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Governance Initiatives

MTR's Organization

The organization of MTR consists of the Shareholders' Meeting comprised of unitholders, one Executive Director, two Supervisory Directors, the Board of Management comprised of the Executive Director and the Supervisory Directors, and the Accounting Auditor.

Details of Organization

(a)Shareholders' Meeting

  Certain matters concerning MTR as set forth in the Act on Investment Trusts and Investment Corporations (“AITIC”) or the Articles of Incorporation are decided by a resolution of the Shareholders' Meeting , which shall be composed of unitholders. Unless otherwise stipulated in laws or the Articles of Incorporation, a resolution at the General Meeting of Unitholders will be made by the majority of the voting rights of the unitholders present. However, certain important matters, including amendments to the Articles of Incorporation, require a resolution made by two-thirds or more of voting rights of unitholders present, provided that unitholders holding investment units equivalent to majority of total investment units issued are present (special resolution).
  With regard to all investment units issued, each unitholder holds voting rights at a ratio of one voting right for each investment unit held by the unitholder.

(b)Executive Director, Supervisory Directors and Board of Management

  The Executive Director executes the business of MTR and also has the authority to take any judicial or extra-judicial acts related to the business of MTR on behalf of MTR. A Supervisory Director has the authority to supervise the conduct of business by the Executive Director. The Board of Management is composed of the Executive Director and Supervisory Directors and has the authority to approve the execution of specific responsibilities as well as the authority set forth in the AITIC and the Articles of Incorporation and the authority to supervise the execution of duties by the Executive Director.
  The appointment and dismissal of Executive Directors and Supervisory Directors will be made by resolution of a General Meeting of Unitholders in accordance with the provisions of the Act on Investment Trusts and Investment Corporations and the Articles of Incorporation.

(Status of Investment Corporation's Board of Management meetings)

Position Name Attendance (April 2020 - March 2021)
Executive Director Masayuki Yagi 11 meetings/11 meetings (100%)
Supervisory Director Naomasa  Nakagawa 11 meetings/11 meetings (100%)
Harumi  Katagiri 11 meetings/11 meetings (100%)

(c)Accounting Auditor

  MTR has elected Ernst & Young ShinNihon LLC as the Accounting Auditor. The Accounting Auditor will audit MTR's financial statements and other relevant material, report to Supervisory Directors in the event of detection of a fraudulent act or material fact violating any law or the Articles of Incorporation concerning execution of duties of the Executive Director and perform other duties stipulated in laws.

Organization of MTR

仕組み図

Status of Directors

The status of the Executive Director and Supervisory Directors is as shown below.
(Please see the following regarding their brief personal histories.
 Overview of MTR - Status of Directors)

Title Name Gender Date
appointed
Significant concurrent positions, etc. Directors'
remuneration
(Note)
Number of
investment
units owned
Executive
Director
Masayuki Yagi Male June 2017 Representative Director, Chief Operating Officer
(COO), Head of Sogo REIT Management Division,
MORI TRUST Asset Management Co., Ltd.
0
Supervisory
Director
Naomasa Nakagawa Male June 2019 Partner lawyer, Hibiya Park Officers ¥1,800,000 0
Harumi Katagiri Female June 2019 CPA, Harumi Katagiri CPA office ¥1,800,000 0
(Note) Directors' remuneration for the fiscal period ended March 2021 (6 months).

Status of Accounting Auditor

The status of the Accounting Auditor is as shown below.

Title Name Remuneration (Note)
Accounting Auditor Ernst & Young ShinNihon LLC \11,900,000
(Note) Accounting Auditor's remuneration is for the fiscal period ended March 2021 (6 months).The accounting auditor's remuneration includes the remuneration(\2,100,000) for the preparation of comfort letters for Issuance of investment corporation bonds in February 2021.

Status of Unitholders

MTR's principal unitholders (the top ten entities with the highest holding ratios) as of the end of September 2019 are as shown below.

Major investors

Same Boat Investment by Sponsor Group

MTR aims to improve unitholder value by aligning sponsor interests with those of unitholders.

Percentage of investment units
owned by Mori Trust Group
26.5% (as of March 31, 2021)

MTAM's Organizational Structure

MTR entrusts asset management to MTAM. MTAM's organizational structure is as shown below.

Compliance Initiatives

Compliance Structure

 MTAM has set compliance with laws, regulations and other rules as one of its management priorities and MTAM's management is actively working to develop and strengthen the compliance structure and internal control structure. To establish an appropriate operational structure, MTAM has appointed a compliance officer as the person responsible for compliance-related matters at MTAM to ensure that internal checks and balances on other departments function effectively. Furthermore, through the establishment and operation of the Compliance Committee, MTAM has established a multi-tiered structure for ensuring MTR's compliance with laws, regulations and other rules.

(a)Board of Directors

 The Board of Directors seeks to ensure compliance as the organization with ultimate responsibility for the execution of business and, besides receiving reports on matters approved by the Compliance Committee, also makes resolutions on important compliance-related matters at MTAM, including formulation and amendment of the basic policy on compliance and compliance program, formulation of the risk management plan and internal audit plan, as well as appointment and dismissal of Compliance Committee members and the Compliance Officer.

(b)Compliance Committee

 The Compliance Committee is responsible for execution of the duties set forth in the Compliance Committee Rules in cooperation with the Board of Directors and Compliance Officer.

