Tokyo Tatemono : 〔Delayed〕Corporate Governance Report

Corporate Governance Report	Tokyo Tatemono Co., Ltd

Last Update: April 15, 2021

Tokyo Tatemono Co., Ltd.

Hitoshi Nomura Representative Director President & Chief Executive Officer

Contact: Corporate Planning Department (TEL: [phone])

Securities Code: 8804 http://www.tatemono.com

The corporate governance of Tokyo Tatemono Co., Ltd. ("Tokyo Tatemono") is described below.

1. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic Views Updated

Tokyo Tatemono strives to build optimal corporate governance with a focus on securing soundness and transparency of management and increasing its effectiveness in order to achieve sustained growth and increase corporate value in the medium to long term based on the corporate philosophy of "Trust beyond the era." Tokyo Tatemono also conducts information disclosure in a proactive and appropriate manner to ensure that shareholders and other stakeholders have an accurate understanding of Tokyo Tatemono's business content, etc.

Furthermore, the Tokyo Tatemono Group established a shared Compliance Charter for group companies as a pledge to society to promote corporate activities that are committed to unwavering compliance in order to a build a long-lasting relationship of trust with society and continue sound corporate activities.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]

Tokyo Tatemono complies with each of the principles of the Corporate Governance Code.

[Disclosure Based on the Principles of the Corporate Governance Code] Updated

[Principle 1.4 Cross-shareholding]

1. Cross-shareholdingpolicy
   Tokyo Tatemono holds shares of other companies other than for purely investment purposes (cross- shareholdings) that are deemed to maintain, strengthen, etc. business relationships and thereby serve to enhance the corporate value of the Tokyo Tatemono Group over the medium to long term.
   Cross-shareholdings are individually assessed by the Board of Directors annually to determine whether or not continuing to hold the shares would be appropriate from the perspective of maintenance or enhancement of corporate value. The details and past dispositions are reported to the Board of Directors, and holding the shares is no longer found to have significance as a result of the assessment, while taking impact on the stock market and other factors into account.
2. Standards for exercise of voting rights
   In exercising voting rights, voting rights are exercised based on a comprehensive judgment of whether to vote in favor or against the proposal in light of whether or not it is in conformity with Tokyo Tatemono's policy on holding, whether or not it serves to enhance the corporate value of the issuing company over the medium to long term and other factors in due respect of the issuing company's corporate management policy, strategy, etc. by engaging in dialogue with the issuing company when necessary.
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[Principle 1.7 Related-party transactions]

When directors or executive officers engage in transactions involving conflicts of interest or competitive transactions, or when they engage in transactions with major shareholders, unless the transaction is one that has a transaction amount of ¥1 million or less and is also an ordinary transaction as a general consumer and there are no concerns of harming the company's and shareholders' common interests, Tokyo Tatemono obtains the prior approval of the Board of Directors pursuant to the rules of the Board of Directors before engaging in transactions and appropriately discloses material facts thereof pursuant to laws and regulations after execution of the transactions.

In addition, if engaging in transactions with directors or major shareholders, Tokyo Tatemono engages in fair and appropriate transactions under the same terms and conditions as general business partners upon negotiation with the counterparty in light of market prices.

[Principle 2.6 Exercising capability as an asset owner for corporate pension]

Tokyo Tatemono has established policy asset allocation to facilitate safe and efficient achievement of the target rate of return for future steady pension benefit and lump-sum payments.

In addition, with an asset management committee in place, the basic policy on asset management and policy asset allocation are formulated and reviewed for revision, and other measures taken to incorporate the opinions of outside experts and ensure appropriate management.

[Principle 3.1 Enhancement of information disclosure]

1. Tokyo Tatemono has formulated a corporate philosophy, a long-term vision and medium-term business plan. For details, please refer to the Tokyo Tatemono website.
2. 
   (Tokyo Tatemono Website: Corporate Philosophy) html://www.tatemono.com/english/company/philosophy.html (Tokyo Tatemono Website: Long-term Vision, Etc.) https://www.tatemono.com/english/ir/management/management.html
3. Please refer to "1. Basic Views" in "I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information" in this Report.
4. Of Tokyo Tatemono's senior management, the remuneration for external directors is limited to fixed remuneration, while the remuneration for directors other than external directors (hereinafter, "inside directors") and executive officers is composed of fixed remuneration, performance-based remuneration and share-based remuneration.
5. 
   The remuneration for directors is set to no more than ¥35 million a month as fixed remuneration, and no more than 1% of consolidated recurring income and also no more than 2% of consolidated profit (profit attributable to owners of the parent) of the previous fiscal year as performance-based remuneration (for inside directors only), while the remuneration for each inside director is deliberated by the Advisory Committee, which has independent external directors as core members, and then decided by the Board of Directors.
   In addition, a share-based remuneration system has been adopted for inside directors and executive officers for the purpose of heightening awareness about contributing to enhancement of corporate value over the medium to long term.
   For details of the share-based remuneration, please refer to "Incentive Policies for Directors" under "II. Business Management Organization and Other Corporate Governance Systems Regarding Decision-Making, Execution of Business, and Oversight in Management."
6. At Tokyo Tatemono, persons capable of contributing to enhancing Tokyo Tatemono Group's corporate value over the medium to long term based on a comprehensive judgment of character, skills, knowledge, experience, etc. are appointed as senior management and nominated as candidates for Director and Audit & Supervisory Board Member.
7. • 
     Appointment and dismissal of representative directors and nomination of candidates for Director and Audit
   • Supervisory Board Member are subject to deliberation by the Nomination and Remuneration Advisory Committee, which has independent external directors as core members, and then resolution by the Board of Directors.
8. The individual career summaries of candidates for Director and Audit & Supervisory Board Member are presented in notices of convocation of general meeting of shareholders and securities reports.
9. 
   In addition, the individual reasons for appointment are also presented in notices of convocation of general meeting of shareholders and this report and, if a proposal for dismissal is to be submitted as agenda of the general meeting of shareholders, the reasons for dismissal are also presented in notices of convocation of general meeting of shareholders.

