TOSEI CORPORATIONCORPORATE GOVERNANCE
Note: This English document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translation and the Japanese original, the Japanese original shall prevail.
Tosei Corporation assumes no responsibility for this translation or for direct, indirect or any other forms of damages arisingfrom the translation.

Last updated: 27 May 2019

Tosei Corporation
Representative Director: Seiichiro Yamaguchi
For Contact: Accounting and IR Department
Tel:+81-3-3435-2865
Securities code: 8923
URL : https://www.toseicorp.co.jp/english
The state of corporate governance of Tosei Corporation (“the Company”) is as described below:
I.

Fundamental Approach toward Corporate Governance, Capital Structure, Corporate Attributes,
and Other Basic Information

1. Fundamental Approach
Fundamental Approach toward Corporate Governance
Our Group aspires to be a valuable contributor to all kinds of our stakeholders in the society, including
the shareholders, the employees, the business partners and others, by promptly and appropriately
responding to the changes in the business environment and continuing operational activities which enable
the Group to achieve a sound growth. For this purpose, the Group has placed the greatest importanceon enhancement of corporate governance, and in particular, “fully cultivating compliance mind”,“enhancing risk management” and “conducting timely disclosure” as three key initiatives. Furthermore,
the Group is determined to make efforts in a unified manner, from the top management down to each
employee of the Group companies, led by the Board of Directors, to develop an internal control system
as required by the Companies Act and the Financial Instruments and Exchange Act, as well as to set upa system which is credible to investors, as a financial instruments business operator.
[Reasons for Non-Compliance with the Principles of the Corporate Governance Code]Supplementary Principle 4-11-1 Basic view on the appropriate balance between knowledge, experienceand skills of the board as a whole, and also on diversity and appropriate board size
⇒The Board of Directors is deemed to contribute to the medium- to long-term growth of the Group
when it is comprised of a diverse range of members. Going forward, the Group’s policy is toappoint any eligible candidate when they are identified. As of this document’s last update, there
is no female Director in office.
[Disclosure Based on the Principles of the Corporate Governance Code]
The Company discloses the basic policy for each of principles of the Corporate Governance Code as “Tosei
Corporation Basic Policy on Corporate Governance (hereinafter, the Company’s Basic Policy)” on the
Company’s website below. In addition, the Basic Policy was partially revised as of March 1, 2019.
https://www.toseicorp.co.jp/english/ir/governance/basic_policy/(1) Company’s disclosure regarding to policies, basic rules, procedures, outline of analysis and others which
are required to disclose under “The Preparation Guidelines for Preparing the Corporate Governance
Reports (Tokyo Stock Exchange)” are written in below,
1General Principle 1.4 Cross-shareholdings
Basic policy for maintaining cross-shareholdings and exercising voting right⇒As of this document’s last update, the Company does not own any shares of another listedcompany for strategic purposes. More details are described in “the Company’s Basic Policy”
Principle 1-4
General Principle 1.7 Related Party Transaction
Basic rules of appropriate manner in case of entering transactions involving conflict of interest withdirector(s) or major shareholders (related parties)⇒“the Company’s Basic Policy” Principle 1-7
General Principle 2.6 Roles as Asset Owner of Corporate Pension Funds⇒As of this document’s last update, the Company does not have any corporate pension funds.
General Principle 3.1 Full Discloseⅰ)Company objectives(e.g., business principles), business strategies and business plans⇒“the Company’s Basic Policy” Principle 3-1,
and Company’s website (https://www.toseicorp.co.jp/)ⅱ)Basic views and guideline on corporate governance based on each of the principles of the Code⇒details are described in Section Ⅰ.1
ⅲ )Board policies and procedures in determining the remuneration for the senior management anddirectors⇒“the Company’s Basic Policy” Principle 3-1ⅳ)Board policies and procedures in the appointment of the senior management and the nomination of
directors and Kansayaku candidates⇒“the Company’s Basic Policy” Principle 3-1ⅴ)Explanation with respect to the individual appointments and nominations based on ⅳ)⇒details are described below (a)General Principle 4.1 Roles and Responsibilities of the Board(1)Supplementary Principle 4-1-1 Outline of the scope Board of Directors delegate to the management ofcompany⇒“the Company’s Basic Policy” Principle 4-1
General Principle 4-9 Independent Standards and Qualification for Independent Directors
Independence Standards for Independent Directors⇒“the Company’s Basic Policy” Principle 4-9
General Principle 4-11 Preconditions for Board and Kansayaku Board EffectivenessSupplementary Principle 4-11-2 The status of directors or Kansayaku who serves concurrently as directors,
Kansayaku or the management at other listed companies⇒details are described below (b)Supplementary Principle 4-11-3 Summary of the analysis/evaluation result of the effectiveness of the entire
Board of Directors⇒details are described below (c)General Principle 4-14 Directors and Kansayaku Training
Policy in Training of Directors and Kansayaku⇒“the Company’s Basic Policy” Principle 4-14
General Principle 5-1 Policy for Constructive Dialogue with Shareholders⇒“the Company’s Basic Policy” Principle 5-1

2

(a)Reasons for nominating current Directors and Audit & Supervisory Board Members(Kansayaku) as
candidate for Directors and Audit & Supervisory Board Members(Kansayaku).
〈Director〉(appointed at the 68th Ordinary General Meeting of Shareholders of the Company held on 27
February, 2018)⇒Reasons for nomination as candidate for Director are described in Notice of the 68th Ordinary General
Meeting of Shareholders (https://www.toseicorp.co.jp/english/docs/E180201_1.pdf)〈Audit & Supervisory Board Members〉(appointed at the Ordinary General Meeting of Shareholders of
the Company held on 24 February, 2017(the 67th) and 27 February, 2018(the 69th))⇒details are described in Section Ⅱ.1【Audit & Supervisory Board Members】(b)The status of Directors/Audit & Supervisory Board Members(Kansayaku) who serves concurrently as
directors, Kansayaku or the management at other listed companies as of 1st March, 2019
Position

Name

Title, Listed companies

President and CEO

Seiichiro Yamaguchi

Non

Director

Katsuhito Kosuge

Non

Director

Noboru Hirano

Non

Director

Masaaki WatanabeNon

Director

Hideki Nakanishi

Non

Director

Kenichi Shohtoku

Non

Director

Hiroyuki Kobayashi

Non

Audit & Supervisory Board Member (full-time)

Yutaka Kitamura

Non

Audit & Supervisory Board Member (full-time)

Hitoshi Yagi

Non

Audit & Supervisory Board Member

Tatsuki Nagano

Director of System Location Co., Ltd

Audit & Supervisory Board Member

Osamu Doi

Non(c)Summary of the analysis/evaluation result of the effectiveness of the entire Board of Directors
a. Evaluation Process
A questionnaire, given to all members of the Board of Directors (seven (7) Directors and four (4)Audit & Supervisory Board Members, as of November 30, 2018), is carried out regarding:
1. Composition of the Board of Directors
2. Effectiveness of the Board of Directors (quality and amount of discussion)
3. Discussion of candidates at the reelection of Directors and Compensation program of the Boardof Directors
4. The operation of the Board of Directors
5. The Directors’ own self-assessments
6. Relation with shareholders and other stakeholders
7. Others(7 categories, 37 items) (responses from all eleven (11) members are collected).
b. Analysis of Questionnaire Results
Major analysis results
The composition of the current Board of Directors is appropriate, and the effectiveness of its
operation has increased. In order to ensure that the deliberations on important management
matters in general and business strategies are carried out more fully, consideration should begiven to such aspects as delegating authority for some of the agenda items to the businessexecution side, and promoting a shift to paperless agenda materials and a summarization of
those materials.

3

The process for the nomination of candidates for Directors and the procedures in determining
the remuneration for Directors, including advance verification by the Nominating andCompensation Advisory Committee, are appropriate. However, further consideration is neededin regard to restructuring the Directors’ remuneration system (the proportion of performancelinked and stock-price linked variable remuneration, rank-based remuneration, etc.).
Further systematic measures will be considered for the fostering of next-generation Director
candidates including candidates for representative director.
As for relation with shareholders, investors and other stakeholders, Executive Directors aremaintaining an appropriate relation, and information is shared within the Board of Directors.
In the Directors’ and Audit & Supervisory Board Members’ own self-assessments, it was
concluded that all members are playing a meaningful role, utilizing their respective experienceand expertise.
There is adequate cooperation between the Directors (Board of Directors) and Audit &Supervisory Board Members (Audit & Supervisory Board).
c. Deliberation of evaluation
After aggregating questionnaire responses and reporting the analysis results at the Pre-Board
meeting discussion held in February 2019, a discussion was held at the regular meeting of theBoard of Directors held in the same month, and was resolved to include the evaluation results in
the Corporate Governance Report.
d. Evaluation results
Effectiveness of the current Board of Directors is fully secured.
In order to enhance the corporate value by responding to the increasing risks associated with
future business expansion and the growth of the Group, it is necessary to further raise theawareness among the current Directors, ensure full deliberation on the important matters at theBoard of Directors’ meetings, verify the incentives for the Directors, and draw up plans forfostering future Director candidates.
2. Capital Structure
Foreign shareholding ratio

Over 30%【Major Shareholders】
Name of shareholders

Number of Owned
SharesShare Holding
Ratio (%)

Seiichiro Yamaguchi

12,885,500

26.54

Zeus Capital Limited

6,000,000

12.35

KBL EPB S.A 107704

4,847,300

9.98

Japan Trustee Services Bank, Ltd. (Trust Account)

1,974,500

4.06

The Master Trust Bank of Japan, Ltd. (Trust Account)

1,432,000

2.94

STATE STREET BANK AND TRUST COMPANY 505001

1,417,572

2.92

4

SSBTC CLIENT OMNIBUS ACCOUNT

1,283,800

2.64

GOVERNMENT OF NORWAY

878,195

1.80

JPMC GOLDMAN SACHS TRUST JASDEC LENDING
ACCOUNT646,100

1.33

MLI FOR CLIENT GENERAL OMNI NON COLLATERALNON TREATY-PB

603,600

1.24

Existence of controlling shareholders (excluding the parent company)―

Existence of a parent company

No

Supplementary explanation-

3. Corporate Attributes
Listed exchange and market divisionTokyo Stock Exchange, First
SectionFiscal year end

NovemberCategory of business

Real estate business

Number of employees (consolidated) as of the end of the latest fiscal year

100 to under 500

Consolidated sales of the latest fiscal year

10 to under 100 billion yen

Number of consolidated subsidiaries as of the end of the latest fiscal year

10 to under 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
There is no special circumstance that may affect the Company’s corporate governance as the Company
does not have a parent company or a listed subsidiary.
As the Company is also listed on the Mainboard of the Singapore Exchange, it is required to act inaccordance with rules and regulations prescribed by the said Exchange.

