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 the 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

Outline of the compliance system
The Asset Management Company has established the Compliance Committee to ensure legitimate asset management and a thorough and complete understanding of compliance with laws and regulations, internal rules, codes of professional conduct, etc. by all employees including contract workers, etc. and has appointed a Chief Compliance Officer (CCO) to supervise compliance matters.
Establishment of the Compliance Committee and its role
The Compliance Committee does not pass resolutions or make 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, for 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 the compliance decision process
The structure requires that, in specific transactions such as property acquisitions, the resolutions by the Investment Committee must be obtained, the transactions must then be scrutinized by the Compliance Committee, and if that scrutiny leads to a judgement that there are compliance-related problems or that such problems may arise, a decision by the Board of Directors must be made. With regards to transactions with "Sponsor/Stakeholder" category including related parties in particular, steps are taken to ensure that restraints are imposed. These take forms of strict processes to counter conflicts of interest, including involvement of external experts and exclusion of committee members in interest.
Internal audit
Based on the Internal Audit Regulations, CCO formulates an internal audit plan and leads to early detection of violation of laws and immanent risks as a responsible asset manager as well as to prevention of violation of laws through the semi-annual physical inspection and the annual business specific audit conducted for a few selected departments per year. The internal audit plan and the audit results are immediately reported to the Compliance Committee. Furthermore, the Asset Management Company is audited by its sponsor, Marubeni once or more a year and intends to early detection, prompt correction and prevention of recurrence of issues from every perspective

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.

Officer Compensation System

United Urban pays compensation to each officer as followings.
Each of the officers has been expected to realize a medium- to long-term growth of United Urban with environmental, social and governance factors being fairly considered over maximization of distributions in the short term.

Executive Officer Monthly compensation of 1.0 million yen per person
Supervisory Officer Monthly compensation of 0.35 million yen per person

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