TOSEIGROUP
ESGREPORT 2021

ŋņŊļŀľŉņŌŇļŊľŉļŇņŉŋĩħĩ1ĺņŅŋļŅŋŊ ԚԵՇՇԱԷԵӨԶՆՃՁӨthe Management••

Message from the President and CEO
Message from the Chairman of
ESG Promotion Committee

 TOSEI Group's Sustainability
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VisionTarget and Progress
Climate Change
Biodiversity
Environmental Pollution and Resources
Sustainability Finance
Environmental Real Estate Certifications ԢՃԳԺԱՀ
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Labor Environment
Response to Social Needs
Social Contribution ԑՃՊԵՆՂԱՂԳԵ
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Our Approach to Sustainability
ESG Promotion System
Mid-term Management Plan “Infinite Potential 2023”
Participation in Initiatives
Commitment to SDGs

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Corporate GovernanceCompliance and Risk Management
Disclosurez External Evaluations

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3

 Message from the Managament

The Tosei Group's corporate philosophy is to "create new value and inspiration in all aspects of real estate." With
environmental and social issues growing increasingly serious, we recognize that the creation of new value that society
demands through our corporate activities is the realization of a sustainable society.
As part of its CSR activities, the Group has long promoted the revitalization and development of real estate with anawareness of reducing environmental impact, in addition the enhancement of corporate governance.In January 2019, weestablished the Tosei Group ESG Policy and ESG Action Guidelines to re-integrate and further develop our activities as ESG
management, and established a promotion system.In addition, since 2020, we have been aware of the roles that the Groupshould play in achieving the Sustainable Development Goals (SDGs) established by the United Nations, and have beenplanning products and services aimed at contributing to SDGs in established businesses such as real estate revitalizationand condominium and detached house development.Amid a rapidly changing social environment, people's lifestyles andvalues are becoming increasingly diverse, and there is also a need for reforms in the style and value of real estate.
The Tosei Group will strive to practice ESG management that gives consideration to sustainability while continuing to
respond flexibly to changes in the social environment so that we can continue to be a company with existence value for all
stakeholders.

The President and CEO
Seiichiro Yamaguchi

4Message from the Chairman of ESG Promotion Committee

The Tosei Group has formulated a medium-term management plan, "Infinite Potential 2023," which begins in 2021, and has
established basic policies for ESG promotion in both its business activities and management infrastructure.
In business activities, Tosei Group aims to expand existing businesses by planning products and providing services with anawareness of environmental issues such as climate change, and social issues such as diversity and disaster prevention. In
addition, in our management infrastructure, we will promote sustainability-conscious business management and further
enhancement of corporate governance.
In order to smoothly promote the initiatives set forth in these basic policies, the ESG Promotion Committee will play acentral role in monitoring the status of initiatives at relevant departments, including group companies, and will work inclose collaboration to steadily achieve the plans.

CFO and Senior Executive Officer
Chairman of ESG Promotion Committee
Noboru Hirano

5 TOSEI Group's Sustainability

Our Approach to Sustainability

ESG Promotion System

Participation in Initiatives

Commitment to SDGs

Mid-term Management Plan “Infinite
Potential 2023”

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 ESG Promotion 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.
5. Contribute to tenants, locals and communities through real estate owned

6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.

ESG Promotion System
The Group has established an ESG Promotion Committee to deliberate and determine ESG-related policies and activities. The committee ischaired by the director in charge of ESG promotion, appointed by the CEO, and consists of members appointed by the director in charge of
ESG promotion. The contents of the deliberations are regularly reported to the Board of Directors and reflected in the Group’s businessactivities in cooperation with each relevant department.

Mid-term Management Plan “Infinite Potential 2023”
In our three-year medium-term management plan "Infinite Potential 2023" starting from the fiscal year ending November 30, 2021, we haveestablished a basic policy for ESG promotion in both our business activities and management infrastructure in order to strongly promote ESG
management. In our business activities, we will strive to expand our existing businesses by planning products and providing services thatare conscious of environmental issues such as climate change and social issues such as diversity and disaster prevention, and in ourmanagement infrastructure, we will promote sustainability-conscious business management and further enhancement of corporate
governance to further increase corporate value and contribute to the realization of a sustainable society.

Basic

Policies

Pursue the Group's infinite growth potential in all aspects of real estate and aim fora new stage as a comprehensive real estate company.

7

Fundamental Policy
Growth Strategy
Expand existing businesses and increase operating profit with a focus on environmental/social issues
Enhance existing businesses and create new income-generating models through DX

Strengthen the Business Base
Implement a balance sheet strategy with a focus on increasing business scale, Group-held assets andcapital efficiency
Implement Group strategy and organizational strategy with a focus on achieving both governance andefficiency
Improve operational and administrative efficiency through the promotion of utilization of IT andenhance employee satisfaction conducive to improving productivity
Promote business, management and ESG with a focus on sustainability

Participation in Initiatives
Supporting the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD)
We have expressed our support for the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and are a memberof the TCFD Consortium, an organization of supporting companies in Japan. Based on the TCFD recommendations, we will analyze the risks
and opportunities posed by climate change to our business, and strive to further enhance information disclosure.

Participation in GRESB Real Estate Assessment
We have participated in the GRESB Real Estate Assessment since 2019, and in 2021, our second year of participation, we
received a "1 Star" and "Green Star" rating in the GRESB Ratings, which are rated according to the global ranking of theoverall score. The "Green Star" rating is given to participants that excel both in terms of their organization and structure inpromoting ESG and in terms of the environmental performance of the properties they own. In 2021, we made efforts toacquire environmental performance data on the properties we own and to enhance our efforts with tenants.

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

The Tosei Group ESG Action Guidelines

E

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 Growth9 Environment

VisionEnvironmental Promotion System

Our Approach and Vision for the Environment

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 established bya 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.

10Environmental Promotion System
ESG Promotion Committee
The Group has established the ESG Promotion Committee to deliberate and decide on ESG-related policies and action plans. The Committee
is chaired by the Director in charge of ESG promotion 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, and are reflected in business activities under thesupervision 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 our environmental policy, including compliance withenvironmental laws and regulations, TCFD compliance, promotion of energy conservation at owned properties, and acquisition of third-party
evaluations.

