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

Ticker symbol 8830
June 7, 2022
Sumitomo Realty & Development Co., Ltd.
2-4-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Kojun Nishima,
Executive Managing Director and President
To Our Shareholders:

NOTICE OF CONVOCATION OF THE 89TH ORDINARY GENERAL MEETING OF
SHAREHOLDERS
You are hereby notified that the 89th Ordinary General Meeting of Shareholders of Sumitomo Realty & Development
Co., Ltd. (the “Company”) will be held as stated below. Your attendance is respectfully requested.
In the event that you are unable to attend, you can exercise your voting rights with either of the methods below. You
are requested to review the attached Reference Documents for General Meeting of Shareholders and exercise yourvoting rights.
[Exercising Voting Rights via Mail]
Please indicate your approval or disapproval on the enclosed Form for the Exercise of Voting Rights and return it to
the Company by 5:40 p.m. on Tuesday, June 28, 2022.
[Exercising Voting Rights via the Internet, etc.]
Please enter your approval or disapproval on the voting rights exercise website designated by the Company(https://www.web54.net) by 5:40 p.m. on Tuesday, June 28, 2022.
Particulars
1. Date and Time: 10:00 a.m. on Wednesday, June 29, 2022
2. Place:
Shinjuku Sumitomo Hall (Entrance B1F), Shinjuku Sumitomo Building,
2-6-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
3. Purpose of the Meeting:
Matters to be reported:
1. Business Report, Consolidated Financial Statements and Audit Reports for Consolidated Financial
Statements for the 89th fiscal year (from April 1, 2021 to March 31, 2022) by the Independent Auditor andthe Board of Corporate Auditors
2. Financial Statements for the 89th fiscal year (from April 1, 2021 to March 31, 2022)
Matters to be resolved:
Agenda 1. Appropriation of Retained Earnings
Agenda 2. Partial Amendment to the Articles of Incorporation
Agenda 3. Election of One Substitute Corporate Auditor
Agenda 4. Renewal of the Policy for Takeover Defense Measures Against Purchase Proposals That Undermine
the Corporate Value of the Company (Policy on Large-Scale Purchase of Shares of the Company)-1-

If attending the meeting, you are kindly requested to submit the enclosed Form for the Exercise of Voting Rights to a receptionist.
If any matter is found to be modified in the Reference Documents for General Meeting of Shareholders, Business Report, Financial
Statements and/or Consolidated Financial Statements, the revised matters will be posted on the Company website.
Of the documents to be provided with this Notice of Convocation of the General Meeting of Shareholders, the following items are postedon the Company website in accordance with the provisions of laws and regulations and Article 16 of the articles of incorporation, andtherefore are not provided with the documents provided with this Notice of Convocation. Accordingly, the documents attached with thisNotice of Convocation constitute part of the documents audited by the Corporate Auditors and the Independent Auditor when preparing
their Audit Reports.
1. “Overview of the Corporate Group, Major Lenders and Borrowing Amounts,” “Matters regarding Share Option of the Company,
etc.,” “Matters regarding Independent Auditor,” and “Systems for Ensuring Appropriateness of Business Operations and its
Operational Status” in the Business Report
2. “Consolidated statement of changes in net assets” and “Notes to consolidated financial statements” in the Consolidated Financial
Statements (in Japanese only)
3. “Statement of changes in equity” and “Notes to non-consolidated financial statements” in the Financial Statements (in Japanese only)
The Company website (https://www.sumitomo-rd.co.jp/english)
To Institutional Investors
You may use the Electronic Voting System Platform for institutional investors operated by ICJ, Inc. as a method of exercising voting
rights.

-2-

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Agenda and References
Agenda 1. Appropriation of Retained Earnings
The Company’s basic policy of profit distribution is to ensure prioritization of investment in lease buildings in orderto enhance the long-term revenue base and a “sustainable increase on dividend payments” in line with profit growth.
In the fiscal year under review, revenue from operations, operating income, ordinary profit and profit all exceeded
the previous year. Ordinary profit recovered to a record high after decreasing during the COVID-19 pandemic for
only one fiscal year, and profit renewed a record high for the ninth consecutive year.
Taking this result into consideration, we would like to propose to continue the “annual dividend increase of 5 yen”
and to increase the year-end dividend to 23 yen per share (2 yen increase from the previous fiscal year).
If this agenda is approved as originally proposed, the annual dividend per share will be 45 yen (5 yen increase fromthe previous fiscal year), including the interim dividend of 22 yen per share.
For the next fiscal year ending March 31, 2023, we expect to renew record profit for the 10th consecutive year, andwe intend to raise the annual dividend by 5 yen from the fiscal year under review to 50 yen (including an interim
dividend of 24 yen).
Matters concerning year-end dividends
Type of dividends
Cash
Matters concerning allocation of dividends to shareholders and the aggregate amount
Dividends of 23 yen per share of common stock of the Company
The aggregate amount: 10,900,595,988 yen
The effective date of the appropriation of retained earnings
June 30, 2022
Dividend per share and profit-3-Agenda 2. Partial Amendment to the Articles of Incorporation
1. Reasons for the amendment
Since the revised provisions provided for in the proviso to Article 1 of the Supplementary Provisions of the Act
Partially Amending the Companies Act (Act No.70 of 2019) are to be enforced on September 1, 2022, theCompany proposes to make the following changes to the articles of incorporation in preparation for the
introduction of the system for providing informational materials for the general meeting of shareholders inelectronic format.
(1) Article 16, paragraph 1 in “Proposed Amendment” below will stipulate that the Company shall takemeasures for providing information that constitutes the content of Reference Documents for General
Meeting of Shareholders, etc. in electronic format.
(2) Article 16, paragraph 2 in “Proposed Amendment” below will establish the provision to limit the scope of
the items to be stated in the paper-based documents to be delivered to shareholders who requested thedelivery of paper-based documents.
(3) Since the provisions for Internet Disclosure of Reference Documents for General Meeting of Shareholders,Etc. (Article 16 of the current articles of incorporation) will no longer be required, they will be deleted.
(4) Accompanying the aforementioned establishment and deletion of provisions, supplementary provisions
regarding the effective date, etc. will be established.
2. Details of the amendment
Details of the amendment are as follows:(Underlined portions indicate the proposed amendment.)
Current Articles of Incorporation

Proposed Amendment(Internet Disclosure of Reference Documents, Etc.)
Article 16.

(Deleted)

The Company may disclose information that is to be stated orpresented in the Reference Documents for General Meeting of
Shareholders, Financial Statements, Consolidated Financial
Statements, and Business Report through the internet inaccordance with the provisions of the Ministry of Justice Order.
(Measures, etc. for Providing Information in Electronic Format)(Newly established)

Article 16.
1. When the Company convenes a general meeting ofshareholders, it shall take measures for providing
information that constitutes the content of Reference
Documents for General Meeting of Shareholders, etc. inelectronic format.
2. Among items for which the measures for providing
information in electronic format will be taken, the Company
may exclude all or some of those items designated by the
Ministry of Justice Order from statements in the paperbased documents to be delivered to shareholders whorequested the delivery of paper-based documents by therecord date of voting rights.

-4-Current Articles of Incorporation

Proposed Amendment(Newly established)(Supplementary Provisions)(Newly established)

Article 1.
1. The deletion of Article 16 (Internet Disclosure of Reference
Documents, Etc.) in the pre-amended articles ofincorporation and the establishment of the new Article 16(Measures, etc. for Providing Information in Electronic
Format) in the amended articles of incorporation shall beeffective from September 1, 2022, which is the date ofenforcement of the revised provisions provided for in theproviso to Article 1 of the Supplementary Provisions of the
Act Partially Amending the Companies Act (Act No.70 of2019) (hereinafter referred to as the “Date of
Enforcement”).
2. Notwithstanding the provisions of the preceding paragraph,
Article 16 of the pre-amended articles of incorporation(Internet Disclosure of Reference Documents, Etc.) shallremain effective regarding any general meeting ofshareholders held on a date within six months from the Dateof Enforcement.
3. The provisions of this article shall be deleted on the dateeither when six months have elapsed from the Date of
Enforcement or three months have elapsed from the date of
the general meeting of shareholders in the preceding
paragraph, whichever is later.

-5-

Agenda 3. Election of One Substitute Corporate Auditor
The Company requests approval for the election of one substitute corporate auditor, to provide for the case where thenumber of incumbent auditors becomes less than the number stipulated in laws and regulations, which require
majority is comprised of outside corporate auditors. The board of corporate auditors has consented to this agenda.
Candidate for substitute corporate auditor:
Name(Date of birth)

Career summary, position in the Company, and significant concurrent
positions outside the Company
Aug. 1963
July 1969

Notes:

Number of theCompany’s shares
held

Registered as certified public accountant
Senior Partner of the auditing corporation Asahi & Co.
(Currently KPMG AZSA LLC)
Apr. 1974
Registered as certified tax accountant
May 1974
Founded Uno Kozo Certified Public Accountant
Office (present)
0
Kozo Uno
Oct. 1993
Vice President of Asahi & Co (Currently KPMG
(July 3, 1933)
AZSA LLC)
OutsideMay 1997
President of Asahi & Co
Independent
May 1999
Chairman of Asahi & Co
May 2001
Retired from Asahi & Co
Reasons for nomination as candidate for substitute outside corporate auditor
Mr. Kozo Uno has expertise as certified public accountant and certified tax accountant, and richexperience and wide discernment as president of auditing firm, etc. The Company deems him tobe suitable as a substitute outside corporate auditor, and therefore proposes his election.
1. There is no special conflict of interest between the candidate and the Company.
2. If this agenda is approved and Mr. Kozo Uno assumes office as an outside corporate auditor, the Company will register
him as an independent officer with Tokyo Stock Exchange, Inc.
3. If this agenda is approved and he assumes office as an outside corporate auditor, the Company will enter into a limited
liability agreement with him in accordance with laws and regulations and the articles of incorporation. Under theagreement, his liability is limited to the minimum limit stipulated by laws and regulations.
4. The Company has concluded a director and office liability insurance policy with an insurance company, whereby insured
persons will be compensated for any legal damages and litigation costs incurred under the policy. If this agenda is approved
and he assumes office as an outside corporate auditor, he will be included as an insured person under the insurance policy.

-6-Agenda 4. Renewal of the Policy for Takeover Defense Measures Against Purchase Proposals That Undermine the
Corporate Value of the Company (Policy on Large-Scale Purchase of Shares of the Company)
Sumitomo Realty & Development Co., Ltd. (the “Company”) adopted a policy toward large-scale purchase of theCompany shares based on the decision of the meeting of Board of Directors (the “Board of Directors”) dated May
17, 2007. The policy was continued based on the resolution of the shareholders’ meeting of the 74th fiscal year dated
June 2007, and was renewed with partial modifications based on the resolutions of the shareholders’ meetings of the77th fiscal year, the 80th fiscal year, the 83rd fiscal year and the 86th fiscal year (the policy after the renewal shallbe hereinafter referred to as the “Current Policy”). The term of the Current Policy will expire upon the conclusion ofthis meeting. The Company has continued to consider the proper role of the Current Policy as one of its initiatives
for increasing corporate value and common interests of shareholders since renewal of the Current Policy, in light ofchanges in social and economic circumstances, and trends and progress made in various discussions surrounding
takeover defense measures.
After examining the issue, as a means to prevent malicious takeover proposals that undermine corporate value, theCompany made the decision, by resolution of the meeting of the Board of Directors held on May 12, 2022, to renew
the Current Policy, subject to the approval of this meeting (the “Renewal.” The policy after the renewal shall behereinafter referred to as the “Policy”). Views expressing objection to the Renewal were not raised by any of theCompany’s corporate auditors including the two outside corporate auditors, or outside directors with respect to theresolution of the meeting of the Board of Directors where the decision on the Renewal was made.
Therefore, we would like to kindly ask you to approve the Renewal.
1. Initiatives to increase the Company’s corporate value and common interests of shareholders, and the necessity
for the Policy(1) Steadily achieving objectives of the medium-term management plans and maintaining the revenue andprofit growth trajectoryWith top priority placed on achieving objectivesof the medium-term management plans it draws
up every three years, the Company has increased
its corporate value as a result of having steadily
carried out such initiatives. Over the past 25
years, the Company has executed eight
management plans, and has achieved increases inordinary profit in 22 fiscal years, excluding thethree fiscal years of the global financial crisis andthe COVID-19 pandemic.
In the first 10 fiscal years (three medium-term management plan periods), the Company focused on
restoring its asset base, which had been damaged by the bursting of Japan’s bubble economy, and reducing
interest-bearing debt. In the latter 15 fiscal years (five medium-term management plan periods), theCompany doubled leasing assets, strengthened management foundations by strengthening the four
segments of leasing, sales, construction and brokerage, and enhanced shareholders’ equity, lifting the credit
rating to the AA zone.
Over the next three medium-term management plan periods through fiscal 2030, the Company will
maintain an approach that prioritizes the allocation of funds to further investment to increase leasing assets
and take steps for sustainable profit growth, while also aiming to create a resilient management foundation
and achieve sustainable growth, based on the high level of social contribution of the Company’s businesses
themselves, and increasing investment capability and the level of flexibility in capital strategy. At present,
there are various issues in the management environment such as the COVID-19 pandemic, geopolitical risk
and instability in resource procurement, but as the Company expects to achieve ordinary profit of 300
billion yen for fiscal 2030, it will position the new medium-term management plan announced in May 2022,
the “Ninth Management Plan (fiscal year ending March 31, 2023 to the fiscal year ending March 31, 2025),”as the first step to achieving that target, and exert every effort to continue enhancing corporate value.

