Governance Initiatives

Policy and Approach

In order to contribute to the realization of a sustainable society, we aim to maximize unitholder value over the medium to long term.
We believe that it is absolutely imperative to remain a company that is trusted by society.

By firmly acknowledging this belief, MHR and MIM work on building fair and effective corporate governance and strive to enhance internal control through thorough compliance and risk management based on an appropriate compliance and internal control structure.

Corporate Governance

In addition to a general meeting of all unitholders, MHR’s governance structure consists of one executive director, three supervisory directors, the board of directors and an accounting auditor as required by the Act on Investment Trusts and Investment Corporations.

The executive director undertakes executive management and represents MHR. The supervisory directors oversee the executive director's performance of the position’s duties.

The board of directors is comprised of the executive director and the supervisory directors and makes important decisions regarding the execution of MHR’s duties, such as approval of the executive director's execution of MHR’s important duties and approval of financial statements.

The executive director reports to the supervisory directors from time to time regarding the status of asset management, compliance and risk management and other matters.
Each supervisory director oversees the execution of duties by the executive director through the reporting on investigation requested by the supervisory directors.

The Accounting Auditor performs the audit of financial statements etc. of MHR and reports to the supervisory directors in the event of discovering any serious actions in violation of laws and regulations or actions violating the proper execution of duties by the executive director.

Management Profiles

Title	Name	Brief Profile		Equity Owned
Executive Director4	Hiroyuki Yamamoto	April 1992	Joined Kumagai Gumi Co., Ltd.	04
Executive Director4	Hiroyuki Yamamoto	November 2000	Joined Mori Building Co., Ltd.	04
Executive Director4	Hiroyuki Yamamoto	August 2006	Mori Building Co., Ltd., Senior Manager of Urban Planning and Development Division, Research and Development Department, Research and Development Group	04
Executive Director4	Hiroyuki Yamamoto	November 2011	Mori Building Co., Ltd., General Manager of Urban Planning and Development Division, Research and Development Department	04
Executive Director4	Hiroyuki Yamamoto	July 2013	Mori Building Co., Ltd., Deputy General Manager of Urban Planning and Development Division, Development Department, Planning and Development Unit Ⅰ	04
Executive Director4	Hiroyuki Yamamoto	October 2016	Mori Building Co., Ltd., General Manager of Urban Planning and Development Division, Development Department, Development Unit Ⅲ	04
Executive Director4	Hiroyuki Yamamoto	July 2019	Mori Building Co., Ltd., General Manager of Urban Planning and Development Division, Development Department, Research and Development Department	04