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Target and Progress
GHG (CO2) Emissions and Energy Use

Water Use

Waste Discharge

Environment-related Violations and Fines

GHG (CO2) Emissions and Energy Use
FY2023

FY2018Result(Base year)

GHG (CO2) emissions(t-CO2)FY2019FY2020

FY2021ResultResultResult

Year）

6,366

-

6,170

6,394

6,575

126

-

137

132

143

90

86

66

68

56

-

-5%

-27%

-24%

-38%

1.78

1.69

1.46

1.41

1.22

-

-5%

-18%

-21%

-31%

70,664-

93,957

93,957

117,007

Energy use (1,000 GJ)
Result/GHG(CO2)

Target（TargetTargetEmissions
intensity

Base year(kg-CO2/㎡)

compared
reduction rate
Result/Energy use
intensity(GJ/㎡)

TargetBase year
compared
reduction rate

Total floor area of target
properties (㎡)Water Use
FY2023

FY2018Result(Base year)

Water use(㎥)Result/Water use
intensity(㎥/㎡)

TargetTarget

FY2019FY2020

FY2021（TargetResultResultResultYear）

87,889-97,19869,75582,579

1.35

1.32

1.23

0.79

0.74

-

-2.5%

-9%

-41%

-45%

65,304-79,07988,597

111,647

Base year
compared
reduction rate

Total floor area of target
properties(㎡)12Waste Discharge
FY2023

FY2018Result(Base year)

Total
Waste

Incinerated/redischarge(t)claimedRecycled
Result/Waste

TargetTarget

FY2019FY2020

FY2021（TargetResultResultResult

Year）

60

-

67

71

100

22

-

23

33

49

38

-

44

38

51

13.27

11.13

14.84

15.70

8.37

-

-2.5%

12%

18%

-37%

4,515

-

4,515

4,515

11,986discharge
intensity

Base year(kg/㎡)

compared
reduction rate

Total floor area of target
properties (㎡)* Properties subject to the above exclude those with less than one year of energy monitoring, underutilized properties, condominiums,
condominium unit ownership, and real estate for sale.
* Occupancy rate is not taken into account in the calculation of floor area intensity.
* The Group excludes GHGs (chlorofluorocarbons) 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.
* Waste emissions are those of Tosei's head office buildings (Toranomon Tosei Building and Tamachi Tosei Building).
* All water use is taken from tap water, and no other water is taken (groundwater, external wastewater, seawater, etc.).

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 FY2021.

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Climate Change
Our Approach to Climate Change

Targets and Achievements

Environmental Efforts

Our Approach to Climate Change
The Tosei Group strongly recognizes the importance of environmental issues and promotes efforts to reduce the burden on the environment,
resource recycling, and climate change risk countermeasures to realize a sustainable society. In light of recent changes in the global
environment and the urgent issues such as reducing greenhouse gas emissions, we take our corporate responsibility as a real estatecompany very seriously and will strengthen our environmental efforts. We will also recognize and support the importance of the Paris
Agreement, other agreements among countries, and government targets on climate change, and based on our environmental policy, we willproactively introduce measures to adapt to climate change including measures that promote energy conservation to contribute to theformation of a low-carbon society.

Climate Change-related Promotion System
Management and Supervisory Body

Board of Directors

Deliberative Body

ESG Promotion Committee

Director in Charge

Noboru Hirano (CFO and Senior Executive Officer of Administrative Division)

Department in Charge

Corporate Management Department

Supporting the Recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD)
We have expressed our support for the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and are a memberof the TCFD Consortium, an organization of supporting companies in Japan. Based on the TCFD recommendations, we will analyze the risks
and opportunities posed by climate change to our business, and strive to further enhance information disclosure.

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Targets and Achievements
In promoting efforts against climate change, we have set the following reduction targets. The base year is set for 2018, and the long-termtarget is through 2023.

Targets for Energy-saving and Greenhouse Gas Emission Reductions

Long-term targets

Short-term targets

Target properties

Decrease energy consumption and greenhouse gas emissions by 5%, respectively, in terms of basic units infive years
Decrease energy consumption and greenhouse gas emissions by 1%, respectively, in terms of basic units in
one year

Fixed assets owned by the Company*Please see page 12 for performance data

Environmental Efforts
Creation of Sustainable Value ~Three Value-Up Codes~
In the product planning phase both in the case of new construction and renovation to add value, we examine using eco-friendly equipment
which suits property characteristics and we actively adopt products that are eco-friendly in a variety of ways, for example, equipment thatconserves energy and saves resources. Especially when adding value to existing properties after acquisition, the Group considers the
adoption of specifications which will help conserve energy and save money and resources based on the "Three Value-Up Codes" for adding
value across three dimensions: "Security," "Design" and "Ecofriendly."

CO2 Emission Reduction by 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 during 100-year term.‫ق‬According
to our estimation‫ك‬

15

Assumptions
Assuming that a newly constructed office building (total floor area: 10,000m2 , steel-framed reinforced concrete structure) will bemaintained for 100 years*1

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 similarbuilding (2 times in total).
*1 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 not taken into account.

Installation of LED Lighting in Existing Office Building
We are promoting the installation of LED lighting in our portfolio properties to achieve the reduction target we set in 2019. So far, weinstalled LED lighting in four existing office properties and a Logistics, reducing electricity consumption by almost 20 凕 30% on average.
Besides reducing electricity consumption and costs, the installation work is also expected to improve tenant satisfaction through better
lighting and easier maintenance.

Awajicho Tosei Building

Shinbashi Frontia Building

Toranomon Tosei Building

Yotsuya Tosei Building

16

Shinden Logistics

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

Energy Conservation Efforts in Development Properties
In the properties developed by the Group, we actively adopt equipment and materials that contribute to the reduction of greenhouse gases
and energy conservation. We will continue these efforts to provide living environments that combine high energy-saving performance andcomfort.

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 vegetable

Electric car charging facilities

Car sharing, bicycle rental

garden, garden

Development of Net-zero Energy Housing (ZEH)

The Tosei Group is also working to develop houses that meet the ZEH (Net Zero Energy House)standard, and supplied 13 ZEH from December 2020 to November 2021. We are developing productsthat incorporate cutting-edge housing equipment and systems, including solar power generation,energy- and water-saving equipment, and IOT. We will continue to contribute to CO2 reduction throughthe spread and expansion of ZEH.
Comodo CASA Higashitamagawagakuen

Solar power

High performance insulation

17

Energy meter

Green Leasing
To promote energy conservation in the properties we own, we are working with tenants to conserve energy. We conduct periodic surveys oftenants in our buildings regarding building management and operation systems, facilities, etc., to understand their needs. In addition, we
are implementing green leases for operational improvements, mainly for tenants of buildings that have undergone whole-building LED
construction, to confirm their willingness to work with owners on various energy-saving activities in terms of building operation. We are also
working on economical green leases for some of our properties that return the energy-saving benefits of installing energy-efficientequipment to the owners. Moreover, we are striving to raise energy conservation awareness among building users and curb energy use by
distributing Sustainability Guides, which provide key points for energy conservation activities and show trends in building water, light, andheat consumption, and by displaying posters calling for energy and resource conservation.

