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

Ticker symbol 8830
June 7, 2021
Sumitomo Realty & Development Co., Ltd.
2-4-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Kojun Nishima
Executive Managing Director and President
To Our Shareholders:

NOTICE OF CONVOCATION OF THE 88TH ORDINARY GENERAL MEETING OF
SHAREHOLDERS
You are hereby notified that the 88th Ordinary General Meeting of Shareholders of Sumitomo Realty & Development
Co., Ltd. (the “Company”) will be held as stated below. Your attendance is respectfully requested.
In the event that you are unable to attend, you can exercise your voting rights with the appropriate form. You arerequested to review the attached Reference Documents for General Meeting of Shareholders and indicate yourapproval or disapproval on the enclosed Form for the Exercise of Voting Rights and return it to the Company by 5:40
p.m. of Monday, June 28, 2021.
Particulars
1. Date and Time: 10:00 a.m. on Tuesday, June 29, 2021
2. Place:
Shinjuku Sumitomo Hall (Entrance B1F)
Shinjuku Sumitomo Building
2-6-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
Please note that the place is different from that of last year.
3. Purpose of the Meeting:
Matters to be reported:
1. Business Report, Consolidated Financial Statements and Audit Reports for Consolidated Financial
Statements for the 88th fiscal year (from April 1, 2020 to March 31, 2021) by the Independent Auditor andthe Board of Statutory Auditors
2. Financial Statements for the 88th fiscal year (from April 1, 2020 to March 31, 2021)
Matters to be resolved:
Agenda 1.
Appropriation of Retained Earnings
Agenda 2.
Election of Ten Directors
Agenda 3.
Election of One Substitute Statutory Auditor
If attending the meeting, you are kindly requested to submit the enclosed Form for the Exercise of Voting Rights to a receptionist.
If any matter is found to be modified in the Reference Documents for General Meeting of Shareholders, Business Report, Consolidated
Financial Statements and/or Financial Statements until the day before the meeting, it will be notified by mail or posted on the Company
website. (http://www.sumitomo-rd.co.jp/english/)-1-

REFERENCE DOCUMENTS FOR GENERAL MEETING OF SHAREHOLDERS
Agenda and References
Agenda 1.

Appropriation of Retained Earnings

The Company’s basic policy of profit distribution is to ensure prioritization of investment in rental buildings in orderto enhance the long-term revenue base and a “sustainable increase on dividend payments” in line with profit growth.
In the fiscal year under review, a decline in profits in the commercial facilities such as hotels and event halls was
unavoidable due to the impact of the COVID-19 pandemic. However, profit renewed a record high for the 8thconsecutive year as a result of growth of mainstay office building leasing business in both revenue and profits, andalso steady trend of housing-related business including condominiums, remodeling and brokerage.
Taking this result into consideration, we would like to propose to continue the “annual dividend increase of 5 yen”
and to increase the year-end dividend to 21 yen per share (2 yen increase from the previous fiscal year) as stated in
the “Notice Concerning Revision of Year-end Dividend Forecast” dated February 12, 2021.
If this agenda is approved as originally proposed, the annual dividend per share will be 40 yen (5 yen increase fromthe previous fiscal year), including the interim dividend of 19 yen per share.
For the next fiscal year ending March 31, 2022, we expect to renew record profit for the 9th consecutive year, andwe intend to raise the annual dividend by 5 yen from the fiscal year under review to 45 yen (including an interim
dividend of 22 yen).

Matters concerning year-end dividends
Type of dividends
Cash
Matters concerning allocation of dividends to shareholders and the aggregate amount
Dividends of 21 yen per share of common stock of the Company
The aggregate amount: 9,952,720,113 yen
The effective date of the appropriation of retained earnings
June 30, 2021
Cash Dividend per Share and Profit*-2-

Agenda 2.

