ARE : Matters not Included in Delivered Documents Concerning Convocation Notice of the 15th General Shareholders Meeting

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

Notice of the 15th Annual General Meeting of Shareholders

Matters excluded in accordance with laws and regulations and the Company's Articles of Incorporation from paper-based documents delivered in response to a request for delivery of documents stating matters subject to measures for electronic provision

Structure to ensure the appropriateness of business………………………………………	2
Status of operation of structure to ensure the appropriateness of business…………………	5
Notes to consolidated financial statements…………………………………………………	7
Notes to non-consolidated financial statements……………………………………………	24

The items above are omitted in the document to be delivered to shareholders who have requested delivery of the document (the document stating the matters to be provided electronically) in accordance with laws and regulations, and Article 14, Paragraph 2 of the Articles of Incorporation of ARE Holdings, Inc.

ARE Holdings, Inc.

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Cover

Structure to ensure the appropriateness of business

Decisions on 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 of the Company are as follows:

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 the laws and the Articles of Incorporation
2. 1. The Board of Directors will establish "Asahi Way" for the Directors and employees in order for the Directors, Corporate Officers and employees to comply with the laws, Articles of Incorporation and internal rules and to fulfill their duties.
   2. We will distribute "Asahi Way" to the Directors and employees so as to keep them informed of legal compliance. The internal audit division will make improvements and give guidance through the business audit.
   3. We will establish the "Internal Control Promotion Meeting" consisting of officers and responsible persons of various divisions as an organization that controls the entire compliance in order to promote the construction, maintenance and improvement of the internal control system.
   4. 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 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 will take a firm attitude and respond to it organizationally in accordance with the law and internal rules.
3. Framework for storage and management of information relating to business operations by the Directors and a framework for report to the Company about the matters relating to the performance of duties by the Directors and employees of our subsidiaries
4. 1. We will appropriately control the manner of storing, disposing of and otherwise managing the records 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.
5. Rules and other frameworks for management for risk of loss in the Company and our subsidiaries
6. 1. We will establish the risk management rules and build a risk management system in accordance with 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.

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Structure to ensure the appropriateness of business

1. Framework to secure the efficient performance of duties by the Directors of the Company and our subsidiaries
2. 1. The Board of Directors will hold a meeting regularly no less than once every three months and from time to time when needed in order to determine the management policies and other important 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.
   3. The Board of Directors will draft a mid-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.
3. Framework to secure the appropriateness of business of the corporate group consisting of the Company and our subsidiaries
4. 1. We will build a system to manage our subsidiaries and will develop a system to report their business 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 to observe the appropriateness of such subsidiary's business.
   3. The internal audit division 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 Audit and Supervisory Committee and Executive Directors.
5. Framework to appoint an employee who assists the duties of the Audit and Supervisory Committee of the Company, and the matters relating to the independence of such employee from the Directors (excluding Directors serving as the Audit and Supervisory Committee Members) and the matters relating to the assurance of effective instructions given by the Audit and Supervisory Committee to such employee
6. 1. 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 and Supervisory Committee Secretariat staff who assists the committee in performing its duties to perform his/her duties.

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Status of operation of structure to ensure the appropriateness of business

1. Framework where the Directors (excluding Directors serving as the 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 a report from aforementioned persons report to the Audit and Supervisory Committee of the Company, and other matters relating to reporting to the Audit and Supervisory Committee
2. 1. The Directors (excluding Directors serving as the Audit and Supervisory Committee Members) and 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 division and 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 in addition to the meeting of the Board of Directors, access important documents relating to the business operations and request a Director or an employee to explain the situation when needed.
3. 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.
4. Matters relating to the policies for settlement of expenses or debts associated with the procedures for prepayment or reimbursement of expenses incurred for the performance of duties by the Audit and Supervisory Committee Members of the Company (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 and Supervisory Committee).
5. Other framework to ensure that the Audit and Supervisory Committee of the Company 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.

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Structure to ensure the appropriateness of business

Status of operation of structure to ensure the appropriateness of business

As of June 16, 2015, the Company made a transition to the Board with Audit and Supervisory Committee to promote efforts to ensure transparency and improve the efficiency of corporate management by reinforcing the supervisory function of the Board of Directors and utilizing Outside Directors. The Company's Board of Directors discusses management risks and reviews the Company's internal organizations, operations and regulations accordingly to enhance their effectiveness.

The status of operation of structure to ensure the appropriateness of business operations is as follows.

