(REIT) Financial Report for Fiscal Period Ended January 31, 2017
March 17, 2017
Stock Exchange Listing: Tokyo Stock Exchange
URL: http://starasia­reit.com

REIT Securities Issuer:
Securities Code:
Representative:

Star Asia Investment Corporation
3468
Atsushi Kato, Executive Director

Asset Management Company:
Representative:
Contact:

Star Asia Investment Management Co., Ltd.
Atsushi Kato, President and CEO
Toru Sugihara, Director and CFO
TEL: 03­5425­1340

Scheduled date of commencement of cash distribution payment:
Scheduled date of submission of securities report:

April 17, 2017
April 27, 2017

Preparation of supplementary financial results briefing materials:
Holding of financial results briefing session:

Yes
None

(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for Fiscal Period Ended January 31, 2017 (from August 1, 2016 to January 31, 2017)(1) Management Status(% figures are the rate of period­on­period increase (decrease))
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income
million yen%
million yen%
million yen%
million yen%
Ended Jan. 2017
2,017
8.5
1,190
3.7
1,073
220.1
1,072
221.2
Ended Jul. 2016
1,859
1,147
335
333
Net income
per unit

Ratio of ordinary income Ratio of ordinary income
to total assets
to operating revenue
yen
%
%
%
Ended Jan. 2017
3,111
3.1
1.6
53.2
Ended Jul. 2016
1,813
1.5
0.6
18.0
(Note 1) The calculation period for the fiscal period ended July 31, 2016 of Star Asia Investment Corporation is a period of 244 days
from December 1, 2015 to July 31, 2016, but the actual asset management period is a period of 200 days from January 14,
2016 to July 31, 2016.
(Note 2) Net income per unit for the fiscal period ended July 31, 2016 is calculated by dividing net income by the daily weighted
average number of investment units (184,092 units).
(Note 3) Ratio of net income to equity and ratio of ordinary income to total assets for the fiscal period ended July 31, 2016 are
calculated based on the weighted average equity and total assets, respectively, with the actual asset management period
commencement date January 14, 2016 deemed as the beginning of the period.
Fiscal period(2) Status of Cash Distribution
Cash
Total
distribution
cash
per unit
distribution
Fiscal period(not including(not including
cash distribution
in excess ofearnings)

cash distribution
in excess ofearnings)

Ratio of net income
to equity

Cashdistribution
in excess ofearnings
per unit

Total
cash
distribution
in excess ofearnings

Cashdistribution
per unit

Total
cash
distribution(including
cash distribution
in excess ofearnings)(including
cash distribution
in excess ofearnings)

Ratio ofCash
cash
distribution distribution
payout ratiotonet assets

yen million yen
yen million yen
yen million yen%%
Ended Jan. 2017
3,112
1,072
0
0
3,112
1,072
100.0
3.1
Ended Jul. 2016
892
307
76
26
968
333
92.1
0.9
(Note 1) For the fiscal period ended July 31, 2016, of cash distribution in excess of earnings per unit of 76 yen, allowance for temporary
difference adjustment is 76 yen.
(Note 2) For the fiscal period ended July 31, 2016, cash distribution payout ratio is calculated by the following formula due to changes
in the number of investment units during the period following issuance of new investment units during the period:
Cash distribution payout ratio = Total cash distribution (not including cash distribution in excess of earnings) ÷ Net income × 100(Note 3) For the fiscal period ended July 31, 2016, ratio of cash distribution to net assets is calculated based on the weighted average
net assets per unit with the actual asset management period commencement date January 14, 2016 deemed as the beginningof the period.
(3) Financial Position
Fiscal period
Ended Jan. 2017
Ended Jul. 2016

Total assets
million yen
67,363
68,636

Net assets
million yen
34,67433,8481

Equity ratio
%
51.5
49.3

Net assets per unit
yen
100,592
98,197

(4) Status of Cash Flows
Fiscal period

Ended Jan. 2017
Ended Jul. 2016

Net cashprovided by (used in)operating activities
million yen
2,803
(397)

Net cashprovided by (used in)investing activities
million yen(181)(61,010)