5II. Business Management Organization and Other Corporate Governance System regarding
Decision-making, Execution and Oversight in Management
1. Matters Concerning Governing Bodies and Conduct of Organizations
Organizational form

Company with Audit & Supervisory
Board Members【Board of Directors】
Number of directors in the Articles of Incorporation

10

Term of directorship in the Articles of Incorporation

2 years

Chairperson of Board of Directors meetings

President

Number of directors

7

Appointment of outside directors

Yes

Number of outside directors

2

Number of outside directors appointed as independent director

2

Relationship between outside directors and the company (1)Relationship with the Company (*)
Name

AttributesaKenichi Shohtoku

Certified public accountant

Hiroyuki Kobayashi

From other company

b

c

d

e

f

g

h

i

j

k

* Each type of the relationship with the Company is defined as follows:* Fill in the applicable box with○ if the person himself is applicable currently or recently, and with △if the person himself was applicable in the past:* Fill in the applicable box with● if the close relative is applicable currently or recently, and with ▲ if
the close relative was applicable in the past:a Person who executes business of the listed company or its subsidiary;b Person who executes business or director who is not executive personnel of a parent companyof the listed company;c Person who executes business of a fellow subsidiary of the listed company;d Party for which the listed company is a major client or a person who executes its business;
e Listed company’s major client or a person who executes its business;
fConsultant, accounting professional, or legal professional who receives a large amount of money or6other financial asset other than remuneration for directorship/auditorship from the listed company;
g Listed company's major shareholder (in case of a corporate shareholder, person who executes its
business);
h Person who executes business of a client of the listed company which does not fall under d, e or f (thesaid person only);
i

Person who executes business of an entity in which the outside officer has concurrent positions to serve(the said person only);

j

Person who executes business of an entity to which the listed company make donations (the said person
only); ork Other
Relationship between outside directors and the Company (2)Name

Kenichi
Shohtoku

Hiroyuki
Kobayashi

Independent
Director

Yes

Yes

Supplemental Information
Concerning Eligibility for
the Position

Reason for the election-

Director Shotoku secures independence as
he has no such interest that may cause any
conflict of interest with generalshareholders.
As a certified public accountant, he has anextensive experience and knowledge
including those relating to overseas
business. The Company believes he canprovide appropriate supervisions over theCompany’s operation, with his objective
position as an accounting professional.

-

Director Kobayashi secures independence
as he has no such interest that may cause
any conflict of interest with generalshareholders.
He has extensive experience and expert
knowledge, accumulated mainly at major
financial institutions. Consequently, theCompany is promoting a group expansion
strategy, it may expect objective
monitoring and proposals can be expectedfrom him as Outside Director from the
aspect of group governance drawing on
his expertise in organization development
and M&As.

Presence or absence of any voluntary committees corresponding
to a nominating committee or a compensation committee.

7

Yes

Committee’s Name, Composition, and Attributes of Chairperson

Committee’s

All Committee Full-time Inside

Name

Members

Committee

Nominating andCorresponding toCompensation

Nominating

Advisory

Committee

Committee

Committee

Nominating andCorresponding toCompensation

Compensation

Advisory

Committee

Committee

OutsideOutside Other Chairperson

Members Directors Directors Experts

5

0

2

2

0

1

Outsidedirector

5

0

2

2

0

1

Outsidedirector

Supplementary Explanation
The Company established the Nominating and Compensation Advisory Committee voluntarily as aconsultative body to the Board of Directors to ensure appropriateness and transparency in such matters as
the process of selecting candidates in connection with director election proposals submitted to the general
meeting of shareholders and resolutions of the Board of Directors relating to allocation of remuneration,etc. to individual directors.
The constituent members of the committee include a representative director (one person), a full-time
director (one person), outside director(s) (independent director(s), one person or more), and a full-time
audit & supervisory board member (outside audit & supervisory board member, one person). An outside
director who is a committee member will assume the office of the chair of committee.
The Board of Directors will continue to fulfill its mandate from the Company’s shareholders and investors
by respecting the recommendations of the committee to the maximum extent and developing anappropriate governance system.
【Audit & Supervisory Board Members】
Existence of Audit & Supervisory Board

Yes

Number of Audit & Supervisory Board Members in the Articles
of Incorporation

6

Number of Audit & Supervisory Board Members

4

Cooperation among Audit & Supervisory Board Members, accounting auditors and internal audit
department
1. Cooperation between Audit & Supervisory Board Members and accounting auditors
In the course of auditing activities conducted in accordance with the annual audit plan, the Audit &Supervisory Board Members closely work with the accounting auditors by regularly exchanging
information and opinions. The Audit & Supervisory Board Members receive the audit plans and results
8

from the accounting auditors, and witness the audits performed by the accounting auditors from time totime. The meetings for the accounting auditors to report to the Audit & Supervisory Board Members(Audit & Supervisory Board) were held six times during the year ended November 30, 2018.
Furthermore, to enhance the threefold auditing structure, the fulltime Audit & Supervisory Board
Members, the accounting auditors and internal audit department held the opinion-exchanging meetingin March and September 2018.
2. Cooperation between Audit & Supervisory Board Members and internal audit department
The Audit & Supervisory Board Members and the internal audit department meet to exchange opinions
every other month, and the internal audit department also reports to the Audit & Supervisory Board
Members in a timely manner as to the internal audit results. While the full-time Audit & Supervisory
Board Members meet with the general managers of internal audit department on a weekly basis, bothsides work in concert with each other to enhance the quality of its audits and to efficiently conduct audits.
Appointment of outside Audit & Supervisory Board Members

Yes

Number of outside Audit & Supervisory Board Members

4

Number of outside Audit & Supervisory Board Members
appointed as independent auditor

4

Relationship between outside Audit & Supervisory Board Members and the Company (1)NameAttributes

Yutaka Kitamura

From other company

Hitoshi Yagi

From other company

Tatsuki Nagano

From other company

Osamu Doi

From other company

Relationship with the Company (*)
a

b

c

d

e

f

g

h

i

j

k

l

m

○

* Each type of the relationship with the Company is defined as follows:* Fill in the applicable box with○ if the person himself is applicable currently or recently, and with △if the person himself was applicable in the past:* Fill in the applicable box with● if the close relative is applicable currently or recently, and with ▲ if
the close relative was applicable in the past:a Person who executes business of the listed company or its subsidiary;
b Director or accounting advisor who is not executive personnel of the listed company or its subsidiary;
c Person who executes business or director who is not executive personnel of a parent company of thelisted company;
d Audit & Supervisory Board Member of a parent company of the listed company;
e Person who executes business of a fellow subsidiary of the listed company;

9fParty for which the listed company is a major client or a person who executes its business;

g. Listed company’s major client or a person who executes its businessy;
h Consultant, accounting professional, or legal professional who receives a large amount of money orother financial asset other than remuneration for directorship/auditorship from the listed companyi

Listed company's major shareholder (in case of a corporate shareholder, person who executes its
business)jPerson who executes business of a client of the listed company which does not fall under f, g or h (thesaid person only);

k Person who executes business of an entity in which the outside officer has concurrent positions to serve(the said person only);
lPerson who executes business of an entity to which the listed company make donations (the said person
only); orm Other

Relationship between outside Audit & Supervisory Board Members and the Company (2)Name

YutakaKitamura

Hitoshi Yagi

Independent
Audit &
Supervisory
Board
MemberYes

Yes

Notes Concerning
Eligibility for theOutside/Independent
Audit & Supervisory
Board Member

Reason for the election-

Audit & Supervisory Board Member
Kitamura secures independence as he has nosuch interest that may cause any conflict ofinterest with general shareholders.
He has gained abundant experience
including overseas assignments primarily ata major financial institution, as well as
professional knowledge in this field. The
Company believes that he will be acontributor in ensuring the adequacy andappropriateness of the management of theCompany, particularly in financial andglobal aspects.

-

Audit & Supervisory Board Member Yagi
secures independence as he has no suchinterest that may cause any conflict ofinterest with general shareholders.
Based on his abundant experience andspecialist knowledge acquired at audit
divisions of major financial institutions, we
determined that he can fulfill his
responsibilities of securing adequacy andappropriateness in the Company’s
management, and elected him as a candidate

10for Outside Audit & Supervisory Board
Member.

