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14

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ԢՉՇՈԱԺՂԱԲԺՀԺՈՍӨԐԺՂԱՂԳԵ
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•••46ԙԱԲՃՆӨԏՂՊԺՆՃՂՁԵՂՈ
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ԞՉՆӨԋՄՄՆՃԱԳԸӨՈՃӨԢՉՇՈԱԺՂԱԲԺՀԺՈՍ
ԏԢԑӨԟՆՃՁՃՈԺՃՂӨԢՍՇՈԵՁ
Long-Term Vision, Medium-Term Management Plan
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•
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72

ԍՃՆՄՃՆԱՈԵӨԑՃՊԵՆՂԱՂԳԵ
ԍՃՁՄՀԺԱՂԳԵӨԱՂԴӨԡԺՇԽӨԚԱՂԱԷԵՁԵՂՈ
ԎԺՇԳՀՃՇՉՆԵz ԏՌՈԵՆՂԱՀӨԏՊԱՀՉԱՈԺՃՂՇ

91ÀӨԡԵՄՃՆՈԺՂԷӨԟԵՆԺՃԴ
ӠӨӨԐԺՇԳԱՀӨՍԵԱՆӨӼӺӼ3ӨӨӨӨӨӲԐՆՃՁӨԎԵԳԵՁԲԵՆӨӻӶӨӼӺӼ2ӨՈՃӨԝՃՊԵՁԲԵՆӨӽӺӶӨӼӺӼ3Ӵ

3

 Message from the Managament

The Tosei Group's corporate philosophy is to "create new value and inspiration in all aspects of real estate." In this time of serious
environmental and social issues, we recognize that creating a sustainable society through our corporate activities is the "creation of newvalue" demanded by the world. With climate change becoming a pressing issue globally, companies have a greater responsibility to fulfill inorder to realize a decarbonized society and a circulating society, and the demand for sustainability management is further increasing.
In this business environment, we established the Tosei Group ESG Policy and ESG Action Guidelines in January 2019, and set up a system topromote them. Since 2020, we are promoting our business activities in recognition of our role in achieving SDGs (the Sustainable
Development Goals) set forth by the United Nations.
We aim to grow through the portfolio management of six businesses. In particular, we position as growth drivers the Revitalization Business,
which contributes to the utilization of existing resources and the reduction of environmental impact, and the Development Business, which
promotes initiatives that contribute to environmental friendliness and comfort, such as energy conservation and the introduction of IoT, andour stable businesses, such as the Leasing, Fund, Management, and Hotel Businesses, will also strive to approach environmental and social
issues according to the ESG Policy and the ESG Action Guidelines.
With the spread of COVID-19 since 2020, people's values and lifestyles have become even more diverse. The Tosei Group will continue to
strive for ESG management in consideration of sustainability in order to continue to be a company with value to all stakeholders, while
responding flexibly to changes in the social environment.

The President and CEO
Seiichiro Yamaguchi

4Message from the Chairman of Sustainability Committee
In November 2023, the Tosei Group identified materiality (material issues) in the promotion of sustainability and specified important issues
and themes to be prioritized by the Group. In January 2024, we also formulated our Long-Term Vision 2032 and Medium-Term Management
Plan “Further Evolution 2026,” in which we announced our intention to evolve further as a comprehensive real estate company in order tocontribute to the realization of a sustainable society.
In our business activities, we aim to promote sustainability measures by planning products and providing services with an awareness ofenvironmental issues such as climate change and social issues such as diversity, disaster prevention and community revitalization. In ourmanagement infrastructure, we will strive to further enhance sustainability-conscious business management and corporate governance.
In order to smoothly promote these initiatives, the Sustainability Committee will play a central role in monitoring the status of initiatives atrelevant departments including group companies, and will work in close collaboration to steadily achieve the plans.

CFO and Senior Executive Officer
Chairman of Sustainability Committee
Noboru Hirano

5 TOSEI Group's Sustainability
Our Approach to Sustainability

ESG Promotion System

Participation in Initiatives

Commitment to SDGs

Long-Term Vision, Medium-Term
Management Plan

Our Approach to Sustainability
In order to contribute to the realization of a sustainable society through our corporate activities, the Tosei Group has established "The Tosei
Group ESG Policy" and "The Tosei Group ESG Action Guidelines" and is striving to implement ESG management that takes sustainability into
consideration by establishing an ESG promotion system led by the Sustainability Committee.

The Tosei Group ESG Policy and The Tosei Group ESG Action Guidelines
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 the Environment, Social 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.

The Tosei Group ESG Action Guidelines
1. Carry out business activities that achieve sound growth
We will respond swiftly and appropriately to changes in business circumstances and continue business activities that will ensure soundgrowth to meet our social responsibility to all stakeholders. We will make concerted efforts to strengthen our structure for enhancing
corporate governance and building an internal control system.
2. Comply with laws and regulations
We will not only comply with laws and regulations relating to the environment, society and corporate governance, but we will also
provide internal training aimed at improving knowledge and promoting understanding, and we will carry out activities for increasing
outsiders' awareness.
3. Take actions that increase the value of real estate
We will take actions toward resolving a range of issues involved in real estate and increasing its added value with a view to making
effective use of real estate and energizing local communities in all our business activities.
4. Carry out business activities with environmental considerations
With the aspiration of building a low-carbon society, we will introduce measures that increase the energy efficiency of real estate
owned. We will work to reduce water consumption and waste emissions and implement reduce, reuse and recycle activities in a positiveeffort towards building a recycling-oriented society.

65. Contribute to tenants, locals and communities through real estate owned
In terms of our aim of practicing actions in accordance with these action guidelines, we will work to collaborate with corporate tenantsof real estate owned, business partners such as property management firms and occupants of residential real estate to establish
harmony with the local people and communities.
6. Increase customer satisfaction
We will strive to offer products and services based on safety and reassurance and sincerely carry out business activities consistently
from customers' standpoints in an effort to increase customer satisfaction.
7. Increase employee satisfaction
We will define personnel as an essential part of our business and continue developing seasoned professionals. We will create a positive
corporate culture in which diverse personnel with different backgrounds respect one another and work with a focus on teamwork in aneffort to boost employee satisfaction.
8. Disclose ESG information
We will disclose our ESG targets, monitor the state of actions on a regular basis and make their results known to stakeholders on our
website and by other means.

Developed: January 20197

Materiality (Material Issues) for the Tosei GroupThe Tosei Group started identifying its materiality as part of its pursuit of sustainability from November in fiscal year 2022, in order tostrongly drive ESG management.
We have long been implementing a wide range of environmental,social and governance initiatives. With companies sure to come underincreasing pressure to implement initiatives to address climate change and other social and environmental issues in the future, we arecommitted to further accelerating our initiatives by specifying important themes that we should address as a priority to help solve social andenvironmental issues for the development of a sustainable society and to drive ESG management for the achievement of sustainablecorporate growth.

Materiality Identification Process8Materiality of The Tosei Group

Theme

Contributi

Materiality(The value we believe it is important

Major initiatives

to create)

on to theSDGs

- Energy conser ation and use of
Action on climate change and promotion of arenewable energy

recycling-oriented society- Disaster pre ention and mitigation- Efficient use of resource

Coexistence with the- Impr vement and visualization ofenvironment

environmental performance in bothEnvironmentally friendly manufacturing and service'tangible' and 'intangible' aspects

provision-

eduction of environmental impact ofreal estate revitalization anddevelopment- Utilization of di erse humanresources
Healthy work environment that embraces diversity
and individuality- Promotion of di erse working styles- Pursuit of job satisfactio-

especting for human rights- Promotion of mental and p ysicalwellbeing
Action to addresssocial issues- Safe y and security of mind ofHigh quality products and services that give safety

customers

and reassurance- Safe y and security of mind of
employees and suppliers

Creation, rehabilitation and revitalization of local
communities-

ehabilitation, creation andrevitalization of local communities-

evitalization of local economies- Enhancement of corpo ate
Solid corporate
governance

Governance that promotes healthy corporate growth

governance- Complianc- Strengthening risk managemen
Developed: November 2023

9

ESG Promotion System
The Group has established a Sustainability Committee to deliberate and determine ESG-related policies and activities. The committee ischaired by the director responsible for sustainability (Noboru Hirano, CFO and Senior Executive Officer) appointed by the CEO, and consistsof members appointed by the director responsible for sustainability. The contents of the deliberations are regularly reported to the Board of
Directors and reflected in the Group’s business activities in cooperation with each relevant department.

Tosei Group Long-Term Vision 2032
Background and Purpose
The business environment surrounding the Group has become increasingly uncertain amid revolutionary changes, including the escalation ofclimate change issues, the emergence of geopolitical risks, the declining birthrate and the aging of society in Japan, the acceleration of
behavioral changes triggered by the COVID-19 pandemic, and rapid advances in digital technology. In order to adapt to such changes in thebusiness environment, ensure the Group’s continued growth over the future, and enhance corporate value by contributing to the realizationof a sustainable society, the Company formulated “Tosei Group Long-Term Vision 2032” to clarify “the Company’s direction (what theCompany envisions to be)” based on the Company’s core competencies that are the source of the Group’s competitive advantage and to
make Group-wide efforts to realize its vision.
The Company formulated the new medium-term management plan “Further Evolution 2026” for the initial three years (phase 1) out of thenine-year period in order to realize the Long-Term Vision 2032.

Overview of the “Tosei Group Long-Term Vision 2032”

The Group, through its six real estate-related businesses, has provided various solutions to realize the potential value of real estate. The
Company is also expanding the business domain while mitigating risks by combining multiple businesses with different business attributes
and are continuing to improve its real estate investment technique as a portfolio manager capable of handling a wide variety of assets.
Furthermore, in the asset management domain, the Company offers world-class services trusted by real estate investors around the world
and will work toward growing its business and realizing the Long-Term Vision 2032 by further expanding the Company’s core competencies,
i.e., the Company’s “Real Estate Solution Capabilities,” “Portfolio Management Capabilities,” and “Global Reach Capabilities”.

10Medium-Term Management Plan “Further Evolution 2026”
Main Policy and Basic Policies
By executing various measures under the following main policy and five basic policies, the Company will enhance the competitive edge ofthe Group and also contribute to the realization of a sustainable society.

Target management indicators

11

Specific Initiatives
The plan will aim for the evolution and growth of the six existing business portfolio by strengthening “Real Estate Solution Capabilities”,“Portfolio Management Capabilities”, and “Global Reach Capabilities”, which are the sources of the Group’s corporate value, and expanding
the service domains of each business and maximizing synergies within the Group.

In the Revitalization Business and the Development Business, the Company will aim to establish and penetrate the Tosei brand throughdifferentiation by providing environmentally-friendly products conscious of sustainability, encouraging the utilization of existing real estate
stock, and expanding the scope of products handled, among others. Additionally, to enhance its purchasing competitiveness, the Company
will promote studies to improve the efficiency of property appraisals and the utilization of M&As.

In stable businesses, the Company will work on the studies of facility specifications in line with tenant demand in the Rental Business andthe reinforcement of its service functions and the improved efficiency of back office operations in the Fund and Consulting Business and theProperty Management Business, and make efforts to penetrate the Company’s brand through appeal to customers by differentiating the Tosei
Hotel COCONE from other hotels and expand scales in the Hotel Business.

Furthermore, in the DX field, the Company will make efforts to promote business efficiency, while also providing real estate investment
opportunities to a new customer base through real estate crowd funding, a real estate tech business which combines real estate, finance,
and DX, issuing security tokens, and digital matching of the sales of pre-owned condominium units, in order to diversify the exit strategies
for properties revitalized and developed by the Company.

To strengthen the Company’s business base that sustains growth, it will focus its efforts on the building of a personnel system,
organizational structure, and work environment that allows for human resources development and enables diverse employees to leverage
their individuality and maximize their capabilities and deepen its engagement with the employees. Additionally, in terms of finances andcapital allocation, the Company will strengthen its funding capabilities to support the expansion of its business scale and the balance ofassets held, while maintaining a sound financial structure and aiming to continue its growth investment and improvement of the return ofprofits with an awareness of capital efficiency.

Participation in Initiatives
To solve social issues such as climate change, we participate in the following initiatives that are consistent with the Group's approach.

Supporting the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD)
In September 2021, we expressed our support for the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD)
and joined the TCFD Consortium, an organization of supporters in Japan. Based on the TCFD recommendations, we will analyze the risks andopportunities posed by climate change to our business, and strive to further enhance information disclosure.

12

Commitment to SDGs
We have created links between the UN Sustainable Development Goals (SDGs) and the Tosei GroupESG Policy and Action Guidelines.
Please see page 9 for the relationship between materiality and the SDGs.

The Tosei Group ESG Action Guidelines

E

Relationship with SDGs

Carry out business activities with environmental
considerations

Take actions that increase the value of real estate
Contribute to tenants, locals and communities
S

through real estate owned
Increase customer satisfaction
Increase employee satisfaction
Carry out business activities that achieve soundgrowthG

Comply with laws and regulations
Disclose ESG information

SDGs 17 Goals
1. No Poverty

9. Industry, Innovation and Infrastructure

15. Life On Land

2. Zero Hunger

10. Reduced Inequalities

16. Peace, Justice and Strong Institutions

3. Good Health and Well-Being

11. Sustainable Cities and Communities

17. Partnerships for the Goals

4. Quality Education

12. Responsible Consumption and5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy

Production
13. Climate Action
14. Life Below Water

8. Decent Work and Economic Growth13 Environment

VisionOur Approach and Vision for the Environment

Environmental Promotion System

Our Approach and Vision for the Environment
The Tosei Group takes seriously its corporate responsibility as a real estate business company in light of recent changes in the global
environment and the urgent need to reduce greenhouse gas emissions. In order to strengthen our environmental efforts, we established the"Tosei Group Eco Declaration" and "Eco-Mission" in April 2009, and in March 2022, the "Tosei Group Environmental Policy" was establishedby a resolution of the Board of Directors.

Tosei Group Environmental Policy
The Tosei Group has established the following five items as its environmental policy and endeavor to promote environmental efforts in all of
its corporate activities.

1. Promotion of efforts to create a low-carbon society
We will contribute to the formation of a low-carbon society by actively introducing measures that contribute to energy conservation andreducing energy consumption and greenhouse gas emissions.

2. Promotion of efforts to create a circulating society
We will strive to reduce our environmental impact and contribute to the formation of a circulating society by preventing environmental
pollution, promoting resource conservation including reduce, reuse, and recycle, and reducing water consumption and waste emissions.

3. Promotion of efforts to coexist in harmony with the environment
We will contribute to the formation of a prosperous and sustainable society by creating urban environments that are in harmony withnature, taking biodiversity into consideration.

4. Compliance with environmental laws and regulations and raising awareness of environmental conservation
In addition to complying with environmental laws and regulations, we will conduct environmental education and awareness-raising
activities to enhance the awareness of Group employees regarding environmental conservation.

5. Promotion of Environmental Communication
We will disclose the status of our environmental efforts to society and engage in dialogue with our various stakeholders.

14Environmental Promotion System
Sustainability Committee
The Group has established the Sustainability Committee to deliberate and decide on ESG-related policies and action plans. The Committee ischaired by the Director responsible for sustainability (Noboru Hirano, CFO and Senior Executive Officer) appointed by the President and CEO,and consists of members appointed by the Director. The contents of the deliberations are regularly reported to the Board of Directors, andare reflected in business activities under the supervision and direction of the directors and in cooperation with the relevant departments. In
the environmental area, the committee deliberates, manages progress, and provides instructions on all measures based on ourenvironmental policy, including compliance with environmental laws and regulations, TCFD compliance, promotion of energy conservation at
owned properties, and acquisition of third-party evaluations.

Environmental Management
We are working to reduce the negative impacts of our assets on the environment through our own PDCA cycle, under the direction andsupervision of our Sustainability Committee.

PLAN
Assessing energy consumption, GHG emissions, water consumption, etc., of owned assets and establishing reduction targets.
Formulate a plan to promote energy conservation through the installation of LEDs throughout the building.
Formulate a plan for awareness-raising activities for energy conservation measures in cooperation with tenants.

DO
Installation of high-efficiency equipment such as LEDs throughout the building.
Introduction of renewable energy.
Energy conservation awareness activities through sustainability guides, tenant surveys, etc., and requests for cooperation.

CHECK
Energy monitoring, measurement of LED installation effectiveness.
Tenant survey tabulation, PM・BM sharing.

ACTION
Sustainability Committee discusses effectiveness measurement verification, tenant survey results, etc., and examines improvement
measures.
Reflected in next year's renovation work plan, awareness-raising activity plan, etc.
※ EMS such as ISO14001 is not currently in place

15

Target and Progress
Various Targets

GHG(CO2) Emissions Results

Energy Use Results

Water Use Results

Waste Discharge Results

Environment-related Violations and Fines

Various Targets（FY2024 -）Base Year

Subject

TargetTosei Group

Long-term Target: Net-zero by FY2050

Scope 1 and 2

Mid-term Target: 50% reduction from base year by FY2030

GHG(CO2) Emissions

FY2022

Energy Use-

Tosei Group

Water Use-

Tosei Group

Reduce energy use intensity (Crude oil equivalent kl/㎡) by 1%
from the previous year
Reduce water use intensity (㎥/㎡) from the previous year
Long-term Target: Reduce waste discharge intensity by 15%

Waste Discharge

FY2022

Tosei Group's Head Officeby FY2050

Buildings

Short-term Target: Reduce waste discharge intensity by 5% by
FY2030*Tosei Group: Real estate portfolio with substantial energy management title among Tosei-owned fixed assets

Various Targets (FY2018 - FY2023)
Base year

FY2022

Subject

Tosei Group
Scope 1 and 2

TargetLong-term Target: Net-zero by FY2050
Mid-term Target :50% reduction from base year by FY2030

GHG(CO2)
Long-term Target:

Emissions
FY2018

Tosei Owned Fixed

Reduce GHG emissions intensity by 5% by FY2023

AssetsShort-term Target :Reduce GHG emissions intensity by 1% per year
Long-term Target:

Energy Use

FY2018

Tosei Owned Fixed

Reduce energy use intensity by 5% by FY2023

AssetsShort-term Target :Reduce energy use intensity by 1% per year
Long-term Target:

Water Use

FY2018

Tosei Owned Fixed

Reduce water use intensity by 2.5% by FY2023

AssetsShort-term Target :Reduce water use intensity by 0.5% per year
Long-term Target:

Waste Discharge

FY2018

Tosei Head Office

Reduce waste discharge intensity by 2.5% by FY2023

Building

Short-term Target :Reduce waste discharge intensity by 0.5% per year16

GHG(CO2) Emissions Results【Subject】Tosei Group Scope 1 and 2【Target】Compared to FY2022, 50% reduction by FY2030, net zero by FY2050

FY2030

FY2022
Results(Base year)

GHG(CO2)
Emissions(t-CO2)targetFY2021

FY2022

FY2023(TargetResults

Results

Results

year)

Scope1

480✓

-

197

480✓

584✓

Scope2

3,289✓-

1,696

3,289✓

2,714✓

3,769✓

1,885

1,893

3,769✓

3,297✓

-

-50%

-

-

-13%

Scope1+
Scope2 Total

Reduction ratecompared to base year
(Scope1+Scope2 Total)
Subject

Tosei Group Scope 1 and 2※ The indicators with ✓ mark are guaranteed by an independent third party, Sustainability Accounting Co.,Ltd.
The warranty report : FY2023 / FY2022*The PDF link on the left is valid when this report is viewed as PDF data.