Net cashprovided by (used in)financing activities
million yen(2,686)
65,972

Cash and cash equivalents
at end of period
million yen
4,498
4,564

2. Management Status Forecast for Fiscal Period Ending July 31, 2017 (from February 1, 2017 to July 31, 2017) and Fiscal Period Ending
January 31, 2018 (from August 1, 2017 to January 31, 2018)(% figures are the rate of period­on­period increase (decrease))
Cash distribution
per unit
Cash distribution
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income(not including
in excess of earnings
cash distribution
per unit
in excess of earnings)
million yen% million yen% million yen% million yen
%
yen
yen
Ending Jul. 2017
3,135
55.4
2,071
74.0
1,798
67.6
1,798
67.6
4,340
0
Ending Jan. 2018
3,103
(1.0)
2,009
(3.0)
1,859
3.3
1,783
(0.8)
4,039
0

(Reference) Forecast net income per unit (fiscal period ending July 31, 2017)
4,340 yen
Forecast net income per unit (fiscal period ending January 31, 2018) 4,305 yen* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement① Changes in accounting policies accompanying amendments to accounting standards, etc.: No② Changes in accounting policies other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatement:No(2) Total Number of Investment Units Issued and Outstanding① Total number of investment units issued and outstanding (including own investment units) at end of period
Fiscal period ended Jan 31, 2017344,700 units
Fiscal period ended July 31, 2016
344,700 units② Number of own investment units at end of period
Fiscal period ended Jan 31, 2017
0 units
Fiscal period ended July 31, 2016
0 units* Presentation of Status of Implementation of Audit Procedures
At the time of disclosure of this financial report, audit procedures for financial statements pursuant to the Financial Instruments andExchange Act have not been completed.
* Explanation of Appropriate Use of Management Status Forecast, and Other Matters of Special Note
The management status outlook and other forward­looking statements contained in this document are based on information thatare currently available and certain assumptions that are deemed reasonable by Star Asia Investment Corporation. Accordingly, theactual management status, etc. may differ materially due to various factors. In addition, the forecast figures are the current figures
calculated under the assumptions described in “Assumptions Underlying Management Status Forecast for Fiscal Period Ending July
31, 2017 and Fiscal Period Ending January 31, 2018” on page 3­4. Accordingly, the actual operating revenue, operating income,ordinary income, net income, cash distribution per unit (not including cash distribution in excess of earnings) and cash distribution
in excess of earnings per unit may vary due to acquisition/disposition of real estate, etc., trends of the real estate market, etc.,
fluctuations in interest rates or other changes in the circumstances surrounding Star Asia Investment Corporation, etc. in the future.
In addition, the forecast is not a guarantee of the amount of cash distribution.

2

Assumptions Underlying Operating Results Forecasts for
Fiscal Period Ending July 31, 2017 and Fiscal Period Ending January 31, 2018
Item
Calculation period