1. Status of efforts to enhance the appropriateness and efficiency of business execution
2. 1. The Board of Directors consists of one (1) Director with executive authority over operations and five (5) Directors serving as Audit and Supervisory Committee Members (including four (4) Outside Directors) and has held active discussions.
   2. During the fiscal year under review, the Board of Directors held eight (8) meetings where the status of business execution was supervised by deliberating proposals and receiving reports on the status of important business execution.
   3. The Board of Directors entrusts the authority over some important business execution to Directors to ensure efficient decision making and business execution.
   4. To secure the transparency in decisions on nomination and compensation for Directors and Group companies, the Nominating Committee and the Compensation Committee, each of which consists of one Representative Director and two (2) Outside Directors serving as Audit and Supervisory Committee Members, were established as voluntary committees, and have provided advice and suggestions to the Board of Directors.
3. Status of efforts regarding compliance and risk management
4. 1. Continuous efforts to ensure compliance with laws, regulations and the Articles of Incorporation have been made by providing employees with compliance education through in-house trainings and meetings and announcing the content of laws and their revisions on the internal portal site or with other means.
   2. To counter an act that violates laws, regulations and the Articles of Incorporation, the whistle-blowing system has been reinforced to monitor such an act, thereby strengthening legal compliance and risk management.
   3. The Internal Control Promotion Meeting engages in identification and control of internal risks, and improves the internal organizations, facilities and equipment, information systems and internal regulations accordingly.
5. Status of execution of duties of the Audit and Supervisory Committee
6. 1. Directors serving as Audit and Supervisory Committee Members join the discussion and resolution of proposals and receive reports on the status of business execution at the meetings of the Board of Directors and attend the Group Subsidiaries Management Meeting and other meetings to enhance the effectiveness of audits.
   2. To ensure the effectiveness of audits by Directors serving as Audit and Supervisory Committee Members, the Audit and Supervisory Committee Secretariat, which is independent of orders from Executive Directors, is placed to support the Audit and Supervisory Committee Members.

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Status of operation of structure to ensure the appropriateness of business

1. Status of the internal audits system
2. 1. An internal audit division for conducting audits on a Group-wide basis has been in place for enhancement of the internal audits system.
   2. The internal audit division conducts audits on overall business operations and reports to the Audit and Supervisory Committee. The division also cooperates with the Audit and Supervisory Committee Members and the Accounting Auditor to enhance the effectiveness of audits.

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Status of operation of structure to ensure the appropriateness of business

Notes to consolidated financial statements

(Basis of preparing consolidated financial statements)

1. Standards for preparing the consolidated financial statements
   The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (hereinafter "IFRS") under the provision of Article 120, Paragraph 1 of the Rules of Corporate Accounting. Certain disclosures required by IFRS have been omitted from these consolidated financial statements under the provision set forth in the second sentence of said Paragraph.
2. Scope of consolidation

	Number of consolidated subsidiaries	10
		Asahi Pretec Corp.
		ASAHI METALFINE, Inc.
		Waste System Japan Corporation
		Asahi G&S Sdn. Bhd.
	Major consolidated subsidiaries	Asahi Pretec Korea Co., Ltd.
	Asahi Refining USA Inc.
		Asahi Refining Florida LLC
		Asahi Refining Canada Ltd.
		Asahi Depository LLC
		DXE INC.
3. Equity method affiliate
	Number of equity method affiliates	16
	Major equity method affiliate	Renatus Co., Ltd.

4. Change in scope of consolidation or scope of application of equity method

As Waste System Japan Corporation was newly established during the current consolidated fiscal year, it is included in the scope of consolidation. As the Company exchanged all shares it held in Japan Waste Corporation, JW Chemitech Co., Ltd., Fuji Rozai Co., Ltd., and Nihon Chemitech Logitem Co., Ltd. with part of shares of Renatus Co., Ltd., they are excluded from the scope of consolidation and have become equity method affiliates. Renatus Co., Ltd. is also included in the scope of equity method application.

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Notes to consolidated financial statements

5. Accounting policies

1. Valuation standards and methods for major assets

1. Financial assets other than derivatives

(i) Initial recognition and measurement

The Group recognizes financial assets when it becomes a party to the contract clauses of financial instruments and classifies the financial assets into financial assets measured at fair value through profit or loss or other comprehensive income and financial assets measured at amortized cost.

All financial assets, unless they are classified into those measured at fair value through profit or loss, are measured at fair value plus transaction costs.

Financial assets are classified as financial assets measured at amortized cost if both of the following conditions are met:

• The financial asset is held within a business model for which the objective is to hold financial assets in order to collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that

are solely payments of principal and interest on the principal amount outstanding. Financial assets other than those measured at amortized cost are classified as financial assets measured at fair value.

