Note: This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

Corporate Governance Report
Last Update: June 28, 2024

Sumitomo Realty & Development Co., Ltd.

Kojun Nishima, Representative Director and President
Contact: Corporate Administration Department
Securities Code: 8830
https://www.sumitomo-rd.co.jp/english/

The corporate governance of Sumitomo Realty & Development Co., Ltd. (the “Company”) is described below.
I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic
Information
1. Basic Views
The Company is a comprehensive real estate enterprise of the Sumitomo Group which has a history of 430 years
and inherits Sumitomo’s business philosophy of “Placing prime importance on integrity” and “Under nocircumstances, shall it pursue easy gains.” The Company’s slogan, “Integrity and Innovation” expresses its
corporate stance to all stakeholders including its employees, customers, business partners, creditors andshareholders. This includes the pride as a developer which values “Integrity” above all, and creates new corporate
value with a pioneering spirit, without pursuing easy gains under any circumstances. Under this slogan, we haveset forth our fundamental mission as to “Create even better social assets for the next generation,” and our basic
management policy aims to contribute to addressing various social issues such as the environment, while
maximizing corporate value through each business.
This fundamental mission also includes a reminder “Do not rest on seniors’ laurels and make the best efforts
for a better company for the next generation.” At this point in time, we believe that the management of theCompany should continue to be carried out by people mainly from within the Company who have inherited thestrong will to sow the seeds of growth for the sake of the next generation. In doing so, we believe that employees
will be able to maintain a high level of motivation to eventually participate in management.
In consideration of this basic stance, we are working to further strengthen and enhance corporate governanceso as to contribute to the enhancement of the Company’s corporate value over the medium- to long-term, byworking on collaboration and dialogue with all stakeholders including shareholders, improving the efficiency ofdecision-making, appropriate supervision of execution, and proper disclosure of information.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code][Supplementary Principle 4.10.1] Voluntary Nomination Committee and Compensation Committee
As stated in the Basic Views, we believe that people from within the Company should be the core member ofmanagement and execution, and we are aiming to have a management system in which the Board of Directors,
which is mainly composed of people from within the Company, assumes the responsibility for execution, andthe corporate auditors are responsible for management supervision. Hence, we have not established voluntarycommittees, but we have established the following system to obtain appropriate involvement and advice fromindependent outside directors and outside corporate auditors in order to ensure independence and objectivity inthe nomination and compensation of directors and executive officers.
Regarding nomination of candidates for directors and appointment of executive officers, persons with a wealthof experience, high-level insight and sophisticated expertise who will contribute to the Company’s sustainablegrowth and medium- to long-term enhancement of corporate value are narrowed down to candidates throughmultiple meetings of the Executive Committee. The final decision is then made by the Board of Directors basedon thorough deliberation, reflecting independent and objective opinions of independent outside directors andoutside corporate auditors. Independent outside directors and outside corporate auditors have opportunities to-1-know relevant information such as the background, insights and achievements of internal directors and executive
officers at several occasions including meetings of the Committee of Outside Directors and Auditors, briefings
for outside directors, and meetings of the Board of Corporate Auditors.
Regarding the compensation for directors and executive officers, the total amount of compensation isdetermined based on a clear linkage to business performance, and the policy for the determination of the
breakdown of compensation, etc. for each individual (hereinafter referred to as the “determination policy”) is
determined by a resolution of the Board of Directors, with the participation of independent outside directors andoutside corporate auditors. In the determination policy, the compensation for each director and executive officer
is fixed compensation only and the amount paid to each of them is determined upon agreement by the Chairmanof the Board and Representative Directors, a total of four directors.
For details, please refer to [Disclosure Based on the Principles of the Corporate Governance Code], [Principle3.1], (3) and (4).
[Disclosure Based on the Principles of the Corporate Governance Code] [Updated][Principle 1.4] Strategic Shareholdings
The Company may acquire and hold shares of business partners, etc., if it is deemed to contribute to theCompany’s sustainable growth and medium- to long-standing enhancement of corporate value primarily fromthe standpoint of establishing and strengthening stable and long-term business relationships with business
partners, etc.
With regard to the reduction of strategic shareholdings, in the Ninth Management Plan, the Company has set a
numerical target of reducing the ratio of the book value of listed shareholdings each year to 10% or less ofshareholders’ equity by FY2027 at the latest, and it imposes a certain level of discipline on the balance ofshareholdings. In the previous fiscal year, we sold 12 issues, with book value of approximately ¥9.0 billion in
total, whose significance of our holdings had declined. Additionally, we transferred three issues, which arescheduled to be sold in the future, from strategic shareholdings to pure investments. As a result, the book valueof listed shares held as strategic shareholdings decreased to ¥250.8 billion (down ¥18.2 billion from thepreceding fiscal year), and the ratio to shareholders’ equity declined 2.4 parcentage points to 14.2%. The
Company will continue to examine the significance of the strategic holding of shares individually, and it willproceed to sell shares that are deemed to have lost their significance to continue holding as subject to reduction.
Among the strategic shareholdings, the Company assesses major stocks in terms of whether or not to hold eachindividual strategic shareholding, comprehensively taking into account the benefits and risks from each holdingin light of the aforementioned purpose of holding at important meetings such as meetings of the Executive
Committee in which directors and executive officers participate.
When exercising voting rights, the Company decides whether to approve or reject proposals individually, after
deliberating such factors as the management policies and strategies of investee companies, comprehensively
taking into consideration whether they contribute to the improvement of corporate value and the common
interests of shareholders from a medium- to long-term perspective.
In addition, whether to approve or reject proposals that may have a significant impact on the common interestsof shareholders is decided through dialogue with the investee companies.
[Principle 1.7] Related Party Transactions
Based on the disclosure requirements prescribed in the Accounting Standards Board of Japan’s Implementation
Guidance, the Company periodically requests reporting and verification every year, and the Board of Directors
monitors the appropriateness of those transactions.
[Supplementary Principle 2.4.1] Ensuring Diversity in the Promotion to Core Human Resources
For some time, we have been actively promoting diversity based on the recognition that the presence of diverse
perspectives and values reflecting a variety of experiences, skills and attributes within the Company is anadvantage that ensures the sustainable growth of the Company.
For more than 20 years, we have been actively hiring people with diverse careers at other companies as
individuals who can be immediately effective in the Company. Today, mid-career hires with work experience atother companies account for 90% of our employees at Sumitomo Realty & Development, and are the source of
the Company’s growth.
In addition, for increasing employees’ motivation, we believe that equal opportunity in promotion to
managerial positions is the most important factor, so we promote employees based solely on their enthusiasm,
ability and achievements, regardless of gender or whether they were hired as new graduates or as mid-career
workers. As a result, mid-career hires account for more than 60% of managerial personnel, thus ensuring-2-

