Independent Auditor’s Report

The Board of Directors
MORI TRUST Reit, Inc.
OpinionWe have audited the accompanying financial statements of MORI TRUST Reit, Inc. (formerly,
MORI TRUST Sogo Reit, Inc.; the Company), which comprise the balance sheet as at February
28, 2023, and the statements of income and retained earnings, changes in net assets, cash
distributions, and cash flows for the five-month period then ended, and notes to the financial
statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at February 28, 2023, and its financial performance and its
cash flows for the five-month period then ended in accordance with accounting principles
generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to our audit of the financial statements
in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note 18. SUBSEQUENT EVENTS to the financial statements, which
describes the Company conducted an absorption-type merger, effective March 1, 2023, with theCompany as the surviving corporation and MORI TRUST Hotel Reit, Inc. as the absorbed
corporation. Our opinion is not modified in respect of this matter.
Other Information
The other information comprises the information included in the Audited Financial Statementsthat contains audited financial statements but does not include the financial statements and our
auditor’s report thereon.
We have concluded that the other information did not exist. Accordingly, we have not performed
any work related to the other information.

Ernst & Young ShinNihon LLC

Responsibilities of Management and the Supervisory Director for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal control
as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles generally
accepted in Japan, matters related to going concern.
The Supervisory Director is responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Company’s ability to continue asa going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation in accordance with accounting principles
generally accepted in Japan.
We communicate with the Executive Director regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
Ernst & Young ShinNihon LLC

We also provide the Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Ernst & Young ShinNihon LLC
Tokyo, JapanMay 26, 2023/s/ 吉田 雅彦
Masahiko Yoshida
Designated Engagement Partner
Certified Public Accountant/s/ 佐藤 賢治
Kenji Sato
Designated Engagement Partner
Certified Public Accountant

Ernst & Young ShinNihon LLC

FINANCIAL STATEMENTS
BALANCE SHEETS
Thousands of yen
As of February 28, 2023

As of September 30, 2022
AssetsCurrent assets
Cash and deposits

16,534,395

14,729,422

3,089,760

2,413,662

Operating accounts receivable
Accounts receivable - other77,534

97,513-28

Prepaid expenses

86,346
15,44955,63164,91519,803,486

17,361,173

Cash and deposits in trust

Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation

35,007,630

34,742,923(18,237,032)(18,302,773)

Buildings, net

16,770,597

16,440,150

Structures
Accumulated depreciation

443,976

443,960(413,582)(413,398)

30,39330,561

Structures, net
Machinery and equipment
Accumulated depreciation

153,655

128,457(127,417)(105,502)

Machinery and equipment, net

26,237

22,955Tools, furniture and fixtures
Accumulated depreciation

111,307113,212(87,823)(89,644)

Tools, furniture and fixtures, net

23,48323,567

Land

114,585,335

109,001,394

Buildings in trust
Accumulated depreciation

33,964,244

35,354,628(13,395,018)(13,931,696)

Buildings in trust, net

20,569,225

21,422,932

Structures in trust
Accumulated depreciation

187,293

187,941(116,015)(119,677)

Structures in trust, net

71,277

68,264

Machinery and equipment in trust
Accumulated depreciation

66,552

70,137(8,450)(10,557)

Machinery and equipment in trust, net

58,102

59,579Tools, furniture and fixtures in trust
Accumulated depreciation

102,790

105,717(69,394)(72,856)

Tools, furniture and fixtures in trust, net

33,39532,860Land in trust

153,798,827

157,795,399

Total property, plant and equipment

305,966,876

304,897,665

240

240

Intangible assets
Other

1

Thousands of yen
As of September 30, 2022
Total intangible assets
Investments and other assets
Guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets

As of February 28, 2023

240

240

10,00066,8252,815

10,00057,897
2,815

79,64070,713306,046,756

304,968,618

Deferred assets
Investment corporation bond issuance costs

58,984

68,950Total deferred assets

58,984

68,950325,909,227

322,398,742

Total non-current assets

Total assets
Liabilities
Current liabilities
Operating accounts payable

307,709220,285

Short-term loans payable

6,000,000

6,000,000

Current portion of investment corporation bonds
Current portion of long-term loans payable

4,000,000

3,000,000

18,000,000

15,000,000

Accrued expenses

58,604430,289

349,524444,375

Dividends payable

8,073

7,955

Accounts payable – other

Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities

867

718

233,884

61,744809,224322

814,808
214

29,848,976

25,899,627

Non-current liabilities
Investment corporation bonds

11,000,000

11,000,000

Long-term loans payable

117,000,000

117,500,000

7,555,628

7,698,469

918,125

943,131

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Deferred tax liabilities

514,820

631,732

Total non-current liabilities

136,988,574

137,773,333

Total liabilities

166,837,550

163,672,960

153,990,040

153,990,040

1,750,398

1,121,637

Net assets
Unitholders' equity
Unitholders' capital
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total voluntary retained earnings
Unappropriated retained earnings

2

1,750,398

1,121,637

3,331,238

3,614,104

Thousands of yen
As of September 30, 2022
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets
The accompanying notes form an integral part of these financial statements.

3

As of February 28, 2023

5,081,637

4,735,741

159,071,677

158,725,781

159,071,677

158,725,781

325,909,227

322,398,742

STATEMENTS OF INCOME AND RETAINED EARNINGSFor the six-month period ended September 30, 2022 and the five-month period ended February 28,2023
Thousands of yen
For the period
from October 1, 2022
to February 28, 2023

For the period
from April 1, 2022
to September 30, 2022
Operating revenue
Lease business revenue
Other lease business revenue
Gain on sale of investment property

6,603,932

5,620,653

298,407

207,435-

1,430,579

6,902,340

7,258,668

3,057,896

2,710,417

Asset custody fee

307,505
12,987275,258
10,829Administrative service fees

45,07650,842

Directors' compensations
Merger-related expenses

3,600

3,000

-

61,360

Other operating expenses

46,95088,983

Total operating expenses

3,474,016

3,200,691

3,428,323

4,057,976

Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee

Operating income
Non-operating income
Interest income

90

94

Reversal of dividends payable

845

647

Total non-operating income

936

741

345,823

291,515

27,15824,397

8,874

7,679

Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
other

3,886

3,376

385,741

326,968

Ordinary income

3,043,518

3,731,749

Profit before income taxes

3,043,518

3,731,749

Income taxes - current

881

732

Income taxes - deferred(288,601)

116,912

Total income taxes(287,720)

117,644

Total non-operating expenses

Profit3,331,238

3,614,104

Unappropriated retained earnings

3,331,238

3,614,104

The accompanying notes form an integral part of these financial statements.