TatsukiNaganoYes

Audit & Supervisory Board Member
Nagano secures independence as he has nosuch interest that may cause any conflict ofinterest with general shareholders.
He has experience at a major financial
institution and continues to be involved in
the business management. The Company
believes that he will contribute to theCompany in ensuring the adequacy andappropriateness of the management of theCompany, with his extensive experience andhigh level of professional knowledge.

-

Audit & Supervisory Board Member Doi
secures independence as he has no suchinterest that may cause any conflict ofinterest with general shareholders.
The Company believes that he willcontribute to the Company in ensuring theadequacy and appropriateness of thebusiness management of the Company withhis abundant experience and professional
knowledge he acquired in his past careers at
a major securities firm and an investmentbanking firm.

-

Osamu Doi

Yes

【Independent Directors/Audit & Supervisory Board Members】
Number of independent directors/Audit & Supervisory
Board Members

6

Other Matters Concerning Independent Directors/Audit & Supervisory Board Members
All eligible outside directors are designated as independent directors.
【Incentives for Directors】
Implementation of initiatives to offer incentives to directors

Stock option system introduced

Supplementary explanation concerning the above
The Company introduced stock options to further incentivize people to work to improve the performanceand enhance the corporate value of the Group.
The issuance of the stock options is administered in accordance with the resolution adopted by the General

11Meeting of Shareholders, and the number of actual allotments to be allowed is determined by the Board of
Directors based on the recommendation by the Nominating and Compensation Advisory Committee.

Eligible persons for stock options

Inside directors, outside directors, andemployees of the Company, and directorsof the Company’s subsidiaries

Supplementary explanation concerning the above
The issuance of the stock options to Directors and Employees of the Company and its subsidiaries is aimed
at improving the consolidated performance of the Company and its subsidiaries by providing the recipientswith the common incentive of improving the performance of the Group as a whole.

【Directors’ Remuneration】
Disclosure of remuneration of each director

Remuneration of each director is not disclosed.

Supplementary explanation concerning the above
The remuneration paid to the directors is as follows:
Total amount of the remuneration paid to the directors: Yen 208,222 thousand(from the Annual Securities Report for the 69th Fiscal Period (December 1, 2017 - November 30, 2018))

Existence of Policies for determining remuneration amounts
and calculation method

Yes

Disclosed details of the policies for determining remuneration amounts and calculation method
The maximum amounts of remuneration to be paid to the directors and to the Audit & Supervisory Board
Members are determined by a resolution made at the General Meeting of Shareholders. Remuneration foreach director shall consist of fixed salary according to their duties, performance-linked bonuses and stock
options that can be exercised after a defined period of time. After the discussion on the adequacy of its
contents in the Nomination and Compensation Advisory Committee, the Board of Directors shall makedecision thereof by its resolution. The remuneration of Audit & Supervisory Board Member is determinedby the deliberation of the Audit & Supervisory Board Members.
【Support System Provided for Outside Directors/Outside Audit & Supervisory Board Members】
1. Support System Provided for Outside Directors
As a method of conveying information to Outside Directors, the Outside Directors have the option of
attending the Pre-Board meeting discussion (constituted by full-time Directors, full-time Audit &12Supervisory Board Members, and the Executive Officer in charge of the administrative department) or
have materials and the minutes of this meeting sent to them, so that they are informed of the details of
the agendas to be submitted at the board meeting before the board meeting is held. For regular board
meetings, Outside Directors are notified at least three days prior to the meeting, and the agenda materials
are distributed to them in advance. For extraordinary board meetings too, agenda materials are
distributed to them in advance, as a general rule, and if they are unable to attend, they are informed by
the Administration Department of the matters resolved.
2. Support System Provided for Outside Audit & Supervisory Board Members
There are four outside Audit & Supervisory Board Members and two of them are part-time. The agendas
to be submitted at the board meeting are pre-discussed by both full-time and part-time Audit &Supervisory Board Members at the management meeting (constituted by the executive officers
appointed by the President and CEO. held twice a month) or the Pre-Board meeting discussion. The
meeting agendas/materials are distributed to them the day before either meeting. In the event any of thepart-time Audit & Supervisory Board Members are unable to attend either the management meeting or
the Pre-Board meeting discussion, the matters discussed at either meeting are delivered by the full-time
Audit & Supervisory Board Members at the meeting of the Audit & Supervisory Board. The assistanceduties for the Audit & Supervisory Board Members as well as the administrative tasks for the meetingof the Audit & Supervisory Board are undertaken by the Internal Audit Department.

2. Matters Concerning Business Execution, Audit/Supervision, Appointment of Officers, andDetermination of Remuneration (Overview of the Current Corporate Governance System)
1. Operation of the Meetings of Board of Directors
The Board of Directors is constituted by seven directors, two of whom are outside directors. Basedon the regulations of the Board of Directors, the directors hold regular meetings every month, andextraordinary meetings are held as necessary. As the highest management decision-making body, theBoard of Directors makes resolutions on management policies and material issues and alsosupervises the execution of duties by the directors. In addition, the outside directors (the independent
directors), by sharing their opinions from their objective standpoint, provide advices and suggestions
to ensure the adequateness and appropriateness of the decisions made by the Board of Directors.
2. Nominating and Compensation Advisory Committee
The Company established the Nominating and Compensation Advisory Committee voluntarily as aconsultative body to the Board of Directors to ensure appropriateness and transparency in suchmatters as the process of selecting candidates in connection with director election proposals
submitted to the general meeting of shareholders and resolutions of the Board of Directors relating
to allocation of remuneration, etc. to individual directors. The constituent members of the committee
include a representative director (one person), a full-time director (one person), outside director(s)(independent director(s), one person or more), and a full-time audit & supervisory board member(outside audit & supervisory board member, one person). An outside director who is a committee
member will assume the office of the chair of committee. The Board of Directors will continue tofulfill its mandate from the Company’s shareholders and investors by respecting therecommendations of the committee to the maximum extent and developing an appropriate

13

governance system.
3. Audits Performed by Audit & Supervisory Board Members
The Company has adopted the Audit & Supervisory Board Member system and has the Audit &Supervisory Board with two full-time and two part-time Audit & Supervisory Board Members. Allof these four persons fall under the definition of outside Audit & Supervisory Board Members as
stipulated in Article 2, Item 16 of the Companies Act. The meetings of the Audit & Supervisory
Board are held once a month as a general rule, and the matters of concern are discussed and resolved
at such meeting. The activities conducted by the full-time Audit & Supervisory Board Members
are also reported to the part-time Audit & Supervisory Board Members so that the information iscommonly shared by all the Audit & Supervisory Board Members. The Audit & Supervisory Board
Members also attend the meeting of the Board of Directors, the Pre-Board meeting discussion where
matters to be resolved at the board meetings are confirmed in advance, as well as the management
meeting, which serves as a consultative body for the matters to be approved by CEO.
The auditing activities by the Audit & Supervisory Board Members are performed in accordancewith an annual audit plan. By cooperating with the accounting auditors as well as with the Audit
Department, the Company has developed an efficient and viable auditing system. Furthermore, thefull-time Audit & Supervisory Board Members regularly meet with each of the directors and officers
in charge of each department, so as to fully understand the status of the business execution.
Such activities conducted by the Audit & Supervisory Board Members have worked effectively as
an auditing function for the Company’s business management and have delivered positive effects to
the Company.
4. Executive Officer System
The Company has adopted the executive officer system in order to more clearly segregate themonitoring/supervision of the Company’s business management, which is the duty andresponsibility of the directors, from the execution of the business. The executive officers areappointed at the board meetings and the representative director and president has assumed theposition of the chief executive officer.
All of the Company’s executive officers adhere to its internal rules and regulations as well as to theresolutions of the Board of Directors in executing and controlling the business operations of theCompany. In addition, CEO holds the management meetings twice a month as a general rule toseek for consultations on the material issues to be decided by him, and to discuss the matters to beresolved at the board meetings in advance.
5. Corporate Governance Meeting
With the aim of continuously strengthening its corporate governance, the Company holds thecorporate governance meetings constituted by the full-time directors and the full-time Audit &Supervisory Board Members monthly.
At the meetings, the directors and the Audit & Supervisory Board Members review and discuss thecorporate governance concerns and the internal control matters in an effort to increase the corporate
value of the Company, and where necessary, they receive advices from the outside experts such as
corporate attorneys and/or certified public accountants.

14

6. Internal Audit
The Internal Audit Department under the direct supervision of the President and CEO performs audits
for the entire Group in accordance with their annual auditing plan. In the event any inadequacy is
discovered, recommendations for corrective actions are made to the audited departments. The audit
has been quite effective as the Internal Audit Department discusses with the audited departments as
to the issues in need of corrective actions and follows up with specific guidance.
7. Information Disclosure
The Company discloses various documents required by the relevant laws and regulations such as theCompanies Act and the Financial Instruments and Exchange Act, and also discloses information
required by the stock exchanges. The Company provides information to its stakeholders including
shareholders and investors in appropriate and timely manners, though its IR activities as well as via
its website. Further, with the listing on the Singapore Exchange, the Company has been making
disclosures in accordance with the rules prescribed by the said exchange.
8. Audit by Accounting Auditors
The Company has entered into an auditing agreement with Shinsoh Audit Corporation in accordancewith the Companies Act and the Financial Instruments and Exchange Act, and the audit of theCompany’s accounts is performed by Shinsoh Audit Corporation based on the annual audit plan.
In addition to the full-year audit performed at the end of the fiscal years, Shinsoh conducts reviews
at each quarter end.
The details of the Company’s accounting auditor are as follows:
Name of Audit Corporation：

Shinsoh Audit Corporation

Designated Partner/Engagement Partner: Takayuki Sakashita, CPA(Number of continuing audit years including the current fiscal
year: 5)
Designated Partner/Engagement Partner: Atushi Iijima, CPA(Number of continuing audit years including the current fiscal
year: 4)
9. Limited Liability Agreement
The Company has concluded contracts for limitation of liability with Kenichi Shotoku andHiroyuki Kobayashi as Outside Directors of the Company, and Yutaka Kitamura, Hitoshi
Yagi, Tatsuki Nagano and Osamu Doi as Outside Audit & Supervisory Board Members
pursuant to the provisions of Article 427, paragraph 1 of the Companies Act for the liability
for damages provided for in Article 423, paragraph 1 of the same, and limits their liability
to the amount provided by relevant laws and regulations.

