Financial Statements(16th Fiscal Period: From August 1, 2019 to January 31, 2020)

Independent Auditor’s Report
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Balance Sheet
As of January 31, 2020
16th Fiscal Period
as of January 31, 2020

15th Fiscal Period
as of July 31, 2019(in thousands of yen)
ASSETS
Current assets
Cash and deposits (Notes 8 and 10)
Cash and deposits in trust (Notes 8 and 10)
Operating accounts receivable
Prepaid expenses
Other
Total current assets
Noncurrent assets
Property, plant and equipment (Notes 15 and 20)
Land
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
Total property, plant and equipment, net
Intangible assets
Leasehold right in trust (Notes 15 and 20)
Other
Total intangible assets
Investments and other assets
Investment securities (Notes 10 and 19)
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

1¥10,978,807
10,187,104
37,3738,640
589
21,212,515¥10,296,548
9,903,118
36,005
12,815856
20,249,344

1,798,041
100,799,661(11,698,397)
89,101,264
1,089,011(223,450)
865,561
1,448,282(353,874)
1,094,407
570,610(81,223)
489,387
139,731,924
233,080,586

1,798,041
99,911,220(10,381,143)
89,530,077
1,073,137(191,362)
881,774
1,436,362(321,177)
1,115,184
523,059(65,444)457,614
138,484,736
232,267,430

1,227,187
4,787
1,231,974

1,228,912
5,563
1,234,475

89,097945,375338
1,034,810
235,347,371

2,398
89,0971,014,728
1,106,223
234,608,129

49,30335,32756,62072,944

105,924¥256,665,810

108,272¥254,965,747

16th Fiscal Period
as of January 31, 2020

15th Fiscal Period
as of July 31, 2019(in thousands of yen)
LIABILITIESCurrent liabilities
Operating accounts payable¥595,433¥772,751

Short-term loans payable (Notes 10 and 22)

3,300,000

2,500,000

Current portion of long-term loans payable (Notes 10, 11 and 22)
Accounts payable-otherAccrued expenses
Income taxes payable

10,100,000
294,697
35,152605

13,200,000
305,806
27,560605

Accrued consumption taxes
Advances received
Deposits received
Other
Total current liabilities
Noncurrent liabilities

53,827

21,474

1,173,813
59,879

1,148,654
58,742

4,090

10,09815,617,497

18,045,693

Investment corporation bonds (Notes 10 and 21)

7,000,000

5,000,000

Long-term loans payable (Notes 10, 11 and 22)
Tenant leasehold and security deposits in trust

107,250,000
3,059,671

105,200,000
3,099,642

4,689,541

4,493,753

67,522

67,338Tenant lump sum deposits in trust
Asset retirement obligations (Note 14)

481,213517,915

122,547,949

118,378,649

138,165,447

136,424,343

99,731,514

99,731,514

13,187,100

13,187,100

Reserve for temporary difference adjustments (Note 4)

1,960,000

1,980,000

Total voluntary retained earnings

1,960,000

1,980,000

Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Unitholders' equity
Unitholders' capital
SurplusCapital surplus
Voluntary retained earnings

Unappropriated retained earnings

4,072,277

4,125,881

19,219,377
118,950,891

19,292,981
119,024,495

Deferred gains or losses on hedges (Notes 10 and 11)(450,527)(483,092)

Total valuation and translation adjustments(450,527)(483,092)

Total surplus
Total unitholders' equity
Valuation and translation adjustments

Total net assets (Note 3)

118,500,363

118,541,403

Total liabilities and net assets¥256,665,810¥254,965,747

See accompanying notes to the financial statements.