4

STATEMENTS OF CHANGES IN NET ASSETSFor the six-month period ended September 30, 2022
Thousands of yen
Unitholders' equity
Surplus
Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items during
periodProvision of reserve for
reduction entry
Reversal of reserve for
reduction entry

Total unitholders' Total net assets
equityVoluntary retained earnings

UnappropriatedReserve for
Total voluntary retained earnings
reduction entry retained earnings (undisposed loss)
1,430,418

1,430,418

4,537,379

5,967,798

159,957,838

159,957,838

454,094454,094(454,094)---(134,114)(134,114)

134,114---

Dividends of surplus(4,217,400)(4,217,400)(4,217,400)(4,217,400)

Profit3,331,238

3,331,238

3,331,238

3,331,238

Total changes of items
during period
Balance at end of current
period153,990,040

Total surplus-

319,979

319,979(1,206,140)(886,161)(886,161)(886,161)

153,990,040

1,750,398

1,750,398

3,331,238

5,081,637

159,071,677

159,071,677

The accompanying notes form an integral part of these financial statements.
For the five-month period ended February 28, 2023
Thousands of yen
Unitholders' equity
Surplus
Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items during
periodReversal of reserve for
reduction entry

Total unitholders' Total net assets
equityVoluntary retained earnings

Unappropriatedretainedearnings
Reserve for
Total voluntary
reduction entry retained earnings (undisposed loss)

153,990,040

Total surplus

1,750,398

1,750,398

3,331,238

5,081,637

159,071,677

159,071,677(628,761)(628,761)

628,761---

Dividends of surplus(3,960,000)(3,960,000)(3,960,000)(3,960,000)

Profit

3,614,104

3,614,104

3,614,104

3,614,104

Total changes of items
during period-(628,761)(628,761)

282,865(345,895)(345,895)(345,895)

Balance at end of current
period153,990,040

1,121,637

1,121,637

3,614,104

4,735,741

158,725,781

158,725,781

The accompanying notes form an integral part of these financial statements.

5

STATEMENTS OF CASH DISTRIBUTIONS
For the six-month period ended September 30, 2022 and the five-month period ended February 28,2023
Fiscal Period ended
September 30, 2022
(April 1, 2022 to September 30, 2022)
I. Unappropriated retained earnings
Ⅱ.

Reversalofvoluntary

Unit: yen
Fiscal Period ended
February 28, 2023
(October 1, 2022 to February 28, 2023)

3,331,238,876

3,614,104,524

628,761,124-

3,960,000,000(3,000)3,359,400,000(2,545)-

254,704,524--

retainedearnings
Reversal of reserve for reduction
entry
Ⅲ. Distribution amount(Distribution amount per unit)
Ⅳ. Voluntary retained earnings
Provision of reserve for reduction
entry
Ⅴ. Retained earnings carried forward
Calculation
amountmethodofdistribution

In accordance with Paragraph 1,

In accordance with Paragraph 1,

Article 29 of the Investment

Article 29 of the Investment

Corporation’s Articles of Incorporation,
MTR decided to distribute the total

Corporation’s Articles of Incorporation,
MTR decided to distribute the totalbalance of unappropriated retainedbalance of unappropriated retained

earnings after adding the reversal of theearnings after deducting provision of thereserve for reduction entry under Article

reserve for reduction entry under Article66-2 of the Act on Special Measures
Concerning Taxation , the amount of

66-7 of the Act on Special Measures
Concerning Taxation, the amount of

which is 3,960,000,000 yen.

which is 3,359,400,000 yen.

In addition, MTR does not distribute

In addition, MTR does not distributedividends in excess of accounting profit

dividends in excess of accounting profit

as set forth in Paragraph 2, Article 29 ofas set forth in Paragraph 2, Article 29 of

the Investment Corporation’s Articles ofIncorporation.

the Investment Corporation’s Articles ofIncorporation.

6

STATEMENTS OF CASH FLOWSFor the six-month period ended September 30, 2022 and the five-month period ended February 28,2023
Thousands of yen
For the period
from October 1, 2022
to February 28, 2023

For the period
from April 1, 2022
to September 30, 2022
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of investment corporation bond issuance
costs
Interest income
Interest expenses

3,043,518
1,116,153

3,731,749
914,440

8,874

7,679

(90)

(94)
315,912(19,978)

Decrease (Increase) in operating accounts receivable

372,981(35,671)

Increase (Decrease) in operating accounts payable(10,983)(10,954)

Increase (Decrease) in accrued consumption taxes
Increase (Decrease) in advances received

125,207(172,139)(104,045)

5,584

Other, net(89,768)

5,829,179
73,655

Subtotal

4,426,175

10,675,035

Interest income received

90(353,781)

94(348,757)

Decrease due to sale of investment property

Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment

(892)

(881)

4,071,591

10,325,489(69,009)(16,911)Purchase of property, plant and equipment in trust
Repayments of tenant leasehold and security deposits(80,198)(5,405,860)(90,166)(122,170)

Proceeds from tenant leasehold and security deposits

160,283

184,460(25,275)(8,391)

7,804

37,476(96,562)(5,331,397)

17,000,000(17,000,000)

6,000,000(8,500,000)

Repayments of tenant leasehold and security deposits intrust
Proceeds from tenant leasehold and security deposits intrust
Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment corporation bonds

2,000,000

3,000,000

Redemption of investment corporation bonds
Payments for investment corporation bond issuance costs-(4,000,000)(12,457)(15,045)

Dividends paid

(4,216,512)(3,960,117)

Net cash used in financing activities(2,228,969)(7,475,163)

Net increase (decrease) in cash and cash equivalents

1,746,059(2,481,070)

Cash and cash equivalents at beginning of period

17,878,096

19,624,156

Cash and cash equivalents at end of period

19,624,156

17,143,085

The accompanying notes form an integral part of these financial statements.

7

NOTES TO FINANCIAL STATEMENTS
For the five-month period from October1, 2022 to February 28, 2023

1. ORGANIZATION AND BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
Organization
MORI TRUST Sogo Reit, Inc. (“MTR”), a Japanese real estate investment corporation, was incorporated on October 2, 2001
under the Law Concerning Investment Trusts and Investment Corporations of Japan, or the Investment Trust Law. MTR was
originally formed by Mori Trust Co., Ltd., and commenced operations on March 28, 2002 by acquiring a property. MTR isprovided professional asset management services of properties of various types by a licensed asset management company, MORI
TRUST Asset Management Co., Ltd. (“MTAM”). MTAM is currently owned 95% by MORI TRUST Co., Ltd., and 5% by Mori
Trust Hotels & Resorts Co., Ltd. On February 13, 2004, MTR was listed on the J-REIT section of the Tokyo Stock Exchange(securities code: 8961). As of February 28, 2023, MTR owned a portfolio of 17 properties with a total rentable area of 427,871.92
sq. meters occupied by 109 tenants. The occupancy rate was 96.9%.

Basis of presentation of financial statements
MTR maintains its accounting records and prepares its financial statements in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Law, the Financial Instruments andExchange Law of Japan and the related regulations, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards. The accompanying financial statements are a translation of thefinancial statements of MTR, which were prepared in accordance with Japanese GAAP and were presented in the Securities
Report of MTR filed with the Kanto Local Finance Bureau. In preparing the accompanying financial statements, certain
reclassifications have been made to the financial statements issued domestically in order to present them in a format which ismore familiar to readers outside Japan. In addition, the notes to financial statements include information which might not be
required under Japanese GAAP but is presented herein as additional information. As permitted under the Japanese Financial
Instruments and Exchange Law, amounts of less than one million yen have been omitted. As a result, the totals shown in theaccompanying financial statements do not necessarily agree with the sum of the individual amounts. MTR does not prepare
consolidated financial statements as it has no subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESProperty and equipment
Property and equipment is stated at cost less accumulated depreciation. The costs of land, buildings and building improvements
include the purchase prices of properties, legal fees and acquisition costs. Depreciation of property and equipment is calculated
on a straight-line basis over the estimated useful lives of the respective assets ranging as follows:
Buildings including trust accounts.................................................. 3 - 81 years
Structures including trust accounts..................................................2 - 45 years
Machinery and equipment including trust accounts........................ 2 - 17 years
Tools, furniture and fixtures including trust accounts..................... 2 - 18 years
Expenditures for repairs and maintenance are charged to income as incurred. Significant renewals and betterments arecapitalized.