3. Reasons for Adopting the Current Corporate Governance System
The Company has set up the Board of Directors and the Audit & Supervisory Board. While appointing
from outside its outside directors and all of its Audit & Supervisory Board Members, it has also adopted

15

an executive officer system, for the purpose of operating its businesses with high transparency.
All of the Audit & Supervisory Board Members of the Company have been outside Audit & Supervisory
Board Members since the time of listing. The Audit & Supervisory Board Members have always
performed audits of the business management of the Company from the viewpoints of ensuring andincreasing the Company’s corporate value and the common interests of its shareholders. The Company
further enhances its supervisory function over its management by inviting outside directors to the Boardof Directors. On the management side, the Company has employed the executive officer system so as
to achieve optimal distribution of decision-making functions and operational duties, as well as
encouraging the delegation of authority in executing the businesses, in an attempt to strengthen its
corporate governance.
As stated above, the management of the Company and the current system of monitoring and supervision
over the management is adequately functioning, and the Company continues to maintain the systemcurrently in place.

16

III. Implementation of Measures for Shareholders and Other Interested Parties
1.

Efforts for Active General Shareholders Meetings and Smooth Exercises of Voting Rights
Supplementary Explanation2.

Early Notification ofGeneral Shareholders Meeting

The Company has implemented “early notification” (sending atleast 3 business days prior to the statutory date).

Avoidance of Peak Day

Not applicable (As the general shareholders meeting of theCompany is held in February)

Exercise of Voting Rights by
Electronic Means

The Company has implemented “the exercise of voting rights via
the internet”.

Participation in Electronic
Voting Platform as well as
Improving the Environment
for Voting by Institutional
Investors

The Company implements “the exercise of voting rights via theinternet” as well as participation in the platform for electronic
exercise of voting rights for institutional investors operated by
ICJ Inc. since ordinary general meeting of shareholders held in
February 2015.

Preparation of Convocation
Notice (a summary of theoriginal) in English

Convocation notice is provided in English.

OthersIn order to foster a better understanding among the shareholders,the Company is conducting 1) the general shareholders meetings
with visual presentations and 2) the post-meeting explanatory
sessions on the Company’s future business strategies. In
addition, the convocation notice of the general shareholders
meeting has been posted on its corporate website in both
Japanese and English before it is dispatched.

Status of Investor Relations Activities

Supplemental Information

Presentation by
the Company
representative

Establishment andDisclosure of Disclosure
Policies

Disclosure policies have been established anddisclosed on the Company’s corporate website.

Periodical Briefing
Sessions for Individual
Investors

Periodical briefing sessions are held for the
purpose of communicating with individual
investors.

Yes

Periodical Briefing
Sessions for Analysts andInstitutional Investors

Large meetings (following full year and half year
operating results announcements) are organized.

Yes

17

3.

Availability of IR
Materials on the
Corporate Website

IR information platform is posted on the
Company’s corporate website, and “News
Release” discloses the latest information. “IR
Library” page contains the Company’s financial
statements and the Annual Securities Reports.
The quarterly presentation videos are also posted
with the presentation slides. The English
versions of the IR materials and the presentation
videos are disclosed as well.

Designation of a
Department (or person)
responsible for Investor
Relations

Accounting and IR Department

Status of Measures to Ensure Due Respect for Stakeholders
Supplemental Information
Provision of Rules on
Respect for the Positions of
the Stakeholders under theInternal Regulations of theCompany

The Company has established the information disclosure regulations,effective from December 2006.

Conducting ofEnvironmental Preservation
Activities and CSR
Activities

The Company conducts its business based on the three Eco-Missions
stipulated in the “Tosei Group Eco Declaration”. Specifically, under“Mission 1 - Promote environmental practice through businessactivities”, we strive to minimize environmental burdens byintroducing measures to contribute to energy conservation andresource saving in the real-estate revitalization. Under “Mission 2 Comply with environmental laws, regulations and raising ofenvironmental awareness”, we organize volunteer beach-cleaning
activities by our employees, participate in support activities for areas
affected by the Great East Japan Earthquake, and promote energy andresource saving efforts internally, aiming to increase Tosei Group
employees’ environmental conservation awareness. Under “Mission 3- Inform our activities to stakeholders”, we prepare the “Tosei GroupCSR Activity Report” and publish the report on the Company’s
website in order to provide our stakeholders with a clear explanationon the Group’s environmental, social and corporate governanceinitiatives.

Establishment of Policies
Concerning Provision ofInformation to Stakeholders

The disclosure policies have been established and put into effect.

18

IV. Matters Concerning Internal Control System
1.

Basic Policy of Internal Control Systems and the Progress of the System Development
The Company’s basic policies of internal control system are currently as stated below. The progress of
system development as of November 30, 2018 is also provided later in this section.
Basic Policies for “Ensuring Appropriate Company Management”
1. Basic Policies for Compliance with Laws and Regulations(1) Ensure awareness among all officers and employees regarding compliance with laws andregulations.
(2) Strengthen the checking function for breach of laws and regulations.
(3) Promptly react to any breach of laws and regulations, and make timely and appropriate

information disclosure concerning such breaches.
(4) Eliminate any association with anti-social forces.
2. Basic Policies for Storing and Managing of Information(1) Ensure awareness among all officers and employees regarding the importance of storing andmanaging information.
(2) Enhance the initiatives for preventing the leakage of material information.
(3) Ensure thorough familiarity with important information and information requiring timely

disclosure and prevention of misstatements or material omissions.
3. Basic Policies for Management of Risk of Loss
(1) Ensure thorough understanding, analysis and assessment of risks that may hinder the continuationof the Company’s corporate activities.
(2) Enhance monitoring of risk management.
(3) Establish a proper whistle-blowing system for any occurrences and/or signs of surfacing ofcontingencies.
(4) Promptly react to any occurrence of contingencies and/or accidents, and make timely andappropriate disclosure of information regarding such occurrences.
4. Basic Policies for Efficient Execution of Duties by Directors(1) Carry out deliberation and decision-making on the important management matters of theCompany, in efficient, timely and appropriate manners.
(2) Eliminate excessive pursuit of efficiencies in the management plans and/or the business targets
and make balanced decisions considering the soundness of the Company.
(3) Establish a system to allow appropriate and efficient execution of business in accordance withthe rules on delegation of operational authority.
5. Basic Policies for Properness of the Operations of the Entire Group(1) Strive for a full penetration of the understanding of the Company’s corporate philosophy andawareness for the compliance among the officers and the employees of each of the Group
companies and ensure that each of the Group companies complies with laws and regulations.
(2) Strive for full awareness, analysis and evaluation of risks that impede the sustenance and19continuation of the businesses of each of the Group companies, prepare for contingencies, andestablish a system to compel prompt reporting if contingencies occur.
(3) Formulate a medium-term management plan, business plans for single fiscal years and budgets
for the same relating to the entire Group, periodically check the progress of these plans, andcompel timely reporting on newly occurring problems and appropriately handle such problems.
(4) For matters that are important and those for which timely disclosure is required at each of theGroup companies, and other matters relating to execution of duties by officers and employees at
each of the Group companies, establish a system to compel prompt reporting from each of theGroup companies to the Company.
(5) Enhance the system for ensuring the appropriateness of the financial reporting relating to theentire Group.
(6) Eliminate wrongful acts and/or irregular transactions using the Group.
6. Basic Policies for Systems to Ensure Effective Audits by the Audit & Supervisory Board Members(1) Designate members of staff to assist Audit & Supervisory Board Members in their duties, andhave them carry out assistance duties under the command of the Audit & Supervisory Board
Members.
(2) Ensure the independence of the aforementioned members of staff from directors and obtainconcurrence from the Audit & Supervisory Board for personnel matters for the said members ofstaff such as transfers and performance evaluations.
(3) In addition to deliberations on proposals and reports on important matters at the Board of
Directors, have Audit & Supervisory Board Members attend important meetings for businessexecution, and carry out periodic interviews with Directors and important employees.
Furthermore, ensure prompt reporting to Audit & Supervisory Board Members from all officers
and employees who have identified any material loss and signs of the same or any breach of
regulations or misconduct, and prompt reporting to the same in response to demands from them.
(4) Establish a system to compel prompt reporting to Audit & Supervisory Board Members from all
officers and employees at each of the Group companies who have identified any material loss
caused by management at each of the Group companies and signs of the same or any breach oflaws and regulations or misconduct, or from officers and employees of the Company who havereceived reports from such persons, and strive for its full implementation, and also compel prompt
reporting if reporting is demanded by Audit & Supervisory Board Members.
(5) Ensure full notification of policy not to mete out disadvantageous treatment for the reason of areport described in the preceding two paragraphs made by officers and employees of theCompany and the Group companies to Audit & Supervisory Board Members.
(6) Develop a whistle-blowing system across the entire Group and promptly report to Audit &Supervisory Board Members if whistle-blowing occurs.
(7) When Audit & Supervisory Board Members request advance payments, etc. of expenses,
promptly handle the said expenses or debt obligations, except in cases where they are deemed
unnecessary for the execution of duties.
(8) The directors are to make efforts to understand and support the audits by the Audit & Supervisory
Board Members and proactively work to improve the issues raised by the Audit & Supervisory
Board Members.
(9) In order to accomplish adequate audits of the entire Group performed by the Audit & Supervisory
Board Members, the directors are to provide necessary cooperation to the Audit & Supervisory
Board Members.