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(2)

Growth underpinned by central Tokyo office building leasing business and corporate value
The real estate leasing business primarily involving office buildings in central Tokyo has been a driving
force underpinning the Company’s growth thus far. Given that this business accounts for nearly 70% of theCompany’s operating income overall, it clearly forms the core aspect of its corporate value acting as amajor pillar of operations.
The Company has been expanding its business platform by promoting development of office buildings
with a specific focus on central Tokyo over roughly half a century since the early 1970s, an era that usheredin completion of the Shinjuku Sumitomo Building, often referred to as “the Triangle Building.” The
Company has experienced unprecedented economic crises such as the bursting of Japan’s bubble economy
and the 2008 global financial crisis in wake of the Lehman Brothers collapse, and various changes in thebusiness environment such as Japan’s bubble economy and business conditions under Abenomics policies.
Still, the Company has consistently persisted with respect to unwaveringly implementing its management
policies such that: (i) the Company will not pursue temporary gains by selling assets; (ii) the Company willdevelop sites and construct buildings; and (iii) the Company will hold ownership of the buildings
constructed on sites it has developed to generate stable leasing income over the long-term by owning andleasing such buildings. The Company has consequently grown to become a building owner with a diverse
portfolio of more than 230 buildings located in central Tokyo, and cash flows from the leasing businessexceeded 220 billion yen in the fiscal year ended March 31, 2022 (operating income of the real estateleasing business + depreciation).
The office building leasing business calls for comprehensive strengths for carrying out businessencompassing everything from acquisition of development sites to operations that include planning projects,
marketing tenants, providing services for tenants and managing buildings. Given that acquiring
development sites is the most important of these operations, the Company has been developing sites forbuildings as if it were a manufacturer in terms of the approach it takes to redevelopment in terms ofpurchasing multiple small parcels of land to integrate them into a larger scale and coordinating rights andinterests of landowners. In addition, the Company attaches importance to performing building management,
tenant marketing, etc. directly, thus grasping the actual condition of clients and sites appropriately andalways eagerly working on the improvement of project planning and making operations more efficient. As
a result, we have realized high profitability, and have increased the value of the property possessed as well
as of the corporation. As of March 31, 2022, unrealized gains from rental and other investment properties,
as disclosed in Consolidated Financial Results for Fiscal 2021 (Year ended March 31, 2022), amounted toapproximately 3.5 trillion yen having accumulated over the years.

(3)

The necessity for the takeover defense measures
In the recently announced Ninth Management Plan, the Company has set forth the continuation andpromotion of investment in lease buildings in central Tokyo as its third target, and it aims to further expand
its earnings base, increase its corporate value, and augment shareholder returns by successively completing
concrete development plans, centered on redevelopment, with a gross floor area of over 700,000 tsubo (onetsubo is roughly 3.3 m2), which constitutes more than 40% of the 1,700,000 tsubo in gross floor area forleasing as of March 31, 2022, and putting these buildings into operation.
Such large-scale development plans involve ultimately generating revenues from the substantial amount of
cumulative upfront investment made thus far. The Company has long managed to continuously expand its
business platform by developing lease buildings while avoiding exposure to vicissitudes of the real estatemarket and economic conditions, given that it has always been buoyed by cash flows from the leasing
business which have been a stable source of revenues. As such, the Company needs to maintain and further
expand its cash flows from the leasing business, which have grown to exceed 200 billion yen, in order toconfidently carry out such upfront investment without having to continually resort to interest-bearing debt.
Moreover, it is likely to take another two or three medium-term management plan periods before theCompany achieves full profitability given that the focus has been on large-scale redevelopment.
On the other hand, amid large-scale financial easing, appetite for investment in top-class domestic revenuegenerating real estate has increased, and it cannot be denied that there is a risk that a large-scale acquisition
will be forcefully conducted in a one-sided manner in relation to shares of the Company, which holds many
top-class buildings in Tokyo. If the management policies of the Company, which aim to sustainably
enhance corporate value through the steady accumulation of leasing assets that the Company has continued-8-to build up over the past half a century, are rejected and a short-term management policy is adopted to seek
temporary earnings and realizes latent gains by selling real estate holdings prior to having accomplishedthe objectives of the development plans formulated to contribute to higher corporate value in the future,
cash flows from the leasing business that act as a stable revenue source will decrease as a result, thereby
exposing the development plans to financial risk. As such, the Company is unable to rule out a possible
threat of damage to the foundations of the Company’s corporate value.
The Company’s management policy aims to steadily increase corporate value based on a medium- to longterm outlook, and is consequently incompatible with such short-term management policies. As such, until
there is a general timeline for the generation of revenues from development plans covering over 700,000
tsubo, which is equivalent to over 40% of the current gross floor area in operation, and development plansthat are not reflected in corporate value have decreased to a certain proportion, the Company needs to seeka mandate from its shareholders upon having ensured sufficient information and time for completing
discussions in case an investor seeking to orchestrate a takeover emerges.
In addition, under the Financial Instruments and Exchange Act of Japan, there is a tender offer system inplace as a process for ensuring transparency and fairness for share transactions that affect the control ofcompanies, and it is thus ensured that shareholders will have information and time to make an assessment.
The tender offer period is however short, at 30 business days, and thus cannot be said to provide sufficient
time for consideration. In addition, the Company believes issues remain in relation to the legal system,
such as the fact that high-handed purchases and other abusive purchases cannot necessarily be eliminatedbecause partial tender offers are permitted, and the fact that the tender offer system will not be applied in
the first place if the purchaser only purchases shares through market transactions.
Based on the above, the Company deems that in order to continue to sustainably enhance the corporate
value of the Company in the future, the provision of procedures through the Policy continues to align withthe common interests of shareholders.
2. Basic conceptions regarding the Policy
The Company believes that if a large-scale purchase, as defined below, of the Company shares (“Large-Scale
Purchase”) is initiated, the shareholders should decide whether to accept or reject the Large-Scale Purchase. In
order for the shareholders to correctly recognize the effect on the corporate value and common interests ofshareholders, however, it is necessary that both the party making the Large-Scale Purchase (the “Large-Scale
Purchaser”) and the Board of Directors provide to the shareholders necessary and sufficient information, opinions,alternative proposals etc., and necessary and sufficient time to consider them.
Based on the basic conceptions above, the Board of Directors set out rules on Large-Scale Purchase (hereinafterreferred to as “Large-Scale Purchase Rules”) and request the Large-Scale Purchaser to comply with the LargeScale Purchase Rules. The Board of Directors shall take certain measures if the Large-Scale Purchaser does notcomply with the Large-Scale Purchase Rules, or even though the Large-Scale Purchaser complies with the LargeScale Purchase Rules, if it is clear that the Large-Scale Purchase will cause unrecoverable damages to theCompany or if the Large-Scale Purchase significantly damages the corporate value and common interests ofshareholders.
To ensure the objectivity, fairness and rationality of decisions of the Board of Directors on important mattersregarding the Policy as to whether the Large-Scale Purchase Information Provision Period (to be defined in
section 3. below) should be extended or not, whether the Large-Scale Purchaser complies with the Large-Scale
Purchase Rules, whether it is clear that the Large-Scale Purchase will cause unrecoverable damages to theCompany, whether the Large-Scale Purchase will significantly damage the corporate value and common interestsof shareholders, whether the Board of Directors should take countermeasures, etc., the Board of Directors shallconsult the Special Committee consisting of outside directors, outside corporate auditors, persons with corporate
management experience, lawyers, certified public accountants etc., and its recommendation shall be taken into
the fullest account.
Large-Scale Purchase
A Large-Scale Purchase refers to either of items (i) through (iii) below:(i) A purchase or purchases of shares of the Company where a specific shareholder group (Note 1) intends tohold a ratio of voting rights (Note 2) of 20% or more
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(ii)

A purchase or purchases of shares where a specific shareholder group will hold a ratio of voting rights of
20% or more as a consequence(iii) An agreement etc. with other shareholders of the Company where a specific shareholder group will hold aratio of voting rights of 20% or more as a consequence (Note 3)
Purchases or agreements include all transactions regardless of whether the specific purchase means is a market
transaction, a takeover bid etc., except for transactions with the Board of Directors approvals in advance.
3. Setting out Large-Scale Purchase Rules
The Board of Directors deems that any Large-Scale Purchase being carried out in accordance with the LargeScale Purchase Rules, as defined below, aligns with the corporate value and common interests of shareholders.
(1)

Outline of the Large-Scale Purchase Rules
1) The Large-Scale Purchaser must provide the Board of Directors with necessary and sufficient
information regarding the Large-Scale Purchase in advance.
2) The Large-Scale Purchaser is to abstain from commencing the Large-Scale Purchase until a certain
assessment period by the Board of Directors has elapsed.

Specifically, the Large-Scale Purchaser needs to, first of all, provide to the Board of Directors informationnecessary and sufficient for the shareholders to make a judgment and for the Board of Directors to form its
opinion (hereinafter referred to as “Large-Scale Purchase Information”). The specific content of the information
requested differs depending on the profile of the Large-Scale Purchaser and the nature of the Large-Scale
Purchase, but the general items are as follows:
1) Profile of the Large-Scale Purchaser and its group
2) Purpose and nature of the Large-Scale Purchase (especially in the case of a purchase of only a part of theCompany’s shares, this item includes the approach concerning the setting of an upper limit for the numberof the shares planned to be purchased and the plan related to the modifications of the capital structure after
the purchase)3) Calculation basis for the purchase price and proof of purchase funds
4) Management policy to manage the Group after completion of the Large-Scale Purchase (including measures
for the actual realization of the management policy, i.e. business plans*, financial planning, capital policy,
dividend policy, labor policy, plan for efficient use of assets etc., as well as approach concerning the
integration or coordination of businesses of the Large-Scale Purchaser with businesses of the Company orof the Group and specific measures so as to avoid conflicts of interests between the Large-Scale Purchaser
and the Company or the Group)* Restructuring plan for existing business, new business plans and capital investment plans are included.

5) Policy to deal with the Group’s stakeholders including employees, customers, suppliers, and local
communities after completion of the Large-Scale Purchase6) If the Large-Scale Purchaser is operating business of the same type as the Company or the Group, approachconcerning the legitimacy of the Large-Scale Purchase under Antimonopoly Law and foreign competition
laws
(2)

Submission of a letter of intent
If a Large-Scale Purchaser intending to make a Large-Scale Purchase needs to submit to the Board of
Directors a letter of intent stating that it will comply with the Large-Scale Purchase Rules. The letter ofintent must include the Large-Scale Purchaser’s name and address, the governing law of incorporation, thename of the representative, domestic contact information, and an outline of the proposal of the Large-Scale
Purchase. When a letter of intent by the Large-Scale Purchaser is delivered, the information of the letter ofintent shall be disclosed in a timely manner.

(3)

Request for the Large-Scale Purchaser to provide information
A first list of the Large-Scale Purchase Information that needs to be provided shall be sent by the Board of
Directors to the Large-Scale Purchaser within ten days of the receipt of the letter of intent above. If it is- 10 -

deemed that the information provided is insufficient for the Large-Scale Purchase Information, the LargeScale Purchaser may be requested to provide additional information until necessary and sufficient LargeScale Purchase Information is received. In principle, the provision of Large-Scale Purchase Information
shall be completed within 60 days from the delivery of the Large-Scale Purchase Information list by the
Board of Directors to the Large-Scale Purchaser (hereinafter referred to as “Large-Scale Purchase
Information Provision Period”). However, since the specific content of the Large-Scale Purchase
Information might differ depending on the nature of the Large-Scale Purchase and its scale, the Board of
Directors can extend the Large-Scale Purchase Information Period for a maximum of 30 days, taking into
consideration the nature of the Large-Scale Purchase, its scale and the condition of the provision of LargeScale Purchase Information, based on the recommendation of the Special Committee. The Board of
Directors will disclose all or part of the Large-Scale Purchase Information provided at the time consideredappropriate if the disclosure is considered necessary for the shareholders’ decision.
(4)

Board Assessment Period
Depending on the difficulty of the assessment etc. of Large-Scale Purchases, the Board of Directors will
have 60 days*1 or 90 days*2 after the completion of Large-Scale Purchase Information Provision Period toassess and examine the Large Scale Purchase Information, negotiate with the Large Scale Purchaser, form
an opinion, and develop an alternative proposal (hereinafter referred to as “Board Assessment Period”).
When the Board Assessment Period has started, it shall be disclosed in a timely manner. Hence a LargeScale Purchase must be initiated only after the expiration of the Board Assessment Period. During theBoard Assessment Period, the Board of Directors will assess and examine the provided Large-Scale
Purchase Information sufficiently, taking advice from external experts into consideration, and will disclose
its opinion. The Board of Directors may negotiate with the Large-Scale Purchaser to improve the conditionsof the Large-Scale Purchase and may present its alternative proposal to the shareholders as needed.
*1 For a tender offer in cash only, in yen currency, for all shares of the Company*2 For other Large-Scale Purchases

4. Policy for handling Large-Scale Purchase
As previously stated, the Company will not overlook abusive behavior with respect to a Large-Scale Purchase.
Accordingly, if the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules, if it is clearthat the Large-Scale Purchase will cause unrecoverable damages to the Company, and if the Large-Scale
Purchase significantly damages the corporate value and common interests of shareholders, then the Board of
Directors deems necessary to take suitable and appropriate action to ensure protection thereof, acting as afiduciary who assumes the duty of due care of a prudent manager.
(1)

If the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules
If the Large-Scale Purchaser does not comply with the Large-Scale Purchase Rules, the Board of Directors
may take countermeasures, including the issuance of share options, permitted by the Corporate Code andother laws and the Company’s Articles of Incorporation, to protect the corporate value and common
interests of shareholders. The Board of Directors will decide to take countermeasures, taking the opinions
of external experts including lawyers and financial advisors into consideration and taking therecommendations of the Special Committee into the fullest account. The Board of Directors will choose
specific measures considered to be appropriate at the time. If the issuance of share options at no cost to
subscribers is chosen as a countermeasure, the terms of the share options will be those outlined in
Attachment 3 in principle. If share options are issued, the Board of Directors may set a period andconditions to exercise the share options, taking the effect of the countermeasure into consideration.
It is reiterated that the Large-Scale Purchaser should not begin Large-Scale Purchase without complying
with the Large-Scale Purchase Rules.

