member elected as a substitute to fill a
vacancy of an Audit & Supervisory Board
Member who retires before the end of his/her
term of office shall expire at the end of the term
of office of the retired Audit & Supervisory
Board Member.

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Current Articles of Incorporation	Proposed Amendments
Article 31(Procedures for Convening Meeting	Article 29(Procedures for Convening Meeting
of the Audit & Supervisory Board)	of the Audit and Supervisory Committee)
Notice of a meeting of the Audit & Supervisory	Notice of a meeting of the Audit and
Boardshall be given to each Audit &	Supervisory Committeeshall be given to each
Supervisory Board Memberat least three (3)	Member of the Audit and Supervisory
days prior to the date of the meeting. However,	Committeeat least three (3) days prior to the
this period may be shortened if there is an urgent	date of the meeting. However, this period may be
need to convene the meeting.	shortened if there is an urgent need to convene
	the meeting.
2 Subject to the unanimous consent of Audit &	2 Subject to the unanimous consent of Members
Supervisory Board Members, a meeting of the	of the Audit and Supervisory Committee, a
Audit & Supervisory Boardmay be held without	meeting of the Audit and Supervisory
following the convening procedures.	Committeemay be held without following the
	convening procedures.
(New)	Article 30 (Resolution of the Audit and
	Supervisory Committee)
	Resolutions of the Audit and Supervisory
	Committee shall be adopted by a majority of the
	Members of the Audit and Supervisory
	Committee present at a meeting of the Audit and
	Supervisory Committee where a majority of the
	Members of the Audit and Supervisory
	Committee entitled to vote in the resolution are
	present.
Article 32(Rules of the Audit & Supervisory	Article 31(Rules of the Audit and Supervisory
Board	Committee)
Matters relating to the Audit & Supervisory	Matters relating to the Audit and Supervisory
Boardshall be governed by the Rules of the	Committeeshall be governed by the Rules of the
Audit & Supervisory Boardestablished by the	Audit and Supervisory Committeeestablished by
Audit & Supervisory Board, as well as by laws	the Audit and Supervisory Committee, as well as
and regulations and these Articles of	by laws and regulations and these Articles of
Incorporation.	Incorporation.

Article 33 (Compensation, etc.)

(Deleted)

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Current Articles of Incorporation	Proposed Amendments
The Compensation, etc. of Audit & Supervisory
Board Members shall be determined by a
resolution of a General Meeting of Shareholders.
Article 34 (Exemption of Audit & Supervisory	(Deleted)
Board Members From Liability)
Pursuant to Article 426, paragraph 1 of the
Companies Act, the Company may, by a
resolution of the Board of Directors, exempt its
Audit & Supervisory Board Members (including
former Audit & Supervisory Board Members)
from their liability arising from their act
provided for in Article 423, paragraph 1 of the
Companies Act, to the extent permitted by laws
and regulations.
2 Pursuant to Article 427, paragraph 1 of the
Companies Act, the Company may enter into
agreements with its Audit & Supervisory Board
Members to limit their liability arising from their
act provided for in Article 423, paragraph 1 of
the Companies Act. However, the maximum
amount of liability under the agreements shall be
the amount provided for by laws and regulations.
Articles 35to40(Omitted)	Articles 32to37(Not amended)
(New)	(Supplementary Provisions)
	To the extent permitted by laws and regulations,
	the Company may, by a resolution of the Board
	of Directors, exempt its Audit & Supervisory
	Board Members (including former Audit &
	Supervisory Board Members) from their liability
	provided for in Article 423, paragraph 1 of the
	Companies Act for their acts which were taken
	prior to the conclusion of the 74th Ordinary
	General Meeting of Shareholders.
	2 The agreements to limit the liability of Audit &

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Current Articles of Incorporation	Proposed Amendments
	Supervisory Board Members (including former
	Audit & Supervisory Board Members) provided
	for in Article 423, paragraph 1 of the Companies
	Act for their acts which were taken prior to the
	conclusion of the 74th Ordinary General
	Meeting of Shareholders shall be governed by
	Article 34, paragraph 2 of the Articles of
	Incorporation before amendment which is to be
	resolved at the said Ordinary General Meeting of
	Shareholders.

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