2

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Income and Retained Earnings
For the period from August 1, 2019 to January 31, 2020
16th Fiscal Period
from August 1, 2019
to January 31, 2020

15th Fiscal Period
from February 1, 2019
to July 31, 2019(in thousands of yen)
Operating revenues
Rent revenue-real estate (Note 6)
Other lease business revenue (Note 6)
Gain on sales of real estate property (Note 6)
Total operating revenues
Operating expenses
Expenses related to rent business (Note 6)
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Dividends and redemption-prescription
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing expenses
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes (Note 13)
Current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings¥7,472,039
555,566
39,013
8,066,618¥7,342,246
590,778
203,392
8,136,417

2,911,303
576,676
13,836
46,625
8,100
249,665
3,806,207
4,260,411

2,915,721
562,274
13,40445,9508,100
231,968
3,777,419
4,358,998

41
1,394
1,435

38
765
463
1,268

498,295
15,857112,332
3,534
16,3241,500
647,8453,614,002
3,614,002

485,799
13,825100,264
3,243
15,269618,4023,741,863
3,741,863

605
605
3,613,397
458,879¥4,072,277

605
605
3,741,258
384,622¥4,125,881

See accompanying notes to the financial statements.

3

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Changes in Net Assets
For the period from August 1, 2019 to January 31, 2020

Unitholders'
capitalBalance as of January 31, 2019
Changes of items during the period
Issuance of new investment units
Reversal of reserve for temporary
difference adjustments
Dividends from surplus
Net income
Net changes of items other thanunitholders' equity
Total changes of items during the period
Balance as of July 31, 2019 (Note 7)
Changes of items during the period
Reversal of reserve for temporary
difference adjustments
Dividends from surplus
Net income
Net changes of items other thanunitholders' equity
Total changes of items during the period
Balance as of January 31, 2020 (Note 7)¥93,226,228

Capitalsurplus¥13,187,100

Unitholders' equity
Surplus
Voluntary retained earnings
UnappropriatedReserve for
Total
retained
temporaryvoluntaryearnings
difference
retained
adjustments
earnings(in thousands of yen)
¥2,000,000¥2,000,000¥3,875,050¥19,062,150

6,505,285

6,505,285¥99,731,514¥99,731,514¥112,288,379
6,505,285(20,000)¥13,187,100(20,000)¥1,980,000(20,000)¥1,980,000(20,000)(20,000)(20,000)¥1,960,000¥13,187,100(20,000)(20,000)¥1,960,000

Valuation and translation adjustments
Deferred gains orlosses on hedges

Balance as of January 31, 2019
Changes of items during the period
Issuance of new investment units
Reversal of reserve for temporary
difference adjustment
Dividends from surplus
Net income
Net changes of items other thanunitholders' equity
Total changes of items during the period
Balance as of July 31, 2019 (Note 7)
Changes of items during the period
Reversal of reserve for temporary
difference adjustments
Dividends from surplus
Net income
Net changes of items other thanunitholders' equity
Total changes of items during the period
Balance as of January 31, 2020 (Note 7)

Totalunitholders'equityTotal
surplus

Total valuationand translation
adjustments(in thousands of yen)¥(337,222)¥(337,222)

Total net assets¥111,951,157
6,505,285(3,510,428)
3,741,258(145,870)(145,870)(145,870)(145,870)¥(483,092)(145,870)¥(483,092)

6,590,246¥118,541,403(3,687,001)
3,613,397

32,56432,56432,56432,564¥(450,527)

32,564¥(450,527)(41,039)¥118,500,363

See accompanying notes to the financial statements.

4

20,000--(3,510,428)
3,741,258(3,510,428)
3,741,258(3,510,428)
3,741,258

250,830¥4,125,881

230,830¥19,292,981

6,736,116¥119,024,495

20,000--(3,687,001)
3,613,397(3,687,001)
3,613,397(3,687,001)
3,613,397(53,604)¥4,072,277(73,604)¥19,219,377(73,604)¥118,950,891

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Cash Flows
For the period from August 1, 2019 to January 31, 2020
16th Fiscal Period
from August 1, 2019
to January 31, 2020

15th Fiscal Period
from February 1, 2019
to July 31, 2019(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Decrease in net property, plant and equipment held in trust due to sale
Other, net¥3,614,002
1,429,641
3,534
16,324(41)514,152(1,368)4,175
82,398(9,042)32,35225,15969,352420,922
4,194¥3,741,863
1,392,068
3,243
15,269(38)
499,624(9,393)
338,402(5,365)(109,149)
7,522
10,061
52,37245,046482,312(8,827)