diversity in the managerial positions.
We are also actively working on the promotion of female participation and career advancement. Firstly, we
have announced a numerical target for the ratio of female employees newly hired in sales and engineering
positions that support our front line operations (25% in sales and 13% in engineering positions) in order toincrease the number of female employees to be promoted in future by increasing the ratio of women in our
workforce. Secondly, we are also working to support women’s career development. For example, in 2022, we
implemented reforms to apply personnel systems centered on job evaluation-based pay to all employees, andcreated a system that enables employees with medium- to long-term gaps in their career owing to life events
such as childbirth and raising children to immediately assume positions of responsibility with no disadvantage
after returning to work. In July 2023, we established Diversity Promotion Office to focus on the development of
future executive candidates. We are also actively working on the appointment of female officers. As of thesubmission of this report, we have three female officers including one female executive officer we appointed in
April 2024.
We believe that diversity in managerial positions should be ensured naturally as a result of fair employment
policies, systems and appointments, such as those described above. We believe that setting a numerical target
for diversity in managerial positions may distort equal opportunity in the appointment of managers and lower
the morale of employees as a whole, and therefore we will not set such a numerical target.
[Principle 2.6] Roles of Corporate Pension Funds as Asset Owners
The Company’s retirement benefit plan consists of pension benefits of contract-type corporate pension plans andlump-sum payment plans.
The Company, as an asset owner, regularly verifies the management status of pension funds while entrusting
the management to multiple institutions that have adopted the stewardship code. The Company also strives toenable the department in charge of corporate pension to perform appropriate activities such as monitoring ofmanagement institutions, by appointing personnel with necessary experience and qualities and training such
personnel.
[Principle 3.1] Full Disclosure(1) Management principles, management strategies and management plans
These are published on the Company website and in securities reports and integrated reports.
(2) Basic views and basic policy on corporate governance
These are described in “I. 1. Basic Views” of this report.
(3) Basic policy and process on determination of compensation for directors and executive officers
The Company has a performance-based compensation system, which the total annual compensation for directors
is set at just 1% of consolidated ordinary profit. As the Company introduced an executive officer system, whichenables the appointment of officers comparable to directors necessary for business expansion, the compensationof executive officers is also to be paid from the aforementioned total amount of compensation for directors, withthe agreement of all directors. (Hereinafter, directors and executive officers are collectively referred to as“directors, etc.”).
The policy for the determination of the content of compensation, etc. for individual directors, etc. is establishedby resolution of the Board of Directors. Under the determination policy, compensation for each director, etc.,
consists only of fixed compensation, and the specific content (payment amount, timing of payment, payment
method, etc.) of the compensation for individual directors is determined by agreement between the Chairman of
the Board and Representative Directors, based on a resolution of authorization by the Board of Directors. Whenmaking this agreement, each director’s duties and level of contribution to performance are considered.
(4) Policy and process on the nomination of candidates for directors and corporate auditors and the appointment
and dismissal of executive officers
Regarding nomination of candidates for directors and corporate auditors, and appointment of executive officers,
persons with a wealth of experience, high-level insight and sophisticated expertise who will contribute to theCompany’s sustainable growth and medium- to long-term enhancement of corporate value are narrowed down
to candidates through multiple meetings of the Executive Committee. The final decision is then made by the
Board of Directors based on thorough deliberation, reflecting independent and objective opinions of independent
outside directors and outside corporate auditors. Independent outside directors and outside corporate auditors
have sufficient opportunities to know relevant information such as the background, insights and achievements
of internal directors, executive officers and internal corporate auditors at several occasions including meetings-3-