20

Under the basic policies above, in a continuous effort to develop the internal control system, theCompany establishes plans for implementation and operation of the internal control system annually
taking into consideration of revisions of relevant laws and regulations, changes in the businessenvironment of the Group, expansion of the businesses, etc.
The internal control system of the Group implemented and operated as of November 30, 2018 is asfollows :*Major meetings cited in the text
Meeting name
Board of Directors’ meeting

Frequency of meeting
Monthly + Extraordinary

Pre-Board meeting discussion

Monthly + Extraordinary

Corporate governance meeting Monthly
Management meeting

Twice a month +Extraordinary

Risk Management andCompliance Committee’s
meetingMonthly

Information Disclosure
Committee’s meeting

Monthly + Extraordinary

Attendees
Directors and Audit & Supervisory
Board Members
Full-time Directors, full-time Audit &Supervisory
Board
Members,
Executive Officer in charge ofadministrative department, and person
responsible for briefing on the agenda
Full-time Directors and full-time
Audit & Supervisory Board Member
All Executive Officers and Audit &Supervisory Board Members (asobservers)
Senior Executive Officers, all headsof each division, those responsible forrisk management and compliance ateach Group company, and full-time
Audit & Supervisory Board Members(as observers)
Senior Executive Officers, Executive
Officers of departments involved in
information disclosure, and full-time
Audit & Supervisory Board Members(as observers)

1. Compliance with Laws and Regulations(1) Ensure awareness regarding compliance with laws and regulations

At the beginning of each fiscal year a risk compliance program is drawn up, and trainings in therelevant laws and regulations, measures to cultivate awareness of legal issues have been
implemented, in addition to which a compliance questionnaire is circulated every fiscal year to
all officers and employees of the Group.
In addition, the Risk Management and Compliance Committee’s meeting (attended by all headsof each department) and a business law liaison meeting (attended by all heads of the operational
divisions) are held every month, during which participants are duly made familiar with
amendments to laws and regulations, etc. and notices from ministries with jurisdiction etc.,

21

while the results of deliberations by the Committee are reported to the monthly meetings of theBoard of Directors.
During the fiscal year under review, we implemented the Harassment Prevention Training Course
for officers and those in managerial positions in the Company and each of the Group companies.
In addition, we formulated and distributed the Harassment Prevention Leaflet to all officers andemployees in the Group.
(2) Strengthen the checking function for breaches of laws and regulations
As well as monitoring and supervising by two Outside Directors and four Audit & Supervisory
Board Members (all Outside Audit & Supervisory Board Members) at the Board of Directors’
meeting, periodic meetings are held to exchange opinions between Audit & Supervisory Board
Members and Outside Directors (held three times during the fiscal year under review), andbetween Audit & Supervisory Board Members and legal advisors (held three times during the
fiscal year under review), so as to check for any signs of breaches of laws and regulations by
the Directors responsible for executing business.
Moreover, while the Internal Audit Department conducts internal audits on the Company and theGroup companies and self-inspections at the departmental level are implemented, the Company
continues to operate the whistle-blowing system providing three points of contact, internal,
external and through Audit & Supervisory Board Members.
(3) Promptly react to any breach of laws and regulations, and make information disclosure
At important meetings and committees attended by full-time Directors, including those of theBoard of Directors, checks are made for signs, or actual occurrences, of breaches of laws andregulations, instructions are given regarding responses, and status reports are made. Also, theCompany has prescribed internal rules regarding the establishment of a crisis management
office headed by the President and CEO, and timely and appropriate information disclosure in
the event that serious breaches and/or incidents occur.
During the fiscal year under review, we revised the Crisis PR Manual, which stipulates the
responses to be taken (information disclosure, etc.) in the event of occurrence of serious breaches
and/or incidents.
(4) Eliminate any association with anti-social forces
The Company continues screening of counterparties at the inception of transactions and carries
out trainings on action against anti-social forces for all officers and employees of the Group inorder to completely eliminate any association with anti-social forces.
2. Storing and managing information(1) Ensure awareness regarding the importance of storing and managing information

Every fiscal year we implement training for the information asset management, including
personal information, and for the prevention of insider trading for all employees of theCompany, and by doing so, we have continued to educate and inculcate rules for the handling ofimportant information.
During the fiscal year under review, we formulated and disseminated guidelines regarding thehandling of important information of other companies that are likely to be acquired through sales
activities.
(2) Enhance the initiatives for preventing the leakage of important information
With regard to the state of compliance with rules for the handling of information assets (printed
and electronic information), in addition to self-inspections implemented at all departments and22

audits conducted by the Internal Audit Department, we have strengthened the penalties forbreaches and continued targeted guidance for those who infringe the rules.
(3) Ensure thorough familiarity with material information and information for timely disclosure andprevention of misstatements
The Information Disclosure Committee meets on a monthly and a temporary basis to understandwhich information is subject to timely disclosure, and to confirm information disclosure methods,
etc. In addition, any changes in the rules regarding timely disclosure in connection with
amendments of listing rules, etc. are reviewed on a monthly basis by the Committee and reported
to the monthly meetings of the Board of Directors.
3. Management of Risk of Loss
(1) Ensure thorough understanding, analysis and assessment of risks

In accordance with the risk compliance program formulated at the beginning of each fiscal year,
we implement a survey on 30 significant risks (once a year), and stress tests (twice a year) in
relation to real estate market conditions, transaction conditions, and the financing status offinancial institutions. The results are reported at the Board of Directors’ meetings.
Regarding the hotel operations business that we started in the fiscal year under review, we haveidentified 10 significant risks including emergency accidents and fires, formulated and set up a
manual for business execution procedures to follow in the event of an accident, and implemented
drills and trainings regularly.
(2) Enhance monitoring of risk management
At monthly Risk Management and Compliance Committee’s meeting, the states of our responses
to emerging risks are checked, information gathering efforts on latent risks are continued, and thedetails are reported at the Board of Directors’ meeting held each month, in addition to which theoutcomes of the responses are monitored by the Internal Audit Department.
(3) Establish a proper internal reporting system for any occurrences and/or signs that contingencies
may occur
All employees are kept informed through morning briefings, training sessions and meetings, ofduty to promptly report to the heads of each department and duty of the heads of each department
to report to full-time Directors and Audit & Supervisory Board Members.
(4) Promptly react to any occurrence of contingencies and disclose information
In case of occurrence of a contingency, a natural disaster, etc., a crisis management office directedby the President and CEO as the head will be established to collect information, confirm facts
and circumstance, develop and implement countermeasures, and properly disclose information
in a timely manner.
During the fiscal year under review, we revised the Crisis PR Manual, which stipulates the
responses to be taken (information disclosure, etc.) in case of occurrence of a contingency, etc.
4. Efficient Execution of Duties by the Directors(1) Carry out deliberation and decision-making on the important management matters, in an efficient,

timely and appropriate manner
In order to further enrich and to make more efficient the deliberations of the Board of Directors(held on a regular and a temporary basis), we have implemented management meetings (heldtwice a month) and pre-Board meeting discussions to confer beforehand on matters to be resolved

23

by the Board of Directors.
(2) Eliminate excessive pursuit of efficiencies in the management plans, etc. and pursue the balancewith the soundness
Annual business plans and budgets are prepared toward the achievement of the three-year
medium-term management plan.
When drawing up the business plans and budgets, we analyze the economic environment in Japanand overseas and the operating environment in the real estate market, conduct separate
discussions with each department and Group company without setting goals that are overambitious, and make our final decisions.
(3) Establish a system to allow appropriate and efficient execution of businessWe have been implementing organizational changes and other modifications in order to executebusiness appropriately and efficiently. This is in response to changes in the content of thebusinesses, the increase in the number of employees associated with the expansion of businessincluding new businesses, and the increase in the number of Group companies, etc.
In preparation for the new fiscal year, in the fiscal year under review, we have resolved to conduct
the organizational restructuring of business divisions and establish Asset Solution Department 5
with the aim of expanding business.
5. Properness of operations of entire Group(1) Ensure compliance with laws and regulations by officers and employees of each Group

companies
Through various trainings, etc. conducted by the Company and each Group company, we are
striving for a full penetration of the understanding of the Group’s philosophy and improvementof compliance awareness.
In addition, we share information on compliance through implementation of the risk management
and compliance program, established by the Company and each Group company, and attendanceof responsible personnel of each Group company to meetings of the Company’s Risk
Management and Compliance Committee. Furthermore, the Company’s in-house booklets aboutcompliance with laws and regulations, called the Compliance Mind, are distributed to the Group
companies to keep them informed of the importance of compliance. Also, we conduct thecompliance questionnaire every fiscal year for all officers and employees in the Group, identify
issues of each company, and consider responses to such issues.
(2) Ensure thorough understanding, analysis and assessment of operational risks related to eachGroup company, and responses to contingencies
Regarding the management of each Group company and significant risks (30 items) related totheir business, risk evaluations are conducted each fiscal year. At the same time, the Company’s
full-time Directors, Executive Officers in the Administrative Division, etc. are concurrently
appointed as Director or Audit & Supervisory Board Member for each Group company with theremit of monitoring and supervising each company’s responses to risks. Every month, eachGroup company reports management conditions and their responses to risks at the meeting of theBoard of Directors of the Company or the Risk Management and Compliance Committee’s
meeting. Moreover, the response of these companies and the results thereof are continuously
audited or monitored by the Company’s Internal Audit Department, which may also conduct
checks using external agencies as necessary, with the results being reported at the Board of
Directors’ meeting.