Election of Ten Directors

The term of office of all ten directors will expire upon the conclusion of this meeting, and the Company proposes theelection of the ten directors.
Candidates for director:
CandidatenumberName

Current position and responsibility in the Company

Candidate attributes

1

Kenichi Onodera

Director - Chairman of the Board

Reelection

2

Kojun Nishima

Executive Managing Director and President
Head of Building Development Division

Reelection

3

Nobuaki Takemura

Executive Managing Director and Deputy President
Head of Management Division

Reelection

4

Masato Kobayashi

Executive Managing Director and Deputy President
Head of Residential Business Division

Reelection

5

Hiroshi Kato

Director, Senior Managing Executive Officer
Head of Shinchiku - Sokkurisan Remodeling Division

Reelection

6

Hisatoshi Katayama

Director, Senior Managing Executive Officer
Head of Urban Property Development Division

Reelection

7

Yoshiyuki Odai

Director, Senior Managing Executive Officer
Head of Corporate Planning Division

Reelection

8

Koji Ito

Director, Senior Managing Executive Officer
Executive Managing Director and President of Sumitomo
Real Estate Sales Co., Ltd.

Reelection

9

Yozo Izuhara

Outside Director

10

Nobumasa Kemori

Outside Director

Notes:

Reelection
OutsideIndependent
Reelection
OutsideIndependent

1. There is no special conflict of interest between each of the candidates and the Company.
2. The Company has concluded a directors and officers liability insurance policy with an insurance company, whereby
insured persons will be compensated for any legal damages and litigation costs incurred under the policy. Each candidate
will be included as an insured person under said policy. In addition, we plan to renew the policy upon the next renewal
with the same terms and conditions.

-3-

Candidate
number1

Name(Date of birth)

Kenichi Onodera(February 4, 1947)
Reelection

2

Kojun Nishima(March 6, 1961)
Reelection

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company

Number of theCompany’s shares
held

Apr. 1970
Joined the Company
June 1998
Director
June 2001
Managing Director
June 2005
Executive Managing Director
30,500June 2007
Director - President
June 2013
Director - Deputy Chairman of the Board
Sept. 2019
Director - Chairman of the Board (present)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
Mr. Kenichi Onodera leads management of the Company as Director - Chairman of theBoard, and the Company expects him to make further contribution to improving thecorporate value of the Group by utilizing his extensive knowledge of the Group’s
management in general, and therefore proposes his re-election.
Apr. 1984
Joined the Company
Apr. 2000
General Manager of Business Management
Department, Building Development Division
Apr. 2007
Deputy Head of Urban Property
Development Division
Apr. 2009
Head of Residential Business Division
June 2009
Director
15,000
Sept. 2009
Head of Building Development Division
June 2010
Executive Managing Director (present)
June 2013
Director - President (present)
May 2017
Head of Building Development Division(present)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
Mr. Kojun Nishima leads management of the Company as Director - President, and theCompany expects him to make further contribution to improving the corporate value of
the Group by utilizing his extensive knowledge of the Group’s management in general,and therefore proposes his re-election.

-4-

Candidate
numberName(Date of birth)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company
Apr. 1981
June 2000

3

Nobuaki Takemura(February 13, 1959)
Reelection

4

Masato Kobayashi(June 14, 1960)
Reelection

Number of theCompany’s shares
held

Joined the Company
General Manager of Accounting
Department, Finance and Accounting
Division
June 2008
Director
Oct. 2008
Head of Finance and Accounting Division
20,600June 2010
Executive Managing Director (present)
Oct. 2012
Head of Business Management Division
June 2013
Director - Deputy President (present)
Mar. 2016
Head of Management Division (present)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
Mr. Nobuaki Takemura has experience in finance, accounting, general affairs, humanresources, etc., and the Company expects him to make further contribution to improving
the corporate value of the Group by especially utilizing his extensive knowledge about
the Management Division in general of the Group, and therefore proposes his re-election.
Apr. 1983
Joined the Company
Apr. 2000
General Manager of Building Planning
Department, Building Development Division
Apr. 2007
Deputy Head of Urban Property
Development Division
Apr. 2009
Head of Site Acquisition Division
June 2009
Director
June 2010
Executive Managing Director (present)
14,900Aug. 2010
Head of Residential Business Division
June 2013
Director - Deputy President (present)
Mar. 2016
Head of Building Development Division,
Head of Urban Property Development
Division
Nov. 2017
Head of Residential Business Division(present)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
Mr. Masato Kobayashi has experience in real estate development and real estate
management related to office building business and condominium business, etc., and theCompany expects him to make further contribution to improving the corporate value of
the Group by especially utilizing his extensive knowledge about the Group’s businessdivisions in general, and therefore proposes his re-election.