※ The figures for FY2020 include estimates in some cases.
※ For FY2021 calculation, the Princess Group, which became a consolidated subsidiary in October 2021, is not included.
※ The Group excludes GHGs (Freon gas, etc.) other than CO2 due to their extremely small amounts, and calculates and reports only CO2.
※ The GHG emission factor is based on the "Emission Factor by Electric Power Company" published by Ministry of the Environment andMinistry of Economy, Trade and Industry, and uses the emission factor of the electric power company used by the subject building.
※ As of November 30, 2023

【Subject】Tosei-owned Fixed Assets【Target】Compared to FY2018, 5% reduction GHG emissions intensity by FY2023

Total amount
GHG(CO2)
Emissions(t-CO2)Emissions intensity(t-CO2/㎡)

FY2018FY2023Results

targetFY2021

FY2022

FY2023（Base（targetResults

Results

Results

year）

year）

6,366

-

6,701

8,233

7,264

90

86

57

59

51

-

-5%

-37%

-35%

-43%

70,664-

117,982

140,002141,306

Reduction ratecompared to base year
(Emissions intensity)
Subject(Tosei owned fixed assets・㎡)

17

※ The subject property is Tosei-owned fixed assets. This excludes those with an energy monitoring period of less than one year,
condominium unit ownership properties, and real estate for sale.
※ The Group excludes GHGs (Freon gas, etc.) other than CO2 due to their extremely small amounts, and calculates and reports only CO2.
※ The GHG emission factor is based on the "Emission Factor by Electric Power Company" published by Ministry of the Environment andMinistry of Economy, Trade and Industry, and uses the emission factor of the electric power company used by the subject building.
※ As of November 30, 2023

Energy Use Results【Subject】Tosei-owned Fixed Assets【Target】Compared to FY2018, 5% reduction energy use intensity by FY2023

FY2023

FY2018Results(Base year）

Total amount(1,000GJ)

targetFY2021

FY2022

FY2023（targetResults

Results

Results

year）

126

-

146

175

177

1.78

1.69

1.23

1.25

1.26

-

-5%

-31%

-30%

-29％

70,664-

117,982

140,002141,306

Energy use
Energy use intensity(GJ/㎡)
Reduction ratecompared to base year
(Energy use intensity)
Subject(Tosei owned fixed assets・㎡)※ The subject property is Tosei-owned fixed assets. This excludes those with an energy monitoring period of less than one year,
condominium unit ownership properties, and real estate for sale.
※ Occupancy rate is not taken into account in the calculation of floor area intensity.
※ As of November 30, 2023

18

Water Use Results【Subject】Tosei-owned Fixed Assets【Target】Compared to FY2018, 2.5% reduction water use intensity by FY2023

FY2023

FY2018Results(Base year）

Total amount(㎥)

targetFY2021

FY2022

FY2023（targetResults

Results

Results

year）

87,889-83,161

144,712173,914

0

-

0

0

0

0

-

0

0

0

0

-

0

0

0

87,889-83,161

144,712173,914

1.35

1.32

0.74

1.05

1.23

-

-2.5%

-45%

-22%

-9%

-

-

79,859141,218

169,991

-

-

0

0

0

-

-

0

0

0

-

-

0

0

0

-

-

79,859141,218

169,991

-

-

0.71

1.03

1.20

65,304-112,622

137,499

141,306

Fresh surface
water (㎥)
Brackish surface
water/
Water withdrawal

sea water (㎥)Underground water(㎥)
Tap water (㎥)Water withdrawal
intensity(㎥/㎡)

Reduction ratecompared to base year
(Water withdrawal intensity)
Total amount(㎥)
Fresh surface
water (㎥)
Brackish surface
water/
Wastewatersea water (㎥)Underground water(㎥)
sewage (㎥)Wastewater intensity(㎥/㎡)

Subject(Tosei owned fixed assets・㎡)※ Our group's main business activities are located in Tokyo and three prefectures (Kanagawa, Chiba, and Saitama) in Japan. According to
the Aqueduct survey by the World Resource Institute (WRI), the water-related risk in this area falls into the "Low to Low-Medium"
category, and we have confirmed that we do not conduct business activities in areas where water stress is a concern.
※ Wastewater discharge has been monitored since FY2021.
※ The subject property is Tosei-owned fixed assets. This excludes those with an energy monitoring period of less than one year,
condominium unit ownership properties, and real estate for sale.
※ Occupancy rate is not taken into account in the calculation of floor area intensity.
※ As of November 30, 2023

19

Waste Discharge Results【Subject】Tosei Head Office Building【Target】Compared to FY2018, 2.5% reduction waste discharge intensity by FY2023

FY2023

FY2018Results(Base year）

Total amount(t)
Incineration/
landfill (t)targetFY2021

FY2022

FY2023（targetResults

Results

Results

year）

60

-

100

126

121

22

-

49

87

84

38

-

51

39

37

13.27

11.13

8.37

8.27

7.95

-

-2.5%

-37%

-38%

-40%

4,515

-

11,986

15,24915,249Waste Discharge
Recycle (t)Waste Discharge
intensity(kg/㎡)
Reduction ratecompared to base year
(Waste Discharge intensity)
Subject(Tosei head office building・㎡)※ Waste discharge are those of Tosei head office building (Tamachi Tosei Building).
※ Occupancy rate is not taken into account in the calculation of floor area intensity.
※ As of November 30, 2023

Environment-related Violations and Fines
There were no penalties or fines for violations of environment-related laws and regulations (including water-related) or accidents in FY2023.

20

Climate Change
Supporting the Recommendations of the Task Force on

The Company's Perceptions of Climate Change Issues

Climate-related Financial Disclosures (TCFD)

Governance

Strategy

Risk Management

Metrics and Targets

Disclosure Based on TCFD Recommendations(PDF)

The Company's Perceptions of Climate Change Issues
Since the Paris Agreement of 2015, climate change has become an urgent global challenge, and the need to address environmental issues
has become a common understanding among countries around the world. The current climate system and the scale of the changes observedin the climate are unprecedented in hundreds of thousands of years. The IPCC Sixth Assessment Report, published in 2021, warns thatanthropogenic climate change is already affecting many weather and climate extremes in all regions of the world and that unless GHG
emissions are significantly reduced over the next few decades, it will cause more severe and frequent natural disasters. The world must holdthe increase in global average temperature to below 2°C or even to 1.5°C above the pre-industrial level by the end of the 21st century.
Efforts to reduce GHG emissions are being made worldwide, and in Japan, the movement toward the achievement of a decarbonized society
has been accelerating since the Japanese government’s declaration on Net Zero GHG Emissions by 2050.
Under these circumstances, the Tosei Group recognizes that the climate change will cause dramatic changes in the natural environment andsocial structure, and that it is an issue that will have a significant impact on our business. We also are aware that natural disasters could
reduce the value of real estate and stricter government environmental regulations could significantly affect our business activities, strategies
and financial plans. Tosei has established the Tosei Group ESG Policy and Action Guidelines and has also included initiatives to addressenvironmental and social issues in its current medium-term management plan, Infinite Potential 2023. We will continue to strive toimplement ESG management that takes sustainability into consideration and contribute to the realization of a sustainable and decarbonizedsociety through our corporate activities.

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 the Environment, Social 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.

Supporting the Recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD)
In September 2021, we expressed our support for the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD)
and joined the TCFD Consortium, an organization of supporters in Japan. Based on the TCFD recommendations, we will analyze the risks andopportunities posed by climate change to our business, and strive to further enhance climate-related information disclosure.

21

Governance
Organization Framework
Tosei Group has established the Sustainability Committee, which reports directly to the Board of Directors, to promote ESG management
practices that take sustainability into account. Based on the Tosei Group ESG Policy and ESG Action Guidelines, the Sustainability Committee
formulates policies to improve the Group's overall sustainability, including addressing climate change, formulates annual activity plans for
ESG promotion, monitors, provides advice and guidance the progress of each measures and departmental activities.
The Sustainability Committee is chaired by the director responsible for sustainability (Noboru Hirano, CFO and Senior Executive
Officer) appointed by the President and CEO, and consists of members appointed by the director. In principle, the committee holds six
meeting a year, and its deliberations, activity status, and reported matters are reported monthly to the Board of Directors.
The Sustainability Committee identifies, classifies, analyzes, and evaluates risks and opportunities, and formulates organizational measuresand response plans for adaptation and mitigation for climate-related risks in accordance with the Regulations for Risk Management Related
to Climate Change. The measures approved by the Board of Directors are linked to business strategies under the leadership of the
Sustainability Committee and are directed to the Group companies and their respective business units.

Role of the Board of Directors
The Board of Directors has the highest responsibility for climate change-related risk management, and shall establish the necessaryorganizational structure, appropriately supervise it, and provide instructions as necessary. In addition, based on reports from theSustainability Committee, the Board of Directors appropriately monitors and supervises the progress of each measure and program,reviewing the policies and directing improvements to the promotion system as necessary. In addition, ESG promotion targets, including
climate change, are set as items for evaluation and reward of full-time directors in charge of ESG.

Management andSupervisory Body

Board of directors

about Climate Change Risk
Person responsible for climate change-related risk management:
Noboru Hirano, CFO and Senior Executive Officer of Administrative
Person in Charge

Division*This person shall report monthly on matters related to climatechange response at the Board of Directors meetings.

OfficeCorporate Management department

Strategy
To understand the possible impact of future climate change on our group's business and to reflect such impact into our business strategy, we
chose multiple future climate change scenarios defined by international institutions and identified risks and opportunities of the hypotheticalworld under each scenario. The details of the scenario analysis are as follows.

Determining Targets for the Analysis
In this scenario analysis, all our group's businesses are included as the target. Regarding the possible impact on real estate holdings, theanalysis covers office buildings, commercial facilities, detached houses, apartment buildings, hotels, and logistics facilities as asset classes
that are expected to be strongly affected by climate change, while pre-owned condominiums units, which have a small impact, were
excluded from the analysis.

Determining Time Frames for the Analysis
In analyzing the scenarios, we used 2030 (medium-term) and 2050 (long-term) as time frames for the scenario analysis, considering theeffects of climate change assumed in each scenario parameter will materialize in the medium to long term.

22

Assumptions Underlying Each Scenario
The TCFD recommendations advise the use of several scenarios, including a 2°C or lower scenario, to examine the resilience of theorganization in an uncertain future.
Our group used the following two scenarios for our study and analysis.

(1) 1.5°C–2°C increase scenario (high transition risks, low physical risks)
Under this scenario in which regulations and policies are strengthened for decarbonization, measures to address climate change aretaken, and temperature rise is expected to be around 1.5 -2°C in 2100.
Companies are strongly required to respond to climate change, and if they do not, customer outflow and reputation risks will increase,resulting in higher transition risks, while physical risks will be relatively low, as the severity and increase of disasters caused by climatechange will be suppressed into a certain extent.
(2) 4°C increase scenario (low transition risks, high physical risks)
Under this scenario in which climate change measures are not adequately addressed and temperatures rise from pre-industrial levels toabout 4°C by 2100.
Physical risks are assumed to increase, including more severe natural disasters, sea level rise, and an increase in extreme weather
events.
This will increase the competitiveness of products and services with superior BCPs. On the other hand, transition risks will be lower, as
government regulations will not be strengthened.

＜Mainly Referenced Scenario Parameters＞
Institutions/
Organizations

1.5～2°C Scenario

4°C Scenario

WEO2020;
Sustainable Development
Scenario (SDS) Net Zero
Emissions by 2050 caseTransition Risks

IEA (International
Energy Agency)(NZE2050)-

WEO2022;Net Zero Emissions by 2050
Scenario (NZE2050)
ETP2017;
Beyond 2℃Scenario (B2DS)

IPCC
Physical Risks(Intergovernmental
Panel on Climate
Change)

IPCC Sixth Assessment

IPCC Sixth Assessment

Report;Report;

IPCC SSP1-2.6

IPCC SSP5-8.5

23

Future World View of Each Scenario

Identification of Risks/Opportunities Based on Scenario Analysis and Evaluation of
Financial Impact
Based on the two climate-related risks and opportunities (Transition risks/opportunities and Physical risks/opportunities) categorized in the
TCFD recommendations, we have identified the major risks and opportunities that are expected to have a significant impact on our businessfor each scenario. For each of the identified risks and opportunities, we evaluated the financial impact using parameters published byinternational organizations. The degree of impact on the Group was assessed on a four-point scale (major, medium, minor, and minimal)
based on the materiality standards of the Tokyo Stock Exchange for timely disclosure, qualitative judgments take into account. Details are as
follows.

24

Transition Risks・Opportunities*Financial impact is calculated based on internal data available as of May 2023.

Resilience of the Group and the Results of the Analysis
Results of the scenario analysis indicate that the financial impact on the Group from transition risks, especially in the "medium to long term"
time frame, will be emerge as a result of changes in the social transformation associated with the transition to a decarbonized society (1.5
°C - 2°C Scenario), specifically through the strengthening of various government regulations (adoption of carbon taxes, mandatory ZEH/ZEB
levels, etc.), and changes in the behavior and preferences of investors and financial institutions.
The Group intend to switch using electricity generated from renewable energy sources for its head office and company-operated hotels. We
will also promote internal resource and energy conservation efforts to reduce the Group's GHG emissions. moreover, we will aim to minimizerisks and maximize opportunities by systematically promoting environmentally friendly product developments, renovating buildings toenvironmentally friendly real estate specifications, and acquiring environmental real estate certifications.

25

Physical Risks・Opportunities*Financial impact is calculated based on internal data available as of May 2023.

Resilience of the Group and the Results of the Analysis
Results of the scenario analysis indicate that financial impact from physical risks on the Group, especially in the "medium to long term" timeframe, will emerge as a result of intensifying of extreme weather events in society where climate change measures are not sufficiently
implemented (4°C scenario). We make investment decisions only after comprehensively considering various factors, including flood risks.
Also, regularly checks the risk status of its property portfolio using hazard maps, and takes appropriate business continuity planning (BCP)
measures by reviewing the portfolio, purchasing insurance, and implementing countermeasure construction. Through these efforts, we aim
to minimize risks while maximizing opportunities.

Strategies and Measures Developed Based on the Results of Scenario Analysis
Considering the aforementioned scenario analysis results, the Group will promote and consider the following measures in its management
strategy and financial plan to minimize risks and maximize opportunities.

Utilize Renewable Energy
To reduce CO2 emissions from the buildings we own, we are working on the use of renewable energy in addition to energy conservation
renovation work.
Tosei's head office building, the Tamachi Tosei Building, and Tosei Hotel Tsukiji Ginza Premier are powered by renewable energy, and Tosei isalso working on local production for local consumption of energy by installing solar panels and storage batteries at T's eco Kawasaki as partof its value-up work to power some common areas as part of its renewable energy utilization in its regeneration business.

T's eco Kawasaki Solar Panels

26

Reduce CO2 Emission through Revitalization BusinessTosei’s Revitalization Business is not only attractive as an investment product, but also leads to the utilization and extension of existing
resources and is environmentally friendly. This means that, Tosei’s model as the utilization of existing used properties can reduce total
amount of CO2 generated due to construction by 54% in comparison to the Scrap and Build Model during 100-year term.（According to ourestimation）

Assumptions
Assuming that a newly constructed office building (total floor area: 10,000m2 , steel-framed reinforced concrete structure) will bemaintained for 100 years*
TOSEI Value-Up Model
Repair and maintenance work to be carried out every 10 years (8 times in total), and life-extension work to be carried out once every 30
to 40 years (2 times in total).
Lengthening of service life = large-scale repair work for air conditioning, water supply, elevators, water-saving toilets, etc.
Scrap and Build model
Repair work every 10 years (9 times in total), and once every 30-40 years, Demolish the existing building and build a new similar building(2 times in total).
*In order to extend the life of the building frame up to 100 years, it is assumed that the neutralization diagnosis of the building frame
and its treatment have been taken. In addition, CO2 emissions from the work related to neutralization diagnosis and treatment are notconsidered.

Redevelopment project utilizing the building site
We are engaged in the redevelopment of former building sites acquiring land on which warehouses and other buildings once stood, improving
the land, and constructing new buildings to create new communities.
We developed large condominiums on the former warehouse sites of a company engaged in food sales in Chofu City, Tokyo, and a company
engaged in construction in Toda City, Saitama Prefecture. All of the condominiums have been designed to create a new community in thearea through redevelopment, with enhanced plantings that harmonize with the surrounding environment and common areas designed tocreate a community of residents.

Condominium Development

Warehouse site

27

Initiatives to reduce GHG Emissions in the Real Estate Fund and Consulting BusinessIn our Fund and Consulting Business, through our asset management services, we promote energy-saving renovation of buildings owned byprivately placed real estate funds and REITs, acquisition of environment-related certifications, and efforts to reduce GHG emissions.
Tosei Asset Advisors, Inc has established the Green x Value Up Residential Fund (hereinafter "the Fund") in FY2023, which aims to reduce
whole-building GHG emissions through energy-saving renovations, working with domestic institutional investors.
The Fund will operate its properties with the goal of significant reducing GHG emissions for the whole-building byholding existing rental

apartments over the long term and conducting energy-saving renovations not only of common areas but also vacant units. The Company
will carry out the renovation work as construction manager, and the value of the property will be increased with a focus on the reduction ofenvironmental impact, thereby revitalizing the property as a rental apartment building that contributes to the realization of a decarbonizedsociety. In addition to LED lighting and the introduction of motion sensors in common areas, the installation of solar power generationequipment on the rooftop is planned along with the application of highly reflective paint. In the exclusive areas, water, lighting, and air
conditioning equipment will be upgraded to energy- and water-saving models, and a Home Energy Management System (HEMS) is installed
to enable the visualization and optimization of energy use.

Exterior view of subject property

Rooftop where solar power generation equipment will be installed

Energy Conservation Efforts in Development Properties
The Group is actively adopting equipment and materials that contribute to greenhouse gas reduction and energy conservation in theproperties it develops. We are also working to build houses that meet the ZEH (Net Zero Energy House) standard, and in the FY2023, we
supplied 12 ZEH and long-life quality housing. We are developing products that incorporate the most advanced housing equipment andsystems, including solar power generators, energy- and water-saving equipment, and IoT. We will continue with these efforts to provide
houses that combine high energy-saving performance and comfort.

Major Environmentally-Conscious Equipment Installations
Energy-saving water heater (Eco-Jozu,

Double-layered glass

LED lighting, motion sensor lighting

Highly insulated sashes

Solar power generation system

Rainwater utilization equipment

Water-saving faucets, water-saving

Recycled materials(rainwater tank, water-retaining

toilets

ENE-FARM)
Highly insulated design (equivalent toheat insulation performance grade 4)

interlocking)Rooftop greenery, rooftop

Electric car charging facilities

Car sharing, bicycle rental

green/vegetable garden

Example of ZEH construction

Solar power generation system

High-performance heat-insulating
material

28

Energy Meter

Promotion of LED Installation in Used Office Buildings
The Group is promoting the installation of LED lighting in the fixed assets it owns. To date, we have installed LED lighting throughout 7
existing office buildings and 1 existing logistic facility and reduced electricity consumption by an average of approximately 20% to 30%. Thisis expected to improve tenant satisfaction by reducing electricity consumption and costs, increasing the brightness of the buildings, andeliminating the need for maintenance.

Shinden Logistics
Shinbashi Frontier BL

Yotsuya Tosei BL

Toranomon Tosei BL

Narimasu Tosei BL

Koishikawa Tosei BL

Promotion of energy conservation in cooperation with tenants
To promote energy conservation in the properties we own, we are working with tenants to conserve energy.

Tenant Survey
We conduct an annual survey of all tenants of our buildings (fixed assets) to ascertain their needs regarding building management systems
and facilities, etc. The Sustainability Committee of Tosei Community Corporation, which is responsible for the management of fixed assets,
and the Sustainability Committee of Tosei confirm the results of the survey and take necessary measures to improve tenant satisfaction. The
Sustainability Committee of Tosei Community Corporation, which is responsible for the management of fixed assets, and the Sustainability
Committee of Tosei Corporation confirm the results of the questionnaires and take necessary measures to improve tenant satisfaction.。

Green Lease Agreement
For tenants of buildings that have undergone whole-building LED construction, we have entered into green lease contracts with tenants that
stipulate that both the owner and the tenant will enjoy the benefits of energy conservation through the installation of energy-saving
equipment, and that the tenant will work with the owner on various energy-saving activities that will contribute to improving theenvironmental performance of the property. As of the end of the fiscal period ended November 30, 2023, green lease contracts were in placefor 8 properties, including Shinden Logistics, Awaji-cho Tosei Building, and others.

Energy conservation awareness activities
We are striving to raise building users' awareness of energy conservation and reduce energy consumption by distributing Sustainability
Guides, which provide information on energy conservation activities, and by displaying posters to promote energy and resource
conservation, waste separation, stairway use, and other activities.

Sustainability guidebooks

Energy Conservation Promotion Poster29

Promotion of Acquiring Environmental Real Estate Certification
We are promoting energy-saving renovations, including the installation of LED lighting in buildings. We are also promoting the acquisition ofcertifications that evaluate the environmental performance and social aspects of real estate and use these certifications to enhance the valueof our assets and for leasing.

Risk Management
Process for Identifying and Assessing Climate-related Risks and Opportunities
The Sustainability Committee, responsible for risk management related to climate change, conducts regular group-wide surveillance once a
year and identifies climate-related risks and opportunities based on the results. The identified climate-related risks and opportunities areevaluated on two scales, “likelihood” and “impact” based on multiple assumptions (scenarios) about future climate change defined byinternational organizations and others. The results of the analysis are reported to the Board of Directors each time they are performed.
Climate-related risks and opportunities in this analysis are based on the following definitions.
1. Transition Risks
Risks associated with the transition to a low-carbon society, which are risks brought about by changes in policies and legal regulations toaddress climate change, as well as changes in technological development, market trends, market valuations, etc.