Investment assets

Operating revenue

Operating expenses

NOI(Net Operating
Income)Non­operating
expensesAssumptions
Fiscal period ending July 31, 2017: February 1, 2017 – July 31, 2017 (181 days)
Fiscal period ending January 31, 2018: August 1, 2017 – January 31, 2018 (184 days)
For the real estate beneficiary interests in trust of the 18 properties held by SAR as of the date of thisdocument (hereafter referred to as the “Existing Properties” in these assumptions), it is assumed that
there will be no change in the investment assets(new property acquisitions, sales of the Existing
Properties, etc.) other than acquisition of real estate beneficiary interests in trust of the following six
properties (the “Property Planned for the Acquisition”) and transfer of real estate beneficiary interests intrust of the following one property (hereinafter referred to as the “Acquisition” and “Transfer,”
respectively) through the end of the fiscal period ending January 31, 2018.
<Acquisition>
Property name: OFC­09 Hakata­eki East Place, RSC­07 Urban Park Kashiwa, LGC­04 Baraki Logistics, LGC­
05 Tokorozawa Logistics, HTL­03 Best Western Tokyo Nishikasai, HTL­04 Best Western
Yokohama
Acquisition date: April 6, 2017
<Transfer>
Property name: OFC­02 Oak Minami­Azabu
Transfer date: March 31, 2017 Quasi co­ownership interest: 49%
August 1, 2017 Quasi co­ownership interest: 51%
In practice, this may vary due to changes in investment assets.
Rent revenues from the Existing Properties are calculated based on the rent stated in the leaseagreements that are effective as of the date of this document. Rent revenues from the Properties Planned
for the Acquisition are calculated based on the information from the seller and rent stated in the leaseagreements that will be effective as of the date of acquisition taking factors such as market movement
into consideration, respectively.
As to operating revenue, it is assumed that no rent payments will be delinquent or declined by tenants.
Gain on sales of real estate property from the transfer of the asset on February 1, 2017 is expected to be
153 million yen for the fiscal period ending July 31, 2017 as described in “Notice Concerning Acquisition
and Transfer of Real Estate Beneficiary Interests in Trust” announced on December 5, 2016.
Gain on sales of real estate property from the Transfer is expected to be 734 million yen for the fiscal
period ending July 31, 2017 and 769 million yen for the fiscal period ending January 31, 2018.
Among expenses related to rent business of the Existing Properties, which are the principal operating
expenses, expenses excluding depreciation are calculated on the basis of historical data, reflecting
variable factors of expenses.
Fixed property taxes, city planning taxes and other public charges are expected to be 156 million yen for
the fiscal period ending July 31, 2017 and 142 million yen for the fiscal period ending January 31, 2018.
For the Properties Planned for the Acquisition, fixed property taxes, city planning taxes and other publiccharges in fiscal 2017 will be settled on a pro rata basis based on the number of days of ownership withthe seller at the time of acquisition of the properties. However, in the case of SAR, the settled amount will
be included in the acquisition cost and thus will not be recorded as expenses in the fiscal periods ending
July 31, 2017 and ending January 31, 2018. In addition, fixed property taxes, city planning taxes and otherpublic charges in fiscal 2018 for the Property Planned for the Acquisition will be recorded as expenses
from the fiscal period ending July 31, 2018.
For the expenditures for repair and maintenance of buildings, 54 million yen is expected for the fiscal
period ending July 31, 2017 and 47 million yen is expected for the fiscal period ending January 31, 2018
based on repair and maintenance plans drawn up by the Asset Management Company. However, theexpenditures for repair and maintenance for the fiscal periods could differ significantly from the estimatedamounts, as expenditures may arise urgently due to damage to buildings and such caused by unexpectedfactors, and because the variance in amounts generally tends to be significant from year to year and repair
and maintenance expenses do not arise regularly.
Depreciation is calculated using the straight line method and is expected to be 291 million yen for the
fiscal period ending July 31, 2017 and 312 million yen for the fiscal period ending January 31, 2018.
The NOI of SAR’s portfolio is expected to be 1,733 million yen for the fiscal period ending July 31, 2017
and 1,832 million yen for the fiscal period ending January 31, 2018.
NOI is calculated by using the following calculation method.
NOI = rent revenue – rent expenses (excluding depreciation)
Temporary expenses are expected to be 50 million yen for the fiscal period ending July 31, 2017 as
issuance cost of new investment units.
Interest expense and other financial expenses are expected to total 222 million yen for the fiscal period
ending July 31, 2017 and 150 million yen for the fiscal period ending January 31, 2018.
3

Item

Debt financing

Assumptions
The total amount of interest­bearing liabilities is assumed to be 38,730 million yen as of the end of the
fiscal period ending July 31, 2017 and 37,350 million yen as of the end of the fiscal period ending January
31, 2018.
As of today, SAR has 30,800 million yen of outstanding borrowings. In this regard, SAR plans new
borrowings totaling 8,230 million yen on April 6, 2017 from qualified institutional investors defined in
Article 2, paragraph 3, item 1 of the Financial Instruments and Exchange Act.
It is assumed to repay 300 million yen by the end of the fiscal period ending July 31, 2017 by using thepayment for issuance of the new investment units through third­party allotment described in “Investment
units” below.
It is assumed to repay 990 million yen by the end of the fiscal period ending January 31, 2018 by using theproceeds from sale of 51% quasi co­ownership interest in Oak Minami­Azabu described in the above“Investment assets.”

It is assumed to repay 390 million yen by the end of the fiscal period ending January 31, 2018by using consumption tax refund resulting from acquisition of the properties planned for theAcquisition and payment of other various expenses.

Investment units

Cash distribution
per unit(not including
cash distribution
in excess of earnings)

