Corporate Governance

Basic Approach
The MIRARTH HOLDINGS Group has set "Our Purpose" as "To design sustainable environments for a happier future for bothpeople and our planet." and recognizes that addressing issues related to sustainability is an important management issue. We
will not only pursue profits, but also comply with laws, regulations, and corporate ethics, fulfill our social responsibilities as amember of the corporate community, and aim to sustainably enhance our corporate value.
To this end, our basic approach to corporate governance is to always consider the happiness of all stakeholders, including
customers, employees, business partners, local communities, and shareholders, and to promote sound corporate activities bymaking decisions quickly and responding flexibly to changes in the business environment, as well as ensuring thoroughcompliance and transparency in decision making.

Initiatives to Strengthen Corporate Governance

Details of Initiatives

2010

Introduction of executive officer system

2012

Introduction of stock option plan for stock-based compensation for directors (excluding outside directors) and executive officers

2016

Start of evaluation of the effectiveness of the Board of Directors

2017

Term of office for directors changed from two years to one year

2019

Establishment of Nomination Committee and Compensation Committee

2020

Appointment of outside directors as chairpersons of the Nomination Committee and Compensation Committee

Appointment of female outside directors

2021

Ratio of outside directors increased to more than one-third (4 outside directors out of 12 directors)

Revision of executive compensation system (introduction of non-financial indicators as evaluation items)

Disclosure of the skills matrix
2022
Transition to a holding company structure116Corporate Governance System
MIRARTH HOLDINGS has established a system to ensure the appropriateness of management through careful and prompt
decision-making by the Board of Directors, appropriate supervision of business execution by mutual directors, and auditing andsupervision of business execution by directors by corporate auditors. In addition, the Company has adopted an executive officer
system to clarify the management oversight responsibilities of directors and the business execution responsibilities of executive
officers.

Ordinary General Meeting of Shareholders
Election

Nomination Committee

AdviceCompensation Committee

Audit

Board of Directors(including outside directors)

Audit & Supervisory Board(outside auditors)

Collaboration

Audit
Election/Supervise

Reports

Representative Director
Compliance
Committee
Sustainability Collaboration
Committee

Reports

Executive
Various
Officers Reports Departments

Audit

Accounting
AuditorReports

Risk
Management
Committee

Reports
Collaboration

Reports

Election

Election

Reports

Audit

Direction

Group Internal Audit Office
Audit

Collaboration
Audit
Audit

Group business companies

117Corporate Governance System Trends
There are six directors, four of whom are independent outside directors with diverse backgrounds. The term of office of
directors expires at the close of the ordinary general meeting of shareholders relating to the last fiscal year ending within one
year after their election. 19 meetings of the Board of Directors were held in FY2022.
The Company has three corporate auditors, all of whom are independent outside corporate auditors, and has established asystem that enables it to adequately fulfill its management oversight function from the outside. The Audit & Supervisory Board
works to improve the level of auditing by sharing issues and information among the corporate auditors and requesting
information from the Directors and various departments as necessary. The Board held 12 meetings in FY2022.

Fiscal Year

Form of
Organization

Total Number of
Directors

Number of Outside
Directors

Total Number ofAuditors

Number of Outside
Auditors

FY2016Company with Audit& Supervisory
Board

10

2

3

3

FY2017Company with Audit& Supervisory
Board

10

3

3

3

FY2018Company with Audit& Supervisory
Board

11

3

3

3

FY2019Company with Audit& Supervisory
Board

13

3

3

3

FY2020Company with Audit& Supervisory
Board

13

4

3

3

FY2021Company with Audit& Supervisory
Board

12

4

3

3

FY2022Company with Audit& Supervisory
Board

12

4

3

3

FY2023Company with Audit& Supervisory
Board

6

4

3

3

* Transferred to holding company structure as of October 1, 2022.