(ⅰ)Current Regulations (Policy

Risks related to policy actions that attempt to constrain actions that contribute to theand Legal)

adverse effects of climate change(ⅱ)New Regulations (Policy andLegal)(ⅲ)Technology(ⅳ)litigation

Risks related to policy actions that seek to promote adaptation to climate change

Risks related to technology that may change or evolve with climate change among suppliersof materials and services related to each of the Group's businesses
Risks related to climate-related litigation claims being brought before courts.
Risks associated with changes in the markets relevant to the business of the Group(ⅴ)Market

companies as society transitions to a low-carbon and decarbonized society in relation toclimate change.

(ⅵ)Reputation

Risk of changes in the Group' s reputation with customers, investors, various suppliers,
communities, governments, and others related to the Group in relation to climate change.

2. Physical Risks
Risk of exposure to acute or chronic damage from climate change and other causes brought about by climate change.
3. Opportunity(ⅰ)Resource Efficiency(ⅱ)Energy Source(ⅲ)Products and Services(ⅳ)Market(ⅴ)Resilience

Opportunities related to improving resource efficiency in the business activities of ourGroup.
opportunities from shifting to low-carbon energy sources to meet the energy needs of ourgroup companies' business activities.
opportunities arising from low-carbon and climate change adaptive products and services ofour group companies.
opportunities for our Group to enter new markets as we transition to a low-carbon
economy.
opportunities arising from enhancing various adaptive capacities of our group companies tocope with climate change.

30

Processes to Manage Climate-related Risks and Opportunities
Of the identified risks and opportunities, the Sustainability Committee creates a plan for each element that the Tosei Group should address inan organized manner, and the Board of Directors approves the plan. The plan is formulated based on the basic framework of risk
management, namely "avoidance," "acceptance," "mitigation," and "transfer”.
Under the supervision of the Board of Directors and in accordance with the instructions of the Sustainability Committee, the approved risk
response plans are implemented by the respective business operation systems of Tosei and its group companies. The Sustainability
Committee also takes the lead in linking the risk management plan to the business strategy by providing instructions to each Group
company and their respective business organizations.

Status of Company-wide Risk Management Integration
The Risk and Compliance Committee, which is a committee directly under the Board of Directors, is responsible for centralized and crosssectional risk management of the Tosei Group. The committee is responsible for implementing basic measures for the Group's risk
management, responding to management crises that may occur as risks emerge, and overseeing and managing the various risks
surrounding the Group's businesses.
Climate Change Risks and Opportunities, which are of particular importance among the company-wide risks and should manage following theframework recommended by the TCFD, are led by the Sustainability Committee under the supervision of the Board of Directors. The Risk andCompliance Committee ensure the integrated Enterprise Risk Management by assisting and supporting the Sustainability Committee in its
implementation of various measures.

Metrics and Targets
Disclosure Elements of Greenhouse Gas (GHG) Reduction Target
The Tosei Group has set the goal of achieving net-zero greenhouse gas emissions in Scope 1 and 2 in FY2050 to keep the global temperature
increase below 1.5°C. In addition, the Company will pursue the following reduction targets over the medium term, with FY2022 as the baseyear.

Base Year

Reduction Target**

FY2022（From December 2021 to November 2022）
Scope 1; direct emission of GHGs by business operators themselves, such as from combustion of fuelScope 2; indirect emission of GHGs associated with the use of electricity, heat, and steam

Target Year /Long-term Target: Net-zero by FY2050

Reduction Ratio

Mid-term Target: 50% reduction from base year by FY2030

The GHGs emitted by our group consist of GHGs emitted directly from our company through the usage of city gas used at our headquarter, sales offices, andcompany-operated hotels and gasoline used in company vehicles (Scope1), and GHGs emitted indirectly through the usage of electricity at our headquarter,
sales offices, and company-operated hotels and district heat and cooling used at our headquarter office (Scope2).

31Greenhouse Gases (GHG) Emissions

unit

Scope1(Direct GHG emissions)

FY2020

FY2022

FY2021(Base Year)FY2023

t-Co2

135

197

480✓

584✓

t-Co2

1,318

1,696

3,289✓

2,714✓

t-Co2

1,453

1,893

3,769✓

3,297✓

Scope2(Indirect emissions associatedwith energy sources)
Total(Scope1+2)* The indicators with ✓ mark are guaranteed by an independent third party, Sustainability Accounting Co.,Ltd.

The warranty report : FY2023 / FY2022

The PDF link on the left is valid when this report is viewed as PDF data.

* The greenhouse gas emissions shown above are the total emissions from the business activities of all domestic consolidated subsidiaries of the Tosei Group,

based on the GHGs Protocol's control criteria.
* The figures for FY2020 include estimates in some cases.
* For FY2021 calculation, the Princess Group, which became a consolidated subsidiary in October 2021, is not included.
* The Group excludes GHGs (Freon gas, etc.) other than CO2 due to their extremely small amounts, and calculates and reports only CO2.
* The GHG emission factor is based on the "Emission Factor by Electric Power Company" published by Ministry of the Environment and Ministry of Economy, Tradeand Industry, and uses the emission factor of the electric power company used by the subject building.
* As of November 30, 2023

Disclosure Based on TCFD Recommendations (Announced on September 28,
2022)
Based on TCFD recommendations, we disclosed information about Governance, Strategy, Risk Management, Metrics and Targets related toclimate change risks and opportunities. We will continue to promote our measures to climate change issues and strive to further enhance
climate-related information disclosure.losure TCFD Recommendations（PDF:1,0MB）*Progress after September 28, 2022 is reported as needed on the "Climate Change" page.

32

Biodiversity
Our Approach to Biodiversity

Efforts to Protect Urban Greenery

Efforts to Protect Ecosystems

Our Approach to Biodiversity
In accordance with the Group's environmental policy, we will strive to create urban environments that are in harmony with nature by taking
biodiversity into consideration and working to conserve and green the natural environment. We will also actively participate in local volunteer
activities to raise employee awareness of biodiversity conservation.

Efforts to Protect Urban Greenery
Efforts through Business
Promotion of Greening
In order to improve the landscape and reduce the environmental impact, we are working on greening existing real estate and development
properties. Specifically, we are planting trees on the rooftops and walls of office buildings, grounds of condominiums and detached houses tocreate green spaces. We are also focusing on rooftop greening, with a total of 3,927 square meters of green space planted so far as of theend of November 2022. We are planning to introduce this system to commercial facilities and hotels under development.

THE PALMS Chofu Manor Garden

THE PALMS Sagamihara Park Brightia

TOSEI HOTEL COCONE Ueno
Okachimachi

Symbiosis with Plants
T's garden Nishiterao, a rental condominium that we revitalized, has a variety of plantings in the courtyard and otherareas of the property, and QR codes are attached to tall trees to know tree species. Residents can interact with theplants in their daily lives and enjoy the seasonal changes.

QR code to know tree
speciesEfforts around the Head Office
Green Space around the Head Office
Tamachi Tosei Building is a 30-year-old existing building that has been renovated and occupied by the Tosei Group as its headquarters
building from 2021. Over 30% of the more than 1,300 m2 of open space is greened, with a diverse mix of tall trees, medium-sized trees,33

shrubs, and ground cover, allowing residents to enjoy the changes in the seasons. The canal that runs in front of the building is visited bywild birds, creating an environment where one can enjoy the richness of nature even in the heart of the city. The courtyards on the 5th and13th floors of the head office building are designed to replicate a Japanese garden, with a pond in which carp are kept, and trees in thegarden provide perches for wild birds so that one can hear them chirping.

Public open space

Courtyard (5F)

On the rooftop of Toranomon Tosei Building, which was used as the head office building until March
2021, we operated a rooftop vegetable garden in order to mitigate the heat island effect, raise
employee awareness of the environment, and revitalize group communication. We grew flowers andvegetables according to the season and held a "harvest festival" to raise the environmental awarenessof employees through employee-participatory events.

Participation in the "Minato City Adopt-a-Program," a community cleanup activity
Since October 2022, we have been participating in the "Minato City Adopt-a-Program" and engaging incommunity cleanup activities. The "Minato City Adopt-a-Program" is an agreement between Minato Cityand organizations that live, work, or study in Minato City to collaborate in the maintenance andmanagement of roads, parks, and other facilities. In principle, once a month, employees of our grouppick up trash and remove weeds from the streets and parks around our head office. Through these
activities, the Group will contribute to environmental preservation and beautification of the Minato City
where the head office building is located.
Cleaning activity▼Please see page 68 for activity results

Social Contribution Activities
Tree-planting Activities
For seven consecutive years from 2009 to 2015, we participated as volunteers in the "Umi-no-Mori (SeaForest)" tree-planting event organized by the Tokyo Metropolitan Government. "Umi-no-Mori" is an
initiative to plant saplings on the inner landfill of the central breakwater in Tokyo Bay, which wasreclaimed with garbage and construction soil, and transform it into a beautiful forest to create a venue
for the 2021 Tokyo Olympic and Paralympic Games. Umi-no-Mori is expected to serve as a starting point
for winds blowing from the ocean to the city center, as well as to absorb CO2, thereby reducing global
warming and the heat-island effect. It actually was used as a venue for rowing and canoeing
competitions at the Tokyo Olympics and Paralympics.

FY2015 "Umi-no-Mori" tree-planting
event

The Green Feather Fundraising Activity
The purpose of this fundraising campaign is to support Tokyo's forest maintenance, training of forest volunteers, and forest andenvironmental education for children. We have been making donations every year since 2007.

34

Efforts to Protect Ecosystems
Volunteer seaside cleanup activities
We have participated in volunteer cleanup activities since 2009. In 2023, 46 employees of our group and their families participated in"Tokyo Satoumi Aid from Nishi-Nagisa," an event to clean up floating garbage in Kasai Marine Park.While Kasai Marine Park is a valuable areain Tokyo where one can experience biodiversity close at hand and was registered under the Ramsar Convention in 2018, it has long been
plagued by debris drifting from the Kyu-Edo River and Arakawa River. The event also included a tally of the types and quantities of trashcollected to help investigate the causes of the drifted trash. Through this activity, we aim to raise employee awareness of environmental andsocial issues such as trash reduction and ecosystem conservation.

Plastic garbage

Cleaning up

Participants and marine debris
collected

Efforts in Development Properties
We are working to enhance the planting of trees in our urban development of condominiums and detached houses. In selecting tree species,
we have taken steps to ensure that residents can enjoy seasonal changes, and we have taken biodiversity into consideration by including
fruit trees. The company also emphasizes harmony with the surrounding natural environment, and at THE Palms Court Hibarigaoka, adetached house, rich plantings form a green network with the adjacent Nishi-Tokyo Ikoi-no-Mori Park, contributing to the preservation of thelocal ecosystem. In addition, at "THE Palms Yutenji Master Place," a condominium, existing trees have been transplanted to the plaza on thesite to create a streetscape that blends in with the surrounding nature without spoiling the greenery of the land.

THE PALMS Yutenji Master Place

35

Environmental Pollution and Resources
Approach to Environmental Pollution and Resource

Pollution Prevention Efforts

Conservation
Waste Reduction Efforts

Resource Conservation Efforts

Approach to Environmental Pollution and Resource Conservation
In addition to complying with all applicable laws and regulations regarding environmental pollution and taking appropriate measures, theTosei Group Environmental Policy stipulates that the Group will strive to prevent environmental pollution, promote resource conservationsuch as reducing, reusing and recycling, and promote efforts to reduce environmental impact and create a material-cycle society.

Pollution Prevention Efforts
Risk Management
When considering the acquisition of land or buildings, a "Real Estate Purchase Check Sheet" is completed and reviewed for all projects aspart of the property purchase due diligence flow. We conduct a geo-historical survey of the property to be acquired and, if necessary, a soil
contamination survey. In addition, depending on the age and structure of the property, we conduct asbestos inspections and other hazardous
material inspections to ensure risk management against contamination.

Soil Contamination Countermeasures
As part of the property purchase due diligence, further contamination investigations are conducted according to the results of the geohistorical survey. If the results confirm contamination by hazardous substances, development activities are conducted after appropriate soil
improvement and spread prevention measures are taken by a designated contaminated soil treatment company in accordance with the Soil
Contamination Countermeasures Act.

Hazardous Materials Treatment
When acquiring an existing property and demolishing or renovating it, we conduct a thorough preliminary confirmation with the demolition or
renovation contractor in order to comply with relevant laws and regulations, including asbestos surveys, and take appropriate measures toprevent the dispersal of harmful substances such as asbestos and chlorofluorocarbons. In the event that treatment or managementof specially controlled industrial waste becomes necessary at any of our buildings, we will dispose of them appropriately in accordance withlaws and regulations. In the development of our buildings, we use building materials that meet JIS and JAS standards for low emission offormaldehyde, a substance that causes sick building syndrome, in an effort to provide safe and secure housing.

FY2020Specially Controlled
Industrial Waste

PCB Waste(t)

0.76

36

FY2021

FY20220

FY202300Waste Reduction Efforts
Waste Reduction Targets and Results
The following reduction targets have been set for waste reduction.

Targets (FY2024 -)Waste Discharge Reduction Targets
Long-term target

Reduce waste discharge intensity by 15% by FY2050 compared to FY2022

Short-term target

Reduce waste discharge intensity by 5% by FY2030 compared to FY2022

Target Properties

Tosei Group's Head Office Buildings

Targets (FY2018 - FY2023)
Waste Discharge Reduction Targets
Long-term target

Reduce waste discharge intensity by 2.5% in 5 years

Short-term target

Reduce waste discharge intensity by 0.5% in 1 year

Target Properties

Fixed assets owned by the Company**Tosei's head office buildings▼Please see page 20 for performance data.

Collection and donation of plastic bottle caps through the NPO Ecocap Promotion
Association
We collect plastic bottle caps and through a NPO,the Ecocap Promotion Association, convert them into recycled plastic material and donate
them to various social contribution activities such as medical assistance, support for people with disabilities, and environmental education forchildren.

Waste Reduction and Separation
Efforts through Tenant Communication
We conduct periodic surveys of tenants in our properties regarding building management and operation
systems, facilities, etc. to understand their needs. In terms of waste reduction, separation, and recycling,
we have been taking various measures, such as putting up posters encouraging cooperation in separation
and recycling, installing trash cans for separation, and posting information on how to dispose of, separate,
and recycle trash at trash disposal sites.

Tenant education poster37

Resource Conservation Efforts
Water Resource Conservation
In promoting efforts to conserve water resources, the following reduction targets have been set.

Target (FY2024 -)Water Use Reduction Target
Reduce Tosei Group's water use intensity (㎥/㎡) from the previous year
*Tosei Group : Real estate portfolio with substantial energy management title among Tosei-owned fixed assets

Targets (FY2018 - FY2023)
Water Use Reduction Targets
Long-term target

Reduce water use intensity by 2.5% in 5 years

Short-term target

Reduce water use intensity by 0.5% in 1 year

Target Properties

Fixed assets owned by the Company▼Please see page 19 for performance data.

Business Activities in Water Stressed Areas
Our group's main business activities are located in Tokyo and three prefectures (Kanagawa, Chiba, and Saitama) in Japan. According to the
Aqueduct survey by the World Resource Institute (WRI), the water-related risk in this area falls into the "Low to Low-Medium" category, andwe have confirmed that we do not conduct business activities in areas where water stress is a concern.

Environment-related Violations and Fines
There were no penalties or fines for violations of environment-related laws and regulations (including water-related) or accidents in FY2023.

Efforts through the Real Estate Revitalization BusinessIn our real estate revitalization business, existing buildings are utilized to enhance their value, which has less impact on the environment andconserves resources compared to rebuilding. In order to make the most of the individuality of a wide variety of existing properties andfurther enhance their attractiveness, we consider a revitalization menu with "Security," "Design" and "Ecofriendly" as important guidelines,
providing optimal value for owners and tenants.

Utilization of Idle Company Housing
In recent years, company housing has been increasingly decommissioned and left vacant as companies reassess their assets, contributing to
the growing problem of vacant housing in cities. We are working to supply new rental housing to the market while making effective use of
the existing buildings by purchasing unused company housing and enhancing the value of the property.

38

Case 1: Improvement of soundproofing performance (T-Rhythmic SOKA)
This property was built as a company dormitory and had been vacant. In addition to soundproofing all of
the studio units, a lounge for concerts and a storage room were newly built, and the property wasrevitalized as a rental apartment for music lovers.

Lounge where concerts can be held

Case 2: Establishment of new common facilities (T's garden Kitakashiwa)
This large property was once developed as a corporate housing for families, which was transformed into a
rental apartment with three new common facilities: a study room, kids' room, and party room, which are asextensive as those in condominiums.

Spacious kids' room

Case 3: Renewal to a share house (ARDEN Fujigaoka)
A former company dormitory was extensively renovated and revitalized as a share house. Existing space
was effectively utilized by converting an unneeded shared bathroom into a lounge and renovating the hotwater supply room into a shower room.

Lounge as a place for socializing

Case 4: Enhancement of disaster prevention and green conservation (T's garden Nishiterao)
The company housing, which had become vacant and nearly abandoned, was acquired, and three themes
were established: "green conservation," "disaster prevention and crime prevention," and "energy andresource conservation. The company aims to contribute to "SDGs (Sustainable Development Goals)" by
upgrading the value of the property with facilities and specifications in line with the themes.

Courtyard with design andfunctionality

Case 5: Installation of solar panels and storage batteries (T's eco Kawasaki)
The condominium was revitalized as a rental condominium with the theme of promoting ecology throughout
the entire condominium, with the installation of LED lighting and other energy-saving equipment in bothcommon and private areas, as well as our first solar panels on the rooftop.

Solar panels installed on therooftop

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 ecofriendly because almost no water or trees are used. The Group aims to reduce the amount of paper used and raise
environmental awareness among employees by replacing business cards, the use of which reaches 500 pieces perperson every year, with those made of eco-friendly materials.

39

Sustainability Finance
ESG Loans

Green Bonds

ESG Loans
When procuring funds from financial institutions for our real estate revitalization and development business, we take advantage of loan
programs that banks evaluate "companies with ESG-conscious management." Under Hokuriku Bank's "Eco-Lead Master" environmental
assessment loan program, we have received an "S-rank" rating a total of 13 times since 2010, and have received preferential interest rates.
In the environmental rank evaluation of the loan system, we were evaluated for our "environmentally friendly business activities" and "ESGconscious initiatives" being promoted throughout the Group. In addition, in 2021, we received an "A-rank" for "good ESG/SDGs initiatives
and information disclosure" under SMBC's "ESG/SDGs evaluation-type loan.
We are also actively engaged in the use of green loans, which are evaluated for borrowing to finance green projects. In 2021, we obtained a"Green 1" in JCR Green Loan Rating from Japan Credit Rating Agency, Ltd. (JCR) for a loan from Aozora Bank for the construction of alogistics facility.

Allocation

Lender

Property

Aozora Bank

T’s Logi Ome

Use of Proceeds(Sold)

Construction funds fordevelopment of logistics
facilities, etc.
※1

Total amount of Loan

5,800 million yen

Procurement

Redemption

Date

Date

July 30, 2021

External Evaluation

JCR

Status of Allocation ofEnvironmental

Proceeds

Improvement Impact

Fully allocatedGreen1※2

June 30, 2025※1

BELS 5 star rating(Acquired in October 2022)

This loan was repaid on December 8, 2023 through the sale of the property.

※2 We received "Green 1" rating, the highest JCR green loan rating, from Japan Credit Rating Agency, Ltd (JCR).
As of December 31, 2023

Green Bonds
Tosei Reit Investment Corporation, which has been actively working on green finance, established a "Green Finance Framework" and issued
green bonds in 2021, receiving the highest rating of "Green 1 (F)" from JCR. Through green finance, the corporation aims to further enhance
its ESG initiatives and strengthen its fund-raising base by expanding the investor base interested in ESG investment.

40

Environmental Real Estate Certifications
Acquisition of Environmental Real Estate Certification for

DBJ Green Building Certification

Fixed Assets

CASBEE (Comprehensive Assessment System for Built

BELS (Building-Housing Energy-efficiency Labeling System)

Environment Efficiency)

Acquisition of Environmental Real Estate Certification for Fixed Assets
We promote environmental and social considerations in our revitalization and development real estate, and actively acquire environmental
real estate certifications such as "BELS (Building Energy Efficiency and Leasing System)", "DBJ Green Building Certification", and "CASBEE(Comprehensive Assessment System for Built Environment Efficiency)" to demonstrate the performance of our real estate to ourstakeholders.The progress rate of acquisition of environmental real estate certification for fixed assets is as follows.