of the Committee of Outside Directors and Auditors, briefings for outside directors, and meetings of the Boardof Corporate Auditors.
Dismissal of executive officers is decided after thorough deliberation at the meetings of the Board of Directors,
which are also attended by independent outside directors and outside corporate auditors.
(5) For candidates for directors and corporate auditors resolved in (4) above, their background and the reasonsfor their nomination are individually described in the Notice of Convocation of General Meeting of
Shareholders.
[Supplementary Principle 3.1.3] Initiatives for Sustainability
The Company is a comprehensive real estate enterprise of the Sumitomo Group, which succeeded the Sumitomo
Honsha Ltd. and inherits “Sumitomo’s Business Philosophy” which has a history of 430 years. The Sumitomo
Group is one of the longest-lasting corporate groups in the world, and its business philosophy — “Placing prime
importance on integrity,” “Under no circumstances, shall it pursue easy gains,” “Benefit self and benefit others,
private and public interests are one and the same,” etc. — has been handed down as a guiding principle
throughout its history. In light of the wisdom of its predecessors, the Sumitomo Realty Group has developed its
business based on a business philosophy of placing top priority on integrity, not pursuing easy gains, and creating
not only its own economic value, but also lasting social value that will be needed for future generations.
Our corporate slogan “Integrity and Innovation” expresses such corporate stance. With this corporate slogan,we have set our code of conduct to create new values by placing top priority on relationships of trust withstakeholders, always setting higher goals, and pioneering with new approaches. Under this slogan, we have set
forth our fundamental mission as to “Create even better social assets for the next generation,” and our basic
management policy aims to address various social issues including environmental ones through each businesswhile maximizing corporate value.
The real estate business has great social significance with a mission of enriching people’s daily lives by formingbases where people work, live and interact, as well as providing related services. In our redevelopment businesscentered on office buildings and condominiums, which is our main development approach, we have promoted
urban development that contributes to solving issues facing the community. For example, in areas with highdisaster risks, such as an area where wooden houses are densely built up, we integrate those houses into a robust
fire-resistant building to greatly improve local disaster preparedness. In addition, by promoting projects jointlywith landowners, we create hubs for community building and revitalization.
We have identified “Disaster Resistant,” “Environmentally Friendly,” “Together with the Community” and“People Friendly” as our four material issues and have been practicing “Sustainability Management” offering
sustainable social assets for future generations.
For sustainability initiatives, please refer to the Company website and Integrated Report.
[Supplementary Principle 4.1.1] Disclosure of Scope of Delegation to Management
The following matters shall be resolved by the Board of Directors:(1) Matters prescribed in the Companies Act and other laws and regulations(2) Matters prescribed in the articles of incorporation(3) Matters delegated by a resolution of the general meeting of shareholders(4) Other important management matters
The following matters shall be reported to the Board of Directors:(1) Status of execution of business and other matters prescribed in the Companies Act and other laws andregulations(2) Other matters deemed necessary by the Board of Directors[Principle 4.9] Independence Standards and Qualification for Independent Outside Directors
The Company appoints outside directors who will be independent officers based on the requirements for outside
directors prescribed in the Companies Act and the independence criteria set by the Tokyo Stock Exchange.
[Supplementary Principle 4.11.1] View on the Balance between Knowledge, Experience and Skills among theBoard of Directors, as well as on Diversity and Size
The policy regarding the Board of Directors is to prioritize that the Board as a whole has knowledge, experienceand skills necessary for corporate management, and to maintain the appropriate balance, diversity and size toallow prompt decision-making.
As stated in “I. 1. Basic Views,” we believe that the management of the Company should be carried out bypeople mainly from within the Company. Therefore, the Board of Directors is comprised of six directors from-4-within the Company who are in charge of business execution as they are deeply familiar with the significance ofalways looking resolutely forward and continuing to invest for sustainable growth, and three outside directors
with experience as a chairman, a president or other management executives, who have superior character andinsight and understand the Company’s management principles.
The abilities expected of each director (skill matrix) are described in the Notice of Convocation of Ordinary
General Meeting of Shareholders.
[Supplementary Principle 4.11.2] Disclosure of Concurrent Positions of Officers
Significant concurrent positions, etc. are described in the Notice of Convocation of the Ordinary General
Meeting of Shareholders.
[Supplementary Principle 4.11.3] Evaluation of Effectiveness of the Board of Directors
Every year, the Company analyzes and evaluates the effectiveness of the Board of Directors to further improve
its functions.
A survey to all of our directors and corporate auditors for evaluating the composition, operations, deliberations,and other aspects of the Board of Directors, showed improvements compared to the last survey with highevaluation. Based on this result, at the meeting of the Board of Directors held on March 28, 2024, analysis andevaluation of the structure and the operational status of the Board of Directors were performed, and it was
confirmed that the effectiveness of the Board of Directors was secured appropriately.
[Supplementary Principle 4.14.2] Policy for Training Officers
The Company periodically briefs outside directors and outside corporate auditors on the industry to which theCompany belongs, the Company’s history, business overview, financial information, strategies, organizations,etc. and offers all officers, including outside directors and outside corporate auditors, opportunities for gaining
information necessary for them to fulfill their roles and responsibilities.
[Principle 5.1] Policy for Constructive Dialogue with Shareholders
The Company strives to give an account of the Company’s corporate management and business activities throughgeneral meetings of shareholders, financial results briefing sessions, individual meetings, and other opportunities
for communication with shareholders and investors. If a shareholder requests a dialogue, the Company’s policy
is that the Investor Relations & ESG Section will respond to such request appropriately under the supervision of
the responsible director, etc. depending on the objective of the dialogue, the method of communication, thenumber of shares held, the attributes, etc.
We hold more than 100 individual meetings each year with both domestic and foreign institutional investors
to exchange views mainly on growth strategies, shareholder returns, capital efficiency, takeover defense
measures, reduction of strategic shareholdings, and decarbonization initiatives.
Regarding dialogues with shareholders, we exercise due care concerning the handling of insider information,and share the contents of the dialogues, as necessary, at important meetings such as meetings of the Executive
Committee attended by directors and executive officers in order to utilize them for the formulation ofmanagement plans and medium- to long-term outlook, etc.
[Principle 5.2] Establishing and Disclosing Business Strategies and Business Plans
In our mainstay real estate leasing and sales businesses, the process takes a minimum of two to three years fromacquisition of land to completion of buildings and making a profit, and many large-scale development projects
such as redevelopment projects require five years or more. We create three-year medium-term management plansinstead of single fiscal-year plans as it may undermine the most important perspective of the real estate business,
which is to maximize revenues by optimizing the value of the land we acquire. With top priority placed onachieving the objectives of the medium-term management plans we have formulated every three years, we haveincreased our corporate value as a result of the steady implementation of the plans. We have executed eight
management plans, and have achieved increases in ordinary profit in 24 fiscal years, excluding the three fiscal
years under the global financial crisis and the COVID-19 pandemic.
In FY2023, the second year of the Ninth Management Plan, ordinary profit achieved a record high for the third
consecutive year, while profit attributable to owners of parent achieved a record high for the eleventh consecutive
year. The Company is making steady progress towards achieving its target for the cumulative three-year periodof the medium-term management plan.
[Action to Implement Management that is Conscious of Cost of Capital and Stock Price] (Disclosed in English)
In FY2023, we achieved high capital efficiency with ROE of 9.2%, well above the cost of capital. Going forward,-5-

in order to implement management that is conscious of cost of capital and stock price, we will continue tomaintain ROE that exceeds the cost of capital while balancing financial stability, such as the shareholders’ equity
ratio, with enhanced profitability.
Please refer to the Company website for “Proactive Revision of Management Strategy for Sustainable Growth,”
released on May 9, 2024.
Japanese: https://www.sumitomo-rd.co.jp/uploads/release_20240509_1.pdf
English: https://english.sumitomo-rd.co.jp/ir/management_plan
2. Capital Structure
Foreign Shareholding Ratio

More than 20% and less than 30%[Status of Major Shareholders] [Updated]
Number of
Shares Held(thousand)
61,23723,304
10,94410,000
9,550
8,367
8,188
8,090
7,500
7,244

Name/Company Name
The Master Trust Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account)
Custody Bank of Japan, Ltd. (Trust account 4)
Sumitomo Mitsui Banking Corporation
Taisei Corporation
Daikin Industries, Ltd.
SSBTC CLIENT OMNIBUS ACCOUNT
Obayashi Corporation
Shimizu Corporation
Maeda Corporation
Controlling Shareholder (except for Parent
Company)
Parent Company

Percentage
(%)
12.92
4.92
2.31
2.11
2.02
1.77
1.73
1.71
1.58
1.53

―
None

Supplementary Explanation [Updated]
The status of major shareholders is as of March 31, 2024.

Percentage of shares held has been calculated by excluding treasury stock.