(2)

If the Large-Scale Purchaser complies with the Large-Scale Purchase Rules
The objective of the Large-Scale Purchase Rules is to provide the shareholders with information necessary
to make a judgement whether to accept or reject a proposal to purchase the shares of the Company at ascale that could affect the management of the Company, the assessment and opinion of the Board of- 11 -

Directors which is in charge of management of the Company, and the opportunities to receive an alternative
proposal so that the corporate value and common interests of shareholders will be protected. If the LargeScale Rules are complied with, the Board of Directors in principle will not take a countermeasure by its
own judgement.
However, even if the Large-Scale Purchaser complies with the Large-Scale Purchase Rules, if the Boardof Directors determines that it is clear that the Large-Scale Purchase will cause unrecoverable damages to
the Company or that the Large-Scale Purchase will significantly damage the corporate value and common
interests of shareholders, specifically, that the Large-Scale Purchase will fall under (i) and (ii) below, after
considering the opinions of external experts including lawyers and financial advisors and taking into thefullest account the recommendations of the Special Committee, the Board of Directors may take theexceptional countermeasures to deter the Large-Scale Purchase as described in section 4. (1). If the Boardof Directors decides to take countermeasures, it will disclose information appropriately and in a timely
manner.
1) The Large-Scale Purchaser clearly damages the corporate value and common interests of shareholders
through activities described in “i)” through “iv)” below:i)
To buy up shares and request the Company to buy them back at a high priceii) To control the management of the Company temporarily, and realize the interests of the purchaser
at the cost of the Company’s interests by acquiring important assets of the Company at low prices
etc.
iii) To divert assets of the Company to collateral for debts of the purchaser or its group companies
etc. or to resources for payments for themiv) To control the management of the Company temporarily, have the Company dispose of highvalue assets, etc., and have the Company pay a temporary high dividend based on gains from thedisposal or sell shares at a profit when the shares price surges following a temporary highdividend
2) A high-handed, two-step purchase in which the Large-Scale Purchaser threatens to effectively force
shareholders to sell shares (i.e., the purchase proposal through tender offer etc. in the manner that thepurchaser sets the purchase terms for the second step less favorable to shareholders than those for the
first step or that the purchaser does not make clear the purchase terms for the second step).
Further, if the Board of Directors judges that there is appropriate time to confirm the intent of theshareholders concerning whether to take countermeasures, it will confirm such intent of the shareholders
by convoking a shareholders meeting etc. In this case, the Large-Scale Purchaser shall be requested toabstain from the Large-Scale Purchase until the completion of the procedure for the confirmation of theshareholders’ intention.
(3)

Establishment of a Special Committee
A Special Committee independent of the Board of Directors is established to properly operate the Policy
and to ensure the objectivity, fairness and rationality of decisions of the Board of Directors. The Special
Committee consists of three members, selected from outside directors, outside corporate auditors, persons
with corporate management experience, lawyers, certified public accountants, certified tax accountants,
etc. (Please refer to Attachment 1 for outline of the Special Committee.) The names and career summariesof the Special Committee members upon the renewal of the Policy are described in Attachment 2.
The Board of Directors shall consult the Special Committee and shall receive the recommendations of theCommittee when taking important decisions related to the Policy, i.e. with respect to deciding whether or
not to extend the Large-Scale Purchase Information Provision Period, whether or not the Large-Scale
Purchaser complies with the Large-Scale Purchase Rules, whether or not it is clear that the Large-Scale
Purchase will cause unrecoverable damages to the Company, whether or not the Large-Scale Purchase will
significantly damage the corporate value and common interests of shareholders, and whether or notcountermeasures should be taken. The Board of Directors shall take the Special Committee’s
recommendations into the fullest account.
When deliberating and adopting resolutions about the items submitted by the Board of Directors, theSpecial Committee receives advice from third parties (including experts such as financial advisors, certified
public accountants, lawyers and consultants) independent of the Board of Directors of the Company, at the- 12 -

expense of the Company. The Special Committee also requests directors, corporate auditors, employees,
etc. of the Company to attend meetings of the Committee and provide explanations for necessary
information. The Special Committee will make a recommendation to the Board of Directors based on thecontent of the resolutions adopted.
5. Effects, etc. on the Company’s shareholders and investors
If the Board of Directors decides to take countermeasures, the Company will disclose information on the decision
appropriately and in a timely manner in accordance with laws and regulations and the rules of the financial
instruments exchanges, although we do not anticipate a situation where the Company’s shareholders (excluding
the Large-Scale Purchaser and the specific shareholder group) will incur economic losses or damages to theirrights due to such countermeasure taken by the Company. If the countermeasure taken is an allotment of shareoptions at no cost, shareholders are required to pay a certain amount of money within a prescribed period so as
to exercise the share options and to obtain the shares. Moreover, if the Board of Directors decides to obtain shareoptions, new shares might be delivered to shareholders as equivalent value of the acquisition of share options by
the Company, without the shareholders having to pay an amount equivalent to the exercise price. The details of
the procedures will be communicated separately in accordance with laws and regulations and the rules of thefinancial instruments exchanges when share options are to be issued.
The Company may cancel allocation of share options or acquire share options at no cost to the Company incertain cases (e.g., if the Large-Scale Purchaser cancels the Large-Scale Purchase) before issuing shares of theCompany to the share option holders until the day immediately before the first day of the period for exercising
share options even after the record date for allocation of share options or after the allocation of share options iseffective. Since dilution of the value of each share does not occur in this case, investors who have sold sharesbased on the assumption of dilution of the value of each share may incur losses depending on the change in thestock price.
6. Expiration date of the Policy
The Policy shall expire at the closing of the annual shareholders’ meeting for the last fiscal year ending within
three years from the day of this meeting.
If the Board of Directors decides to continue the Policy, it will announce the decision promptly. The Board of
Directors will re-evaluate the necessity of the Policy from time to time based on the development and revisions
etc. of relevant laws and regulations including the Corporate Code and the Financial Instruments and Exchange
Act to protect the corporate value and common interests of shareholders.
If the shareholders’ meeting or the Board of Directors meeting adopts a resolution abolishing the Policy, thePolicy shall be abolished immediately even before its expiration date.
7. Rationality of the Policy(1)

The Policy meets the requirements of the guidelines regarding takeover defense measures
The Policy fully satisfies the three basic principles (principle of protection and enhancement of corporate
value and common interests of shareholders, principle of prior disclosure and shareholders’ intentions,principle of securing necessity and suitability) provided in the “Guidelines Regarding Takeover Defense
Measures for the Purposes of the Protection and Enhancement of Corporate Value and Common Interestsof Shareholders” released by the Ministry of Economy, Trade and Industry and the Ministry of Justice on
May 27, 2005 (hereinafter referred to as the “Guidelines”), and its content is based on the above-mentioned
three principles provided by the Guidelines and takes into consideration the content of “The Proper Roleof Takeover Defense Measures in Light of Recent Changes in Various Environments” published on June30, 2008 by the Corporate Value Study Group established within the Ministry of Economy, Trade andIndustry, and other practices and debates regarding takeover defense measures. Further, the Policy
conforms to the purpose of various regulations etc. regarding the introduction of takeover defense measures
as provided by the Tokyo Stock Exchange.
- 13 -

(2)The Policy is renewed with the purpose of enhancing corporate value and common interests of shareholders
The Policy is renewed with the purpose of enhancing corporate value and common interests of shareholders
in cases of Large-Scale Purchases. For this purpose, the Board of Directors obtains the necessary
information from the Large-Scale Purchaser, sufficient time for the assessment and consideration of theLarge-Scale Purchase is secured, and necessary information for making a decision, including alternative
proposals, is provided to the shareholders, so that the shareholders can make a proper decision about
whether or not to accept the purchase.

(3)

The Policy respects the shareholders’ intentions
The renewal from the Current Policy to the Policy will be effective from the day of approval by theshareholders at this meeting, and the term of its validity will expire at the closing of the annual shareholders’meeting for the last fiscal year ending within three years from the day of this meeting. Further, the Policy
will be abolished even before its expiration date, if there is a resolution of the shareholders’ meeting forthe abolition of the Policy, in respect of the shareholders’ intentions.
Moreover, if it is difficult to make judgment regarding whether or not it is clear that the Large-Scale
Purchase will cause unrecoverable damages to the Company or whether or not the Large-Scale Purchasewill significantly damage the corporate value and common interests of shareholders, the shareholders’intention regarding whether or not countermeasures should be taken will be confirmed at a shareholders’meeting.

(4)

Importance attached to the decision of a Special Committee with a high level of independence
In order to properly operate the Policy, to prevent arbitrary decisions taken by the Board of Directors, andto ensure the objectivity, fairness and rationality of its decisions, a Special Committee independent of theBoard of Directors is established. The Special Committee consists of three members, selected from outside
directors, outside corporate auditors, persons with corporate management experience, lawyers, certified
public accountants, certified tax accountants, etc. The Board of Directors shall consult the Special
Committee, obtain its recommendation and take such recommendation to the fullest account, regardingwhether or not a Large-Scale Purchaser complies with the Large-Scale Purchase Rules, whether or not it isclear that the Large-Scale Purchase will cause unrecoverable damages to the Company, whether or not theLarge-Scale Purchase will significantly damage the corporate value and common interests of shareholders,
and whether or not countermeasures should be taken.

(5)

Setting out reasonable objective requirements
The Policy has been set out so that it cannot be activated unless reasonable and detailed objective
requirements are fulfilled. It is therefore considered that a system for the prevention of any arbitrary
activation by the Board of Directors has been ensured.

Note

1: Specific shareholder group refers to either (i) or (ii) below:(i) A holder*1 of share certificates etc.*2 of the Company and joint holders*3 of the holder(ii) A person carrying out purchase etc.*4 of share certificates etc.*5 of the Company and persons having
special relationships with the person*6*1 Holder stipulated in Article 27-23, paragraph 1 of the Financial Instruments and Exchange Act, including aperson deemed to be a holder under Article 27-23, paragraph 3*2 Shares etc. set out in Article 27-23, paragraph 1*3 Joint holders prescribed in Article 27-23, paragraph 5, including holders regarded as joint holders under Article
27-23, paragraph 6*4 Purchase etc. specified in Article 27-2, paragraph 1 of the Financial Instruments and Exchange Act, including apurchase made in securities markets*5 Share certificates etc. stipulated in Article 27-2, paragraph 1*6 Persons set out in Article 27-2, paragraph 7- 14 -

Note

2: Ratio of voting rights(i) If the specific shareholder group falls under (i) in the note 1 above
The ratio of voting rights means the ratio*7 of share certificates etc. held by a holder of sharecertificates etc. of the Company.
(ii) If the specific shareholder group falls under (ii) in the note 1 above
The ratio of voting rights means the total of the ratio*8 of share certificates etc. of a person carryingout a purchase etc. of share certificates etc. of the Company and that of persons having a special
relationship with the purchaser.
In calculating the ratio of voting rights, the number of voting rights*9 and the number of sharesissued*10 in the most recent out of the financial statement report, quarterly report or share buyback
report can be used.
*7 Ratio of share certificates etc. set out in Article 27-23, paragraph 4 of the Financial Instruments and ExchangeAct; the number of the share certificates, etc. held by the joint holders as specified in the same paragraph shallbe taken into consideration*8 Ratio of share certificates etc. prescribed in Article 27-2, paragraph 8 of the Financial Instruments and ExchangeAct*9 Stipulated in Article 27-2, paragraph 8 of the Financial Instruments and Exchange Act*10 Set out in Article 27-23, paragraph 4

Note

3: An agreement etc. with other shareholders of the Company
An agreement etc. with other shareholders of the Company means any agreement concerning the joint
acquisition or transfer of share certificates of the Company, or the exertion of voting rights or any otherrights as shareholder of the Company, as well as any other action falling under the joint holder stipulated
in Article 27-23, paragraph 5 and paragraph 6.

- 15 -

Attachment 1
Outline of the Special Committee
1. Establishment
The Special Committee shall be established by resolution of the Board of Directors.
2. Members
The Special Committee shall consist of three persons commissioned by the Board of Directors. Persons qualified
to serve on the Special Committee shall include outside directors, outside corporate auditors, persons withcorporate management experience, lawyers, certified public accountants and certified tax accountants.
3. Term
The term of office of members of the Special Committee shall be decided by resolution of the Board of Directors.
4. Requirements for Resolution
In principle, resolutions by the Special Committee shall be adopted by a majority vote of members present atmeetings at which all members are present. If circumstances prevent the attendance of all members, however,resolutions by the Special Committee shall be adopted by a majority vote of those present at meetings at whicha majority of members are present.
5. Matters to be resolved:
If consultation is requested by the Board of Directors, the Special Committee shall accept the request, decide on
the items stated below in principle, and submit the details of its decisions to the Board of Directors together withthe reasons for such decisions. Members of the Special Committee shall be required to make such decisions fromthe viewpoint of whether or not they contribute to the corporate value and common interests of shareholders, andshall refrain from making decisions in their own personal interests or in the personal interests of the Directors of
the Company.
(1)
(2)
(3)

(4)
(5)

Whether or not to extend the Large-Scale Purchase Information Provision Period
Whether or not a Large-Scale Purchaser complies with the Large-Scale Purchase Rules
Whether or not it is clear that the Large-Scale Purchase will cause unrecoverable damages to the Company
or whether or not the Large-Scale Purchase will significantly damage the corporate value and common
interests of shareholders
Whether or not countermeasures should be taken
Other items pertaining to this Policy for which the Board of Directors requested consultation

6. Advice of Experts etc.
In forming decisions stated above under 5, the Special Committee shall make its efforts to collect necessary andsufficient information to ensure the proper judgment. The Special Committee may seek, at the expense of theCompany, advice from third parties independent of the management of the Company (including financial
advisors, certified public accountants, lawyers, consultants and other experts).