FY2020

FY2021

FY2022

FY2023

FY2024

Newly certified
properties
total floor-

14,347

18,13012,426

2,851

1,583

15,93034,06046,48649,337

2%

17%

32%

40%

42%

space(㎡)
Certifiedproperties
Cumulative total
floor space(㎡)Percentage ofcertification
progress※ The certification progress rate refers to the percentage of the total floor area of properties that have acquired "BELS (Building Energy
Efficiency and Leasing System)" or "DBJ Green Building Certification".
※ The certification progress rate is calculated based on the total floor area excluding properties that cannot be certified due to reasons suchas planned sale, condominium ownership, or lack of management authority.
As of April 5, 2024

DBJ Green Building Certification
Property Name

External Appearance

Rank

Toranomon Tosei

Year of acquisition

May, 2023

Building(reacquisition)★★（2 Star）

41

Total floor area

4,515.24㎡

Koishikawa Tosei

May, 2023

Building(reacquisition)

3,275.97㎡★★（2 Star）

Tamachi Tosei
Building

May, 2022

15,722.40㎡

October, 2023

10,459.63㎡★★（2 Star）

Narimasu Tosei
Building★★★（3 Star）

What is DBJ Green Building Certification?
DBJ Green Building Certification is a certification system established by the Development Bank of Japan (DBJ) in April 2011 to serve asa bridge between businesses, financial institutions, and investors through the evaluation of environmentally and socially conscious realestate. In addition to the environmental performance of the building, the program supports ESG initiatives for existing buildings
through a comprehensive evaluation that includes consideration of the social demands of the various stakeholders surrounding theproperty.

BELS (Building-Housing Energy-efficiency Labeling System)

Property Name

External Appearance

Rank

Awajicho Tosei Building

Year ofacquisition

Total floor area

May, 2021

1,582.79㎡

December, 2021

6,384.27㎡★★★（3 Star）

Shinden Logistics★★★★（4 Star）

42

Yotsuya Tosei Building

April, 2022

3,417.27㎡

April, 2022

4,515.24㎡

August, 2022

26,937.68㎡

October, 2022

27,975.48㎡

May, 2023

10,459.63㎡

May, 2023

3,275.97㎡

March, 2024

1,966.14㎡★★★（3 Star）

Toranomon Tosei Building★★（2 Star）

T’s Logi Sano★★★★★（5 Star）

T’s Logi Ome★★★★★（5 Star）

Narimasu Tosei Building★★★★（4 Star）

Koishikawa Tosei Building★★★（3 Star）
Fujisawa Tosei Building★★★ 3 Star）

43

Edogawabashi Tosei
Building

March, 2024

1,060.64㎡

October, 2023

1,790.74㎡★★★★★（5 Star）

Nakanosakaue Tosei
Building(Former Daishin NS
Building)★★★（3 Star）

What is BELS (Building-Housing Energy-efficiency Labeling System)?
BELS (Building-Housing Energy-efficiency Labeling System) is one of the third-party certification systems based on the "Guidelines forEnergy Efficiency Labeling of Buildings (Guidelines for Labeling Energy Consumption Performance of Buildings)" established by the
Ministry of Land, Infrastructure, Transport and Tourism.

CASBEE (Comprehensive Assessment System for Built Environment Efficiency)

Property Name

Heiwajima Tosei
Building

External Appearance

Type of Certification

Rank

CASBEE for New

Year of

Total floor

acquisition

area

May, 2009

Construction

14,449.47㎡

Rank A

Kamata Tosei Building

CASBEE for New

December,

Construction

2009

8,354.58㎡

Rank A

Toranomon Tosei
Building

September,

CASBEE for Real Estate2015
Rank A

44

4,515.24㎡

What is CASBEE (Comprehensive Assessment System for Built Environment
Efficiency)?
CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a system for evaluating the environmental
performance of buildings. In addition to aspects of environmental load reduction such as energy saving, resource saving, and recycling
performance, it also includes consideration of indoor comfort, landscape, and biodiversity, and is a comprehensive check from a broad
perspective.

*The above includes sold properties and properties for which certification has expired.

45

z Social
Labor Environment
Basic Approach to the Labor Environment

Respect for Human Rights

Safety and HealthWork-life Balance and Diversity

Human Resource Management

Social Performance Data

Basic Approach to the Labor Environment
We recognize that the creation of a healthy, safe, and comfortable work environment for all employees is an important factor for sustainablecorporate growth, and we promote occupational health and safety activities, including the prevention of occupational accidents, and healthpromotion initiatives. We respect the human rights of all people who work for our group, do not tolerate any discrimination or harassment,
and strive to develop human resources to become professionals with a good heart and build a favorable work environment.

Respect for Human Rights
Our Approach to Human Rights
The Tosei Group's approach to respect for human rights, employee ethics and norms, and occupational health and safety is set forth inpolicies and internal regulations, including the "Tosei Group Human Rights Policy" and the "Tosei Group Ethics Code." These policies, norms,
and regulations were established through meetings of the Management Committee and Board of Directors of Tosei Corporation, and areposted on the Company's website and intranet, as well as distributed in the Risk Compliance Guidebook, to ensure that all employees are
fully aware of them. In addition, periodic education is provided to all employees to promote correct understanding of these policies.

The Tosei Group Human Rights Policy
The Tosei Group respects the fundamental human rights set forth in the International Bill of Human Rights and the Guiding Principles
on Business and Human Rights. We support and respect the following items as basic labor rights.
１．Prohibition of discrimination
We prohibit all forms of discrimination based on race, religion, gender, age, sexual orientation, disability, or nationality.
２．Prohibition of harassment
We prohibit all forms of harassment, including sexual harassment and power harassment.
３．Prohibition of child labor
We prohibit all forms of child labor.
４．Prohibition of forced labor
We prohibit all forms of forced labor.
５．Reduction of excessive work
We implement appropriate working hour management to reduce excessive work.
６．Respect for freedom of association and the right to collective bargaining
We respect freedom of association and the right to collective bargaining.
７．Payment of wages above the minimum wage
We comply with the Minimum Wage Law and other labor laws and regulations to pay wages to our employees above the minimum
wage.
８．Ensuring health and safety
We strive to prevent occupational accidents and create workplaces where employees can work in good health and safety.

46

The Tosei Group Ethics CodeTo fulfill our corporate social responsibility, we will always attach importance to a high standard of ethics and a law-abiding spirit whilepursuing our corporate philosophy, and will conduct our business activities in accordance with the following Code.
1.Sustainable economic growth and resolution of social issues
We will strive for sustainable growth and the resolution of social issues by always putting ourselves in our customers' shoes andpositioning safety and security at the heart of the products and services we develop and provide, and by forever remaining humble andconducting business activities in good faith.
2.Fair Information Disclosure
We will disclose the necessary corporate information in a fair, timely and appropriate manner in order to obtain proper evaluation andunderstanding from investors and wider society.
3.Fair and transparent decision-making
We will make decisions based on appropriate and explainable reasoning, in accordance with laws, regulations and internal rules.
4.Thorough compliance with laws and regulations and fair dealings
We will understand both domestic and international laws and regulations and will never engage in any conduct that violates such
legislation, or in any fraudulent conduct. We will also engage in fair and free competition and appropriate transactions, and will avoid
becoming involved in bribery or other similar giving or receiving of unfair advantage in any way.
5.Comprehensive crisis management
We will not have any relationships with antisocial forces and will conduct thorough and organized crisis management to prepare for aterrorism, cyber-attack, natural disaster or other crisis.
6.Protection of confidential information
We will protect and strictly manage the material information of the Tosei Group, the personal information of customers, the informationof business partners, and other confidential information.
7.Respect for human rights and creation of positive work environments
We will respect human rights and will not tolerate any behavior which violates the dignity of individuals including discrimination andharassment. We will also strive to develop human resources and create working environment with mutual trust and decency.
8.Initiatives to address environmental issues
We will contribute to the realization of a sustainable society by implementing initiatives to reduce our environmental impact, recycle
resources and address the risk of climate change, based on a strong awareness of the importance of environmental issues.
9.Social Contribution
We will seek harmony with local communities and the global community as a good corporate citizen and actively and continuously
promote activities that contribute to society.
10.Commitment of Top Management
The Tosei Group's Top Management recognizes that it falls to them to embody the spirit of this Code and, in the event of a violation ofthis Code, top management will proactively take charge of resolving the issue, endeavor to identify the cause and prevent a
recurrence, demonstrate accountability, including the disclosure of information to markets and society in a timely and appropriatemanner, and fairly and strictly punish those involved, including themselves.

47

Efforts to Respect Human Rights
Addressing Labor Issues
Prohibition of child labor
We require applicants to be at least 18 years of age to be considered for employment, and we are required to verify the age of applicants
when we receive an application for employment.
Prohibition of forced labor
In hiring, we assume that the applicant has applied for the position, and after one or more employment screenings, we notify theapplicant of his/her acceptance. Upon entering the company, working conditions are presented and employment is initiated upon
agreement with the applicant.
Prevention of overwork
We strive to prevent overwork through daily and monthly monitoring of working hours, no-overtime days, and encouraging employees totake paid leave.
Payment of salary above living wage
Our basic policy is not only to comply with minimum wage regulations, but also to pay wages that exceed them. For FY2023, the averageannual salary was 8.47 million yen.(Tosei Corporation)

Respect for Human Rights in the Supply Chain
We confirm the status of our suppliers' efforts to respect human rights in the supply chain. We have established a Sustainable Procurement
Manual and conduct an ESG questionnaire for suppliers whose annual transaction value exceeds a certain level, to check their efforts toprohibit child labor, forced labor, and harassment, ensure occupational health and safety, comply with laws and regulations, giveconsideration to the environment, and implement risk management. The Sustainability Committee then reviews the results and discusses
whether or not to continue transactions with them.
In 2023, we conducted questionnaires for 6 suppliers in the real estate revitalization, development, and rental businesses, and thecommittee reviewed their initiatives and discussed whether to continue transactions with them. The same questionnaire has been conductedsince 2021, monitoring a cumulative total of 19 suppliers, accounting for more than 84% of total supplier orders in the relevant businesses.

Efforts to Prevent Harassment
In addition to distributing the "Harassment Handbook" to all Group officers and employees to provide specific definitions and examples ofharassment, we are working to promote understanding and prevent harassment by distributing educational content to the Risk Compliance
Portal on the intranet and providing online courses by outside instructors. In addition, "Personnel, Labor and Management Training" isprovided to managers, which includes training on how to respond to incidents of harassment, what they should pay attention to as
managers, and how to prepare themselves for harassment prevention.

Harassment Consultation Desk and Working Style Consultation Desk
The Group has established dedicated consultation desk (via e-mail or telephone) in the human resources sections of each Group company forthe purpose of preventing all forms of harassment and responding promptly and appropriately in the event that harassment does occur. Thisharassment consultation desk is available to all Group employees regardless of their employment status. In resolving the problem, we will
confirm the facts through hearings with the reporter, the subject of the report, as well as cooperating parties, etc., and take appropriate
measures to prevent recurrence. If you wish to consult or report anonymously, you may do so through the dedicated anonymous
consultation desk. In addition, we ensure that the privacy of the informant is protected and that confidentiality is strictly observed so thatthe informant will not be disadvantaged when using the harassment consultation desk. If an investigation confirms that harassment has
occurred, disciplinary action will be taken against the harasser in accordance with the rules on rewards and punishments. In addition to theharassment consultation desk, the Company also provides a consultation desk regarding working styles and personnel systems.
In addition to the harassment consultation desk, we have also established the "Tosei Hot Line," a whistle-blowing desk for the entire Group,
which accepts reports from employees and officers of the Group on any conduct that violates or may violate laws and regulations, for theprevention and early detection of violations of laws and regulations and corruption, including bribery.

48

Safety and HealthApproach to Safety and Health in the Workplace
We recognize that ensuring health and safety in the workplace is a key management issue, and we strive to prevent occupational accidents
and promote the creation of a healthy and safe work environment in which all employees can maximize their abilities. We have established a“Health Committee” as a system to promote the health of our employees, to create a working environment where employees can work
energetically, and to assess risks related to health and safety. The Health Committee meets monthly and reports to the Board of Directors.

Tosei Group Health & Productivity Management Policy
The Tosei Group regards employees' health and safety as a key management issue, build a workplace environment that inspires employees
to work energetically, and take measures proactively to maintain and promote their health, under our management principle: Continue
developing seasoned, true professionals based on people-centered management.

Health and Productivity Management Declaration
１．Promoting employee health
We will drive health and productivity management proactively to build a workplace environment that inspires each employee to work
energetically with good physical and mental health.
２．Growth and development of the GroupWe will work to maintain and promote the health of Group companies' employees, thereby improving the Group's performance for its
further growth and development.
３．Contribution to society
Through real-estate-related products and services we provide at the Group, we will work to maintain and promote the health of people
living in local communities, thus contributing to building a wealthy, sustainable society.

Promotion System
Health Committee
Management andSupervisory Body

Board of directors

Chairman of the Health Committee:
Shunsuke Yamaguchi, Director and Managing Executive Officer
Representatives from each department participate as committee
Person in Charge and Matters ofDeliberations

members, and the meeting is held monthly in the presence of anindustrial physician. The Health Committee monitors the overall
working environment, including the status of the workplaceenvironment, health checkups received, and overtime hours
worked, evaluates risks related to employee health and safety, andprovides feedback to employees and takes other actions. Reports
are also made to the Board of Directors on a monthly basis.

OfficePersonnel department

49

Health and Productivity Management Organization
We have been certified as an "Health and Productivity Management Organization 2024 (Large Corporation Division)" following 2023. The"Health and Productivity Management Organization" is a system to honor large corporations, small and medium-sized companies, and othercorporations that practice particularly excellent health management, based on initiatives that meet local health issues and health promotion
efforts promoted by Nippon Kenko Kaigi. We have established "Tosei Group Health & Productivity Management Policy" and regard the healthand safety of employees as an important management issue, and is actively working on measures to maintain and promote health bycreating a workplace environment where employees can work with vitality.

Health Management
Health Checkup
In addition to the legally mandated annual medical checkup, employees aged 35 and over are eligible for company-subsidized thoroughphysical examination to detect illnesses at an early stage and further promote their health.
For FY2023, the health checkup uptake rate was 100%.(Tosei Corporation)

Stress Check
The stress check system is implemented once a year for the purpose of primary prevention of mental health problems by helping employees
recognize and cope with their own stress and improving the work environment.
For FY2023, the stress check examination rate was 100%.(Tosei Corporation)

Cooperation with Industrial Physician
For employees who work overtime above a certain level, including managers, an interview with an industrial physician is mandatory, ameasure that exceeds the legal standard.

Health Promotion Programs
In addition to regular health checkups, we offer health promotion programs that employees can easily participate in on a voluntary basis. In
2023, we held "health seminars" and "health measurement session" by public health nurses and "relaxation seminars" with yoga instructors.

Relaxation Seminar

Health measurement session

Mental healthcare
Questionnaires and training on mental health care are conducted for all employees under the guidance of affiliated industrial physicians. In
addition, in cooperation with affiliated hospitals, we have set up a dedicated desk where employees can directly seek health consultation.

50

Measures to Prevent the COVID-19 Infection
In response to the spread of the COVID-19 infection, we implemented measures to ensure the health and safety of employees, their families,
business partners, and others, such as requiring the wearing of masks, installing disinfectants, ventilating office and meeting rooms,
encouraging hand sanitization, and installing acrylic panels. In addition, working from home is encouraged, and a teleworking environmenthas been prepared by distributing mobile terminals, utilizing the cloud, building PCs with external connectivity, and establishing various otherinfrastructure.

*We are working to continue our flexible working style while changing our measures after the transition to a new type 5 coronavirus infectionin May 2023.

Occupational Safety and Health
Employee Safety and Health
We recognize the importance of a healthy, safe, and comfortable work environment for all employees in order to achieve sustainablecorporate growth, and we are promoting occupational health and safety activities, including the prevention of occupational accidents, and thepromotion of employee health. In the event of an occupational accident, the Human Resources Department, which is the main management
department, will promptly confirm the situation and, in cooperation with the department where the incident occurred, report to and consult
with various meetings and related organizations in an effort to contain the situation and take appropriate measures. In addition, we promptly
formulate and implement countermeasures, ensure that all employees of the Group are fully aware of these measures, and continuously
follow up to prevent recurrence.
For FY2023, the number of violations of labor standards and the number of occupational accidents were 0.(Tosei Corporation)

Safety and Health in the Supply Chain
Our Approach to Safety and Health
Recognizing that promoting the creation of a healthy, safe, and comfortable work environment for all employees of the Group is an importantmatter for sustainable corporate growth, the Group promotes occupational health and safety activities, including the prevention ofoccupational accidents, and initiatives related to health promotion. In addition, at every stage from design, construction, and construction
supervision to building operation and management, we work closely and collaboratively with government agencies, suppliers, contractors,
and others to ensure the health, safety, and security of workplaces, construction sites, and other areas.

Supplier Questionnaire (ESG Questionnaire)
As part of our supply chain management, we have established a Sustainable Procurement Manual and conduct an annual supplierquestionnaire (ESG questionnaire) for important suppliers whose annual order value exceeds a certain amount to check their respect forhuman rights, including occupational health and safety, prohibition of child labor and forced labor, prohibition of harassment, as well ascompliance with laws, environmental considerations, and risk management. The results are reviewed by the Sustainability Committee, whichthen deliberates on whether or not to continue transactions with the companies. In 2023, we conducted questionnaires for 6 suppliers in thereal estate revitalization, development, and rental businesses, and the committee reviewed their initiatives and discussed whether tocontinue transactions with them. The same questionnaire has been conducted since 2021, monitoring a cumulative total of 19 suppliers,
accounting for more than 84% of total supplier orders in the relevant businesses.

Our Approach to Real Estate Portfolio Management
In the management of real estate portfolios, the Tosei Group holds an annual “Operations Quality Improvement
Conference” to raise awareness of safety, quality management and compliance and to build a strong partnership withpartner companies, with the aim of improving the quality of operations. This event is hosted by Tosei Community,
which operates a property management business, and is a group training session for its primary suppliers, orsecondary suppliers to Tosei, which are important business partners, and is part of the supply chain management of
the Tosei Group's real estate portfolio. 51 participants from 29 business partners joined the event in 2023.

Percentage of Offices with OHSAS 18001 Certification
Currently, we have no offices with OHSAS 18001 certification.

51

Convention

Work-Life Balance and Diversity
Working Hours Management
Compliance with labor-related laws
To reduce long working hours and comply with the 36 Agreements, we comply with the Labor Standards Law, the Industrial Safety and
Health Law, and other domestic laws and regulations, and strive to properly manage working hours and the working environment.

Prevention of overwork
We manage employee working hours on a daily basis through our attendance management system, and notify employees and theirsupervisors whose overtime hours exceed a certain threshold.
We are promoting initiatives to reduce overtime and excessive work, such as the introduction of "No Overtime Days.
We report the results of monthly monitoring of employee overtime and use of paid leave to the Health Committee, and after sharing
information, we are working to reduce overtime and promote the use of paid leave.
We provide an occupational physician consultation to employees whose overtime hours exceed a certain standard.
For FY2023, the average overtime hours was 24.3 hours per month.(Tosei Corporation)

Encouraging Employees to Take Paid Leave
To create an atmosphere that encourages employees to take paid leave, we have introduced "anniversary leave," which allows employees totake a day of paid leave once a year on an anniversary date they voluntarily set, and "planned annual leave (1 day)," which allows
employees to take a summer vacation for a longer period of time.
For FY2023, the paid leave utilization rate was 66.1%.(Tosei Corporation)

Various Leave Systems
To support changes in life due to life stages such as childbirth, childcare, and nursing care, we have established various systems including
maternity leave, childcare leave, and nursing care leave.
For FY2023, the female childcare leave utilization rate is 100%, and the male childcare leave utilization rate is 42.9%.(Tosei Corporation)

Flexible Working Systems
Short-time Work・Staggered Commute
Employees who care for children in the third grade of elementary school or younger and those who care for family members in need ofnursing care* may shorten their working hours by 30-minute increments up to a maximum of two hours per day. In addition to this,
employees who care for children in the third grade of elementary school or younger are allowed to stagger their work hours by 30-minuteincrements, up to a maximum of one hour before or after the start and end of the workday.
*The coverage is three years from the start date of use per family member in need of care for.
For FY2023, the number of employees using shortened working hours was 10.(Tosei Corporation)

Working From HomeAs a measure to prevent the spread of the COVID-19, we are promoting the use of cloud services and web meetings to encourage working
from home.
*We are working to continue our flexible working style while changing our measures after the transition to a new type 5 coronavirus infectionin May 2023.