While the Large Shareholding Report (dated November 7, 2023) was submitted by Sumitomo Mitsui Trust Bank,
Limited and its joint holder, this is not included in the status of major shareholders above because it was notpossible for the Company to confirm the actual number of shares as of the end of FY2023.
3. Corporate Attributes
Listed Stock Market and Market Section
Fiscal Year-End
Type of Business
Number of Employees (consolidated) as of the Endof the Previous Fiscal Year
Revenues (consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of the Endof the Previous Fiscal Year

Prime Market, Tokyo Stock Exchange
MarchReal Estate
More than 1,000
More than ¥100 billion and Less than ¥1 trillion
More than 10 and Less than 50

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder—-6-5. Other Special Circumstances which may have Material Impact on Corporate Governance—
II. Business Management Organization and Other Corporate Governance Systems regarding Decisionmaking, Execution of Business, and Oversight in Management
1. Organizational Composition and Operations
Organization Form
A Company with the Board of Corporate Auditors[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office Stipulated in Articles ofIncorporation
Chairperson of the Board
Number of Directors
Appointment of Outside Directors
Number of Outside Directors
Number of Independent Directors

12
2 years
Chairman of the Board
9
Appointed
33Outside Directors’ Relationship with the Company (1) [Updated]

Name

Attribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

Nobumasa Kemori
From another company△
Chiyono Terada
From another company△
Hakaru Tamura
Others* Categories for “Relationship with the Company”“○” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past“●” when a close relative of the director presently falls or has recently fallen under the category;“▲” when a close relative of the director fell under the category in the pasta. An executive officer of the Company or its subsidiaries
b. An executive officer or a non-executive director of a parent company of the Company
c. An executive officer of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive officer thereof
e. Major client or supplier of the Company or an executive officer thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as a director/corporate auditor
g. Major shareholder of the Company (or an executive officer of said major shareholder if the shareholder is alegal entity)h. An executive officer of a client or supplier company of the Company (which does not correspond to any of d,e, or f) (the director himself/herself only)
i. An executive officer of a company, between which and the Company outside directors/corporate auditors aremutually appointed (the director himself/herself only)
j. An executive officer of a company or organization that receives a donation from the Company (the director
himself/herself only)
k. Others-7-Outside Directors’ Relationship with the Company (2) [Updated]
Name

Nobumasa Kemori

Chiyono Terada

Hakaru Tamura

Independent
Director○○

Supplementary Explanation of
the Relationship
Mr. Kemori served as Director,
Chairman of the Company’sbusiness partner Sumitomo
Metal Mining Co., Ltd. until
June 2017. However, since thetransaction amount between
said company and theCompany in the most recent
fiscal year was small,accounting for less than 1% ofsales for both companies, theCompany deems there is no
impact on independence.
Ms. Terada served as President
and CEO of the Company’sbusiness partner Art Moving
Company Co., Ltd. until
December 2019. However,since the transaction amountbetween said company and theCompany in the most recent
fiscal year was small,accounting for less than 1% ofsales for both companies, theCompany deems there is no
impact on independence.
Mr. Tamura has provided
advice to the Company
regarding compliance mattersrelated to the constructionindustry from an independent
standpoint as a part-timeadvisor, and the Company
deems him to be suitable as anindependent officer.

○-8-

Reasons of Appointment
Mr. Kemori had served as
President and Chairman of
Sumitomo Metal Mining Co.,
Ltd., and he has extensive
knowledge of the mining
industry from a long-term
perspective and overseas
business as a manager. The
Company deems him to besuitable as an outside director.

Ms. Terada founded Art
Hikkoshi Center and had
served as its President andChairperson, etc., and she has
extensive knowledge and wide
discernment as a manager. The
Company deems her to besuitable as an outside director.

Mr. Tamura has served as
Director General of the Land
and Construction Industry
Bureau of the Ministry ofLand, Infrastructure, Transport
and Tourism, as Director
General of Secretariat for
Promotion of Regional
Revitalization of the Cabinet
Office, etc. and he has
extensive experience relating toadministrative andorganizational management aswell as a wealth of knowledge
and wide discernment
regarding real estate andconstruction administration. In
addition, as a part-time advisorof the Company, he has
provided pertinent advice
regarding compliance mattersrelated to the constructionindustry, and the Company
deems him to be suitable as an
outside director.

Voluntary Establishment of Committee(s)Corresponding to Nomination Committee or
Compensation Committee

None[Corporate Auditors]
Establishment of Board of Corporate Auditors
Maximum Number of Corporate Auditors
Stipulated in Articles of Incorporation
Number of Corporate Auditors

Established
N/A
4

Cooperation among Corporate Auditors, Independent Auditors and Internal Audit Department
In addition to reporting the audit results to the Corporate Auditors and the Independent Auditors, the Internal
Audit Department exchanges opinions with them as appropriate to enhance and improve the efficiency of audits.
Appointment of Outside Corporate Auditors
Number of Outside Corporate Auditors
Number of Independent Corporate Auditors

Appointed
22Outside Corporate Auditors’ Relationship with the Company (1)NameAttribute

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

Takashi Sakai
From another company△
Naoko Hasegawa
From another company △* Categories for “Relationship with the Company”“○” when the auditor presently falls or has recently fallen under the category;“△” when the auditor fell under the category in the past“●” when a close relative of the auditor presently falls or has recently fallen under the category;“▲” when a close relative of the auditor fell under the category in the pasta. An executive officer of the Company or its subsidiaryb. Non-executive director or accounting advisor of the Company or its subsidiaryc. An executive officer or non-executive director of a parent of the Company
d. Corporate auditor of a parent of the Company
e. An executive officer of a fellow subsidiary company of the Company
f. A party whose major client or supplier is the Company or an executive officer thereof
g. Major client or supplier of the Company or an executive officer thereofh. Consultant, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as a corporate auditor
i. Major shareholder of the Company (or an executive officer of said major shareholder if the shareholder is alegal entity)
j. An executive officer of a client or supplier company of the Company (which does not correspond to any off, g, or h) (the corporate auditor himself/herself only)
k. An executive officer of a company, between which and the Company outside directors/corporate auditors aremutually appointed (the corporate auditor himself/herself only)l. An executive officer of a company or organization that receives a donation from the Company (the corporate
auditor himself/herself only)
m. Others

Outside Corporate Auditors’ Relationship with the Company (2)

-9-

Name

Takashi Sakai

Naoko Hasegawa

Independent
Auditor○○Supplementary Explanation of
the RelationshipMr. Sakai served as
Representative Director,
Executive Vice-President of theCompany’s business partner
Osaka Gas Co., Ltd. until
March 2013. However, since
the transaction amount between
said company and theCompany in the most recent
fiscal year was small,accounting for less than 1% ofsales for both companies, theCompany deems there is no
impact on independence.
Ms. Hasegawa worked for theCompany’s subsidiary
Sumitomo Fudosan Fitness
Co., Ltd. (currently Sumitomo
Fudosan Esforta Co., Ltd.)
from April 1987 to October
2002. However, since morethan 20 years have passed since
she resigned from said
company and she has not been
involved in execution ofbusiness of said company after
her resignation, the Company
deems there is no impact on
independence.