- 16 -

Attachment 2
Career Summaries of the Special Committee Members
At the time of the Renewal of the Policy, the Special Committee will consist of the following three members:
Yukihiko Inoue<Career summary>November 1937

Born

April 1962
June 1989

Joined the National Police Agency
Chief of Chiba Prefectural Police Headquarters

September 1994
September 2003

Superintendent-General of the Metropolitan Police of Japan
President of Japan Guide Dog Association (present)

Yozo Izuhara<Career summary>
September 1938

Born

April 1962
June 1998

Joined Nippon Sheet Glass Co., Ltd.
Representative Director, President of Nippon Sheet Glass Co., Ltd.

June 2004
June 2010

Representative Director, Chairman of Nippon Sheet Glass Co., Ltd.
Executive Advisor of Nippon Sheet Glass Co., Ltd.

June 2012
June 2014

Honorary Senior Advisor of Nippon Sheet Glass Co., Ltd. (present)
Outside Corporate Auditor of the Company

June 2019
Outside Director of the Company (present)* The Company has reported Mr. Yozo Izuhara to Tokyo Stock Exchange as an independent officer. His original company, Nippon
Sheet Glass Co., Ltd. and the Company have some transactions etc., but we have judged that in view of the scale, nature etc. ofsuch transactions, there is no fear of his independence as a Special Committee member being influenced.

Nobumasa Kemori<Career summary>
April 1951

Born

September 1980
June 2007

Joined Sumitomo Metal Mining Co., Ltd.
Representative Director, President of Sumitomo Metal Mining Co., Ltd.

June 2013
June 2016

Representative Director, Chairman of Sumitomo Metal Mining Co., Ltd.
Chairman of Sumitomo Metal Mining Co., Ltd.

June 2017
June 2019

Executive Advisor of Sumitomo Metal Mining Co., Ltd.
Outside Director of the Company (present)

June 2021
Honorable Advisor of Sumitomo Metal Mining Co., Ltd. (present)* The Company has reported Mr. Nobumasa Kemori to Tokyo Stock Exchange as an independent officer. His original company,
Sumitomo Metal Mining Co., Ltd. and the Company have some transactions etc., but we have judged that in view of the scale,nature etc. of such transactions, there is no fear of his independence as a Special Committee member being influenced.

There is no special conflict of interests between the persons mentioned above and the Company.

- 17 -

Attachment 3
Description of Share Options
1. Shareholders to whom share options shall be granted and conditions for issue
Share options shall be allotted to shareholders indicated or recorded in the register of shareholders or beneficiaryshareholders as of the closing of the base date decided by the Board of Directors at a ratio of one share options
to one share of common stock of the Company which is held by the shareholders (excluding shares of common
stock held by the Company) without requiring any new payment.
2. Type and number of shares to be issued upon exercise of share options
The type of shares to be issued upon exercise of share options shall be the common stock of the Company. The
upper limit of the total number of shares to be issued upon exercise of share options shall be the number of sharesobtained by deducting the total number of outstanding shares of common stock of the Company (excluding
shares of common stock held by the Company) from the total number of shares authorized to be issued by theCompany as of the base date decided by the Board of Directors. The number of shares to be issued upon exercise
of one share option (hereinafter referred to as “the Number of Shares to Be Issued”) shall be separately decided
by the Board of Directors. However, if the Company conducts a share split or a reverse share split, proper
adjustments shall be made.
3. Total number of share options to be issued
The total number of share options to be issued shall be a number separately decided by the Board of Directors.
The Board of Directors may allot share options more than once.
4. Value of investment at the time of the exercise of each share option (the amount to be paid)
The value of the investment at the time of the exercise of each share option (the amount to be paid) shall beseparately decided by the Board of Directors, which shall be one yen or more.
5. Restriction on the transfer of share options
The acquisition of a share option through the transfer of the share option shall be subject to the approval of theBoard of Directors.
6. Conditions for the exercise of share options
In principle, a person who belongs to a specified shareholders’ group with a ratio of voting rights of 20% or more
may not exercise share options. A person who is required to follow a certain procedure to exercise share options
by applicable foreign laws and ordinances of certain foreign jurisdiction, in which he/she/it is located, may not
exercise share options in principle (However, such persons including a person to whom an exemption from theprocedure is available under the applicable laws and ordinances of the foreign jurisdiction may exercise shareoptions, if certain requirements are met. In addition, the share options held by the person shall become the objectof acquisition by the Company in exchange for the shares of the Company as compensation as stated in 8 below.).
In addition, a person who does not submit a form prescribed by the Company to confirm, among others, that theperson does not belong to any specified shareholders’ group may not exercise these share options (excluding
persons who were not requested by the Company to submit such form). The details shall be separately decided
by the Board of Directors.
7. Period for the exercise of share options
The period for the exercise of share options shall be separately decided at the Board of Directors meeting
resolving the issuance of share options at no cost to subscribers, which shall be one to three months, and the firstday (hereinafter referred to as “the First Day of the Exercise Period”) of which shall be separately decided at theBoard of Directors meeting resolving the issuance of share options at no cost to subscribers. If the final day ofthe period for exercise falls on a holiday of the organization handling the payment of money to be paid at thetime of exercise, the final day shall be the preceding business day.

- 18 -

8. Acquisition of share options by the Company(1) If the Board of Directors deems that the acquisition of share options by the Company is appropriate, theCompany may acquire all share options without compensation on a day separately decided by the Boardof Directors at any time prior to the day preceding the First Day of the Exercise Period.
(2) The Company may acquire on a day separately specified by the Board of Directors all share options heldby persons other than persons belonging to a specified shareholders’ group and persons who do not submit
a form prescribed by the Company to confirm that the persons do not belong to any specified shareholders’group by the day of acquisition (excluding, however, persons who are not required by the Company tosubmit such form) which have not been exercised as of the day preceding the day specified by the Boardof Directors, and deliver the Number of Shares to Be Issued of the Company for one share options in
exchange for all share options acquired.
If the Board of Directors determines on or after the day of acquisition that there is a person holding shareoptions who does not belong to a specified shareholders’ group (for example, if a person fails to submit adocument in the form prescribed by the Company in the first paragraph of this Section 8 (2) above by thedate the acquisition is made, but is subsequently found not to be a member of the specific shareholder
group, etc.; however, the Board of Directors may request the submission from such person of a form
prescribed by the Company as set out in the first paragraph of this Section 8. (2) above for the Board of
Directors determination), the Company may acquire on a day falling after the day of acquisition as specified
by the Board of Directors all share options held by the person which have not been exercised as of the day
preceding the day specified by the Board of Directors, and deliver the Number of Shares to Be Issued of
the Company for one share options in exchange for all share options acquired. This shall apply subsequently.
(3) The details of the acquisition provision shall be separately decided at a meeting of the Board of Directors.

- 19 -

(Reference) Ninth Management PlanThe Eighth Management Plan ended in the fiscal year ended March 31, 2022. Accordingly, the Company has
formulated a new medium-term management plan (the Ninth Management Plan) starting from the fiscal year ending
March 31, 2023.
With top priority placed on achieving objectives of the medium-term management plans it draws up every three years,
the Company has increased its corporate value as a result of having steadily carried out such initiatives. Over the past
25 years, the Company has executed eight management plans, and has achieved increases in ordinary profit in 22
fiscal years, excluding the three fiscal years of the global financial crisis and the COVID-19 pandemic.
In the first 10 fiscal years (three medium-term management plan periods), the Company focused on restoring its asset
base, which had been damaged by the bursting of Japan’s bubble economy, and reducing interest-bearing debt. In thelatter 15 fiscal years (five medium-term management plan periods), the Company doubled leasing assets,strengthened management foundations by strengthening the four segments of leasing, sales, construction andbrokerage, and enhanced shareholders’ equity, lifting the credit rating to the AA zone.
Over the next three medium-term management plan periods through fiscal 2030, the Company will maintain an
approach that prioritizes the allocation of funds to further investment to increase leasing assets and take steps forsustainable profit growth, while also aiming to create a resilient management foundation and achieve sustainablegrowth, based on the high level of social contribution of the Company’s businesses themselves, and increasing
investment capacity and the level of flexibility in capital strategy.
At present, there are various issues in the management environment such as the COVID-19 pandemic, geopoliticalrisk and instability in resource procurement, but as the Company expects to achieve ordinary profit of 300 billion
yen for fiscal 2030, it will position the “Ninth Management Plan” as the first step to achieving that target.
Name

Ninth Management Plan

Plan period

Three years, from the fiscal year ending March 31, 2023 to the fiscal year ending
March 31, 2025

Key Points of Plan
1.

Earnings Targets
Consecutive record profit for the period covered
Achieve cumulative ordinary profit of 750 billion yen and profit of 500 billion yen over the three-year period
Aim to achieve record profits for the fourth consecutive plan since the Sixth Management Plan by maintaining
the pace of growth attained through the Eighth Management Plan
< Three-year cumulative earnings targets >Revenue from operations¥3 trillion ( Vs. Eighth Management Plan: + ¥ 129.6 billion + 5% )Operating income¥ 770.0 billion (“+ ¥ 82.5 billion + 12% )“+ ¥ 94.4 billion + 14% )Ordinary profit¥ 750.0 billion (Profit¥ 500.0 billion (“+ ¥ 67.2 billion + 16% )- 20 -

(Reference) Comparison of Management Plan results(Billion yen)
(Fiscal year ended/ending March 31)
Revenue from operations

6th Plan
2014-2016

7th Plan
2017-2019

8th Plan
2020-2022

9th Plan2023-2025

2,442.1

2,885.8

2,870.4

3,000.0

Operating income

500.6

613.2

687.5

770.0

Ordinary profit

418.0

557.8

655.6

750.0

Profit

238.1

353.3

432.8

500.0

Note:

All figures are cumulative totals within the period of the plan.

- 21 -

2.

Performance Targets and Strategies by Segment
We will maintain the position of office building leasing in Tokyo as a solid foundation, and will aim to utilize
the comprehensive strengths of the Group as a whole to achieve our targets< Performance targets by segment >(Billion yen)
6th Plan

7th Plan

8th Plan

9th Plan

Leasing

886.2

1,073.1

1,218.9

1,300.0

Sales

773.1

957.2

822.1

750.0

Construction

589.3

634.7

612.0

700.0

Brokerage

177.2

207.7

210.5

250.0

2,442.1

2,885.8

2,870.4

3,000.0

Leasing

313.7

415.5

487.3

520.0

Sales

127.2

140.1

150.9

150.0

Construction

47.0

50.4

54.7

75.0

Brokerage

40.6

47.4

44.1

68.0

500.6

613.2

687.5

770.0

Revenue from operations

Operating income< Strategies >(1) Leasing
Aim to maintain the earnings foundation built through the Eighth Management Plan, and achieve profit
growth for the fourth consecutive plan period• In office building leasing, we will strive to maintain the profitability of existing buildings, while also
securing earnings with the full-year contribution of buildings completed in the Eighth Management Plan
(180 thousand tsubo of gross floor area) and by starting operation of new buildings to be completed in theNinth Management Plan (190 thousand tsubo of gross floor area)• In the operation of commercial facilities, such as hotels, event halls, and retail facilities, we will recover
the profitability to pre-COVID-19 levels and anticipate a return to growth from the Tenth Management
Plan onward(2) Sales
High level of profit of the Eighth Management Plan to be maintained• We will maintain our policy of controlling the pace of sales, pursuing profit rather than volume• Rising construction costs will need to be addressed, but the impact will be limited as construction has
been started on all projects to be delivered during the Ninth Management Plan
• We will maintain our policy of securing prime sites steadily amid continuing intensified competition forland acquisition(3) Construction
In both remodeling (Shinchiku Sokkurisan) and custom home construction, we will focus on controlling
costs while enhancing quality, and aim to achieve consecutive record profits by expanding orders• We will expand orders by proposing products that accurately respond to customer needs, such as a highlevel of environmental performance and disaster preparedness• We will appropriately address spikes in prices of wood and materials, and minimize the impact- 22 -

(4) Brokerage
We will further strengthen profitability as we aim to achieve record profit in a management plan with asignificant increase
We will strengthen Group collaboration and further pursue customer-oriented services to expand ourmarket share- 23 -

3.

Capital Investment Plans (Non-current asset investment excluding sales assets, such as condominiums for
sale)
Further investment in leasing office assets in central Tokyo, strengthening our earnings base
Expect to invest 1 trillion yen over the three years of the Ninth Management Plan
(1) We will invest 700 billion yen in concrete development projects for over 700 thousand tsubo (one tsubo isroughly 3.3 m2) of gross floor area, mainly comprising redevelopment projects
Current forecasts for the operation of leasing office assets are as shown in the table below< Pace of development >(Thousand tsubo)

Gross floor area

6th Plan

7th Plan

8th Plan

9th Plan

10th Plan
onward

110

210

180

190

520

(2) We will ensure that we take advantage of opportunities that arise by securing 300 billion yen forinvestments in new projects

4.