For financial assets measured at fair value, except equity instruments that are held for trading and must be measured at fair value through profit or loss, a designation is made of individual equity instruments as those measured at fair value through profit or loss or those measured at fair value through other comprehensive income, and such designation is applied consistently. (ii) Subsequent measurement

After initial recognition, financial assets are measured based on the classification as follows. a) Financial assets measured at amortized cost

Financial assets measured at amortized cost are measured using the amortized cost based on the effective interest method.

b) Financial assets measured at fair value

Changes in the fair value of financial assets measured at fair value are recognized in profit or loss. However, for equity instruments designated as those measured at fair value through other comprehensive income, changes in the fair value are recognized in other comprehensive income. Said amounts recognized in other comprehensive income are not subsequently reclassified into profit or loss. In cases where such financial assets are derecognized or their fair value declines significantly, the other comprehensive income previously recognized is directly transferred to retained earnings. Dividends relating to such financial assets are recognized as part of finance income and in profit or loss for the fiscal year under review.

(iii) Impairment of financial assets

The Group recognizes impairment of financial assets based on whether the credit risk on the financial asset or financial asset group measured at amortized cost at each end of the reporting periods has increased significantly since initial recognition. Specifically, if the credit risk has not increased significantly since initial recognition, a loss allowance is recognized based on 12-month expected credit losses. On the other hand, if the credit risk has increased significantly since initial recognition, a loss allowance is recognized based on expected credit

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Notes to consolidated financial statements

losses through the remaining life of the financial asset. Whether the credit risk has increased significantly is determined based on changes in the risk of default. Whether there are changes in the risk of default is determined by taking into account any significant changes in the external credit ratings of the financial asset, unfavorable changes in the status of business operations or financial position, any events of overdue payments and other information. For trade receivables, however, lifetime expected credit losses are recognized from when the instruments are first recognized.

Expected credit losses are measured based on the discounted present value of differences between contractual amounts to be received and amounts expected to be received.

(iv) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or when the Group transfers substantially all the risks and rewards of ownership of the asset to another entity. If the Group retains control over the transferred financial asset, the Group recognizes the asset and related liability to the extent of its continuing involvement.

1. Derivatives
   The Group utilizes derivatives, including foreign exchange forward contracts, interest rate swaps and commodity forward contracts, to hedge, respectively, foreign exchange, interest rate and commodity price risks. These derivative instruments are initially measured at fair value when the contract is entered into and are subsequently remeasured at fair value.
2. Inventories
   Inventories are measured at the lower of cost and net realizable value. The net realizable value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories is determined mainly by the moving-average method and includes the cost of purchase, cost of conversion and all other costs incurred in bringing the inventories to their present location and condition.

1. Depreciation and amortization for major assets

1) Property, plant and equipment	: Assets	other than land and construction in
	progress are depreciated using the straight-line
	method over their estimated useful lives as
	follows.
	-	Buildings and structures: 2-50 years
	-	Machinery, equipment and vehicles: 2-20
		years
	Estimated useful lives, residual values and

depreciation methods are reviewed at each fiscal year-end, and any changes are applied prospectively as changes in accounting estimates.

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Notes to consolidated financial statements

2)	Intangible assets	:	Intangible assets, except those for which the
			useful life is not determined, are amortized
			using the straight-line method over their
			estimated useful lives as follows.
			-	Software: 5 years
			Estimated useful lives, residual values and
			amortization methods are reviewed at each
			fiscal year-end, and any changes are applied
			prospectively as changes in accounting
			estimates.
3)	Leases	:	For lease transactions, when the ownership of
			the underlying asset is transferred to the Group
			prior to the termination of the lease period, or
			when the exercise of a purchase option is
			reflected in the acquisition price of the right-of-
			use asset, the right-of-use asset is depreciated
			using the straight-line method based on its
			useful life. In other cases, right-of-use assets are
			depreciated using the straight-line method based
			on either the useful life or at the termination of

the lease period, whichever is shorter. Lease payments are apportioned between finance costs and repayment of lease liabilities based on the interest method, and financial costs are recognized in the consolidated statement of income. Short-term leases with a lease term of 12 months or less and leases of low-value underlying assets are recognized as expenses on either a straight-line basis or another systematic basis over the lease term for the total lease payments.

(3) Recognition criteria for significant provisions

Provisions are recognized when the Group has present legal or constructive obligations as a result of past events and it is probable that outflows of resources embodying economic benefits will be required to settle the obligations and reliable estimates can be made of the amount of the obligations. When the effect of the time value of money is material, the amount of a provision is measured by discounting the estimated future cash flows at the discount rate, which is a pretax rate that reflects the time value of money and the risks specific to the liability. The unwinding of the discount due to the passage of time is recognized as finance cost.

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Notes to consolidated financial statements