It is assumed that, in addition to the total number of investment units issued and outstanding as of today(344,700 units), all of the new investment units to be issued through public offering (66,200 units) and allof the new investment units to be issued through third­party allotment (up to 3,400 units), respectively
resolved at the Board of Directors meeting held today, are issued.
Excluding the above, it is assumed that there will be no changes in the number of investment units issued
due to additional issuance, etc. of new investment units through the end of the fiscal period ending
January 31, 2018.
Cash distribution per unit (not including cash distribution in excess of earnings) is calculated based on the
expected number of investment units issued and outstanding as of the end of the fiscal periods ending
July 31, 2017 and ending January 31, 2018 (414,300 units) including new investment units to be issued
described above (up to 69,600 units).
Cash distribution per unit (not including cash distribution in excess of earnings) is calculated on theassumption described in the cash distribution policy stipulated in SAR’s Articles of Incorporation.
It is assumed that derivative transactions (interest rate swaps) will continue to be conducted. However, It
is assumed that deferred losses on hedges, which is an item of deduction from net assets (those provided
in Article 2, item 30 (b) of the Ordinance on Accountings of Investment Corporations), is nonaccrual in
the fiscal periods ending July 31, 2017 and ending January 31, 2018, and cash distribution per unit (notincluding cash distribution in excess of earnings) will not be affected by changes in items of deduction
from net assets in the calculation.
It is possible that the cash distribution per unit (not including cash distribution in excess of earnings) couldchange due to various factors, including changes in investment assets, changes in rent revenue
accompanying changes in tenants, etc., or unexpected repair and maintenance, etc. In addition, cash
distribution per unit (not including cash distribution in excess of earnings) may be affected by changes in
items of deduction from net assets.
As to 769 million yen expected for the fiscal period ending January 31, 2018 as gain on sales of real estate
property from the Transfer described in the above “Operating revenue,” 110 million yen is expected tobe recorded as voluntary reserve and be internally retained. In practice, the amount of voluntary reserve
may change.

SAR assumed 99 million yen as internal reserves by the part of gain on sale of real estate
property in “Notice Concerning Acquisition and Transfer of Real Estate Beneficiary Interest in
Trust” announced on February 28, 2017 as described in “Assumptions Underlying Operating
Results Forecasts for Fiscal Period Ending July 31, 2017” attached to “Notice Concerning
Revision to Forecasts for Operating Results and Distribution for the 3rd Fiscal Period Ending July
31, 2017” announced on February 28, 2017. SAR has changed such assumption and it is now assumed thatsuch internal reserves will not be made.
Cash distribution
in excess of earnings
per unit

Other

It is assumed that there will be no existing balance of deferred losses on hedges, which is an item of
deduction from net assets, as described above. Of cash distribution in excess of earnings, that attributable
to allowance for temporary difference adjustment is not scheduled at this point.

In addition, of cash distribution in excess of earnings, that falling under the category of cash
distribution accompanying decrease in capital, etc. under tax law is not scheduled at this point.
Forecasts are based on the assumption that revisions that impact the above forecast figures will not bemade to laws and regulations, tax systems, accounting standards, listing rules, and rules of The Investment
Trusts Association, Japan etc.

Forecasts are based on the assumption that there will be no major unforeseen changes togeneral economic trends and real estate market conditions, etc.

4

3.

Financial Statements(1) Balance Sheet(Unit: thousand yen)
1st fiscal period(As of July 31, 2016)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Consumption taxes receivable
Other
Total current assets
Non­current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold rights in trust
Total intangible assets
Investments and other assetsLong­term prepaid expenses
Lease and guarantee deposits
Other
Total investments and other assets
Total non­current assets
Total assets

5

2nd fiscal period(As of January 31, 2017)

2,006,136
2,557,948
52,69596,63832
1,259,266
7,175
5,979,894

1,839,594
2,659,211
50,08988,27911­
8,650
4,645,837

20,056,951(246,543)
19,810,407
­
­
­
­
­
­
4,396
(141)
4,255
39,208,659­
59,023,323

20,317,871(490,008)
19,827,862
9,606
(61)
9,545
6,282
(137)
6,144
7,628
(731)
6,896
39,208,659
2,161
59,061,270

3,459,138
3,459,138

3,459,138
3,459,138

164,478
10,000­174,478
62,656,940
68,636,834

127,156
10,00060,135
197,292
62,717,701
67,363,539

(Unit: thousand yen)
1st fiscal period(As of July 31, 2016)
Liabilities
Current liabilities
Operating accounts payable
Short­term loans payable
Accounts payable ­ otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non­current liabilities
Long­term loans payable
Tenant leasehold and security deposits in trust
Other
Total non­current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Capital deduction
Allowance for temporary difference adjustment
Total capital deduction
Unitholders’ capital, net
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

6

2nd fiscal period(As of January 31, 2017)

