Corporate Governance
Sun Frontier Fudousan Co., Ltd.
Last Updated: June 26, 2024
Sun Frontier Fudousan Co., Ltd.
Seiichi Saito, President Representative Director
Contact: Takeshi Hirahara, General Manager of Corporate Planning Division
Tel: 03-5521-1551
Securities Code: 8934
https://www.sunfrt.co.jp/

The status of the Company's corporate governance is as follows.
I. Basic Views on Corporate Governance and Other Basic Information, including Capital Structure,

Corporate Profile, etc.
1. Basic Views
The Group’s basic policy is that all officers and employees should always do "the right thing as a human being" based onhigh ethical standards in their work. Based on this, we believe it is important for management to contribute to society
through business activities and to pursue profit fairly, and to build strong trust with stakeholders like shareholders,customers, employees, business partners, the environment, and local communities by continuously increasing corporate
value over the long term.
The company strengthens its corporate governance by（１） Improving transparency and ensuring fairness.
（２） Making quick decisions and executing business swiftly.
（３） Being thoroughly accountable.
（４） Disclosing information in a timely and appropriate manner.
（５） Enhancing compliance awareness.
At the 23rd Annual General Meeting of Shareholders Meeting held on June 21, 2022, The Company got approval to change
its Articles of Incorporation and moved from having an Audit & Supervisory Board to having an Audit & Supervisory
Committee. By adopting this corporate governance system, Audit & Supervisory Committee members, who are in chargeof auditing and supervising the directors' duties, will become members of the Board of Directors. This will strengthen the
Board's supervisory function and further improve corporate governance. In addition, by allowing the Board of Directors
to delegate many business decisions to directors, we aim to speed up decision-making. At the same time, we aim to achievesustainable growth and increase corporate value over the medium to long term by focusing on important management
decisions, such as management plans, made by the Board of Directors.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]Supplementary Principle 4-3 (ii) and Supplementary Principle 4-3 (iii)
Roles and Responsibilities of Board of Directors (3)Since appointing and dismissing the Representative Director is the most important strategic decision, the Board of Directors
chooses someone with an excellent personality, good insight, respect from others, and a lot of experience. They do thisafter considering the objectivity, timeliness, and transparency of the appointment procedures and having sufficient
discussions within the Board of Directors.
Supplementary Principle 4-10 (i)Voluntary Nomination and Compensation Committee
As a voluntary advisory body to the Board of Directors, the Company has created a Nomination and Compensation
Committee to improve the objectivity and transparency of the procedures for appointing, dismissing, and compensating
officers. This committee consists of Chairman Representative Director, President Representative Director, and two or moreOutside Directors. For details, please refer to “II 1. Organizational Composition and Operation [Voluntary Committee]” inthis report. In the future, we will consider having Outside Directors make up the majority of the committee members.

[Disclosure Based on the Principles of the Corporate Governance Code]Principle 1-4 Cross-shareholdings
As a basic policy, the Group does not hold cross-shareholdings unless they are very important.
A holding is considered very important if it is judged to help maintain and improve the Company's corporate value.
If the Group holds cross-shareholdings, it will use its voting rights after carefully considering the votes in favor and thevotes against. It will check if the issuing company has a good governance system and makes decisions that will increase
corporate value in the medium to long term, all from the perspective of improving the Group's corporate value.
If the Group decides it cannot approve the proposal, it may consider the need to sell the shares.
Principle 1-7 Related Party Transactions
To protect shareholders' interests, the Group works to prevent its officers and employees from engaging in transactions
that go against the interests of the Group and its shareholders.
The directors of the Company should not pursue their own interests or the interests of others over the Company's interests.
Even if they do not mean to, supervisors must not engage in conflict of interest transactions or competitive transactions
without the Board of Directors' approval. For transactions between related parties, the involved officers will not be counted
in the quorum as they are specially interested parties, when the Board of Directors makes the decision. The Company will
check afterwards to ensure these transactions were done properly and report this to the Board of Directors.
The Company also conducts quarterly investigations of all officers, including those of the Company and its subsidiaries,
to check if there are any transactions between related parties.
Supplementary Principle 2-4 (i)Ensuring Diversity in the Company, including the Promotion of Active Participation of Women
The Group assigns employees to managerial positions based on their performance and skills, regardless of gender,
nationality, or whether they were hired mid-career. The Company aims to have 12% or more female managers by April
2025. As of the end of March 2024, 10.3% of the Company's managers (section managers and above) were women. For
other indices related to diversity, please refer to “ ESG data (Social)” at the page of 36 in our sustainability report 2023
(https://www.sunfrt.co.jp/en/pdf/sustainability_report_2023i_en.pdf) on the Company’s website.
In addition, “Human Resource Development Policy” and “Internal Environment Development Policy” is at the page of 24
in our sustainability report (https://www.sunfrt.co.jp/en/pdf/sustainability_report_2023i_en.pdf) on the Company’s
website.
Principle 2-6 Function as an asset owner of corporate pension
The Company does not have a corporate pension system. If the Company decides to adopt one, it will make efforts inpersonnel and management so that the pension system can work well as an asset owner. This is because managing thepension fund will impact the stable asset growth of employees and the financial condition of the Company.
Principle 3-1 Enhancement of Information Disclosure<Company objectives (Credo, mission, etc.) and management plans>
The Group's Company policy, Credo, mission and management plans are available on the Company's website.
・ Sun Frontier Philosophy https://www.sunfrt.co.jp/en/company/concept_comp.html
・ Medium-term management plan https://www.sunfrt.co.jp/en/ir_info/ir_prospects/
・ Sustainability https://www.sunfrt.co.jp/en/sustainability/<Basic views and basic policy on Corporate Governance>
Please refer to “I 1. Basic Views” of this report for the Group's basic views on corporate governance.
<Policies and procedures in determining the remuneration of directors who are not Audit & Supervisory Committee
members>
For directors who are not Audit & Supervisory Committee members, their pay and stock remuneration, which include a
performance-linked part and a fixed part based on rank, are determined for internal directors. For outside directors, theappropriate fixed pay is set to ensure their independence. This is decided by the Board of Directors within the framework
approved by the General Meeting of Shareholders. The Board made this decision after consulting the Nomination andCompensation Committee, which includes Chairman Representative Director, President-Representative Director, and two
or more outside directors.
<Policies and Procedures for Nominating Candidates for Directors>
In selecting a director, the Group assumes the following requirements are met, in addition to satisfying the requirements
in laws and regulations and the Articles of Incorporation, not having reasons for disqualification in the Regulations for
Officers, and not being involved with anti-social forces now or in the past:（１） Empathy with the Company Policy, Management Principle, and Corporate Philosophy of the Group, and a desire tocontribute to society's progress and development through the Group's business management.
（２） Excellent personality, knowledge, and insight, with a high sense of law-abiding spirit and ethics.
（３） Objective judgment capabilities, insight, and foresight.
In addition to the preceding paragraph, the Company requires the following qualifications in selecting outside directors.
（１） Has a high level of insight, lots of practical experience, or has played a leading role in fields like corporate
management, internal control, legal compliance, finance/accounting, legal profession, administration, crisis
management, or education.
（２） Can understand the Group as a whole, understands key issues and risks, and is expected to contribute to open, active,
and constructive discussions in the Board of Directors.
（３） Has no direct interests with the Representative Director and directors and is independent from the Company's generalshareholders without risking conflicts of interest with them.
In addition, the Company has established the following requirements according to each position and role:
Outside directors should provide advice and support for the Company's sustainable growth and offer objective
management supervision and judgment. They should do this from a practical viewpoint based on their extensive
experience in corporate management and specialized fields.
（２） Full-time directors should be familiar with the Group’s industry trends, related regulations, and the Group’s businessmodel. They should have abundant practical experience in their respective specialized fields. They haveorganizational management capabilities from a company-wide perspective and are able to execute tasks effectively.
（３） Outside directors who are Audit & Supervisory Committee members should be able to express their opinions on
audits objectively from a neutral standpoint because they are appointed to enhance the neutrality and independenceof the audit system across the company.
（４） As full-time Audit & Supervisory Committee members, directors should be well-versed in the organization, business,and business processes of the Company. They should appropriately collect information from within the Company
and be capable of conducting highly effective audits.
（１）