24

(3) Formulate a medium-term management plan, business plans for single fiscal year and budgets

relating to the entire Group, manage the progress of these plans, and respond to new issues
appropriately
Annual business plans and budgets are prepared for each company, aimed toward theachievement of the Group’s three-year medium-term management plan.
When drawing up the business plans and budgets, we analyze the economic environment in Japanand overseas as well as the environment for the business of each Group company, then make final
decisions based on separate discussions with each Group company so as to avoid setting goals
that are over-ambitious.
The progress of the business plans and budgets is reported by representative directors of eachcompany at the Board of Directors’ meeting of the Company on a monthly basis, and also,
responses to new issues are deliberated and areas to be focused during the next half-year period
are specified at the growth strategy meeting held with each Group company on a half-yearly basis.
(4) Establish a system for prompt reporting of significant matters of each Group company to theCompanyWith regard to important matters in the management and latent risks of each company, reports
are made each month at meetings of the Board of Directors and the Risk Management andCompliance Committee of the Company.
Any contingencies, if occurred, are immediately reported to the chairman of the Risk
Management and Compliance Committee of the Company, and a contingency management
meeting composed of members including officers of the Company and each Group company isestablished to deliberate and implement countermeasures as a Group and to disclose information
in a timely and appropriate manner.
(5) Enhance the system for ensuring the appropriateness of the financial reporting relating to theentire GroupIn order to ensure the appropriateness of the financial reporting and the expeditious consolidated
financial closing, the Accounting Department of the Company holds a meeting with theaccounting department of each Group company for every quarterly closing to share informationand provide instructions.
Furthermore, annual plans for internal control (J-SOX) are prepared to ensure the appropriatenessof the financial reporting, and the Internal Audit Department of the Company conducts
assessments and the audit corporation conducts audits.
In addition, opinion-exchanging meetings concerning threefold auditing are held regularly,
between the Company’s full-time Audit & Supervisory Board Members, the Internal Audit
Department, and the audit corporation.
(6) Eliminate wrongful acts and/or irregular transactions using the Group
Wrongful acts and/or irregular transactions are monitored by Directors and Audit & Supervisory
Board Members of the Company through management reports of each Group company at the preBoard meeting discussions each month, opinion-exchanging meetings (twice a year) attended byfull-time Audit & Supervisory Board Members of the Company with representative directors ofmajor Group companies, and the investigation of subsidiaries by full-time Audit & Supervisory
Board Members (once a year). Also, internal rules have been established requiring any significant
transactions by a Group company with the Company or other Group companies to be reported inadvance to the Board of Directors of the Company.
6. System to ensure effective auditing by Audit & Supervisory Board Members

25

(1) Designate members of staff to assist Audit & Supervisory Board Members in their duties

The Internal Audit Department has been assigned as the department in charge, and the personnelof the Internal Audit Department provide assistant duties under the command of Audit &Supervisory Board Members and carry out administrative duties for the Audit & Supervisory
Board.
(2) Ensure the independence of the aforementioned members of staff from Directors
Evaluations, rewards and punishments, and transfers of personnel of the Internal Audit
Department are carried out after the concurrence from the Audit & Supervisory Board is obtainedin advance.
(3) Ensure prompt reporting to Audit & Supervisory Board Members from all officers and employees
who have identified occurrence or signs of any material losses, any breach of laws and regulations
or misconduct, and prompt responses to the inquiry from Audit & Supervisory Board Members
Reports are made in a timely and appropriate manner at corporate governance meetings,
comprising full-time Directors and full-time Audit & Supervisory Board Members (heldmonthly), as well as in the interviews by full-time Audit & Supervisory Board Members with the
President and CEO (once a month), other full-time Directors (once a quarter), and heads of eachdepartment (twice a year).
Regarding the whistle-blowing system, besides informing the employees of the Company thatfull-time Audit & Supervisory Board Members of the Company will act as regular contact points,
reports made to the internal contact point (the chairman of the Risk Management and Compliance
Committee) or to the external contact point (an external agency) will all be promptly reported tofull-time Audit & Supervisory Board Members. Therefore, the system is designed so that reported
facts are swiftly transmitted to full-time Audit & Supervisory Board Members.
(4) Ensure prompt reporting to Audit & Supervisory Board Members from all officers and employeesof each Group companies who have identified occurrence and signs of any material losses
attributable to the management of each Group company, any breach of laws and regulations or
misconduct, and prompt responses to the inquiry from Audit & Supervisory Board Members
At the pre-Board meeting discussions of the Company, where each Group company makes themonthly management reporting, and at interviews by full-time Audit & Supervisory Board
Members of the Company with representative directors of each Group company held on a regularbasis, each Group company is required to report occurrence and signs of any material losses andsignificant risks associated with management of the Group company.
All officers and employees of the Group are continuously informed at morning briefings andtraining sessions that those who identify any breach of laws and regulations or misconduct havea duty to report Audit & Supervisory Board Members of the Company promptly.
(5) Ensure full notification of prohibition of disadvantageous treatments for the reason of a report by
officers and employees of the Company and the Group companies to Audit & Supervisory Board
Members
Regulations of the Company explicitly state that those who report Audit & Supervisory Board
Members or whistle-blowers are protected from any disadvantageous treatments. Such policy is
continuously informed at training sessions, etc., and is also stated in the explanation of systems
on the Company’s intranet and in leaflets, etc. distributed to employees.
(6) Develop a whistle-blowing system across the entire Group and promptly report to Audit &Supervisory Board Members if whistle-blowing occurs
The Company continues to operate a whistle-blowing system that provides three contact points,
internal, external, and through Audit & Supervisory Board Members of the Company. Reports to26

the internal and external contact points, if any, are promptly reported to Audit & Supervisory
Board Members, and when no whistle-blowing has occurred, this fact is reported on a monthly
basis.
In addition, all officers and employees of the Group are provided with a pocket-size card on
which the contact points of the whistle-blowing system are listed, and are continuously informedof the system through various training sessions relating to compliance, morning briefings, andthe publication of notice, etc.
(7) Allowance for expenses associated with execution of duties of Audit & Supervisory Board
Members
Expenses required for audit activities by and the studies of Audit & Supervisory Board Members
are appropriated in the budget, and expenditures are reimbursed in a timely manner. Also, any
unbudgeted expenditures required for audit activities are properly handled.
(8) Directors’ understanding of and support for the audits by Audit & Supervisory Board Members
and proactive improvement of the issues raised by Audit & Supervisory Board Members
At the Board of Directors’ meeting subsequent to the Ordinary General Meeting of Shareholders,the Directors receive explanations of Audit & Supervisory Board Members’ annual audit plans
and make efforts to understand such plans and cooperate in their implementation. At the Boardof Directors’ meeting once every three months, Directors report the status of their responses tothe issues raised by full-time Audit & Supervisory Board Members in their monthly audit reports.
(9) Cooperation by Directors aiming to enhance audits by Audit & Supervisory Board Members
across the entire GroupAt the Board of Directors’ meetings, the pre-Board meeting discussions, management meetings,
and the Risk Management and Compliance Committee’s meetings, Directors report the
management conditions of the entire Group, risk information, etc. to Audit & Supervisory Board
Members and share information. Furthermore, the periodic interviews by full-time Audit &Supervisory Board Members with full-time Directors including the President and CEO, heads ofeach department, and representative directors of major Group companies, as well as the liaison
meetings of Audit & Supervisory Board Members of the Group companies (on a half-yearlybasis) are held with necessary cooperation by full-time Directors.

2.

Basic Policies for Eliminating Anti-social Forces and Progress of System Establishment
The Company recognizes any association with anti-social forces will result in a breach of laws andregulations. The Company always treats this as a critical matter and takes countermeasures so as torefuse any transaction with such. In the event any dispute arises between the Company and anti-social
forces, it will stand firmly against them.
In ordinary times, the Company makes it a rule to research and confirm that new business counterparty
is not one of the anti-social forces, prior to the commencement of any transaction. If any issue arises,
it will be handled, not by an individual, but by a team including the Administration Department (towhich an officer responsible for unreasonable claim preventions belongs), and the Company will also
coordinate closely with the legal counsel and the office of police responsible for the area. In addition
to developing “The manual for acting against anti-social forces”, the Company has provided the basic
policies for eliminating any contact with anti-social forces and the checkpoints on the specific actionsin the Company’s compliance guidebook. The Company annually offers a training session and educate
its employees in coping with such anti-social forces.

27

V.

Others1.