52

In-house Club Activities
We provide subsidies for in-house club activities to stimulate communication among employees. So far, a total of 10 cultural and athletic
clubs have been established, providing valuable opportunities for communication with employees in departments and group companies withwhich they have little contact in their daily work.

Family Days
We hold family days once a year to give children a better understanding of their parents' job and workplace. In
2023, a total of 21 families or 69 family members attended the family day and enjoyed activities such as sticker
relay around the headoffice, origami corner using recycled wallpaper and family photo shoot. The day also served asa social occasion for employees and their family members to get to know each other.
*Canceled from 2020 to 2022 because of the pandemic of COVID-19.

Origami corner

Employee Satisfaction Survey
We implement employee satisfaction surveys to gain an understanding of employees' attitudes toward their work and the workplaceenvironment, which is reflected in various personnel policies.

LGBTs Initiatives
Tosei Group prohibits any discrimination related to sexual orientation in our human rights policy. In addition, we have established a contact
point (anonymous or otherwise) for consultation in the unlikely event of discrimination or harassment related to sexual orientation, etc., andhave built a system to deal with the situation promptly.

Initiatives for Condominium Sales
Princess Square Co.,Ltd. is promoting various initiatives to support LGBTs people in finding and purchasing housing, including holding
seminars for employees with outside lecturers and sponsoring the "Tokyo Rainbow Pride" since 2018. In addition, the company has received
the highest "Gold" rating for three consecutive years since 2020 in the "PRIDE Index," which evaluates a company's commitment to LGBTs
people.

LGBTs Training
Princess Square Co.,Ltd. invite outside lecturers who are LGBT people to our training sessions. The lecturers sharedvarious experiences and explained terms such as SOGIE, a generic term for sexual orientation, gender identity, andgender expression, and ALLY, which refers to associates who endorse and support the activities of LGBT people, andhow those working in companies should interact with and support LGBT people.

Human Resource Management
Approach to Human Resource Development
Human Resource Development Based on the Group's Corporate Philosophy
In order to realize the Tosei Group's goal of "becoming a group of seasoned professionals who create new value and inspiration in all aspectsof real estate," our human resource development goal is to create an organization in which each and every employee can strive to improvetheir knowledge and skills, and maximize their motivation and abilities. We value diversity in the hiring, development, and promotion ofhuman resources, and provide equal opportunities for growth and success to those who continue to pursue our corporate philosophy,
regardless of gender, nationality, or employment history.

53

Human Resource Development Policy
The Group positions human resource development as a total system that includes the creation of training opportunities for employees, aswell as promotion, transfer, and evaluation, and focuses on "training from various perspectives," "on-the-job training," "support for selfdevelopment," and "cooperation with various personnel systems."
Training from various perspectives
In the rank-based training, employees acquire the skills and abilities to perform their jobs in a systematic, intensive, and experiential
manner. Job-specific training provides systematic, intensive, and experiential learning of the value-added competencies defined for eachorganization and job category. Training common to all employees (training in essential knowledge and skills that all employees must
acquire) includes various compliance training programs, English language training, and IT literacy training.
On-the-job training (OJT)
It is a systematic training program for employees to provide each other with necessary information, knowledge, skills, and experience thatare closely related to their work. Through this process of mutual development, we aim to improve the leadership and instructional skills of
not only those who receive instruction but also those who promote OJT.
Support for Self-Development
In order to support the self-development of each employee to develop his or her own abilities, we have established a system ofcongratulatory payments for the acquisition of various qualifications, and support for attendance at courses sponsored by educational andtraining institutions designated by the company.
Cooperation with Various Personnel Systems
In order to promote the growth and vitalization of each employee and the organization, we make much account of opportunities forcommunication with each individual, such as providing regular feedback on the results of personnel evaluations, regular reports on OJT,
and opportunities to meet with managers and the Human Resources Department to discuss career development and job rotations.

Education and Training
Training Title

Target Group

Training Objectives

Frequency

Training Contents
Description of the Group's

To understand the matters to
Induction training
for new employees

New graduates andbe complied with as an

new members who

employee of our group,join mid-way

business outline, system

operations
Every year

Basics of organization, risk
compliance, and IT systems
Basic knowledge of the use ofoperation rules, etc.

installed IT systems, etc.
Harassment Prevention
ComplianceTraining

Whistle-blowing system

Foster a culture and raise
All employees

awareness of compliance andEvery year

acquire latest knowledge.

Ethics Code (including
promotion of fair trade)
Compliance trends, etc.
Mental health issues
Periodic Health Checkups and

To deepen understanding ofManagement
Training

Health Management

health care, personnel andManagers

labor management, which areimportant for department andunit operations.

Every year

Working hour management
Harassment
Trends in human resources andlabor issues, etc.

54

Participants voluntarily selectfrom a wide range of training
programs offered by external
Skills Training

All employees

To improve the individual skills
and knowledge of employees.

Every year

organizations, including
business skills, sales
techniques, thinking methods,
management, tool creation
skills, etc.
Definition of Information Assets
Rules to prevent information

Raise awareness of information
Information AssetManagement

leakageleak prevention and establish
All employees

Training

internal rules regarding

Every year

Management of personal andinformation asset management

inside informationand insider trading.

Basic knowledge andimportance of insider trading
prevention, etc.
Tosei Group's ESG promotion
system and disaster prevention-

To acquire knowledge on ESG
ESG Training

All employees

and establish sustainability
awareness in the course of

related efforts
Every year

Corporate Governance
Climate change issues,

business.

environmental real estatecertification, etc.
Lecture on theInvite outside lecturers toacquisition of theProspective

Obtain the "Real Estate"Real Estate

employees and new

Notary" qualification, which is

Notary"graduates

related to the business.

conduct training to obtain theEvery year

"Real Estate Notary"
qualification, which is related toqualification

the business
Recent Court Decisions on
All employees of the

Building Lots and Buildings

Sales Department

Transactions

except Asset

Revision of Real Estate

Solution Business
Promotion

To acquire basic and applied

Business Law

Department andknowledge of relevant laws andTraining

Architecture

regulations and to foster aPlanning Department

culture of legal compliance.

Brokerage Act based on the Act
on the Arrangement of Related
Every year

Laws for the Formation of a
Digital Society*Excludes division

Act on Prevention of Transfer ofmanagers and above

Criminal Proceeds

and temporary

Consumer Contract Act

employees.

Advertising Regulations

Support for Getting Qualifications
In order to support the self-development of employees and to promote the acquisition of qualifications necessary for the licensing ofoperations related to the Company and the Group, and to contribute to the promotion of human resource development of the Company, theCompany has a system to provide congratulatory money for the acquisition of such qualifications.
For FY2023, the number of newly qualified employees was 23.(Tosei Corporation)

55

Social Performance Data
Employees Data
FY2018 - FY2022:
Group as a whole
FY2023: Tosei Corporation/(GroupFY2018FY2019FY2020

FY2021

FY2022

FY2023as a whole)
Male/
Number of

Female294/137

314/143

345/164411/227430/233

431

457

509

638

663

68/32

69/31

68/32

64/36

65/35

50/32

56/30

70/47

84/64

96/64

82

86

117

148

160

89/50

103/5498/50

125/81

115/92

139

157

148

206

207

110/42

101/41111/50124/66

119/61

152

142

161

190

180

40/11

53/13

58/15

67/13

84/13

51

66

73

80

97

5/2

4/2

8/2

11/3

16/3

7

6

10

14

19

101/6

104/5

101/8

124/13

136/14

107

109

109

137

150

95/5

95/5

92/8

90/10

91/9

0

0

0

2

1

201/67(474/253)

Employees
Total
Percentage of

Male/

Employees(%)

FemaleMale/

20s

FemaleTotal
Male/
Female268(727)75/25(65/35)55/22(101/64)
77(165)54/17(129/102)

30s
Total
Male/

Employees
by AgeGroup

40s

Female
Total
Male/

50s

Female
Total

60s
and
over

Male/
Female
Total
Male/

Number of Managers

Female
Total

Percentage of

Male/Managers(%)

FemaleNumber of Female Directors

71(231)
44/20(124/64)
64(188)33/7(103/22)40(125)
15/1(17/1)
16(18)
63/4(156/12)67(168)
94/6(93/7)
0(1)*Figures from FY2018 to FY2022 are for the Tosei Group as a whole. Figures from FY2023 are for Tosei Corporation on a non-consolidated
basis. Figures in ( ) are for the Tosei Group as a whole.
Coverage of the Tosei Group as a whole: Tosei Corporation, Tosei Asset Advisors, Inc., Tosei Community Co., Ltd., Tosei Logistics
Management Co., Ltd., Tosei Hotel Management Co., Ltd., Tosei Hotel Service Co., Ltd., Princess Square Co., Ltd., Kishino Coporation, Masuda
Kenzai-ten Co., Ltd., Isogo Asset Management Co., Ltd., Shibaura Residential Co., Ltd., TOSEI-R, Inc.

56

Employment Data
FY2018Male/
Number of new graduate

FemaleFY2019FY2020

FY2021

FY2022

FY2023

7/5

7/3

7/3

10/3

10/5

14/6

12

10

10

13

15

20

21/3

19/3

13/7

15/11

30/13

29/5

24

22

20

26

43

34

2/7

2/8

3/16

2/7

0/6

18/4

9

10

19

9

6

22

0.36

0.35

1.64

1.33

1.63

4.9/6.7

5.3/7.0

5.4/6.4

5.0/6.5

5.2/5.6

5.3/6.2

5.5

5.8

5.7

5.4

5.5

5.6

-

-

-

-

69.0

-

-

-

-

68.5

hires
Total
Male/
Number of mid-career

Female

hires
Total
Male/
Number of non-regularFemalehires
Total
Percentage of employees withdisabilities (%)
Male/
Average number of years

Female2.24(1.10)of service
Whole

All Employee

Whole
GenderRegularWage Gap

Employee*1*2*3

*4

nt/

-

-

-

-

82.5/82.0

General

-

-

-

-

86.2

15

18

20

14

24

7.6

8.2

9.1

8.6

9.3

*5

Turnover rate for personal reasons (%)

85.0(82.4/
80.4)

Fixed-term Employee

personal reasons

70.5(67.6)
85.1/

Manageme

Number of employees who left for

69.5(67.9)

52.7(74.6)

21(105)8.9(15.7)

Coverage: Tosei Corporation. Figures in ( ) are for the Tosei Group as a whole.
Coverage of the Tosei Group as a whole: Tosei Corporation, Tosei Asset Advisors, Inc., Tosei Community Co., Ltd., Tosei Logistics
Management Co., Ltd., Tosei Hotel Management Co., Ltd., Tosei Hotel Service Co., Ltd., Princess Square Co., Ltd., Kishino Coporation, Masuda
Kenzai-ten Co., Ltd., Isogo Asset Management Co., Ltd., Shibaura Residential Co., Ltd., TOSEI-R, Inc.
*1

Percentage of women in average annual wages, with men as 100*2

Target Periods：FY2022 (from December 1, 2021 to November 30, 2022)*3

Wages：Includes fixed salary, remuneration for overtime, bonuses, etc., and excludes retirement allowance, commuting allowance, etc.

*4Regular Employee：Excluding seconded employees.

*5

Fixed-term Employee：Excluding temporary employees.

57

Leaves and Diverse Work Styles Data
FY2018Overtime working hours(average per employee)
Percentage of paid leave used (%)
Male/
Number of employees

FemaleFY2019FY2020

FY2021

FY2022

FY2023

32:01

29:03

25:55

26:29

24:45

24:18

44.4

65.1

60.3

65.4

68.3

66.1

0/3

0/3

0/3

1/3

4/4

3/0

3

3

3

4

8

3

0/100

0/100

0/100

7/100

40/100

43/0

0/100

0/100

0/100

100/100

100/100

100/100

0

0

0

0

0

1/0

0

0

0

0

0

1

0/3

0/6

0/4

0/6

0/6

1/9

3

6

4

6

6

10

who used childcare leave
Total
Acquisition rate ofMale/childcare leave (%)

FemalePercentage of employees
who returned to work
after childcare leave (%)

Number of employees
who used nursing care
leave

Male/
FemaleMale/
Female
Total
Male/

Number of employees

Femaleworking short-time
Total
Coverage︓Tosei Corporation

58

Employee Health and Safety Data
FY2018
Number of violations of labor standards

FY2019FY2020

FY2021

FY2022

FY2023

1

0

0

2

0

0

0.20

0.15

0.04

0.10

0.33

0.22

100

100

100

100

100

100

100

100

100

100

100

100

Number of occupational accidents

0

0

0

1

0

0

Number of fatal disasters

0

0

0

0

0

0(0)

Lost-time incident rate(%)

0

0

0

0

0

0(0)

Injury rate (%)

0

0

0

0.5

0

0

Lost day incident rate (%)

0

0

0

0

0

0

Lost-time injury frequency rate (%)

0

0

0

0

0

0

-

-

-

48

66

88

Absentee rate (%)
Percentage of employees who had
health checkups (%)
Percentage of employees who had
stress check (%)

Number of employees trained in healthand safety

Coverage: Tosei Corporation. Figures in ( ) are for the Tosei Group as a whole.
Coverage of the Tosei Group as a whole: Tosei Corporation, Tosei Asset Advisors, Inc., Tosei Community Co., Ltd., Tosei Logistics
Management Co., Ltd., Tosei Hotel Management Co., Ltd., Tosei Hotel Service Co., Ltd., Princess Square Co., Ltd., Kishino Coporation, Masuda
Kenzai-ten Co., Ltd., Isogo Asset Management Co., Ltd., Shibaura Residential Co., Ltd., TOSEI-R, Inc.
Formula for calculating the lost-time incident rate(%): Number of lost time incidents / (annual prescribed working hours x number of
employees) x 1,000,000

Human Resource Management Data
FY2018
Number of empoyees who newly

FY2019FY2020

FY2021

FY2022

FY2023

14

13

14

19

28

23

26

145

72

30

90

49

-

-

-

5,403.5

15,743.2

12,186.2

Annual training hours per employee

-

-

-

25.1

64.5

45.5

Annual training days per employee

-

-

-

3.14

8.07

5.68

-

-

-

4,367

6,400

7,706

acquired qualifications*1
Number of students hosted forinternships*2
Total annual company-wide training
hours

Total annual training expenses for theentire company(Thousands of yen)
Coverage：Tosei Corporation*1

Number of employees who acquired encouraged qualifications*2

Includes seminar-type 1-day internship59Response to Social Needs
Approach to Responding to Social Needs

Management of Product Quality

Responsible Advertising and Marketing Activities

Providing Value Through Products and Services

Approach to Responding to Social Needs
The Group's ESG policy states that it will contribute to tenants, regions, and communities through owned real estate, etc., and the Group
strives to engage in dialogue and collaboration with all stakeholders, aiming to coexist in harmony with regions and communities. We will
strive to provide value that is supported by all stakeholders by responding to social needs through our business, including product quality
control, reduction of environmental impact, energy conservation, enhancement of disaster prevention and crime prevention functions, andrevitalization of local communities.

Management of Product Quality
Approach to Quality Control
The Group is engaged in businesses closely related to the lives of our customers, providing a variety of real estate-related products andservices, including office buildings, condominiums, detached houses, commercial facilities, logistics facilities, hotels, and real estate
investment products such as crowdfunding. Always from the customer's perspective, we strive to improve customer satisfaction by providing
products and services that are rooted in safety and security, and by working to ensure quality. In selling these products and services, we
strive to comply with various laws, regulations, and internal rules, and promote responsible advertising and promotional activities from theviewpoint of consumer protection.

ISO9001
Tosei's Architecture Planning Department has acquired ISO 9001 certification for the planning, design, construction
management, and after-sales service (regular inspections) of condominiums, office buildings, commercial buildings,
and detached houses, and conducts strict quality control in accordance with ISO 9001. Tosei Community Co., Ltd., asubsidiary of Tosei Corporation, is also an ISO 9001-certified entity that undertakes the planning and provision ofgeneral management operations for condominiums, office buildings and rental condominiums.

(Updated May, 2022)

Quality Control and Quality Improvement Initiatives
TOSEI-QC-10
All processes related to construction management in the construction of office buildings andcondominiums are managed by the three parties of our company, designers and construction
supervisors, and constructors based on the "TOSEI-QC-10" standards, with particular emphasis on
inspection and check of areas out of sight of the customers, in order to provide safe and secure
products.

60

Quality Improvement Review Meeting
In construction and renovation of office buildings and condominiums, detailed checks of specifications and in-depth meetings on instructions
are conducted by our company, designers and construction supervisors, and constructors twice, immediately after the start of construction
and before finishing work. While preventing the occurrence of problems, we strengthen cooperation among all parties involved in order toprovide better products.

Building Safety Management and Risk Assessment
Tosei Community, a group company, regularly conducts patrolling inspections by the General Support Department and reports the results to
the BM and PM Departments as part of safety management and risk assessment initiatives for managed properties. If any items are
identified, the department in charge examines and implements preventive measures and corrective actions.

Supply Chain Management
Operations Quality Improvement Convention
The Tosei Group holds an annual “Operations Quality Improvement Convention” to raise awareness ofsafety, quality management and compliance and to build a strong partnership with partner companies,
with the aim of improving the quality of operations. This event is hosted by Tosei Community, which
operates a property management business, and is a group training session for its primary suppliers, orsecondary suppliers to Tosei, which are important business partners, and is part of the supply chain
management of the Tosei Group's real estate portfolio. 51 participants from 29 business partners joined
the event in 2023.
Convention

Supplier Questionnaire (ESG Questionnaire)
As part of our supply chain management, we have established a Sustainable Procurement Manual and conduct an annual supplierquestionnaire (ESG questionnaire) for important suppliers whose annual order value exceeds a certain amount to check their respect forhuman rights, including occupational health and safety, prohibition of child labor and forced labor, prohibition of harassment, as well ascompliance with laws, environmental considerations, and risk management. The results are reviewed by the Sustainability Committee, whichthen deliberates on whether or not to continue transactions with the companies.
In 2023, we conducted questionnaires for 6 suppliers in the real estate revitalization, development, and rental businesses, and thecommittee reviewed their initiatives and discussed whether to continue transactions with them. The same questionnaire has been conductedsince 2021, monitoring a cumulative total of 19 suppliers, accounting for more than 84% of total supplier orders in the relevant businesses.

Disaster Prevention Initiatives
Disaster Prevention Training
Tosei manages all processes related to the construction and maintenance of new or existing officebuildings or condominiums through three parties - the Company, design and construction managementcompanies, and construction companies - based on Tosei's unique quality control standards, TOSEI-QC10. Tosei strives to provide customers with safe and reliable products by conducting inspections andparticularly rechecking those items that customers cannot oversee.

AED training

Workplace Disaster Preparedness Leaders
We have been registered as a Workplace Disaster Preparedness Leaders since February 2024.
Workplace Disaster Preparedness Leaders is a service in which companies, stores, etc. receive daily disaster prevention information anddisaster information in the event of a disaster directly from the Tokyo Metropolitan Government. Receiving regular information on disasterprevention measures on a regular basis will promote disaster prevention measures in the workplace in advance in preparation.

61

Responsible Advertising and Marketing Activities
Advertisement Review
With respect to various sales promotion activities in advertising and marketing of our products and services, we have established the“Regulations Concerning Advertisements and Premium Offers” to ensure proper operations in compliance with relevant laws and regulations,and to contribute to consumer protection. In accordance with these rules, we have established the “Manual for Review of Advertisements” asan operational system for conducting appropriate advertising and marketing activities, and have built a system for review of advertisements
by the General Affairs Department, which is responsible for legal affairs, depending on the target of the advertisement and the advertising
media to be used. In principle, advertisement reviews are conducted in advance, and compliance with the manual is checked from theperspective of risk management and compliance, and corrective actions or recommendations are made as necessary. The General Affairs
Department, which is in charge of advertisement review, prepares and maintains a report on the results of the advertisement review as arecord of the review.
Regarding the use of SNS in our business activities, we have established "Rules for Management of Social Media Use Related to Business"and disclosed our "Social Media Policy."
From the viewpoint of risk management regarding internal SNS operation, we conduct "SNS training" for SNS managers and staffs in charge,
and have established a system in which only those who have completed the training are involved in SNS operation to ensure proper
operation.