Intangible assets
Intangible assets are amortized on a straight-line basis.

Deferred assets
Deferred investment corporation bond issuance costs are amortized using the straight-line method over the respective terms of thebonds.

Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally
expensed during the period. The sellers of the properties were liable for property taxes for the calendar year including the period
from the date of purchase by MTR through the end of the year since the taxes were imposed on the registered owners as ofJanuary 1, based on assessments made by local governments.

Revenue recognition
The main performance obligations related to revenue arising from contracts with customers of the MTR and the normal time forsatisfying such performance obligations (the normal time for recognizing revenue) are as follows.
(1) Sales of real estate and other assets

8MTR recognizes revenue from the sale of real estate and other assets when the buyer, as the customer, obtains control of the realestate and other assets by fulfilling the delivery obligations stipulated in the contract for the sale of real estate and other assets.
(2) Utility revenues
Utility revenues are recognized based on the supply of electricity, water, etc. to the lessee, the customer, in accordance with theterms of the real estate lease contract and related agreements.
With regard to utility charge reimbursements which MTR deems to fall under that for an agent, the net amount sought by
subtracting the amount paid to another party from the amount that is received as charge for electric power, gas, etc. which issupplied by another concerned party is recognized as revenue.

Accounting treatment of beneficiary interests in trust assets including real estate
For trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust as well as all income
generated and expenses incurred from assets in trust are recorded in the relevant balance sheets and statements of income andretained earnings accounts.

Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks and short-term investments which are highly liquid,readily convertible to cash and with an insignificant risk of price fluctuation, and with an original maturity of three months or
less.

9

3. PROPERTY AND EQUIPMENT
Property and equipment at September 30, 2022 and February 28, 2023 consisted of the following:

Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Total

Thousands of yen
As of February 28, 2023
As of September 30, 2022
Acquisition Cost
Book Value
Acquisition Cost
Book Value
114,585,335
114,585,335
109,001,394
109,001,394
35,451,606
35,186,883(18,650,615)
16,800,991(18,716,171)
16,470,711
153,655
128,457(127,417)
26,237(105,502)
22,955111,307113,212(87,823)
23,483(89,644)
23,567
153,798,827
153,798,827
157,795,399
157,795,399
34,151,537
35,542,569(13,511,034)
20,640,503(14,051,373)
21,491,196
66,552
70,137(8,450)58,102(10,557)
59,579102,790
105,717(69,394)
33,395(72,856)
32,860305,966,876
304,897,665

The compressed amount of tangible assets with government grants under the Corporation Tax Law of Japan was ¥38,340
thousand at September 30, 2022 and ¥38,340 thousand at February 28, 2023.

10

4. INVESTMENT CORPORATION BONDS
Investment corporation bonds at September 30, 2022 and February 28, 2023 consisted of the following:Thousands of yen
As of
As of
February 28,
September 30,
2022
2023
4,000,000
3,000,000
3,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
3,000,000－
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
15,000,000
14,000,000

Unsecured bonds due on February 20, 2020
Unsecured bonds due on February 25 2021
Unsecured bonds due on February 21, 2022
Unsecured bonds due on February 26, 2015
Unsecured bonds due on June 20, 2022
Unsecured bonds due on February 17, 2023
Unsecured bonds due on February 25, 2021
Unsecured bonds due on February 21, 2022
Unsecured bonds due on February 25, 2021
Unsecured bonds due on February 23, 2017
Total

Averageinterest rate
(%)
0.17
0.11
1.07
0.42
0.79
0.50
0.50
0.75
1.08
－

Due on－February 22, 2024
February 28, 2025
February 26, 2027
February 29, 2028
February 28, 2029
February 25, 2031
February 27, 2032
February 25, 2036
February 23, 2037－

Use of
funds

Note

(1)

(2)

−

−

(1) Use of the above funds includes acquisition of real estate or beneficiary interests.
(2) The above loans are unsecured and non-guaranteed with floating rates.
(3) Investment corporation bonds repayable expected to be repaid during each of the 5 years subsequent tothe current balance sheet date are summarized as follows (except for investment corporation bonds due within one year):
1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

1,000,000−

1,000,000

2,000,000

Investment corporation bonds(Thousands of yen)

5. SHORT-TERM LOANS PAYABLE
Short-term loans payable at September 30, 2022 and February 28, 2023 consisted of the following:

LenderSumitomo Mitsui Banking Corporation
Resona Bank, Limited
Mizuho Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Banking Corporation
Resona Bank, Limited
Total short-term loans

Thousands of yen
As of
As of
February 28,
September 30,
2022
2023
2,500,000－
500,000－
2,000,000
2,000,000
1,000,000
1,000,000－
2,500,000－
500,000
6,000,000
6,000,000

Averageinterest rate(%) (1)
－
－
0.20
0.20
0.20
0.20
－

Due on－－April 7, 2023
August 31, 2023
October 6, 2023
October 13, 2023－

Use of
funds

Note

－

－

(2)

(3)

－

－

(1) Average interest rate for each loan has been rounded to the second decimal place.
(2) Use of the above funds includes acquisition of real estate or beneficiary interests.
(3) The above loans are unsecured and non-guaranteed with floating rates.
MTR has entered into line of credit loan agreements totaling ¥20,000 million with banks to reduce refinancing risk. The unused
amount of such credit lines was ¥20,000 million at February 28, 2023.

6. LONG-TERM LOANS PAYABLE
Long-term loans payable at September 30, 2022 and February 28, 2023 consisted of the following:

LenderSumitomo Mitsui Trust Bank, Ltd.
Mizuho Bank, Ltd
MUFG Bank, Ltd.
Mizuho Bank, Ltd
Sumitomo Mitsui Trust Bank, Ltd.