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[Supplementary Principle 4.1.1]

Tokyo Tatemono has adopted an executive officers system to strengthen management functions and business execution functions, stimulate the Board of Directors and accelerate the decision-making process, delegating the authority to make business execution decisions to the president & chief executive officer and other executive officers, unless otherwise provided in laws, regulations, the articles of incorporation, etc. as matters to be resolved by the Board of Directors and important matters concerning execution of business.

The scope of the delegation is provided in internal rules on the basis of the transaction conditions, transaction amount, etc.

[Principle 4.9 Criteria for independence and credentials of independent external directors]

Tokyo Tatemono deems external directors to be independent when, in addition to meeting the criteria for independence stipulated by Tokyo Stock Exchange, they do not fall under any of the following items:

1. A business partner of Tokyo Tatemono that constitutes 2% or more of Tokyo Tatemono's consolidated net sales in the most recent fiscal year or a person executing business of such partner
2. A shareholder of Tokyo Tatemono that holds more than 10% of the total number of voting rights of Tokyo Tatemono or a person executing business of such shareholder
3. A representative, member or employee of an auditing firm employed as the accounting auditor for Tokyo Tatemono
4. A consultant, accounting professional or legal professional that receives remuneration (excluding director remuneration) of more than ¥10 million from Tokyo Tatemono in the most recent fiscal year

[Supplementary Principle 4.11.1]

Tokyo Tatemono strives to secure diversity and balance in knowledge, experience, skills, etc. of the Board of Directors as a whole to ensure useful and multilateral discussions by the Board of Directors, and maintains the Board of Directors in an appropriate size to ensure that the Board of Directors functions effectively and efficiently.

[Supplementary Principle 4.11.2]

The status of important concurrent positions held by Tokyo Tatemono's directors and Audit & Supervisory Board members are disclosed in notices of convocation of general meeting of shareholders.

[Supplementary Principle 4.11.3]

Tokyo Tatemono has all directors and Audit & Supervisory Board members respond to a questionnaire survey on the composition, agenda, operation, etc. of the Board of Directors once a year, the results of which are analyzed and then discussed by the Board of Directors.

The results have found that effectiveness as a board of directors is fully secured.

[Supplementary Principle 4.14.2]

Tokyo Tatemono conducts legal and corporate management training workshops, etc. for directors and Audit & Supervisory Board members as appropriate to promote their understanding of their roles and responsibilities. In addition, the Tokyo Tatemono Group's business overview, medium-term business plan content and progress status, medium- to long-term business issues, etc. are explained to external directors upon their assumption of office.

[Principle 5.1 Policy on constructive dialogue with shareholders]

Tokyo Tatemono takes proactive measures for dialogue with shareholders and investors on the thinking that proactive and appropriate disclosure of the medium-term business plan progress and other management status, financial information, etc. leads to fulfillment of corporate accountability.

Tokyo Tatemono has the Corporate Communications Department set as the competent department having jurisdiction over dialogue with shareholders and investors and information disclosure, and the director in charge of the Corporate Communications Department set as the director in charge of dialogue with shareholders and investors and information disclosure, and also has these working in cooperation with other directors, departments, etc. when necessary. Based on such, Tokyo Tatemono strives for constructive dialogue with shareholders and investors and information disclosure through the general meeting of shareholders, financial results briefings, individual interviews and other opportunities.

