JEI shall have at least one Executive Director(s) and at least two Supervisory Directors (the number of Executive Directors plus one).
The current organization of JEI is comprised of the Unitholders' Meeting which consists of unitholders; one Executive Director and three Supervisory Directors; the Board of Directors which consists of the Executive Director and Supervisory Directors; and the Accounting Auditor. The elected Supervisory Directors of JEI are one attorney, one certified public accountant and one real estate appraiser; and each of the directors supervises execution of business operations by the Executive Director from the expert’s point of view.
Compensation for Directors
Compensation for Executive Directors and Supervisory Directors of JEI is specified in the Articles of Incorporation as below, and any change to such requires resolution by the General Meeting of Unitholders.
Compensation for Executive Director shall be the amount determined by the Board of Directors with 700,000 yen per month per person as an upper limit
Compensation for Supervisory Director shall be the amount determined by the Board of Directors with 700,000 yen per month per person as an upper limit
The actual amount of compensation is as follows.
Title
Name
Total compensation for each director（Thousand yen）
Period ended Jun. 2024
Period ended Dec. 2024
Executive Director
Shuichiro Kayama
－
－
Supervisory Director
Eiji Takagi
1,800
1,800
Supervisory Director
Osamu Hirakawa
1,800
1,800
Supervisory Director
Hiroaki Komatsu
1,800
1,800
Fees for Accounting Auditor
Fees for Accounting Auditor of JEI is specified in the Articles of Incorporation as below, and any change to such requires resolution by the General Meeting of Unitholders.
Fees for Accounting Auditor shall be the amount determined by the Board of Directors with 20 million yen per fiscal period as an upper limit.
Fees of the Accounting Auditor is as follows.
Title
Name
Description of compensation
Total amount of compensation （Thousand yen）
36th Period （Ended Jun. 2024）
37th Period （Ended Dec. 2024）
Accounting Auditor
Ernst & Young ShinNihon LLC
Compensation based on audit services
13,200
13,200
Compensation based on non-audit services
7,025
5,000
Selection Criteria for Directors
Candidates for Directors are selected for the following reasons in addition to fulfilling conditions that the individual does not fall under any cause for disqualification defined in the Investment Trusts Act and does not have a special interest relationship with JEI. Directors of JEI are selected through resolution by the General Meeting of Unitholders.
Title
Name
Reason for appointment
Attendance at Board of Directors meetings （FY2024）
Executive Director
Shuichiro Kayama(Note)
Management from the broad standpoint based on knowledge and experience in financial and real estate businesses, etc., can be expected.
100% （5times/5times）
Executive Director
Kazuhiro Ono(Note)
Management from the broad standpoint based on knowledge and experience in financial and real estate businesses, etc., can be expected.
100% （1time/1time）
Supervisory Director
Eiji Takagi
Supervision of management from the broad standpoint based on knowledge and experience as an accounting expert, etc., can be expected.
100% （6times/6times）
Supervisory Director
Osamu Hirakawa
Supervision of management from the broad standpoint based on knowledge and experience as a legal expert, etc., can be expected.
100% （6times/6times）
Supervisory Director
Hiroaki Komatsu
Supervision of management from the broad standpoint based on knowledge and experience as a real estate expert, etc., can be expected.
100% （6times/6times）
Shuichiro Kayama resigned on January 8, 2025, and Kazuhiro Ono, who was elected as substitute executive director at the general unitholders’ meeting held on September 29, 2023, and assumed office on January 8, 2025.
Prevention of Insider Transactions
JEI strives to prevent insider transactions or similar transactions by Directors, by establishing insider trading management rules.
Management Structure of JEI
Asset management of JEI is entrusted to an asset management company, Japan Excellent Asset Management Co., Ltd. The organizational structure of the asset management company is as follows.
Organizational structure
Overview of Major Bodies
Name of Committee
Description
Board of Directors
Matters to be resolved:
Matters related to unitholder’s meetings and stocks
Matters related to directors and the Board of Directors
Matters related to the organization and personnel affairs
Matters related to asset management business
Matters related to finance and accounting
Matters related to compliance
Matters related to other important business operations
Requirements for resolution
The resolution is passed by a majority of the directors present at the Board of Directors meeting where the majority of the directors entitled to vote are present.
Constituent members
Chairperson: President and CEO
Constituent members: all directors
Frequency of meetings
Once or more every three months
Investment Committee
Matters to be discussed, resolved and determined
Formulation of and changes to the investment policies of the Investment Corporation
Matters related to the annual management plan of the Investment Corporation
Decisions regarding asset acquisition and sale of the Investment Corporation
Matters related to asset operation and management of the Investment Corporation
Matters related to fundraising of the Investment Corporation
Decisions regarding transactions between the Investment Corporation and interested parties as stipulated in the Rules for Transactions with Sponsor-Related Parties
Decisions regarding revisions to business forecasts of the Investment Corporation
Other important matters related to business entrusted to the Asset Management Company by the Investment Corporation
Requirements for resolution
The resolution at an Investment Committee meeting is passed by a two-thirds majority or more of the committee members present at the meeting where the majority of the members entitled to vote are present.