Thousands of yen
As of
As of
September 30,
February 28,
2022
2023
1,500,000－
500,000－
2,500,000－
2,000,000－
1,000,000－

11

Averageinterest rate(%) (1)－－－－－

Due onUse of
funds

Note

－
－
－
－
－

－

－

Mizuho Trust & Banking Co., Ltd.
Mizuho Bank, Ltd
The Bank of Fukuoka, Ltd.
The Nishi-Nippon City Bank, Ltd.
Mizuho Bank, Ltd
Development Bank of Japan Inc.
Resona Bank, Limited.
MUFG Bank, Ltd.
Development Bank of Japan Inc.
Resona Bank, Limited.
Mizuho Bank, Ltd
Development Bank of Japan Inc.
Aozora Bank, Ltd.
Shinkin Central Bank
Sumitomo Mitsui Banking Corporation
Development Bank of Japan Inc.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
The Bank of Fukuoka, Ltd.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Banking Corporation.
The Nishi-Nippon City Bank, Ltd.
Mizuho Bank, Ltd
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Mizuho Bank, Ltd
Sumitomo Mitsui Banking Corporation.
The 82 Bank, Ltd.
MUFG Bank, Ltd.
Development Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
The Bank of Fukuoka, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Trust Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Development Bank of Japan Inc.
Nippon Life Insurance Company
Resona Bank, Limited.
Aozora Bank, Ltd.
Resona Bank, Limited.
Sumitomo Mitsui Trust Bank, Ltd.
Development Bank of Japan Inc.
The Nishi-Nippon City Bank, Ltd.
The 77 Bank, Ltd.
Nippon Life Insurance Company
Mitsui Sumitomo Insurance Company, Limited
Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
Resona Bank, Limited.
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd
The Bank of Fukuoka, Ltd.
The Norinchukin Bank

1,000,000
3,500,000
1,000,000
500,000
1,500,000
1,000,000
1,000,000
500,000
500,000
1,000,000
3,000,000
1,500,000
2,000,000
2,000,000
3,000,000
2,000,000
1,000,000
3,000,000
1,000,000
3,000,000
1,000,000
500,000
1,500,000
500,000
3,000,000
1,000,000
1,000,000
1,000,000
500,000
1,000,000
2,500,000
4,000,000
1,000,000
3,000,000
3,000,000
1,000,000
1,000,000
1,500,000
1,000,000
1,500,000
1,000,000
1,000,000
500,000
1,000,000
500,000
500,000
2,000,000
1,000,000
1,000,000
500,000
500,000
500,000
1,000,000
1,000,000
500,000
500,000
500,000
1,000,000
3,000,000－
3,500,000
1,000,000
500,000
1,500,000
1,000,000
1,000,000
500,000
500,000
1,000,000
3,000,000
1,500,000
2,000,000
2,000,000
3,000,000
2,000,000
1,000,000
3,000,000
1,000,000
3,000,000
1,000,000
500,000
1,500,000
500,000
3,000,000
1,000,000
1,000,000
1,000,000
500,000
1,000,000
2,500,000
4,000,000
1,000,000
3,000,000
3,000,000
1,000,000
1,000,000
1,500,000
1,000,000
1,500,000
1,000,000
1,000,000
500,000
1,000,000
500,000
500,000
2,000,000
1,000,000
1,000,000
500,000
500,000
500,000
1,000,000
1,000,000
500,000
500,000
500,000
1,000,000
3,000,000

12

－
0.47
0.43
0.49
0.48
0.51
0.48
0.43
0.54
0.46
0.17
0.64
0.54
0.57
0.27
0.36
0.36
0.56
0.56
0.29
0.30
0.43
0.56
0.56
0.32
0.65
0.65
0.34
0.65
0.64
0.33
0.37
0.32
0.46
0.68
0.43
0.42
0.47
0.52
0.41
0.50
0.41
0.36
0.39
0.72
0.39
0.55
0.33
0.41
0.31
0.40
0.39
0.42
0.40
0.56
0.56
0.50
0.51
0.38

－
April 12, 2023
April 21, 2023
April 24, 2023
August 31, 2023
August 31, 2023
August 31, 2023
August 31, 2023
September 29, 2023
October 18, 2023
February 29, 2024
February 29, 2024
March 11, 2024
March 19, 2024
April 9, 2024
April 11, 2024
April 11, 2024
April 24, 2024
May 31, 2024
October 9, 2024
October 9, 2024
December 26, 2024
January 17, 2025
January 17, 2025
February 28, 2025
February 28, 2025
February 28, 2025
February 28, 2025
February 28, 2025
March 19, 2025
April 9, 2025
April 11, 2025
April 11, 2025
April 24, 2025
August 29, 2025
January 19, 2026
January 30, 2026
February 27, 2026
February 27, 2026
February 27, 2026
February 27, 2026
March 12, 2026
March 31, 2026
April 22, 2026
April 24, 2026
May 29, 2026
August 31, 2026
August 31, 2026
August 31, 2026
August 31, 2026
September 18, 2026
September 30, 2026
December 24, 2026
December 25, 2026
December 25, 2026
December 25, 2026
January 19, 2027
January 29, 2027
February 26, 2027

Sumitomo Mitsui Trust Bank, Ltd.
The Ashikaga Bank, Ltd.
Aozora Bank, Ltd.
SUMITOMO LIFE INSURANCE COMPANY
The Bank of Fukuoka, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
The Norinchukin Bank
The Nishi-Nippon City Bank, Ltd.
Resona Bank, Limited.
SUMITOMO LIFE INSURANCE COMPANY
The Dai-ichi Life Insurance Company, Limited
Development Bank of Japan Inc.
Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Sumitomo Mitsui Trust Bank, Ltd.
Development Bank of Japan Inc.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Banking Corporation.
Aozora Bank, Ltd.
Mizuho Bank, Ltd
The 77 Bank, Ltd.
Shinsei Bank Limited
Mitsui Sumitomo Insurance Company, Limited
Development Bank of Japan Inc.
Mizuho Bank, Ltd
Mizuho Trust & Banking Co., Ltd.
Mizuho Bank, Ltd
Aozora Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Bank, Ltd
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
Sumitomo Mitsui Banking Corporation.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Sumitomo Mitsui Banking Corporation.
Mizuho Bank, Ltd
Mizuho Bank, Ltd
Total long-term loans

1,500,000
1,000,000
500,000
500,000
1,000,000
1,500,000－
1,500,000
1,500,000
500,000
500,000
500,000
1,000,000
1,000,000
1,500,000
1,000,000
1,000,000
1,000,000－－
500,000
1,500,000
1,500,000
1,500,000
1,000,000
1,500,000
1,000,000
1,000,000
1,500,000
3,000,000－－
1,000,000
1,500,000
500,000
1,500,000
2,000,000
1,000,000
1,500,000
1,000,000
500,000
2,000,000
1,500,000
1,500,000
135,000,000

1,500,000
1,000,000
500,000
500,000
1,000,000
1,500,000
1,000,000
1,500,000
1,500,000
500,000
500,000
500,000
1,000,000
1,000,000
1,500,000
1,000,000
1,000,000
1,000,000
500,000
1,500,000
500,000
1,500,000
1,500,000
1,500,000
1,000,000
1,500,000
1,000,000
1,000,000
1,500,000
3,000,000
2,000,000
1,000,000
1,000,000
1,500,000
500,000
1,500,000
2,000,000
1,000,000
1,500,000
1,000,000
500,000
2,000,000
1,500,000
1,500,000
132,500,000

0.59
0.63
0.45
0.59
0.55
0.63
0.84
0.38
0.48
0.48
0.38
0.56
0.43
0.74
0.50
0.63
0.47
0.55
0.99
0.99
0.47
0.53
0.54
0.51
0.71
0.51
0.54
0.53
0.59
0.71
1.07
1.07
0.82
0.59
0.79
0.90
0.92
0.65
0.76
0.62
0.63
0.98
0.66
0.98
－