The Board of Directors discusses proposals to be submitted to the annual general meeting of shareholders based on theabove requirements and appoints suitable candidates for directors.
Additionally, if individual directors no longer meet the requirements or are likely to fail to meet them, the Board of
Directors will discuss this in light of the requirements and will not select them as candidates for reappointment at the endof their terms.
<Explanation of Individual Election and Nominations>
The reasons for choosing director candidates are disclosed in the notice for the annual general meeting of shareholders.
Supplementary Principle 3-1 (iii) Initiatives for Sustainability
The Group established the “Sustainability Committee” as an advisory body to the President Representative Director. Its
aim is to help create a sustainable society and increase corporate value over the medium to long term. This is done bypromoting activities that solve social issues, based on our Management Principle and Corporate Philosophy. The
Sustainability Committee meets four times a year regularly and as needed. To support our sustainability activities, we
disclose information based on the TCFD (Task Force on Climate-related Financial Disclosures) recommendations. Pleaserefer to “Sustainability” https://www.sunfrt.co.jp/en/sustainability/ on the Company's website for information on the statusof our sustainability activities.

Supplementary Principle 4-1 (i) Scope of delegation to management
To further strengthen the Board of Directors' supervisory function and speed up management decision-making, we changed
to a Company with an Audit & Supervisory Board Committee in June 2022. Except for matters specified by laws andregulations to be decided only by the Board of Directors and important matters specified by the Board of Directors
Regulations, the Board delegates important business execution decisions to directors. This allows the Board to focus on
making key business policy decisions and supervising business execution.
Principle 4-9 Independence Standards for an Independent Outside Director
To ensure the independence of our independent outside directors in practice, our company has established criteria for
determining the independence of outside directors. If an outside director is judged to meet none of the criteria for
independence, we consider that the outside director has independence from our company and there is no risk of conflict ofinterest with our general shareholders. Regarding our " Independence Standards for an Independent Outside Director," itis disclosed on our company's website, so please refer to the following website.
https://www.sunfrt.co.jp/en/sustainability/esg_governance_independence_criteria.html
Supplementary Principle 4-11 (i)Preconditions for ensuring the effectiveness of the Board of Directors and Audit & Supervisory Committee
When nominating candidates for directors, we widely select candidates from both inside and outside the company anddetermine candidates at the Board of Directors who have excellent character, insight, and high managerial abilities. In
particular, for independent outside directors, we nominate individuals who have extensive experience and knowledge intheir respective fields and can fulfill their roles and responsibilities from a professional and objective perspective, such asproviding advice for enhancing long-term corporate value and supervising management.
For executive directors, we use selection criteria that include being well-versed in industry trends and related regulations
surrounding the Company Group, understanding the business model of the Company Group, and having extensive practicalexperience in their respective areas of expertise.
Director's expertise and experience (skill matrix) are disclosed on the Company's website.
https://www.sunfrt.co.jp/en/sustainability/esg_governance.html
For policies and procedures regarding the election of directors, please refer to the above (Principle 3-1: Enhancement ofInformation Disclosure).
Supplementary Principle 4-11 (ii) Concurrent Positions of Directors
The status of concurrent positions of officers is disclosed in the notice of the Annual General Meeting of Shareholders.
Supplementary Principle 4-11 (iii) Board of Directors Effectiveness Evaluation
To enhance the function of the Board of Directors, our company regularly (once a year) conducts analysis and evaluationof the effectiveness of the Board of Directors. Specifically, we conduct surveys targeting directors and Audit & Supervisory
Committee members on general matters related to the Board, including its composition, operation methods, deliberation
status, and performance evaluations of directors and Audit & Supervisory Committee members. The evaluation of theanalysis results is then conducted by the Board of Directors. To elicit frank opinions from the survey participants, thecollection, aggregation, and analysis of survey results are outsourced to external organizations, and the surveys are
conducted anonymously.
As a result of this year's survey, we have determined that the effectiveness of the Board of Directors is generally ensured.
Regarding the issues identified last year, such as "setting KPIs that enable the company to achieve sustainable growth" and"establishing a system for regularly reviewing the business portfolio of the entire group considering sustainableprofitability and capital costs," we observed trends toward improvement, although there is still room for progress. On theother hand, new mid- to long-term issues were raised, including questions about "succession planning for the CEO andother key executives" and "establishing an organizational structure, training and securing talent, budget allocation, project
management, and revising personnel evaluation systems to promote DX (Digital Transformation). Moving forward, we
will strive to improve corporate governance by addressing the issues identified in this evaluation, further promoting
management aimed at enhancing sustainable corporate value.