(c)Compliance Officer

 As the person responsible for compliance at MTAM, the Compliance Officer works to establish an internal compliance structure and to raise awareness of norms for compliance with laws, regulations and other rules within the company. The Compliance Officer, therefore, constantly monitors whether MTAM executes asset management business in accordance with laws, regulations and other rules, and also monitors and supervises the status of compliance in the exécution of day-to-day operations.
In light of the importance of the Compliance Officer's responsibilities, MTAM elects as Compliance Officer an individual who is sufficiently capable of examining and supervising business execution to achieve compliance with laws, regulations and norms.
MTAM has put in place a structure such that any act pertaining to MTAM's business operations that violates or is likely to violate laws and regulations discovered by any officer or employee is reported immediately to the Compliance Officer.

Appropriate Management of Conflicts of Interest

 To prevent MTAM from engaging in transactions with related parties sharing certain interests with MTAM which may be harmful to the interests of MTR, MTAM has identified types of related party transactions and set forth related party transactions standards and comprehensively judges whether to conduct a transaction through deliberation by more than one body. MTAM elects outside specialists as committee members to both the Compliance Committee and the Investment Committees that hold such deliberations.

 If the acquisition of an asset or other transaction by an investment corporation which entrusts its asset management to MTAM constitutes a related party transaction, the approval of the outside committee members of the Compliance Committee and Investment Committees are required. Details of this decision-making process are as shown below.

Exclusion of Antisocial Forces

 MTAM has formulated the Basic Policy to Prevent Damages Caused by Antisocial Forces in order to exclude antisocial forces and groups that threaten public order or stability and obstruct the economic activity of companies and individuals.
 The Policy sets out that the organization as a whole will deal with unjust demands by antisocial forces, that MTAM will establish close and cooperative relationships with external specialist organizations such as the competent police, the National Center for Removal of Criminal Organizations, and legal practitioners, that it have no relations with antisocial forces including business relations, and that it will refuse any unjust demands by antisocial forces.

Prohibition of Insider Trading

 MTR and MTAM established respectively its Corporate Information Management Rules to prohibit MTR's officers and MTAM's all its officers and employees (including temporary employees, contract employees, and employees on loan or dispatched from other companies) from engaging in transactions such as trading securities including MTR's investment units, based on corporate information or other special information that they have obtained in the course of operations by taking advantage of their titles and positions.

Relations with politicians and governments

 MTAM’s Basic Policy on Compliance stipulates that it shall maintain transparent and sound relations with politicians and governments.
 It has never made any political donations in the past. 

Prevention of Bribery and Corruption

 MTAM set out in its Rules of Employment and its Basic Policy on Compliance that its officers and employees will not engage in an acts of fraud or corruption including bribery  such as  offering or accepting gifts, entertainment and/or other benefits beyond socially accepted limits, and money laundering and that MTAM will take strict disciplinary action against any officer or employee who violates these rules.
 There has been no material violation of laws and ordinances around these matters, and nor has there been any record of paying penalties, surcharges or settlement money in relation to any acts of corruption.
  In addition, no employee has been subject to reprimand or dismissal due to acts in relation to bribery or corruption.

Establishment of Whistleblowing System

 MTAM has a whistleblowing system in place for all its officers and employees (including temporary employees, contract employees, and employees on loan or dispatched from other companies).
 In this system, a whistleblower can make a report anonymously. In addition, in accordance with the Whistleblower Protection Act, it is prohibited to carry out dismissal, disciplinary measures, retaliation or any other treatment that is disadvantageous to a whistleblower on account of such whistleblowing.

Provision of Regular Compliance Training

 MTAM provides all its officers and employees (including temporary employees, contract employees, and employees on loan or dispatched from other companies) with training mainly aimed at raising compliance awareness on a regular basis.

Information Security

 MTAM enacted the Information Management Rules with the aim of properly utilizing company information and preventing information incidents including unauthorized access and the loss or leak of company information.
 The rules aim to ensure information management by providing for training and audits on the management of confidential information, restriction of unauthorized access, prevention of information leaks, maintenance of information systems and information system.

Customer-oriented Business Conduct

 MTAM adopted the Principles for Customer-Oriented Business Conduct announced by the Financial Services Agency on March 30, 2017 and set forth a Policy on Customer-Oriented Business Conduct as set out below.

1. Formulation and Announcement of Policies regarding Customer-Oriented Business Conduct

 We have formulated and announced this Policy and we publish the status of the Policy's implementation and also revise this Policy as appropriate.

2. Pursuit of the Customers' Best Interest

 As a financial service provider, we maintain a high level of expertise and professional ethics, conduct business with customers in a faithful and fair manner, and pursue customers' best interests. MTAM also endeavors to ensure that such business conduct becomes firmly established as its corporate culture.

3. Appropriate Management of Conflicts of Interest

 To accurately understand and manage potential conflicts of interests in transactions, we have established rules such as the Related Party Transaction Rules and Compliance Rules as voluntary rules in addition to the provisions of relevant laws and regulations, and we have established a policy for dealing with transactions involving conflicts of interest and an operating structure to ensure high independence.

4. Clarification of Various Fees and Commissions

 MTAM properly provides information to help customers understand details of various fees and commissions paid to us by investment corporations which entrust their asset management to us, including details of the kind of services provided in exchange for these fees and commissions.

5. Providing Important Information in an Easy-to-understand Manner

 MTAM provides important information which might affect customers' investment decisions in an easy-to-understand manner through statutory disclosure, timely disclosure, voluntary disclosure and other means.

6. Providing Suitable Service to Customers

 We endeavor to understand customers' needs and conduct asset management based on an awareness of these needs. We also provide easy-to-understand information that helps customers understand the status of operations of investment corporations who entrust their asset management to us.

7. Framework for Adequate Motivation of its Employees

 To further promote customer-oriented business conduct, MTAM raises awareness of its Corporate Philosophy and its Basic Policy on Compliance as well as of the importance of this policy among individual employees through compliance training, etc.