February 26, 2027
April 22, 2027
June 24, 2027
June 25, 2027
July 30, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
August 31, 2027
September 10, 2027
September 30, 2027
October 13, 2027
December 24, 2027
January 19, 2028
January 19, 2028
January 19, 2028
January 19, 2028
January 19, 2028
March 31, 2028
April 7, 2028
April 11, 2028
April 11, 2028
April 17, 2028
August 31, 2028
August 31, 2028
October 31, 2028
February 28, 2029
February 28, 2029
February 28, 2029
April 11, 2029
April 23, 2029
February 28, 2030
April 11, 2030
April 12, 2030
June 24, 2030
July 19, 2030
August 30, 2030
August 30, 2030
October 28, 2030
February 28, 2031
April 11, 2031－－－

(1) Average interest rate for each loan has been rounded to the second decimal place.
(2) Use of the above funds includes acquisition of real estate or beneficiary interests.
(3) The above loans are unsecured and non-guaranteed with fixed interest rates.
(4) The total amounts of long-term loans repayable expected to be repaid during each of the 5 years subsequent to the current
balance sheet date are summarized as follows (except for long-term loans payable due within one year):
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
Amount of loans
27,000,000
21,500,000
18,000,000
19,000,000(Thousands of yen)

7. NET ASSETS
MTR is required to maintain net assets of at least ¥50 million as required pursuant to the Investment Trust Law.

13

8. INCOME TAXESAt September 30, 2022 and February 28, 2023 MTR’s deferred tax assets consisted mainly of enterprise tax payable, which is
not deductible for tax purposes.
The significant components of deferred tax assets and liabilities as of September 30, 2022 and February 28, 2023 were as
follows:
As of September 30, 2022
As of February 28, 2023
Thousands of yen

Deferred tax assets:
Accrued enterprise tax
Total deferred tax assets
Deferred tax liabilities:
Reserve for advanced depreciation of non-current assets
Total deferred tax liabilities
Net deferred tax assets (liabilities)

13
13

10
10

514,833
514,833(514,820)

631,743
631,743(631,732)

A reconciliation of the tax rate differences between the adjusted statutory tax rate and the effective tax rates for the six-month
period ended September 30, 2022 and the five-month period ended February 28,2023 was as follows:
April 1, 2022 to
October 1, 2022 toSeptember 30, 2022
February 28, 2023
Statutory tax rate
31.46%
31.46%
Deductible dividend distribution(40.93%)(28.32%)Others0.02%
0.01%
Effective tax rates(9.45%)(3.15%)
MTR is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation Measures
Law (STML) of Japan, an investment corporation is allowed to deduct dividends of accounting profits, or dividend distributions,paid to investors from its taxable income if certain tax requirements are satisfied. Such tax requirements include dividend
distributions in excess of 90% of the investment corporation’s distributable profit for the accounting period as stipulated in
Article 67-15 of the STML. Based on the distribution policy provided by its Articles of Incorporation, MTR made a dividend
distribution of approximately 100% of retained earnings in the amount of ¥3,359,400 thousand at February 28, 2023 and treated it
as a tax-deductible distribution. MTR does not distribute dividends in excess of accounting profit in accordance with its Articles
of Incorporation.

9. PER SHARE INFORMATION
The following table summarizes information about net assets per share and net income per share at September 30, 2022 andFebruary 28, 2023 and for the six-month period and five-month period,respectively, then ended:Yen
Net assets per share at period end
Net income per share
Weighted-average number of shares

April 1, 2022 toSeptember 30, 2022
60,2541,261
2,640,000 shares

October 1, 2022 toFebruary 28, 2023
60,1231,368
2,640,000 shares

In calculating net assets per share, the amount of the net assets has been adjusted for the cash distribution declared in thesubsequent period. Net income per share is computed by dividing net income by the weighted-average number of shares
outstanding during each period. Diluted net income per share has not been presented since no warrants or convertible bonds were
outstanding during the period.
Since MTR conducted a 2-for-1 unit split effective March 1, 2023, net asset value per unit and net income per unit are calculated
based on the assumption that the said unit split was conducted at the beginning of the previous fiscal period.

1410. RELATED PARTY TRANSACTIONSMTR entered into the following related party transactions:(1) Parent company and major corporate shareholders: None applicable(2) Subsidiaries: None applicable(3) Sister companies:(For the six months ended September 30, 2022)
Party type
Party name
Address
CapitalBusiness
Percentage of voting rights held
Concurrent board appointment
Business relationship
Details of transactions
Transaction amountAccount name and balance atperiod end

Subsidiary of other related company*
Mori Trust Co., Ltd.
Minato-ku Tokyo, Japan¥30,000,000 thousand
Urban development; hotel management andinvestment businessLeasing
Buying property
Sale of property
Rental revenues¥1,811,460 thousand
Property management revenues¥219,868 thousand
Rental and other receivables¥5,208 thousand
Rents received in advance¥24,761 thousand
Leasehold and security deposits including trust
accounts¥883,417 thousand
Trade accounts payable¥157,705 thousand
Accrued expenses¥430 thousand* MTR deemed Mori Trust Co., Ltd. to be a “Subsidiary of other related company” under Article 8 of Regulations Concerning
Financial Statements.

(For the five months ended February 28, 2023)
Party type
Party name
Address
CapitalBusiness
Percentage of voting rights held
Concurrent board appointment
Business relationship
Details of transactions
Transaction amount

Subsidiary of other related company*
Mori Trust Co., Ltd.
Minato-ku Tokyo, Japan¥30,000,000 thousand
Urban development; hotel management andinvestment businessLeasing
Buying property
5,266,666
Sale of property
7,266,666

15

Account name and balance atperiod end

Rental revenues¥1,603,874 thousand
Property management revenues¥183,045 thousand
Rental and other receivables¥7,180 thousand
Rents received in advance¥24,761 thousand
Leasehold and security deposits including trust
accounts¥894,581 thousand
Trade accounts payable¥42,409 thousand
Accrued expenses¥59 thousand* MTR deemed Mori Trust Co., Ltd. to be a “Subsidiary of other related company” under Article 8 of Regulations Concerning
Financial Statements.

(4) Directors and major individual shareholders: None applicable1611. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
A breakdown of property-related revenues and expenses for the six-month period ended September 30, 2022 and five-month
period ended February 28, 2023 is summarized as follows:(1) Rental revenues and property-related expenses

Property-Related Revenues:
Property rental revenues
Common charges
Land rental revenues
Other rental revenues
Parking revenues
Utilities revenues
Penalty revenues
Other revenues
Property-Related Expenses:
Property management fees
Utilities expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Depreciation
Other rental expenses
ProfitThousands of yen
October 1, 2022 toApril 1, 2022 toFebruary 28, 2023
September 30, 2022
6,603,932
5,620,653
6,244,322
5,321,121
236,001
196,524
123,609
103,007
298,407
207,435
90,701
76,370144,763
99,674－25,172
37,771
31,3903,057,896
2,710,417
717,358
600,789
255,836
211,827
881,367
879,362
19,142
16,235
41,62362,957
1,116,153
914,440
26,41424,805
3,844,443
3,117,671(2) Gain on sale of real estate

Income from sale of real estate
Cost of real estate sales
Other expenses on sale
Gain on sale of real estate

Thousands of yen
October 1, 2022 toApril 1, 2022 toFebruary 28, 2023
September 30, 2022－
Shinbashiekimae MTR Building－
7,266,666－
5,829,179－
6,907－
1,430,579

17

12. FINANCIAL INSTRUMENTS
Overview(1) Policy for financial instruments
For efficient and stable management operations, MTR raises funds required for acquisition and renovation of assets, payment ofdividends and debt and regular operations mainly through bank borrowings, issuance of investment corporation bonds andissuance of new investment shares. MTR manages cash surpluses carefully in consideration of safety, liquidity, interest rateenvironment and cash flow plans.
(2) Types of financial instruments, related risk and risk management for financial instruments
Loans, issuance of investment corporation bonds and issuance of new investment shares are undertaken for acquisition of realestate or real estate trust beneficiary rights.
Loans and security deposits are exposed to liquidity risk. MTR prepares and updates its cash flow plans based on reports fromeach division and maintains the ready liquidity to manage liquidity risk.
In addition, MTR has established commitment lines of credit to ensure flexible fund procurement.
(3) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market priceavailable, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value,
different assumptions and factors could result in different fair values.

Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of September 30, 2022 and estimated fair value are shown in
the following table. Notes on “Cash and deposits,” “Cash and deposits in trust,” and “Short-term loans payable” are omitted
because their fair value approximates their book value due to cash and short term settlements.
Thousands of yen
Carrying
Value

Estimated
Fair Value (1)Difference1) Current portion of
investment corporation bonds2) Current portion of long-termloans payable3) Investment corporation bonds

4,000,000

3,986,259(13,740)

18,000,000

17,953,691(46,308)

11,000,000

10,560,560(439,439)

4) Long-term loans payable

117,000,000

114,113,240(2,886,759)

7,555,628

6,708,856(846,772)

918,125

827,109(91,016)

158,473,754

154,149,718(4,324,036)

5)Tenant leasehold and security deposits
6)Tenant leasehold and security deposits
in trust
Total Liabilities

The carrying value of financial instruments on the balance sheet as of February 28, 2023 and estimated fair value are shown in
the following table. Notes on “Cash and deposits,” “Cash and deposits in trust,” and “Short-term loans payable” are omitted
because their fair value approximates their book value due to cash and short term settlements.
Thousands of yen
Carrying
Value

Liabilities
1) Current portion of
investment corporation bonds2) Current portion of long-termloans payable3) Investment corporation bonds

Estimated
Fair Value (1)Difference

3,000,000

2,972,527(27,472)

15,000,000

14,942,401(57,598)

11,000,000

10,305,120(694,879)184) Long-term loans payable5)Tenant leasehold and security deposits
6)Tenant leasehold and security deposits
in trust
Total Liabilities

117,500,000

113,879,368(3,620,631)

7,698,469

6,667,125(1,031,343)

943,121831,117(112,013)

155,141,600

149,597,661(5,543,938)(1) Methods to determine the estimated fair value of financial instruments
Current portion of investment corporation bonds and investment corporation bonds
The fair value of investment corporation bonds is calculated based on the present value of the total of principal and interest
discounted at the current interest rate estimated by taking into consideration the remaining term of the investment
corporation bonds and their credit risk.
Current portion of long-term loans payable and long-term loans payable
The fair value of long-term loans is based on the present value of the total of principal and interest discounted by the interest
rate to be applied if similar new borrowings were entered into.
Tenant leasehold and security deposits and Tenant leasehold and security deposits in trust
The fair value of tenant leasehold and security deposits including trust accounts is based on the present value of the total of
cash flow discounted by an interest rate determined taking into account the remaining period of each item and current creditrisk.
(2) The redemption schedule for loans(As of September 30, 2022)
Due in1 year or lessCurrent portion of investment
corporation bonds
Current portion of long-term loans
payableInvestment corporation bonds

4,000,000-

18,000,000

Long-term loans payable

Thousands of yen
Due inDue in2 to 3 years
3 to 4 years

Due in1 to 2 years

-

-

-

-

-

3,000,000

1,000,000-

19,500,000

27,500,000

Due in1 to 2 years

Due in4 to 5 years

Due after
5 years
-

-

-

-

-

1,000,000

6,000,000

16,000,000

20,000,000

34,000,000

Thousands of yen
Due inDue in2 to 3 years
3 to 4 years

Due in4 to 5 years

Due after
5 years-(As of February 28, 2023)
Due in1 year or lessCurrent portion of investment
corporation bonds
Current portion of long-term loans
payableInvestment corporation bonds
Long-term loans payable

3,000,000-

15,000,000

-

-

-

-

-

-

-

-

-

-

1,000,000-

1,000,000

2,000,000

7,000,000-

27,000,000

21,500,000

18,000,000

19,000,000

32,000,000

1913. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of September 30, 2022 and February 28, 2023 were as follows:
Thousands of yen
As of September 30, 2022
As of February 28, 2023
16,534,395
14,729,422
3,089,760
2,413,662
19,624,156
17,143,085

Cash and deposits
Cash and deposits in trust
Cash and cash equivalents

14. LEASESMTR leases properties and earns rental revenues. Future lease revenues subsequent to September 30, 2022 and February 28, 2023
under non-cancelable operating leases were as follows:

Due within one year
Due after one year
Total

Thousands of yen
As of September 30, 2022
As of February 28, 2023
7,654,988
7,096,745
32,185,923
30,292,749
39,840,912
37,389,494

15. REVENUE RECOGNITION
1.Breakdown of revenue from contracts with customers
For the period from April 1, 2022 to September 30, 2022

Sales of real estate properties *2
Utilities income
Others
Total

Thousands of yen
Revenue from contracts with customers *1
Revenue from external customers
145,016
145,016
6,757,323
145,016
6,902,340

For the period from October 1, 2022 to February 28, 2023

Sales of real estate properties
Utilities income
Others
Total

Thousands of yen
Revenue from contracts with customers *1
Revenue from external customers
7,266,666
1,430,579
99,85099,8505,728,237
7,366,517
7,258,668*1 Rent revenues subject to Accounting Standard for Lease Transactions (ASBJ Statement No. 13) are excluded from “Revenue
from contracts with customers” as such revenues are not subject to Accounting Standard for Revenue Recognition. Revenue
from contracts with customers mainly represents revenues from the sale of real estate and utilities.
*2 Sales of real estate properties are recorded as gains or losses on sales of real estate properties in the statements of income areretained earnings in accordance with Article 48-2 of the Regulations on Accounting of Investment Corporation (Cabinet
Office Ordinance No. 47 of 2006), and therefore the amount represents the proceeds from sales of real estate properties, lessthe cost of real estate properties sold and other sales expenses.
2. Information that provides a basis for understanding revenue from contracts with customers
For the period from April 1, 2022 to September 30, 2022
As described in the Summary of Significant Accounting Policies.
For the period from October 1, 2022 to February 28, 2023
As described in the Summary of Significant Accounting Policies.