Financing plans(1) We expect to be able to cover the additional investment of 700 billion yen in properties that are in processwith increases in cash flows from the leasing business*< Capital investment and cash flows from the leasing business >(Billion yen)
6th Plan

7th Plan

8th Plan

9th PlanCapital investment(422.3)(663.5)(805.3)(1,000.0)

Cash flows from theleasing business

409.8

534.6

644.5

700.0

Interest-bearing debt

3,158.9

3,342.8

3,560.03,800.0* Cash flows from the leasing business: Operating income of the leasing business + Depreciation(2) Introduction of green financing
Procure total long-term funding amount of 1 trillion yen from green financing(i)

Procure 1 trillion yen in funds from green financing for 12 buildings, out of 27 buildings owned by
the Company that have already acquired a rating of three stars or above in DBJ Green Building
Certification* (as of March 31, 2022)(ii) Principles for target properties during financing period• Disclose environmental performance information, including CO2 emissions and energy consumption• Maintain at least three stars in the DBJ Green Building Certification• Prohibit selling, as this financing is to contribute to social issues, such as environmental
improvements(iii) Obtain assessment of conformity with green finance from JCR and R&I* DBJ Green Building Certification is a certification system established by the Development Bank of Japan to evaluate
real estate for its performance and initiatives regarding “environmental and social awareness” beyond its “profitability”- 24 -

5.

Policy for Shareholder Returns
Continue “sustainable dividend increase” and “annual dividend increase of 5 yen” in line with profit growth
Cash flow allocation policy of prioritizing investment in leasing office assets, to be maintained
As we expect the shareholders’ equity ratio to exceed 30% during the Ninth Management Plan period, ourflexibility in capital strategy is increasing.
< Dividends and earnings per share >(Yen)
7th Plan(Fiscal year ended March 31)

6.

2017

2018

8th Plan
2019

2020

2021

2022

Dividends

24

27

30

35

40

45

Earnings per share

218

253

275

298

298

317

Introduction of Numerical Targets regarding Strategic Shareholdings
Reduce the ratio of the book value of shares held to 10% or less of shareholders’ equity by fiscal 2030
The Company maintains that it can acquire and hold shares of business partners, etc., if it is deemed tocontribute to the Company’s sustainable growth and medium- to long-term enhancement of corporate value
primarily from the standpoint of establishing and strengthening stable and long-standing business relationships
with them.
In this new management plan, the Company has decided to establish a numerical target for the amount ofstrategic shareholdings held, and certain rules. As of the end of the previous fiscal year, the book value oflisted shares held of 271.9 billion yen was approximately 18% of shareholders’ equity of 1,479.2 billion yen(after subtracting net unrealized holding gains on securities, etc., from net assets.) Going forward, we will
reduce this ratio each year to 10% or less by fiscal 2030.
< Book value of listed shares and shareholders’ equity >(Billion yen)
(As of March 31)

6th Plan(2016)

7th Plan(2019)

8th Plan(2022)

Book value of shares

190.3

255.5

271.9

Shareholders’ equity

821.0

1,099.3

1,479.2

Ratio

23%

23%

18%

- 25 -

Fiscal 2030
target

10% or less

7.

Establishment of CO2 Emissions Reduction Targets (Scope 1, 2, and 3)
50% reduction by fiscal 2030 compared with fiscal 2014, immediately prior to the Paris Agreement
Expressed support for 2050 carbon neutrality
Aim to achieve the target by linking decarbonization initiatives with business expansion(1) Promote energy-saving in leasing business centered on office buildings and facility management businesses• We will further pursue the introduction of highly efficient facilities for new constructions andrenovations, and will reduce the Company’s CO2 emissions from energy consumption, etc., by 50% perunit of floor area
• Continue awareness-raising activities for energy saving towards tenants(2) Promote measures to reduce emissions in both upstream and downstream parts of main businesses• Support tenant companies to introduce green power for their office spaces in a building• Curb energy consumption during construction• Enhance high-performance designs (adopting ZEH*-M Oriented as the standard specification for
condominiums) *ZEH=Net Zero Energy House• Promote provision of the new solar power generation service, “SUMIFU × ENEKARI,” which willcontribute to decarbonization for detached houses• Promote the provision of Shinchiku Sokkurisan high thermal remodeling products• Promote spread of automobile charging stations(3) Aim to reduce total emissions by 10% in the Ninth Management Plan
• Reductions in the condominium business, which accounts for approximately 60% of total emissions,will contribute from the Tenth Management Plan onward, when the construction of properties with new
design standards will be completed• Aim to reduce emissions by 25% except for condominiums< CO2 emissions reduction targets for the Ninth Management Plan>(Reference)
Fiscal 2014
emissions

Proportion

Condominiums

3,605

61%

3,540

Custom homes andShinchiku Sokkurisan remodeling

1,591

27%

1,565

Office buildings

689

12%

1,366

Other
(head office and Group companies)

55

1%

66

Non-condominium

2,336

39%

(25)%

2,997

Total

5,940

100%

(10)%

6,537

(Thousand tons of CO2)

9th Planreduction target

Fiscal 2019
emissions

Main numerical targets in each business
(1)
(2)
(3)
(4)

30% of tenant office spaces to introduce green power
100% of condominiums to be ZEH-M Oriented designs
60% of custom home orders to be ZEH homes (already standardized)
20% of Shinchiku Sokkurisan remodeling orders to be high thermal insulation remodeling products(already introduced)(5) All of electric power used in the Group’s own offices to be green by obtaining environmental value
generated by solar power through “SUMIFU × ENEKARI”- 26 -

(Reference) Status of the Company’s Corporate Governance
Basic Views of Corporate Governance
The Company is a comprehensive real estate enterprise of the Sumitomo Group which has a history of 430 years andinherits Sumitomo’s business philosophy of “Placing prime importance on integrity and sound management in the
conduct of its business” and “Under no circumstances, shall it pursue easy gains.” The Company’s slogan, “Integrity
and Innovation” expresses its corporate stance to all stakeholders including its employees, customers, business
partners, creditors and shareholders. This includes the pride as a developer which values “Integrity” above all, andcreates new corporate value with a pioneering spirit, without pursuing easy gains under any circumstances.
Under this slogan, we have set forth our fundamental mission as to “Create even better social assets for the next
generation,” and our basic management policy aims to contribute to addressing various social issues such as theenvironment, while at the same time maximizing corporate value through each business.
This fundamental mission also includes a reminder “Do not rest on seniors’ laurels and make the best efforts for abetter company for the next generation.” At this point in time, we believe that the management of the Company
should continue to be carried out by people mainly from within the Company who have inherited the strong will to
sow the seeds of growth for the sake of the next generation. In doing so, we believe that employees will be able tomaintain a high level of motivation to eventually participate in management.
In consideration of this basic stance, we are working to further strengthen and enhance corporate governance so as
to contribute to the enhancement of the Company’s corporate value over the medium- to long-term, by working on
collaboration and dialogue with all stakeholders including shareholders, improving the efficiency of decision-making,appropriate supervision of execution, and proper disclosure of information.
Corporate Governance System‧

Reasons for Adopting an Organizational Structure of a Company with Corporate Auditors
Under the Companies Act of Japan, companies may adopt one of the following three forms of organizational
structure: (i) a company with corporate auditors, in which the Board of Directors assumes executive
responsibility, while corporate auditors are in charge of the monitoring of management; (ii) a company with anominating committee, etc., wherein the Board of Directors is tasked with the management monitoring function
and the Board of Executive Officers assumes executive responsibility; and (iii) a company with an audit andsupervisory committee, in which the management monitoring function of corporate auditors is incorporated into
the functions of the Board of Directors. In this way, companies may select the optimum governance structurethat best suits their circumstances.
As stated in the basic views above, in order for the Company to continue growing, we believe that people fromwithin the Company who are deeply familiar with the significance of continuing to invest, always looking
resolutely forward even in difficult times, should be the core members of management and execution, and the
motivation of juniors, who will acquire experience in the real estate business and eventually join the
management team, should be maintained; hence we have a structure as a company with a corporate auditors,
where the Board of Directors bears responsibility for execution, and corporate auditors take on the management
supervision function.
Eight directors, mainly from within the Company, who are deeply familiar with the business content, are in
charge of management and execution, while two outside directors and four corporate auditors for a total of six
persons, which accounts for over 40% of the 14 attendees of the Board of Directors meeting, are responsible forthe management supervision function. In order to fully demonstrate the supervisory function, we have built asystem to accurately grasp the management condition and issues and to cooperate with each other as follows.
We believe that the Company’s corporate governance is sufficiently functioning, as its effectiveness is beingreflected in our business results.

‧

Role and Structure of the Board of Directors
The Board of Directors promotes the sustainable growth of the Company and the enhancement of corporate
value over the medium- to long-term, improves profitability and business efficiency, and prevents fraud before
it occurs. In order to do so, it is responsible for deliberating and deciding important matters for the Company
such as basic management policy and management strategy, as well as supervising the execution of duties by
each director.
- 27 -

The maximum number of directors stipulated in the Articles of Incorporation is 12. The Board of Directors iscomprised of eight directors from within the Company who are in charge of business execution as they are
deeply familiar with the significance of always looking resolutely forward and continuing to invest forsustainable growth, and two outside directors with experience as chairman and president of listed companies,
who have superior character and insight and understand the Company’s management principles.
‧

Executive Officer System
Due to the limited number of directors, we have introduced an executive officer system comparable withdirectors so that we can appoint officers necessary for business expansion, and we have appointed nine executive
officers who do not concurrently serve as directors. Compensation for executive officers who are non-concurrent
directors is not an employee salary, but is to be paid from the total compensation for directors, which is clearlybased on the Company’s performance set at 1% of consolidated ordinary profit for the previous consolidated
fiscal year, because they are considered to be comparable with directors.

‧

Role and Structure of the Board of Corporate Auditors
Corporate auditors are responsible to supervise whether directors are performing their duties properly by using
the powerful authority endorsed by law.
The Board of Corporate Auditors consists of four corporate auditors, half of whom are the two outside corporate
auditors.

‧

Cooperation among Internal Audit Department, Independent Auditor, and Corporate Auditors
We have established the Internal Audit Department to check the business execution status of each Departmentof the Group and the operational status of internal controls, to prevent fraud and errors, and to make proposals
for operational improvement.
The Internal Audit Department reports the results of its internal audits to, and exchanges views as appropriate
with, corporate auditors and the independent auditor in an effort to forge closer collaboration between the threeparties and increase the quality and efficiency of individual audits.

- 28 -

Initiatives to Strengthen Corporate Governance‧

Steps Taken to Strengthen Corporate Governance
June 2002
April 2004
June 2004
June 2015

April 2020
June 2020‧

Appointed two outside corporate auditors, making half of the four corporate auditors outside
members
Reformed the management system, reducing the number of directors from 23 to nine
Introduced a fully performance-based compensation system for directors
Abolished the retirement benefit and bonus system for directors
Appointed two outside directors
Established a Committee of Outside Directors and Auditors and began holding briefings foroutside directors on a regular basis, to strengthen the supervision function of outside directors
and outside corporate auditors
Introduced an executive officer system
Appointed one female corporate officer (outside corporate auditor)

Roles of Outside Directors and Outside Corporate Auditors
As part of its initiatives to strengthen corporate governance, the Company appointed two outside corporate
auditors in 2002 and two outside directors in 2015.
Corporate auditor is a system that has taken root in Japan for a long time. Corporate auditors use the strong
investigative power granted by the law to audit whether the directors are conducting their duties appropriately.
Although full-time corporate auditors from within the Company are familiar with the company’s internal affairs
and have excellent information-gathering skills, they might become somewhat lenient, albeit unconsciously,
when it comes to auditing their colleagues. Therefore, the Company ensures that at least half of the corporate
auditors are outside members to add an objective perspective and thereby ensure the effectiveness of audits.
Likewise, it is undeniable that the Board of Directors may become narrow-minded if it consists only of people
from within the Company, and it is possible that the Board may find itself left behind by the changes in theworld. Therefore, the Company has appointed outside directors who have excellent character and insight, who
understand its management philosophy, and who have experience as a chairman or president of listed companies,
in order to have them advise the management team and monitor the directors by utilizing their wide range ofknowledge and insight based on their experience in corporate management.

‧

Efforts to Strengthen the Supervision Function
The Company has two outside directors and four corporate auditors for a total of six persons, which accounts
for over 40% of the 14 attendees of the Board of Directors meeting, responsible for the management supervisionfunction. In order to ensure that outside directors and outside corporate auditors can fully perform their roles, inthe fiscal year under review the Company (i) held eight briefings for outside directors in which they were briefed
on the agendas for the Board of Directors meetings, the content of discussions at Executive Committee, andother matters; and (ii) convened 13 meetings of the Board of Corporate Auditors wherein they received reports
from the independent auditor and the Internal Audit Department and conducted interviews about the operating
situation with the heads of each department.
In addition, (iii) we have established a Committee of Outside Directors and Auditors with only four members,
comprised of outside directors and outside corporate auditors. The Committee of Outside Directors and Auditors
directly hears from each officer about the execution status of the duties of which he or she is in charge and theissues they are aware of, as well as giving appropriate advice. In the event of whistleblowing report toward
officers, outside corporate auditors receive a report directly to share at the Committee of Outside Directors andAuditors.
Through these initiatives, we believe that the Company’s corporate governance has achieved a certain level ofquality, and its effectiveness is being reflected in our business results.

