ＴＯＳＥＩ ＧＲＯＵＰ ＥＳＧ ＲＥＰＯＲＴ ２０１９

ＣＯＮＴＥＮＴＳ⚫ Message from Executive Officer
in Charge of Promoting ESG

2⚫ Recap of Mid-term Plan
"Seamless Growth 2020"2⚫ Tosei Group’s ESG promotion system 3•••

The Tosei Group ESG Policy
ESG promotion system
Commitment to SDGs

⚫ Environment••••

Environmental Targets and Vision
Initiatives Through Business Activities
Environmental awareness-raising and education
Third-party evaluation⚫ Social•••

14

Our Idea of Corporate GovernanceCompliance
Risk Management
Timely and appropriate disclosure⚫ Corporate Data
1

9

For Our Customers
For Our Employees
Contributions to Local Communities⚫ Corporate Governance
•
•
•
•

4

18

Message from Executive Officer in Charge of Promoting ESG
Recently, ESG investment has been expanding worldwide, particularly amongmajor institutional investors. ESG investment refers to an investment method
in which consideration is given to important indicators of whether investment
target companies recognize three factors, namely, the environment, society
and government, as significant in terms of management and implement
corporate management (ESG management) accordingly. With companies
becoming increasingly expected and pressured to engage in ESG, the Tosei

Group has adopted “enhance Tosei’s brand value based on an awareness ofESG” as part of a fundamental policy to strengthen the business base under
Executive

its Mid-term Plan “Seamless Growth 2020,” and aims to step up ESG

Officer ininitiatives. We have always promoted enhancement of corporate governance

Charge ofand real estate revitalization and development based on an awareness of

Promoting ESG

reducing environmental impact as part of our CSR activities, and to realign andNoboru Hirano

further develop our activities to date with ESG management, the Groupestablished the Tosei Group ESG Policy and ESG Action Guidelines in January
2019 and developed a framework for their implementation.
From 2020, we will position the UN Sustainable Development Goals (SDGs) as

important indicators for the Tosei Group’s ESG management, determine therole to be played by the Group and material issues for realization of asustainable society and endeavor to practice ESG management to ensure that
the Group continues to be of value in the eyes of its various stakeholders.
Noboru Hirano

Recap of Mid-term Plan "Seamless Growth 2020"
We established our Mid-term Plan “Seamless Growth 2020” covering the three years from the fiscal
year ended November 30, 2018 to the fiscal year ending November 30, 2020, adopting “achieve
further growth in the existing businesses” and “establish new profit-making businesses” as growthstrategies while at the same time positioning “strengthen the business base” to support growth as
an important policy. "Enhancement of Tosei’s brand based on an awareness of ESG” means aiming
to achieve sustainable growth and contributing to society into the future by becoming a company
that inspires trust in all kinds of stakeholders through the incorporation of ESG considerations into
its management.

Growth Strategy

Achieve further growth in the existing five businesses
Establish new profit-making businesses in addition to
the existing five businesses
Strengthen the Business Base
Improve financial conditions
to support the expansion ofbusiness scale

Strengthen optimum
corporate governance

Increase employee
satisfaction, strengthenorganizational capabilities andimprove productivity

Enhancement of Tosei’s
brand based on anawareness of ESG
2

Tosei Group’s ESG promotion system
The Tosei Group ESG Policy
The Tosei Group has a mission of creating new value and inspiration in all aspects of real estate
as a global-minded group of seasoned professionals. It regards its commitment to theEnvironment, Society and Governance as a priority management challenge. It will seriously
address the social issues associated with real estate to contribute to society and achieve its
own continuous growth.

ESG promotion system■ESG Promotion Meeting

An ESG Promotion Meeting is held mainly to deliberateand determine ESG-related policies and action plans.
The meeting is made up of Executive Officers
determined by the Board of Directors and its
examination results are reported to the Board of
Directors and reflected in management plans andbusiness activities.
(Eight meetings were held during FY2019.)■ESG Project Teams
We establish ESG Projects Teams made up of members of each department as subordinate
organizations to the ESG Promotion Meeting and these teams implement action plans and makereports as and when necessary.

Commitment to SDGs
We have created links between the UN Sustainable Development
Goals (SDGs) and the Tosei Group ESG Policy and Action Guidelines.
In the future, we plan to select material issues for the Group to
focus on.

The Tosei Group ESG Action
Guidelines

Ｅ

Carry out business activities withenvironmental considerations

Take actions that increase thevalue of real estateＳ

Contribute to tenants, locals andcommunities through real estate
owned
Increase customer satisfaction
Increase employee satisfaction
Carry out business activities that
achieve sound growthG

Comply with laws and regulations
Disclose ESG information

3

Relationship with SDGs

Environment
Environmental Targets and Vision
Given pressing issues such as the changing attitudes towards environmental issues and reductionof greenhouse gas emissions, the Tosei Group takes its corporate responsibility as a real estatecompany seriously. To step up its environmental initiatives, the Group established the Tosei GroupEco Declaration in April 2019 and it conducts business activities based on Eco-Missions consistingof three action policies.
In order to achieve our slogan "Heart into the City", the Tosei Group declares its
Tosei Group
Eco
Declaration

intention to promote corporate activities that are friendly to people and theenvironment and to work to reduce burdens on the environment, while keeping true

to our philosophy "To create new value and inspiration in all aspects of real estate."