[Independent Directors/Corporate Auditors]
Number of Independent Directors/Corporate
Auditors

Reasons of Appointment
Mr. Sakai has served as
Executive Vice-President of
Osaka Gas Co., Ltd. andPresident of Honshu-Shikoku
Bridge Expressway Company
Limited, and he has extensive
knowledge and wide
discernment as a manager. The
Company deems him to besuitable as an outside corporate
auditor.

Ms. Hasegawa has served as
Executive Officer and Chief
Business Ethics Officer of The
Prudential Life Insurance
Company, Ltd. and she has
extensive experience and wide
discernment in corporate
management and corporate
ethics. The Company deems
her to be suitable as an outside
corporate auditor.

5

Matters Relating to Independent Directors/Corporate Auditors
All independent officers qualify as independent officers and are designated as independent officers.
[Incentives]
Incentive Policies for Directors

Performance-based Compensation

Supplementary Explanation
At the Ordinary General Meeting of Shareholders held on June 29, 2004, a resolution was passed to set the total
annual compensation for all directors at just 1% of consolidated ordinary profit for the previous consolidated
fiscal year. On April 1, 2020, the Company introduced an executive officer system, which enables theappointment of officers comparable to directors necessary for business expansion, with the aim of the further
broadening the scope of business and enhancing employee morale. Accordingly, with the agreement of all
directors, the compensation of executive officers is also to be paid from the aforementioned total amount ofcompensation for directors.

- 10 -

Recipients of Stock Options
Supplementary Explanation―[Director Compensation]
Disclosure of Individual Directors’ Compensation

Selected Directors

Supplementary Explanation [Updated]
Compensation for Board of Directors and Board of Corporate Auditors in FY2023 was as follows:(1) Compensation etc. for Each Category of Officers
Amount Paid to Each Director and Executive Officer
Amount by Type of Compensation
Number of(Million Yen)
Amount Paid
Category
Officers Eligible(Million Yen)
Basic
Stock
Retirement(Persons)
Bonus
Compensation Options
BenefitDirectors(excluding Outside
761
761
―
―
―
7
Directors)
Executive Officers
633
633
―
―
―
14
Outside Directors
66
66
―
―
―
3
Total
1,461
1,461
―
―
―
23
Note: Whereas the total annual amount of compensation for directors including outside directors for FY2023 is
fixed at 2,337 million yen, the full amount has not been paid to the individual directors and executive
officers in the same fiscal year, and 876 million yen, the difference from the above-mentioned amount
paid, has been retained as provision for future use such as their retirement benefits and supplementationof declines in their compensation due to future downturns in business performance, etc. Regarding theretained amount, the timing of payment and the amount for individual officers cannot be determined, andthus, the retained amount will become subject to calculation of compensation etc. of individual officers
upon payment in the future or upon confirmation of future payment.
Total Amount of Compensation etc. for Each Category of Officers and Number of Officers Eligible
Amount by Type of Compensation
Total
Number of(Million Yen)
Category
Compensation
Officers Eligible
Basic
Stock
Retirement(Million Yen)
(Persons)
Bonus
Compensation Options
BenefitDirectors(excluding Outside
2,271
2,271
―
―
―
7
Directors)
Corporate Auditors(excluding Outside
34
34
―
―
―
2
Corporate
Auditors)
OutsideDirectors/Outside
87
87
―
―
―
6
Corporate Auditors
Total
2,392
2,392
―
―
―
15
Notes: 1. With the agreement of all directors, a portion of the amount of directors’ compensation has been
allocated to the 14 executive officers.
2. The breakdown of total amount of compensation etc. for outside directors and outside corporate
auditors is 66 million yen for outside directors and 21 million yen for outside corporate auditors.

- 11 -

(2) Total Amount of Consolidated Compensation of Persons with Total Consolidated Compensation of 100
Million Yen or MoreName

Category

Kenichi
OnoderaDirector

Kojun
NishimaDirector

MasatoKobayashi

Director

Yoshiyuki
Odai

Director

Companysubmitting
reportCompanysubmitting
reportCompanysubmitting
reportCompanysubmitting
reportAmount by Type of Compensation(Million Yen)
Basic
Stock
Retirement
Bonus
Compensation Options
Benefit

Total
Compensation(Million Yen)

168

―

―

―

168

168

―

―

―

168

138

―

―

―

138

114

―

―

―

114

Policy on Determining Compensation Amounts andCalculation Methods

Established

Disclosure of Policy on Determining Compensation Amounts and Calculation Methods
The policy for the determination of the content of compensation, etc. for individual directors, etc. (hereinafterreferred to as the “determination policy”) is established by resolution of the Board of Directors. Under thedetermination policy, compensation for each director, etc., consists only of fixed compensation, and the specificcontent (payment amount, timing of payment, payment method, etc.) of the compensation for individual directors
is determined by agreement between the Chairman of the Board and Representative Directors, based on a
resolution of authorization by the Board of Directors. When making this agreement, each director’s duties andlevel of contribution to performance are considered. Whereas the total annual amount of directors’ compensationis set at 1% of ordinary profit for the previous consolidated fiscal year, the full amount is not paid to the individual
directors, etc., in the current fiscal year, and part of directors’ compensation is retained without fixing the amountper director, etc., for future use as retirement benefits for directors, etc., and supplementation of declines in thecompensation of directors, etc., due to downturns in business performance, etc.
[Supporting System for Outside Directors (Outside Corporate Auditors)]
The Corporate Planning Department supports outside directors and outside corporate auditors to perform theirroles.
2. Matters on Functions of Business Execution, Auditing and Oversight, Nomination, Compensation
Determination, etc. (Overview of Current Corporate Governance System) [Updated](1) Corporate Governance System
・Role and Structure of the Board of Directors
The Board of Directors promotes the sustainable growth of the Company and the enhancement of corporate
value over the medium- to long-term, improves profitability and business efficiency, and prevents fraud before
it occurs. In order to do so, it is responsible for deliberating and deciding important matters for the Company
such as basic management policy and management strategy, as well as supervising the execution of duties by
each director and executive officer.
The maximum number of directors in the Board stipulated in the Articles of Incorporation is 12. The Boardof Directors is comprised of six directors from within the Company who are in charge of business execution as
they are deeply familiar with the significance of always looking resolutely forward and continuing to invest forsustainable growth, and three outside directors with experience as a chairman, a president or other management
executives, who have superior character and insight and understand the Company’s management principles.