-5-

Candidate
numberName(Date of birth)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company
Apr. 1984
Apr. 2000

5

Hiroshi Kato
(August 1, 1961)
Reelection

6

Hisatoshi Katayama(July 11, 1961)
Reelection

Number of theCompany’s shares
held

Joined the Company
General Manager of Related Businesses
Department, Building Development Division
Apr. 2007
General Manager of Site Acquisition
Department, Urban Property Development
DivisionAug. 2010
Deputy Head of Building Development
Division
Apr. 2012
Head of New Business Development
13,500
Division
Apr. 2013
Head of Assets Development Division
June 2013
Director (present)
Sept. 2016
Head of Shinchiku - Sokkurisan Remodeling
Division (present)
Apr. 2020
Senior Managing Executive Officer (present)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
Mr. Hiroshi Kato has experience in real estate development and real estate management
related to office building business and housing renovation business, etc., and theCompany expects him to make further contribution to improving the corporate value of
the Group by utilizing his extensive knowledge about the Company’s real estatebusiness, and therefore proposes his re-election.
Apr. 1985
Joined the Company
Dec. 2004
Branch Manager of West Tokyo Branch,
Urban Property Management DivisionDec. 2005
General Manager of Redevelopment
Department, Urban Property Development
Division
Apr. 2010
Deputy Head of Building Development
Division
Feb. 2014
Deputy Head of Site Acquisition Division in
10,500
the Metropolitan Area
Apr. 2016
Deputy Head of Urban Property
Development Division
Sept. 2016
Head of Urban Property Development
Division (present)
June 2018
Director (present)
Apr. 2020
Senior Managing Executive Officer (present)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
Mr. Hisatoshi Katayama has experience in urban redevelopment, real estatedevelopment, and real estate management related to office building business, etc., andthe Company expects him to make further contribution to improving the corporate valueof the Group by utilizing his extensive knowledge about the Company’s real estatebusiness, and therefore proposes his re-election.

-6-

Candidate
numberName(Date of birth)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company

Number of theCompany’s shares
held

Apr. 1985
Sept. 2004

7

Yoshiyuki Odai
(June 9, 1961)
Reelection

8

Koji Ito(December 13, 1959)
Reelection

Joined the Company
General Manager of Corporate Planning
Department, Corporate Planning Division
Apr. 2010
Head of Residential Business DivisionNov. 2010
Head of Corporate Planning Division
June 2011
Director (present)
15,700Nov. 2011
Head of Finance and Accounting Division
Jan. 2014
Head of Overseas Business DivisionNov. 2019
Head of Corporate Planning Division(present)
Apr. 2020
Senior Managing Executive Officer (present)(Significant concurrent positions outside the Company)–
Reasons for nomination as candidate for Director
Mr. Yoshiyuki Odai has experience in corporate planning, finance, accounting, overseas
business, etc., and the Company expects him to make further contribution to improving
the corporate value of the Group by utilizing his extensive knowledge about the Group’s
corporate planning and overseas business, and therefore proposes his re-election.
Apr. 1984
Joined the Company
Apr. 2000
General Manager of Jyosai Operation
Department, Building Management Division
Apr. 2004
General Manager of Development andPlanning Department, Urban Property
Development Division
Apr. 2009
Head of Construction Technology Division
Apr. 2010
Head of Customer Division
Apr. 2013
Head of Residential Business Division
June 2013
Director (present)
16,768Mar. 2016
Head of Housing Renovation Division
Apr. 2017