EcoMission■Mission 1■Mission 2■Mission 3

Promote environmental

Comply with environmental

Inform our activities topractice throughlaws, regulations and raising

stakeholder

business activities

of environmental awarenessStarting with the

We strive to minimize

We work to conserve theannouncement of “Ecoenvironmental burdens

environment by complying

Declaration” and “Ecoby introducing measureswith environmental laws andMission”, we will

to contribute to energy

regulations. We will also

promote open

conservation andconduct various measurescommunication with theresource saving in theaiming to increase Tosei groupsociety while providing

real-estate

employees environmental

information on ourrevitalization.

conservation awareness.

progress and results.

■Establishment of targets in the environmental area
The Group has set itself reduction targets in the three areas shown below to promote
environmental initiatives.
Targets for energy-saving andgreenhouse gas emission reductions

Water-saving
targets

Long-term
targets

Decrease energy consumption andgreenhouse gas emissions by 5%,
respectively, in terms of basic units infive years

Reduce water
consumption by
2.5% in five
years

Reduce waste
generation by
2.5% in five years

Short-termtargets

Decrease energy consumption andgreenhouse gas emissions by 1%,
respectively, in terms of basic units in
one year

Reduce water
consumption by
0.5% in one year

Reduce waste
generation by
0.5% in one year

Targetproperties

Targets for waste
generation
reductions

Fixed assets owned by the Company■Creation of sustainable value ～Three Value-Ups Code～In the product planning phase both in the case of new construction and renovation to add value,
we examine using eco-friendly equipment which suits property characteristics and we actively
adopt products that are eco-friendly in a variety of ways, for example, equipment that conservesenergy and saves resources. Especially when adding value to existing properties after acquisition,
the Group considers the adoption of specifications which will help conserve energy and savemoney and resources based on the “Three Value-Ups Code” for adding value across three
dimensions: “Security,” “Design” and “Ecofriendly.”4

Environment
Initiatives Through Business Activities
In the revitalization and development of real estate, The Tosei Group has been striving to reducethe burden on the global environment by actively introducing measures that contribute to energy
and resource savings.

■Installation of LED lighting in existing
office building
We are promoting the installation of LED lighting in our
portfolio properties to achieve the reduction target we
set in 2019.

Last year, we installed LED lighting in two

existing office properties, reducing electricity
consumption by 30% on average. Besides reducing
electricity consumption and costs, the installation work isalso expected to improve tenant satisfaction throughbetter lighting and easier maintenance.

収益オフィスの省エネ改修

Awajicho
Tosei building

Shinbashi frontia
building■Revitalization of existing properties as own-brand hotels
In the case of Tosei Hotel Cocone Ueno, which is the Group’s second own brand hotel, weconverted an office building that was standing completely empty into a hotel. In the first-floor
entrance, which is the public face of the hotel, we took out the first-floor ceiling and built a newstairwell leading to the reception on the second floor. We also created a roof terrace where
guests can relax.
In the case of Tosei Hotel & Seminar Makuhari, scheduled to open in May 2020, Tosei acquired

the business of operating an aging training facility. We then renovated the entire building to add
value and are currently in the process of turning it into a facility which meets corporate training
needs and the training and accommodation needs of other organizations. We will continue
making full use of existing properties in the future by creatively converting them into hotels.

BeforeAfterCreating a roof terrace on the roofTOSEI HOTEL COCONE UENO

BeforeAfter

Remodeling a cafeteria into a restaurant

BeforeAfter

TOSEI HOTEL & SEMINAR
MAKUHARI
5

Convert to rooms that can be accommodated in groups

Environment■ Promotion of greening
We are actively incorporating green spaces into existing properties and newly developed
properties as part of our commitment to reducing the environmental impact of our activities. As ofthe end of November 2019, the total area we had “greened,” including the rooftops and walls of
office buildings and the sites of condominiums, was 3,673m2. We also plan to incorporate green

spaces into commercial facilities and hotels currently under development.

ＴＨＥ PALMS CHOFU MANOR GARDENTOSEI HOTEL COCONEUENOOKACHIMACHI■Development of net-zero energy housing (ZEH)
Tosei Urban Home Corporation is registered under the “Registration
System of ZEH Builder” launched by METI and aims to increase theZEH share of the properties it supplies annually to 60% by 2020.

The number of ZEH buildings supplied as of the end of November
2019 was 16 out of 33, which represents a share of 48%. We aim tocontinue contributing to the reduction of CO2 emissions through the
spread of ZEH in the future.