Sustainability Guide

Energy conservation

posters

In-house Resource and Energy Conservation Initiatives
By establishing an IT infrastructure within the company, meeting materials, decision-making documents, etc. are becoming paperless. In
addition, we are continuing steady activities such as using electric fans and halogen heaters instead of relying on air conditioners. We arealso actively introducing resource- and energy-saving equipment such as water-saving toilets and motion-sensor lighting. We believe that it
is important to make continuous efforts throughout the year to promote resource and energy conservation, and we will continue to educate
and implement familiar eco-activities that can be carried out by each and every employee.

18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 3,893 square meters of green space planted so far as of theend of November 2021. We are planning to introduce this system to commercial facilities and hotels under development.

THE PALMS Chofu Manor Garden

THE PALMS Sagamihara Park Brightia

19

TOSEI HOTEL COCONE Ueno Okachimachi

Efforts 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,
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.

Planting seedlings

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.

20

Efforts to Protect Ecosystems
Volunteer seaside cleanup activities
We have been participating in volunteer cleanup activities since 2009, and in 2021, 25 employees participated in the "Tokyo Satoumi Aidfrom Nishi-Nagisa" event to clean up debris in Kasai Marine Park. While Kasai Marine Park is a valuable area in Tokyo where one canexperience biodiversity close at hand and was registered under the Ramsar Convention in 2018, it has long been plagued by debris driftingfrom the Kyu-Edo River and Arakawa River. The event also included a tally of the types and quantities of trash collected to help investigate
the causes of the drifted trash. Through this activity, we aim to raise employee awareness of environmental and social issues such as trash
reduction and ecosystem conservation.
*Cleanup events are conducted with adequate infection prevention measures in place.

Plastic garbage

Participants and marine debris collected

Cleaning up

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

THE PALMS Yutenji Master Place

21

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 existing properties and undertaking renovation and demolition work, we conduct asbestos investigations and thoroughly
confirm with the demolition and construction contractors in advance to comply with relevant laws and regulations, and take appropriate
measures to prevent the dispersion of harmful substances such as asbestos and CFCs before carrying out the work. In the fiscal year ended
November 30, 2021, there was no discharge or treatment of waste oil, mercury, PCBs, etc., which are specially controlled industrial wastes.
In the event that treatment or management of such wastes becomes necessary at any of our buildings, we will dispose of them appropriately
in accordance with laws and regulations. In the development of our buildings, we use building materials that meet JIS and JAS standards forlow emission of formaldehyde, a substance that causes sick building syndrome, in an effort to provide safe and secure housing.

22

Waste Reduction Efforts
Waste Reduction Targets and Results
The following reduction targets have been set for waste reduction. The base year is set for 2018, and the long-term target is set until 2023.

Waste Discharge Reduction Targets

Long-term target

Reduce waste discharge intensity by 2.5% in five years

Short-term target

Reduce waste discharge intensity by 0.5% in one year

Target Properties

Fixed assets owned by the Company (*)*Tosei's head office buildings*Please see page 13 for performance data

3R (Reuse, Reduce, Recycle) Initiatives
Recycling of Plastic Bottle Caps
We are participating in an initiative to recycle plastic bottle caps. We have collection boxes next to vending machines on each floor to collectplastic bottle caps.

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 poster

Resource Conservation Efforts
Water Resource Conservation
In promoting efforts to conserve water resources, the following reduction targets have been set. The base year is set as 2018, and the longterm target is set until 2023.

Water Use Reduction Targets
Long-term target

Reduce water use intensity by 2.5% in five years

Short-term target

Reduce water use intensity by 0.5% in one year

Target Properties

Fixed assets owned by the Company*Please see page 12 for performance data

23

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.

Example 1: 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

Example 2: 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

Example 3: 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

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.

24

Sustainability FinanceGreen Bonds

Loans Based on Environmental Assessment

Loans Based on Environmental Assessment
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 10 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, we received an "A-rank" for "good ESG/SDGs initiatives andinformation disclosure" under SMBC's "ESG/SDGs evaluation-type loan.
In addition, we are actively working on financing utilizing evaluations by external institutions, and 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 a logistics facility.

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.

25

Environmental Real Estate Certifications
DBJ Green Building Certification

BELS (Building-Housing Energy-efficiency Labeling System)

CASBEE (Comprehensive Assessment System for Built
Environment Efficiency)

DBJ Green Building Certification
Property Name

Rank

Year of acquisition

Total floor area

Toranomon Tosei Building★★（2 Star）

May, 2020

4,515.24㎡

Koishikawa Tosei Building★（1 Star）

May, 2020

3,863.62㎡

Toranomon Tosei Building

Koishikawa Tosei Building

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
Awajicho Tosei Building
Shinden Logistics

Rank

Year of acquisition

Total floor area★★★（3 Star）

May, 2021

1,582.79㎡★★★★（4 Star）

December, 2021

6,384.27㎡

26

Shinden Logistics

Awajicho Tosei Building

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

Kamata Tosei Building

Toranomon Tosei
Building

Type of Certification

Rank

CASBEE for New
Construction
CASBEE for New
Construction

CASBEE for Real EstateYear of acquisition

Total floor area

Rank A

May, 2009

14,449.47㎡

Rank A

December, 2009

8,354.58㎡

Rank A

September, 2015

4,515.24㎡

Toranomon Tosei Building

Kamata Tosei Building

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.

27

 Social

Labor Environment
Basic Approach to the Labor Environment

Respect for Human Rights

Safety and HealthWork-life Balance

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.

28

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.

29

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.
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. The average annual
salary for the fiscal year ending November 30, 2021 is 7.73 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 ESG Promotion Committee then reviews the results and discusses
whether or not to continue transactions with them.
In 2021, 11 major clients in the real estate revitalization, development, and leasing businesses were surveyed and reviewed in theCommittee.

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.

30

Safety and HealthApproach to Safety and Health in the Workplace
We recognize that ensuring health and safety in the workplace is an important issue, and we strive to prevent occupational accidents andpromote the creation of a healthy and safe work environment in which all employees can maximize their abilities. We have established the"Health Committee" as a promotion system for safety and health, and the committee meets monthly and reports to the Board of Directors.

Promotion System
Health Committee
Management andSupervisory Body

Board of directors

Chairman of the Health Committee: Noboru Hirano, CFO and Senior
Executive Officer
Representatives from each department participate as committee
Person in Charge and Matters ofmembers, and the meeting is held monthly in the presence of an

Deliberationsindustrial physician. The committee reviews the overall working
environment, including the status of the workplace environment,
health checkups, and overtime hours, and provides feedback to
employees. Reports are also made to the Board of Directors on amonthly basis.

OfficePersonnel department

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.
All employees had health checkups for the fiscal year ended November 30, 2021.(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.
All employees had stress check for the fiscal year ended November 30, 2021.(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.

31

Health Promotion Programs
In addition to regular health checkups, we offer health promotion programs that employees can easily participate in on a voluntary basis. We
also continue to offer "health counseling sessions" by public health nurses, "locomotive syndrome tests," and a "refreshment program"incorporating yoga for relaxation every year.
*Cancelled in 2020 and 2021 due to the COVID-19 pandemic.