Executive Director4	Hiroyuki Yamamoto	June 2023	Seconded to Mori Building Investment Management Co., Ltd. Mori Building Investment Management Co., Ltd., Managing Director	04
Executive Director4	Hiroyuki Yamamoto	June 2024	Mori Building Investment Management Co., Ltd., President & CEO (current post)	04
Executive Director4	Hiroyuki Yamamoto	April 2025	Mori Hills REIT Investment Corporation, Executive Director (current post)	04
Supervisory Director3	Koji Nishimura	April 1992	Registered as attorney	03
Supervisory Director3	Koji Nishimura	April 1992	Joined Matsuo Law Offices	03
Supervisory Director3	Koji Nishimura	April 2004	Chuo University Faculty of Law, Full-time Lecturer (current post)	03
Supervisory Director3	Koji Nishimura	November 2004	Matsuo & Kosugi, Partner (current post)	03
Supervisory Director3	Koji Nishimura	December 2014	Seraku Co., Ltd., External Director (current post)	03
Supervisory Director3	Koji Nishimura	April 2017	Mori Hills REIT Investment Corporation, Supervisory Director (current post)	03
Supervisory Director3	Koji Nishimura	June 2018	Ocean Network Express Holdings,Ltd. Auditor (current post)	03
Supervisory Director3	Koji Nishimura	October 2020	Plus Alpha Consulting Co., Ltd., External Director (current post)	03
Supervisory Director3	Koji Nishimura	June 2023	KITAZAWA MUSEUM OF ART, Councilor (current post)	03
Supervisory Director2	Miyako Ishijima	April 1990	Registered as attorney	02
Supervisory Director2	Miyako Ishijima	April 1990	Joined Kizawa Fujiwara Law Offices (presently, Hashimoto Sogo Law Offices)	02
Supervisory Director2	Miyako Ishijima	September 2015	Member of Housing Dispute Examination committee in Tokyo Bar Association (current post)	02
Supervisory Director2	Miyako Ishijima	September 2020	Opened Ishijima Law Office (current post)	02
Supervisory Director2	Miyako Ishijima	April 2021	Mori Hills REIT Investment Corporation, Supervisory Director (current post)	02
Supervisory Director2	Miyako Ishijima	June 2021	Vice Chairperson of Committee on Housing Dispute Settlement Agencies in Japan Federation of Bar Associations (current post)	02
Supervisory Director2	Miyako Ishijima	April 2025	Responsible committee member of Alternative Dispute Resolution in Real Estate Transaction Improvement Organization (current post)	02
Supervisory Director1	Emi Kitamura	April 1987	Joined Yasuda Trust & Banking Co., Ltd. (presently, Mizuho Trust & Banking Co., Ltd.)	01
Supervisory Director1	Emi Kitamura	December 1990	Registered as Real Estate Appraiser	01
Supervisory Director1	Emi Kitamura	September 1995	Joined Mimura Tax & Accounting	01
Supervisory Director1	Emi Kitamura	December 1998	Registered as Certified Public Accountant	01
Supervisory Director1	Emi Kitamura	August 1999	Registered as Certified Public Tax Accountant	01
Supervisory Director1	Emi Kitamura	October 2005	Mimura Tax & consulting, Partner	01
Supervisory Director1	Emi Kitamura	September 2010	Mimura Tax & consulting, Representative (current post)	01
Supervisory Director1	Emi Kitamura	June 2013	Miyairi Valve Mfg. Co., Ltd. Auditor (current post)	01
Supervisory Director1	Emi Kitamura	April 2021	Mori Hills REIT Investment Corporation, Supervisory Director (current post)	01