ＴＨＥ PALMS COURTKAMAKURASHIROMEGURI

Main
specifications
and equipment
Solar power

Energy meter

High performance insulation■Revitalization of idle company-owned apartments
With population decreasing due to the country’s declining birthrate
and aging society, it is increasingly critical to take appropriate
measures to deal with the issue of abandoned houses and offices.
Tosei therefore undertakes to purchase idle company-owned
apartments. By making upgrades to a whole building or restyling abuilding for use as condominiums, it seeks to use existing buildings aseffectively as possible.

Tsuzuki Ward, Yokohama■Participation in program to promote creation of quake-resistantand energy-efficient real estate
In 2013, Tosei Asset Advisors was selected as a manager of the first real estate fund operated
by the general incorporated association Real Estate Sustainability & Energy-Efficiency
Diffusion (Re-Seed) in a program to promote creation of quake-resistant and energy-efficient
real estate launched by the Ministry of Land, Infrastructure, Transport and Tourism and theMinistry of the Environment. Tosei Asset Advisors was selected as a manager of the second realestate fund in 2014, and again in 2017.

6

Environment
Environmental awareness-raising and education
Each employee of the Tosei Group strives to improve awareness of environmental conservation,and pursues environmental initiatives in his/her daily life. These initiatives are aimed at reducing
the burden on the environment and developing a sustainable society. The project team, which
consists of members selected from each department, plays the leading role in internal eco-friendly
activities.

■Rooftop Greening
In May 2010, the Tosei Group introduced greening to the rooftop
of its head office, Toranomon Tosei Building. It did so mainly tobolster the environmental awareness of employees and toencourage communication, as well as to help alleviate the heatisland phenomenon. The Group strives to raise employees'
environmental awareness through events in which employees cantake part, such as raising seasonal flowers and vegetables andholding the Harvest Festival, for example.

■Participation in Events
Volunteers for cleaning activities
The Group has participated in community volunteer activities
since 2009. This year, it took part in the Nishinagisa-Hatsu
Tokyo-Satoumi-Aid, a clean-up event held at Kasai Rinkai Park

to remove marine debris. It also checked the types of debris
collected and measured the total volume to contribute tofuture surveys for identifying the cause of marine debris.
Going forward, the Company will continue to promote
environmental conservation activities.

■Adoption of new eco-friendly materials for employees’
business cards
The Group changed the material of business cards used by the Group’s employees to LIMEX. This
material is eco-friendly because almost no water or trees are used. The Group aims to reduce theamount of paper used and raise environmental awareness among employees by replacing businesscards, the use of which reaches 500 pieces per person every year, with those made of eco-friendly
materials.

■ In-house resource and energy conservation initiatives
We are gradually making meeting materials, approval documents and other documents paperlessthrough the development of our IT environment. We also continue to take slow and steady actions,such as using fans and halogen heaters rather than relying entirely on air-conditioning systems.
We believe that continuous initiatives throughout the year are important to save resources andconserve energy and intend to continue raising awareness and educating employees about
environmentally-friendly activities they can do in their daily lives.

７

Environment
Third-party evaluation
The Tosei Group actively acquires third-party reviews of its environmental performance data both asa benchmark for implementing and evaluating initiatives based on its ESG Policy and ESG Action
Guidelines and in order to improve the reliability of the real estate it handles.

■Participation in GRESB Real Estate Assessment
Tosei Corporation participated in the GRESB Real Estate Assessment for the
first time in 2019 and received a “1 Star” in the GRESB Rating, which is arelative evaluation based on the overall GRESB Score.
About the GRESB Real Estate Assessment…
GRESB is an annual benchmark which measures environmental, social, and governance (“ESG”)
considerations in real assets including real estate and infrastructure held and managed by realestate companies and funds．It was established primarily by major European pension funds
groups based on the Principles for Responsible Investment (PRI) in 2009. A total of 964
entities, including real estate companies, REITs and funds, globally participated in the 2019GRESB Real Estate Ratings.

■「Acquisition of A rank certification of the Certification
for CASBEE for Real Estate
Toranomon Tosei Building, an office building developed by Tosei, received
an A rank certification of the Certification for CASBEE for Real Estate,
which comprehensively assesses and rates the environmental
performance of buildings.
About Certification for CASBEE for Real Estate
Certification for CASBEE for Real Estate is a system in which a third
party examines and certifies assessment results prepared inaccordance with CASBEE for Real Estate (formerly CASBEE for Market
Promotion), an evaluation system that ranks buildings and structures interms of their environmental performance. The system assesses
buildings across a broad range of considerations including their energy

Toranomon Tosei
Building

and resource efficiency, recycling activity and environmental load aswell as considerations for protecting biodiversity.

■Utilization of environmentally rated loan programs
When raising funds for the acquisition of properties, we utilize loans programs for companies thatare practicing environmentally conscious management offered by various banks. We havebenefited from favorable interest rates on a total of seven occasions since 2010 under theenvironmentally rated loan programs of Mizuho Bank and the Yachiyo Bank as well as the Hokuriku

Bank’s Eco-Leadmaster environmentally rated loan program. Loan program environmental ratingassessments rated us highly for management that promotes environmentally conscious businessactivities and ESG initiatives across the entire Group.