General Manager of General Affairs
Department, Management Division
Apr. 2019
Executive Managing Director and Presidentof Sumitomo Real Estate Sales Co., Ltd.
(present)
Apr. 2020
Senior Managing Executive Officer of theCompany (present)(Significant concurrent positions outside the Company)
Executive Managing Director and President of Sumitomo Real
Estate Sales Co., Ltd.
Reasons for nomination as candidate for Director
Mr. Koji Ito has experience in real estate development, general affairs, and real estate
management related to housing business and real estate brokerage business, etc., and theCompany expects him to make further contribution to improving the corporate value of
the Group by utilizing his extensive knowledge about the Group’s administrative
division and real estate business, and therefore proposes his re-election.

-7-

Candidate
number9

Notes:

1.
2.

3.

4.

Name
(Date of birth)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company

Number of theCompany’s shares
held

Apr. 1962
Joined Nippon Sheet Glass Co., Ltd.
June 1996
Managing Director
June 1998
Representative Director, President
June 2004
Representative Director, Chairman
June 2008
Director, Chairman of the Board
Oct. 2009
Director, Chairman of the Board - Chairman
0June 2010
Executive Advisor
Yozo Izuhara
June 2012
Honorary Senior Advisor (present)(September 23, 1938)
June 2014
Outside Statutory Auditor of the Company
June 2019
Outside Director (present)
Reelection(Significant concurrent positions outside the Company)
Outside–Independent
Reasons for nomination as a candidate for Outside Director and expected roles
Mr. Yozo Izuhara had served as President and Chairman of Nippon Sheet Glass Co., Ltd.,and he has extensive knowledge on overseas business and M&A as a manager. The
Company deems him to be suitable as an Outside Director, and therefore proposes his reelection. The Company expects Mr. Yozo Izuhara, mainly through important decisionmaking of the Board of Directors, to provide supervision of the Group’s management
and advice aiming at improving corporate value over the medium- to long-term from an
independent standpoint.
The Company has registered Mr. Yozo Izuhara as an independent officer with Tokyo Stock Exchange, Inc.
The Company has entered into a limited liability agreement with him as an outside director in accordance with laws andregulations and the articles of incorporation. Under the agreement, his liability is limited to the minimum limit stipulated
by laws and regulations. If this agenda is approved, the Company plans to enter into a limited liability agreement of thesame content as above with him.
Nippon Sheet Glass Co., Ltd., in which candidate for Outside Director Mr. Yozo Izuhara was Chairman of the Board, does
not hold the Company’s shares. The Company holds 0.3% of said company’s shares, and the transaction amount between
said company and the Company (most recent fiscal year) is less than 1% of sales for both companies; since both capitaland business relationships are small, the Company deems there is no impact on independence.
His tenure as an outside director of the Company will have been two years at the conclusion of this meeting.

-8-

Candidate
number10Notes:

1.
2.

3.

4.

Name
(Date of birth)

Career summary, position and responsibility in the Company, andsignificant concurrent positions outside the Company