- 29 -

Policies for Appointment of Officers‧

Basic Policy
Regarding nomination of candidates for directors and corporate auditors, as well as the appointment of executive
officers, persons with a wealth of experience, high-level insight and sophisticated expertise who will contributeto the Company’s sustainable growth and medium- to long-term enhancement of corporate value are narrowed
down to candidates through multiple meetings of Executive Committee. The final decision is then made by the
Board of Directors based on thorough deliberation, reflecting independent and objective opinions of independent
outside directors and outside corporate auditors. Independent outside directors and outside corporate auditors
have opportunities to know relevant information such as the background, insights and achievements of internal
directors, executive officers and internal corporate auditors at several occasions including meetings of theCommittee of Outside Directors and Auditors, briefings for outside directors, and meetings of the Board of
Corporate Auditors.

‧

Skill Matrix (Abilities Expected of Each Director)
Corporate
management

Leasing

Sales

Construction

Brokerage

Redevelopment

Planning andfinanceCompliance

Kenichi Onodera

○

○

○

○

○

○

○

○

Kojun Nishima

○

○

○

○

○

○

○

○

Masato Kobayashi○

Yoshiyuki Odai

○

○

○

Nobuaki Takemura○

Hiroshi Kato○

Hisatoshi Katayama○

Yozo Izuhara
Outside (independent)

○

○

○

○

Name

Nobumasa Kemori
Outside (independent)

○

○

○

○

○
○

- 30 -

‧Compliance with the Independence Criteria of Outside Directors and Outside Corporate Auditors andReasons for Appointment Thereof
Regarding appointment of outside directors and outside corporate auditors, the Company has adopted therequirements for outside directors and outside corporate auditors prescribed in the Companies Act and the
independence criteria set by the Tokyo Stock Exchange.
Name

Independence Supplementary Explanation of the RelationshipYozo Izuhara

Reasons of Appointment

Mr. Izuhara has a background at Nippon Sheet Mr. Izuhara had served as President andGlass Co., Ltd., with which the Company hassome transactions etc. Considering the scale○

Nobumasa Kemori○

Chairman of Nippon Sheet Glass Co., Ltd., andhe has extensive knowledge on overseas

and nature of such transactions, the Company business and M&A as a manager. The
judges it is unlikely the relationship would have Company deems him to be suitable as anany impact on decisions of shareholders andinvestors.

outside director, and therefore appointed him tothat position.

Mr. Kemori has a background at Sumitomo

Mr. Kemori had served as President andMetal Mining Co., Ltd., with which theCompany has some transactions etc.

Chairman of Sumitomo Metal Mining Co.,
Ltd., and he has extensive knowledge of theConsidering the scale and nature of suchmining industry from a long-term perspective
transactions, the Company judges it is unlikely and overseas business as a manager. The
the relationship would have any impact ondecisions of shareholders and investors.

Company deems him to be suitable as an
outside director, and therefore appointed him tothat position.

Yoshiyuki Norihisa○

Mr. Norihisa has a background at Sumitomo
Mitsui Construction Co., Ltd., with which the

Mr. Norihisa has a wealth of managerial
experience at another company. In view of his

Company has some transactions etc.
Considering the scale and nature of such

personality, insight, experience, etc., theCompany judges he is suitable and qualified totransactions, the Company judges it is unlikely serve as an outside corporate auditor and has
the relationship would have any impact on
appointed him to that position.
decisions of shareholders and investors.
Chiyono Terada○

Ms. Terada has a background at Art Moving
Company Co., Ltd., with which the Company

Ms. Terada has a wealth of managerial
experience at another company. In view of her

has some transactions etc. Considering thescale and nature of such transactions, thepersonality, insight, experience, etc., theCompany judges she is suitable and qualified toCompany judges it is unlikely the relationshipwould have any impact on decisions ofserve as an outside corporate auditor and has
appointed her to that position.

shareholders and investors.

- 31 -

Initiatives for Promoting Diversity
We have been actively promoting diversity since before, based on the awareness that the existence of diverse
perspectives and values reflecting a variety of experiences, skills and characteristics within the Company is a strengththat supports the sustainable growth of the Company.
For more than 20 years, we have been actively hiring people with diverse careers at other companies as individuals
who can be immediately effective in the Company. Today, mid-career hires with work experience at other companies
account for 90% of our employees, and are the source of the Company’s growth.
In addition, we believe that equal opportunity in promoting employees to managerial positions is the most importantfactor for increasing their motivation, so we promote employees based solely on their enthusiasm, ability andachievements, regardless of gender or whether they were hired as new graduates or as mid-career hires. As a result,more than 60% of our managers are currently mid-career hires, ensuring diversity in the managerial positions.
We are also actively working on the promotion of female participation and career advancement. Firstly, we haveannounced a numerical target for the ratio of female employees in sales and engineering positions that support our
front line operations (25% in sales and 13% in engineering positions) in order to increase the number of female to bepromoted in future by increasing the ratio of female in our workforce. Secondly, we are also working to support
women’s career development. For example, in the previous fiscal year, we implemented reforms to apply personnel
systems centered on job evaluation-based pay to all employees, and created a system that enables employees withmedium- to long-term gaps in their career owing to life events such as childbirth and raising children to immediately
assume positions of responsibility with no disadvantage after returning to work.
We believe that diversity in managerial positions should be ensured naturally as a result of fair employment policies,
systems and appointments, such as those described above. We believe that setting a numerical target for diversity inmanagerial positions may distort equal opportunity in the appointment of managers and lower the morale ofemployees as a whole, and therefore we will not set such a numerical target.

- 32 -

(Appendix)

Business Report(April 1, 2021 - March 31, 2022)
I.

Overview of the Corporate Group

1.

Business Progress and Results, and Issues to be Addressed(1) Overview of consolidated results
Return to record-high ordinary profit, and record-high profit for the ninth consecutive year
The financial results for the consolidated fiscal year under review is as shown in the table below. Revenue fromoperations, operating income, ordinary profit and profit all increased from the previous year. Ordinary profit
returned to a record high as the decline in profit caused by COVID-19 pandemic only lasted for one year, while
profit attributable to owners of parent achieved a record high for the ninth consecutive year.
Increased revenue and profit in office building business, significant increase in brokerage profit
By segment, the mainstay office building business recorded increases in both revenue and profit, and the decline
in commercial facilities such as hotels and event halls shrank compared with the previous year, resulting inincreased revenue and profit in the leasing business. In addition, there was a contribution to overall performancefrom increased revenue and profit in the construction business including Shinchiku Sokkurisan remodeling, as
well as the brokerage business, owing to good performance from brokerage of existing homes. In the sales
business, focusing on condominium sales, revenue and profits decreased owing to a decline in the number ofunits delivered, but it achieved a high level of operating income and performed well.

Non-operating loss recorded 8.7 billion yen (an improvement of 0.5 billion yen year-on-year). Extraordinary
loss recorded 6.4 billion yen (down 6.8 billion yen year-on-year), owing to the absence of 11.8 billion yen ingains on the transfer of equity interest in the condominium development joint venture company in Dalian City,
China, which the Company recorded in the previous year.
As a result, revenue from operations for the fiscal year was 939.4 billion yen (up 2.4% year-on-year), operating
income was 233.8 billion yen (up 6.7% year-on-year), ordinary profit was 225.1 billion yen (up 7.2% year-onyear) and profit attributable to owners of parent reached 150.4 billion yen (up 6.4% year-on-year).
Fiscal 2021
(Apr. 1, 2021 – Mar. 31, 2022)

YoY change

Revenue from operations¥

939.4 billion+¥

21.9 billion

Operating income¥

233.8 billion+¥

14.6 billion

Ordinary profit¥

225.1 billion+¥

15.1 billion

Profit attributable to owners of parent¥

150.4 billion+¥

9.0 billion- 33 -

Business results by segment are as follows.
Revenue from operations

Fiscal 2021

YoY change

Leasing¥ 425.0 billion+¥ 26.8 billion

Sales¥ 233.7 billion(¥ 29.6 billion)

Construction¥ 204.3 billion+¥ 15.6 billion

Brokerage¥ 73.4 billion+¥ 7.6 billion

Operating income

Fiscal 2021

YoY change

Leasing¥ 162.6 billion+¥ 7.4 billion

Sales¥ 50.4 billion(¥ 3.4 billion)

Construction¥ 18.5 billion+¥ 2.9 billion

Brokerage¥ 18.0 billion+¥ 6.5 billion

Note: Percentage is calculated from figures
before elimination and/or corporate
for the fiscal year ended March 31,
2022.

Consolidated operating income and gross floor area for leasing (owned)
The office building business has shown “sustainable growth” alongside the growth in owned gross floor area

- 34 -

(2) Outlook for next fiscal year
Forecasts for the next consolidated fiscal year (year ending March 31, 2023) are as shown below. Revenue fromoperations, operating income, ordinary profit and profit attributable to owners of parent will all increase fromthe previous year. We intend to achieve a record-high ordinary profit for the second consecutive year, and thetenth consecutive year of record-high in profit attributable to owners of parent.
Fiscal 2022 Forecast(Apr. 1, 2022 – Mar. 31, 2023)¥ 950.0 billion¥ 240.0 billion¥ 235.0 billion¥ 160.0 billion+¥ 10.5 billion+¥ 6.1 billion+¥ 9.8 billion+¥ 9.5 billion

Revenue from operations
Leasing
Sales
Construction
Brokerage

Fiscal 2022 Forecast¥ 430.0 billion¥ 220.0 billion¥ 220.0 billion¥ 78.0 billion

YoY change+¥ 4.9 billion(¥ 13.7 billion)+¥ 15.6 billion+¥ 4.5 billion

Operating income
Leasing
Sales
Construction
Brokerage

Fiscal 2022 Forecast¥ 165.0 billion¥ 50.0 billion¥ 21.0 billion¥ 20.0 billion

YoY change+¥ 2.3 billion(¥ 0.4 billion)+¥ 2.4 billion+¥ 1.9 billion

Revenue from operations
Operating income
Ordinary profit
Profit attributable to owners of parent

YoY change(Outlook by segment)- 35 -

(3) Progress of the Eighth Management Plan
The fiscal year under review (fiscal year ended March 31, 2022) marked the end of the “Eighth Management
Plan,” which the Company has been operating since April 2019. In the second year of the plan, declines inrevenue and profit were unavoidable due to the impact of COVID-19, but in the fiscal year under review, thefinal fiscal year of the plan, revenue and profit increased, and ordinary profit recovered to a record-high in one
year, as described in the above “Overview of consolidated results.” Three-year cumulative performance is asshown in the table below. Although we did not achieve our initial targets formulated before the COVID-19
pandemic, we achieved record-high operating income and ordinary profit for the third consecutive management
plan from the Sixth Management Plan.
(Billion yen)
8th Plan
Results

7th Plan
Results(Apr. 1, 2016 –Mar. 31, 2019)

Revenue fromoperations

Fiscal 2019 Fiscal 2020 Fiscal 2021

(Three-year
cumulative)Vs.
7th Plan

8th Plan
Targets*(Apr. 1, 2019 –Mar. 31, 2022)

2,885.8

1,013.5

917.5

939.4

2,870.4(153)

3,100.0

Operating income

613.2

234.3

219.2

233.9

687.5

+ 74.3740.0

Ordinary profit

557.8

220.5

209.9

225.1

655.6

+ 97.8700.0*Announced on May 16, 2019- 36 -

(4) Overview of each segment for the fiscal year under review
Leasing
Fiscal 2021 (YoY change)
Fiscal 2022 forecasts (YoY change)

Revenue from operations+¥ 26.8 billion¥425.0 billion+¥ 4.9 billion¥430.0 billion

Operating income+¥ 7.4 billion¥162.6 billion+¥ 2.3 billion¥165.0 billion

Full-year contribution from office buildings, resulting in higher revenue and profit
In the consolidated fiscal year under review, revenue and profit in the mainstay office building businessincreased due to the full-year operation of Sumitomo Fudosan Kojimachi Garden Tower, Sumitomo Fudosan
Ochanomizu Building and other buildings completed in the previous fiscal year, as well as the absence ofacquisition expenses for large properties, which the Company acquired in the previous year.
In addition the decline in the commercial facilities such as hotels and event halls shrank compared with theprevious year as a result of the full-year operation of Ariake Garden and temporary contribution to revenue
related to the Olympics, etc., despite the ongoing impact of COVID-19.
As a result for this segment, both revenue and profit increased.
Seesawing market, vacancy rate is 5.8% in existing buildings
Although the vacancy rate in existing buildings rose in the first half of the year, it remained flat with 5.8% in
the second half of the year. As the tenant needs grow increasingly diverse, the market conditions continue tomove back and forth.
In addition, in terms of tenant-seeking activities for new buildings, contracts have almost been completed for
Sumitomo Fudosan Tamachi Building East and Sumitomo Fudosan Kanda Izumicho Building, which werecompleted in the first half of the year, and the Company is focusing on tenant-seeking activities for properties
such as Sumitomo Fudosan Osaki Twin Building East, which was completed in the fourth quarter, as well as
the Tokyo Mita Redevelopment Project and the Nishi-shinjuku 5-chome Kita Project, which are large-scalebuildings to be completed in the next fiscal year.
Vacancy rate in existing buildings
End of Fiscal 2020
(March 31, 2021)
2.8%

End of third quarter(December 31, 2021)
5.9%- 37 -End of Fiscal 2021
(March 31, 2022)
5.8%

SalesFiscal 2021 (YoY change)
Fiscal 2022 forecasts (YoY change)

Revenue from operations(¥ 29.6 billion)¥233.7 billion(¥ 13.7 billion)¥220.0 billion