8

Environment■Acquisition of environmental certifications for real estate at
Tosei Asset Advisers
Tosei Asset Advisors, Inc. is working to acquire a range of certifications through initiatives such as
the installation of environmentally-friendly equipment such as LED lighting and energy monitoringat office buildings for which it provides asset management services and the proposal andconclusion of green lease agreements (lease contracts which include articles on environmental

consideration).

・Acquisition of “4 Stars” in the GRESB Real Estate Assessment
OSJ Kinshicho TMK and OSJ NSY TMK, which are provided with asset
management services by Tosei Asset Advisors, Inc., received a “Green Star”
designation and a rating of “4 Stars.”・Acquisition of DBJ Green Building Certification

Office building in Sumida Ward

Office building in Yokohama City

About DBJ Green Building Certification
DBJ Green Building Certification is a certification system established by the Development Bankof Japan (DBJ) in April 2011 to act as a bridge between businesses and financial institutions
and investors through the evaluation of real estate with high environmental and social
awareness. The system supports ESG initiatives at existing buildings through comprehensive
evaluation, which includes consideration for the social requirements from various stakeholders
surrounding the properties in addition to their environmental performance.

・ Acquisition ofＢＥＬＳ
About “Building Energy-efficiency Labeling System”(BELS)
BELS is a system which evaluates energy conservation
performance of buildings through a third-party
evaluative organization and accredits them based on
OfficeOfficebuilding inbuilding inbuilding in

SumidaTaito Ward

Yokohama

the Guidelines on Indicating the Energy Consumption

OfficePerformance of Buildings established by the Ministryof Land, Infrastructure, Transport and Tourism.

Ward

9

City

SocialFor Our Customers
We are conscious of creating products that respond to social issues and needs as the times change.

■Creation of comfortable residences
In the detached house development business, the Group proposes residences that are comfortable
for all family members in response to increasingly diverse lifestyles, including the rise inhouseholds where both partners work. At certain houses in The Palms Court Kamakura Shiromeguri,
we have planned houses where all family members can easily take part in family chores, considering
the line of flow. In product planning, we focused attention on the views of women, who support the
lives of family members through family chores and child rearing. A project team consisting chiefly
of female employees is responsible for the project from planning to development to create more
comfortable houses.

Atrium living room

Island kitchen

Iron counter

Soil space with highstorage capacity

mama counterwood deck■Creation of Community Spaces in Condominiums
In new condominiums for sale and rental condominiums, we actively incorporate community

spaces that residents can use depending on the situation. At THE Palms Chofu Manor Garden, a
new condominium that sold out in 2019, we sought to create an environment where residents
with different lifestyles could live comfortably, with the Picnic Terrace, an area where children
can play and family members and other residents can gather, and the Relaxing Library, suitable
for studying and reading.

Relax Library

Afternoon Garden

Kid’s Room
10

Social■Barrier-Free Houses
THE Palms Court series of condominiums for sale includes barrier-free “Withstyle” homes for theelderly. These homes, Tosei applies a unique design code consisting of 10 items based on theconcept of a permanent residence, to create house designs suitable for any situation in a long life.
Features include the installation of a closet that can be converted into an elevator at low costshould an elevator become necessary in the future and wheelchair-accessible designs.

■Management of product quality
・Implementation of evaluations and inspections by third parties
For the THE Palms Yutenji Master Place, a newly constructedcondominium, Tosei implements evaluations and inspections throughthe Japan Constructive Inspect Association, a third party designatedby the Minister of Land, Infrastructure and Transport, as well as
inspections based on laws and regulations to provide safe andreliable housing to customers.

・ISO 9001 (quality management system)
Tosei is an ISO 9001-certified company for the planning, design, construction work
management and after-sales service (regular inspections) of condominiums, officebuildings, commercial buildings and detached houses, and engages in strict quality
management in compliance with ISO 9001. Tosei Community Co., Ltd., a subsidiary of
Tosei Corporation, is also an ISO 9001-certified entity that undertakes the planning andprovision of general management operations for condominiums, office buildings andrental condominiums.

May 2019
update・Efforts to pursue quality improvements in products in response tocustomer needs Meetings
As part of quality management, the Tosei Group is in the process of adopting more unique initiatives.
【Meetings for examining quality improvements】
In conjunction with the construction or renovation of new or existing office buildings andcondominiums, among other properties, Tosei conducts detailed checks on specifications and in-depth meetings with the attendance of three parties—the Company, design and construction
management companies, and construction companies. It seeks to strengthen collaboration among
concerned parties to provide better products while preventing the occurrence of issues.
[TOSEI-QC-10]
Tosei manages all processes related to the construction andmaintenance of new or existing office buildings or condominiums

through three parties—the Company, design and construction
management companies, and construction companies—based on Tosei's
unique quality control standards, TOSEI-QC-10. Tosei strives to provide
customers with safe and reliable products by conducting inspections
and particularly rechecking those items that customers cannot oversee.
【Feedback on customer requests for products】
Tosei is moving forward with efforts to plan and design products with better quality by internally
sharing feedback on complaints and requests raised by customers during after-sales inspections
and their straightforward opinions obtained from personal perspectives and resident
questionnaires.
11SocialFor Our Employees■Creation of happy, positive workplaces
We endeavor to create workplace environments that are based on respect for the diversity of theworkforce regardless of differences such as gender or age and where all employees can reach
their full potential.