Subtotal

6,205,759

6,455,011

Interest income received
Interest expenses paid
Income taxes (paid) refund

41(519,985)
135

38(509,888)
2,074

Net cash provided by (used in) operating activities

5,685,950

5,947,236(2,922,615)
2,276
(72)
72
(160,351)
120,380(72,386)
268,174(13,813,975)(162,428)
103,455(60,000)(141,168)
558,072(79,827)
168,384

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets in trust
Proceeds from investment securities
Payments for lease and guarantee deposits
Proceeds from lease and guarantee deposits
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Repayments of tenant lump sum deposits in trust
Proceeds from tenant lump sum deposits in trust
Net cash provided by (used in) investing activities(2,764,521)(13,427,488)

Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment corporation bonds
Proceeds from issuance of investment units
Dividends paid

800,000
6,150,000(7,200,000)
1,982,489(3,687,673)

2,500,000(2,050,000)
4,700,000(2,500,000)
6,462,083(3,510,096)

Net cash provided by (used in) financing activities(1,955,184)

5,601,986

Net increase (decrease) in cash and cash equivalents

966,243(1,878,264)

Cash and cash equivalents at the beginning of period

20,199,667

22,077,932

Cash and cash equivalents at the end of period (Note 8)¥21,165,911¥20,199,667

See accompanying notes to the financial statements.

5

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Notes to Financial Statements
For the period from August 1, 2019 to January 31, 2020

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Residential Next Investment Corporation (“the Investment Corporation”) was established on November 15, 2011 under the Act on
Investment Trusts and Investment Corporations of Japan (“the Investment Trust Act”). On April 26, 2012, the Investment Corporation was listed on
the Real Estate Investment Trust Market of the Tokyo Stock Exchange (Securities Code: 3278). The Investment Corporation implemented a 2-for-1
split of its investment units held by unitholders set forth or recorded in the final unitholder registry on February 28, 2018 with March 1, 2018 as theeffective date. And also on March 1, 2018, the Investment Corporation conducted an absorption-type merger (“the Merger”) whereby theInvestment Corporation was the surviving corporation and Japan Senior Living Investment Corporation (“JSL”) was the dissolving corporation.
After "the Merger", the Investment Corporation raised funds through two public offerings and third-party allotment. As of January 31, 2020, theend of the 16th fiscal period, the number of investment units issued and outstanding totaled 907,458 units.
The Investment Corporation is externally managed by Kenedix Real Estate Fund Management, Inc. (“the Asset Management Company”), a
company that was formed with personnel from Kenedix, Inc. and adheres to the core philosophies of Kenedix, Inc., that is, to provide management
services from the perspective of real estate investors as an independent real estate management company. As the asset manager, the AssetManagement Company shall provide flexible and speedy real estate investment and management services based on the strategies of theInvestment Corporation: “Flexible pursuit for appropriate investment and profit opportunities with comprehension of the real estate market trends”
and “Speedy execution based on expeditious information collection and judgement.”
During the 16th fiscal period, the Investment Corporation acquired 2 residential properties (total acquisition price of ¥1,914 million) and sold 1
residential property (acquisition price of ¥400 million, disposition price of ¥480 million). As the result, the Investment Corporation has a portfolio
comprised of 144 properties (total acquisition price of ¥234,766 million) as of January 31, 2020, the end of the 16th fiscal period. The portfolio
consists of 119 residential properties (total acquisition price of ¥178,887 million), 24 healthcare properties (total acquisition price of ¥54,128 million)and 1 other property (acquisition price of ¥1,750 million).
The occupancy rates of the overall portfolio including land with leasehold interest were 97.5% and 97.6% as of the end of the 15th and 16th
fiscal period, respectively. Furthermore, the average occupancy rates of the properties for residential and healthcare were 96.5% and 100.0% as ofthe end of 16th fiscal period.
During the 15th and 16th fiscal period, the Investment Corporation made borrowings of ¥4,300 million and ¥5,000 million for the repayment ofdebt matured. During the 15th fiscal period, the Investment Corporation made new borrowings of ¥2,900 million upon acquiring properties. During
the 16th fiscal period, the Investment Corporation made new borrowings of ¥1,950 million upon acquiring properties and partially paid off loan
amounting to 2,000 million yen from the investment corporation bonds issued. As a result, the balance of borrowings as of the end of the 15th and16th fiscal period stood at ¥120,900 million and ¥120,650 million, respectively. The balance of interest-bearing debt including investment
corporation bonds as of the end of the 15th and 16th periods, was ¥ 125,900 million and ¥ 127,650 million, respectively.
Basis of Presentation
The Investment Corporation 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 Act, the Companies Act of Japan, theFinancial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Investment Corporation, which wereprepared in accordance with Japanese GAAP and were presented in the Securities Report of the Investment Corporation filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial
statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition, the notes tofinancial statements include certain information that might not be required under Japanese GAAP but is presented herein as additional information.
The Investment Corporation fiscal period is a six-month period which ends at the end of January or July. The Investment Corporation does notprepare consolidated financial statements because it has no subsidiaries.

62. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) Securities
Other securities without market value are stated using the moving average cost method. Equity investments in an anonymous association
are stated, the amount equivalent to the corresponding equity interests including net amount of gain or loss from the anonymous association.
(B) Property and Equipment (including trust assets)
Property and equipment are stated at cost. Depreciation of property and equipment is calculated on a straight-line basis over the estimateduseful lives of the assets ranging as stated below:

Buildings

From August 1, 2019
to January 31, 2020
2-69 years

From February 1, 2019
to July 31, 20192-69 years

Structures

3-65 years

3-65 years

Machinery and equipment

8-40 years

8-40 years

Tools, furniture and fixtures

2-30 years

2-30 years(C) Intangible Assets(including trust assets)
Intangible assets are amortized by the straight-line method. Fixed-term leaseholds are amortized by the straight-line method based on thecontract period.
(D) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(E) Unit Issuance Costs
Unit issuance costs are amortized over a period of 3 years under the straight-line method.
(F) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(G) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all relevant
assets and liabilities in trust are recorded on the balance sheet and the statement of income and retained earnings.
(H) Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues including
parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrual basis over the lifeof each lease.
(I)

Taxes on Property and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar
year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to said period.
Under Japanese tax regulations, the seller of the property is liable for these taxes on the property from the date of disposal to the end of thecalendar year in which the property is disposed. The seller, however, is generally reimbursed by the purchaser for these accrued
property-related tax liabilities.

7

When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related to the period
following the purchase date of each property through the end of the calendar year. The amounts of those allocated portions of theproperty-related taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to¥33,037 thousand and ¥1,263 thousand as of July 31, 2019 and January 31, 2020, respectively.
(J) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets
and liabilities using the statutory tax rates.
(K) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes
applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(L) Derivative Financial Instruments
The Investment Corporation enters into derivative transactions to hedge risks prescribed in its Articles of Incorporation based on its risk
management policies. The Investment Corporation hedges interest rate volatility risk of its interest payments on its borrowings by utilizing
interest rate swap as hedging instruments.
As for the method of assessment of the effectiveness of the hedge in the period from the inception of the hedge to the time of judgment of its
effectiveness, the cumulative changes in cash flow of the hedged items and hedging instruments are compared and a judgment is madebased on changed amount, etc. However, an assessment of the effectiveness of hedging activities is omitted in the case of interest rate
swaps and other derivatives that meet the requirements for special treatment.
(M) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily
convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.
(N) Presentation of Amounts
Amounts of less than one thousand yen are truncated in the Japanese financial statements prepared in accordance with Japanese GAAP
and filed with regulatory authorities in Japan. Unless otherwise noted, amounts are rounded down and ratios are rounded off in theaccompanying financial statements. Totals shown in the accompanying financial statements do not necessarily agree with the sums of theindividual amounts.

8

3. NET ASSETSThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Act. The entire amount of the issue price of
new units is designated as stated capital. The Investment Corporation is required to maintain net assets of at least ¥50,000 thousand as requiredby the Investment Trust Act.