Supplementary Principle 4-14 (ii) Director training policies
Although the Company has not established a clear "Policy for Training for Directors," it has stated in its Management
Principle that it aims to “Co-create a sustainable society by contributing to the evolution and the development of humansociety.” Because of this, the Company provides plenty of training opportunities for officers and employees to gain theknowledge they need to fulfill their roles and responsibilities and covers the costs for them. The Company also holds
seminars and participates in external seminars at the request of each officer.
Principle 5-1 Policy for Constructive Dialogue with Shareholders
The Group has the Corporate Planning Division as the department in charge of IR (Investor Relations). For shareholders
and investors, the Company holds financial results briefings once every quarter and also holds small meetings.
The Company has established the following policy for constructive dialogue with shareholders to support sustainablegrowth and improve corporate value over the medium to long term.
（１） We will disclose information to all stakeholders, including shareholders and investors, in a fair and timely manner,and emphasize direct communication by the Representative Director.
（２） The Corporate Planning Division will serve as the IR contact point and promote coordination with related
departments.
（３） We will provide various means of dialogue, including financial results briefings, briefings for individual investors,
field tours, and small meetings.
（４） The Corporate Planning Division will report the status of the dialogue to the Representative Director and, if necessary,to the Board of Directors.
（５） The Company will establish rules to prevent insider trading and make them known to all employees.
Action to Implement Management that is Conscious of Cost of Capital and Stock PriceOn December 20, 2023 we disclosed “Action to Implement Management that is Conscious of Cost of Capital and Stock
Price”. See the outline of the disclosure as below.
https://www.sunfrt.co.jp/en/pdf/20231220_en.pdf
Specific IR activities are disclosed in the IR presentation published for each quarter. Please refer to it at the link below.
https://www.sunfrt.co.jp/en/ir_info/

2. Capital Structure
Foreign Shareholding Ratio

From 10% to less than 20%[Status of Major Shareholders]Name/Company Name
HOUON Co.,Ltd

Number of Shares Owned
18,507,500

Percentage (%)
38.02

3,524,500
2,478,396
2,037,100
892,400

7.24
5.09
4.18
1.83

477,700
416,500
416,000
374,851
354,057

0.98
0.86
0.85
0.77
0.73

The Master Trust Bank of Japan, Ltd. (Trust Account)
Tomoaki HORIGUCHI
Custody Bank of Japan, Ltd. (Trust Account)
THE BANK OF NEW YORK MELLON 140044
DFA INTL SMALL CAP VALUE PORTFOLIO
Keiko Horiguchi
Sun Frontier Employee Stock Ownership Plan
JP Morgan Securities Co., Ltd.
SSBTC CLIENT OMNIBUS ACCOUNT
Controlling Shareholder (except for
Parent Company)---

Parent Company

NoneSupplementary Explanation
The status of major shareholders is as of March 31, 2024. In addition to the above, the Company holds 74,908 treasury
shares.

3. Company Attributes
Listed Stock Market and Market
SectionTokyo Prime

Fiscal Year-End

MarchType of Business

Real Estate

Number of Employees(consolidated) as of the End of thePrevious Fiscal Year

more than 1,000

Sales (consolidated) as of the End of
the Previous Fiscal Year

From JPY10 billion to less than JPY100 billion

Number of Consolidated
Subsidiaries as of the End of thePrevious Fiscal Year

From 10 to less than 50

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder——

5. Other Special Circumstances which may have Material Impact on Corporate Governance——

II. Business Management Organization and Other Corporate Governance Systems regarding Decisionmaking, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Organization Form

Company with Audit & Supervisory Committee[Directors]
Maximum Number of Directors
Stipulated in Articles ofIncorporation