Advertisement Review Process62

Dissemination and Education of Advertising Laws and Regulations
Business Legal Affairs Liaison Meeting
In order to provide safe and secure products and services and promote fair transactions in compliance with related laws and regulations, wehave established the Business Legal Affairs Liaison Meeting to confirm the enactment and revision of laws and regulations related to eachbusiness of the Tosei Group. At the meeting, we disseminate information on revisions to various laws and regulations and precautions
regarding advertising. The meeting consists of general managers and above from each business, including group companies, and is held
monthly under the supervision of the General Affairs Department, which is in charge of legal affairs.

Business Legal Affairs Training
Business Legal Affairs Training is held every year to provide employees of the sales department with basic and applied knowledge of laws andregulations related to various businesses and to foster a culture of compliance. The main content of the training is to provide knowledge
related to compliance in sales operations, such as information on revisions to related laws and regulations, knowledge of new laws, and thelatest precedents regarding building lots and buildings transactions, and to learn advertising-related laws and regulations. The training isdesigned to acquire and consolidate knowledge for the promotion of responsible advertising and marketing activities.

Audits of Advertisement Reviews
The Company's Internal Auditing Department conducts audits to inspect the status of implementation of review for advertisements of realestate for sale and lease in the periodic audits of group companies and related departments in the Building Lots and Buildings Transaction
Business and Type II Financial Instruments Business.

Providing Value Through Products and Services
Through Our Revitalization BusinessIn the revitalization business, we create new value by revitalizing various assets ranging from condominiums to office buildings, hotels, andlogistics.

■Renovation of company housing x Concept housing for music lovers"T-Rhythmic SOKA"(Sold) was a vacant company housing, which we acquired and renovatedinto a rental apartment with improved sound insulation performance. Of the 52 apartments, 24
studio apartments were soundproofed, and the floor used as a cafeteria was converted into aparty room, creating a space where residents can gather to hold events and deepen exchanges
while relaxing freely with each other.

Party room renovated from cafeteria■Hotel Revitalization x Contribution to Local Communities"Tosei Hotel & Seminar Makuhari" was a 27-year-old, aging accommodation and training facility
that was comprehensively revitalized in terms of both hardware and software through our realestate M&A of the entire management company. The number of accommodation rooms wasincreased from 79 to 137, and each room was newly equipped with toilet, washbasin, and otherwater facilities to enhance its superiority as an accommodation facility. In addition, based on therevitalization concept of "a hotel, a seminar house, and a space that contributes to the local
community," a lounge open to the local community was created by utilizing the existing
space. The lounge invites seasonal events and also serves as a venue for local traditional
performing arts. Restaurants in the hotel offer "local production for local consumption" menus
using local ingredients, so the hotel contributes to the creation of liveliness and local
revitalization through the operation of its facilities.

63

Restaurant renovated from cafeteria

Through Our Development Business
Aiming to contribute to the SDGs by creating housing
In our housing development business, we are creating houses with the aim of contributing to the SDGs.

■SDGs to be addressed by the entire block"THE Palms Court Hibarigaoka"(Sold) aims to contribute to the 6 SDGs targets not only for individual households but also for the entire
block, based on the 4 themes of "green conservation," "energy conservation and waste reduction," "water saving and water resource
conservation," and "crime and disaster prevention."

Rainwater tank

Plantings of four seasons

Light agreements

Exterior tile

Creation of comfortable residences
The project team, which was formed to respond to diversifying lifestyles, plans and proposes "comfortable houses for all family members"
with meticulous thinking from the perspective of real life. The floor plans proposed by the project have been adopted in some of theproperties.(This activity was completed in FY2023.)■THE Palms Court Kamakura Shiromeguri
We planned houses where all family members can easily participate in housework with an eye on the moving line, and houses to enjoy
hobbies with a large shoe-in closet with a counter for DIY.

■THE Palms Court Hibarigaoka
We planned houses where women can feel special, equipping a walk-in closet with a dresser directly connected to the master bedroom
and atmospheric indirect lighting in the living room.

Creation of Community Space in Condominiums■Urban Development that Fosters Community
The detached houses block "THE Palms Court Kashiwa Hatsuishi"(Sold) has a "cul-de-sac," aturnaround plaza that cars cannot get through, not only to foster interaction among residents but
also to bring into safety. In the condominiums, we actively adopt community spaces that can be
freely used for any purpose, such as "study room," "guest room," "party room," and "moms andkids lounge" to create a comfortable environment for residents with various lifestyles.
THE Palms Court Kashiwa Hatsuishi

64

■Urban Development Open to the Local Community
In front of the entrance of the condominium "THE Palms Sagamihara Park Brightia,"(Sold) apark has been set up to provide a place for residents and local residents to get close to natureand relax. Three "kamado benches" that can be used as kamado in the event of a disaster andsome solar-powered streetlights have been installed as efforts to prevent disasters.

THE Palms Sagamihara Park Brightia

Barrier-Free Houses
THE Palms Court series of condominiums for sale includes barrier-free "Withstyle" homes for the elderly.
These homes, Tosei applies a unique design code consisting of 10 items based on the concept 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 cost should an elevator become necessary in the future
and wheelchair-accessible designs.
THE Palms Court Hashimoto(Sold)

Through Our Rental and Property Management Business
Efforts to Improve Convenience and Comfort
We are also promoting efforts to improve convenience and comfort in our residential and office rental and management businesses. In ourrental housing, we are creating community spaces and renovating the design of aging common areas, while in our rental offices, we areworking to attract shared bicycles and food trucks.

Food truck

Shared cycle■Tʻs garden Kitakashiwa
We revitalized an idle company housing consisting of three buildings and upgraded it into a rental
apartment for families. Targeting families raising children, we created three community spaces: a"kids' room" where parents and children can play together without worrying about theirsurroundings, a "party room" where friends and relatives can gather and enjoy cooking classes
or birthday events, and a "study room" where residents can have time alone to study or readbooks. We provide comfortable living spaces for various occasions.

kids' room65

Through the Fund BusinessResilience
We are working to strengthen resilience in asset management and property management in the real estate fund business to ensure thesafety and security of our tenants through prompt recovery in the event of a disaster. In addition to the "Earthquake Countermeasures
Manual" established by Tosei, the REIT Division and Private Fund Division of Tosei Asset Advisors have established their own BCP (BusinessContinuity Plan), information disclosure manual in the event of an earthquake, and reporting manual in the event of an emergency, to ensure
an appropriate response system in an emergency.

Through the Hotel Business
Environmental Efforts
Tosei Hotel COCONE and Tosei Hotel & Seminar Makuhari offer an eco-friendly cleaning plan for guests staying for consecutive nights.

Contribution to Local Communities■Regional revitalization, community building
Some hotels are collaborating with local tourism operators to contribute to local revitalization. "COCONE Kamakura" offers a plan that
includes "Noriorikun," a ticket for unlimited one-day rides on the Enoden train, plan with Enoshima Aquarium ticket and Kamakura
Japanese goods. "COCONE Asakusa Kuramae" offers a plan that includes kimono rental and dressing. "Tosei Hotel & Seminar Makuhari"is also actively involved in activities that contribute to the local community. The restaurant uses local ingredients in its menu for local
production for local consumption, and the lobby on the first floor is open to the public and seasonal social events are held for local
residents to participate. In addition, the hotel provides opportunities for guests to casually participate in social contribution activities byintroducing donation-type vending machines.

66

Social Contribution
Approach to Social Contribution

Contributions to Society

Donation Activities

Approach to Social Contribution
The Group's ESG policy states that it will contribute to tenants, regions, and communities through owned real estate, etc., and the Group
strives to engage in dialogue and collaboration with all stakeholders, aiming to coexist in harmony with regions and communities. Throughour group's business activities, we will strive to solve social issues and add value related to real estate, contribute to the creation of local
employment, economic vitality, and sustainable development of the area, as well as promote comprehensive and continuous social
contribution activities in harmony with local and international communities as a good corporate citizen.
In our social contribution and donation activities, we will focus on the priority areas of "coexistence with local communities," "naturalenvironment conservation," and "social welfare." Based on our corporate philosophy of "creating new value and inspiration in all aspects ofreal estate," we will engage in activities that contribute to the revitalization and community building of the regions where our properties arelocated, the preservation of the natural environment, and the enhancement of welfare, mainly in our business area, the Tokyo metropolitan
area. In the event of a natural disaster, we aim to contribute broadly to society by providing assistance to people in difficult circumstances.

Contributions to Society
Environmental Preservation and Beautification
Participation in the "Tokyo Satoumi Aid from West Nagisa" event to clean up floating
garbage
We have participated in volunteer cleanup activities since 2009. In 2022, 39 employees of our group and their families participated in "Tokyo
Satoumi Aid from Nishi-Nagisa," an event to clean up floating garbage in Kasai Marine Park. The type and amount of trash collected wascounted to help in the investigation of the cause of the floating garbage. Through this activity, we aim to raise awareness of the social issues
such as trash reduction and marine resource conservation.
*Cleanup events are conducted with adequate infection prevention measures in place.

Plastic waste

Cleaning in progress

Participants and collected debris

FY2023 Activity Results
Date of Activity

Number of Participants

Garbage Collected

October 28 (Saturday)

46 persons

180ℓ

Total

46 persons

180ℓ

67

Participation in the "Minato City Adopt-a-Program," a community cleanup activity
Since October 2022, we have been participating in the "Minato City Adopt-a-Program" and engaging in community cleanup activities. The"Minato City Adopt-a-Program" is an agreement between Minato City and organizations that live, work, or study in Minato City to collaboratein the maintenance and management of roads, parks, and other facilities. In principle, once a month, employees of our group pick up trash
and remove weeds from the streets and parks around our head office. Through these activities, the Group will contribute to environmental
preservation and beautification of the Minato City where the head office building is located.

FY2023 Activity Results
Date of Activity

Number of Participants

Garbage Collected

December 15 (Thursday)

8 persons

40.0ℓ

January 19 (Thursday)

10 persons

20.0ℓ

February 16 (Thursday)

11 persons

20.0ℓ

March 16 (Thursday)

10 persons

20.0ℓ

April 20 (Thursday)

18 persons

20.0ℓ

May 18 (Thursday)

14 persons

20.0ℓ

July 12 (Wednesday)

8 persons

8.5ℓ

August 23 (Wednesday)

4 persons

5.1ℓ

September 14 (Thursday)

10 persons

8.5ℓ

October 12 (Thursday)

15 persons

10.0ℓ

November 9 (Thursday)

11 persons

20.0ℓ

Total

119 persons

192.1ℓ68

Local Revitalization and Community Building
Tosei Hotel & Seminar Makuhari provides a place for families and local residents to communicate with each other through live performancesby professional musicians to make music accessible to local residents in line with Narashino City's concept of "a city of sports and music," aswell as workshops by clay sculptors. In addition to the use of local ingredients in restaurant menus for local production for local
consumption, the hotel provides opportunities for local residents and hotel guests to casually participate in social contribution activities byintroducing donation-type vending machines.

"Art na Christmas" (Christmas of Art)

"Minato-cyo Bakamen Odori"

FY2023 Event Track Record
Date of the Event

Number of Participants

Corporate Social Gathering(Cooperation:
the Minato-cyo Bakamen Odori
Preservation

January 25, 2023 (Wednesday)

Organizers: 10 persons /Spectators:
115persons

Society)"Art na Christmas" (Christmas of Art)

December 18, 2022 (Sunday)

9 groups / 28 persons

Support for Children's Homes
Since 2021, we have been providing volunteer support to Ayumi Gakuen, a children's home in Hanyu City, Saitama Prefecture. In 2023, weparticipated in the school festival by providing administrative support and Mochi-tsuki event. We will continue to consider and implement
support activities.

Mochi-tsuki event

School festival69

Disaster Support
In 2011, immediately after the earthquake, the Tosei Group began support activities by volunteers and inviting experts and making
donations. One year after the earthquake, we began support activities in cooperation with a NPO, the "Association for the Support ofChildren's Homes," based in Higashimatsushima City, Miyagi Prefecture, that conducts volunteer activities.

Main Activities

Ground maintenance

Rust removal and painting of nursery

Booth operation at the opening event

playground equipmentof the town

We collected donations from our group employees and other voluntary members and donated 28 taiko drums
to Naruse Mirai Junior High School, which had just opened in Higashimatsushima City. In this city, taiko
performances have long been popular at elementary and junior high schools, but many were lost due totsunami damage. The school and community members were very delighted that the donated taiko drums
enabled them to perform at the school festival.
Donated Japanese drums

Donation Activities
Donation through the NPO Japan Platform
In 2023, we donated 1 million yen through a NPO, Japan Platform, for the purpose of supporting for the affected areas in Turkey and Syria.

Donation to Children's HomeIn 2023, we donated television, rice cooker, cacuum cleaner, etc. to the children's home Ayumi Gakuen. They said they were very pleased tosee that the children are now able to live more comfortably and enjoyably. We will continue to listen to the needs of the home and consider
supports that are really needed.

Donation through the NPO Association for Support of Children's Homes
Since the Great East Japan Earthquake in 2011, we have donated 1 million yen annually to the Association for the Support of Children's
Homes, an NPO that supports children living in children's homes. In addition to supporting children's homes, the donation is also used tosupport the areas affected by the disaster.

Collection and donation of plastic bottle caps through the NPO Ecocap Promotion
Association
We collect plastic bottle caps and through a NPO,the Ecocap Promotion Association, convert them into recycled plastic material and donate
them to various social contribution activities such as medical assistance, support for people with disabilities, and environmental education forchildren.

70

The Green Feather Fundraising Activity
The activity aims to provide support for a range of programs, such as the maintenance of forests, development of forestry volunteers andprovision of forestry and environmental education for children.

Donations and Contributions Data

FY2020

FY2021

FY2022

FY2023

Total amount of
donations and

2,000,000 yen

1,448,000 yen

2,519,864 yen

2,694,733 yencontributions

Recipient

Purposes
Support for disaster-affected areas and children's homes(2011〜

Association for the Support of Children's Homes (NPO)2023)
Support for victims of the Western Japan heavy rainfall disaster,

The Japanese Red Cross Society

Typhoons Faxai and Hagibis(2019)

Higashimatsushima City Naruse Mirai Junior High School

Donation of Japanese drums(2018)

Tokyo Coronavirus Medical Support Fund

Support for medical institutions in dealing with COVID-19(2020)
Donation of 2 TVs and an air conditioner(2021)
Donation of 2 recorders and 2 refrigerators(2022)

Ayumi Gakuen (children's home)

Donation of TV, TV stand, rice cooker, vacuum cleaner, etc.
(2023)
Humanitarian assistance to Ukraine(2022)
Support for the areas affected by Turkey-Syria Earthquake(2023)

Japan Platform (NPO)

Support for the areas affected by Noto Peninsula Earthquake(2024)71z ԑՃՊԵՆՂԱՂԳԵ
Corporate GovernanceFundamental Approach toward Corporate GovernanceCorporate Governance Report

Corporate Governance System

Policy for Appointment of Directors

Independent Officers' Remuneration

Internal Control System

Fundamental Approach toward Corporate Governance

Our Group aspires to be a valuable contributor to all kinds of our stakeholders in the society, including the shareholders, the employees, thebusiness partners and others, by promptly and appropriately responding to the changes in the business environment and continuing
operational activities which enable the Group to achieve a sound growth. For this purpose, the Group has placed the greatest importance onenhancement of corporate governance, and in particular, “fully cultivating compliance mind,” “enhancing risk management” and “conducting
timely disclosure” as three 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, to develop 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 GovernanceCompliance

Risk Management

Information Disclosure

We place compliance at the top of ourAssuming every possible risk, we

We practice disclosure andagenda and raise awareness of it fromprepare and practice emergency

communication appropriately and on a

top management to all employees of

responses under normal conditions withtimely basis to all stakeholders

the Group companies.

a special focus on eliminating

including shareholders.

relationships with anti-social forces.

72Basic Policy on Corporate Governance*The PDF link on the left is valid
when this report is viewed as PDF data.

Basic Policy on Corporate Governance（PDF：174KB）

Corporate Governance Report
Corporate Governance Report（PDF:524KB）*The PDF link on the left is valid
when this report is viewed as PDF data.

Corporate Governance System
Corporate Governance System

As of March 1, 2023

Reasons for Adopting the Current Corporate Governance System
The Company has set up the Board of Directors and the Audit & Supervisory Board. While appointing from outside its outside directors andall of its Audit & Supervisory Board Members, it has also adopted an executive officer system, for the purpose of operating its businesses
with high transparency. All of the Audit & Supervisory Board Members of the Company have been outside Audit & Supervisory Board
Members since the time of listing. The Audit & Supervisory Board Members have always performed audits of the business management of
the Company from the viewpoints of ensuring and increasing the Company’s corporate value and the common interests of its shareholders.
The Company further enhances its supervisory function over its management by inviting outside directors to the Board of Directors. On the
management side, the Company has employed the executive officer system so as to achieve optimal distribution of decision-making
functions and operational duties, as well as encouraging the delegation of authority in executing the businesses, in an attempt to strengthen
its corporate governance.

Board of Directors
The Board of Directors is constituted by nine directors, three of whom are outside directors. As the highest management decision-making
body, the Board of Directors makes resolutions on management policies and material issues and also supervises the execution of duties by
the directors. In addition, the outside directors (the independent directors), by sharing their opinions from their objective standpoint, provide
advices and suggestions to ensure the adequateness and appropriateness of the decisions made by the Board of Directors.

73

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 in such 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 outside director(s) (independent director(s), one person ormore), a full-time audit & supervisory board member (outside audit supervisory board member, one person), representative director (oneperson), and a full-time director (one person). The outside director who is a member of the committee is the chairperson of the committee.
To monitor the legality of each decision-making process, the Company's Basic Policy on Corporate Governancestipulates

that thecommittee shall include an independent outside Audit & Supervisory Board Member and that independent outside directors andindependent outside Audit & Supervisory Board Members shall be a majority of the committee. To ensure the independence and objectivityof the committee, four of the six committee members are independent officers, and the chairperson is an independent outside director.

Executive Officer System
The Company adopts the executive officer system in order to further segregate the monitoring/supervision of the Company’s business
management, which is the duty and responsibility of the directors, from the execution of the business. All executive officers are appointed by
the Board of Directors and will adhere to the Company's internal rules and regulations as well as to the resolutions of the Board of Directors
in executing and controlling the business operations of the Company. In addition, the representative director and president has assumed theposition of the chief executive officer and holds the management meetings twice a month as a general rule, where consultation on thematerial issues to be decided by him are made as well as discussions on the matters to be resolved by the Board of Directors in advance.

Corporate Governance Meeting
With the aim of continuously strengthening its corporate governance, the Company holds monthly Corporate Governance Meetings
constituted by full-time Directors and full-time Audit & Supervisory Board Members. At the meetings, the Directors and the Audit &Supervisory Board Members review and discuss the corporate governance concerns and the internal control matters in an effort to enhance
the corporate value of the Company, and where necessary, they receive advices from the outside experts such as corporate attorneys and/or
certified public accountants.

Audit & Supervisory Board
The Company has adopted the Audit & Supervisory Board Member system and has the Audit & Supervisory Board with two full-time and twopart-time Audit & Supervisory Board Members, all of whom are outside Audit & Supervisory Board Members. They audit the operation of theBoard of Directors and execution of duties of Directors from an independent and objective standpoint, and provide constructive advice andrecommendations for the increase of corporate value with their knowledge.

Cooperation among the audits by Audit & Supervisory Board Member, Internal Audit
Member, and audits by Accounting Auditors (the threefold auditing structure)
The auditing activities by the Audit & Supervisory Board Members are performed in accordance withan annual audit plan. By cooperating with the accounting auditors as well as with the Internal Auditing
Audits by corporate auditors

Department, the Company has developed an efficient and viable auditing system. The full-time Audit &Supervisory Board Members holds regular meetings with each of the directors and officers in charge ofeach department to fully understand the status of the business execution as well as to regularly
exchange opinions with the outside directors.
TThe Internal Audit Department under the direct supervision of the chief executive officer, performs
audits for the entire Group’s overall business activities from the perspective of legality and adequacy,Internal audits

etc. in accordance with their annual auditing plan. In the event any inadequacy is discovered,
recommendations for corrective actions are made to the audited departments. The internal Audit
Department discusses with the audited departments for issues in need of corrective actions, andfollows up with specific guide which leads to the provision of effective audits.