4. RESERVE FOR TEMPORARY DIFFERENCE ADJUSTMENTS
As of January 31, 2020
The following summarizes reserve for temporary difference adjustments.
Balance atReserve
Initial amountthe beginningduring theof the period
period(in thousands of yen)

Reversalduring theperiodBalance atthe end of
the period

Reason for reserve andreversalAppropriation for cash
distribution* The Investment Corporation reserved part of gain on negative goodwill incurred in the 13th fiscal period as reserve for temporary difference
Gain on negative goodwill*¥2,000,000¥1,980,000¥ -¥20,000¥1,960,000

adjustments. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal period
starting from the next fiscal period after the fiscal period, in which the initial amount was reserved.
As of July 31, 2019
The following summarizes reserve for temporary difference adjustments.
Balance atReserve
Initial amountthe beginningduring theof the period
period(in thousands of yen)

Reversalduring theperiodBalance atthe end of
the period

Reason for reserve andreversalAppropriation for cash
distribution* The Investment Corporation reserved part of gain on negative goodwill incurred in the 13th fiscal period as reserve for temporary difference
Gain on negative goodwill*¥2,000,000¥2,000,000¥ -¥20,000¥1,980,000

adjustments. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal period
starting from the next fiscal period after the fiscal period, in which the initial amount was reserved.

5. COMMITMENT LINE CONTRACTS
KDR has commitment line contracts with the banks with which it does business.
As of January 31, 2020

As of July 31, 2019(in thousands of yen)

Total amount of commitment line contracts¥4,500,000

Balance of loans payable outstanding¥-

Remaining amount¥4,500,000

9

-

¥

-

6. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY
Rental and other operating revenues and property-related expenses for the periods from August 1, 2019 to January 31, 2020 and from February 1,
2019 to July 31, 2019 consist of the following:
From August 1, 2019
From February 1, 2019
to January 31, 2020
to July 31, 2019(in thousands of yen)
A. Rental and other operating revenues:
Rental revenues¥7,089,789¥6,964,736

Rental revenues from limited proprietary rights of land

43,74943,750Common area charges

338,499

333,759

7,472,039

7,342,246

Parking space rental revenues

206,829

206,653

Miscellaneous

348,736

384,125

Subtotal
Others:Subtotal
Total rental and other operating revenues

555,566

590,778¥8,027,605¥7,933,025¥409,507¥425,193

B. Property-related expenses:
Property management fees and facility management fees
Utilities

95,29995,304Taxes

475,323

476,820

Repairs and maintenance281,724

300,657

Insurance

12,023

11,671

Trust fees

55,27253,335

Depreciation

1,428,865

1,391,292

Others153,286

161,445¥2,911,303¥2,915,721¥5,116,301¥5,017,303

Total property-related expenses
C. Net operating income from real estate rental business (A-B)
Gain on sales of real estate property:
From August 1, 2019 to January 31, 2020

(in thousands of yen)
Melody Heim Gotenyama
Revenue from sale of real estate property¥480,000Cost of real estate property

420,922

Other sales expenses

20,063Gain on sales of real estate property¥39,013

From February 1, 2019 to July 31, 2019(in thousands of yen)
KDX Residence Shin-Osaka
Revenue from sale of real estate property¥690,000Cost of real estate property

482,312

Other sales expenses

4,295

Gain on sales of real estate property¥203,392

10

7. UNITHOLDERS’ EQUITY
Total number of authorized investment units and total number of investment units issued and outstanding are as follows:

Total number of authorized investment units

From August 1, 2019
to January 31, 2020
10,000,000 units

From February 1, 2019
to July 31, 201910,000,000 units

907,458 units

907,458 units

Total number of investment units issued and outstanding

8. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of January 31, 2020 and July 31, 2019:
As of January 31, 2020

As of July 31, 2019(in thousands of yen)
Cash and deposits¥10,978,807¥10,296,548

Cash and deposits in trust

10,187,104

9,903,118

Cash and cash equivalents¥21,165,911¥20,199,667

9. LEASES
The Investment Corporation, as lessee, has entered into Fixed-term lease contract whereby fixed monthly rents are due in advance . The future
minimum rental expenses under existing non-cancelable operating leases as of January 31, 2020 and July 31, 2019 are as follows:
As of January 31, 2020