- 12 -

・Executive Officer System
Due to the limited number of directors, we have introduced an executive officer system comparable withdirectors so that we can appoint officers necessary for business expansion, and we have appointed 15 executive
officers who do not concurrently serve as directors. Compensation for executive officers who are non-concurrent
directors is not an employee salary, but is to be paid from the total compensation for directors, which is clearlybased on the Company’s performance set at 1% of consolidated ordinary profit for the previous fiscal year,
because they are considered to be comparable with directors.
・Role and Structure of the Board of Corporate Auditors
Corporate auditors are responsible to supervise whether directors are performing their duties properly by using
the powerful authority endorsed by law.
The Board of Corporate Auditors consists of four corporate auditors, half of whom are the two outside
corporate auditors.
・Cooperation among Internal Audit Department, Independent Auditor, and Corporate Auditors
We have established the Internal Audit Department to check the business execution status of each Departmentof the Group and the operational status of internal controls, to prevent fraud and errors, and to make proposals
for operational improvement. The Internal Audit Department reports the results of its internal audits to, andexchanges views as appropriate with, corporate auditors and the independent auditor in an effort to forge closer
collaboration between the three parties and increase the quality and efficiency of individual audits.
(2) Initiatives to Strengthen Corporate Governance‧Steps Taken to Strengthen Corporate Governance
June 2002 Appointed two outside corporate auditors, making half of the four corporate auditors outside
members
April 2004 Reformed the management system, reducing the number of directors from 23 to 12
June 2004 Introduced a fully performance-based compensation system for officers
Abolished the retirement benefit and bonus system for officers
June 2015 Appointed two outside directors
Established a Committee of Outside Directors and Auditors and began holding briefings for outside
directors on a regular basis to strengthen the supervision function of outside directors and outside
corporate auditors
April 2020 Introduced an executive officer system
June 2020 Appointed one female officer (outside corporate auditor)
June 2023 Increased the number of outside directors to three
Appointed one female director
・Roles of Outside Directors and Outside Corporate Auditors
As part of its initiatives to strengthen corporate governance, the Company appointed two outside corporate
auditors in 2002 and two outside directors in 2015. The number of outside directors has been increased to three,including one female, in 2023.
Corporate auditor is a system that has taken root in Japan for a long time. Corporate auditors use the strong
investigative power granted by the law to audit whether the directors are conducting their duties appropriately.
Although full-time corporate auditors from within the Company are familiar with the Company’s internal affairs
and have excellent information-gathering skills, they might become somewhat lenient, albeit unconsciously,
when it comes to auditing their colleagues. Therefore, the Company ensures that at least half of the corporate
auditors are outside members to add an objective perspective and thereby ensure the effectiveness of audits.
Likewise, it is undeniable that the Board of Directors may become narrow-minded if it consists only of people
from within the Company, and it is possible that the Board may find itself left behind by the changes in the world.
Therefore, the Company has appointed outside directors who have excellent character and insight, who
understand its management philosophy, and who have experience as a chairman, a president or othermanagement executives, in order to have them advise the management team and monitor the officers by utilizing
their wide range of knowledge and insight based on their experience in corporate management.
・Efforts to Strengthen the Supervision Function
The Company has three outside directors and four corporate auditors for a total of seven persons, which accounts
for over half of the 13 attendees of the Board of Directors meeting, responsible for the management supervision- 13 -

function. In order to ensure that outside directors and outside corporate auditors can fully perform their roles, in
FY2023 the Company (i) held eight briefings for outside directors in which they were briefed on the agendas for
the Board of Directors meetings, the content of discussions at the Executive Committee, and other issues; and(ii) convened 13 meetings of the Board of Corporate Auditors wherein they received reports from theindependent auditor and the Internal Audit Department and conducted interviews about the operating situation
with the heads of each department.
In addition, (iii) we have established a Committee of Outside Directors and Auditors, comprised only of outside
directors and outside corporate auditors. The Committee of Outside Directors and Auditors directly hears fromeach officer about the execution status of the duties of which he or she is in charge and the issues they are awareof, as well as giving appropriate advice. In the event of a whistleblowing report on officers, outside corporate
auditors receive a report directly and share the information at the Committee of Outside Directors and Auditors.
Through these initiatives, we believe that the Company’s corporate governance has achieved a certain level ofquality.
3. Reasons for Adoption of Current Corporate Governance System
Under the Companies Act of Japan, companies may adopt one of the following three forms of organizational
structure: (i) a company with corporate auditors, in which the Board of Directors assumes executive
responsibility, while corporate auditors are in charge of the monitoring of management; (ii) a company with anominating committee, etc., wherein the Board of Directors is tasked with the management monitoring function
and the Board of Executive Officers assumes executive responsibility; and (iii) a company with an audit andsupervisory committee, in which the management monitoring function of corporate auditors is incorporated into
the functions of the Board of Directors. In this way, companies may select the optimum governance structurethat best suits their circumstances.
As stated in the Basic Views above, in order for the Company to continue growing, we believe that people
from within the Company who are deeply familiar with the significance of continuing to invest, always looking
resolutely forward even in difficult times, should be the core members of management and execution, and the
motivation of juniors, who will acquire experience in the real estate business and eventually join the management
team, should be maintained; hence we have a structure as a company with corporate auditors, where the Boardof Directors bears responsibility for execution, and corporate auditors take on the management supervisionfunction.
Six directors, from within the Company, who are deeply familiar with the business content, are in charge ofmanagement and execution, while three outside directors and four corporate auditors for a total of seven persons,which accounts for over half of the 13 attendees of the Board of Directors meeting, are responsible for the
management supervision function. In order to fully demonstrate the supervisory function, we have built a system
to accurately grasp the management condition and issues and to cooperate with each other as stated in “Matters
on Functions of Business Execution, Auditing and Oversight, Nomination, Compensation Determination, etc.
(Overview of Current Corporate Governance System)” above.
III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Meeting of Shareholders and Smooth Exercise of Voting Rights
Supplementary Explanations
Early Notification of General Meeting of
Notice of Convocation is sent out three weeks
Shareholders
before the General Meeting of Shareholders.
The exercise of voting rights via the Internet isAllowing Electronic Exercise of Voting Rights
available.
Participation in Electronic Voting Platform and
The Company has participated in the Electronic
Other Initiatives to Improve Environment for
Voting System Platform for institutional investors
Exercise of Voting Rights for Institutional Investors operated by ICJ, Inc.
Provision of (Summarized) Notice of Convocation
The Company creates English-language translation
in English
of Notice of Convocation.
Notice of Convocation is posted on the Company
Otherwebsite.