Locomotive syndrome test

Diagnosis of lung age

Interview with public health nurses

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.

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.

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.
Only one occupational accident occurred in the fiscal year ended November 30, 2021.(Tosei Corporation)

Safety and Health 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 ESG Promotion Committee then reviews the results and discusses
whether or not to continue transactions with them.
In 2021, 11 major clients in the real estate revitalization, development, and leasing businesses were surveyed and reviewed in theCommittee.

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

32

Work-life Balance
Working Hours Management
In addition to complying with the Labor Standards Law, the Industrial Safety and Health Law, and other domestic laws and regulations, we
also manage daily attendance through our attendance management system, introduce "no overtime days," prohibit overtime after 9:00 p.m.
in principle, encourage morning work, and implement other measures to correct long working hours and comply with the 36 agreements.
The results of monthly monitoring of employee overtime and use of paid leave are reported to the Health Committee, and information isshared to promote reductions in overtime hours and use of paid leave.
The average overtime hours in FY2021 was 26.5 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.
The paid leave utilization rate for the fiscal year ended November 30, 2021 was 65.4%.(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.
In the fiscal year ending November 30, 2021, the maternity leave utilization rate and the childcare leave utilization rate were both 100%.
(Tosei Corporation)

Flexible Working Systems
Short-time Work
Employees who care for children up to elementary school age and those who care for family members in need of nursing care* may reduce
their working hours in 30-minute increments, up to a maximum of two hours per day.
*The coverage is three years from the start date of use per family member in need of care for.
6 employees used the short-time work during the fiscal year ended November 30, 2021.(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.

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.

33

Family Days
We hold family days once a year to give children a better understanding of their parents' job andworkplace. In 2019, a total of 20 families or 62 family members attended the family day and enjoyedactivities such as swapping business cards, a stamp rally around the offices, and making models ofhomes. The day also served as a social occasion for employees and their family members to get to knoweach other.
*canceled in 2020 and 2021 because of the spread of coronavirus infection
Business card exchange experience

Employee Satisfaction Survey

with executives

We implemet employee satisfaction surveys to gain an understanding of employees' attitudes toward their work and the workplaceenvironment, which is reflected in various personnel policies.
In the survey for the fiscal year ended November 30, 2021, 59.6% of employees selected the top 2 items out of 5 in the "Job Satisfaction"question.(Tosei Corporation)

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.

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.

34

Education and Training
Major Training
Training Title

target group

Training Objectives

Training Contents

Induction training

New graduates andTo understand the matters to be complied

Description of the Group's operations

for new

new members whowith as an employee of our group, businessemployees

join mid-way

outline, system operation rules, etc.

Basics of organization, risk compliance,and IT systems
Basic knowledge of the use of installed IT
systems, etc.
Harassment Prevention

ComplianceTraining

All employees

Foster a culture and raise awareness ofcompliance and acquire latest knowledge.

Whistle-blowing system
Ethics Code (including promotion of fairtrade)
Compliance trends, etc.
Mental health issues
Periodic Health Checkups and Health

To deepen understanding of health care,
Management
Training

Managers

personnel and labor management, which
are important for department and unit

Management
Working hour management
Harassment

operations.

Trends in human resources and labor
issues, etc.
Participants voluntarily select from awide range of training programs offered
Skills Training

All employees

To improve the individual skills andby external organizations, including

knowledge of employees.

business skills, sales techniques, thinking
methods, management, tool creation
skills, etc.
Definition of Information Assets

Information AssetManagement

All employees

Training

Raise awareness of information leakRules to prevent information leakage

prevention and establish internal rules

Management of personal and inside

regarding information asset management

informationand insider trading.

Basic knowledge and importance ofinsider trading prevention, etc.
Tosei Group's ESG promotion system andTo acquire knowledge on ESG and establish
ESG Training

All employees

sustainability awareness in the course ofbusinessdisaster prevention-related efforts
Corporate Governance
Climate change issues, environmental
real estate certification, etc.

Lecture on theacquisition of theProspective

Obtain the "Real Estate Notary""Real Estate

employees and newqualification, which is related to the

Notary"graduates

business.

Invite outside lecturers to conduct
training to obtain the "Real Estate
Notary" qualification, which is related tothe business.

qualification

35

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.
19 employees acquired qualifications during the fiscal year ended November 30, 2021.(Tosei Corporation)

36

Social Performance Data
Employees Data
FY2017
Male/
Number of

FemaleFY2018FY2019FY2020

FY2021

269/117294/137

314/143

345/164411/227

386

431

457

509

638

69/31

68/32

69/31

68/32

64/36

46/25

50/32

56/30

70/47

84/64

71

82

86

117

148

94/45

89/50

103/5498/50

125/81

139

139

157

148

206

95/36

110/42

101/41111/50124/66

131

152

142

161

190

28/9

40/11

53/13

58/15

67/13

37

51

66

73

80

6/2

5/2

4/2

8/2

11/3

8

7

6

10

14

87/5

101/6

104/5

101/8

124/13

92

107

109

109

137

94/6

95/5

95/5

92/8

90/10

0

0

0

0

2

Employees
Total
Percentage of

Male/

Employees(%)

FemaleEmployees by Age Group
Male/
20s

Female
Total
Male/

30s

Female
Total
Male/

40s

Female
Total
Male/

50s

FemaleTotal
Male/

60s and overFemale
Total
Male/

Number of

FemaleManagers
Total
Percentage ofManagers(%)

Male/
FemaleNumber of
FemaleDirectors
Coverage︓10 Tosei Group Companies(Tosei Corporation, Tosei Asset Advisors, Inc., Tosei Community Co., Ltd., Tosei Revival Investment Co.,
Ltd., Tosei Hotel Management Co., Ltd., Tosei Hotel Service Co., Ltd., Princess Square Co., Ltd., G.P. Asset Co., Ltd., Let’s Creation Co., Ltd.,
Tosei Urban Home Co., Ltd.)

