Daito Trust Construction Co., Ltd. Last Update: June 27, 2018 DAITO TRUST CONSTRUCTION CO., LTD

CORPORATE GOVERNANCE CORPORATE GOVERNANCE Daito Trust Construction Co., Ltd. Last Update: June 27, 2018 DAITO TRUST CONSTRUCTION CO., LTD. Naomi Kumakiri President and Representative Director, Chief Executive Officer Contact: Shuji Kawai Managing Director, General Manager of Corporate Management Headquarters TEL: +81-3-6718-9068 Securities Code: 1878 http://www.kentaku.co.jp The corporate governance of Daito Trust Construction Co., Ltd. (the “Company”) is described below. ⅠBasic Views on Corporate Governance, Capital Structure, Corporate Profile, and Other Basic Information 1. Basic Views The Company’s basic views on corporate governance are as follows. The basic policy and purpose of the Company’s corporate governance are to maximize corporate value for shareholders and all other stakeholders and to improve the efficiency and transparency of management. To this end, the Company strives to thoroughly instill corporate ethics and law observance, develop and strengthen its internal control systems, and ensure objectivity and prompt decision-making in management as its main issues. [Reasons for Non-compliance with the Principles of the Corporate Governance Code] (Principle 1.4 Cross-Shareholdings) The basic policy towards shares held for purposes other than investment is to hold such shares within a scope that fulfills all conditions that include 1) the legitimacy of the purpose of holding such as business partnership, the maintenance and strengthening of transactions, and the stability of shares, and 2) such holdings accounting for no more than 5% of total assets on the consolidated balance sheet. For decisions on the additional purchase or disposal of such shares, reviews will be conducted as appropriate by the responsible Director from the perspective of whether such shares are necessary for the Company’s growth, whether there are other effective ways of using funds, etc., subject to discussion by the Board of Directors as necessary. Furthermore, in the exercise of voting rights for such shares, in addition to whether proposals are consistent with the Company’s holding policy, overall consideration is also given to factors such as whether proposals are useful for the efficient and sound management of the issuing company and whether proposals can be expected to improve corporate value. It should be noted that no uniform standard has been established at this time as a qualitative and comprehensive judgment based on individual shares is required. [Disclosure Based on the Principles of the Corporate Governance Code] The Company’s initiatives and policies towards these initiatives in accordance with the 73 principles (general principles, principles, and supplementary principles) of the Corporate Governance Code, including items for disclosure based on the Code, are posted in “The Company’s Initiatives Related to the Corporate Governance Code” on the Company’s website indicated below. An English version of “The Company’s Initiatives Related to the Corporate Governance Code” is available on the English-language page of the website. - “The Company’s Initiatives Related to the Corporate Governance Code”: http://www.kentaku.co.jp/corporate/ir/governance/top.html - “The Company’s Initiatives Related to the Corporate Governance Code” (English): http://www.kentaku.co.jp/e/ir/library.html Submission of the report based on the revision of the Corporate Governance Code effective from June 1, 2018 will be made as soon as it is available. 2. Capital Structure Percentage of Foreign Shareholders 30% or more [Status of Major Shareholders] Updated Number of Shares Percentage Name/Company Name Owned (Shares) (%) JP MORGAN CHASE BANK 380055 3,953,655 5.22 The Master Trust Bank of Japan, Ltd. (Trust Account) 3,805,900 5.03 Japan Trustee Services Bank, Ltd. (Trust Account) 3,313,500 4.38 STATE STREET BANK WEST CLIENT – TREATY 505234 1,621,519 2.14 Sumitomo Realty & Development Co., Ltd. 1,606,700 2.12 Japan Trustee Services Bank, Ltd. (Trust Account 5) 1,550,400 2.05 Daito Trust Construction Cooperative Committee Shareholding Association 1,505,905 1.99 SMBC Trust Bank Ltd. (Sumitomo Mitsui Banking Corporation Retirement Benefit Trust 1,474,800 1.95 Account) ORBIS SICAV 1,374,174 1.81 BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC) 1,256,691 1.66 Controlling Shareholder (Except for ― Parent Company) Parent Company None Supplementary Explanation ― 3. Corporate Profile Listed Stock Market and Market Section Tokyo Stock Exchange, First Section; Nagoya Stock Exchange, First Section Fiscal Year-end March Type of Business Construction Number of Employees (Consolidated) as of the End of the Previous Fiscal 1,000 or more Year Sales (Consolidated) for the Previous 1 trillion yen or more Fiscal Year