14 people

Term of Office Stipulated in Articles
of Incorporation

1 yearChairperson of the Board

President

Number of Directors

11 people

Status of appointing Outside Director

Appointed

Number of Outside Directors

4 people

Number of Outside Directors
designated as independent officers

4 peopleOutside Directors’ Relationship with the Company (1)NameAttribute

Relationship with the Company *
a

b

c

d

e

f

g

h

Keiichi Asai

From another company

Kouichi Ishimizu

From another company△

Kazutaka Okubo

CPA〇

Yukiko Edahiro

Lawyerijk* Categories for “Relationship with the Company”* “○” when the director presently falls or has recently fallen under the category.
“△” when the director fell under the category in the past
* “●” when a close relative of the director presently falls or has recently fallen under the category.
“▲” when a close relative of the director fell under the category in the pasta. Executive of the listed company or its subsidiaries
b. Non-executive director or executive director of a parent company of the listed company
c. Executive of a fellow subsidiary company of the listed company
d. A party whose major client or supplier is the listed company or an executive thereof
e. Major client or supplier of the listed company or an executive thereof
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property
from the listed company besides compensation as a director/Audit & Supervisory Board member
g. Major shareholder of the listed company (or an executive of the said major shareholder if the shareholder is a legal
entity)h. Executive of a client or supplier company of the listed company (which does not correspond to any of d, e, or f) (thedirector himself/herself only)
i. Executive of a company, between which and the listed company outside directors/Audit & Supervisory Board member
are mutually appointed (the director himself/herself only)
j. Executive of a company or organization that receives a donation from the listed company (the director himself/herself
only)
k. Others
Outside Directors’ Relationship with the Company (2)Name

Keiichi
Asai

Audit &
Supervisory
Committee
memberDesignation
SupplementaryasExplanation of
Independent
the RelationshipDirector--〇

Reasons of Appointment

After joining Mitsubishi Corporation, Mr.
Keiichi Asai has worked in various divisions of
the oil business, including oil sales, supply anddemand, and refining. He has been involved ininternational business in the energy sector forthe most part, with assignments in the UnitedStates and India. He was appointed Vice
President Director of Lithium Energy Japan
Co., Ltd. in 2013 and President Representative
Director of KH Neochem Co., Ltd. in 2014,
and engaged in corporate management ingeneral, and has abundant knowledge andexperience. From his wealth of knowledge andexperience, the Company has determined that
he can be expected to supervise the Company's
management and appropriately perform his
duties. In addition, there are no attributes thatwould raise questions about his independence
from the Company. Therefore, the Company
has judged that there is no risk of conflict ofinterest with general shareholders and has
nominated him as an Independent Outside
Director.
KouichiIshimizu

Kazutaka
Okubo

〇

〇

Mr. Koichi Ishimizu
served as a Senior
Managing Officer of
Shimizu Corporation, abusiness partner of theCompany, until March
2023. However, in lightof the details of thetransactions, theCompany has determinedthat this does not affecthis independence. The
ratio of such transactions
to the total amount ofGroup transactions in themost recent fiscal year isless than 2%.

〇

Mr. Kazutaka Okubo
serves as President
Representative Directorof SS Dnaform, abusiness partner of theCompany. However, inlight of the details of thetransactions, theCompany has determinedthat this does not affecthis independence. There
were no such transactionsin the most recent fiscal
year.

Since joining Shimizu Corporation, Mr. Koichi
Ishimizu has consistently been involved inconstruction sites. He oversaw building
construction management, placing orders forconstruction work, and everything from thestart of construction to completion. He also has
experience in corporate management, having
served as Managing Officer and Senior
Managing Officer. The Company has
determined that he can be expected to provide
supervision and advice to the Group based on
his abundant knowledge and experience in thefield and management. In addition, there are no
attributes that would raise questions about his
independence from the Company. Therefore,
the Company has judged that there is no risk of
conflict of interest with general shareholders
and has nominated him as an Independent
Outside Director.
Mr. Kazutaka Okubo has extensive knowledge
and experience in a wide range of fields,
including corporate compliance and corporatesocial responsibility, in addition to being
familiar with corporate governance andfinance from his auditing experience at a largesized audit firm. The Company has determinedthat he can be expected to strengthen corporate
governance and audit and supervise
management
towardthesustainableimprovement of the Company's corporate
value based on his abundant knowledge andexperience. In addition, there are no attributes
that would raise questions about his
independence from the Company. Therefore,
the Company has judged that there is no risk of
conflict of interest with general shareholders
and has nominated him as an Independent
Outside Director who is an Audit andSupervisory Committee member.

Yukiko
Edahiro〇〇---Ms. Yukiko Edahiro has specialized
knowledge and extensive experience incorporate legal affairs as an attorney, mainly inthe fields of real estate and inheritance-related
matters. The Company has determined that she
can be expected to utilize her expertise instrengthening the governance of the Group andauditing and supervising the execution ofbusiness. We also expect objective and expert
advice in promoting the activities of diverse
human resources, including women andforeign nationals. In addition, there are no
attributes that would raise questions about her
independence from the Company. Therefore,
the Company has judged that there is no risk of
conflict of interest with general shareholders
and has nominated her as an Independent
Outside Director who is an Audit andSupervisory Committee member.

Audit & Supervisory Committee
Composition of Members and Attributes of Chairperson
All Committee
members
Audit &
Supervisory
Committee

3 people

Whether there is a director or an
employee who is to assist the dutiesof the Audit & Supervisory
Committee

Full-timemember1 person

Inside Director

1 person

OutsideDirectors
2 people

Chairperson

Inside Director

Present

Matters related to the independency of the director and employees from the director in which the execution of businessis carried out
If the Audit & Supervisory Committee asks for help from employees, employees will be assigned to help them. The
assistant for the Audit & Supervisory Committee must have enough knowledge of accounting or law and will follow the
instructions of the Audit & Supervisory Committee.
Coordination Situation of Audit & Supervisory Committee, Accounting Auditor and Internal Audit Divisions
The Internal Audit Office follows the Internal Audit Plan to check business operations, effectiveness, accuracy, andcompliance. It regularly reports the audit results to President Representative Director, the Audit & Supervisory Committee,
and sometimes the Board of Directors. The Internal Audit Office also explains internal controls, evaluates them, and gives
advice for business improvement and proper management. The Internal Audit Office, Audit & Supervisory Committee,
and Accounting Auditor work closely together. The Audit & Supervisory Committee and Accounting Auditor have a system
to understand the internal audit situation quickly and share information to coordinate their audits.