37

Employment Data
FY2017

Number of new
graduate hires

Male/
Female
Total
Male/

Number of mid-FemaleFY2018FY2019FY2020

FY2021

12/6

7/5

7/3

7/3

10/3

18

12

10

10

13

9/1

21/3

19/3

13/7

15/11

10

24

22

20

26

3/13

2/7

2/8

3/16

2/7

16

9

10

19

9

0.40

0.36

0.35

1.64

1.33

5.5/6.6

4.9/6.7

5.3/7.0

5.4/6.4

5.0/6.5

5.8

5.5

5.8

5.7

5.4

17

15

18

20

14

9.6

7.6

8.2

9.1

6.8

career hires
Total
Male/
Number of non-Femaleregular hires
Total
Percentage of
employees withdisabilities (%)

Averagenumber ofyears of service

Male/
FemaleWhole

Number of employees who left
for personal reasonsTurnover rate for personalreasons (%)
Coverage︓Tosei Corporation

38

Leaves and Diverse Work Styles Data
FY2017
Overtime working hours(average per employee)
Percentage of paid leave used(%)
Number ofMale/

employees who

FemaleFY2018FY2019FY2020

FY2021

34:10

32:10

29:03

25:55

26:29

40.3

44.4

65.1

60.3

65.4

0/4

0/3

0/3

0/3

1/3

4

3

3

3

4

0/100

0/100

0/100

0/100

7/100

0/100

0/100

0/100

0/100

100/100

4

3

3

3

3

100

100

100

100

100

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0/3

0/3

0/6

0/4

0/6

3

3

6

4

6

used childcare
leave
Acquisition rateof childcare
leave (%)

Total

Male/
FemalePercentage of
employees who
returned toMale/work after

Femalechildcare leave(%)
Number of employees who usedmaternity leave
Acquisition rate of maternity
leave (%)
Number of
employees who

Male/
Femaleused nursing
care leave

Total

Acquisition rate of nursing careleave (%)
Number ofMale/

employees

Femaleworking shorttime

Total

Coverage︓Tosei Corporation

39

Employee Health and Safety Data
FY2017
Number of violations of labor

FY2018FY2019FY2020

FY2021

21

1

0

0

2

0.10

0.20

0.15

0.04

0.10

100

100

100

100

100

100

100

100

100

100

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Injury rate (%)

0

0

0

0

0.5

Lost day incident rate (%)

0

0

0

0

0

0

0

0

0

0

-

-

-

-

48

standards
Absentee rate (%)
Percentage of employees who
had health checkups (%)
Percentage of employees who
had stress check (%)
Number of occupational
accidents
Number of fatal disasters
Lost time injury frequencyrate(%)

Lost-time injury frequency rate(%)
Number of employees trained inhealth and safety
Coverage︓Tosei Corporation

Human Resource Management Data
FY2017
Number of empoyees who
newly acquired qualifications*1
Number of students hosted forinternships*2
Total annual company-widetraining hours
Annual training hours per
employee
Annual training days per
employee

FY2018FY2019FY2020

FY2021

14

14

13

14

19

145

26

145

72

30

-

-

-

-

5,403.5

-

-

-

-

25.1

-

-

-

-

3.14

-

-

-

-

4,367

Total annual training expenses
for the entire company(Thousands of yen)
Coverage︓Tosei Corporation*1︓Number of employees who acquired encouraged qualifications*2︓Includes seminar-type 1-day internship40

Response to Social Needs
Approach to Responding to Social Needs

Management of Product Quality

Providing Value Through Products and Services

Approach to Responding to Social Needs
In order to meet diversifying social needs through the provision of products and services, and to provide value supported by customers in all
aspects of real estate, the Group strives to respond to social needs through its business, including product quality control, reduction ofenvironmental impact, energy conservation, enhancement of disaster prevention and crime prevention functions, and revitalization of local
communities.

Management of Product Quality
Approach to Quality Control
Our group provides products and services related to all types of real estate, including office buildings, condominiums, detached houses,
commercial facilities, logistics facilities, and hotels, and we are closely involved in the lives of our customers. We are committed to enhancing
customer satisfaction by providing products and services that are rooted in safety and security and ensuring quality, always from thecustomer's perspective.

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, 2019)

Meetings for examining quality improvements
In conjunction with the construction or renovation of new or existing office buildings and condominiums, among other properties, Tosei
conducts detailed checks on specifications and indepth meetings with the attendance of three parties - the Company, design and construction
management companies, and construction companies. It seeks to strengthen collaboration among concerned parties to provide better
products while preventing the occurrence of issues.

41

TOSEI-QC-10
Tosei manages all processes related to the construction and maintenance of new or existing office buildings orcondominiums through three parties - the Company, design and construction management companies, andconstruction companies - based on Tosei's unique quality control standards, TOSEI-QC-10. Tosei strives toprovide customers with safe and reliable products by conducting inspections and particularly rechecking those
items that customers cannot oversee.

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" was a vacant company housing, which we acquired and renovated into a
rental apartment with improved sound insulation performance. Of the 52 apartments, 24 studioapartments were soundproofed, and the floor used as a cafeteria was converted into a party
room, creating a space where residents can gather to hold events and deepen exchanges whilerelaxing 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,and a restaurant within the facility offers a "local production for local consumption" menu using
local ingredients to contribute to the local community through the operation of the facility.

42

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" 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.

■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.

43

Creation of Community Space in Condominiums■Urban Development that Fosters Community
The detached houses block "THE Palms Court Kashiwa Hatsuishi" 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■Urban Development Open to the Local Community
In front of the entrance of the condominium "THE Palms Sagamihara Park Brightia," a park has
been set up to provide a place for residents and local residents to get close to nature and relax.
Three "kamado benches" that can be used as kamado in the event of a disaster and some solarpowered 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 in 2016)

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 andmanagement businesses. In our rental housing, we are creating community spaces and renovating the designof aging common areas, while in our rental offices, we are working to attract shared bicycles and food trucks.

Food truck■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.

44

kids' room

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, and "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 by introducing donation-type vending machines.

45Social Contribution
Approach to Social Contribution

Contributions to Society

Donation Activities

Approach to Social Contribution
Through all of its business activities, the Group strives to solve social issues related to real estate and increase added value, contribute to
local communities, and promote comprehensive and continuous social contribution activities as a good corporate citizen in harmony withlocal communities and the international community. In our social contribution and donation activities, we will focus on the priority areas of"coexistence with local communities," "natural environment conservation," and "social welfare." Based on our corporate philosophy of"creating new value and inspiration in all aspects of real estate," we will engage in activities that contribute to the revitalization andcommunity building of the regions where our properties are located, the preservation of the natural environment, and the enhancement ofwelfare, 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
Disaster Support
Since 2011, immediately after the earthquake disaster, the Tosei Group has continued its support such as volunteer activities, experts
invitation, and making donations, etc. Since one year after the earthquake, we have continued support activities in cooperation with the
Association for the Support of Children's Homes, an NPO based in Higashimatsushima City, Miyagi Prefecture.

Main Activities in Recent Years

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

46

Environmental Preservation and Beautification
We have participated in volunteer cleanup activities since 2009. In 2021, 25 employees participated in "Tokyo Satoumi Aid from NishiNagisa," an event to clean up debris in Kasai Marine Park. The type and amount of trash collected was counted to help in the investigation of
the cause of the drifted trash. 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

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 Haruyasumi" (Spring Vacation of Art)

"Art na Christmas" (Christmas of Art)

Event Track Record
Date of the Event"Art na Haruyasumi" (Spring Vacationof Art)"Art na Christmas" (Christmas of Art)
"Art na Natsuyasumi" (Summer
Vacation of Art)

Number of Participants

March 19, 2022 (Saturday)

19 groups / 55 persons

December 12, 2021 (Sunday)

19 groups / 59 persons

August 1, 2021 (Sunday)

11 groups / 37 persons

47

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 2021, we
cooperated with events at the school and assisted in cleaning the facility buildings. Although the scope of our activities is limited due to the
COVID-19 disaster, we will continue to consider and implement support activities.
*Events at the facility are carried out with adequate infection prevention measures in place.