As of July 31, 2019(in thousands of yen)Due in 1 year

¥12,000¥12,000

Due after 1 year

545,000

551,000

Total¥557,000¥563,000

The Investment Corporation, as lessor, has entered into leases whereby fixed monthly rents are due in advance with a lease term of generally
two years for residential properties. The future minimum rental revenues under existing non-cancelable operating leases as of January 31, 2020and July 31, 2019 are as follows:
As of January 31, 2020

As of July 31, 2019(in thousands of yen)Due in 1 year

¥3,238,403¥3,265,232

Due after 1 year

19,714,966

20,920,160

Total¥22,953,370¥24,185,392

11

10. FINANCIAL INSTRUMENTS(A). Overview(1) Policy for financial instruments
The Investment Corporation procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans fromfinancial institutions, issuance of investment corporation bonds, issuance of investment units and other means. With regard to the procurement ofinterest-bearing debts, the Investment Corporation ensures that it can effectively combine stable long-term funds with flexible short-term funds.
Management of surplus funds is undertaken through various bank deposits focusing on safety, liquidity and effectiveness. The Investment
Corporation uses derivatives for the purpose of hedging its exposure to changes in interest rates and other risks and does not enter into derivativetransactions for speculative or trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing the Investment Corporation’s surplus funds and are exposed to credit risk such as the bankruptcy of financial
institutions at which funds are deposited. Investment securities represent equity investments in an anonymous association and are exposed tocredit risk of the issuer, risk of fluctuation of value of its property and interest rate fluctuation risk.
Borrowings and investment corporation bonds are made primarily for the purpose of procuring funds for the acquisition of real estate and trust
beneficiary interests in real estate and have a repayment date of a maximum of 8 years and 8 months for borrowings and also have a redemption
date of a maximum of 9 years and 10 months for investment corporation bonds as of January 31, 2020, the end of the 16th fiscal period, areexposed to liquidity risk where alternative funds may not be procured by the repayment date. Also, borrowings with floating interest rates are
exposed to interest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk for a certain portion of theborrowings.
(3) Risk management for financial instruments
a. Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored
by deposits in non-interest bearing ordinary savings accounts or with financial institutions with credit ratings above a certain level. Investment
securities represent equity investments in an anonymous association and are exposed to credit risk of the issuer and interest rate fluctuation risk.
To manage this credit risk, the Investment Corporation regularly evaluates the results of operations and the financial condition of the issuer, etc. In
utilizing derivatives, the Investment Corporation aims to mitigate counterparty risk such as by transacting with financial institutions with favorable
ratings.
b.

Market risk

While borrowings with floating rates are exposed to interest rate volatility risk, such risk is monitored by adjusting the rate of the balance ofborrowings with floating rates against the total borrowings according to the financial environment, interest rate forecasts by continuous monitoring,etc. and by using derivatives, etc. While investment securities, which are equity investments in an anonymous association, are exposed to credit
risk of the issuer and property value fluctuation risk, the Investment Corporation periodically reviews the value of the property and financial
condition of the issuer with regard to these investment securities. A risk management policy is established with regard to the execution andmanagement of derivatives, and such transactions are entered into based on this policy.
c.

Liquidity risk

Though borrowings are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates and by
diversifying financial institutions. Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.
(4) 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 price available, fairvalue is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different fair value.

12

(B). Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet and estimated fair value are shown in the following table.
As of January 31, 2020
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1)

Cash and deposits¥10,978,807¥10,978,807(2)

Cash and deposits in trust

10,187,104

10,187,104-

Subtotal¥-

21,165,911

21,165,911-(1)

Short-term loans payable

3,300,000

3,300,000-(2)

Current portion of long-term loans payable

10,100,000

10,112,003

12,003(3)

Investment corporation bonds

7,000,000

7,024,300

24,300(4)

Long-term loans payable

107,250,000

107,913,233

663,233

127,650,000

128,349,537

699,537

Subtotal

Derivative transactions*¥(450,527)¥(450,527)¥* Figures indicate net amount of derivative assets/liabilities derived from derivative transactions, with minus representing net liabilities-

As of July 31, 2019
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1)

Cash and deposits(2)

Cash and deposits in trust
Subtotal¥10,296,548¥10,296,548¥-

9,903,118

9,903,118-

20,199,667

20,199,667-(1)

Short-term loans payable

2,500,000

2,500,000-(2)

Current portion of long-term loans payable

13,200,000

13,198,325(1,674)(3)

Investment corporation bonds

5,000,000

5,036,600

36,600(4)

Long-term loans payable

105,200,000

106,075,204

875,204

125,900,000

126,810,130

910,130

Subtotal

Derivative transactions*¥(483,092)¥(483,092)¥* Figures indicate net amount of derivative assets/liabilities derived from derivative transactions, with minus representing net liabilities.