203. Information about the relationship between the fulfillment of performance obligations under contracts with customers and cash
flows arising from those contracts, and the amount and timing of revenue expected to be recognized in subsequent periods fromcontracts with customers that existed at the end of the current period
For the period from April 1, 2022 to September 30, 2022
(1) Balance of contract assets and contract liabilities

Claims arising from contracts with customers (At beginning of period)
Claims arising from contracts with customers (At end of period)
Contract assets (At beginning of period)
Contract assets (At end of period)
Contract liabilities (At beginning of period)
Contract liabilities (At end of period)

Thousands of yen
April 1, 2022 toSeptember 30, 2022
24,82836,980-(2) Transaction price allocated to remaining performance obligations
As of September 30, 2022, the total transaction price allocated to the remaining performance obligations for the sale ofreal estate is 21,800,000 thousand yen for the real estate for which a sale contract was executed on July 28, 2022.
MTR expects to recognize revenue for such remaining performance obligations upon delivery of such real estate properties,
which is expected to occur on February 28, 2023, August 31, 2023 and February 29, 2024.
In accordance with Paragraph 19 of the Guidance on Accounting Standard for Revenue Recognition, MTR recognizes
utility revenues at the amount it has the right to charge, because MTR has the right to receive from the customer the amountof consideration that directly corresponds to the value to the customer, the lessee, of the portion of the performancecompleted by the end of the fiscal year. Accordingly, MTR has applied the provisions of paragraph 80-22(2) of the
Accounting Standard for Revenue Recognition and has not included in the notes the transaction price allocated to theremaining performance obligations.
For the period from October 1, 2022 to February 28, 2023
(1) Balance of contract assets and contract liabilities

Claims arising from contracts with customers (At beginning of period)
Claims arising from contracts with customers (At end of period)
Contract assets (At beginning of period)
Contract assets (At end of period)
Contract liabilities (At beginning of period)
Contract liabilities (At end of period)

Thousands of yen
October 1, 2022 toFebruary 28, 2023
36,98039,506-(2) Transaction price allocated to remaining performance obligations
As of February 28, 2023, the total transaction price allocated to the remaining performance obligations for the sale of realestate is 14,533,333 thousand yen for the real estate for which a sale contract was executed on February 28, 2023.
MTR expects to recognize revenue for such remaining performance obligations upon delivery of such real estate properties,
which is expected to occur on August 31, 2023 and February 29, 2024.
In accordance with Paragraph 19 of the Guidance on Accounting Standard for Revenue Recognition, MTR recognizes
utility revenues at the amount it has the right to charge, because MTR has the right to receive from the customer the amountof consideration that directly corresponds to the value to the customer, the lessee, of the portion of the performancecompleted by the end of the fiscal year. Accordingly, MTR has applied the provisions of paragraph 80-22(2) of the
Accounting Standard for Revenue Recognition and has not included in the notes the transaction price allocated to theremaining performance obligations.

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16. INVESTMENT AND RENTAL PROPERTIESMTR owns office buildings and retail facilities for lease mainly in Tokyo and other areas. The carrying value in the balance
sheet and corresponding fair value of those properties are as follows:
Thousands of yen
Fair Value(3)

Carrying Value(1)

Use
Officebuildings
Retailfacilities
Others
Total

As of
March
31, 2022

Net Changes

Carrying Value
(1)

As of
September
30, 2022

As of
September
30, 2022

Net Changes

(2)

As of
September
30, 2022

219,623,334(712,059)

218,911,274

243,710,000

68,687,691(124,916)

68,562,774

18,674,613(181,785)

306,985,638(1,018,762)

Fair Value
(3)

(2)

As of
February28, 2023

As ofFebruary28, 2023

218,911,274

4,765,105

223,676,380

249,530,000

85,140,000

68,562774(5,667,954)

62,894,820

78,100,000

18,492,827

21,150,000

18,492,827(166,362)

18,326,464

21,190,000

305,966,876

350,000,000

305,966,976(1,069,211)

304,897,665

348,820,000(1)The carrying value represents the acquisition cost less accumulated depreciation.
(2) The main reason for the increase in the amount of change from the previous period was renovation of owned assets, while thereason for the decrease was depreciation. The main reason for the increase during the period was the acquisition of Sendai MT
Building, while the reason for the decrease was the transfer of Shimbashi Ekimae MTR Building and depreciation.
(3)The fair value is an appraisal value or a price estimated by real estate appraisers outside MTR.
The profit and loss for the six-month period ended September 30, 2022 and the five-month period ended February 28, 2023
concerning rental properties is as follows:
Thousands of yen

April 1, 2022 toSeptember 30, 2022
Use

Officebuildings
Retailfacilities
OthersTotal

Gain onSale ofInvestment
Property(2)

RentalRevenues(1)

PropertyrelatedExpenses(1)

Net Income

Gain onSale ofInvestment
Property(2)

2,239,412-

3,967,263

2,130,511

1,836,752-

305,184

1,187,456-

1,245,374

283,085

962,289

1,430,579

320,643

417,574-

615,451

296,821318,630-

3,844,443-

3,117,671

1,430,579

RentalRevenues(1)

PropertyrelatedExpenses(1)

4,671,481

2,432,069

1,492,640
738,218
6,902,340

October 1, 2022 toFebruary 28, 2023

3,057,896

Net Income

5,828,088

2,710,417(1)“Rental revenues” and “Property-related expenses”, which are rental revenues and related expenses (depreciation, repairs andmaintenance, casualty insurance, property and other taxes etc.), are presented in the statements of income and retained earnings
as “Operating revenue” and “Operating expenses”.
(2)“Gain on sale of investment property” is presented in the statements of income and retained earnings under “Operating
revenue”.

17. SEGMENT AND RELATED INFORMATION
Segment Information
Since the business of MTR consists of only the “real estate leasing business”, there are no reporting segments. Therefore,
segment disclosures have been omitted.
(For the six months ended September 30, 2022)

Related Information(1)Information about products and services
Since the proportion of operating revenues from external customers for each product and service exceeds 90% of operating22

revenues, product and service disclosures have been omitted.
(2)Information about geographical areas①Operating revenues
Since the proportion of operating revenues from external customers in Japan exceeds 90% of operating revenues,
geographic area disclosures have been omitted.
②Property and equipment
Since the proportion of property and equipment located in Japan exceeds 90% of property and equipment located in all
countries, property and equipment disclosures have been omitted.
(3)Information about major customers
Thousands of yen

Name of major customers
Mori Trust Co., Ltd.

Operating Revenues
1,811,460

Related Segment
Leasing Business(For the five months ended February 28,2023

Related Information(1)Information about products and services
Since the proportion of operating revenues from external customers for each product and service exceeds 90% of operating
revenues, product and service disclosures have been omitted.
(2)Information about geographical areas①Operating revenues
Since the proportion of operating revenues from external customers in Japan exceeds 90% of operating revenues,
geographic area disclosures have been omitted.
②Property and equipment
Since the proportion of property and equipment located in Japan exceeds 90% of property and equipment located in all
countries, property and equipment disclosures have been omitted.
(3)Information about major customers
Thousands of yen

Name of major customers
Mori Trust Co., Ltd.

Operating Revenues
1,603,874

Related Segment
Leasing Business18. SUBSEQUENT EVENTS
MTR and MORI TRUST Hotel Reit, Inc. (“MTH”) conducted an absorption-type merger (the “Merger”), effective March 1,
2023, with MTR as the surviving corporation and MTH as the absorbed corporation.

I.

Reason for Merger
Each of these investment corporations have decided that building a portfolio that combines the stability of office assets
with the growth potential of hotel assets and returning to a growth path by making maximum use of sponsor support willlead to further improvement in unitholder value, and have therefore executed this merger.