76,381
3,355,000
319,011
5,286
1,490
­
265,383
12,875
4,035,429

245,1311,000,000
246,508
5,336
844
76,405319,180
6,574
1,899,981

29,200,000
1,526,363
26,23830,752,602
34,788,032

29,200,000
1,589,434­
30,789,434
32,689,416

33,541,125

33,541,125­­
33,541,125

26,197
26,19733,514,927

333,916
333,916
33,875,041

1,099,059
1,099,059
34,613,987(26,238)(26,238)
33,848,802
68,636,834

60,13560,13534,674,123
67,363,539

(2) Statement of Income(Unit: thousand yen)
1st fiscal period
From: December 1, 2015
To: July 31, 2016
Operating revenue
Lease business revenue
Other lease business revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody and administrative service fees
Directors’ compensations
Other operating expenses
Total operating expenses
Operating incomeNon­operating income
Interest income
Interest on refund
Other
Total non­operating incomeNon­operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Investment corporation bond issuance costs
Borrowing related expenses
Deferred organization expenses
Investment unit issuance expenses
Other
Total non­operating expenses
Ordinary income
Income before income taxes
Income taxes ­ current
Income taxes ­ deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

7

2nd fiscal period
From: August 1, 2016
To: January 31, 2017

1,737,036
122,389
1,859,425

1,865,642
151,743
2,017,386

568,022103,104
12,7183,200
24,681
711,726
1,147,698

624,655
146,714
14,792
2,400
38,230826,793
1,190,592

37
­
0
37

17
745
­
762

133,353
38,052
12,604453,952
62,950111,40934
812,356
335,379
335,379
1,496
(32)
1,463
333,916­
333,916

68,522­­
49,349­­­117,871
1,073,483
1,073,483
847
21
868
1,072,615
26,444
1,099,059

(3) Statement of Unitholders’ Equity
1st fiscal period (from December 1, 2015 to July 31, 2016)(Unit: thousand yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginningof the period­

Unappropriatedretained earnings(undisposed loss)

Total
unitholders’equityTotal
surplus­­­Deferred
gains or losses onhedges­Totalvaluation andtranslation
adjustments

­

Total
net assets­

Changes of items
during the period
Issuance of new
investment units

33,541,125

Net income

333,916

333,916

33,541,125

33,541,125

333,916

333,916

Net changes of
items other than

(26,238)(26,238)(26,238)

owners' equity
Total changes of
items during the33,541,125

333,916

333,916

33,875,041(26,238)(26,238)

33,848,802

33,541,125

333,916

333,916

33,875,041(26,238)(26,238)

33,848,802

periodBalance at end of
the period82nd fiscal period (from August 1, 2016 to January 31, 2017)

Unitholders’ equity
Unitholders’ capital
Capital deduction
Unitholders’ capital

Balance at beginning of theperiodAllowance fortemporarydifference
adjustment

33,541,125

Unitholders’capital, net

Total capital
deduction­­

33,541,125(26,197)(26,197)(26,197)­(26,197)(26,197)(26,197)

33,541,125(26,197)(26,197)

33,514,927

Changes of items theperiodDividends from surplus
Distributions inallowance for temporary
difference adjustment
Net income
Net changes of items
other than owners'
equityTotal changes of items
during the period
Balance at end of theperiod(Unit: thousand yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unappropriatedretainedearnings(undisposed
loss)
Balance at beginning of theperiodTotal
surplusTotal
unitholders’equityDeferred
gains or losses onhedges(26,238)

Total
valuation andtranslation
adjustments

Total
net assets(26,238)

33,848,802

333,916

333,916

33,875,041(307,472)(307,472)(307,472)(307,472)(26,197)(26,197)

1,072,615

1,072,615

Changes of items during
the period
Dividends from surplus
Distributions inallowance for temporary
difference adjustment
Net income

1,072,615

1,072,615

Net changes of items
other than owners'

86,37486,37486,374

equityTotal changes of items
during the period
Balance at end of theperiod765,142

765,142

738,945

86,37486,374825,320

1,099,059

1,099,059

34,613,987

60,13560,13534,674,123

9

(4) Statement of Cash Distributions(Unit: yen)
1st fiscal period
From: December 1, 2015
To: July 31, 2016

2nd fiscal period
From: August 1, 2016
To: January 31, 2017

. Unappropriated retained earnings

333,916,519

1,099,059,426. Addition of cash distribution in excess of earnings

26,197,200
26,197,200­­­

26,197,200­
333,669,600

26,197,200
1,072,706,400[968]
307,472,400[3,112]
1,072,706,400[892]
26,197,200[3,112]
­

[76]

[­]