Ratio of Outside Directors on the Board of Directors
Outside:20%

Internal

80%

Outside:67%

Internal

33%

As of March 31,
2017

118

As of October 1,
2022

Board of Directors
MIRARTH HOLDINGS has six directors, four of whom are outside directors. All outside directors are designated as independent
directors. In principle, the Board of Directors meets once a month. Extraordinary Board of Directors meetings are held asnecessary to ensure decisions are made both carefully and promptly, and that directors mutually supervise each other'sbusiness execution.
Corporate auditors attend these meetings and provide their opinions when necessary. They also collaborate closely with outside
directors to audit and oversee both the functioning of the Board and the status of business execution. Additionally, executive
officers, the head of the Group Internal Audit Department, and leaders of other departments attend Board of Directors meetings
when requested, in line with internal regulations. They provide opinions on agenda items and reported issues as appropriate.
Furthermore, the Company conducts a Group Management Committee meeting once a month. This meeting serves to discussand deliberate on significant plans and proposals related to group management policies, strategies, and overall group
governance, thereby refining the decision-making process.

Executive Officer System
The Company has introduced an executive officer system to clarify the management oversight responsibilities of directors andthe business execution responsibilities of executive officers, and to further accelerate decision-making and strengthen businessexecution.

Audit & Supervisory Board
As a check and balance system for decision-making, all three corporate auditors are outside corporate auditors, and all of them
have sufficient professional experience, track record, and attitude to make objective judgments and checks. In addition to auditsof the Company, audits of affiliated companies are also conducted by attending meetings of each company's board of directors
and conducting interviews with directors, thus maintaining a tense relationship. In addition, we work with the accounting auditor
to understand and coordinate each other's annual schedules, accompany each other on site visits and model room inspections,and exchange information as needed to further improve the effectiveness and efficiency of our audits.

Group Internal Audit Office
In order to enhance and strengthen internal audits, the Company has established Internal Audit Regulations and established theGroup Internal Audit Office as an independent organization reporting directly to the President. In planning and conducting
internal audits, the schedule and content of audits are fully coordinated with those of corporate auditors and accounting
auditors to ensure the efficient operation of each function. Corporate auditors strive to build an effective and efficient audit
system by accompanying and attending operational audits conducted by the Group Internal Audit Office, confirming the content
of the audits, and hearing opinions as appropriate.

119Director Skills Matrix
In order to make objective judgments based on diverse knowledge and experience, the Company has identified the combinationof knowledge, experience, and abilities that the Board of Directors should possess, as shown in the table below.

Directors Skills Matrix (as of June 26, 2023)

Name

Position

Corporate
Management

Finance/
Accounting

Legal/
Risk
Management

Sales/
Marketing

Human
Resources/
Labor Relations

KazuichiShimadaRepresentative
Director
Group CEOGroup COO
President and
Chief
Executive
Officer

◎

〇

〇

〇

〇

Masashi
Yamamoto

Director
Group CFOManaging
Executive
Officer

◎

〇

〇

Kenji
KawadaOutsideDirector〇〇〇

Chiaki Tsuji

OutsideDirector

Keiko
Yamahira

OutsideDirector

NaohitoYamagishi

OutsideDirector◎

GlobalBusiness

Nominating
Committee

Compensation
Committee〇〇〇

Committee
Chairman

〇

〇

〇

〇

〇

Committee
Chairman

〇

〇

〇

IT

〇

◎

◎

〇

〇

〇

〇

◎

* Each director has been given "◎" rating for items that he or she considers to be particular strengths.

Reasons for Appointment of Outside Directors and Number of Board Meetings Attended
Reasons for the appointment of each outside director and the number of board meetings attended in FY2022 are disclosed.

Reasons for Appointment of Outside Directors and Number of Board Meetings Attended

Name

Position

Reason for Appointment

Year ending March 31,
2023
Attendance at Board of
Directors Meetings

Kenji Kawada

Outside Director

He has been involved in management at financial institutions andbusiness companies, and is appointed because of his extensive
experience and track record in management, as well as his broad
knowledge and insight.