74

The audit of the Company’s accounts is performed based on the annual audit plan. In addition to thefull-year audit performed at the end of the fiscal year, Company’s Audit Company (Shinsoh Audit
Corporation) conducts reviews at the end of each quarter. The periodic replacement and reAudits by the accounting
auditor (Shinsoh Audit

engagement of the accounting auditor in accordance with the rules and regulations of the audit
corporation under the Certified Public Accountants Act are operated as follows;

Corporation)

The Engagement Partner may not be involved in the company's auditing operations for more thanseven accounting periods.
The Engagement Partner may not be involved in the company's auditing operations for two
accounting periods after being replaced.

Constituent Member by Board (as of Feb. 28, 2024)（◎Chairperson, 〇Constituent Member, △Observer）

Name

Seiichiro
Yamaguchi

Noboru Hirano

Position Name

President and CEO

CFO and Senior
Executive Officer

Meeting of Board

Audit & Supervisoryof Directors

Board

Nominating andCompensation
Advisory Committee

Corporate
Governance Meeting

◎

〇

◎

〇

〇

〇

Director, COO and
Hideki Nakanishi

Senior Executive

〇

〇

〇

〇

〇

〇

〇

〇

Officer
Shunsuke

Director, Managing

Yamaguchi

Executive Officer

Hiroyasu Yoneda

Hitoshi Oshima

Kenichi Shohtoku

Director, Managing
Executive Officer
Director, Executive
OfficerIndependent
Director

Hiroyuki

Independent

Kobayashi

Director

Mai Ishiwatari

Independent
Director

〇

◎

〇

〇

〇

〇

Outside Audit &Hitoshi Yagi

Supervisory Board

△

◎

△

〇

△

〇

△

〇

〇

〇

Member (full-time)
Outside Audit &Toshinori Kuroda

Supervisory Board
Member (full-time)
Outside Audit &Tatsuki Nagano

Supervisory Board
Member (part-time)
Outside Audit &Osamu DoiSupervisory Board
Member (part-time)75〇

Attendance at Meetings of the Board of Directors, Nominating and Compensation Advisory
Committee, and Audit & Supervisory Board (FY2023)

Board of Directors
Name

Position

Meetings(Attendance/Number of meetings)

Seiichiro

Nominating and

Audit & Supervisory

Compensation

Board

Advisory Committee(Attendance(Attendance/Number of/Number of meetings)

meetings)

President and CEO

22/22

2/2

-

Noboru Hirano

CFO and Senior Executive Officer

22/22

2/2

-

Hideki

Director, COO and Senior Executive

Nakanishi

Officer

22/22

-

-

Director, Managing Executive Officer

22/22

-

-

Director, Executive Officer

22/22

-

-

Director, Executive Officer

22/22

-

-

Outside Director

22/22

2/2

-

Outside Director

20/22

2/2

-

Outside Director

19/22

2/2

-

22/22

2/2

16/16

22/22

-

16/16

21/22

-

16/16

21/22

-

16/16

Yamaguchi

MasaakiWatanabeShunsuke
Yamaguchi
Hitoshi Oshima
Kenichi
Shohtoku
Hiroyuki
Kobayashi
Masao
Yamanaka

Outside Audit & Supervisory Board
Hitoshi Yagi

Members(full-time)

Toshinori
KurodaOutside Audit & Supervisory Board
Members(full-time)
Outside Audit & Supervisory Board

Tatsuki Nagano

Members(part-time)
Outside Audit & Supervisory Board

Osamu Doi

Members(part-time)76

Policy for Appointment of Directors
Basic Policy
The Board of Directors places importance on diversity in terms of gender, internationality, work experience, age, etc. and is comprised of
Directors who are familiar with the Group’s philosophies, the details of finance and business, etc., and Independent Outside Directors having
a wide range of experience and knowledge, and being independent.
When nominating candidates for the Board of Directors, those who have the necessary knowledge as Directors and are familiar with theGroup's finances, business, and other aspects of the Group are nominated for Directors who execute the business. For Outside Directors,
persons who can be expected to supervise management from an independent and objective standpoint and provide constructive advice andsuggestions to Directors concurrently serving as Executive Officers are nominated. The candidates are determined based on the result of
discussion regarding appropriateness of nomination of candidates at the Nominating and Compensation Advisory Committee.
In addition, for the nomination of candidates for the Audit & Supervisory Board Members, the Company has a basic policy to nominate
persons who can audit the operation of the Board of Directors, execute duties of directors from an independent and objective standpoint,
and provide constructive advice and recommendations to enhance corporate value with their knowledge. The Board of Directors determines
the candidates based on the result of discussion at the Nominating and Compensation Advisory Committee with the consent of the Audit &Supervisory Board. The Audit & Supervisory Board Members of the Company are all appointed from outside since the time of listing.

Skill Matrix for the Board of Directors

Status of Independent Officer
Outside Directors and Outside Audit & Supervisory Board Members are elected based on the Company’s “Independence Standards”. With
regard to the nomination of Outside Directors, the Company elects persons who has a wide range of experience and knowledge, and canprovide frank, lively and constructive opinions, advice and recommendations at the meeting of the Board of Directors.

77

Reasons for Election of Outside Directors and Outside Audit & Supervisory Board Members
Reasons for Election of Outside Directors
Name

Independent

Reason for the election

Officer

Outside Director Kenichi Shohtoku, a certified public accountant, he has an extensive
experience and knowledge including those relating to overseas business. He has
provided invaluable advice on various occasions such as the Board of Directors’
meetings of the Company, liaison meetings with the Audit & Supervisory Board Members
Kenichi Shohtoku〇

of the Company, etc. and has worked energetically to enhance the governance system of
the Company and the Group as well as to ensure the appropriateness of financial
reporting. The Company considers that he is indispensable for the maintenance andimprovement of corporate governance structure for further expansion of the Group andenhancing the checking functions in the future while paying attention to ESG issues.
Outside Director Hiroyuki Kobayashi, has extensive experience and expert knowledge,
accumulated mainly at major financial institutions. With his objective monitoring andproposals based on his abundant experience and expertise, he has been contributing to

Hiroyuki Kobayashi〇

more active discussion at Board of Directors meetings and improvement of its
effectiveness. The Company considers that he is indispensable for the maintenance andimprovement of corporate governance structure for further expansion of the Group andenhancing the checking functions in the future while paying attention to ESG issues.
Outside Director Mai Ishiwatari possesses a high level of expertise and global knowledgeof corporate legal affairs accumulated mainly at domestic and international law firms.
Accordingly, we believe that she will be able to provide objective supervision and

Mai Ishiwatari〇

proposals that will contribute to legal compliance of the Group’s business. Furthermore,
she has been involved in corporate management at multiple companies in recent years.
The Company believes that she will be able to contribute to the Group’s further growthand enhancement of corporate governance by adopting her external viewpoint based onher knowledge and experience to ensure neutrality in management.

Outside Audit & Supervisory Board Members
Name

Independent

Reason for the election

OfficerFull-time Outside Audit & Supervisory Board Member Hitoshi Yagi has extensive
experience in the auditing divisions of major financial institutions and professional
Hitoshi Yagi〇

insight based on his qualifications as a Certified Internal Auditor (CIA) and a Certified
Information Systems Auditor (CISA). Utilizing such experience and knowledge, theCompany believes that he can perform his role to ensure the adequacy andappropriateness of the Company's management.
Full-time Outside Audit & Supervisory Board Member Toshinori Kuroda has abundant
experience at major financial institution as well as specialist knowledge based on his

Toshinori Kuroda〇

qualification as Master of Business Administration (MBA) and Certified Internal Auditor(CIA). Utilizing such experience and knowledge, the Company believes that he canperform a role in ensuring the adequacy and appropriateness of the Company’s
management.
Outside Audit & Supervisory Board Member Tatsuki Nagano has experience at major
financial institutions and continues to be involved in corporate management. Based on

Tatsuki Nagano〇

his extensive experience and high level of expert insight, the Company believes he canperform a role in ensuring the adequacy and appropriateness of the Company’s
management.
Outside Audit Supervisory Board Member Osamu Doi has abundant experience at major
security companies and at companies that conduct investment banking activities as well

Osamu Doi〇as specialist knowledge. Based on such experience and knowledge, the Company
believes that he can perform a role in ensuring the adequacy and appropriateness of theCompany’s management.

78

Independent Officers' Remuneration
Outline of the Remuneration System for Directors and Policy for Determining
Remuneration
The Company has a basic policy to properly combine and determine a fixed remuneration based on job responsibility, a performance-based
bonus, stock options, the rights of which may be exercised after the lapse of a certain period, and the Company’s share-based compensation
depending on the performance result of a certain period in order to realize the medium- to long-term growth of the Group.
Remuneration for full-time Directors consists of monetary remuneration, comprising a “fixed salary” which is scaled according to duties,“performance evaluation remuneration” which is based on the achievement of individual goals such as the performance of each full-time
Director, and “Directors’ bonuses” which are linked to consolidated profit before tax, “share-based compensation” which are linked toconsolidated profit before tax, and “stock options” which are aimed to increase the desire and motivation to contribute to the medium- tolong-term enhancement of corporate value.
Due to the emphasis on their supervisory function from a standpoint independent of the execution of business, Outside Directors’
remuneration is composed of a “fixed salary”, “share-based compensation” which amount is fixed, and “stock options” only. No “performance
evaluation remuneration” or “Directors’ bonuses” are paid to Outside Directors. The ratio of fixed salary to performance-linked renumeration(including share-based compensation) for full-time Directors is kept around 60:40.
The representative director and president drafts proposals for each Director’s remuneration within the limit, which are discussed by the
Nomination and Compensation Advisory Committee, before being decided by resolution of the Board of Directors.

Matters resolved at the ordinary general meeting of shareholders regarding remuneration
etc. of directors
The maximum amount of remuneration etc. for Directors and Audit & Supervisory Board Members per year is set as follows.
According to the Articles of Incorporation, the number of Directors shall be 12 or less, and the number of Audit & Supervisory Board
Members shall be 6 or less.

Remuneration type

Maximum amount ofDate of resolution of theRemuneration, Maximum

ordinary general meeting of

number of sharesshareholders

Fixed salary,¥500 million or less per year

Performance evaluation(including ¥80 million or less forremuneration,

Outside Directors. Salaries for

Directors’ bonuses

employees are not included)

Stock Options

February 26, 2020
(70th Ordinary General Meetingof Shareholders)¥100 million or less per year

February 27, 2019

(including ¥10 million for(69th Ordinary General Meeting

Outside Directors)of Shareholders)

Directors
Full-time Directors: 100,000 orless of the Company’s ordinary
shares and ¥200 million or lessper year

Share-based compensation

Outside Directors: 10,000 orless of the Company’s ordinary

February 27, 2024
(74th Ordinary General Meetingof Shareholders)shares and ¥20 million or lessper year

Audit & Supervisory Board

February 28, 2004
Fixed salary¥60 million or less per year

Independent Officers' Remuneration

Members(54th Ordinary General Meetingof Shareholders)79Fixed salary
On the basis of comparisons with the results of surveys of Directors’ remuneration at listed companies, conducted by external specialist
agencies, and surveys of the levels of Directors’ remuneration at the Company’s competitors, conducted by the Company, as well ascomparison with the highest amounts of remuneration paid to employees of the Company, the Company has established fixed salaryscaling guidelines, based on Directors’ duties and posts held by Directors concurrently serving as Executive Officers. Remuneration foreach individual Director is discussed by the Nomination and Compensation Advisory Committee, before being decided by the Board of
Directors.

Performance evaluation remuneration (performance-linked renumeration)
The “performance evaluation remuneration” for full-time Directors is based on their individual achievement of single-year performancetargets. A “standard evaluation remuneration amount” equal to 33% of the fixed salary is paid monthly together with the fixed salary.
Where there is an adjustment based on the achievement of performance targets (of between +55% and -50% of the standard
evaluation remuneration), this is added to and paid together with Directors’ bonuses or deducted from Directors’ bonuses after theconclusion of the Ordinary General Meeting of Shareholders held during the fiscal year. Remuneration for each Director is discussed by
the Nominating and Compensation Advisory Committee, where the level of contribution to the governance practices and the pursuit ofsustainability of the Company as well as the Group as a whole, achievement of the department in charge, andmaintenance/improvement of consolidated management indicators (ROE, stock price, etc.) are evaluated, before being decided by the
Board of Directors.

Director’s bonuses (performance-linked renumeration)
Directors’ bonuses are determined based on the pre-determined level of consolidated profit before tax, plus an additional amount isdetermined based on the fixed salary (yearly amount) if the consolidated profit before tax target for a single fiscal year is achieved andare paid after the close of the Ordinary General Meeting of Shareholders for the relevant fiscal year. As Directors of a listed company
engaged in consolidated management, the Company’s Directors are charged with the most important tasks of maintaining andincreasing the level of consolidated profit before tax and achieving the consolidated profit before tax targes each fiscal year.

Share-based compensation(performance linked remuneration for full-time Directors)
In order to further clarify the linkage between remuneration for Directors and the Company’s business performance and share value,
and to continuously enhance the Company’s corporate value, share-based remuneration for full-time Directors is granted in the form of
a number of ordinary shares of the Company after the close of the Ordinary General Meeting of Shareholders for the relevant fiscal
year, calculated according to the achievement of the level set according to the amount of consolidated profit before tax for a single
fiscal year predetermined by the Board of Directors after discussion at the Nomination and Compensation Advisory Committee.
(fixed salary for Outside Directors)
In order to continuously enhance the Company’s corporate value, share-based remuneration for Outside Directors is granted in theform of the Company’s ordinary shares after the close of the Ordinary General Meeting of Shareholders for the relevant fiscal year,
subject to the achievement of the amount of consolidated pre-tax profit for a single fiscal year predetermined by the Board of Directors
after discussion at the Nomination and Compensation Advisory Committee.
The ordinary shares granted to full-time Directors and Outside Directors are subject to certain transfer restrictions such as the
restriction to transfer until the date of their resignation from the position as Directors of the Company.

Stock options
In order to practice corporate management with a focus on enhancing corporate value over the medium- to long-term, therepresentative director and president drafts proposals for the number of stock options to be granted to each Director, based on the
Director’s duties as well as posts held concurrently by the Director as Executive Officer, for each medium-term management plan.
These proposals are examined by the Nomination and Compensation Advisory Committee, before being decided by the Board of
Directors. A fixed number of stock options are granted to Outside Directors, considering the importance of their managementmonitoring and supervisory function aimed at enhancing corporate value.

80Auditor's Remuneration
Audit & Supervisory Board Members, considering their role, are remunerated with a fixed salary only. Remuneration for each Audit &Supervisory Board Member is decided through discussion of the Audit & Supervisory Board, within the limits of the maximum total amount.

Amount of Remuneration for Executive Officers (FY2023)
Total amount of remuneration, etc. by type(¥ thousand)Total amount of
Category

Non-monetary

remuneration,etc.

Performance-linked remuneration(¥ thousand)Fixedremuneration

Performance
evaluation-based
remuneration

Directors'

remuneration,

Number ofetc.

eligible Directors

Stock Options

Bonuses

Directors(of which

312,964

176,353

51,78484,826-

9

Outside(21,000)(21,000)

(-)

(-)

(-)

(3)

33,96033,960---

4(33,960)(33,960)

(-)

(-)

(-)

(4)

Directors)
Audit &
supervisoryboard
members(of whichOutside Audit& Supervisory
Board
Members)

Internal Control System
The Company has established a Basic Policies of Internal Control Systems by resolution of the Board of Directors, and under this basic
policies, in a continuous effort to develop the internal control system, the Company establishes plans for implementation and operation of
the internal control system annually taking into consideration of revisions of relevant laws and regulations, changes in the businessenvironment of the Group, expansion of the businesses, etc. Also, in ensuring the adequacy of financial reporting, an internal control system
structure (so-called J-SOX with reference to the COSO-ERM framework (COSO Enterprise Risk Management - integrated framework)) thatcomplies with the Financial Instruments and Exchange Act has been established and is in operation.

81

Compliance and Risk Management
Compliance and Risk Management Promotion System

Risk Management

Compliance

Education and Training

Compliance and Risk Management Promotion System
Compliance and Risk Management System
The Group has established the Risk and Compliance Committee under direct supervision of the Board of Directors, to promote integrated andcross-sectional risk management and compliance, including sustainability related matters, across the Tosei Group. This committee examines
the company-wide policy, annual plan and other matters for risk management and compliance. Along with this, it oversees and manages thevarious risks surrounding the Group's businesses through the implementation of the Risk Management and Compliance Program andassesses the status of risk management and compliance of each group company. The committee is chaired by CFO and Senior Executive
Officer who oversees all administrative divisions except the Internal Audit Department.
As a subordinate body of the Committee, the Business Law Liaison Committee, attended by all heads of the operational divisions, are held
every month, during which participants are duly made familiar with amendments to laws and regulations. In case of occurrence of acontingency, a natural disaster, etc., a crisis management office directed by the President and CEO as the head will be established to collectinformation, confirm facts and circumstance, consider and implement countermeasures, and properly disclose information in a timely
manner. The Board of Directors receives monthly reports on the results of deliberations and progress of the Risk Compliance Committee, andappropriately supervises the operation and compliance Risk Management System of these committees.
Regarding each Group company, the Company’s full-time Directors, Executive Officers in the Administrative Division, members of theInternal Auditing Department, etc. are concurrently appointed as Director or Audit & Supervisory Board Member for each Group company
with the remit of monitoring and supervising each Group company’s responses to risks. Every month, each Group company reports
management conditions and their responses to risks at the meeting of the Board of Directors or pre-Board meeting discussions of theCompany, and the Risk Management and Compliance Committee’s meeting. Moreover, the response of these Group companies and theresults thereof are continuously audited or monitored by the Company’s Internal Audit Department, which may also conduct checks using
external agencies as necessary, and then the Internal Audit Department reports the results at the Board of Directors’ meeting.
Climate Change Risks and Opportunities, which are of particular importance among the company-wide risks and should manage following theframework recommended by the TCFD, are led by the Sustainability Committee under the supervision of the Board of Directors. The Risk andCompliance Committee ensure the integrated Enterprise Risk Management by assisting and supporting the Sustainability Committee in its
implementation of various measures.

82

Risk Management and Compliance Committee
Tosei has established the Risk and Compliance Committee, which consists of the Executive Officers, heads of each department, officers
responsible for risk management and compliance at each Group company, and full-time Audit & Supervisory Board Members (observers), asa body to examine risk and compliance in Tosei Group in a centralized and cross-sectional manner. The committee deliberates on therecognition, analysis and evaluation of risks of each Group company, information gathering and discussion of countermeasures for individual
events, and promotion of compliance. According to the "Risk Management and Compliance Program" formulated each fiscal year, we arestrengthening our compliance awareness, implementing the PDCA cycle for risk management, and strengthening monitoring.

Compliance and Risk Management Promotion System
Risk Management and Compliance Program
In order to promote compliance and accurately manage the various risks surrounding our business, the Group formulate and implement agroup-wide Risk Management and Compliance Program every fiscal year. This program is approved by the Board of Directors after evaluating
the effectiveness and functionality of the risk management process and through discussions by the Risk Management and Compliance
Committee. In addition to the Program, Tosei and its Group companies formulate and implement individual programs that take into accountthe business environment and organizational structure of each company, and regularly report their progress to the Risk and Compliance
Committee.

Risk Management and Compliance Program(1) Identify, analyze and evaluate risks(2) Formulate and implement measures to address identified risks(3) Monitoring the effectiveness and functionality of countermeasures(4) Management cycle plan to inform the employees of measures to handle risks(5) Measures and training plans to enhance compliance awareness(6) Plans for education, training, seminars, and other activities for risk management and promotion of compliance

Risk Management and Compliance Guidebook
The Group Risk and Compliance Guidebook is distributed to all Tosei Group officers and employees as a specific guideto ensure that they correctly understand risk and compliance and conduct business with awareness of compliance.
The Guidebook explains the Tosei Group Ethics Code, specific points to note regarding compliance with laws andregulations, and the internal reporting system, and will be revised as necessary. In addition, the Company strives toenhance employees' awareness of compliance by informing them through training and other programs conducted
every year.

Risk Management
The Group aims to earn trust from stakeholders by drawing up plans and implementing measures even during normal times to address risks
that might prevent it from conducting business activities and maintaining and improving corporate value, and by developing a system forminimizing losses.