・Whistleblowing system
Tosei operates a whistle-blowing system consisting of three Tosei Hotlines that can be accessedby all Group employees. We also have a contact point in the Human Resource Department toprevent harassment and deal even more quickly with any harassment that does arise.

・Circle activities
We subsidize circle activities to encourage communication among employees. A total of eight
circles, including cultural and sports circles, have been established to date, providing employeeswith a valuable opportunity to communicate with employees from departments or groupcompanies with whom they would normally not associate at work.

・Family days
We hold family days once a year to give children a better understanding of their parents’ job andworkplace. In 2019, a total of 20 families or 62 family members attended the family day andenjoyed activities such as swapping business cards, a stamp rally around the offices, and making
models of homes. The day also served as a social occasion for employees and their family
members to get to know each other.

■Human resource development training
The Tosei Group helps each employee enhance their skills and abilities through the implementationof human resource training programs and the adoption of systems that facilitate personal
development and qualification acquisition. To develop a globally-minded group of seasoned
professionals, as described in its corporate philosophy, the Group also provides externalmanagement school training aimed to develop the next generation of leaders as well as training for
employees according to occupational level.

The Real estatenotary training- Group training for new graduates- Training for instructors of new graduates- Training for mid-career hires- Training for newly assigned junior administrator (one year)- Training on management for managers- Training at business schools (one year)- Real estate notary training- Compliance training- Mental health training- ESG training■Supporting employees' work-life balance・Leave systems for every stage of life
We have developed various leave systems, such as maternity leave, childcare leave and nursing
care leave, to support employees when they have a child, raise young children, care for elderly
relatives or experience other changes in their lifestyles at the different stages of life.

・Health Committee
In the interests of health management, employees are required to undergo an annual medical
health checkup. The Health Committee, which comprises employees and partner industrial
physicians, reviews the general working environment, including the soundness of the officeenvironment and the status of medical checkups, on a monthly basis. The results of the reviews
are provided to employees as feedback.

12

Social・Mental health care
We survey all employees about their mental health and provide training related to mental healthcare under the guidance of partner industrial physicians. Moreover, the Group takes steps tomaintain the sound physical and mental health of its employees through initiatives such asoffering those engaged in overtime work that exceeds a certain level the interviews withindustrial physicians and other professionals. In addition, the Group provides its employees with aconsultation service for their sound mental health, working with external medical institutions. The
service allows the Group's employees as well as their families to informally consult with medical
professionals about mental health conditions either by phone or by e-mail.

・Employees’ health promotion program
Tosei endeavors to maintain and improve its employees’ health through regular medical healthcheckups. We also endeavor to further promote the early detection of disease and better healthamong employees aged 35 and over by paying their share of the cost of comprehensive medical

examinations. Every year, we offer a range of additional internal activities such as public healthnurse interviews, voluntary locomotive syndrome risk testing and a refresh program which includes
relaxing yoga to any employees who wish to participate.

・Encouraging employees to take annual paid leave
To create an environment that made it easier for employees to take annual paid leave, we
introduced the “Anniversary leave” system under which employees take one day’s annual paid
holiday on one date every year which they themselves fixed.

・Efforts to reduce overtime work
To curb employees’ long working hours, the Group is promoting initiatives to reduce overtime workthrough the adoption of no-overtime-work days, the prohibition of overtime work after 21:00 as a
general rule, and the recommendation of morning-oriented workstyles. The average number ofovertime hours decreased for a sixth consecutive fiscal year, reflecting efforts to improve businessefficiency.
＜Reference＞human resources data
FY2017FY2018FY2019Number of employees （Non-consolidated）

159

181

191

Men

111

128

137

Women

48

53

54

Pct. of females in
employees（％）

30.2

29.3

28.3

Pct. of female managers（％）

8.6

11.9

6.3

Number of new graduate hires

18

12

10

Number of mid-career hires

11

28

23

Length of service

5.8

5.5

5.8

Pct. of employees using childbirth andchildcare leave（％）

100

100

100

Pct. of employees returning to work afterchildcare leave％）

100

100

100

Pct. of employees using elderly parent caresingle-day leave（％）

0

0

0

40.3

44.4

45.6

Pct. of paid leave used（％）
13

SocialContributions to Local Communities■Volunteers for cleaning activities
The Group has participated in community volunteer activities since 2009. This year, it took part in
the Nishinagisa-Hatsu Tokyo-Satoumi-Aid, a clean-up event held at Kasai Rinkai Park to remove
marine debris. It also checked the types of debris collected and measured the total volume tocontribute to future surveys for identifying the cause of marine debris. Going forward, theCompany will continue to promote environmental conservation activities.