Chiaki Tsuji

Outside Director

We have appointed her because of her expertise and extensive
experience and achievements as a lawyer in Japan and Germany.

19/19

Keiko Yamahira

Outside Director

The appointment is based on her extensive experience and broad
insight as a manager in the real estate industry.

18/19

Outside Director

He was appointed because of his expertise and wealth of experience
gained at the National Police Agency over a long period of time, as wellas his track record and experience at the Ministry of Construction(currently the Ministry of Land, Infrastructure, Transport and Tourism).

15/15

NaohitoYamagishi

120

19/19

Nomination and Remuneration Committees
The Company has established the Nomination Committee and the Remuneration Committee as voluntary advisory bodies toenhance objectivity and transparency in the decision-making process regarding personnel matters and compensation of
directors, etc., and to further enhance and strengthen the corporate governance system. Both committees are composed of atleast three directors selected by resolution of the Board of Directors, at least half of whom are independent outside directors,
thereby ensuring appropriate opportunities for involvement and advisory services by independent outside directors. Bothcommittees, in consultation with the directors, deliberate and report primarily on the matters listed below.

Nomination Committee(1) Matters related to the composition and balance of the Board of Directors;(2) Matters related to the selection and dismissal of directors;(3) Matters related to the selection and dismissal of representative directors and executive officers;(4) Matters related to criteria for determining the independence of outside directors; and(5) Matters related to succession planning.

Remuneration Committee(1) Matters relating to the remuneration of directors and executive officers;(2) Matters relating to basic policies and criteria on the remuneration of directors and others; and(3) Other matters referred to the Remuneration Committee by the Board of Directors.

Evaluating the Effectiveness of the Board of Directors
In order to improve the functioning of the Board of Directors, we evaluate and analyze the effectiveness of the Board of
Directors. With the cooperation of an outside consulting firm, we conducted an anonymous survey of all directors and corporate
auditors, including outside directors. Based on the responses to the questionnaire, we analyze and evaluate the effectivenessof the Board of Directors. In addition, starting with the effectiveness evaluation in FY2022, the evaluation method was improvedby conducting interviews based on the results of a questionnaire by an outside consulting organization.
The results of the questionnaire and interviews were generally positive, confirming that the Company's Board of Directors isfunctioning effectively to a considerable extent, but some issues were found regarding the nature of the Board of Directors andgroup governance after the Company's transformation into a holding company. In addition, the following issues, which had been
identified as challenges in the previous effectiveness evaluation, were also identified as issues that need to be addressed forcontinued improvement: "Enhancement of discussions on management strategy, including the group-wide crisis management
system and human capital investment," and "Reflection of shareholders' and other investors' opinions."
We will continue to fully consider issues and continue our efforts to improve the functioning of the Board of Directors.

121

Executive Remuneration
Directors’ remuneration is determined on the basis of the degree of each director’s contribution to business expansion andimprovement in corporate value towards sustainable growth. The limit of the annual amount of remuneration is deemed to be¥600 million (not including, however, the employee portion of the salary), and the limitation of the special stock option
remuneration to ¥600 million annually is decided by a resolution at the Ordinary General Meeting of Shareholders. Auditors’
remuneration is limited to an annual amount of ¥60 million or less.

Message from an Outside Director

Outside Director

Keiko Yamahira

Evaluation of MIRARTH HOLDINGS
I have a strong impression that MIRARTH HOLDINGS Group has a spirit of challenge and breakthrough, andcontinues to evolve with a sense of speed. In corporate management, the phrase "a snake that does not shed its
skin will die" is sometimes used. In times of rapid change, remaining in place and not changing means stagnationand decline for the company. Despite our 50-year history in business, we have maintained a challenging corporate
culture and breakthrough capabilities. Sales have also tripled in the 10 years through the fiscal year ending March
31, 2022, and this attitude is probably one of the reasons for the company's significant performance growth in sucha short period of time.
On the other hand, having expanded our business domain in a short period of time, I feel that there is a greaterneed to "optimize our business portfolio," one of the "seven pillars" of our medium-term management plan, in the
future. In making this transition to a holding company, I recognize the importance of reorganizing our portfolio tomaximize the synergies of our group.
The full text can be found here.