Cleaning operations
Mochi-tsuki event

Mochi-tsuki event

Donation Activities
Tokyo Coronavirus Medical Support Fund
In 2020, we donated donations through the Tokyo Coronavirus Medical Support Fund to support medical professionals due to the spread ofcoronavirus infection. We donated 1 million yen and donations of 190,000 yen from Tosei Group officers and volunteer employees.

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

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 to NPOs
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.

Donation to Children's HomeIn 2021, we donated an air conditioner and two TVs to the children's home Ayumi Gakuen. They said they were very pleased to see that thechildren are now able to live more comfortably and enjoyably. We will continue to listen to the needs of the home and consider supports thatare really needed.

48

Recycling of Plastic Bottle Caps
We have participated in an initiative to recycle plastic bottle caps.

Donations and Contributions Data
FY2019Total amount of donations
and contributions

FY20202,000,000 yen

FY20212,000,000 yen

Recipient

1,448,000 yen

Purposes

Association for the Support of Children's Homes (NPO)

Support for disaster-affected areas and children's homes
Support for victims of the Western Japan heavy rainfall disaster,

The Japanese Red Cross Society

Typhoons Faxai and Hagibis

Higashimatsushima City Naruse Mirai Junior High School

Donation of Japanese drums

Tokyo Coronavirus Medical Support Fund

Support for medical institutions in dealing with COVID-19

Ayumi Gakuen (children's home)

Donation of 2 TVs and 1 air conditioner49 ԑՃՊԵՆՂԱՂԳԵ

Corporate GovernanceFundamental Approach toward Corporate GovernanceCorporate Governance Report

Corporate Governance System

The Reasons for Election of Independent Officers

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.

Basic Policy on Corporate Governance
Basic Policy on Corporate Governance‫ق‬PDF‫؟‬177KB‫ك‬*The PDF link on the left is valid when this report is viewed
as PDF data.

Corporate Governance Report
Corporate Governance Report‫ق‬PDF:699KB‫ك‬*The PDF link on the left is valid when this report is viewed

50 as PDF data.

Corporate Governance System
Corporate Governance System

As of March 2, 2022

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.

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). An outside director who is a committee member will assume the office of the chair ofcommittee. The Board of Directors will continue to fulfill its mandate from the Company’s shareholders and investors by respecting therecommendations of the committee to the maximum extent and developing an appropriate governance system.

51

Executive Officer System
The Company has adopted the executive officer system in order to more clearly segregate the monitoring/supervision of the Company’sbusiness management, which is the duty and responsibility of the directors, from the execution of the business and currently ten executive
officers hold this post. All of the Company’s executive officers are appointed by the Board of Directors to adhere to its internal rules andregulations in executing and controlling the business operations of the Company. In addition, the Management Committee, which comprises
all executive officers, discusses matters to be resolved by the Board of Directors in advance and provides advice on important decisions to bemade by the CEO in advance.

Corporate Governance Meeting
With the aim of continuously strengthening its corporate governance, the Company holds the Corporate Governance Meetings constituted by
six full-time directors and two full-time Audit & Supervisory Board Members monthly. 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 increase
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 between Audit & Supervisory Board Members and Internal Audit Department(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
Audits by corporate auditors

Auditting Department, the Company has developed an efficient and viable auditing system. The fulltime Audit & Supervisory Board Members regularly meet with each of the directors and officers incharge of each department, so as to fully understand the status of the business execution andregularly exchange opinions with the outside directors.
The Internal Audit Department under the direct supervision of the President and CEO performs audits
for the entire Group in accordance with their annual auditing plan. In the event any inadequacy isInternal audits

discovered, recommendations for corrective actions are made to the audited departments. The audit
has been quite effective as the Internal Audit Department discusses with the audited departments as
to the issues in need of corrective actions and follows up with specific guidance.
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 years, Company’s Audit Company (Shinsoh Audit
Corporation) conducts reviews at each quarter end. The periodic replacement and re-engagement ofAudits by the accounting
auditor (Shinsoh Audit
Corporation)

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

52

Attendance at Meetings of the Board of Directors, Nominating and Compensation Advisory
Committee, and Audit & Supervisory Board (FY2021)

Board of Directors
Name

Position

Meetings(Attendance/Number of meetings)

Seiichiro
Yamaguchi

President and CEO

Audit & Supervisory

Nominating andCompensation

Board

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

meetings)

19‫ط‬192/2-

19‫ط‬192/2-

19‫ط‬19--19‫ط‬19--19‫ط‬19--19‫ط‬19--

Outside Director

19‫ط‬19

2/2-

Outside Director

19‫ط‬19

2/2-

Outside Director

19‫ط‬192/2-

19‫ط‬19

2/2

16/16

14‫ط‬14-11/11

19‫ط‬19-15/16

19‫ط‬19-

16/16

CFO and Senior Executive Officer ofNoboru Hirano

Administrative Division(in charge of Human Resource
Department)
Director, COO and Senior Executive

HidekiNakanishi

Officer of Business Division(in charge of Asset Solution
Department 4 and Asset Solutions
Business Promotion Department)
Director, Managing Executive Officer,

Masaaki

Deputy Chief of Business Division

Watanabe(in charge of Asset Solution
Department 5)

Shunsuke
Yamaguchi

Director, Executive Officer(in charge of Finance Department andGeneral Affairs Department)
Director, Executive Officer

Hitoshi Oshima(in charge of Asset Solution
Department 1 and Crowd Funding
Department)

Kenichi
Shohtoku
Hiroyuki
Kobayashi
Masao
Yamanaka

Outside Audit & Supervisory Board
Hitoshi Yagi

Members(full-time)

Toshinori
KurodaTatsuki Nagano

Osamu Doi

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

53

The Reasons for Election of Independent Officers
Basic Policy for Appointment of Directors
When nominating candidates for the Board of Directors, those who execute the business are nominated who have the necessary knowledge
as Directors and are familiar with the Group's finances, business, and other aspects of the Group. For Outside Directors, are nominatedpersons 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. At present, there is no female Director in office, but the Group considers
that a diverse membership in terms of gender, internationality, professional experience, and age will contribute to the medium- to long-term
growth of the Group, and if suitable candidates are found in the future, the Company will intend to appoint them.