II.

Form of Merger
The merger was an absorption-type merger with MTR as the surviving corporation, and MTH was dissolved as a result of
this merger.

III. Unit Split
Prior to the allotment to MTH unitholders, MTR will carry out a 2-for-1 unit split with a record date of February 28, 2023
and an effective date of March 1, 2023, for the purpose of issuing one or more units to all MTH unitholders, andunitholders of MTH were allotted 1.84 units of MTR per one unit of MTH.

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IV. Merger Consideration
MTR intends to pay MTH unitholders (the unitholders stated or recorded in the final unitholders’ register on the day
before the effective date of the Merger (excluding MTR, MTH and those MTH unitholders who have demanded thepurchase of their investment units pursuant to Article 149-3 of the Act on Investment Trusts and Investment Corporations(Act No. 198 of 1951, as amended; the “Investment Trusts Act”) (excluding those who have withdrawn such demand forpurchase) (hereinafter referred to as the “Unitholders Subject to Allocation”), in lieu of cash distributions for the lastbusiness period of MTH which ends the day before the effective date of the Merger, the money delivered due to the Merger
in the form of cash distribution based on MTH’s distributable income for that same period of an amount (disregarding
fractions of a yen) which is the amount resulting from dividing the amount of MTH’s distributable income on the date
before the effective date of the Merger by the number of issued MTH investment units on that date less the number ofinvestment units held by unitholders other than the Unitholders Subject to Allocation. The cash to be delivered as a result of
the Merger is payable beginning May 22, 2023.

V.

Total Investment AmountThe amount of unitholders’ capital and unitholders’ surplus increased as a result of the Merger are as follows
Unitholders’ capital:¥0
Capital surplus: The amount obtained by subtracting the above unitholders’ capital from the amount of changes inunitholders’ capital, provided in accordance with Paragraph 1, Article 22 of the Regulations on Investment Corporations
Accounting (Cabinet Office Ordinance No. 47 of 2006, including subsequent amendments).

Unit Split
MTR conducted the unit split with February 28, 2023 as the record date for the split and March 1, 2023 as the effective
date.
（ⅰ）Purpose of split
The merger was conducted through an absorption-type merger, with MTR as the surviving corporation. If 0.92 units of theInvestment Corporation were to be allocated for each unit of MTH in accordance with the merger ratio before the Unit Split,
there would be many unitholders of MTH whose number of units of the Investment Corporation to be delivered would befractional amounts less than one unit of the Investment Corporation. Therefore, in order to enable unitholders of MTH tocontinue to hold investment units of MTR after the merger, MTR has decided to conduct a 2-for-1 unit split for the purposeof issuing at least one unit of MTR to every unitholder of MTH.
（ⅱ）Method of split
The record date was February 28, 2023, the day before the effective date of the Merger, and the split was made at a ratioof two units per one unit held by unitholders of the Investment Corporation listed or recorded in the final register ofunitholders as of the record date.
（ⅲ）Increase in number of investment units due to the split, etc.
（a）Total number of investment units issued and outstanding before the unit split:1,320,000（b）Increase number of investment units due to the unit split:1,320,000（c）Total number of investment units issued and outstanding after the unit split:2,640,000（d）Number of units to be allocated to MTH units as a result of the REIT Merger:920,000（*1）（e）Total number of investment units issued and outstanding after the Merger:3,560,000（f）Total number of investment units authorized after the unit split and merger:20,000,000（*2）（*1）As a result of the merger, 1.84 post-unit split units of MTH were allocated for each unit of MTH, for all of MTH's
outstanding units (500,000 units) as of February 28, 2023.
（*2）In conjunction with the unit split, a partial amendment to the Articles of Incorporation of the Investment Corporation
was made by resolution of the Board of Directors of the Investment Corporation, and the total number of investment units
authorized to be issued was changed as of the effective date of the merger.

24

(Additional Information)
Transfer of property
MTR has transferred the first installment of the following asset as of February 28, 2023.
Shinbashi ekimae MTR Building(i) Outline of the transfer
Property to be transferred:
Real estate trust beneficiary interest
Transfer price:¥21,800,000,000(1st: ¥7,266,666,667; 2nd: ¥7,266,666,667 ;and 3rd: ¥7,266,666,666)(Excluding transfer cost, property taxes, city planning taxes and consumption
taxes)
Gain on transfer:
MTR plans to record gains on sales of real estate in operating revenues ofapproximately 1.4 billion yen in the fiscal period ending August 31, 2023 andapproximately 1.3 billion yen in the fiscal perod ending February 28, 2024.
Date of transfer:
1st;February 28, 2023; 2nd;August 31, 2023;and 3rd;February 29, 2024
Buyer:MORI TRUST CO., LTD.
Remarks
The property will be transferred in three installments: the first installment will betransferred after establishing a trust for one-third of the co-ownership interest as ofFebruary 28, 2023, the second installment will be transferred after placing an
additional trust for one-third of the co-ownership interest as of August 31, 2023,
and the third installment will be transferred after placing an additional trust for
one-third of the co-ownership interest as of February 29, 2024.
Other
This transfer constitutes a forward commitment, etc. as defined in the“Comprehensive Supervisory Guidelines for Financial Instruments Business
Operators, etc.” established by the Financial Services Agency. The Transfer may
be terminated only in the case of willful misconduct or gross negligence on thepart of the other party, on the grounds of a material breach by the other party of its
obligations under the purchase agreement relating to the Transfer. If the Transfer isterminated due to a breach of obligation, the party causing the termination shall
pay to the other party an amount equivalent to 20% of the relevant purchase priceas a penalty.
Acquisition of property
MTR acquired the first installment of the following asset effective February 28, 2023.
Sendai MT Building(i) Outline of the acquisition
Property to be acquired:

Acquisition price:

Date of acquisition:
Seller:Remarks;

Other;

Real estate trust’s beneficiary interest
Land ownership and land lease rights (co-owned interest 90,845 of 1,000,000)
Sectionally owned building¥15,800,000,000(1st: ¥5,266,666,667;2nd: ¥5,266,666,667;and 3rd: ¥5,266,666,666 )(Excluding acquisition cost, property taxes, city planning taxes and consumption
taxes)
1st:February 28, 2023; 2nd:August 31, 2023;and 3rd:February 29, 2024
MORI TRUST CO., LTD.
The acquisition is planned to be made in three installments, with the first
installment being made on February 28, 2023 with 90,845/300,000 of
co-ownership interests held in trust, the second installment being made on August
31, 2023 with an additional 90,845/300,000 of co-ownership interests held in trust
and the third installment being made on February 29, 2024 with an additional
90,845/300,000 of co-ownership interests held in trust, respectively.
The Acquisition constitutes a forward commitment, etc. as defined in the“Comprehensive Supervisory Guidelines for Financial Instruments Business
Operators, etc.” established by the Financial Services Agency. The Acquisition
may be terminated only in the case of willful misconduct or gross negligence on

25

the part of the other party, on the grounds of a material breach by the other partyof its obligations under the purchase agreement for the Acquisition. If theAcquisition is cancelled due to a breach of obligation, the party causing thecancellation shall pay to the other party an amount equivalent to 20% of therelevant purchase price as a penalty.

26