147KB

Excerpt from Integrated Report 2022

Corporate Governance Report
Corporate Governance Report

656KB

122

Compliance

Compliance Basic Policy
In the MIRARTH HOLDINGS Group, in order to fulfill corporate social responsibility, each organization as well as its officers andemployees are required to comply with laws, social norms, and separately established ethical guidelines, and establish acompliance basic policy that aims to become a norm in society.

Internal Whistle-Blowing System (Help Line)The Group has established an internal whistle-blowing system (helpline) as a means of reporting or consulting on issues suchas harassment and compliance violations. The previous whistle-blowing system was reviewed in August 2018, and weoutsourced responses to inquiries to a law firm with which the Group has not conducted business in the past to serve as an
outside consultation desk; moreover, we established an independent internal consultation desk that directs inquiries to thecorporate auditors. We reinforced the protection of reporting individuals, the subjects of reports, persons who cooperate withinvestigations, and others by establishing a mechanism to prevent access to information concerning consultations and reports
by involved directors and taking other measures. We are working to strengthen compliance management through the early
detection and rectification of improper conduct and other issues.

ハラスメントコンプライアンス
ヘルプライン

職場場で解決できない
ルール違反はヘルプラインへ！

ハラスメント・コンプライアンス ヘルプラインとは、自身や周りで起きている
ハラスメント・コンプライアンス違反などに関する問題の相談・通報を受け付ける窓口です。
疑義レベルでも結構です。
自らの行動が規範に反すると思われる場合、進んで連絡した人には、
その背景・状況等を十分に考慮した上で情状を斟酌します。勇気ある行動をお願いします。

通報者・被通報者・調査協力者や情報の保護は、最優先されます。

Pocket-size card
Investigationof facts andconsiderationof disciplinary
actionExternal Contact

Reporter【 Subject 】

Kotobuki Law Office
External contact independentof the company
Female attorneys are also available

MIRARTHHOLDINGS
Compliance
Committee【 Means 】

Emai / Fax / Phone / Mail etc.
Directors, employees,
loaned employees,
Consultation and Reporting
temporary employees,
and others who haveinternal contact
entered into employment
contracts with the Company,
Auditor of MIRARTH
including those of
HOLDINGS, Inc.
Group companies
Retirees【 Means 】
Business partners
Email / Phone / Mail etc.

* You can choose how and where to report.
* Anonymous reporting is also accepted.

MIRARTH HOLDINGS
Board of Directors
Respondent = Board member

Reporting

ReportingGroup company president/
audit & supervisoryboard member【Members 】
Directors andCorporate Auditors/

MIRARTH HOLDINGS
Disciplinary Committee
Respondent = Non-director

Reporting

For consultation
and reporting
related to groupcompanies

Reporting of results

MIRARTHHOLDINGS
Compliance Reporting of results
Committee

Contact
point for Reporting of results
Reporterreceiving
reports* Response in accordance with theReporting of results
regulations of each group company* Report on the status of whistleblower
monitoring to the Compliance Committeeof MIRARTH Holdings in a timely manner

Monitoring* Not reported to the person related to the reported case123

* Check to see if the whistleblower has been disadvantaged

Tax Policy

MIRARTH HOLDINGS Group Tax Policy
MIRARTH HOLDINGS Group (hereinafter referred to as "the Group") contributes to coexisting and prospering with society
and achieving a sustainable society by conducting proper tax payment and corporate activities based on the Group
Philosophy and Code of Conduct. In addition, the Group ensures fairness and transparency based on this tax Policy andcarries out appropriate accounting and tax management.