■The green fund fundraising activity
The activity aims to provide support for a range of programs, such as the maintenance of forests,
development of forestry volunteers and provision of forestry and environmental education forchildren.

■Collection boxes for plastic bottle caps
The activity aims to send vaccines to children in developing countries by using profits earned

from the sale of plastic bottle caps to recycling companies.

■Support activities for affected areas
・Continuation of activities for supporting areas affected by the Great East
Japan Earthquake
Since 2011, the Tosei Group has been engaged in activities for supporting areas affected by theGreat East Japan Earthquake. Its recent activities include the organization of dental seminars andpainting of rusted playground equipment at nursery centers in the affected areas, as well as
support for the opening of food stalls for a festival held at a temporary housing site. These
activities were carried out in cooperation with an NPO that is engaged in volunteer activities in
the affected areas.
We collected voluntary contributions from Group employees andothers in order to donate 28 Taiko drums to Naruse Mirai Junior HighSchool, which had just opened in Higashimatsushima. Elementary andjunior high schools in Higashimatsushima always used to give many
Taiko drumming performances. However, many drums were lost in thetsunami that hit the area. Thanks to the Taiko drums we donated, theschool is now able to give Taiko drumming performances at cultural
festivals and the school and local residents were very pleased with

Taiko drums

the gift.

・Donations through the Japanese Red Cross Society
In 2019, Tosei sent, via the Japanese Red Cross Society, a donation of 1 million yen plus money
collected from Group employees, to support those affected by Typhoons Faxai and Hagibis.
14

Corporate Governance
Our Idea of Corporate Governance
Our Group aspires to be a valuable contributor to all kinds of our
stakeholders in the society, including the shareholders, theemployees, the business partners and others, by promptly andappropriately responding to the changes in the businessenvironment and continuing operational activities which enable theGroup to achieve a sound growth. For this purpose, the Group has
placed the greatest importance on enhancement of corporate
governance, and in particular, “fully cultivating compliance mind,”“enhancing risk management” and “conducting timely disclosure” asthree key initiatives.
Furthermore, the Group is determined to make efforts in a unified manner, from the top
management down to each employee of the Group companies, led by the Board of Directors, todevelop an internal control system as required by the Companies Act and the Financial Instruments
and Exchange Act, as well as to set up a system which is credible to investors, as a financial
instruments business operator.
Three Important Items in Corporate Governance. Group-wide Promotion of three Committees
Compliance

Risk Management

Information Disclosure

We place compliance at the top of
our agenda and raise awareness ofit from top management to all
employees of the Group companies

Assuming every possible risk, we
prepare and practice emergency
responses under normal conditions
with a special focus on eliminating
relationships with anti-social
forces.

We practice disclosure andcommunication appropriately
and on a timely basis to all
stakeholders including
shareholders.

■Corporate Governance System※November、201915

Corporate
Governance３．コーポレート・ガバナンス
・Operation of the Meetings of Board of Directors
The Board of Directors is constituted by Seven directors, two of whom are outside directors.
Based on the regulations of the Board of Directors, the directors hold regular meetings every
month, and extraordinary meetings are held as necessary. As the highest management decisionmaking body, the Board of Directors makes resolutions on management policies and material
issues and also supervises the execution of duties by the directors.

・Executive Officer system
The Company has adopted the executive officer system in order to more clearly segregate themonitoring/supervision of the Company's business management, which is the duty andresponsibility of the directors, from the execution of the business, and has 10 Executive Officers
as of the end of November 2019. Executive Officers are elected by the Board of Directors, andthe Management Meeting, which is made up of the Executive Officers, discusses matters to beresolved at the board meetings in advance and holds consultations on the material issues to be
decided by the CEO.

・Nominating and Compensation Advisory Committee
The Company established the Nominating and Compensation Advisory Committee voluntarily as
a consultative body to the Board of Directors to ensure appropriateness and transparency insuch matters as the process of selecting candidates in connection with director election
proposals submitted to the general meeting of shareholders and resolutions of the Board of
Directors relating to allocation of remuneration, etc. to individual directors. The constituent
members of the committee include a representative director (one person), a full-time director(one person), outside director(s) (independent director(s), one person or more), and a full-time
audit & supervisory board member (outside audit & supervisory board member, one person). An
outside director who is a committee member will assume the office of the chair of committee.
The Board of Directors will continue to fulfill its mandate from the Company's shareholders andinvestors by respecting the recommendations of the committee to the maximum extent anddeveloping an appropriate governance system.