• Executive Director and Supervisory Director may be officers of corporations other than those listed above, but none of them has any interest in MHR.

Policy on gender diversity concerning director composition

Current percentage of female directors: 50%
The policy is to support and respect gender-diversity-oriented approaches and we aim to make the percentage of female directors 30% or more.

Criteria for Electing Directors

Title	Name	Reasons for Election
Executive Director	Hiroyuki Yamamoto	Mr. Yamamoto was elected with the expectation that he would be able to undertake business management as Executive Director based on his knowledge and experience, etc. in the real estate financing business from a broad perspective.
Supervisory Director	Koji Nishimura	Mr. Nishimura was elected with the expectation that he would be able to oversee the Company’s management based on his knowledge and experience, etc. as a lawyer from a broad perspective.
Supervisory Director	Miyako Ishijima	Ms. Ishijima was elected with the expectation that she would be able to oversee the Company’s management based on her knowledge and experience, etc. as a lawyer from a broad perspective.
Supervisory Director	Emi Kitamura	Ms. Kitamura was elected with the expectation that she would be able to oversee the Company’s management based on her knowledge and experience, etc. as an expert of accounting, tax, and real estate from a broad perspective.

Status of the Board of Directors

Title	Name	Status of Attendance
		35th fiscal period ended January 31, 2024	36th fiscal period ended July 31, 2024	37th fiscal period ended January 31, 2025	38th fiscal period ended July 31, 2025
Executive Director	Hiroyuki Yamamoto				4/4 times (100%)
Executive Director	Hideyuki Isobe	5/5 times (100%)	6/6 times (100%)	5/5 times (100%)	2/2 times (100%)
Supervisory Director	Koji Nishimura	5/5 times (100%)	6/6 times (100%)	5/5 times (100%)	6/6 times (100%)
Supervisory Director	Miyako Ishijima	5/5 times (100%)	6/6 times (100%)	5/5 times (100%)	6/6 times (100%)
Supervisory Director	Emi Kitamura	5/5 times (100%)	6/6 times (100%)	5/5 times (100%)	6/6 times (100%)

• Mr. Yamamoto was appointed as Executive Director on April 18, 2025.
• Mr. Isobe was retired Executive Director on April 18, 2025. Mr. Tamura was retired Supervisory Director on the same day.

Skills Matrix of Directors

Title	Name	Chairperson	Independent Director(Note 2)	Experience and Expertise (Note 1)
				Corporate Management	Finance and Accounting	Legal, Risk Management and Compliance	Real Estate	Sustainability ESG
Executive Director	Hiroyuki Yamamoto	○		○	○	○	○	○
Supervisory Director	Koji Nishimura		○			○
Supervisory Director	Miyako Ishijima		○			○
Supervisory Director	Emi Kitamura		○		○		○

• The above table shows the representative skills of each director and does not contain all of the areas of knowledge and experience.
• “Independent Director” in the table refers to “independent directors” in alignment with the standards for independence from the Executive Director, asset management company, etc. stipulated in the Investment Trusts Act.

Director Pay, Director Equity Policy and Auditor

Director Pay

Title	Name	Main Concurrent Position	Total amount of compensation (thousand yen)
			35th fiscal period ended January 31, 2024	36th fiscal period ended July 31, 2024	37th fiscal period ended January 31, 2025	38th fiscal period ended July 31, 2025
Executive Director	Hiroyuki Yamamoto	Mori Building Investment Management Co., Ltd., President & CEO				ー
	Hideyuki Isobe	Mori Building Investment Management Co., Ltd., Chairman	ー	ー	ー	ー
Supervisory Director	Koji Nishimura	Matsuo & Kosugi, Partner, Attorney	2,100	2,100	2,100	2,100
	Miyako Ishijima	Ishijima Law Office, Representative	2,100	2,100	2,100	2,100
	Emi Kitamura	Mimura Tax & consulting, Representative	2,100	2,100	2,100	2,100
	Masakuni Tamura	ARC Brain, President	2,100	2,100	2,100	1,050

• Mr. Yamamoto was appointed as Executive Director on April 18, 2025.
• Mr. Isobe was retired Executive Director on April 18, 2025. Mr. Tamura was retired Supervisory Director on the same day.
• Mr. Yamamoto and Mr. Isobe also serves as Director of MIM and does not receive remuneration as Executive Director of MHR.

Director Equity Policy

Directors of MHR may not buy or sell investment units of MHR in order to prevent insider trading as stipulated in the Insider Trading Management Regulations of MHR.

Auditor

Auditor

• Ernst & Young ShinNihon LLC

Continuing Auditor Tenure

• From February 2006 to the present

Auditor’s Remuneration

	34th fiscal period ended July 31, 2023	35th fiscal period ended January 31, 2024	36th fiscal period ended July 31, 2024	37th fiscal period ended January 31, 2025	38th fiscal period ended July 31, 2025
Fees in relation to the Audit and Attestation Services	13,200 thousand yen	13,200 thousand yen	13,200 thousand yen	13,200 thousand yen	13,700 thousand yen
Fees in relation to the non-Audit Services	0 yen	2,800 thousand yen	0 yen	2,800 thousand yen	2,900 thousand yen

Structure of Asset Management for the Investment Corporation

MHR entrusts the management of its assets to its asset management company. The following is the organizational structure of MHR’s asset management company.