Number of theCompany’s shares
held

Sept. 1980
Joined Sumitomo Metal Mining Co., Ltd.
June 2006
Director, Managing Executive Officer
June 2007
President, Representative Director
June 2013
Chairman, Representative Director
June 2016
Chairman0June 2017
Executive Advisor (present)
June 2019
Outside Director of the Company (present)
Nobumasa Kemori(Significant concurrent positions outside the Company)(April 12, 1951)
Outside Director of NAGASE & CO., LTD.
Outside Director of JFE Holdings, Inc.
Reelection
Reasons for nomination as a candidate for Outside Director and expected roles
OutsideMr. Nobumasa Kemori had served as President and Chairman of Sumitomo Metal
Independent
Mining Co., Ltd., and he has extensive knowledge of the mining industry from a longterm perspective and overseas business as a manager. The Company deems him to besuitable as an Outside Director, and therefore proposes his re-election. The Company
expects Mr. Nobumasa Kemori, mainly through important decision-making of the Boardof Directors, to provide supervision of the Group’s management and advice aiming at
improving corporate value over the medium- to long-term from an independent
standpoint.
The Company has registered Mr. Nobumasa Kemori as an independent officer with Tokyo Stock Exchange, Inc.
The Company has entered into a limited liability agreement with him as an outside director in accordance with laws andregulations and the articles of incorporation. Under the agreement, his liability is limited to the minimum limit stipulated
by laws and regulations. If this agenda is approved, the Company plans to enter into a limited liability agreement of thesame content as above with him.
Regarding Sumitomo Metal Mining Co., Ltd., in which candidate for Outside Director Mr. Nobumasa Kemori was
Chairman, said company holds 1.0% of the Company’s shares, and the Company holds 1.3% of said company’s shares.
The transaction amount between said company and the Company (most recent fiscal year) is less than 1% of sales for bothcompanies; since both capital and business relationships are small, the Company deems there is no impact on independence.
His tenure as an outside director of the Company will have been two years at the conclusion of this meeting.

-9-

(Reference) Members of Directors, Statutory Auditors (after approval and adoption of this agenda)
If Agenda 2 is approved as originally proposed, the members of directors and statutory auditors will be as follows.
Name

Position in the Company

Reelection

Kenichi Onodera

Director - Chairman of the Board

Reelection

Kojun Nishima

Reelection

Nobuaki Takemura

Reelection

Masato Kobayashi

Reelection

Hiroshi Kato

Reelection

Hisatoshi Katayama

Reelection

Yoshiyuki Odai

Reelection

Koji Ito

Attributes

GenderMale

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

Male
Male
Male
Male
Male
Male
Male
OutsideIndependent
OutsideIndependent

Reelection

Yozo Izuhara

Outside Director

Reelection

Nobumasa Kemori

Outside Director

Present

Yoshifumi Nakamura

Full-time Statutory Auditor

Male

Present

Toshikazu Tanaka

Full-time Statutory Auditor

Male

Present

Yoshiyuki Norihisa

Outside Statutory Auditor

Present

Chiyono Terada

Outside Statutory Auditor

Independent: Independent officer registered with the Tokyo Stock Exchange- 10 -

OutsideIndependent
OutsideIndependent

Male
Male

Male
FemaleAgenda 3.

Election of One Substitute Statutory Auditor

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

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

Notes:

Number of theCompany’s shares
held

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

- 11 -

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



Corporate Governance System
In order for the Company to continue growing, we believe that people from within the Company who are deeply
familiar with the significance of continuing to invest, always looking resolutely forward even in difficult times,
should be the core members of management and execution; hence we have a structure as a company with a
Board of Statutory Auditors, where the Board of Directors bears responsibility for execution, and statutory
auditors take on the management supervision function.
Eight directors, mainly from within the Company, who are deeply familiar with the business content, are in
charge of management and execution, while two outside directors and four statutory auditors for a total of six
persons, which accounts for over 40% of the 14 Board of Directors attendees, are responsible for the
management supervision function. In order to fully demonstrate the supervisory function, we have built a system
to accurately grasp the management condition and issues and to cooperate with each other as follows. We believethat the Company’s corporate governance is sufficiently functioning, as its effectiveness is being reflected inour business results.
‧

Board of Directors
The Board of Directors promotes the sustainable growth of the Company and the enhancement of corporate
value over the medium- to long-term, improves profitability and business efficiency, and prevents fraud
before it occurs. In order to do so, it is responsible for deliberating and deciding important matters for theCompany such as basic management policy and management strategy, as well as supervising the executionof duties by each director.
It is comprised of eight directors from within the Company who are in charge of business execution as they
are deeply familiar with the significance of always looking resolutely forward and continuing to invest forsustainable growth, and two outside directors with experience as chairman and president of Sumitomo
Group Companies, who share the Sumitomo’s business philosophy and understand the Company’s
management principles.
The Company deems both of the two outside directors are suitable as outside directors based on theirextensive experiences in management at other companies, character and insight. We are improving therationality of management decisions by receiving their ideas that are not bound by the established conceptsof the industry and advice based on their global perspectives.
- 12 -