-

Note 1: Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying amount approximates fair value.
Liabilities(1)Short-term loans payable
Since these items are settled in a short period of time with floating interest rates, their carrying amount approximates fair value.
(2)Current portion of long-term loans payable and (4) Long-term loans payable
Among these items, the fair value of loans payable with fixed interest rates is calculated based on the present value, which is the total amount ofprincipal and interest discounted by the estimated interest rate to be applied in the event that the Investment Corporation conducts new borrowingsof the same type. As for the fair value of loans payable with floating interest rates, it is based on the carrying amount since market interest rates
are reflected in the short term and the fair value is believed to approximate the carrying amount as the credit standing of the Investment
Corporation has not changed significantly since the loans were made. (However, the fair value of long-term loans payable subject to the special
treatment for interest-rate swaps is based on the present value of the total of principal and interest, accounted for together with the applicableinterest-rate swaps, discounted by the estimated interest rate to be applied in the event that the Investment Corporation conducts new borrowingsof the same type.)13

(3) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices.
Derivative transactions
Please refer to Note 11 “DERIVATIVE TRANSACTIONS”.
Note 2: Financial instruments whose fair values are extremely difficult to recognize(in thousands of yen)Classification

As of January 31, 2020

Investment securities *¥As of July 31, 2019-

¥2,398*Fair values of investment securities are not subject to disclosure of fair value as they have no market value and their fair values are extremely
difficult to recognize.
Loss on valuation of investment securities of ¥5,942 thousand was recognized in the fiscal period ended July 31, 2019.
Note 3: Redemption schedule for financial assets with maturities
As of January 31, 2020
Due in 1 year or
less
Cash anddeposits
Cash anddeposits in trust
Total

Due after 1 year
through 2 years¥10,978,807¥

Due after 2 years
Due after 3 years
through 3 years
through 4 years(in thousands of yen)-

10,187,104¥-¥21,165,911

¥

-

¥

-

-

¥

Due after 4 years
through 5 years

Due after 5 years

¥

¥

-

-

¥

-

-

¥

-

-

¥

-

As of July 31, 2019
Due in 1 year or
less
Cash anddeposits
Cash anddeposits in trust
Total

Due after 1 year
through 2 years¥10,296,548¥

Due after 2 years
Due after 3 years
through 3 years
through 4 years(in thousands of yen)-

9,903,118¥-¥20,199,667

¥

-

¥

-

-

¥

Due after 4 years
through 5 years

Due after 5 years

¥

¥

-

-

¥

-

-

¥

-

-

¥

-

Note 4: Redemption schedule for loans payable and investment corporation bonds
As of January 31, 2020
Due in 1 year or
lessShort-term loans
payableInvestment
corporation bonds
Long-term loans
payableTotal¥3,300,000

Due after 1 year
through 2 years

Due after 2 years
Due after 3 years
through 3 years
through 4 years(in thousands of yen)

Due after 4 years
through 5 years

Due after 5 years

¥

¥

¥

¥

－

－

¥

－

－

－

－

1,000,000－

1,000,000－

5,000,000

10,100,000

14,400,000

18,250,000

14,400,000

12,000,000

48,200,000¥13,400,000¥15,400,000¥18,250,000¥15,400,000¥12,000,000¥53,200,000

Due in 1 year or
less

Due after 1 year
through 2 years

Due after 2 years
Due after 3 years
through 3 years
through 4 years(in thousands of yen)

Due after 4 years
through 5 years

Due after 5 years

¥

¥

¥

¥

As of July 31, 2019

Short-term loans
payableInvestment
corporation bonds
Long-term loans
payableTotal¥2,500,000

