Compliance Promotion Mechanism

Compliance Promotion Mechanism

In accordance with the Compliance Rules, we have built a Company-wide system composed of the Board of Directors at the top, the Compliance Committee, the senior executive managing officer in charge of compliance, and compliance officers of each department. In addition, affiliated companies under management by the Company are monitored and managed in a centralized way to build an effective compliance system that matches the Compliance Rules set by each company. Hulic receives applications and reports on a regular basis and, as required, on the status of compliance at each company, which improves our understanding of the situation and enables an appropriate response, when necessary.

Board of Directors

The Board of Directors makes decisions on the issues discussed at the Compliance Committee and receives reports from the Committee regarding important matters for compliance.

Compliance Committee

Headed by the President, the Compliance Committee convenes four times a year, in principle.
The Committee deliberates on important matters related to compliance, such as revisions to the Compliance Rules and the Compliance Manual, and formulation of a compliance program. The Committee also identifies and makes decisions to improve compliance, including information management.

Compliance Program

The Compliance Committee formulates a compliance program as an implementation plan to promote compliance, on a Company-wide basis. The results of the program are reported to the Compliance Committee. Moreover, affiliated companies create compliance programs in the same manner and report progress and achievements to the Company. Moreover, the contents of “Our Code of Conduct” is reviewed as necessary.

Compliance Promotion Framework

• *1Assigned to each department to promote compliance
• *2Assigned to each department to assist the Compliance Officer

Compliance Manual

Pursuant to Basic Principles of Corporate Conduct and Code of Conduct, the Compliance Manual stipulates the following items as rules for promoting compliance by all officers and employees of the Group.
In addition, we make sure that everyone understands the Compliance Manual and actively puts the principles into practice by providing compliance training and disseminating compliance-related information.

1. Respect human rights and prohibit discrimination and harassment
2. Comply with laws and rules
3. Conduct business in a faithful and fair manner
4. Manage information appropriately
5. Adhere to insider trading regulations
6. Avoid involvement with anti-social forces
7. Be considerate of environmental conservation
8. Maintain and encourage the best communication possible
9. Respect intellectual property rights
10. Prohibit bribery, and rules concerning gifts and entertainments
11. Ensure transparency and reasonableness of transactions

Increasing Compliance Awareness Through Training

We regularly provide compliance training on themes that correspond with the Compliance Manual, etc., including prohibiting bribery and handling gifts and entertainment, preventing corruption such as ensuring transparency and rationality in transactions, intellectual property rights, insider trading, and severing all relations with anti-social forces, to raise awareness of compliance among all employees, including temporary staffs. In addition to training on themes in the Compliance Manual, we also provide real estate industry-specific training on important themes and hold discussions, as needed. We also provide compliance-related news and Q&As once a month on our intranet to supplement the training. Other related training include training for new hires and mid-career employees as well as Group-wide training for newly appointed executive officers.

Treatment of Compliance Violations

When a compliance issue (or suspected) is detected, such as violation of applicable laws and regulations or Hulic’s code of conduct, the issue is immediately reported to a compliance officer or to the department in charge of compliance and the senior executive managing officer in charge of compliance by a compliance manager. The facts are investigated as necessary and necessary measures are taken to determine the causes and prevent recurrence. Hulic Group companies also implement the similar measures and report to the Company.

• Compliance violations regarding Hulic businesses and services and means of transaction (FY2023): 0 incidents
  • -Number of violations of laws and regulations and payment of fines: 0 incidents
  • -Number of violations or suspected violations of Hulic Company rules: 0 incidents

Compliance Hotline

Our employees can report your matter directly anonymously to our company or an external Compliance Hotline, if they consider that appropriate corrective actions will not be made after consultation to compliance officer of the department, or if they are reluctant to consult itself, due to the nature of the issues involved.
In addition to the matters of the Company's officers and employees, the Compliance Hotline also covers cases involving retirees and employees of the Company's business partners. It is possible to report a wide range of matters such as harassment, etc. When we receive a report, we will investigate the facts and respond promptly while giving utmost consideration to the protection of whistleblowers.

Targets

Officers and employees (including temporary and/or part-time staff, etc.) and retirees who have retired within one year and employees of business partners.

Target matters

In the event that violations of compliance, including cases covered by the Whistleblower Protection Act, human rights violations, bribery or other forms of corruption, non-compliance with labor issues, violations of applicable laws and regulations related to the various types of harassment and violations of the Company code of conduct, are suspected.

Whistleblower protection

Reports can be made anonymously. The whistleblower’s privacy is respected, and they will not be treated unfavorably because of the report.

Response when a report is made

When a report is made, we investigate the facts and respond promptly while giving due consideration to the privacy of the reporter.
When a report is made in writing or by e-mail, the Hotline will promptly notify the reporter that the report has been received. Subsequently, the whistleblower’s point of contact will consider the necessity of an investigation in fairness and sincerity, and in principle, notifies the whistleblower of future measures.

Reports received by the Hotline internal contacts will trigger a fact-finding investigation and provide feedback to the whistleblower about the process details and related matters. Reports received by the external contacts (designated lawyers) will be handled by the lawyer-in-charge, who informs the internal contacts of the whistleblower’s report, with the in-house contact conducting any necessary fact-finding investigations, the results of which are reported to the lawyer-in-charge. Based on the findings of this investigation, the lawyer-in-charge will provide the whistleblower with feedback.

Compliance through Outsourcing Contractors

As for outsourcing by the real estate business division, we have made fair trades based on “rules for real estate outsourcing management,” respecting relevant laws and regulations as well as instructions by administrative organizations.
When selecting an outsourcing contractor, we make a comprehensive decision by carefully checking their past performance and their ability to execute operations, the effectiveness of their business execution system and the clarity of the procedures, the appropriateness of the operation management system, possible relationships with anti-social forces, and other items.

Severing Ties with Anti-Social Forces

The Compliance Manual states that no anti-social activities will be tolerated and that all relationships with anti-social forces must be severed. As a concrete measure to promote severing any transactions with anti-social forces, we established Rules for Counteracting Anti-social Forces, which we are now practicing.
In addition, the Legal & Compliance Department promotes implementation at the organizational level, and a range of measures have been introduced to severing any ties with anti-social forces, including creating inhouse procedures, effective ways to ensure employee safety, and coordination with specialist external organizations.