Status of MIM’s Board of Directors’ Meeting

Title	Name	Status of Attendance at the Board of Directors’ Meeting in Fiscal Year 2023
President & CEO	Hideyuki Isobe	11/11 times (100%)
Managing Director	Hiroyuki Yamamoto	9/9 times (100%)
Director	Kojiro Segawa	11/11 times (100%)
Director	Toshio Takano	2/2 times (100%)
Auditor	Atsushi Suginobu	11/11 times (100%)

Title	Name	Status of Attendance at the Board of Directors’ Meeting in Fiscal Year 2024
President & CEO	Hiroyuki Yamamoto	11/11 times (100%)
Chairman	Hideyuki Isobe	11/11 times (100%)
Director	Yoshihiko Kawamura	9/9 times (100%)
Director	Kojiro Segawa	2/2 times (100%)
Auditor	Atsushi Suginobu	11/11 times (100%)

• Mr. Yamamoto transitioned from Managing Director to President & CEO on June 19, 2024.
• Mr. Isobe transitioned from President & CEO to Chairman on June 19, 2024.
• Mr. Segawa retired as Director on June 19,2024, and Mr. Kawamura was appointed as Director on the same day.
• Mr. Takano retired as Director on June 21, 2023.

Internal Audit Structure

MIM has set up its Internal Audit Regulations and the General Manager of Compliance Department works as Internal Audit Manager under President & CEO. Internal audits shall be conducted every year targeting operations of all departments while also receiving support through outsourcing to outside specialized institutions, after formulating the internal audit plan encompassing a broad range of items including corporate ethics.
If problems are found, the Internal Audit Manager will give recommendations and instructions for improvement to the relevant departments, and the results of the audits will be reported to the directors of MIM.

Policy and Approach

From the viewpoint of securing the trust of financial markets and individual investors, financial institution business operators are required to have a management attitude that emphasizes compliance. MHR and MIM recognize that failure to ensure compliance is as an extremely serious risk factor and could diminish our public confidence and business base.

By firmly acknowledging this fact, MHR and MIM strictly adhere to various laws and regulations in order to fulfill our public obligations and to faithfully and fairly engage in corporate activities as a basic principle of management. MHR and MIM strive for thorough compliance, holding a high ethical sense in our operations.

Status and efforts for compliance with laws and regulations

The team at MIM, with the board of directors at the top, along with the President & CEO, the Compliance Department, the Compliance Officer and the Compliance Committee determine and verify various matters concerning compliance in accordance with their respective authorities and responsibilities.

MIM has established a "Compliance Manual" which states the compliance-related principles, as well as internal regulations to control major risks related to compliance such as prevention of transactions involving conflicts of interest and blocking of relations with anti-social forces. MIM strives to prevent problems by maintaining and thoroughly informing all executives and employees through periodic training etc. In addition, MIM introduced monitoring and consultation systems such as internal audit and internal reporting procedures to find and correct problems proactively.

The status of these efforts is reported to the board of directors and utilized for periodic risk assessment.

Initiatives Against Transactions Involving Conflicts of Interest

MIM shall perform its business in good faith and with the due care of a prudent manager for MHR in line with the purpose of the investment management business, and is well aware that failure to ensure thorough compliance, especially inappropriate transactions or transactions involving conflicts of interest with the sponsor company group, may undermine investors’ trust in the securities markets, the corporate management base of MHR and MIM.

Therefore, MIM will use its efforts to prevent any negative impact from transactions involving conflicts of interest and carry out strict compliance as follows.

Process to Counter Transactions Involving Conflicts of Interest

• When acquiring assets from a related party, if a director is an executive or employee of MHR's parent company or the related party (including concurrent positions, but excluding cases where they are seconded or transferred to MHR), such director is not permitted to participate in the relevant resolution of the Board of Directors.

Blocking relations with Anti-Social Forces

MIM provides a statement on “severing all ties, including business ties, with anti-social forces” in its “basic rules on response to anti-social forces.”

Accordingly, MIM endeavors to develop an internal structure, such as assigning a person responsible for overseeing and managing responses to anti-social forces and a person responsible for preventing unjust demands, and also periodically ensuring that all officers and employees are thoroughly informed of how to respond to anti-social forces, etc. through in-house training, etc.

