United Urban Investment Corporation

Securities Code
8960

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Corporate Governance

Management Structure of United Urban

United Urban Investment Corporation ("United Urban" or the "Investment Corporation") endeavors entrusts the management of its assets to the asset management company, Japan REIT Advisors Co., Ltd. (the "Asset Management Company") pursuant to the Investment Trust Act. The operating structure of the Asset Management Company is as follows.

Outline of the organization of the Asset Management Company

Outline of the organization of the Asset Management Company

Investment Committee The Investment Committee deliberates and resolves important management plans and policies regarding the Investment Corporation in a multilayered way by cooperating with the Board of Directors. The chairman of the committee and its members are appointed by the Board of Directors.
Compliance Committee The Compliance Committee aims at executing compliance as an asset management company which deals with the asset management of the Investment Corporation by cooperating with the Board of Directors and Corporate Auditor.

The Investment Committee and Compliance Committee are placed below the Board of Directors and maintain independence in dealing with compliance issues, audits, risk management, etc. in the Asset Management Company. They also endeavor to constrain and remedy transactions involving conflicts of interest.

Flow chart for decision-making structure relating to internal control for investment and management conducted by the Asset Management Company

Flow chart for decision-making structure relating to internal control for investment and management conducted by the Asset Management Company

By ensuring double and triple checks in decision-making for the acquisition and sale or investment and management of assets under management as shown in the above structure, full attention is being paid to transactions with sponsor companies, etc. and other transactions that involve concerns regarding conflicts of interest.

Compliance System

United Urban and the Asset Management Company view strict compliance as one of the basic principles of business management and have developed the following compliance system.

Outline of the compliance system
The Asset Management Company has established the Compliance Committee as a voluntary system to ensure legitimate asset management and a thorough and complete understanding of compliance with laws and regulations, internal rules, codes of professional conduct (compliance), etc. by employees, etc. and has appointed a Chief Compliance Officer (CCO) who is in charge of compliance matters.
Establishment of Compliance Committee and its role
The Compliance Committee does not itself pass resolutions or take decisions, but was established for the purpose of submitting certain reports to the Board of Directors, not only on compliance but also broader matters such as professional standards and internal auditing. It deliberates on the following matters, when necessary submitting reports to or advising the Board of Directors.
Deliberation on investment decisions from the perspective of compliance
Response to acts that are, or may prove to be, problematic from the standpoint of the law, professional standards, etc.
Formulation of internal audit plans and reports on internal audit results
Institution and revision of internal rule
Deliberation of other important compliance-related matters
Faithful execution of compliance decision process
The structure that has been established requires that, in specific transactions such as property acquisitions, approval by the Investment Committee must be obtained, the transactions must then be scrutinized by the Compliance Committee, and if that scrutiny leads to a judgment that there are compliance-related problems or that such problems may arise, a decision by the Board of Directors must be made. In regard to transactions with "Sponsor/Stakeholder" category including related parties, steps are taken to ensure that restraints are imposed. These take the form of strict processes to counter conflicts of interest, including the obligation for the chief compliance officer to attend meetings of the Investment Committee and for the approval of all committee members to be obtained.
Creation of the company structure through the formulation of compliance regulations and a compliance manual

Establishment of a Structure for Eliminating Antisocial Forces

As a goal of the Asset Management Company for the prevention of involvement by antisocial forces in its management activities and the prevention of any damage caused by those forces, we have declared, "we shall consistently and resolutely confront antisocial forces to endeavor to prevent money laundering and other transactions that may be suspected of criminality."

In addition, for the purpose of an organization-wide response to such matters, it is explicitly stipulated in one of the ten rules for the conduct of the Asset Management Company set forth in the Compliance Manual that "we strongly recognize our social responsibility and are committed to refraining from any and all transactions and connection with antisocial forces in both private and public activities to ensure compliance-oriented management." Moreover, based on the provisions of "no connection with antisocial forces, etc." in the rules, standards, etc. of the Asset Management Company, we promote measures for severing all relationships with antisocial forces in our daily activities.

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