[Voluntary Committee]
Voluntary Establishment ofCommittee(s) Corresponding toNomination Committee orRemuneration Committee

Established

Committee’s Name, Composition, and Attributes of Chairperson
Committee’s
Name

All
Full-time Inside
Outside Outside
Committee
members Directors Directors Experts
members

Other

Chairperson

Committee
Corresponding
to Nomination
Committee

Nomination andCompensation
4 peopleCommittee

0 people2 people2 people0 people 0 people

InsideDirector

Committee
Corresponding
toRemuneration
Committee

Nomination andCompensation
4 peopleCommittee

0 people2 people2 people0 people 0 people

InsideDirector

Supplementary Explanation
To make the process of appointing and dismissing directors and setting their pay fairer and clearer, the Company has
created a Nomination and Compensation Committee. This committee includes Chairman Representative Director,
President-Representative Director, and two outside directors. It acts as an advisory group for the Board of Directors toensure fairness and transparency.
The Nomination and Compensation Committee reviews and discusses the standards, procedures, and basic policies forappointing, dismissing, and paying officers. The Board of Directors then makes decisions on these matters, giving great
importance to the committee's recommendations.

[Independent Directors]
Number of Independent Directors

4 people

Matters relating to Independent Directors
All outside directors who meet the qualifications are designated as independent directors.

[Incentives]
Incentive Policies for Directors

Performance-linked remuneration system, stock options, others

Supplementary Explanation
The Group gives executive officer awards to each director to increase their motivation and morale, linking the Group’sbusiness performance with the directors' profits.
Additionally, as part of the review of the officers’ remuneration system, a new restricted stock remuneration system wasapproved at the 23rd Annual General Meeting of Shareholders on June 21, 2022. This new system replaces the old stock
option system for directors (excluding outside directors) who are not Audit & Supervisory Committee members. It aims
to share the benefits and risks of stock price changes with shareholders and to motivate directors to work towards higher
stock prices and greater corporate value.
The total amount of cash remuneration for Restricted Stock will not exceed 36 million yen per year.

The total number of shares with transfer restrictions will not exceed 50,000 shares per year.
For details, please see the news release “Notice Concerning Introduction of Restricted Stock Remuneration System” dated
May 13, 2022.
It is available on our website at News Release (https://www.sunfrt.co.jp/en/pdf/20220513_7_en.pdf)
Recipients of Stock Options

Inside Directors

Supplementary Explanation
Directors of the Company (excluding outside directors) are eligible.
As mentioned earlier, with approval at the 23rd Annual General Meeting of Shareholders on June 21, 2022, the Company
has introduced a restricted stock remuneration plan to replace the stock option plan.

[Director Remuneration]
Disclosure of Individual Directors’
Remuneration

No Individual Disclosure

Supplementary Explanation
The remuneration for Directors of Sun Frontier Fudousan Co., Ltd. in fiscal 2023 (from April 1, 2023 to March 31, 2024)
was as follows.
・Six Directors other than Audit & Supervisory Committee members (excluding Outside Directors):
Total amount of remuneration, etc.: 257 million yen (including basic remuneration: 160 million yen, performance-linked
remuneration: 70 million yen, renumeration of restricted stock: 27 million yen)・One Audit & Supervisory Committee member Director (excluding Outside Directors)
Total amount of remuneration: 12 million yen (including basic remuneration: 12 million yen)・Four Outside Officers
Total amount of remuneration: 26 million yen (including basic remuneration: 26 million yen)
Policy on Determining Remuneration
Amounts and Calculation Methods

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
1. The Company has established the following policies for determining the remuneration of Directors who are not Audit& Supervisory Committee members.
（１） Fixed Remuneration: The amount will be at an appropriate level compared to other companies in the Japanese realestate industry, considering the duties and the Company's situation.
（２） Performance-Linked Remuneration: This will be based on the achievement of consolidated performance targets, suchas ordinary profit (loss), to reflect the improvement in performance.
（３） Share-Based Compensation: The Company provides compensation related to restricted stock to directors who are notaudit and supervisory committee members (excluding external directors) with the aim of sharing the benefits andrisks of stock price fluctuations with our shareholders. This compensation also serves to enhance the directors'
incentives to improve corporate performance and elevate their management awareness towards prioritizing
shareholders.
（４） Remuneration Ratio: For Directors who are not Audit & Supervisory Committee members (excluding Outside
Directors), if the performance-linked remuneration target is 100% achieved, the ratio will be 60% fixed remuneration,
30% performance-linked remuneration, and 10% share-based compensation. Outside Directors will only receive
fixed and performance-linked remuneration, but the same target will be used as a reference. (Revised on May 12,2023. Prior to revision: fixed remuneration 65%, performance-linked remuneration 30%, restricted shares
remuneration system 5%).