Preventing Fraud and Corruption

MIM has formulated a "Compliance Manual" that sets forth the corporate ethics standards such as principles of compliance-related behavior, strict compliance with various laws and regulations including banning bribery, banning insider trading, prohibiting acts that may cause conflicts of interests such as corporate entertainment, gifts and acceptance of benefits that gives rise to public suspicion or distrust.

When a compliance violation or fact of doubt of such is recognized, it is prescribed to report that matter immediately to the Compliance Officer, and when the compliance officer deems it necessary in compliance with law regulations, and other rules, the matter will be reported to the president of MIM and the compliance committee for execution of appropriate measures.

With regard to these prohibited acts, under the system with the president of the asset manager being the person ultimately responsible for compliance and the Compliance Officer being the person responsible for overseeing compliance, we regularly conduct sessions on prevention of fraud and corruption and other corporate ethics standards to familiarize all employees including contract employees and part-timers with these issues and have established a monitoring and consultation system incorporating an internal auditing and whistleblowing system which is official and anonymous and allow whistleblower to report directly to external attorneys for prevention of problems as well as early detection and correction.

	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
No. of compliance sessions held	3	4	4	4	4
Total amount of political donations [yen]	0	0	0	0	0
No. of cases of exposure related to fraud and corruption	0	0	0	0	0
No. of cases of punishment/dismissal related to fraud and corruption	0	0	0	0	0
Reconciliation cost of penalties/punishment related to fraud and corruption [yen]	0	0	0	0	0

Whistleblower System

We have established a Whistleblower Protection System which is official and anonymous and allows all officers and employees of MIM (including contract employees, part-timers, retired employees, etc.) and all employees of its business partners (including contract employees, part-timers, retired employees, etc.) to report directly to external attorneys regarding acts that violate laws, internal rules, action principles and other acts that may be contrary to corporate ethics etc.
We strive to thoroughly inform all officers and employees to prevent, to detect and to correct problems at an early stage.

In the event of whistleblowing, the Investigation Committee with members appointed by external lawyers will conduct necessary investigations and countermeasures in accordance with MIM’s "Whistleblower Protection Regulations" by considering the confidentiality of the whistleblower and the privacy of the concerned parties.

Whistleblowers are provided legal protection under the Whistleblower Protection Act, and we prohibit retaliatory actions such as detrimental treatment and harassment due to whistleblowing and take appropriate measures to protect whistleblowers and to make "Whistleblower Protection Regulations" works properly.
Appropriate measures will be taken so that the work environment will not deteriorate after whistleblowing.

(Number of reports and outline of corrective measures)

FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
0	0	0	0	0

Policy and Approach

There are various risks in corporate activities. When these risks materialize it may lead to a decline in business performance and a decrease in social confidence.

MHR and MIM are well aware that various risks in business execution may undermine our corporate value.
We identify risks according to changes in public perceptions and the business environment as well as implement appropriate monitoring and responses to prevent and minimize damage at the time of occurrence of incident.

Risk Management Structure

MIM has established Risk Management Regulations. The Board of Directors oversees the development of risk management policies and the development of an appropriate risk management system.
In addition, MHR’s Board of Directors will periodically receive reports from MIM and supervise risk management overall.

The practical operation will be carried out with the Compliance Officer of MIM being the supervisor and the General Manager being responsible for risk management of each department.
We will identify various risks related to the tasks involved, including ESG risks, management risks, financial risks, administrative risks and system risks, and monitor the appropriate level of each risk.
Furthermore, the Compliance Officer periodically reports the status of risk management to MIM’s Board of Directors and MHR’s Board of Directors where necessary measures are confirmed and the effectiveness of the risk management process is reviewed.

Information Security

Leakage of information will compromise the trust of the company and it will be a great inconvenience to various stakeholders including our unitholders.

MIM has established Information Management Regulations and has adopted steps to prevent the leakage of information to implement appropriate management of information handled in business. The Information Manager makes efforts to strengthen information security by monitoring usage and strengthening systems.