Three-way auditing (coordination of audits by corporate auditors,
internal audits, and audits by the accounting auditor)
Audits by corporate auditors
The Audit & Supervisory Board Members carry out an efficient and effective audit under anannual audit plan in cooperation with the accounting auditor and the Internal Auditing

Department. The full-time Audit and Supervisory Board Members regularly interview each fulltime Director and head of each department and check the status of business execution. They
also regularly exchange opinions with Independent Directors.
Internal audits
As a department directly controlled by the President, the Internal Auditing Department carries
out an audit of the entire Group under an annual plan and helps correct inadequacies byrecommending actions and conducting follow-up activities, including giving specific guidance.
Audits by the accounting auditor
The accounting auditor carries out an audit under an annual audit plan. It carries out not only afiscal year end audit but also quarterly reviews (accounting auditor: Shinsoh Audit Corporation).

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Corporate
Governance３．コーポレート・ガバナンス
Compliance
The Tosei Group puts top priority on compliance in management. Everyone in the Group from senior
executives to general staff was made aware of compliance.

■Compliance promotion system
・Risk Management and Compliance Committee
The Company established the Risk Management and Compliance Committee comprising the
Executive Officers in charge of each department, all department general managers as well as therisk management and compliance officers of each group company, as an organization to centrally
consider risk management and compliance across the Tosei Group. The Committee recognizes,
analyzes and assesses the risks of the Group as a whole, gathers information about specific risks
and discusses measures to address them and also holds consultations on the promotion ofcompliance. It raises awareness about compliance, implements a PDCA cycle for risk management
and strengthens monitoring in accordance with a “Risk Management and Compliance Program”
formulated each fiscal year.

■Response to anti-social forces
We implement measures as an organization to combat antisocial forces, seeing the elimination of any association withthem as a priority. In the event any dispute arises between
the Company and anti-social forces, we will stand firmly
against them. In addition to providing the basic policies foreliminating any contact with anti-social forces and thecheckpoints on the specific actions in the Tosei Group Risk
Management and Compliance Guidebook, it has developed“The manual for acting against anti-social forces.” In day-today operations, we make it a rule to research and confirm
that a new business counterparty is not an anti-social force,prior to the commencement of any transaction.

■Education and training
In FY2019, we continued to provide group training andonline training to all employees, including training on how
to deal with anti-social forces, insider trader training,training on the financial instruments business, ESG training
and mental health training.
We also implemented initiatives to raise awareness aboutcompliance such as distributing video learning content
about compliance and displaying compliance slogans.

Risk Management
Assuming every possible risk, we prepare and practice emergency responses under normal
conditions with a special focus on eliminating relationships with anti-social forces.

■Risk management system
With respect to risk management, which the Tosei Group recognizes to be equally as important ascompliance, the Group established the Risk Management and Compliance Committee to recognize
and assess risks, to gather information about specific risks and to discuss measures to address them.
17Corporate
Governance３．コーポレート・ガバナンス
・Risk Management and Compliance Guidebook
Tosei prepared and distributed the Tosei Group Risk Management and Compliance
Guidebook as a detailed guide to help Group officers and employees accurately
understand risk management and compliance and put compliance activities into
practice and are seeking to raise compliance awareness through training and othermeasures.
・Action in the event of a crisis or disaster
The Company recognizes situations that are potentially damaging to its corporate value, such aslarge-scale natural disasters and incidents, accidents, and events that impact generally on
customers, residents and wider society, as management crises and, if such an event were to occur,

it would set up a Crisis Management Taskforce headed by the CEO, as provided for in the Risk
Management and Compliance Regulations, and would take action to control the situation incollaboration with the Risk Management and Compliance Committee members and relevant
departments. We have also established a Crisis Communications Manual to speed up and facilitate
corporate communication activities in the event of a crisis and are working to raise awarenessabout dealing with crises properly.

・Action to ensure business continuity
The Company has formulated a Business Continuity Plan (BCP) to ensure that, in the event of anatural disaster, incident, accident or other event that forced the Company to suspend its corebusiness operations or that made business activities under the normal organizational/
personnel structure difficult, the Company would be able to swiftly implement measures tocontinue business or resume business quickly. Besides formulating a Disaster Response Manual
detailing the steps from gaining a basic understanding of the disaster through to making an
initial response in the event of earthquake, fire or other disaster, right down to conducting
evacuation and relief activities, we also conduct a range of drills including evacuation drills,
AED practice drills, and in-house fire-fighting team fire drills.

・Information asset management
Recognizing that information assets are one of our most important management resources, we haveset out provisions on developing and maintaining information management environments in order toproperly protect and efficiently utilize information in the Basic Policy on Information AssetManagement, and we have established Information Asset Management Regulations and Personal

information Protection Rules. Tosei also provides information asset management Training based on its
Risk Management and Compliance Program and works to raise awareness about information asset
management rules and increase literacy with regard to information asset management.

■TOSEI's Group Ethics CodeTo fulfill our corporate social responsibility, we consistently value a law-abiding spirit when pursuing
the Group's Corporate Philosophy, and conduct our business activities in adherence with theprinciples below:
1.Integrity and customer focus
We constantly maintain a sense of humility and integrity in our business activities, acting fromthe perspective of customers and working to ensure the safety and security of the products andservices we provide.