Delegation of Remuneration Decisions: The amount of fixed and performance-linked remuneration for eachindividual Director or the calculation methods for these amounts will be decided by the Board of Directors anddelegated to Chairman Representative Director. To ensure objectivity and transparency, a Nomination andCompensation Committee, consisting of Chairman-Representative Director, President Representative Director, andat least two Outside Directors, will review and deliberate on these matters. President-Representative Director will
make decisions with maximum respect for the committee's deliberations.
（６） Status of the Decision Policy for the Fiscal Year Under Review: The performance target for the fiscal year was 16,000
million yen in consolidated ordinary profit, with actual performance being 17,374 million yen. The Board of Directors,
involving the Nomination and Compensation Committee, entrusted President Representative Director to evaluateeach Director’s business. The Board received a report from the Nomination and Compensation Committee andconfirmed that the individual compensation decisions for Directors, including procedures and content, wereconsistent with the policy.
2. Matters concerning the remuneration of directors concerning the resolution of the General Meeting of Shareholders
Regarding the total amount of remuneration for directors who are not Audit & Supervisory Committee members, thefollowing limits were approved at the 23rd Annual General Meeting of Shareholders held on June 21, 2022.
(1) Remuneration Limit: Up to 360 million yen per year (including up to 36 million yen per year for outside directors).
(2) Stock Remuneration: As a separate framework from the above, the Company has approval to provide stock
remuneration as follows.
✓ The total amount of cash remuneration for Restricted Shares shall not exceed 36 million yen per year.
✓ The maximum number of Restricted Shares allotted each fiscal year shall be 50,000 shares.
✓ At the end of the Annual General Meeting of Shareholders, the number of directors who are not Audit & Supervisory
Committee members was 8, including 6 directors excluding outside directors
At the 23rd Annual General Meeting of Shareholders held on June 21, 2022, it was approved that the total amount of
remuneration for directors who are Audit & Supervisory Committee members should not exceed 36 million yen per year.
At the end of this Annual General Meeting of Shareholders, the number of directors who are Audit & Supervisory
Committee members was 3.
3. Matters concerning the determination of remuneration for each individual director who is not an Audit & Supervisory
Committee member
Regarding the amount of remuneration for the Company's directors or the method of calculation, the Company has
established a voluntary Nomination and Compensation Committee. This committee consists of two or more members from
Chairman Representative Director, President Representative Director, and Outside Directors to ensure the objectivity andtransparency of the procedure. President-Representative Director has the authority to draft the calculation method andbasic policy for directors' remuneration. The Nomination and Compensation Committee discusses this draft, including thecomposition of remuneration, its ratio, and the calculation method for setting indicators. The Board of Directors has theauthority to decide on policies related to the determination of directors' remuneration or the calculation method. However,the Board of Directors will make these decisions with maximum consideration of the deliberations by the Nomination andCompensation Committee.
（５）[Supporting System for Outside Directors]
Although we do not have full-time employees related to Outside Directors, Corporate Planning Division provides support
as necessary.
2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions(Overview of Current Corporate Governance System)
We are a company with an Audit & Supervisory Committee. Our Board of Directors consists of 11 directors (including 4
outside directors) and an Audit & Supervisory Committee with 3 directors (including 2 outside directors).
For the appointment/dismissal of directors and their remuneration, the Company has established the Nomination andCompensation Committee. This committee includes Chairman Representative Director, President Representative Director,
and two independent outside directors. This ensures the objectivity and transparency of these procedures by consulting
within the committee.
Regarding accounting audits, the Company has an audit agreement with BDO Sanyu. Accounting audits are conducted
throughout the fiscal year, not just at year-end. The Company has a system to handle accounting issues appropriately andhas enhanced audit effectiveness through close cooperation with the Audit & Supervisory Committee members and theInternal Audit Office. The current auditing organization is as follows.
・ BDO Sanyu
Hitoshi Torii, Designated Partner and Engagement Partner
Tomoharu Takahashi, Designated Partner and Engagement Partner
・ Assistant for Accounting Audit Services
5 CPAs and 3 other members
3. Reasons for Adoption of Current Corporate Governance System
To further enhance its corporate governance and increase its corporate value, the Company shifted to a corporate
governance system with an Audit & Supervisory Committee in June 2022. By inviting more than one outside director andestablishing a voluntary Nomination and Compensation Committee, we aim to strengthen the Board of Directors’supervisory functions and achieve fair and transparent management.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
Supplementary explanations
Early Notification of General
Shareholder Meeting

In order for shareholders to fully consider and deepen their understandingof the proposals, we have sent them by three weeks prior to the annual
general meeting of shareholders.

Exercise of Voting Rights by
Electromagnetic Means

You can exercise your voting rights via the Internet.

Participation in the Electronic
Voting Platform and other initiatives
to improve the environment for
institutional investors to exercise
their voting rights

The Company participates in the Electronic Voting Platform.

Providing Convocation Notice inEnglish (short form)

We have translated and prepared an English version.

Other

The Notice of the General Meeting of Shareholders (including English
translation) is posted on the Company's website.

2. IR Activities

Supplementary Explanations

Directexplanation
fromtheRepresentative
Director

Regular Investor Briefings for
Individual Investors

The Company holds briefings for individual investors atleast once a year to increase the number of shareholders
who can support the Company over the long term.

Yes

Regular Investor Briefings forAnalysts and Institutional
Investors

At least once every quarter, we hold company briefings foranalysts and institutional investors.

Yes

Posting of IR Materials on
WebsiteThe IR materials used in the above-mentioned company
briefing sessions are posted on the Company's website, andthe scenes of the briefing sessions on the day can be viewed
in an on-demand format.

Establishment of Department
and/or Manager in Charge of IR

The Company's IR Division is as follows.
・ Division in charge: Corporate Planning Division
・ Tel: 03-5521-1551

3. Measures to Ensure Due Respect for Stakeholders
Supplementary explanations

Implementation of Environmental
Activities, CSR Activities etc.

With the Company Policy “altruism,” and its Management Philosophy “To
look after every employee and pursue the happiness of both mind and matter.
At the same time, to cocreate a rich and sustainable society by contributing to
the evolution and the development of the human society”, we are working toresolve environmental and social issues as our business grows.
In line with our future image “To become the most appreciated visionary
company that fully utilizes limited resources and continues the challenges tocreate new values”, we will focus even more on businesses that contribute to
the resolution of environmental issues.
Please refer to https://www.sunfrt.co.jp/en/sustainability/ for more informationon our sustainability activities.