The attendance of the Compliance Officer is required for resolution.
Constituent members
Committee chairperson (president): President and CEO
Members : Real Estate Investment Division Manager, Planning and Management Division Manager, Compliance Officer, Real Estate Investment Department Manager, Real Estate Management Department Manager, Real Estate Engineering Department Manager, Corporate Planning Department Manager, Finance and Accounting Department Manager
Frequency of meetings
Once every three months in principle, and an extraordinary meeting is held as needed
Compliance Committee
Matters to be discussed and resolved
Formulation and revision of compliance-related manuals and programs
Deliberations and determinations regarding improvement, prevention or any other measures against compliance violations
Deliberations and approval regarding transactions between the Investment Corporation and sponsor-related parties
Deliberations and approval regarding matters on which the Chairperson determines that there is any doubt about compliance
Requirements for resolution
The resolution at a Compliance Committee meeting is passed by a majority of the committee members present at the meeting where the majority of the members entitled to vote are present.
Attendance and approval of the Compliance Officer and external committee members are required for resolution.
Members: President and CEO, Planning and Management Division Manager, Real Estate Investment Division Manager, managers of relevant departments, and an external committee member (lawyer who has no interest in the Asset Management Company)
Frequency of meetings
Once every three months in principle, and an extraordinary meeting is held as needed
Asset Management Fee Structure
For the asset management fees that the Investment Corporation pays to the Asset Management Company, the Investment Corporation has adopted the asset management fee structure linked to profits.
Asset Management Fee Ⅰ
The amount of JEI’s assets under management (every 3 months) multiplied by the following fee rates x (the actual number of days within the relevant calculation period / 365)
Fee rates：
0.25% (Assets under management: Portion up to ¥100 billion)
0.15% (Assets under management: Portion over ¥100 billion up to ¥200 billion)
0.05% (Assets under management: Portion over ¥200 billion)
Asset Management Fee Ⅱ
(The amount of ordinary income before deducting Management Fee Ⅱ + the amount of depreciation) x 4.0%
Same-boat Investment by Sponsor
The interests of unitholders are aligned more closely with those of the core sponsor to achieve medium- and long-term growth of the Investment Corporation’s unitholder value.
As of December 31, 2024
Core Sponsor
Number of Units Held
Holding Ratio*
Nippon Steel Kowa Real Estate Co., Ltd.
134,427 units
10.2%
Dai-ichi Life Insurance Co., Ltd.
20,660 units
1.6%
Holding ratios are rounded off to one decimal place.
Ratio of investment units held by the two core sponsors: 11.7%
Compliance
Basic Policy
For the Asset Management Company, compliance refers to the condition whereby individual directors and employees correctly understand the content and intent of laws and regulations, etc., comply with them, and execute business activities in a fair and sincere manner. Fully recognizing its social responsibilities and mission as an asset management company, the Asset Management Company strives to ensure rigorous compliance based on the Compliance Manual created as the code of conduct to be complied with by all directors and employees for the purpose of executing the management of the Investment Corporation’s assets in a fair and appropriate manner.
Compliance Promotion Structure
The Asset Management Company has established a structure in which the Compliance Committee and the Compliance Officer, headed by the Board of Directors, determine compliance-related matters and manage the status of compliance within their respective powers and responsibilities.
Body
Major Roles
Board of Directors
The Board of Directors establishes the necessary structure for compliance, seeks to achieve and ensure compliance by promoting its practical implementation and resolves important compliance-related matters. The Board is also responsible for establishing, revising or rescinding compliance policies and programs. The Board requests reports from the Compliance Officer on the status of compliance.
Compliance Committee
For the purpose of ensuring rigorous compliance of the Asset Management Company with the various laws, rules, regulations, and other relevant compliance matters, the Compliance Committee discusses and makes decisions pertaining to compliance matters.
Compliance Officer
Dedicated exclusively to compliance tasks, the Compliance Officer is an independent position that is not part of any other department. The Compliance Officer supervises and is responsible for all compliance-related planning and promotion of the Asset Management Company. In addition, the Compliance Officer strives to establish a compliance system within the company and raise employee awareness of the need to comply with laws and regulations, etc.
Initiatives for the Management of Conflicts of Interest
For transactions with sponsor-related parties (interested parties) for the acquisition or sale of operating assets, the Asset Management Company has established the Rules for Transactions with Sponsor-Related Parties and built a transparent and fair decision-making framework in order to prevent harm to the interests of the Investment Corporation’s unitholders.
Decision-making flow for the acquisition and sale of operating assets in transactions with interested parties
If the transaction falls under the case set forth in Article 201-2, paragraph 1 of the Investment Trust Act, it is required to obtain prior consent of the Investment Corporation’s Board of Directors.