Number of Consolidated Subsidiaries as From 10 to less than 50 of the End of the Previous Fiscal Year 4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder ― 5. Other Special Circumstances Which May Have Material Impact on Corporate Governance ― II Business Management Organization and Other Corporate Governance Systems Regarding Decision Making, Execution of Business, and Oversight in Management 1. Organizational Composition and Operation Structure of Organization Company with audit & supervisory board members [Directors] Maximum Number of Directors 20 Stipulated in Articles of Incorporation Term of Office Stipulated in Articles of 2 years Incorporation Chairperson of the Board President Number of Directors Updated 12 Appointment of Outside Directors Appointed Number of Outside Directors 3 Number of Outside Directors 3 Designated as Independent Directors Relationship with the Company (1) Relationship with the Company* Name Attribute a b c d e f g h i j k Toshiaki Yamaguchi From another company ○ Mami Sasaki From another company ○ Takashi Shoda From another company ○ * Categories for “Relationship with the Company” * “O” indicates that the director currently falls or has recently fallen under the category, “∆” indicates that the director fell under the category in the past * “●” indicates that a close relative of the director currently falls or has recently fallen under the category, “▲” indicates that a close relative of the director fell under the category in the past a. Executive of the Company or its subsidiaries b. Executive or non-executive director of a parent company of the Company c. Executive of a fellow subsidiary company of the Company d. A party whose major client or supplier is the Company or an executive thereof e. Major client or supplier of the Company or an executive thereof f. Consultant, accountant, or legal professional who receives a large amount of monetary consideration or other property from the Company other than compensation as a director g. Major shareholder of the Company (or an executive of said major shareholder if the shareholder is a legal entity) h. Executive of a client or supplier of the Company (which does not correspond to any of d, e, or f) (the director himself/herself only) i. Executive of a company, between which and the Company’s outside directors/audit & supervisory board members are mutually appointed (the director himself/herself only) j. Executive of a company or organization that receives a donation from the Company (the director himself/herself only) k. Others Updated Relationship with the Company (2) Designation as Supplementary Explanation of Name Independent Reasons for Appointment the Relationship Director [Reason for appointment] The purpose of this appointment is to strengthen the Company’s management monitoring function. We appointed Mr. Yamaguchi as director, judging that his advanced expertise and abundant experience as a lawyer familiar with corporate legal affairs, risk management, and Representative Attorney at corporate governance will be reflected in the Yamaguchi Law Office (current Company’s management. position) Outside Audit & Supervisory Board [Reason for designation as independent Toshiaki Yamaguchi ○ Member of Osaka University Venture director] Capital Co., Ltd. (current position) We have designated Mr. Yamaguchi as an Outside Audit & Supervisory Board independent director because there are no Member of Osaka Metro Co., Ltd. transactions or other relationships of interest (current position) between the Company and Mr. Yamaguchi, the Yamaguchi Law Office, where he serves as Representative Attorney, Osaka University Venture Capital Co., Ltd., where he serves as an Outside Audit & Supervisory Board Member, or the Osaka Metro Co., Ltd., where he serves as an Outside Audit & Supervisory Board Member, and he can therefore maintain independence. [Reason for appointment] The purpose of this appointment is to strengthen the Company’s management supervision function. We appointed Ms. Sasaki as director, judging that the abundant experience and insight she has acquired during her many years involving in organizational management in the global financial business will be reflected in her Mami Sasaki ○ ― supervision of the Company’s management from a global and female perspective. [Reason for designation as independent director] We have designated Ms. Sasaki as an independent director because there are no transactions or other relationships of interest between the Company and Ms. Sasaki, and she can therefore maintain independence. [Reason for appointment] The purpose of this appointment is to strengthen the Company’s management monitoring function. We appointed Mr. Shoda as director, judging that the experience, knowledge and insight he acquired during

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