Whether Takeover Defense Measures Are in Place
Whether Takeover Defense Measures Are in Place

Yes

Supplementary Explanation Concerning the Subject Matter
Basic Policy as to How the Persons Who Control Decision-making of the Financial and Business Policiesof the Company Should Be(1) Contents of the basic policy
The Company believes that the persons who control decisions on the Company’s financial andbusiness policies need to be persons who fully understand the details of the Company’s financial andbusiness affairs and the source of the Company’s corporate value and who will make it possible tocontinually and persistently ensure and enhance the Company’s corporate value and, in turn, thecommon interests of its shareholders.
The Company believes that ultimately its shareholders as a whole must make the decision on any
proposed acquisition that would involve a change of control of the Company. Also, the Company
will not reject a large-scale acquisition of the shares in the Company if it will contribute to thecorporate value of the Company and, in turn, the common interests of its shareholders.
Nonetheless, there are some forms of large-scale acquisition of shares that benefit neither the
corporate value of the target company nor the common interests of its shareholders including thosewith a purpose that would obviously harm the corporate value of the target company and the common
interests of its shareholders, those with the potential to substantially coerce shareholders into selling
their shares; those that do not provide sufficient time or information for the target company’s boardof directors and shareholders to consider the details of the large-scale acquisition, or for the target
company’s board of directors to make an alternative proposal and those that require the target
company to discuss or negotiate with the acquirer in order to procure more favorable terms forshareholders than those presented by the acquirer.
It is particularly necessary and essential for the persons who make decisions on the Company’s
financial and business policies to (i) maintain the system under which the Company group covers
with its comprehensive capability the five business fields and peripheral fields that allow the“integration of real estate and finance,” which leads to maximization of the potential of the Company
group, (ii) maintain employees who support those businesses with knowledge and experience
specializing in real estate and finance, etc., (iii) maintain the Company’s trust in the real estateindustry that has been built up over a long period of time based on the establishment of the ability
and information networks supporting various value creation technologies, and (iv) master knowhowthat enables comprehensive business. Unless the acquirer of a proposed large-scale acquisition of
the shares in the Company understands the source of the corporate value of the Company as well as
the details of financial and business affairs of the Company and would ensure and enhance theseelements over the medium-to-long term, the corporate value of the Company and, in turn, thecommon interests of its shareholders would be harmed.

28

The Company believes that persons who would make a large-scale acquisition of the shares in the
Company in a manner that does not contribute to the corporate value of the Company or the common
interests of its shareholders would be inappropriate as persons that control decisions on the
Company’s financial and business policies. The Company believes that it is necessary to ensure thecorporate value of the Company and, in turn, the common interests of its shareholders by taking
necessary and reasonable countermeasures against a large-scale acquisition by such persons.
(2) Overview of the special measures to realize the basic policy
The Group established its three-year medium-term management plan aiming to further increase theGroup’s corporate value and is pushing ahead with business under the plan.
The Group is promoting its medium-term management plan “Seamless Growth 2020” (December
2017 to November 2020) with the fiscal year ended November 30, 2018 as its first year. The major
policy of the plan is “to continue growth as a Group to build a firm position as an originalcomprehensive real estate company.” In the fiscal year ending November 30, 2019, the Company
will continue implementing its growth strategy based on this plan.
The Revitalization Business will revitalize and create added value for existing properties and aim
to expand operations through initiatives such as product line expansion and diversification of sales
methods. With regard to the acquisition of properties, the Company will actively increase thenumber of small- to medium-size and high liquid property in the metropolitan area and acquire
over ¥2.0 billion of medium- to large-size and profitable property, while paying attention to theportfolio. The Development Business will promote the development and sales of detached houses
and condominiums that are in steady demand, as well as active development of properties such as
logistics facility and hotels after assessing the location demand. On the other hand, the Stock andFee Business, the Company’s stable source of income, aims to expand all segments. The Rental
Business will strive to expand Company-held fixed assets; the Fund and Consulting Business willaccumulate assets under management; and the Property Management Business will increase
properties under management.
Moreover, as an initiative to establish new income-generating businesses, the Hotel Businesssegment will be newly established from the fiscal year ending November 30, 2019. In addition to theoperation and rental of the existing properties, the Company is currently advancing the developmentof own brand hotel at three locations following TOSEI HOTEL COCONE Kanda, opened in
December 2017, and TOSEI HOTEL COCONE Ueno, opened in December 2018, and will continue
to work toward the growth of hotel business and enhancement of Tosei brand.
(3) Overview of the measures to prevent persons deemed as inappropriate, in view of the basic policy,
from controlling the decisions on the Company’s financial and business policies
This plan is a measure to prevent persons deemed as inappropriate, in view of the aforementioned
basic policy, from controlling the decisions on the Company’s financial and business policies, andits objective is to ensure and enhance the Company’s corporate value and, in turn, the common
interests of its shareholders.
The plan stipulates procedures to be followed in an acquisition, etc. of shares, etc. of the Company((A) a purchase and/or other acquisition of the shares and the like issued by the Company that would

29

result in the holding ratio of share certificates, etc. (kabuken tou hoyuu wariai) of a holder (hoyuusha)
of 20% or more; or (B) a tender offer (koukai kaitsuke) with respect to the shares, etc. issued by
the Company that would result in the sum of the offeror’s ownership ratio, and that of the persons
having a special relationship with the offeror, of 20% or more; or any actions similar to (A) or (B)above) by those trying to acquire (hereinafter, the “Acquirer”).
Specifically, the Acquirer must provide the Company a statement of undertaking and an acquisition
document that includes necessary information, prior to making an acquisition.
Upon receiving these documents, an independent committee will conduct the review of theacquisition terms, collection of information on materials such as the management plans and businessplans of the Acquirer and the Company’s board of directors and comparison thereof, the review ofalternative plans, etc. presented by the Company’s board of directors, and discussions andnegotiations with the Acquirer, while obtaining advice from independent experts. In the meantime,
the Company will disclose information in a timely manner.
When the acquisition is not in compliance with the procedures stipulated in the plan, and/or there ispossibility of such offer to apparently cause harm to the corporate value of the Company and, in turn,to the common interests of shareholders, and it is appropriate for the Company to implement thegratis allotment of stock acquisition rights, the independent committee will recommend theimplementation the gratis allotment of stock acquisition rights to the Company’s board of directors.
In addition, when a meeting of shareholders is convened to confirm the intent of the Company’s
shareholders, the Company’s board of directors will comply with the shareholders’ intent. These
stock acquisition rights will be allotted with an exercise condition that does not allow, as a generalrule, the Acquirer to exercise the rights and an acquisition provision to the effect that the Company
will acquire the stock acquisition rights in exchange for shares of the Company from persons otherthan the Acquirer. The Company’s board of directors will resolve, as an agency stipulated by theCompanies Act, as to the implementation or non-implementation of the gratis allotment of stockacquisition rights, fully respecting the recommendation of the Independent Committee. In addition,
when a meeting of shareholders is convened to confirm the intent of the Company’s shareholders,the Company’s board of directors will follow the shareholders’ intent. If the procedures under thisplan have commenced, the Acquirer must refrain from making any acquisition until the Company’sboard of directors resolves not to trigger the plan. The plan will remain in effect until theconclusion of the ordinary general meeting of shareholders for the last fiscal year ending within three
years of the conclusion of the 68th Ordinary General Meeting of Shareholders. However, if, before
the expiration of the effective period, the Company’s board of directors resolves to abolish the plan,
the plan will be abolished at that time.
(4) Assessment by the Company’s board of directors regarding specific measures and reasons thereofCompany’s board of directors is of the view that the various measures to enhance the corporate value,
including the new medium-term management plan and other measures to strengthen corporate
governance have been established as specific actions to continuously and sustainably enhance thecorporate value of the Company and, in turn, the common interests of its shareholders, and that these
are in line with the basic policy, do not undermine the common interests of the Company’s
shareholders and are not for the purpose of maintaining the positions of the Company’s corporate
officers.

30

In addition, the Company’s board of directors is of the view that the plan is in line with the basic policy,
does not undermine the common interests of the Company’s shareholders, and is not for the purposeof maintaining the positions of the Company’s corporate officers, based on the following reasons: anapproval at the general meeting of shareholders has been obtained for its renewal; its maximum
effective period is stipulated to be three years and it can be abolished at any time by the resolution of
the Company’s board of directors; an independent committee, which is comprised of the members thatare independent of the management of the Company, has been established and the countermeasures
stipulated in the plan requires the decision by the independent committee for actual executions; andthe plan fully satisfies the three principles set out in the “Guidelines Regarding Takeover Defense for
the Purposes of Protection and Enhancement of Corporate Value and Shareholders’ Common Interests”
released by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27, 2005.

2.

Other Matters Concerning the Corporate Governance System
1.

Overview of the Corporate Governance System
Tosei Group has implemented the “system to ensure that directors’ execution of duties comply with
relevant laws and regulations as well as the articles of incorporation, and other systems to ensure
appropriateness in the operations of the Company”, as stipulated in the Company Act (so called“an internal control system”). (Please refer to “Basic Policies of Internal Control Systems and theProgress of the System Development” for the detail.) Furthermore, the Group works to enhance its
risk management system and offers compliance training for all of its employees in the Group, as
well as to develop and enhance the timely information disclosure system. In addition, in January
2019, the Group established the Tosei Group ESG Policy and set up the ESG Promotion Meeting.
The Group recognizes that environmental, social and corporate governance initiatives areimportant management matters, and will aim for its continuous growth by contributing to society
through earnest efforts to address social issues related to real estate.