In order for outside directors to deepen their understanding of the Company’s management conditions andissues, we held eight briefings for outside directors during the fiscal year under review to explain the agendaof the Board of Directors and the content of discussions at management meetings.
‧

Executive Officer System
Due to the limited number of directors, we have introduced an executive officer system comparable withdirectors so that we can appoint officers necessary for business expansion, and we have appointed six
executive officers who do not concurrently serve as directors. Compensation for executive officers who are
non-concurrent directors is to be paid from the total compensation for directors because they are considered
to be comparable with directors.

‧

Statutory Auditors and Board of Statutory Auditors
Statutory auditors are responsible to supervise whether directors are performing their duties properly byusing the powerful authority endorsed by law.
The Board of Statutory Auditors consists of four statutory auditors, half of whom are the two outside
statutory auditors.
The two full-time statutory auditors from within the Company are quite familiar with the internal
circumstances of the Company, and they enhance the effectiveness of audits due to their high informationgathering abilities.
The two outside statutory auditors have extensive experience in management at other companies, and theCompany deems they are suitable as outside statutory auditors in view of their character and insight as well.
Both of them exchange opinions with the full-time statutory auditors, the Internal Audit Office, and theIndependent Auditors as appropriate, and express their opinions to Board of Directors from an independent
standpoint, ensuring the objectiveness of audits.
The Board of Statutory Auditors held meetings 13 times during the fiscal year under review to receive
reports from the Independent Auditor and the Internal Audit Office, and to interview the head of each
Department on their respective management status.

‧

Board of Outside Directors and Auditors
In order for outside directors and outside statutory auditors to fully perform their roles, we have establisheda Board of Outside Directors and Auditors with only four members, comprised of outside directors andoutside statutory auditors.
The Board of Outside Directors and Auditors directly hears from each officer about the execution status of
the duties of which he or she is in charge and the issues they are aware of, as well as giving appropriate
advice. In the event of whistle-blowing report toward officers, outside statutory auditors receive a report
directly to share at the Board of Outside Directors and Auditors.

‧

Internal Audit Structure
We have established the Internal Audit Office (16 persons) to check the business execution status of each
Department of the Group and the operational status of internal controls, to prevent fraud and errors, and to
make proposals for operational improvement. In addition to reporting the audit results of the Independent
Auditors, the Internal Audit Office reports directly to the Statutory Auditors to enhance and improve theefficiency of audits by the Statutory Auditors.

- 13 -



Initiatives for Promoting Diversity
We have been actively promoting diversity since before, based on the awareness that the existence of diverse
perspectives and values reflecting a variety of experiences, skills and characteristics within the Company is astrength that supports the sustainable growth of the Company.
For more than 20 years, we have been actively hiring people with diverse careers at other companies as
individuals who can be immediately effective in the Company. Today, mid-career hires with work experience atother companies account for 90% of our employees, and are the source of the Company’s growth.
In addition, we believe that equal opportunity in promoting employees to management positions is the mostimportant factor for increasing their motivation, so we promote employees based solely on their enthusiasm,
ability, and achievements, regardless of gender or whether they were hired as new graduates or as mid-careerhires. As a result, more than 60% of our managers are currently mid-career hires, ensuring diversity in the
managerial positions.
We are also actively working on the promotion of female participation and career advancement. Firstly, we haveannounced a numerical target for the ratio of female employees in sales and engineering positions that support
our front line operations (25% in sales and 13% in engineering positions). By further increasing the ratio of
female in our employees and working on their career development to expand the pool of our human resources,
we will increase the number of female employees for future promotion and gradually promote them tomanagerial positions.
We believe that diversity in managerial positions should be ensured naturally as a result of fair appointments.
We believe that setting a numerical target for diversity in managerial positions may distort equal opportunity inthe appointment of managers and lower the morale of employees as a whole, and therefore we will not set sucha numerical target.

- 14 -