1. Tax Compliance
The Group always complies with the Corporation Tax Law, the Consumption Tax Law, and other relevant laws and regulations, as wellas adheres to the standards published by international organizations (such as OECD). The Group also keeps abreast of tax law
revisions in a timely and appropriate manner to fulfill its tax payment obligations properly. Moreover, in international transactions, theGroup complies with the laws and regulations of each country, tax treaties, and international taxation rules.
2. Tax Governance
The ultimate responsibility for establishment and maintenance of the Group’s tax governance rests with its Chief Financial Officer(CFO). The accounting department manages tax and accounting matters, maintains a system and environment for adequate
communication among Group companies, and strives to enhance training for officers and employees.
3. Tax Planning
The Group will engage in fair and proper tax planning in order to improve cash flow in its business activities but will not engage in tax
planning with the intent to reduce taxes excessively.
4. Tax Risk Management
The Group strives to minimize tax risks by consulting with external experts and utilizing a system of prior inquiries to tax authorities
when tax positions are uncertain.
5. Transfer Pricing Taxation System
In transactions with foreign affiliated parties, the Group strives to pay appropriate taxes in each country by conducting transactions at
arm's length in accordance with the transfer pricing taxation systems of each country.
6. Tax Authorities
The Group strives to ensure transparency and build a relationship of trust related to taxation by maintaining fair relationships with tax
authorities, providing tax authorities with timely and appropriate tax information, and responding to tax authorities in good faith.

Employee Awareness-Raising
Takara Leben administers compliance education on a variety of themes to employees and strives to create a corporate cultureof legal and regulatory compliance and respect for human rights.

Personal Information Protection
We consider the protection of personal information to be part of our CSR, and we have established a management system forthe appropriate protection of personal information. To ensure that all employees handle valuable personal information
appropriately while carrying out their business duties, we have created a personal information protection manual, distribute a
personal information usage and protection handbook, and make all employees thoroughly aware of basic knowledge and rules.
We also provide internal training led by instructors that are legal experts.

124

Preventing Unfair Business Dealings
We actively carry out specialized training to ensure that all transactions with customers are fair. The training, which addresses
conflicts of interest, aims to ensure that basic principles are thoroughly implemented and introduces numerous case examples
to expand the knowledge of attendees.
Furthermore, we strive to foster greater understanding of laws such as the Real Estate Brokerage Act, the Consumer Contract
Act, and the Act against Unjustifiable Premiums and Misleading Representations.

Harassment Prevention
Takara Leben conducts ongoing employee training to ensure that each and every employee is aware of harassment and tocreate a corporate culture that prevents harassment. Harassment training, mainly for managers, focuses on themes such as"laws related to power harassment," "communication in the workplace," and "anger management," to instill the basic concepts
and specific actions needed to eliminate harassment. In addition, we actively hold online training sessions for not only Takara
Leben employees but also managers of Group companies to create a Group-wide culture that does not tolerate harassment.

Dealing with Anti-Social Forces
The Group basic policy against anti-social forces is to adopt a firm stance in dealing with them. In addition to actively
participating in activities to eliminate organized crime under the guidance of our legal advisor, we collaborate with external
specialized agencies, such as local police stations and legal advisors, to establish a system to deal with anti-social forces.
With regard to our trading partners, we are also thorough in implementing measures for the elimination of anti-social forces
through steps such as exchanging memoranda on severing ties with such forces and including clauses on their elimination in
our various contracts and agreements.

Social Media Policy
The Group sees social media as an effective means of strengthening relationships with various stakeholders and has
formulated a Social Media Policy as a guideline on proper use. We comply with laws, regulations, and rules established byindividual Group companies, and, as a member of society with good judgment, we use social media with responsibility for our
conduct and strive to engage in communications through effective information disclosure with an awareness and understandingof our responsibilities regarding the dissemination of information and responses on social media.
We have also established a Privacy Policy as a guideline for employees' business and personal use of social media.