2. Overview of Timely Information Disclosure System(1) Basic Policy
From the viewpoint of corporate governance, corporate social responsibility, and theenhancement of corporate value over the medium- to long-term, the Company believes thatproper management of corporate information and timely and rational disclosure of important
information is the most important responsibility of a corporation. Therefore, it believes that aproper management of the corporate information and a timely and rational disclosure of theimportant information is the most important responsibility of a corporation. Hence, theCompany is making efforts to develop necessary internal systems for its timely information
disclosure, in order to firmly establish the investors’ trust in the Company and the credit
standing of the Company in the capital market.
(2) System for a Timely Information Disclosure(A) The Officers/Department in Charge of Information Disclosure(i) The Officers/Departments in Charge of Information Disclosure
The executive responsible for the Company’s information disclosure is the Senior

31

Executive Officer of Administrative Division and the department in charge is the
Accounting and IR Department.
(ii) Information Disclosure Committee
The Company has a deliberation body, the Information Disclosure Committee which
consolidates and then shares all the relevant information, reviews and determines
necessity and contents of the disclosure, in order to ensure a proper and timely
disclosure of the corporate information.
Chaired by the executive in charge of information disclosure, the Disclosure
Committee is constituted by Company’s the Senior Executive Officers of eachdivision, and the Executive Officers of each department appointed by the chair incharge of information disclosure, Accounting and IR Department functioning as asecretarial office. The Disclosure Committee is responsible for ensuring theCompany’s disclosure in accordance with the relevant laws and regulations describedin (C) below.
(B) Identifying and Verifying Information to be Disclosed
In order for the Company to disclose its corporate information in a proper and timely
manner, the Accounting and IR Department in charge of the information disclosure works
to establish a system which enables close communications with the Board of Directors,
the Management Committee, the operational and administrative departments, as well as
the Company’s subsidiaries.
(i)

The Board of Directors, Pre-Board meeting discussion, and Management Committee
Meetings
The officer in charge of information disclosure is a constituent member of the Boardof Directors, the Pre-Board meeting discussion and the Management Committee
Meeting, and the Company maintains a system which allows prompt identification of
the matters that may require timely disclosures.

(ii) The Operational and Administrative Divisions
As for the operational and administrative divisions, the Administration Department
reviews the circulated approval request memorandums, from the compliancestandpoint. This enables the Accounting and IR Department to identify the matterswhich may be subject to information disclosure.
(iii) The Subsidiaries
We are striving to verify conditions of the Company’s subsidiaries by requiring amonthly report regarding the operational conditions of the Company’s subsidiaries at
the Pre-Board meeting discussion, in addition to requiring an operational report fromthe Board of Directors once a quarter. Also, the Company maintains a system throughwhich it acquires their information requiring information disclosure by suchmeasures as sending directors to the subsidiaries.
(C) The Guidelines for Timely Information Disclosure
The following laws and regulations are referred to by the Company as the basis in32determining the necessity of timely disclosure of its corporate information:(i) Companies Act, Financial Instruments and Exchange Act, and other relevant laws
and regulations(ii) Rules and regulations of the Tokyo Stock Exchange(iii) Rules and regulations of the Singapore Exchange, which the Company is required tocomply with because of its secondary listing on the said Exchange(iv) The Articles of Incorporation of the Company(v) The Insider Trading Prevention Regulations of the Company(vi) The Information Disclosure Regulations of the Company(vii) The Disclosure Policies of the Company (available on the Company’s website)(D) Operational Flow of the Information Disclosure (Please refer to the appendix.)
・ The significant information of the Company as determined in our Information
Disclosure Regulations, such as “information legally required to be disclosed”,“information required to be timely disclosed”, “information based on fairdisclosure rules” or “information required to be disclosed by the Singapore
Exchange”, is promptly reported by the relevant operational department to the
Corporate Planning Department, a secretarial office of the Company’s management
committee meetings, or to the Administration Department, a secretarial office of theboard meetings. The Corporate Planning Department and/or the Administration
Department then instruct the subject departments to carefully manage such information
and review the details of such information if necessary and promptly make a report to
the Accounting and IR Department.
・ The Accounting and IR Department as the office of the Information Disclosure
Committee reports such pieces of information to the Committee for its review, and theCommittee determines whether the disclosure is necessary.
・ With respect to the information whose disclosure is decided to be necessary, the
Accounting and IR Department drafts up the disclosure documents, with theadvice/guidance of the legal counsels and/or the accounting auditors as appropriate,
and the Administration Department confirms the contents of the disclosure. In
finalizing the contents of the disclosure, the Corporate Planning Department further
obtains a resolution from the Board of Directors on those matters requiring the board
resolutions, and/or an approval by the President and CEO for other matters requiring
the Company’s approvals.
(E) Procedures for a Timely Disclosure(i)

General Procedure
The Accounting and IR Department makes timely disclosure though the “Timely
Disclosure Network (TDnet)” operated by the Tokyo Stock Exchange. It also discloses
the same information in English simultaneously through “SGXNET” operated by theSingapore Exchange. Upon such disclosure, the Company also distributes anannouncement on the disclosed information to press clubs and other media immediately.
33

Such announcement is also posted on the Company’s corporate website. The Company
actively discloses other information which is not subject to the timely disclosure
requirements on the website, from the standpoint of investors’ fairness.
(ii)

Emergency Case Procedure
The information is disclosed promptly based on the judgment by the President andCEO or the Senior Executive Officer in charge of the information disclosure.

(3) Managing Corporate Information(A) Preventing Information Leakage
In accordance with the Insider Trading Prevention Regulations, the Executive Officer of
Administrative Division serves as the person responsible for management of the significant
insider information within the Company, communication with the Japan Securities Dealers
Association, and management of a timely disclosure of the Company’s internal control (theOfficer in Charge of Information Handling). With respect to the insider information, accessand utilization are limited only to those whose access is deemed as necessary in the courseof business duty. Further, the General Managers of each department take such measures as
placing strict controls over the storage of documents and electronic data that contain such
insider information he/she obtained in the course of duty, so as to prevent any leakage. In
the event drafting of document and/or preparation of material is outsourced, the Company
takes appropriate actions to ensure confidentiality.
(B) Insider Trading Regulation
In an effort to prevent its employees and officers from committing insider trading , theCompany has set out the items to be observed by its employees and officers with respect tohandling of the Company’s insider information they obtained in the course of their duty,
restrictions on trading of the Company’s shares and other transactions, as well as fulfilling
their operational duties, in accordance with the Insider Trading Prevention Regulations.
Further, it works to enhance the effectiveness of the regulations by requiring the following
specific actions:(i)

Restrictions on the trading conducted by the Company’s employees and directors
The Company requires its employees and directors, as a base rule, to submit an“application for trading of shares, etc.” to the officer in charge of handling insider
information for his/her approval, when they are to transact in the shares of the Company.
It also requires them to report the results of such trading to the officer in charge ofhandling insider information, using the “report of securities trading results”.

(ii) Managing of insider Information
In the event where any information of the Company or other listed companies that may
be deemed insider information came to the knowledge of the Company’s employees
and/or directors, the Company requires them to submit “report on accessing internal
information of the Company” or “report on accessing internal information of othercompanies”, and reports to the officer responsible for handling internal information.

34

(iii) Periodical activity reports by Information Disclosure Committee at the board meetings
With respect to the “activities done by the Information Disclosure Committee”, theCompany designates such activities as one of the agenda items to be regularly reported
at the monthly board meetings, to ensure that its directors are fully aware of the current
status of the Company’s timely disclosure and information control.
(iv) Educating employees and directors of the Company
The Company tries to educate and enlighten its employees and directors regarding theinsider trading issues, during the training sessions organized by the Administration
Department.
The End of Document35

Tosei Corporation’s Corporate Governance System - Diagram

General Meeting of Shareholders
Election/
Dismissal

Accounting
AuditorOutsideexperts Consultation

AdviceAudit & Supervisory
Board
4 Audit & Supervisory
Board Members(All are outside
members)

Board of Directors

Audit

7 directors- 5 full-time directors- 2 full-time Audit &Supervisory Board Members(including 2 outside
directors)
Report(exchange of
opinion)Consultation

Nominating and Compensation
Advisory Committee

Audit

Instruction

ReportAppointment/
Dismissal of
executive
officers ofGroupcompanies

Instruction
Consultation(CEO)

President and CEO

Management
Meeting

Executive Officers(attendance of Audit& Supervisory Board
Members)

Executive Officers(execution ofbusiness)

Information Disclosure
Committee

ReportRisk management andCompliance Committee

Report (exchange of opinion)

Audit/Report

Corporate Governance Meeting

AdviceElection/
Dismissal

Election/
Dismissal

ReportInstruction

Internal Audit Department
ReportReportInstruction

Instruction

Report/Consultation

Instruction/
Order

Each of the divisions/Group companies

36

Audit

Audit/
Investigation

Tosei Corporation’s Information Disclosure - Operational Flow
Disclosure Information
Statutorily Required by
Financial Services
Agency (FSA)

Timely Disclosure
Information Required by
Tokyo Stock Exchange(TSE)

Disclosure Information
Required by Singapore
Exchange(SGX)

Disclosure Information
Based on Fair Disclosure
Rules
(FSA)

Each of the Divisions/ Subsidiaries
ReportInstruction / Confirmation

Management Meeting Office:
The Board Meeting Office:Corporate Planning Department
Administration Department
ReportAccounting and IR Department
Information Disclosure Committee OfficeInformation Disclosure Committee
Corporate Lawyers/
Accounting Auditors

Consultation
Guidance/
Advice

The chair:

Senior Executive Officer in charge ofConsultation

Information Disclosure
Constituent Members:

Guidance/
AdviceSenior Executive Officers,
Executive Officers

Audit & Supervisory
Board
Audit & Supervisory
Board Members

PurposeTokyo Stock
Exchange

Consultation

Singapore
Exchange

Guidance/
Advice- Consolidation and sharing of the corporate information- Deliberation on the contents to be disclosed- Assessment on the necessity of disclosure

Disclosure required

Instruction/
AdviceAdviceCheck

Preparation of Disclosure Materials
Accounting and IR Department

Resolution

Request for Approval
Submission

Approval

The Board of Directors<Information Disclosure><Information Disclosure>Accounting and IR Department

Accounting and IR Department

Administration Department

EDINET(FSA)

Administration
Department

TDnet(Tokyo Stock Exchange)

37

SGXNet(Singapore Exchange)-

President and CEO-

Directors in charge ofInformation Disclosure

Internal
Announcement
Corporate Website

Mass Media