- 14 -

2. IR Activities
Supplementary Explanations
Regular Investor Briefings forAnalysts and Institutional
Investors
Posting of IR Materials on
WebsiteEstablishment of IR-related
Department (Manager)

Financial results briefings are held twice each fiscal
year for analysts and institutional investors, and thePresident and officers in charge, etc. present earnings
reports.
Financial results, securities reports, integrated reports
and other information for investors is posted on the
Company website.
(https://www.sumitomo-rd.co.jp/english/ir/)
The Company has established Investor Relations &ESG Section within Corporate Administration
Department.

Explanation byRepresentativeYes

3. Measures to Ensure Due Respect for Stakeholders

Stipulation of internal rules etc. forrespecting the position of stakeholders

Other

Supplementary Explanations
We recognize the importance of co-creating value based onrelationships of trust with diverse stakeholders in order toachieve our basic management policy of "aiming to address
various social issues through business while maximizing
corporate value." We have established a "Multi-Stakeholder
Policy" to respect the position of our stakeholders, including
giving back to our employees, making consideration for ourbusiness partners, and making efforts for our customers and thecommunities.
In particular, with regard to consideration for our business
partners, we have established "Declaration of Partnership
Building," which sets forth items that we focus on in order toform a new partnership through cooperation and mutual
prosperity with our business partners.
Regarding the Company’s management, the Company believes
that not only fully respecting the position of our stakeholders
such as our employees, customers, business partners, creditorsand shareholders, but also aiming at maximizing corporate value
while contributing to addressing various social issues including
the environment through each business, will lead to the interestsof all stakeholders.

IV. Matters related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
Basic Policy
Based on Sumitomo’s Business Philosophy and Management Philosophy, the Company and its subsidiaries(hereinafter referred to as the “Group”) practice “Sustainability Management” under the slogan of “Integrity
and Innovation” with fundamental mission of “Creating even better social assets for the next generation.”
In conducting its business activities, it follows the Code of Conduct established as guidelines to govern all its
officers and employees in order to maximize the Group’s corporate value.
Also, the Company considers that establishment of internal control systems is one of the importantmanagement issues concerning the improvement of corporate value and sustainable development of the Group
as a whole. With regard to the matters listed below, the Company shall establish systems in which roles andresponsibilities of the Group’s directors, executive officers and employees are clarified, and through operation
and appropriate review of such systems, the Company shall strive to establish appropriate systems forgovernance of the Group.

- 15 -

(1) Systems for ensuring that the execution of duties of the Group’s directors, etc. and employees complies withlaws and regulations and with the Articles of Incorporation
Based on laws and regulations as well as the Articles of Incorporation, the Company has established a general
meeting of shareholders, Board of Directors, corporate auditors, Board of Corporate Auditors, and independent
auditors, as an organization of the Company. In addition, multiple independent outside directors and outside
corporate auditors are appointed and entrusted with the business management supervision function. In order tostrengthen this function, we also (i) hold briefings for outside directors in which they are briefed on the agendas
for the Board of Directors meetings, the content of discussions at the Executive Committee, and other issues,
and we have (ii) established a Committee of Outside Directors and Auditors with only outside directors andoutside corporate auditors as members. The Committee of Outside Directors and Auditors conducts interviews
with individual directors, etc. and gives appropriate advice about the execution status of their duties, as well as
issues they recognize. In the event of a whistleblowing report toward directors, etc., outside corporate auditors
receive the report directly from the internal reporting desks that received the whistleblowing and share theinformation within the Committee of Outside Directors and Auditors.
The Board of Directors discusses and votes on necessary issues based on Board of Directors rules that comply
with laws and regulations. The representative directors and executive directors report on business to the Boardof Directors. In addition, important management issues are discussed at meetings of the Executive Committee
based on our organizational rules, and policies regarding such issues are determined. Furthermore, to enhanceand strengthen the Group’s internal control, the Company has established a Sustainability Committee based on
its Sustainability Committee rules. The Sustainability Committee is chaired by the Company’s president, andsupervises the Group. In order to ensure the effectiveness of this committee, the following three subordinate
organizations have been established: (i) BCP Council (chairman: Head of Corporate Planning Division,
administrative office: Administration Department), (ii) Internal Control Meeting (chairman: Head of Corporate
Planning Division, administrative office: Internal Audit Department), and (iii) Sustainability Promotion Council(chairman: Head of Corporate Planning Division, administrative office: Corporate Administration Department).
Duties to monitor the status of risk response in the Group are divided among the above organizations.
Further, the Internal Audit Department, which reports directly to the President, performs internal audits of theGroup, and several contacts for whistleblowing are established within and outside the Company in order to detectand prevent any misconduct or illegal acts.
(2) Systems for retention and management of information concerning the execution of duties of the Company’s
directors, etc.
Minutes of meetings of the Board of Directors of the Company, requests for managerial decision, and otherdocuments (including electromagnetic records) are prepared, and these documents are retained and managed by
the respective responsible departments in accordance with the Criteria for Document Retention Periods and theInformation Management Rules.
(3) Rules and other systems related to management of risks of losses of the Group
Among the risks of the Group, the risks associated with the business, such as investment risk and market risk,
are monitored and addressed by the respective departments and subsidiaries properly, and important issues are
discussed and determined at meetings of the Company’s Board of Directors and meetings of the Executive
Committee.
In order to address risks of large-scale disasters, etc. affecting business continuity of the Group, the BCP
Council, a subordinate organization of the Sustainability Committee, determines specific policies to manage
BCP measures for the Group and monitors the status of such management. The results are then reported to the
Sustainability Committee at the discretion of the Sustainability Committee chairman.
In addition, the Internal Control Meeting, a subordinate organization of the Sustainability Committee, monitors
compliance promotion status of the Group, and then reports the result to the Sustainability Committee at thediscretion of the Sustainability Committee chairman.
Furthermore, in order to address issues and risks greatly affecting corporate activities of the Group, including
environmental problems, climate change, and human capital problems, the Sustainability Promotion Council, asubordinate organization of the Sustainability Committee, determines the Group’s policies for implementing
environmental preservation activities, responding to climate change risks, and addressing human capital
problems, and monitors their status. The results are then reported to the Sustainability Committee at thediscretion of the Sustainability Committee chairman.
(4) Systems for ensuring that the execution of duties of the Group’s directors, etc. is performed efficiently- 16 -