Social Media Policy
Privacy Policy

125Privacy Mark System Contributor
Leben Community was granted the Privacy Mark in January 2008 and has been working on and updating the management andoperation of personal information. In January 2020, we received a letter of appreciation from the Japan Information Processing
Development Corporation (JIPDEC) for our efforts over the years to maintain and improve our own personal information
protection management system (PMS) and for our contribution to the promotion of the Privacy Mark System. We also focus on
training our employees to raise their awareness of the handling of personal information and to apply this awareness to theirwork. In fiscal year 2021, we conducted training on "Case Studies of Personal Information Leakage Accidents in Condominium
Management" and "Overview of New PMS Standards."
Furthermore, in fiscal year 2022, we revised the "Regulations for the Protection of Whistleblowers and Harassment Compliance
Hotline Reporters" in response to amendments to the Whistleblower Protection Act.

Political Contributions
The MIRARTH HOLDINGS Group complies with the Political Funds Control Act and does not make political contributions.

126

Risk Management

Basic Risk Management Policy

The MIRARTH HOLDINGS Group identifies and manages each risk based on its basic risk management policy of ensuring
the safety of customers, partners, officers, employees, and their families, fulfilling our social responsibility, harmonizing
with the global environment, sustaining sustainable business, and enhancing corporate value. In addition, the Risk
Management Committee has been established as a promotion structure to ensure thorough risk management throughout
the Group.

127

Risk Management System
MIRARTH HOLDINGS has established Risk Management Regulations to manage the risks of the Group and to continuously
improve corporate value, and in accordance with these regulations, has set up the Risk Management Committee chaired by the
President to examine and report on all risks related to overall management and to discuss or decide on measures andmanagement to be implemented to avoid or reduce these risks. The committee examines and reports on all risks related tooverall management, discusses and decides on measures and management to be implemented to avoid or reduce these risks,and ensures that internal controls are strengthened and misconduct and lack of compliance in overall operations, including
financial reporting, are prevented. In order for the committee to develop and continuously improve the Group's risk management
system, the Board of Directors appoints a Group CRO (Chief Risk Officer) from among the directors or executive officers, andsubcommittees of the Risk Management Committee such as "Business Strategy," "Finance," "IT and Administration," and"Compliance" are established as necessary, so that the committee can make proactive proposals in response to individual risk
management. In addition, the contents of discussions at each subcommittee meeting are reported and verified by the Risk
Management Committee as appropriate based on the Risk Management Committee Regulations, and are reported to the Boardof Directors according to the contents of the reports, thereby ensuring prompt decision-making in the event of risk occurrence.

Board of Directors of MIRARTH HOLDINGS
Reporting & Collaboration

Appointment & Supervision

Supervision

Supervision & Advice

Risk Management Committee
Chairperson: CEO,
General Secretary: CRO
Supervision &Direction

Supervision

Reporting

Reporting

Collaboration

ReportingDirection &Reporting

Chief Risk Officer (CRO)

Audit &
Supervisory
Board

Group Legal Department
First line

Second line
Third line

Business departments ofGroup companies

Administrative
departments

Risk Officers of
MIRARTH Group companies

Risk Officers of
MIRARTH Group companies

Business department

Administrative department

Business department

Administrative department

Business department

Administrative department

Audit
Reporting

128

Group Internal
Audit Office

Collaboration &AdvicePreventive Approach to Risk
In order to respond promptly to the occurrence of emergency situations such as corporate scandals, accidents, natural
disasters, administrative action, serious criminal conduct by employees, and so on, the MIRARTH HOLDINGS Group has
established crisis management structures and adopted Crisis Management Rules and a Crisis Management Manual. The Crisis
Management Rules define crises and specify procedures from initial responses to the formation and disbanding of responseorganizations. There are also two sets of detailed crisis control rules regarding crisis responses and disaster countermeasures.
In addition, risks in each department are collected and countermeasure plans to prevent their occurrence are prepared with thedepartment in charge and reported at the Risk Management Committee, which meets quarterly. Furthermore, as part of ourbusiness continuity plan (BCP), we are working to develop manuals for business continuity and recovery in the event of an
emergency, and are striving for a preventive approach to risk.

