Management Structure

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Decision-making Flow for Investment Management

As an asset management company entrusted with asset management by the Investment Corporation, Kenedix Real Estate Fund Management, Inc. ("the Asset Management Company") creates management guidelines of the Office REIT Department ("the Management Guidelines"), and sets forth basic investment management guidelines, including investment policy, related party transaction rules, distribution policy and disclosure policy, regarding the asset management of the Investment Corporation.

Furthermore, as set forth in the Management Guidelines, the Asset Management Company creates asset management plans, etc. (including medium-term business plans and annual business plans other than asset management plans). It also selects investment properties and makes decisions to acquire them, according to investment policy set forth in the Management Guidelines and related party transaction rules.

The decision-making flow for establishing and revising the Management Guidelines and asset management plans, etc. are shown below. Also, the decision-making flow pertaining to acquisition and sale of assets are shown below. Through pursuing highly transparent decision-making flow of the investment management pursuant to these policies and rules, the Asset Management Company is striving to assist in the appropriate functioning of the Investment Corporation’s check-and-balance system over the Asset Management Company.

Decision-making Flow

Decision-making flow

Efforts to Ensure Compliance

Promotion System for Compliance

The Asset Management Company considers that one of the most important challenges in management is to ensure that compliance duties are fulfilled. With this in mind, the Asset Management Company is improving a system whereby compliance is promoted under the leadership of the board of directors, the compliance officer and the compliance committee. The board of directors determines basic policies and other fundamental matters in conjunction with the company-wide promotion of compliance, and has the authority to request, if necessary, that the compliance officer and compliance committee report on progress in the promotion of compliance. The board of directors also discusses and decides on the appointment of outside members of the compliance committee, outside members of the steering committees of the respective departments, and a compliance officer.

Role of Compliance Officer

The compliance officer works on the establishment of compliance system in the Asset Management Company and the creation of a corporate culture that abides by laws and regulations, as well as rules.
The compliance officer also ensures that the necessary relevant documents are prepared in conjunction with the presentation of such an agenda as the establishment/change of operation guidelines and asset management plans for the respective departments and the acquisition of individual assets, and conducts preliminary appraisals regarding whether there are any serious problems in terms of compliance, such as the violation of laws and regulations. The compliance officer also administers matters regarding compliance in the Asset Management Company as a chairperson of the compliance committee. Specifically, the compliance officer is tasked with duties such as the drafting and improvement of compliance manuals and compliance programs, as well as the periodical provisioning of instructions/training to executives and employees and the verification of compliance with laws and regulations, based on compliance programs. The formulation and revision of compliance manuals and compliance programs, which are drafted by a compliance officer, are put into practice subject to the decision of the board of directors after being discussed and resolved at the compliance committee's meetings. Compliance programs are formulated every business year, in principle, and the progress is reported promptly to the board of directors by the compliance officer.

Important Matters concerning Compliance

Important matters concerning compliance are discussed/decided at the compliance committee’s meetings and reported to the board of directors. The compliance department, as a supporter of the compliance officer, shall provide every possible support for the duties of the compliance officer according to the instructions by the compliance officer.

Auditing System

The Head of the Internal Audit Department, in the capacity of a person in charge of internal audits, carries out an internal audit once a year pursuant to the internal audit regulations, and produces an internal audit report that accurately reflects the issues found and raised in the internal audit. The person in charge of internal audits shall share such an internal audit report with the president and representative director and the board of directors without delay. The audited departments shall develop and implement remedial programs for issues raised in the internal audit report without delay, factoring in the significance of such issues. The person in charge of internal audits shall administer the progress of corrective measures taken by the audited departments regarding the issues, confirm the achievement of such measures, and ensure that the result is reflected in subsequent internal audit plans.
The board of directors or a person in charge of internal audits shall have outside experts conduct an external audit if such an audit is considered necessary to verify appropriateness of the business operations of the Asset Management Company, or for any other reasons.