Business Risks Management
As for the recognition, analysis and evaluation of risks, in accordance with the Risk Management and Compliance Program formulated at the
beginning of each fiscal year; 1. implement a survey to identify about 30 significant risks that have material impacts on the Group’s business(once a year), 2. with regard to the external environment, we conduct interviews with major business partners on specified themes in orderto monitor real estate market conditions and transaction conditions, and conduct stress tests (twice a year), taking account of the financing
status of financial institutions. The results are reported at the Board of Directors’ meetings. In addition, at monthly Risk Management andCompliance Committee’s meeting, the states of our responses to emerging risks are checked, continuous efforts to gather information on
potential risks are made, and the details are reported at the Board of Directors’ meeting held each month, in addition to which the outcomesof the responses are monitored by the Internal Audit Department. We have also instructed each Group company to formulate plans for
managing risks and promoting compliance in light of each company’s business operations, focusing on ensuring that the parent company
organization appropriately supports these plans.

83

＜Major business risks recognized by the Group and supervised by the Board of Directors>

Economic conditions
Calamity (natural disasters, man-made disasters, etc.)
Dependency on interest-bearing debt and interest rates
Personnel and labor related matters
Sustainability (environmental, social and governance risks, climate change risks, etc.)

Action in the Event of a Crisis or DisasterIn the event of contingencies, calamities, grave breaches of laws and regulation, serious incidents, etc.,
the company would set up a Crisis Management Office headed by the CEO, and would take action tocontrol the situation in collaboration with the Risk Management and Compliance Committee members
and relevant departments. We have also established a Crisis PR Manual to speed up and facilitate
corporate communication activities in the event of a crisis and are working to raise awareness about
dealing with crises properly. In addition, we have established a Disaster Response Manual that details
the steps from gaining a basic understanding of the disaster to making an initial response in the eventof earthquake, fire, or other disaster, right down to conducting evacuation and relief activities.
Furthermore, based on the assumption of large-scale earthquakes, fires, etc. we conduct regular

AED practice drills

evacuation drills, AED practice drills, in-house fire-fighting team fire drills, etc. in order to be preparedto act calmly and appropriately in case of occurrence of a contingency.

Action to Ensure Business Continuity
The Company has formulated a Business Continuity Plan (BCP) to ensure that, in the event of a natural disaster, incident, accident or otherevent that forced the Company to suspend its core business operations or that made business activities under the normalorganizational/personnel structure difficult, the Group would be able to swiftly implement measures to continue business or resume businessquickly.

Information Asset Management
Recognizing that information asset is one of our most important management resources, we have set out provisions for developing andmaintaining information management environments in order to properly protect and efficiently utilize information in the Basic Policy on
Information Asset Management, and we have established Information Asset Management Regulations and Personal information Protection
Rules. In addition, every fiscal year we implement training for the information asset management, including personal information, and forthe prevention of insider trading for all employees of the Company, and by doing so, we have continued to educate and inculcate rules forthe handling of important information. In addition, to reduce the risk of information leakage and information isolation due to targeted attack
e-mails, etc., we conduct mock drills and network vulnerability assessments by external third-party organizations. Regarding to the state ofcompliance with rules for the handling of information assets (printed and electronic information), in addition to self-inspections implemented
at all departments and audits conducted by the Internal Audit Department, we have strengthened the penalties for breaches and continued
targeted guidance for those who infringe the rules.
In FY2023, as in previous years, we conducted mock drills related to targeted e-mail attacks and vulnerability assessments of our internal
network by an external third party to reduce the risk of information leaks and information isolation triggered by network crimes which arebecoming more complex and sophisticated. Furthermore, as our initiatives for preventing the leakage of important information, we inspected
the state of compliance with rules for the handling of information assets and conducted self-inspection on employees’ use of social
networking services (SNS) with a focus on risks of information leakage caused by the use of SNS and the like, in order to raise employee
awareness.

84

Compliance
The Group considers compliance to be one of its most important management issues and has established The Tosei Group Ethics Code and
The Tosei Group ESG Action Guidelines to be followed by all directors and employees of the Group. We are working to strengthen ourcompliance by ensuring that all employees are fully aware of the code and guidelines.

The Tosei Group Ethics CodeThe Group has established the Tosei Group Ethics Code, matters to be complied with when employees carry out operational activities, andkeeps them informed of and complied with the ethics code through distributing the Tosei Group Risk and Compliance Guidebook and training,
etc. In addition, we conduct a questionnaire survey to all directors and employees of the Group annually to assess the degree of penetrationof compliance and the Group Philosophy and to regularly check its effectiveness, and revise the Code of Conduct and training programs.

The Tosei Group Ethics CodeTo fulfill our corporate social responsibility, we will always attach importance to a high standard of ethics and a law-abiding spirit whilepursuing our corporate philosophy, and will conduct our business activities in accordance with the following Code.
1. Sustainable economic growth and resolution of social issues
We will strive for sustainable growth and the resolution of social issues by always putting ourselves in our customers' shoes andpositioning safety and security at the heart of the products and services we develop and provide, and by forever remaining humble
and conducting business activities in good faith.
2. Fair Information Disclosure
We will disclose the necessary corporate information in a fair, timely and appropriate manner in order to obtain proper evaluation
and understanding from investors and wider society.
3. Fair and transparent decision-making
We will make decisions based on appropriate and explainable reasoning, in accordance with laws, regulations and internal rules.
4. Thorough compliance with laws and regulations and fair dealings
We will understand both domestic and international laws and regulations and will never engage in any conduct that violates such
legislation, or in any fraudulent conduct. We will also engage in fair and free competition and appropriate transactions, and will
avoid becoming involved in bribery or other similar giving or receiving of unfair advantage in any way.
5. Comprehensive crisis management
We will not have any relationships with antisocial forces and will conduct thorough and organized crisis management to prepare fora terrorism, cyber-attack, natural disaster or other crisis.
6. Protection of confidential information
We will protect and strictly manage the material information of the Tosei Group, the personal information of customers, theinformation of business partners, and other confidential information.
7. Respect for human rights and creation of positive work environments
We will respect human rights and will not tolerate any behavior which violates the dignity of individuals including discrimination andharassment. We will also strive to develop human resources and create working environment with mutual trust and decency.
8. Initiatives to address environmental issues
We will contribute to the realization of a sustainable society by implementing initiatives to reduce our environmental impact,
recycle resources and address the risk of climate change, based on a strong awareness of the importance of environmental issues.
9. Social Contribution
We will seek harmony with local communities and the global community as a good corporate citizen and actively and continuously
promote activities that contribute to society.
10. Commitment of Top Management
The Tosei Group's Top Management recognizes that it falls to them to embody the spirit of this Code and, in the event of a violationof this Code, top management will proactively take charge of resolving the issue, endeavor to identify the cause and prevent a
recurrence, demonstrate accountability, including the disclosure of information to markets and society in a timely and appropriatemanner, and fairly and strictly punish those involved, including themselves.

85Enhanced ComplianceTo ensure awareness regarding compliance with laws and regulations, at the beginning of each fiscal year the Risk Management andCompliance Program is drawn up, and training in the relevant laws and regulations, measures to cultivate awareness of legal issues havebeen implemented. In addition, Risk Management and Compliance Committee’s Meeting and Business Law Liaison Meeting are held every
month, during which participants are duly made familiar with amendments to laws and regulations, etc., and notices from ministries withjurisdiction, etc. Furthermore, a compliance and corporate philosophy questionnaire is circulated every fiscal year to all officers andemployees of the Group in order to identify issues and consider responses to such issues, and reflect them to each measure for the next
fiscal year’s Program.
In order to strengthen the screening function for violations of laws and regulations, the Company confirms signs and occurrences ofviolations of laws and regulations, gives instructions on how to respond to such violations, and reports the status of such violations at theBoard of Directors meetings and other important meetings and committees attended by full-time directors. Moreover, full-time Audit &Supervisory Board Members conduct business audits on the Company’s businesses and investigations of subsidiaries, while the Internal
Audit Department conducts internal audits on Group-wide business activities and the Group companies and self-inspections at the
departmental level are implemented. Meanwhile, the Company continues to operate the whistle-blowing system providing three points ofcontact, internal, external and through Audit & Supervisory Board Members, and to conduct training sessions to promote anunderstanding of the system including protection of whistle-blowers.

Fair Business Practices
The Tosei Group promotes sound business activities under the Tosei Code of Ethics, which states ensures compliance with laws andregulations and fair business practices.

(Excerpt from the Tosei Group Ethics Code)
4. Thorough compliance with laws and regulations and fair dealings
We will understand both domestic and international laws and regulations and will never engage in any conduct that violates such
legislation, or in any fraudulent conduct. We will also engage in fair and free competition and appropriate transactions, and will
avoid becoming involved in bribery or other similar giving or receiving of unfair advantage in any way.

The Tosei Group Risk Compliance Guidebook clearly outlines our commitment to fair business practices and compliance with laws andregulations from a global perspective. In addition to compliance with the Anti-Monopoly Act, the Subcontract Act, the Building Lots andBuildings Transaction Business Act, the Financial Instruments and Exchange Act, and other laws, the guidebook specifically outlines actions
that impede fair, transparent, and free competition, and strives to foster compliance awareness.

Response to Anti-social Forces
The Company always treats any association with anti-social forces as a critical matter and takes
countermeasures to refuse any transaction with such. In the event any dispute arises between the
Company and anti-social forces, we will stand firmly against them and have formulated a manual for
acting against anti-social forces. Further, the Company carries out trainings on action against anti-social
forces for all officers and employees of the Group and distributes Tosei Group Risk Compliance
Guidebook in order to raise their awareness of the importance of elimination of transactions with antisocial forces. In addition, the Company conducts thorough screening of counterparties prior to theinception of transactions, as well as periodic screening for continued transactions to confirm whether theTraining for response to anti-social

Company should or should not continue transactions to eliminate any relationship with antisocial forces

forcesin our daily operations.

Prevent Bribery and Corruption
The Group Ethics Code prohibits bribery or other similar giving or receiving of unfair advantage in any way. All types of activities which leadto corruption such as money laundering and illegal political contributions and donations are prohibited, such as entertaining, gift-giving, andthe giving and receiving of cash or a cash equivalent to customers or business partners for the purpose of offering undue or improper
advantage or enjoying preferential treatment.

86

Anti-Corruption Initiatives
With regards to all types of activities that lead to corruption, such as bribery and money laundering, examples of illegal activities andspecific action to be taken as part of business activities, including procedures for verifying compliance with laws and regulations at the
beginning of the transactions and for reporting detected breaches are detailed in the Tosei Group Risk Management and Compliance
Guidebook. By distributing this guidebook and through ESG trainings for all employees including officers and contract employees, theCompany strives to ensure the awareness of the prohibition of all types of activities that lead to corruption.
For business affairs judged to involve high potential risks of corruption (specified business affairs/specified transaction in building lots andbuildings transaction business, financial instruments business and real estate specified joint enterprise pursuant to the Act on Preventionof Transfer of Criminal Proceeds), the Group has developed a management system for verification at the time of transaction andsuspicious transaction reports. For transactions that are considered particularly high-risk, we regularly review risk assessments based on
the contents of the Risk Assessment Report on Transfer of Criminal Proceeds published annually by the National Public Safety Commission
and our past reports of suspicious transactions, and the general manager approves the execution of transactions after conducting rigorous
confirmation at the time of transaction. Further, whilst the Group has little involvement in public projects, its internal regulations prohibit
entertaining and gift-giving in relation to public officials in light of the risk of bribery. Additionally, receiving excessive gifts orentertainment from business partners and contractors is prohibited, and any officer or employee found to have engaged in such corrupt
practices shall be subject to disciplinary action or other punishment in accordance with internal regulations.
The Group asks business partners (contractors) with which annual transactions exceed a certain amount to complete a questionnaire toverify compliance with laws and regulations including bribery and corruption, and determines whether or not to continue transactions
based on verification results.
The Risk and Compliance Committee monitors any signs of breaches of laws and regulations or misconduct including anti-corruption, andpromptly takes corrective measures and recurrence prevention measures when fact-finding investigations reveal a breach or potential
breach.The Board of Directors receives monthly reports from the Risk Compliance Committee and appropriately supervises these
implementation and operation of the system.

Status of Violation of Laws and Regulations related to Corruption
The Group has not been in violation of any laws or regulations or incurred any fines or penalties related to corruption or bribery.
Furthermore, the Company does not provide illegal donations or political contribution. When providing support for the activities of politicalorganizations, the Company conducts them appropriately in accordance with the Political Funds Control Act and Public Office Election Act.

Whistleblowing System（Tosei Hot Line）

87

Outline of Whistleblowing System
The Group established the "Tosei Hot Line" as a whistleblowing hot line, which Group officers and employees (including those who have beenretired for less than one year, advisors, temporary staff) can use to report any identified breaches of the Ethics Code or identified breaches
or potential breaches of laws and regulations including corrupt practices. Whistleblowing reports are treated in confidence. There is also theoption of using an external hot line to make reports anonymously. Whistleblowers are protected under the Whistleblower Protection Act andthe Risk and Compliance Regulations, to ensure that they do not suffer any detriment as a result of making a whistleblowing report. Wheninvestigating the facts, the Group uses external experts, such as legal advisors and certified public accountants, where necessary, andpromptly takes corrective measures and recurrence prevention measures in the event of discovery of a breach or potential breach. The
Group follows up by verifying whether the corrective measures and recurrence prevention measures worked effectively and by making surethat whistleblowers did not suffer any detriment. The Board of Directors appropriately supervises the maintenance and operation of thewhistle-blowing system by receiving regular reports from the Risk and Compliance Committee on the operation of the whistle-blowing
system.
In FY2023, the Company distributed a video lecture by the director of the Company as compliance training. In particular, the Company
strived to raise awareness on the Company’s stance on whistleblower protection and the importance of preventing harassment to officers andemployees.
Moreover, separate from the whistleblowing hot line, the Group has established a Harassment and Work-Style Consultation Hotline in the
personnel organizations of each Group company for the purpose of preventing harassment and speeding up its detection, and dealing withinquiries about work-style reform and personnel systems.

Response to Compliance Violations
In case an investigation of the facts reveals a violation or potential violation of laws and regulations, the Company will take disciplinary
action against the violator, as well as other appropriate measures, corrective actions, and measures to prevent recurrence, and report thematter to relevant administrative agencies and taking legal action as necessary.

Data Related to Compliance
FY2021
Number of whistleblowing cases

FY2022

FY2023

2

4

5

0

0

0

2

4

5

0

0

0

0

0

0

0

0

0

0

0

0

720

960

680

0

0

0

Number of whistleblowing cases which lead toviolation of laws/regulations covered byWhistleblower Protection Act
OthersNumber of compliance violations related to theCompany’s business
Number of violations of laws or regulations related tocorruption or bribery
Number of employees punished or dismissed by therules and regulations or codes related to corrupt
prevention
Fines or penalties related to corruption or bribery (¥)
Political contribution (¥ thousand)Material provisions for fines or settlements related to
ESG issues likely to arise in the future (¥)

88

Education and Training
Education and Training
Based on Risk Management and Compliance Program drawn up at the beginning of each fiscal year,
trainings related to relevant laws and regulations and measures to cultivate awareness of legal issues
have been implemented. In addition, compliance and corporate philosophy questionnaire is circulated
every fiscal year to all officers and employees of the Group in order to identify issues and consider
responses to such issues, and reflect them to each measure for the next fiscal year’s Program.
In FY2023, the Group conducted various types of training based on the Risk Management andCompliance Program approved by the Board of Directors. More specifically, the legal advisors offered a
training course focusing on cases of violation of laws and regulations deeply relevant to the Group’sbusiness. Furthermore, the Company provided Antisocial Forces Response Training aimed at eliminatingties with anti-social forces, Financial Instruments and Exchange Act Training for employees engaged infinancial instruments business, and training related to information asset management (including
personal information management and prevention of insider trading training) to educate and inculcate
rules for handling important information. Also, ESG Training was provided to raise sustainability
awareness throughout the Group and strived to promote the understanding of environmental and social
issues, as well as ethic codes and compliance in general (including prohibition of all types of activities
that lead to corruption). The Company made efforts to promote legitimate and appropriate businessactivity and to raise awareness of compliance with laws and regulations by distributing video lecture by
full-time directors on the Group’s philosophy and the whistleblowing system.
To further foster employee’s compliance awareness, instructions from the officers during morning
meetings, display of compliance slogans in offices, simple videos on the group-wide internal website areprovided. Through such activities, the Group also continuously sought to increase the understanding of
the Ethics Code and the Whistleblowing Hot Line and to promote understanding of relevant businessacts and insider trading rules, prohibited activities that directly lead to breaches such as harassment
and bribery to further foster employees' compliance awareness and to penetrate the Group’s common
rules.

89

Risk management and complianceportal website

Disclosure
Initiatives for Shareholders and Investors
Timely and Appropriate Disclosure
In addition to information disclosed under the Companies Act, the Financial Instruments and Exchange Act, among other laws andregulations, and rules of stock exchanges, the Tosei Group provides corporate information in a timely and appropriate manner tostakeholders, such as shareholders, investors, and business partners, through IR activities and the website.

External Evaluation of Disclosure
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 thecorresponding 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, andshare and shareholder information.

Holding of Financial Results Presentations and Briefings for Individual Investors
We hold earning results briefings by top management twice a year (in the second quarter and at theend of the fiscal year), mainly for institutional investors and analysts.
We also hold individual meetings with institutional investors and briefings for individual investors toensure two-way communication, and actively conduct IR activities by visiting overseas institutional
investors in Europe and Singapore. Through these efforts, we are striving to gain a better
understanding of our company from our stakeholders.
Briefings for individual investors(Online)90 External Evaluations
ESG Assessment

Environmental Real Estate Certification

Health and Safety

Management Infrastructure

Disclosure and Website

ESG Assessment
FTSE Blossom Japan Index Series
We have been selected as a constituent member of the FTSE Blossom Japan Index and the FTSE
Blossom Japan Sector Relative Index. Both indices incorporate Japanese companies that
demonstrate outstanding environmental, social, and governance (ESG) performance and areused by a wide variety of market participants to create and assess responsible investment funds
and other products.

GRESB Real Estate Assessment
This global real estate company benchmarking system, which was established in 2009 by a group of major European pension
funds that led the Principles for Responsible Investment (PRI), evaluates the ESG considerations of companies and funds thatown and manage real estate. We have participated in the assessment since 2019, and in 2022, we obtained a "2 Star" and"Green Star" rating under the GRESB Ratings.

Environmental Real Estate Certification
Please see page 41 for a list of Environmental Real Estate Certifications already obtained.

BELS (Building-Housing Energy-efficiency Labeling System)
BELS is a certification system in which a third-party evaluation organization assesses the energy-saving performance ofbuildings and evaluates energy consumption performance at multiple levels based on guidelines established by the Ministryof Land, Infrastructure, Transport and Tourism. BELS is an abbreviation for Building-housing Energy-efficiency Labeling
System. We have acquired certification for ten of our properties, including Awajicho Tosei Building.

DBJ Green Building Certification
DBJ Green Building Certification is a comprehensive evaluation by DBJ that includes not only the environmental
performance of a building, but also consideration of social demands from various stakeholders, such as crime
prevention, disaster prevention, convenience, and comfortability. We have acquired certification for four of ourproperties, including Toranomon Tosei Building, our former headquarters.

91

Health and Safety
Health and Productivity Management Organization
We have been certified as an "Health and Productivity Management Organization 2024 (Large Corporation Division)" following 2023. The"Health and Productivity Management Organization" is a system to honor large corporations, small and medium-sized companies, and othercorporations that practice particularly excellent health management, based on initiatives that meet local health issues and health promotion
efforts promoted by Nippon Kenko Kaigi. We have established "Tosei Group Health & Productivity Management Policy" and regard the healthand safety of employees as an important management issue, and is actively working on measures to maintain and promote health bycreating a workplace environment where employees can work with vitality.

Management Infrastructure
DX Certification
Based on the DX Certification System established by the Ministry of Economy, Trade andIndustry, we obtained certification as a "DX Certified Operator" as of October 1, 2021.

Disclosure and Website
IR Site Ranking
In an external evaluation that commends investor information of listed companies, we received a high evaluation in FY2023 for the quality of
information and usability of our website. In 2023, the company was again selected as a company of excellence in the Gomez ESG Website
Ranking, which specifically evaluates ESG websites.

2023 IR・ESG Site Ranking Awards

GRESB Public Disclosure Assessment
In the GRESB disclosure evaluation, which measures the level of ESG information disclosure, we received a "Level A" rating, the highest levelin 2022, for our ESG information disclosure efforts.

92ժԔՂՅՉԺՆՍի
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