26,444,119

155,826

Allowance for temporary difference adjustment. Capitalization
Reversal of allowance for temporary difference adjustment. Cash distribution[Cash distribution per unit]
Cash distribution of earnings[Cash distribution of earnings per unit]
Allowance for temporary difference adjustment[Cash distribution in excess of earnings per unit (attributable
to allowance for temporary difference adjustment)]. Retained earnings carried forward
Method of calculation of amount of cash distribution
1st fiscal period (From December 1, 2015 to July 31, 2016):

Pursuant to the cash distribution policy provided in Article 35, Paragraph 1 of SAR’s Articles of Incorporation, SAR shall distribute inexcess of the amount equivalent to 90% of the amount of distributable earnings of SAR as defined in Article 67­15 of the Act on
Special Measures Concerning Taxation. In accordance with such policy, concerning cash distribution of earnings (not including cash
distribution in excess of earnings), the decision was made to distribute 307,472,400 yen, which is the entire amount of the earnings
provided in Article 136, Paragraph 1 of the Act on Investment Trusts and Investment Corporations but excluding the portion where
cash distribution of earnings per unit becomes a fractional amount of less than 1 yen, as cash distribution of earnings.
In addition, pursuant to the policy on cash distribution in excess of earnings provided in Article 35, Paragraph 2 of SAR’s Articles ofIncorporation, SAR shall make cash distribution in excess of earnings in an amount that it determines as the amount equivalent to
the items of deduction from net assets (those provided in Article 2, Paragraph 2, Item 30 of the Ordinance on Accountings ofInvestment Corporations) with due consideration of the impact of the items of deduction from net assets on cash distribution.
Accordingly, in the fiscal period under review, the decision was made to distribute 26,197,200 yen, which is calculated as the amountequivalent to deferred losses on hedges of 26,238,915 yen but excluding the portion where cash distribution in excess of earnings
per unit becomes a fractional amount of less than 1 yen, as cash distribution attributable to allowance for temporary difference
adjustment (those provided in Article 2, Paragraph 2, Item 30 of the Ordinance on Accountings of Investment Corporations). As aresult of the above, the amount of cash distribution declared for the fiscal period under review was 333,669,600 yen.
2nd fiscal period (from August 1, 2016 to January 31, 2017):
Pursuant to the cash distribution policy provided in Article 35, Paragraph 1 of SAR’s Articles of Incorporation, SAR shall distribute inexcess of the amount equivalent to 90% of the amount of distributable earnings of SAR as defined in Article 67­15 of the Act on
Special Measures Concerning Taxation. In accordance with such policy, concerning cash distribution of earnings (not including cash
distribution in excess of earnings), the decision was made to distribute 1,072,706,400 yen, which is the entire amount of the earnings
provided in Article 136, Paragraph 1 of the Act on Investment Trusts and Investment Corporations after deduction of reversal of
allowance for temporary difference adjustment (those provided in Article 2, Paragraph 2, Item 30 of the Ordinance on Accountingsof Investment Corporations) but excluding the portion where cash distribution of earnings per unit becomes a fractional amount ofless than 1 yen, as cash distribution of earnings.

10(5) Statement of Cash Flows(Unit: thousand yen)
1st fiscal period
From: Dec. 1, 2015
To: July 31, 2016
Cash flows from operating activities
Income before income taxes
Depreciation
Investment unit issuance expenses
Investment corporation bond issuance costs
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Decrease (increase) in long­term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable ­ other
Increase (decrease) in advances received
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Payments for lease and guarantee deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short­term loans payable
Decrease in short­term loans payable
Proceeds from long­term loans payable
Proceeds from issuance of investment corporation bonds
Redemption of investment corporation bonds
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period11

2nd fiscal period
From: Aug. 1, 2016
To: Jan. 31, 2017335,379
246,684
111,40912,604(37)
171,405(52,695)(1,259,266)­(96,638)(164,478)
52,772
139,865
265,3836,628(230,982)
37(166,820)(5)(397,771)

1,073,483
244,255­­(17)
68,522
2,605
1,259,266
76,4058,359
37,321
27,97430,55853,796(9,301)2,873,232
17(68,706)(1,493)2,803,050(59,067,252)(3,459,138)(19,378)
1,545,515(10,000)(61,010,253)(244,489)­(61,153)
124,224­(181,418)

35,111,000(31,756,000)
29,200,000
4,562,083(4,574,688)
33,429,715­
65,972,111
4,564,085­
4,564,085­(2,355,000)­­­­(331,910)(2,686,910)(65,279)
4,564,085
4,498,806