Skill Matrix for the Board of Directors

Status of Outside Directors
The Company has three Outside Directors and four Outside Audit & Supervisory Board Members. With regard to the nomination of Outside
Directors, the Company elects persons who can oversee the management from an independent and objective standpoint and be expected toprovide constructive advice and recommendations to Directors concurrently serving as Executive Officers. In nominating Outside Audit &Supervisory Board Members, the Company elects persons who can be deemed to audit the operation of the Board of Directors and executionof duties of Directors from an independent standpoint, and who are expected to provide constructive advice and recommendations for theincrease of corporate value with their knowledge.

54

The Reasons for Election of Independent Officer
Outside Directors
Name

Reason for the election
Director Kenichi Shohtoku, a certified public accountant, he has an extensive experience andknowledge including those relating to overseas business. He has provided invaluable advice onvarious occasions such as the Board of Directors’ meetings of the Company, liaison meetings

Kenichi Shohtoku

with the Audit & Supervisory Board Members of the Company, etc. and has worked
energetically to enhance the governance system of the Company and the Group as well as toensure the appropriateness of financial reporting. Considering that he is indispensable for the
maintenance and improvement of corporate governance structure for further expanding theGroup and enhancing the checking functions in the future while paying attention to ESG issues.
Director Hiroyuki Kobayashi, has extensive experience and expert knowledge, accumulated
mainly at major financial institutions. With his objective monitoring and proposals based on his
abundant experience and expertise, he has been contributing to more active discussion at

Hiroyuki Kobayashi

Board of Directors meetings and improves their effectiveness. Considering that he isindispensable for the maintenance and improvement of corporate governance structure forfurther expanding the Group and enhancing the checking functions in the future while paying
attention to ESG issues.
Director Masao Yamanaka has provided legal advice to a number of companies and has
extensive experience as a lawyer and a wealth of expertise in corporate law. Furthermore,
serving as outside auditor of multiple listed companies, he possesses considerable expertise in

Masao Yamanaka

governance of listed companies, and he is a notably effective person for supervising
governance of the Group, as we aim for expansion of the Group. Considering that he isindispensable for the maintenance and improvement of corporate governance structure forfurther expanding the Group and enhancing the checking functions in the future while paying
attention to ESG issues.

Outside Audit & Supervisory Board Members
Name

Reason for the election
Full-time Outside Audit & Supervisory Board Member Hitoshi Yagi has abundant experience andHitoshi Yagi

specialist knowledge acquired at audit divisions of major financial institutions. As such, theCompany believes that he can fulfill his responsibilities of securing adequacy andappropriateness in the Company’s management.
Full-time Outside Audit & Supervisory Board Member Toshinori Kuroda has abundantToshinori Kuroda

experience including overseas assignment primarily at a major financial institution as well as
specialist knowledge and the Company believes that he can perform a role in ensuring theadequacy and appropriateness of the Company’s management.
Outside Audit & Supervisory Board Member Tatsuki Nagano has experience at major financial

Tatsuki Nagano

institutions and continues to be involved in corporate management and the Company believes
that he can utilize his extensive experience and a high level of expert insight to perform a rolein ensuring the adequacy and appropriateness of the Company’s management.
The Company believes that Osamu Doi can perform a role in ensuring the adequacy andOsamu Doiappropriateness of the Company’s management based on his abundant experience at major
security companies and at companies that conduct investment banking activities as well as his
specialist knowledge.

55Independent Officers' Remuneration
Outline of the Remuneration System for Directors and Policy for Determining
Remuneration
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, and “stock options” which are aimed to increase thedesire and motivation to contribute to the medium- to long-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” and “stock options” only. No “performance evaluation remuneration” or “Directors’ bonuses” arepaid to Outside Directors. The Representative Director drafts proposals for each Director’s remuneration, which are discussed by the
Nomination and Compensation Advisory Committee, before being decided by resolution of the Board of Directors.

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-linked remuneration (performance evaluation remuneration and Bonus)
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,
and 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. “Directors’ bonuses,” which are linked to singleyear consolidated profit before tax, are calculated by multiplying the fixed salary per annum by a factor, which is the sum of apredetermined factor based on the level of profit before tax, and an extra factor where the single-year target profit before tax has beenachieved. This is paid as a lump sum after the conclusion of the Ordinary General Meeting of Shareholders held during the fiscal year.
*The performance targets for full-time Directors include governance practices, ESG promotion, contribution to business performance,
management of departments in charge, and individual missions as evaluation items.

Stock options
In order to practice corporate management with a focus on enhancing corporate value over the medium- to long-term, the President
and Representative Director 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 management monitoring andsupervisory function aimed at enhancing corporate value.

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.

56

Amount of Remuneration for Executive Officers (FY2021)

Total amount by type of remuneration, etc.
Total
Position(¥ thousand)Number ofamount of
remuneration,etc.
(¥ thousand)Basic
remuneration

recipients

performance
evaluation

Bonus

Stock Option(Person)remuneration

Directors

247,220

164,460

48,12032,4542,185

9(outside(20,197)(20,100)

(‫)ش‬

(‫)ش‬

(97)

(3)

directors)
Audit &
supervisoryboard members

31,44031,440

‫ش‬

‫ش‬

‫ش‬

5*

(outside audit &(31,440)(31,440)

(‫)ش‬

(‫)ش‬

(‫)ش‬

(5)*

supervisoryboard members)*One member retired due to expiration of his term of office during the year in review, and one new member was appointed, bringing the total number of members
to five.

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.

57

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 to promote integrated and cross-sectional risk management and complianceacross the Group. The committee identifies, analyzes, and evaluates the risks of the entire Group, gather information about specific risks andto discuss measures to address them, and facilitates compliance promotion. 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 madefamiliar with amendments to laws and regulations. In case of occurrence of a contingency, a natural disaster, etc., a crisis management officedirected by the President and CEO as the head will be established to collect information, confirm facts and circumstance, develop andimplement 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, and appropriately supervises the operation and compliance Risk
Managment System of these committees.

Risk Management and Compliance Committee
The Company established the Risk Management and Compliance Committee comprising the Executive Officers in charge of each department,
all department general managers as well as the risk management and compliance officers of each group company, as an organization tocentrally consider risk management and compliance across the Group. The Committee raises awareness about compliance and monitors theCompany's compliance by implementing the PDCA cycle for risk management in accordance with the Risk Management and Compliance
Program formulated each fiscal year.

58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
In accordance with the Risk Management and Compliance Program formulated at the beginning of each fiscal year; 1. implement a survey toidentify about 30 significant risks that have material impacts on the Group’s business, 2. conduct stress tests (twice a year), taking accountof real estate market conditions, transaction conditions, and the financing status of financial institutions. The results are reported at theBoard of Directors’ meetings. We have also instructed each Group company to formulate plans for managing risks and promoting compliancein light of each company’s business operations, focusing on ensuring that the parent company organization appropriately supports theseplans.