Risk Management Committee
Risk management in a broad sense
Risk management in a narrow sense(Risk Prevention Measures)

Crisis Management

BCP

Risk Control

129

CrisisManagement
Rules

ComplianceRisks and Opportunities
As risks that may have a significant impact on corporate activities are becoming more diverse and complex every day, our groupis working to predict possible future events, identify risks and opportunities, and use them to solve social issues and create
value.

Social issues and external environment
Changes in the direction of economic policy

Market environment
Business activities

Response
Pursue new businesses such as PPA
Strengthening of information-gathering activities

Obsolescence of products and/or services

Capture demand generation/growth opportunities
via new products and services
Expansion in demand for compact condominiums
Expansion of business areas

Reflection of purchaser needs
Diverse product offerings
Supply compact condominiums

Deterioration in market conditions including
political instability and economic recession

Increased funding costs due to changes infinancial institution lending attitudes and financing
market conditions
Intensified competition including new entrants,
and rapid environmental changes
Deteriorating supplier operating conditions
Booking of impairment losses

Increase in opportunities to acquire land andproperties
Increase in M&A opportunities

Redouble efforts to diversify financing methods
Implement ongoing performance monitoring,countermeasures
Strengthening of financial management
Strengthening of overseas business

Low birthrate coupled with an aging anddeclining population

Decreasing demand for housing

Increased demand for condominiums among
seniors
Increase in opportunities for proposing solutions
to vacant house issues and aging buildings
Development of compact cities

Supply condominiums in the center of regional cities
Supply compact condominiums
Strengthening of overseas business

Requests by power companies to control
outputDecline in electricity sales revenue

Expansion of Corporate PPA

Implementation of area strategies in energy business

Surge in land prices as well as raw materialand construction (labor) costs

Soaring procurement prices
Decrease in profit
Slower sales due to higher selling prices

Stabilize procurement prices mainly by diversifying
suppliers, decentralizing on a regional basis, and using
long-term contracts

Difficulty in recruiting human resources,
shortage of labor, and decline in employee
quality

Lower product and service quality
Incurring of compensation costs, brand image
deterioration
Occurrence of occupational accidents

Implementation of activities designed to improve
employee loyalty
Personnel system reform, enhancement and upgrading ofvarious training systems
Implementation of branding penetration measures
Housing performance evaluation report acquisition
Holding Safety Conferences, building safe implementation
management systems

Increasingly serious global environmental
issues

Stricter regulations for greenhouse gas usage/
emissions and energy conservation
More stringent building standards due to stricter
laws and regulations

Invigoration of renewable energy market due to
growing interest in environmental issues

Development of renewable energy generation facilities
Reduction of carbon dioxide emissions
Formulation of climate change policy
Building of internal system in compliance with external
evaluation organization standards
Acquisition of green certifications

Incidence of natural disasters, accidents,and other incidents

Raw materials/component supply shortages
Asset damage
Disruption to Group business facilities, supply
chains, and customers

Increased properties needing large-scale renovation
Increased interest in disaster-resistant buildings

Promote earthquake-proofing of buildings and facilities,
implement countermeasures for tsunamis, torrential rain,
and floods
Stockpile emergency supplies necessary for disasters
Conduct disaster preparation drills
Introduction of safety confirmation system

Acts of terrorism, riots, and war

Disruption to Group business facilities, supply
chains, and customers
Geopolitical risk
Supply chain fragmentation

Spread of infectious diseases

Disruption to Group business facilities, supply
chains, and customers
Disruption to business operations
Decline in hotel and tenant occupancy rates

Incidence of unauthorized access andcyberattacks

Leakage of confidential information and stoppagesof production lines and logistics systems
Payment of damages and fines,
incurring countermeasures expenses

Insufficient internal control function

Improper conduct, leakage of confidential
information
Payment of damages and fines, incurring
countermeasures expenses
Delay in response to global environmental problems

Changes in lifestyles

Climate change, natural disasters, etc.