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Corporate
Governance３．コーポレート・ガバナンス
2.Prompt and appropriate information disclosure
We promptly and appropriately disclose the information necessary to retain a fair evaluation andunderstanding from investors and society.
3.Fair and transparent decision-making
We make decisions based on appropriate and accountable grounds, in compliance with laws andregulations and internal rules.
4.Strict compliance with all laws and regulations, and fair trade practices
We understand the intent and purpose of laws and regulations in domestic and global contexts,
and will never engage in transactions that are illegal or otherwise in violation.
5.Rejection of relations with anti-social forces
We will reject all ties with antisocial forces and will act resolutely as an organization in dealing
with problems and other incidents involving them.
6.Protection of confidential information
We will protect and strictly manage all important business information, personal information ofcustomers, information of business partners, and other confidential information.

7.Establishment of sound operating environment
We will constantly strive to establish a sound operating environment that always respects humanrights, without discrimination or abuse, and will aim for the sound development of our humanresources.

➢
内部通報制度8.Consideration for the environment
トーセイグループの従業員や役員などから法令に違反する行為や違反するおそれのある行為について通報を受け
We will remain constantly aware of the importance of environmental issues, and will seek to
付ける内部通報窓口「トーセイホットライン」を設置しています。「監査役窓口」「社内窓口」「社外窓口」の3つの受付
reducethe environmental footprint of our corporate activities.
窓口があり、通報については秘密厳守の上、公平公正な調査と是正措置、通報者を保護する仕組みを整備していま
9.Social contribution
す。
We will remain committed to our CSR activities as a good corporate citizen.
10.Senior management commitment

Our senior management will take a leading role in dealing with any violations of these principles,working to investigate the cause and prevent a recurrence. They will fulfill their responsibility to
explain to the market and society, including making timely and appropriate information
disclosures, and deal fairly and strictly with the offenders, including themselves.

Timely and appropriate disclosure
In addition to information disclosed under the Companies Act, the Financial Instruments andExchange Act, among other laws and regulations, and rules of stock exchanges, the Tosei Group
provides corporate information in a timely and appropriate manner to stakeholders, such as

shareholders, investors, and business partners, through IR activities and the website.

■Disclosure on the website and external evaluation
As a result of the listing of our shares on the Singapore Exchange,
we now simultaneously disclose information in English and Chinese.
We endeavor to convey how our earning results briefing went tothose who were unable to attend by posting the video of our earning
results briefing and the corresponding presentation materials on our
website and we try to enhance the information we disclose. We also
release corporate information for a wide range of stakeholders,
including ESG information, and share and shareholder information. In

evaluations by third-party organizations that award listed companies
for their IR activities, we were rated highly for the availability andease-of-use of our IR information.
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Corporate
Data
３．コーポレート・ガバナンス
Corporate Data

(As of November 30, 2019)

Company name

Tosei Corporation

President and CEO

Seiichiro Yamaguchi

Date of establishment

February 2, 1950

Address

Toranomon Tosei Bldg., 4-2-3 Toranomon, Minato-ku, Tokyo

Capital6,579,844 thousand yen

Stock Listings

Tokyo Stock Exchange, First Section(Ticker code:8923)
Singapore Exchange, Main board(Ticker code:S2D)

Employees

457(Consolidated) 191(Non-Consolidated)

Fields of business

Revitalization; Development; Rental; Fund and Consulting;
Hotel

Licenses

Real Estate Business License, Specified Construction
Business License, First Class Architect's Office License,
Registered Financial Instrument Business(Type2 Financial
Instrument Business, Advisor and Agency), General Real
Estate Investment Advisory Business Registration, Real
Estate Specific Joint Enterprise Permit

Consolidated
Subsidiaries

Tosei Community Co., Ltd.
Tosei Asset Advisors, Inc.
Tosei Revival Investment Co., Ltd.
Tosei Urban Home Corporation
Tosei Hotel Management Co., Ltd.
Tosei Hotel Service Co., Ltd.
Tosei Singapore Pte.Ltd.

Management team(As of November 30, 2019

President and CEO

Seiichiro Yamaguchi

Director, COO

Katsuhito Kosuge

Director, CFO

Noboru Hirano

Director, Managing
Executive Officer

Masaaki Watanabe

Independent
Directors

Kenichi Shohtoku

Senior Executive
Officer

Ichiro Kawabata
Shunsuke Yamaguchi

Executive Officer

Hideki Nakanishi

Nobuto Fujiwara
Koji Kuramoto
Hitoshi Oshima

Hiroyuki Kobayashi
Yutaka Kitamura

Audit & Supervisory
Board Members

Hitoshi Yagi
Tatsuki Nagano
Osamu Doi

Director, Managing Independent
Executive Officer
Directors

Independent
Directors

Director, Managing
Executive Officer

Masaaki
Hiroyuki Kobayashi Kenichi Shohtoku
Watanabe

HidekiNakanishi

Director, CFO

President and CEO

Director, COO

Noboru Hirano

Seiichiro Yamaguchi

Katsuhito Kosuge

20