59

＜Major business risks recognized by the Group and supervised by the Board of Directors>
Economic conditions
Calamity and natural disasters
Dependency on interest-bearing debt dependence and interest rates
COVID-19
ESG (environmental, social and governance risks, climate change risks, etc.)

Action in the Event of a Crisis or Disaster
The Company recognizes situations that are potentially damaging to its corporate value, such as largescale natural disasters and incidents, accidents, and events that impact generally on customers,
residents, and wider society, as management crises and, if such an event were to occur, it would set upa Crisis Management Office headed by the CEO, and would take action to control the situation incollaboration with the Risk Management and Compliance Committee members and relevant
departments. We have also established a Crisis PR Manual to speed up and facilitate corporate
communication activities in the event of a crisis and are working to raise awareness about dealing withcrises properly. In addition, we have established a Disaster Response Manual that details the steps fromgaining a basic understanding of the disaster to making an initial response in the event of earthquake,

AED practice drills

fire, or other disaster, right down to conducting evacuation and relief activities, and also conduct a rangeof drills including evacuation drills, AED practice drills, and in-house fire-fighting team fire drills.

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. Furthermore, to reduce the risk of information leaks and information isolation triggered by targeted email attacks and other factors, we conducted mock drills and vulnerability assessments of our internal network by an external third party andoverhauled the internal network and other infrastructure of the Company and to improve security level.

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.

60

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.

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, compliance and corporate philosophy questionnaire are conducted every fiscal year for all directors andemployees of the Group in order to identify issues and consider responses to such issues.
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. In addition to monitoring andsupervision by three Outside Directors and four Outside Audit & Supervisory Board Members at the Board of Directors meetings, meetings
are held to exchange opinions between Outside Audit & Supervisory Board Members and Outside Directors, and between Outside Audit &Supervisory Board Members and legal counsel to discuss signs of legal violations by directors who execute business operations.

61

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. We formulated a manual for acting
against anti-social forces, and the Tosei Group Risk Compliance Guidebook is distributed to employees
and is thoroughly communicated through training programs. In addition, we are striving to eliminate
any relationship with antisocial forces by conducting thorough investigations of business partners in ourdaily operations.
Training for response to anti-social
forcesPrevent 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.

Anti-Corruption Initiatives
The Group endeavors to raise awareness about all the types of activities that lead to corruption, such as bribery and money laundering, bydetailing in the Tosei Group Risk Management and Compliance Guidebook examples of illegal activities and specific action to be taken as
part of business activities, including procedures for verifying compliance of beginning of the transaction with laws and regulations and forreporting detected breaches, and by distributing this guidebook to officers and all employees and providing training.
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. Transactions which are especially high risk are subject to stringent verification at the time of thetransaction and are approved by a chief officer. 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 predicts breaches of laws and regulations including preventing corruption within the Group andverifies any breaches which have occurred, issues instructions on responding to breaches, and makes regular reports to the Board of
Directors. Meanwhile, the Board of Directors oversees such operations and systems.

62

Penalty charges, surcharges and settlements 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. In addition,
no employees have been punished or dismissed by the rules and regulations or codes related to corrupt prevention.
(Fiscal year ended November 30, 2021: there were no violations of laws and regulations, no fines, etc., and no employees punished or
dismissed)

Political Donation
The Company does not provide illegal donations or political contribution. When providing support for the activities of political organizations,
we conducted appropriately in accordance with the Political Funds Control Law, laws and regulations. The amount of political donations forthe fiscal year ended November 30, 2021 was 620,000 yen.

Whistleblowing System（Tosei Hot Line）

Outline of Whistleblowing System
The Group established the "Tosei Hot Line" as a whistleblowing hot line, which Group officers and employees (including but not limited toadvisors and temporary staff) can use to report any identified breaches of the Ethics Code or identified breaches or potential breaches oflaws and regulations including corrupt practices. Whistleblowing reports are treated in confidence. There is also the option of using an
external hot line to make reports anonymously. Whistleblowers are protected under the Whistleblower Protection Act and the Risk andCompliance Regulations, to ensure that they do not suffer any detriment as a result of making a whistleblowing report. When investigating
the facts, the Group uses external experts, such as legal advisors and certified public accountants, where necessary, and promptly 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 sure that whistleblowers
did not suffer any detriment.
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
When fact-finding investigations reveal violations or potential violations of laws and regulations, we take corrective actions and recurrenceprevention measures, and if necessary, report the matter to relevant administrative agencies and take legal action. In the fiscal year ended
November 30, 2021, there were two cases of whistleblowing and no cases of compliance viaolation.

63

Education and Training
Education and Training
In the fiscal year ended November 30, 2021, the Group conducted various types of training based on
the Risk Management and Compliance Program approved by the Board of Directors. More specifically,
harnessing the merits of group training and online training respectively, the Group provided Antisocial
Forces Response Training aimed at eliminating ties with antisocial forces, Financial Instruments andExchange Act Training for employees engaged in financial instruments business, ESG Training toincrease knowledge about ESG, and Harassment Training aimed at eliminating harassment. The Groupalso continuously sought to increase understanding of the Ethics Code and the Whistleblowing Hot Lineand to promote understanding of relevant business acts and insider trading rules and prohibited
activities that directly lead to breaches such as harassment and bribery through activities to further
foster employees' compliance awareness, such as morning meeting addresses by officers, the display ofcompliance slogans in offices, and the posting of simple videos on the internal website.

64

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. In evaluations by third-party organizations that award listedcompanies for their IR activities, we were rated highly for the availability and ease-of-use of our IR
information.

2021 IR Site Ranking Awards

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)65 External Evaluations
ESG Assessment

Environmental Real Estate Certification

Management Infrastructure

Disclosure and Website

ESG Assessment
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
that own and manage real estate. We have participated in the assessment since 2019, and in 2021, we obtained a "1 Star"and "Green Star" rating under the GRESB Ratings.

Environmental Real Estate Certification
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 them at five levels based on guidelines established by the Ministry of Land, Infrastructure,
Transport and Tourism. BELS is an abbreviation for Building-housing Energy-efficiency Labeling System. We have acquired
certification for two 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 two of ourproperties, including Toranomon Tosei Building, our former headquarters.

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.

66

Disclosure and Website
IR Site Ranking
In an external evaluation that commends investor information of listed companies, we received a high evaluation in FY2021 for the quality of
information and usability of our website.

2021 IR Site Ranking Awards

GRESB Public Disclosure Assessment
In the GRESB Public Disclosure Assessment, which measures the level of ESG information disclosure, we received a "Level B" rating, second
from the highest, for its efforts in ESG information disclosure.

67

ժInquiryի
Tosei Corporation
Corporate Managemant Department
ԣԏԙӱ+81-ӽ-5439-8807
FAXӱ+81-ӽ-5439-8809
First Edition : April 28, 2022