Opportunities
Increase in commercialization projects due toutilization of subsidy system
Ongoing low-interest housing loans, eased tax
reduction requirements
Introduction of new systems to replace FIT(Stricter laws and regulations, changes in legal
interpretation and management policy)

Governance, etc.

Risks
Decreased number of commercialization projects
due to subsidy system revisions
Lost business opportunities due to changes in FIT
Stricter regulations for energy conservation
Strengthening of regulations on building
standards(Growth in DINKs, dual-income households,
seniors relocating to condominiums,
development of telework)

Diversification of housing needs

Click here for a larger PDF.

Conducting of credit checks on business partners
Verification of geopolitical risk
Stabilize procurement prices mainly by use of diversifying
suppliers, decentralizing on a regional basis, and using
long-term contracts
Creating demand for new products and services tomeet changing lifestyles

Promote teleworking and enhance workplace healthmanagement
Differentiation of products and services(equipment, meeting of specifications, installation of
telework spaces through renovation)
Strengthening of insurance contracts and information
security systems
Ensuring of confidentiality
Restrictions on external access
Establishment of internal regulations, conducting of training
Identify issues and promote resolutions via Compliance &Risk Management Committee
Enhancement of in-house checking system
Conducting thorough compliance education

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130

Response to New Coronavirus Infections
Basic Stance on Response
Since the pandemic caused by Covid-19 in 2020, our group has been promoting the Basic Policy for Responding to Outbreaksof New Coronavirus Infections led by the Crisis Management Committee to protect the health, safety and security of ouremployees, their families and customers, and to continue our business.
We have prepared a response flowchart for cases of possible infection among employees and have been working to prevent the
spread of infection. In the event that an infected person is confirmed, we have established a system to report to the competentpublic health center and promptly report to the general manager of the division to which the person belongs and to the General
Affairs Department of MIRARTH HOLDINGS.
For employees and executives who are confirmed to be infected, rules were clarified until they were able to return to work after
being hospitalized or staying at home under the direction of the public health center, and the details of measures such as taking
PCR tests, staying at home, and working at home, are defined. In addition, offices where infected employees are found are
disinfected as necessary, in accordance with the judgment of the health center with jurisdiction, the office administrator, and theCompany.

Employee Initiatives
To reduce the risk of infection among employees, we continue to implement a variety of measures, including telework andflexible work schedules.
In FY2022, the mutant strain (Omicron strain) infection spread again, resulting in the sixth and seventh waves of outbreaks. We
have established a system for promptly disseminating infection prevention measures to the Group by flexibly monitoring thedomestic infection situation and establishing rules for working systems, and meetings and business dinners including
stakeholders, as appropriate depending on the infection situation.

Initiatives in the Value Chain
Since August 2020, we have been working to alleviate customer concerns by requiring employees participating in previews andinformation sessions in rural areas from the Tokyo metropolitan area (Tokyo, Kanagawa, Saitama, Chiba), where the number of
infected people is high, to prove negative by PCR or antigen testing.
In model rooms, which are the points of contact with customers, basic infection control measures such as "wearing masks andgloves," "regular ventilation," and "sterilization of equipment" were thoroughly implemented, and each staff member strictly
followed "negative antigen test confirmation" and "prompt visit to a medical institution or PCR test in case of positive test
results or symptoms."
In addition, in June 2021, the Group introduced "vaccination leave" to make it easier for employees to receive vaccinations,which not only improves their own health, but also gives their families and customers a sense of security. In addition, we also
support the prevention of infection in the home, and have subsidized the cost of hotel accommodations and other expenses forvoluntary quarantine in the event that an employee or a family member living with an employee tests positive for the disease.
These efforts have been partially suspended since May 2023, when the Covid-19 infection was moved to category 5 infectious
diseases. However, in the event of another pandemic of an infection of its variants or similar infectious disease, we will takeappropriate measures as needed to ensure the safety and security of our customers and employees.

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