Operating income(¥ 3.4 billion)¥50.4 billion(¥ 0.4 billion)¥50.0 billion

Achieved high level of operating income, in line with initial plans
In the consolidated fiscal year under review, a total of 3,604 condominium units, detached houses, and landlots were delivered (down 560 units year-on-year), owing to steady progress on deliveries from condominiums
including the large-scale properties such as City Towers Tokyo Bay and City Tower Ginza East, which werecompleted through the previous year, as well as the start of deliveries of City Tower Musashi-koyama and City
Terrace Kanamachi, etc.
Although the segment’s revenue and profit decreased due to the decline in the number of units delivered
compared with the previous year, operating income achieved a high level at 50.4 billion yen, in line with theinitial plan (50.0 billion yen).
Steady progress in condominium contracting, with 80% of units to be delivered in the next fiscal year
already sold
The number of condominium units sold made good progress as planned, at 3,047 units, unchanged from theprevious year, and at the beginning of the fiscal year, approximately 80% of the 3,000 units planned to bedelivered in the next fiscal year were sold (approximately 80% in the previous year).
Fiscal 2021
3,047 units
3,604 units
3,569 units
35 units¥ 233.7 billion¥ 218.2 billion¥ 15.4 billion

Number of condominium units soldNumber of units delivered
Condominiums/detached houses
Land lots
Revenue from operations
Condominiums/detached houses
Land lots/others- 38 -

YoY change(-)(
560 units)(
580 units)+
20 units(¥ 29.6 billion)(¥ 34.1 billion)+¥
4.4 billion

Construction
Fiscal 2021 (YoY change)
Fiscal 2022 forecasts (YoY change)

Revenue from operations+¥ 15.6 billion¥204.3 billion+¥ 15.6 billion¥220.0 billion

Operating income+¥ 2.9 billion¥18.5 billion+¥ 2.4 billion¥21.0 billion

Orders increased, resulting in increase of revenue and profit
In the consolidated fiscal year under review, the number of units contracted increased with 8,362 units in the
Shinchiku Sokkurisan remodeling business (up 828 units year-on-year) and 2,619 units in the custom homeconstruction business (up 92 units year-on-year), compared with the previous year, when the Company
restricted sales activities under the state-of-emergency declarations. In the fiscal year under review, theCompany introduced new environmentally-friendly products, such as the new solar power generation service“SUMIFU × ENEKARI” and high thermal insulation remodeling plans, contributing to increased orders.
As a result for this segment, both revenue and profit increased as the number of units delivered increased,
despite the impact of rising prices of timber and other materials.
Fiscal 2021
10,981 units
8,362 units
2,619 units
10,582 units
7,971 units
2,611 units¥ 194.1 billion¥ 105.7 billion¥ 88.4 billion

Number of units contracted
Shinchiku Sokkurisan remodeling
Custom Homes
Number of units delivered
Shinchiku Sokkurisan remodeling
Custom Homes
Revenue from operations
Shinchiku Sokkurisan remodeling
Custom Homes- 39 -

YoY change
920 units
828 units+
92 units++
642 units+
405 units+
237 units+¥ 15.6 billion+
7.5 billion+
8.0 billion

Brokerage
Fiscal 2021 (YoY change)
Fiscal 2022 forecasts (YoY change)

Revenue from operations+¥ 7.6 billion¥73.4 billion+¥ 4.5 billion¥78.0 billion

Operating income+¥ 6.5 billion¥18.0 billion+¥ 1.9 billion¥20.0 billion

Record-high number of transactions, revenue, and operating income
In the consolidated fiscal year under review, the number of transactions recorded record-high for the first timein two years, at 38,144 transactions (+3,022 year-on-year), primarily for existing condominiums. The numberof transactions increased compared with the previous year when the Company practiced self-restraint in sales
activities under the state-of-emergency declarations, and “Step Auctions,” a new service introduced in
September also contributed to the result of the record-high number of transactions.
As a result for this segment, both revenue and profit increased significantly with record-high revenue andoperating income (after reflecting segment changes implemented in the previous fiscal year in past results).
The total number of directly operated offices declined to 256 nationwide as of the end of the fiscal year underreview (down by 13 from the end of the previous fiscal year), due to continuous reorganizations made such as
closing offices that were unprofitable with overlapping sales areas and opening new offices in central Tokyo
specialized in condominium brokerage.

Number of transactions
Transaction value
Value per transaction

Fiscal 2021
38,144¥ 1,453.3 billion¥
38.1 million- 40 -++¥+¥

YoY change
3,022
212.3 billion
2.7 million

(5) Promotion of ESG and contributions to SDGs
The Company has been practicing sustainable management that inherits Sumitomo’s Business Philosophy,
which has continued for 430 years, and we aim to contribute to addressing social issues through our businessactivities, while at the same time maximizing our corporate value. Our major initiatives regarding ESG for the
fiscal year under review are listed below.

Major initiatives in Fiscal 2021 (fiscal year ended March 2022)
E: Environment S: Social
June 2021

July 2021

September 2021

November 2021

December 2021

February 2022

March 2022

May 2022・ Shinjuku Sumitomo Building won the “Award of
Excellence” for the Renovation Category in the
CTBUH Awards 2021.
・ Included in “FTSE4Good Index Series” and“FTSE Blossom Japan Index,” the ESG Indexes.
・ “Step Concert” certified as Mecenat Activity.
・ Held “Art Exhibitions using Temporary Enclosure
for Construction Site.”・ Held “remote disaster prevention drills” to respondto the diversification of work styles
・ Began providing the residential solar power
generation service, “SUMIFU × ENEKARI”(jointly with TEPCO Energy Partner, Inc.).
・ Adopted the energy-saving performance “ZEH-M
Oriented” as the standard specification for newly
built condominiums.
・ Planted “MISIA Trees” in Ariake Garden and held
dog adoption event.
・ Began offering “Sumitomo Realty’s Green Power
Plan,” a separate plan for each individual tenants.
・ Acquired A rank in “MSCI ESG Ratings.”
・ Launched nationwide sales of “high thermal
insulation remodeling plan” by Shinchiku
Sokkurisan.
・ Shinchiku Sokkurisan launched industry-academia
collaboration research to establish anenvironmental evaluation method for therenovation of existing houses.
・ Began PET bottle resource circulation activities(jointly with Suntory Beverage & Food Limited).
・ Recognized in the 2022 Certified Health &Productivity Management Outstanding
Organizations Recognition Program (large
enterprise category).
・ Shinjuku Sumitomo Building won the “Award of
Minister of Land, Infrastructure, Transport andTourism” for Achievement award of Japan
Association for Real Estate Sciences

G: Governance

E

S

E

S

G

S
S
S
E

E
S
E
E

S

G

E

E

E

S

E

S

These initiatives also contribute to the achievement of UN’s Sustainable Development Goals (SDGs).

- 41 -

The renovation of Shinjuku Sumitomo Building and its “Sankaku Hiroba (triangular plaza)” won award at
the CTBUH Awards 2021 and the Minister’s Award of Japan Association for Real Estate Sciences (E, S)
The “Shinjuku Sumitomo Building Renovation Project” became the first project in Japan to win the “Award of
Excellence” at the CTBUH Awards 2021 / Renovation Category held by the Council on Tall Buildings and Urban
Habitat.
Shinjuku Sumitomo Building also won the “Award of Minister of Land, Infrastructure, Transport and Tourism” forthe 28th (Fiscal 2021) Achievement award of Japan Association for Real Estate Sciences.
Began providing the residential solar power generation service, “SUMIFU × ENEKARI” (E)As the first project in the “Decarbonization Lead Project Agreement” with TEPCO Energy Partner, Inc., theCompany began offering “SUMIFU × ENEKARI,” an industry-first service that enables customers to use
electricity even in the event of disaster, through the introduction of residential solar power generation facilities andstorage batteries at “zero initial cost” for newly built detached houses, and the provision of support for the entire
period of residency.
Adopted the energy-saving performance “ZEH-M Oriented” as the standard specification for newly built
condominiums (E)The Company adopted the energy-saving performance “ZEH-M Oriented” as the standard specification for newly
built condominiums, as a decarbonization initiative targeting the supply of newly built condominiums.
At the same time, the Company is also promoting the “green power” at construction sites.
Shinchiku Sokkurisan launched industry-academia collaboration research (E)In collaboration with the University of Tokyo and Musashino University, the Company launched research aimed at
the establishment of environmental evaluation methods for renovation of existing houses, including verifying
reduction of CO2 emissions from skeleton renovations (overall renovations) of wood housing utilizing thefoundations and frame.
Recognized in the 2022 Certified Health & Productivity Management Outstanding Organizations
Recognition Program (large enterprise category) (S)The Company has been recognized in the 2022 Certified Health & Productivity Management Outstanding
Organizations Recognition Program (large enterprise category), which is operated jointly by the Ministry of
Economy, Trade and Industry and the Nippon Kenko Kaigi (Japan Health Council).

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2.

Status of Capital Investments
In the fiscal year under review, the Company made capital investments totaling 187.8 billion yen, primarily inthe development of new office buildings.

3.

Status of Financing
In the fiscal year under review, the Company conducted corporate bond issuances, as shown below, andobtained necessary funds through borrowings from financial institutions, etc. and commercial papers.
Issuing company

Sumitomo Realty &Development Co.,
Ltd.
Sumitomo Realty &Development Co.,
Ltd.

4.

Details of issuance

Date of issue

109th Series of Domestic Unsecured
Corporate Bonds

May 10, 2021

110th Series of Domestic Unsecured
Corporate Bonds

August 5, 2021

Maturity
Fiscal year
ending March
31, 2032
Fiscal year
ending March
31, 2032

Total amountissued¥30.0 billion¥10.0 billion

Status of Assets and Profit and Loss

Item

Fiscal year ended
March 31, 2019

(In million yen, unless otherwise specified)Fiscal year ended
March 31, 2022
Fiscal year ended Fiscal year ended
March 31, 2020
March 31, 2021 (Fiscal year underreview)
939,430
1,013,512
917,472
233,882
234,332
219,244
225,115
220,520
209,949

1,012,198
Revenue from operations
219,389
Operating income
203,227
Ordinary profit
Profit attributable to owners of
130,102150,452
140,997
141,389
parent274.51
317.45297.50298.33
Earnings per share (yen)5,130,118
5,806,040
Total assets
5,317,623
5,673,666
1,202,103
1,634,049
Total net assets
1,294,998
1,503,021
2,536.40
3,447.81
2,732.41
3,171.34
Net assets per share (yen)Notes: 1. Figures have been rounded down to the nearest million yen. Earnings per share and net assets per share havebeen rounded up or down to the nearest second decimal place.
2. Due to the retrospective application of changes to accounting policies, the financial figures indicated for the
fiscal year ended March 31, 2019 are those after the retrospective application.
3. The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020) and relevant ASBJ regulations from the beginning of the current fiscal year, and each figure
for the fiscal year ended March 31, 2022, is the figure after applying the accounting standard and relevant
ASBJ regulations.
5.

Principal Business (as of March 31, 2022)
Business

Leasing
Sales
Construction
Brokerage
Other

Description of main businesses
Leasing/management of office buildings, rental apartments, etc.
Operation/management of hotels, event halls, retail facilities, etc.
Sales of condominium units, detached houses, etc.
Construction/remodeling of detached houses, condominiums, etc.
Brokerage of real estate sales, sales agent of residential properties
Fitness club, restaurant, etc.

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6.

Status of Major Subsidiaries (as of March 31, 2022)
Name

Capital(million yen)

Percentage ofvoting rights

2,970

100.0%

Description of main businesses
Brokerage of real estate sale andSumitomo Real Estate Sales Co., Ltd.

leasing; and sales agent ofresidential properties, etc.

Sumitomo Fudosan Tatemono Service Co., Ltd.

300

100.0%

Property management service, etc.

Sumitomo Fudosan Syscon Co., Ltd.

70

100.0%

Sumitomo Fudosan Villa Fontaine Co., Ltd.

50

100.0%

Sumitomo Fudosan Bellesalle Co., Ltd.

50

100.0%

Sumitomo Fudosan Retail Management Co., Ltd.

50

100.0%

Operation of retail facilities

Sumitomo Fudosan Esforta Co., Ltd.

50

100.0%

Operation of fitness clubs

Interior designing and sales,
display suite construction
Operation of business hotels andresort hotels
Leasing of event halls, conference
rooms, etc.

Note: On March 1, 2022, the Company absorbed subsidiary Sumitomo Fudosan Finance Co., Ltd.
7.

Principal Business Locations (as of March 31, 2022)(1)

Sumitomo Realty & Development Co., Ltd.
Head Office: 4-1, Nishi-Shinjuku 2-chome, Shinjuku-ku, Tokyo
Branches:
Kansai Branch (Osaka City), Hokkaido Branch (Sapporo City), Tohoku Branch (SendaiCity), Tokai Branch (Nagoya City), Kyushu Branch (Fukuoka City)(2)

Major subsidiaries
Name

8.

Head Office

Sumitomo Real Estate Sales Co., Ltd.

Shinjuku-ku, Tokyo

Sumitomo Fudosan Tatemono Service Co., Ltd.

Shinjuku-ku, Tokyo

Sumitomo Fudosan Syscon Co., Ltd.

Shinjuku-ku, Tokyo

Sumitomo Fudosan Villa Fontaine Co., Ltd.

Shinjuku-ku, Tokyo

Sumitomo Fudosan Bellesalle Co., Ltd.

Shinjuku-ku, Tokyo

Sumitomo Fudosan Retail Management Co., Ltd.

Shinjuku-ku, Tokyo

Sumitomo Fudosan Esforta Co., Ltd.

Shinjuku-ku, Tokyo

Status of Employees (as of March 31, 2022)
Number of Consolidated Employees
Change from Previous Fiscal Year
13,040(490)
Note: The number of employees of the Company is 5,732 (down 145 from the end of the previous fiscal year).

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II. Matters regarding Shares of the Company (as of March 31, 2022)
1.