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
In accordance with the Ordinance for Enforcement of the Companies Act of Japan and the Companies Act of Japan, theCompany has adopted the "Internal Control System Basic Policy" in the Board of Directors as described below and is operating
its system.
(1) Systems to Ensure That Directors and Employees Execute Their Duties in Compliance with Laws and Regulations
and the Articles of Incorporation.
The Company recognizes its corporate social responsibility to ensure that all directors and employees act with fairness
and high ethical standards, always complying with laws, regulations, and the Articles of Incorporation. The Company
is working to strengthen its internal management system, raise compliance awareness, and establish a management
system that will continue to be trusted by society. To be more specific, we have established the Internal Audit Office,which is under the direct control of President Representative Director, to conduct regular internal audits of all
departments and group companies. The internal audit checks the status and structure of business operations and verifies
whether they are conducted properly according to laws, regulations, the Articles of Incorporation, and internal rules.
The results are reported regularly to President Representative Director and the Audit & Supervisory Committee, andas needed to the Board of Directors. Additionally, the Company has established a “Corporate Ethics Help Line” for theprevention and early detection of misconduct, control of reputational risk, and assurance of social trust. A thoroughwhistle-blowing system is in place to protect whistle-blowers. Furthermore, to improve compliance awareness, theLegal Affairs Department conducts various training and education programs. The Company and its group companies
have no involvement with anti-social forces and respond firmly to any unreasonable demands.
(2) Systems for the Preservation and Management of Information Concerning the Execution of Duties by Directors
The Company properly records information concerning the execution of duties by directors, such as records concerning
the decision-making at important meetings, including the Board of Directors meetings, and documents approved byeach director based on the “Regulations on Authority of Duties.” The Company also retains such information for a
specified period of time based on laws and regulations and the “Document Handling Regulations,” etc., and maintains
a condition in which directors can inspect it as necessary. In addition, the General Manager of the Management
Division is responsible for supervising the preservation and management of information(3) Regulations on Risk Management and Other Systems for Risk Management
To address all risks that could threaten the improvement of corporate value and sustainable development, the Company
will prepare a risk management manual and other relevant documents. In the event of an unexpected situation, a
response headquarters, led by President Representative Director and including a team of outside experts such as
corporate lawyers, will be established.
(4) Systems to Ensure Efficient Execution of Duties by Directors
The Board of Directors formulates medium-term management policies and single-year management plans as indicators
to establish and implement the corporate vision for the Company as a whole. To realize these management policies andplans, the Board of Directors clarifies the executive authority of directors and their duties, thereby enhancing theefficiency of their work.
In addition, for matters where business execution decisions are delegated to President Representative Director andother directors in charge, the Company makes necessary decisions based on the “Organization Rules” or the“Management Rules for Affiliated Companies,” including group companies.
The Company will revise these rules as needed, considering changes in laws and regulations and aiming to improvethe efficiency of duty execution.
(5) Systems to Ensure the Appropriateness of Business Operations in our Company as well as Corporate Group
Consisting of Group Companies
To ensure the appropriate execution of business operations by group companies, the Corporate Planning Division
manages group companies according to the “Regulations for Management of Affiliated Companies.” While respecting
the autonomy of group companies, the Corporate Planning Division receives periodic reports on business operations,
including the execution of directors' duties, and requires prior consultation or approval for important management
matters.
The management plans of group companies are formulated under the Company's management, which provides timely
and appropriate advice and guidance during the business period to improve operational efficiency. Additionally, theCompany and group companies have established a Risk Management Committee, chaired by the President
Representative Director, with a designated risk management person in each department. Any management or businessrisks are reported to the Risk Management Committee, where risk information is analyzed, and countermeasures are
considered to prevent or minimize damage.
The Company has a system where violations of laws or illegal acts at group companies are reported to internal reporting
offices or outside directors who are Audit & Supervisory Committee members, as stipulated in the “Corporate Ethics
Helpline Regulations.” This system aims to detect and resolve violations early.
The Internal Audit Office conducts internal audits of all group companies to ensure the effectiveness andappropriateness of systems, organizations, and rules, reporting the results to the Company's President Representative
Director and designated organizations such as the Audit & Supervisory Committee.
The Company’s President Representative Director prepares and reports financial statements according to fair andappropriate accounting standards to enhance the reliability of financial reporting and increase corporate vale(6) Matters concerning Employees who assist the Audit & Supervisory Committee in their Duties
If the Audit & Supervisory Committee requests an employee to assist them in their duties, the Company appoints
employees as assistants to the Audit & Supervisory Committee. These assistants are chosen from those who have