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2. Capital Structure

		Foreign Shareholding Ratio			More than 30%
[Status of Major Shareholders]
Updated
		Name / Company Name		Number of	Percentage
			Shares Owned	(%)
		The Master Trust Bank of Japan, Ltd. (Trust Account)		23,858,800	11.41
		Custody Bank of Japan, Ltd. (Trust Account)		15,952,700	7.63
		STICHTING PGGM DEPOSITARY PGGM LISTED REAL ESTATE PF	15,546,000	7.43
		FUND (Standing proxy: Citibank, N.A., Tokyo Branch)
		JP MORGAN CHASE BANK 385632 (Standing proxy: Settlement &	4,781,300	2.29
		Clearing Services Department, Mizuho Bank, Ltd.)
		Sompo Japan Insurance Inc.					4,744,000	2.27
		Meiji Yasuda Life Insurance Company (Standing proxy: Custody Bank of	4,729,000	2.26
		Japan, Ltd.)
		THE BANK OF NEW YORK MELLON 140051 (Standing proxy:	4,234,200	2.02
		Settlement & Clearing Services Department, Mizuho Bank, Ltd.)
		JPMorgan Securities Japan Co., Ltd.		4,073,809	1.95
		Custody Bank of Japan, Ltd. (Trust Account 5)		3,091,400	1.48
		Custody Bank of Japan, Ltd. (Trust Account 6)		2,790,600	1.33
		Controlling Shareholder (except for Parent Company)	―――
		Parent Company				None

Supplementary Explanations Updated

• Percentage of share ownership is calculated by the number of shares excluding treasury shares.
• [Status of Major Shareholders] is the status as of December 31, 2020.
• JTC Holdings, Ltd., Japan Trustee Services Bank, Ltd. and Trust & Custody Services Bank, Ltd. merged on July 27, 2020, and the trade name was changed to Custody Bank of Japan, Ltd.
• In a Statement of Changes to a Statement of Large-Volume Holdings made available for public inspection on April 22, 2020, it is indicated that SMBC Nikko Securities Inc and the joint holder Sumitomo Mitsui DS Asset Management Company, Limited respectively own the shares of Tokyo Tatemono as of April 15, 2020. However, they are not included in the Status of Major Shareholders mentioned above as Tokyo Tatemono is unable to confirm their beneficial ownership status as of December 31, 2020.
• In a Statement of Changes to a Statement of Large-Volume Holdings made available for public inspection on October 21, 2020, it is indicated that Sumitomo Mitsui Trust Asset Management Co., Ltd. and the joint holder SMBC Nikko Securities Inc. respectively own the shares of Tokyo Tatemono as of October 15, 2020. However, they are not included in the Status of Major Shareholders mentioned above as Tokyo Tatemono is unable to confirm their beneficial ownership status as of December 31, 2020.
• In a Statement of Changes to a Statement of Large-Volume Holdings made available for public inspection on October 30, 2020, it is indicated that PGGM Vermogensbeheer B.V. owns the shares of Tokyo Tatemono as of October 22, 2020. However, they are not included in the Status of Major Shareholders mentioned above as Tokyo Tatemono is unable to confirm their beneficial ownership status as of December 31, 2020.
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• In a Statement of Changes to a Statement of Large-Volume Holdings made available for public inspection on November 16, 2020, it is indicated that Mitsubishi UFJ Trust and Banking Corporation and the joint holders MUFG Securities EMEA, Mitsubishi UFJ Kokusai Asset Management Co., Ltd. and Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. respectively own the shares of Tokyo Tatemono as of November 9, 2020. However, they are not included in the Status of Major Shareholders mentioned above as Tokyo Tatemono is unable to confirm their beneficial ownership status as of December 31, 2020.
• In a Statement of Changes to a Statement of Large-Volume Holdings made available for public inspection on December 22, 2020, it is indicated that Asset Management One, Co., Ltd.. and the joint holders Mizuho Bank, Ltd. and Mizuho Trust & Banking Co., Ltd. respectively own the shares of Tokyo Tatemono as of December 15, 2020. However, they are not included in the Status of Major Shareholders mentioned above as Tokyo Tatemono is unable to confirm their beneficial ownership status as of December 31, 2020.
• In a Statement of Changes to a Statement of Large-Volume Holdings made available for public inspection on January 8, 2021, it is indicated that Nomura Securities Co., Ltd. and the joint holders Nomura International plc and Nomura Asset Management Co., Ltd. respectively own shares of Tokyo Tatemono as of December 31, 2020. However, they are not included in the Status of Major Shareholders mentioned above as Tokyo Tatemono is unable to confirm their beneficial ownership status as of December 31, 2020.

3. Corporate Attributes

Listed Stock Market and Market Section	Tokyo Stock Exchange First Section
Fiscal Year-End	December
Type of Business	Real Estate
Number of Employees (consolidated) as of	More than 1,000
the End of the Previous Fiscal Year
Sales (consolidated) as of the End of the	From ¥100 billion to less than ¥1 trillion
Previous Fiscal Year
Number of Consolidated Subsidiaries as of	From 10 to less than 50
the End of the Previous Fiscal Year

1. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder
   ―――
2. Other Special Circumstances Which May Have Material Impact on Corporate Governance
   ―――

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