For decisions regarding transactions with interested parties for the acquisition or sale of operating assets, the Asset Management Company obtains approval of the Compliance Committee, deliberation and resolution of the Investment Committee, and reports without delay to the Board of Directors and the Investment Corporation’s Board of Directors. When a transaction is conducted with an interested party regarding the acquisition, sale or lease of operating assets as set forth in Article 201-2, paragraph 1 of the Investment Trust Act, it is required to obtain consent of the Investment Corporation after deliberation and approval by the Investment Corporation’s Board of Directors, in addition to resolution by the Compliance Committee and the Investment Committee.
Initiatives to Raise Compliance Awareness
In order to raise compliance awareness, the Asset Management Company provides monthly compliance training to all directors and employees, including contract and temporary employees, on various topics such as laws and regulations and compliance (including business ethics such as anti-corruption). A confirmation test is administered at the end of the fiscal year to solidify their knowledge necessary for compliance.
Implementation Status of Compliance Training
FY2020
FY2021
FY2022
FY2023
FY2024
Number of compliance training sessions provided
12
12
12
12
12
Ratio of directors and employees who received compliance training (including contract & temporary workers)
100%
100%
100%
100%
100%
Internal Audit Structure
With the cooperation of external audit corporations, the Compliance Officer regularly conducts internal audits targeting all operations at least once a year based on the “Internal Audit Regulations.”
Based on the basic plan on internal audits approved by the Board of Directors, the status of compliance with laws and regulations and internal rules, status of financial management, appropriateness and efficiency of businesses and operation, etc. are audited. The Compliance Officer reports the results of internal audits to the President & CEO, the Compliance Committee and the Board of Directors and, if necessary, gives orders for improvement based on the audit results to the audited department, followed by reports on the status of improvement to the Compliance Committee and the Board of Directors.
Prevention of Bribery and Corruption
In its Compliance Manual and Rules on Entertaining and Gift Giving, JEAM prohibits all forms of misconduct including bribery, money laundering, and insider trading, clarifying actions that are prohibited and matters to be observed. JEAM's officers and employees, including contract and temporary workers, are all thoroughly informed of following prohibitions and related matters through opportunities such as compliance training.
Prohibition on giving or receiving gifts and entertainment beyond reasonable limits.
Prohibition on receiving or offering bribes in any form, regardless of position or authority.
Prohibition on giving, offering or promising improper benefits to business partners.
The Compliance Officer, which is an independent department conducts internal audits on the compliance system of corruption prevention and on the operation of this system. Through continued monitoring, the Compliance Officer checks if day-to-day business execution is conducted appropriately, including the recognition of misconduct risks such as the giving or receiving of bribes. In addition, several compliance help desks are established where suspicion of wrongdoing can be reported officially and anonymously to prevent the occurrence of corruption. The monitoring situation and audit results are reported to and shared with the Compliance Committee and the Board of Directors to create a system that can evaluate and review the prevention structure.
Upon detection of a compliance violation such as the giving or receiving of bribes, a fact-finding investigation will be conducted under the supervision of the Compliance Officer and its findings will be reported to the President & CEO, Compliance Committee, and Board of Directors. If the suspected violation is confirmed as a fact, speedy actions and correction measures will be taken, together with the consideration and implementation of recurrence prevention measures, which will be reported to the Board of Directors. An employee who has committed any misconduct will be strictly punished in accordance with the employment rules.
During FY2024, there were no cases of bribery or corruption detected, no payment of fines/monetary penalties, and no employees punished or discharged for bribery or corruption at JEAM.
Furthermore, JEAM has made no political donation thus far.
Whistleblower System
To promptly detect and rectify misconduct, JEAM has a whistleblower system that enables all its officers and employees (including contract and temporary workers) to anonymously report on acts that are problematic in terms of compliance, such as acts in violation of laws and regulations, corporate ethics, and internal rules.
As contact points to receive consultations or reports, JEAM has designated the Compliance Officer as an internal contact and external lawyers and Group companies' help lines as external contacts to receive consultations and reports by telephone, email, and other means. JEAM ensures that its officers and employees know how to use the help line by including it in compliance training.
When a report is received, the Compliance Officer and the investigation team conduct an investigation while taking into consideration the anonymity and privacy of the whistleblower and the parties involved. In the event that any violation of laws and regulations is found through the investigation, JEAM will respond appropriately based on its employment rules and take corrective and recurrence prevention measures. Information obtained from a whistleblower will only be shared with people involved in the investigation so that it is impossible to identify the whistleblower and no disadvantage will be imposed on the whistleblower.
JEAM protects whistleblowers and other concerned parties through its Whistleblower Protection Rules (based on the Whistleblower Protection Act of Japan) which: prohibits the dismissal of the whistleblower and any other disadvantageous treatment of the whistleblower due to the act of whistleblowing; requires the strict treatment of officers or employees who probe to identify the whistleblower or who commit an act of harassment or retaliation in response to the act of whistleblowing; and bans seeking compensation from the whistleblower on the ground of damage incurred to the company due to the act of whistleblowing, among other things. In addition, JEAM notifies all its officers and employees through internal training that such acts of causing disadvantages to the whistleblower are subject to disciplinary actions.