sufficient knowledge of accounting or law and perform their duties according to the instructions of the Audit &Supervisory Committee.
(7) Independence of Employees from Directors
To ensure the independence of the Audit & Supervisory Committee’s assistant as mentioned in the previous paragraph,
the Company will report any personnel changes or assignments of the assistant to the Audit & Supervisory Committee
in advance and obtain their consent.
(8) Matters concerning Assurance of Effectiveness of Instructions to the Employee who is designated to be the Audit& Supervisory Committee’s assistant in (6)The Audit & Supervisory Committee’s assistants mentioned in (6) are ensured the opportunity to attend important
Board of Directors meetings and other relevant meetings. They also accompany the Audit & Supervisory Committee
to regularly exchange opinions with President Representative Director and the Accounting Auditor. Directors andemployees cooperate with the Audit & Supervisory Committee to create a smooth audit environment for the assistants.
(9) System for Reporting to the Company’s Audit & Supervisory Committee by Directors and Employees of theCompany and Group Companies and System for Reporting to other Audit & Supervisory Committees
All directors (excluding directors who are Audit & Supervisory Committee members) and General Managers ofDepartments of the Company shall report on the status of their duties in meetings attended by the Board of Directors
and Audit & Supervisory Committee members. They are also allowed to attend any meetings within the Company ifrequested by the Audit & Supervisory Committee.
Directors (excluding directors who are Audit & Supervisory Committee members) and employees of the Company, as
well as directors, auditors, and employees of group companies (referred to as “directors and employees of the Company
and its group companies”), must immediately report to the Audit & Supervisory Committee if they discover any matterthat may have a material impact on the Company's credit or business performance, or any significant violation of the
Corporate Vision, Corporate Behavior Rules, etc.
Directors and employees of the Company and its group companies may report to the Internal Reporting Office as set
forth in the “Corporate Ethics Help Line” at any time. They can also report voluntarily to the Company’s Audit &Supervisory Committee member.
The Compliance Division of the Company encourages directors and employees to familiarize themselves with thereporting contacts and actively report through educational and training opportunities. The “Rules Concerning the
Corporate Ethics Help Line” clearly state that directors and employees of the Company and its group companies will
not face disadvantageous treatment in personnel evaluations or adverse actions such as disciplinary measures for using
the Whistleblower Hotline. The Company also makes it known that no adverse actions will be taken against those whoreport to the Audit & Supervisory Committee.
(10) Matters concerning the Policy for the Disposition of Expenses or Liabilities Incurred in the Execution of Duties
by Audit & Supervisory Committee members (limited to those related to the execution of Audit & Supervisory
Committee duties)
When Audit & Supervisory Committee members request advance payment for expenses incurred in their duties,
reimbursement of expenses paid, or payment of liabilities incurred, the Company promptly responds, unless it can beproven that these expenses did not arise from the execution of their duties or Audit & Supervisory Committee activities.
(11) Others, System to Ensure Effective Audits by the Audit & Supervisory Committee
President Representative Director holds regular meetings with Audit & Supervisory Committee members for mutualcommunication.
In addition, according to the “Regulations for Internal Audit” and the “Internal Audit Implementation Guidelines,” theInternal Audit Office will closely communicate and coordinate with the Audit & Supervisory Committee and theoutside auditors to ensure efficient and effective audits.

2. Basic Views on Eliminating Anti-Social Forces(1) Establishment of Response Control Department and Person in Charge of Prevention of Unreasonable Demands
The Company has established a Person in Charge of Control and a Person in Charge of Response to handle anti-social
forces. This system allows the Company to respond in an organized manner by contacting and consulting with the
General Manager and the Response Manager, rather than taking personal action in the event of an unjust act or request.
(2) Cooperation with External Specialized Agencies

The Company has set up a system against anti-social forces in cooperation with local police stations and external
experts like corporate lawyers. The Company is also a member of the Special Violence Prevention Association under
the Metropolitan Police Department (Tokubouren) and actively participates in activities to eliminate organized crimegroups.
(3) Status of Aggregation and Management of Information on Anti-Social Forces
The Compliance Division gathers and manages information on anti-social forces to prevent damage by assessing theattributes of business partners.
(4) Preparation of Response Manuals
The Company has created the Anti-Social Forces Response Manual, which sets standards of conduct regarding antisocial forces. All officers and employees of the group can view the manual on the Company's LAN.
(5) Status of Implementation of Training Activities
In training by the Compliance Department, the Company ensures that officers and employees are thoroughly educatedand informed.

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation

2. Other Matters Concerning the Corporate Governance System
Overview of Timely Disclosure System
The status of the Company's internal system for timely disclosure of corporate information is as follows.
1. Basic Stance on Timely Disclosure
From the perspective of corporate social responsibility and long-term enhancement of corporate value, the Company
is committed to fulfilling its responsibilities to all stakeholders, including shareholders and investors.
We will disclose information in a timely, accurate, and fair manner. In addition to promptly disclosing information that
falls under the “Securities Listing Regulations,” as required by the Companies Act of Japan, the Financial Instruments
and Exchange Act, various laws and regulations, and stock exchange rules, we will also actively disclose socially useful
information about the Group.
2. Status of Internal System for Timely Disclosure
The Company has a system in place to centrally manage important corporate information, including information
related to subsidiaries, under the Corporate Planning Division, which is responsible for timely disclosure of
information.
The Corporate Planning Division determines whether the information qualifies as timely disclosure informationaccording to the TSE's Securities Listing Regulations. With approval from President Representative Director (or,in their absence, other officers and employees designated as responsible for handling the Company's information),they decide on the content, timing, and method of disclosure.
Based on this decision, the Representative Director or a delegate carries out the information disclosure, managed by
the Corporate Planning Division. Information is made public by registering with TDnet and, if necessary, throughpress conferences and posting materials. All information registered in TDnet is also posted on the Company's
website.
Additionally, the Company discloses information according to various laws, regulations, and internal rules such as
the rules for preventing insider trading
The system for collecting important corporate information for the Corporate Planning Division includes being awareof all proposals and reports to be presented to the Board of Directors and the Executive Officer Committee.
(1) Decision madeAt the Company, important matters requiring decisions are made by the Board of Directors. Therefore, the Corporate
Planning Division is fully aware of these decisions.
(2) Occurrence of Material Facts

When officers and employees of the Company learn that a material fact has occurred or is likely to occur, they must
promptly notify the Corporate Planning Division of the details(3) Financial Results
The accounting department prepares the financial statements and receives audits by the Accounting Auditor. Financial
results, including the analysis of major items, are submitted to the Board of Directors. Audits by the Accounting Auditor
are conducted throughout the fiscal year to reduce the impact at the end of the year. As a result, the Company strives
to disclose information accurately and promptly.
(4) Information on subsidiaries
Officers and employees of the Company in charge of subsidiaries, as well as officers and employees of subsidiaries,
are required to contact the Corporate Planning Division when they learn that a material fact has occurred or may haveoccurred at the subsidiary.

<System Image of the Company’s Corporate Government>