Number of Shares
Total number of authorized shares:

1,900,000,000

Total number of issued shares:

473,938,956(excluding 2,147,022 treasury shares)2.

Number of Shareholders

12,666(of which 11,662 holding share unit)

3.

Major Shareholders
Number of shares Percentage of shares
held
held
(Thousands of shares)
(%)

Name
The Master Trust Bank of Japan, Ltd. (Trust account)

76,750

16.19

Custody Bank of Japan, Ltd. (Trust account)

24,883

5.25

Sumitomo Mitsui Banking Corporation

11,9902.53

Custody Bank of Japan, Ltd. (Trust account 4)

11,073

2.34

Taisei Corporation

9,550

2.02

Daikin Industries, Ltd.

8,367

1.77

Obayashi Corporation

8,090

1.71

Shimizu Corporation

7,500

1.58

Maeda Corporation

7,244

1.53

Takenaka Corporation

7,100

1.50

Notes: 1. Numbers of shares have been rounded down to the nearest thousand shares.
2. Percentage of shares held has been calculated by excluding treasury stock.

- 45 -

III. Corporate Officers
1.

Names and Other Details of Directors and Corporate Auditors (as of March 31, 2022)
Name

Position

Koji Ito

Director - Chairman of the
Board
Executive Managing
Director and President
Executive Managing
Director and Deputy
President
Executive Managing
Director and Deputy
President
Director, Senior Managing
Executive Officer
Director, Senior Managing
Executive Officer
Director, Senior Managing
Executive Officer
Director, Senior Managing
Executive Officer

Yozo Izuhara

Director

Nobumasa Kemori

Director

Kenichi Onodera
Kojun Nishima
Nobuaki Takemura
Masato Kobayashi
Hiroshi Kato
Hisatoshi Katayama
Yoshiyuki Odai

Toshikazu Tanaka

Full-time Corporate
AuditorFull-time Corporate
AuditorYoshiyuki Norihisa

Corporate Auditor

Chiyono Terada

Corporate Auditor

Yoshifumi Nakamura

Notes: 1.

Responsibilities and significant concurrent positions

Head of Office Leasing Business Division
Head of Management Division
Head of Condominium Sales Business Division
Head of Remodeling Business Division
Head of Commercial Property Development Division
Head of Corporate Planning Division
Executive Managing Director and President of Sumitomo Real
Estate Sales Co., Ltd.

Outside Director of NAGASE & CO., LTD. Outside Directorof JFE Holdings, Inc.

Chairperson Emeritus of Art Moving Company Co., Ltd.

Messrs. Yozo Izuhara and Nobumasa Kemori are Outside Directors as provided for in the Companies Act.

2.
3.

Mr. Yoshiyuki Norihisa and Ms. Chiyono Terada are Outside Corporate Auditors as provided for in the Companies Act.
There are no special conflict of interest between the Company and any of the companies at which the Outside Directors

4.

and Corporate Auditors hold significant concurrent positions.
The Company has registered Messrs. Yozo Izuhara, Nobumasa Kemori, and Yoshiyuki Norihisa and Ms. Chiyono Terada5.

as independent officers with Tokyo Stock Exchange, Inc.
With the introduction of an executive officer system, Mr. Ryuzo Amemiya has been elected as a Senior Managing
Executive Officer, Messrs. Ichiro Wada and Hiroyuki Hashizume have been elected as Managing Executive Officers, andMessrs. Makoto Nakano, Takuji Iba, Kenichi Kawai, Dai Miyamoto, Tokiyuki Okada, and Takeo Kojima have been

6.

elected as Executive Officers.
The Company has concluded a directors and officers liability insurance policy with Directors and Corporate Auditors as
the insured, as provided for in Article 430-3, paragraph 1 of the Companies Act. Excluding cases that fall under the
grounds for exemption set forth in the insurance agreement, this agreement covers any damages, etc., for which Directors
and Corporate Auditors are liable in relation to the execution of their duties, as well as those that arise as a result of claims
related to the pursuit of such liability, and the Company bears the full amount of any insurance premiums associated withthis insurance agreement.

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7.

There were changes in the positions and responsibilities of Directors on April 1, 2022, as follows.
Name

Yoshiyuki Odai

Nobuaki Takemura

Hiroshi Kato
Koji Ito2.

Position

Responsibilities

Executive Managing Director
and Deputy President
Director, Senior Managing
Executive Officer

Head of Corporate Planning Division
Group Compliance Supervisor
Executive Managing Director and President of Sumitomo Real
Estate Sales Co., Ltd.

Director, Senior Managing
Executive Officer

Head of Remodeling Business Division and in charge of Custom
Home Construction BusinessDirector, Senior Managing

Director - Chairman of the Board of Sumitomo Fudosan Tatemono

Executive Officer

Service Co., Ltd.

Officers’ Compensation, etc.

(1) Resolutions of the General Meeting of Shareholders concerning officers’ compensation, etc.
At the Ordinary General Meeting of Shareholders held on June 29, 2004, a resolution was passed to set the total
annual compensation for directors at just 1% of consolidated ordinary profit for the previous consolidated fiscal
year. The number of directors as of the conclusion of that General Meeting of Shareholders was 12.
On April 1, 2020, the Company introduced an executive officer system, which enables the appointment ofofficers comparable to directors necessary for business expansion, with the aim of the further broadening thescope of business and enhancing employee morale. Accordingly, with the agreement of all directors, thecompensation of executive officers is also to be paid from the aforementioned total amount of compensation for
directors. (Hereinafter, directors and executive officers are collectively referred to as “directors, etc.”)
The monetary compensation for corporate auditors is determined to be within 6.5 million yen per month, in
accordance with the resolution made at the Ordinary General Meeting of Shareholders held on June 29, 1999.
The number of corporate auditors as of the conclusion of that General Meeting of Shareholders was five.
(2) Policies related to the determination of the content of compensation, etc., for individual directors, etc.,
and authorization for the determination thereof
The policy for the determination of the content of compensation, etc. for individual directors, etc. (hereinafterreferred to as the “determination policy”) is established by resolution of the Board of Directors. Under thedetermination policy, compensation for each director, etc., consists only of fixed compensation, and the specificcontent (payment amount, timing of payment, payment method, etc.) of the compensation for individual
directors is determined by agreement between the Chairman of the Board and Representative Directors, basedon a resolution of authorization by the Board of Directors. When making this agreement, each director’s duties
and level of contribution to performance are considered.
Whereas the total annual amount of directors’ compensation is set at 1% of consolidated ordinary profit for theprevious consolidated fiscal year, the full amount is not paid to the individual directors, etc., in the current fiscal
year, and part of directors’ compensation is retained without fixing the amount per director, etc., for future use
as retirement benefits for directors, etc., and supplementation of declines in the compensation of directors, etc.,
due to downturns in business performance, etc.
With regard to compensation for directors, etc., in the fiscal year under review, based on authority resolved by
the Board of Directors at a meeting held on June 29, 2021, the specific content (payment amount, timing of
payment, payment method, etc.) of the compensation for individual directors was determined by agreement
between Mr. Kenichi Onodera (Director - Chairman of the Board/Chairman of the Board), Mr. Kojun Nishima(Executive Managing Director and President/Head of Office Leasing Business Division), Mr. Nobuaki
Takemura (Executive Managing Director and Deputy President/Head of Management Division), and Mr. Masato
Kobayashi (Executive Managing Director and Deputy President/Head of Condominium Sales Business
Division).
These four directors are, respectively, the Chairman of the Board, Executive Managing Director and President,
Executive Managing Director and Deputy President in charge of the Management Division, and Executive
Managing Director and Deputy President in charge of the Business Division, and as these persons received this- 47 -

authorization based on the judgment that they would be able to agree upon and comprehensively examine andappropriately assess the duties and contributions to performance of each director from their respective
viewpoints, the Board of Directors has judged that the content of the compensation of individual directors, etc.,
for the fiscal year under review is in line with the determination policy.
(3) Total amount and other details of compensation, etc., for officers, etc.
Of officer compensation, etc., in the fiscal year under review, amount paid per position in the fiscal year underreview
Position

Amount paid
(million yen)Amount paid per type (million yen)
Performance-basedNon-monetary
Basic compensation compensation, etc. compensation, etc.

Number of
eligible
officers(persons)

Directors
1,111
16
1,111(Note 1)(of which,
(278)
(6)
(278)
Executive Officers––(Note 2))(of which, Outside
(46)
(2)
(46)
Directors)
Corporate Auditor
56
56
4(of which, Outside––
Corporate
(26)
(26)
(2)
Auditors)
Total
1,167
1,167
20
(of which, Outside
–
–
(72)
(72)
(4)
Officers)
Notes: 1. Whereas the total annual amount of directors’ compensation for the fiscal year under review is fixed at 2,125
million yen, the full amount has not been paid to the individual directors, etc., in the fiscal year under review,and 1,014 million yen, the difference with the amount paid as stated above, has been retained without being
paid, to prepare for use as retirement benefits for directors, etc., and supplementation of declines in thecompensation of directors, etc., due to future downturns in business performance, etc.
2. The amount paid to directors, etc., and the number of directors, etc., includes six executive officers who do
not serve concurrently as directors.
3. The total amount of compensation, etc., for corporate auditors is the amount paid as stated above.

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3.

Matters regarding Outside Officers(1) The status of main activities in the fiscal year under review
Position

Name

Director

Yozo Izuhara

Director

Nobumasa Kemori

Corporate
AuditorYoshiyuki Norihisa

Corporate
AuditorChiyono Terada

Main activities
Mr. Izuhara attended all meetings of the Board of Directors held during the
fiscal year under review and expressed his opinions necessary for the
deliberation of agenda, etc. as appropriate. He also provided advice from an
independent standpoint in terms of the supervision of the Group’s management
and the medium- to long-term improvement of its corporate value not only in
the Board of Directors meetings but also through such forums as briefings foroutside directors and meetings of the Committee of Outside Directors andAuditors.
Mr. Kemori attended all meetings of the Board of Directors held during the
fiscal year under review and expressed his opinions necessary for the
deliberation of agenda, etc. as appropriate. He also provided advice from an
independent standpoint in terms of the supervision of the Group’s management
and the medium- to long-term improvement of its corporate value not only in
the Board of Directors meetings but also through such forums as briefings foroutside directors and meetings of the Committee of Outside Directors andAuditors.
Mr. Norihisa attended all meetings of the Board of Directors, the Board of
Corporate Auditors, and the Committee of Outside Directors and Auditors held
during the fiscal year under review, and expressed his opinions necessary for the
deliberation of agenda, etc. as appropriate.
Ms. Terada attended all except one of the meetings of the Board of Directors
and all meetings of the Board of Corporate Auditors and Committee of Outside
Directors and Auditors held during the fiscal year under review, and expressed
her opinions necessary for the deliberation of agenda, etc. as appropriate.

(2) Overview of limited liability agreement
The Company enters into agreements with all outside officers that limit their liability toward the Company.
Under the agreements, their liabilities are limited to the minimum limit stipulated by laws and regulations.

- 49 -

IV. Basic Policy on the Company’s Control
Regarding the basic policy on the Company’s control and initiatives to ensure it, and the policy on measures to alarge-scale purchase of shares of the Company and the Board’s stance to it, they were adopted as “The Policy on
Large-Scale Purchase of Shares of the Company (Takeover Defense Measures)” based on the decision of themeeting of its Board of Directors dated May 17, 2007. Subsequently, it was continued or renewed upon receiving
approval from shareholders at each of the shareholders’ meetings of the 74th fiscal year dated June 28, 2007, the77th fiscal year dated June 29, 2010, the 80th fiscal year dated June 27, 2013, the 83rd fiscal year dated June 29,
2016, and the 86th fiscal year dated June 27, 2019. The term of the Policy will expire upon the conclusion of theshareholders’ meeting of the 89th fiscal year scheduled to be held in June 2022.
The Policy sets out rules on Large-Scale Purchases (hereinafter referred to as “Large-Scale Purchase Rules”) andrequests the Large-Scale Purchaser to comply with the Large-Scale Purchase Rules. The Large-Scale Purchase
Rules state that the Large-Scale Purchaser provides the Board of Directors of the Company necessary and sufficient
information regarding the Large-Scale Purchase in advance, and only commence the Large-Scale Purchase after acertain period of evaluation by the Board of Directors of the Company has elapsed. The Board of Directors shalltake countermeasures that it deems necessary if the Large-Scale Purchaser does not comply with the Large-Scale
Purchase Rules, or even though the Large- Scale Purchaser complies with the Large-Scale Purchase Rules, if it isclear that the Large-Scale Purchase will cause unrecoverable damages to the Company or if the Large-Scale
Purchase significantly damages the corporate value and common interests of shareholders. The Board of Directorsof the Company shall consult with a Special Committee consisting of outside directors, outside corporate auditors,
persons with management experience, lawyers, certified public accountants, etc., and shall receive therecommendations of the Committee when taking decisions as to whether or not the Large-Scale Purchaser complies
with the Large-Scale Purchase Rules, whether or not it is clear that the Large-Scale Purchase will cause
unrecoverable damages to the Company, whether or not the Large-Scale Purchase will significantly damage thecorporate value and common interests of shareholders, and whether or not countermeasures should be taken. The
Board of Directors of the Company shall take the Special Committee’s recommendations into the fullest account.
As stated above, the Policy stipulates rules to secure the necessary information and time for shareholders todeliberate on the Large-Scale Purchase, as well as countermeasures in such cases as the Large-Scale Purchaser does
not comply with the Large-Scale Purchase Rules or if it is clear that the Large-Scale Purchase will cause
unrecoverable damages to the Company. The purpose of the Policy is not to maintain the status of the Company’s
officers but to contribute to the Company’s corporate value and the common interests of its shareholders.

- 50 -