The Group’s directors direct and supervise business operations of the respective departments and subsidiaries inaccordance with the Company’s management plan formulated by the Board of Directors. In addition, executive
officers appointed by the Board of Directors are entrusted with important duties, such as those of division heads,
general managers, and subsidiary presidents, and handle business execution.
Furthermore, to achieve the Company’s management plans, the Company establishes the headquarters andother necessary organizations based on its organizational rules, and determines the authorization of the person
in charge of each organization based on the Company’s approval criteria, and thereby ensures a system enabling
efficient execution of the Company’s business.
(5) Systems for ensuring appropriateness of business operations of the corporate group consisting of the Groupand systems related to reporting of matters concerning the execution of duties to the Company
For a subsidiary to make decisions for important management issues, we have established systems, under which
the issues are discussed and their policies are determined at meetings of the Company’s Board of Directors,
meetings of the Executive Committee, and other important meetings. In addition, the Company periodicallyreceives reports from its subsidiaries on the execution of duties, such as the status of business execution andfinancial conditions, and provides advice and guidance concerning business operations properly, depending on
the nature of the matter in question.
Moreover, the Company’s corporate auditors and the Company’s Internal Audit Department audit its
subsidiaries, as necessary.
(6) Matters related to employees, in cases where the Company’s corporate auditors request the appointment of
the employees to assist them with their duties
Persons with concurrent positions are appointed as administrative office staff for the Board of Corporate Auditors.
When the Company’s corporate auditors make a request for an employee to assist them with their auditing work,
the Company will actively cooperate. In this case, the employee assisting with the auditing work will receive
direct instructions from the Company’s corporate auditors and will not be subject to any command and order of
directors or other employees.
(7) Systems for reporting to the Company’s corporate auditors by the Group’s directors, etc. and employees orby persons who received reports from such persons and other systems related to reporting to the Company’s
corporate auditors
In cases where directors, etc. or other employees of the Company, directors, etc., corporate auditors, or
employees of a subsidiary, or persons who receive a report from the above persons report to the Company’s
corporate auditors or receive a request to report to the corporate auditors, those persons must report promptly. In
addition, the Internal Audit Department, which reports directly to the president, monitors that the reporter does
not suffer from any disadvantage as a result of reporting to the Company’s corporate auditors. If such case isidentified, it is reported to the Board of Corporate Auditors by the Internal Audit Department.
Moreover, the independent auditor and the Company’s Internal Audit Department shall report to the Company’s
corporate auditors concerning the audit status properly.
(8) Particulars related to policies concerning the procedures for advance payment or reimbursement of expenses
that arise with regard to the execution of duties of the Company’s corporate auditors or any other processingof expenses or obligations that arise with regard to the execution of duties
When, concerning the execution of duties, a corporate auditor of the Company requests advance payment or
reimbursement, etc. of expenses in accordance with the Companies Act, the Company shall process such
expenses or obligations, excluding any cases deemed unnecessary for the execution of duties of the said
corporate auditor.
(9) Other systems for ensuring that audits by the Company’s corporate auditors are performed effectively
Opportunities are ensured for the Company’s corporate auditors to attend meetings of the Board of Directors andother important meetings so that they can comprehend the Group’s important issues, etc., and state opinions, asnecessary.
2. Basic Views on Eliminating Anti-Social Forces and the Progress of Development
The Company shall take a resolute attitude toward antisocial forces that threaten social order and safety, andhave no relationships with such antisocial forces. Designating the Administration Department as a division in
charge of countermeasures against antisocial forces, the Company has appointed a person responsible for the- 17 -

prevention of unjust claims. Furthermore, the Company collects and manages information concerning antisocial
forces by collaborating with the police and other relevant institutions, and shares such information internallyalong with cautionary notices.
V. Other
1. Adoption of Takeover Defense Measures
Adoption of Takeover Defense Measures

AdoptedSupplementary Explanation [Updated]“Policy for Takeover Defense Measures Against Purchase Proposals That Undermine the Corporate Value of theCompany (Policy on Large-Scale Purchase of Shares of the Company)” was adopted based on the decision of
the meeting of its Board of Directors dated May 17, 2007. It was continued based on the resolution of the 74th
ordinary general meeting of shareholders held in June of the same year, and was renewed upon receiving
approval from shareholders at the 77th, the 80th, the 83rd, the 86th and the 89th ordinary general meetings ofshareholders.
Last year, there was progress in reviewing the approach to corporate acquisitions at the Ministry of Economy,
Trade and Industry, and the Financial Services Agency. In addition, the scale of our business and profitability
directly linked to corporate value have expanded and stabilized. Consequently, we have decided not to renew
the defense measures at the next update due in June 2025.
2. Other Matters Concerning the Corporate Governance System, etc.
The Company considers that it is important to ensure soundness and transparency of management by means oftimely and appropriate information disclosure.
In accordance with this basic policy, the Company has put in place systems that enable swift reporting to the
responsible department at the head office and implementation of appropriate information management measures,
if a material fact that may have an impact on investors’ investment decisions arises at the Company’s departments
or at subsidiaries.
Upon emergence of a material fact and reporting thereof, the responsible department, the Administration
Department, the Corporate Planning Department, and other relevant departments, discuss whether there is needfor timely disclosure, and if it is judged that disclosure is necessary, timely disclosure is performed without delay
following the necessary internal procedures. Subsequently, the disclosure materials are posted on the Company
website for thorough information disclosure.

- 18 -

General Meeting of Shareholders
Board ofCorporate Auditors

Board of Directors
AdviseBriefing for
Outside Directors

Executive
Committee

Share
information

Committee of Outside
Directors and Auditors

Share
information

Whistleblowing
reportCooperate

Independent
Auditors

President
Sustainability Committee
Chairman: President

BCP Council

Administrative Office:Administration Department

Control
Business risks

Control
Disaster risks

Sustainability Promotion
CouncilInternal Control
Meeting

Administrative Office:Corporate Administration
Department

Administrative Office:Internal Audit Department

Control

Control

Environment, Biodiversity Legal compliance
Compliance
Human rights, Diversity

Executive Department- 19 -

Host

Internal Audit
Department

Audit

Audit