－

－

¥

－

－

－

－

－

1,000,000－

1,000,000

3,000,000

13,200,000

9,450,000

19,650,000

11,550,000

12,800,000

51,750,000¥15,700,000¥9,450,000¥20,650,000¥11,550,000¥13,800,000¥54,750,000

1411. DERIVATIVE TRANSACTIONS
The contract amount and the fair value of interest-rate swap transactions as of January 31, 2020 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable(2) Transactions subject to hedge accounting
Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
Total
year

Fair value(in thousands of yen)Calculation method for
applicable fair value

Interest rate swap
Based on the amounttransaction:
Long-term¥60,950,000¥53,450,000¥(450,527) provided by counterparty
Receive/floatingloans payablefinancial institutions
and pay/fixedSpecialInterest rate swap
treatment for transaction:
Long-term
36,800,000
33,200,000*
interest-rate Receive/floatingloans payableswaps
and pay/fixed
Total¥97,750,000¥86,650,000¥(450,527)*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair
Accounting
method, inprinciple

value is included in the fair value of the hedged long-term loans payable.
The contract amount and the fair value of interest-rate swap transactions as of July 31, 2019 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable(2) Transactions subject to hedge accounting
Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
Total
year

Fair value(in thousands of yen)Calculation method for
applicable fair value

Interest rate swap
Based on the amounttransaction:
Long-term¥56,200,000¥48,700,000¥(483,092) provided by counterparty
Receive/floatingloans payablefinancial institutions
and pay/fixedSpecialInterest rate swap
treatment for transaction:
Long-term
38,300,000
36,800,000*
interest-rate Receive/floatingloans payableswaps
and pay/fixed
Total¥94,500,000¥85,500,000¥(483,092)*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair
Accounting
method, inprinciple

value is included in the fair value of the hedged long-term loans payable.

12. RELATED-PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other16th Fiscal Period (August 1, 2019 to January 31, 2020) and 15th Fiscal Period (February 1, 2019 to July 31, 2019): Not applicable
2．Affiliated companies and other16th Fiscal Period (August 1, 2019 to January 31, 2020) and 15th Fiscal Period (February 1, 2019 to July 31, 2019): Not applicable
3．Fellow subsidiary companies and other16th Fiscal Period (August 1, 2019 to January 31, 2020) and 15th Fiscal Period (February 1, 2019 to July 31, 2019): Not applicable
4．Directors, major individual unitholders and other16th Fiscal Period (August 1, 2019 to January 31, 2020) and 15th Fiscal Period (February 1, 2019 to July 31, 2019): Not applicable1513. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 32%. However, the Investment
Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements under the Special Taxation
Measures Law of Japan are met, including a requirement that it currently distributes in excess of 90% of its net income for the fiscal period in order
to be able to deduct such amounts. If the Investment Corporation does not satisfy all of the requirements, the entire taxable income of theInvestment Corporation will be subject to regular corporate income taxes. Since the Investment Corporation distributed in excess of 90% of its
distributable income in the form of cash distributions totaling ¥3,687 million and ¥3,687 million for the periods ended January 31, 2020 and July 31,
2019, respectively, the distributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on theInvestment Corporation’s income were 0.02% for the periods ended January 31, 2020 and July 31, 2019. The following table summarizes thesignificant differences between the statutory tax rate and the effective tax rate.
From August 1, 2019
to January 31, 2020
31.51%

From February 1, 2019
to July 31, 201931.51%

Deductible cash distributions(30.94)(31.04)

Others(0.55)(0.45)

Effective tax rate

0.02％

0.02%

Statutory tax rate

The significant components of deferred tax assets and liabilities as of January 31, 2020 and July 31, 2019 are as follows:
As of January 31, 2020

As of July 31, 2019(in thousands of yen)
Deferred tax assets:
Valuation difference on assets acquired by merger¥697,994¥720,920

Deferred gains or losses on hedges

141,875

152,608

Asset retirement obligations

21,242

21,272

Loss on valuation of investment securities

-

1,872

Amortization of leasehold right in trust

723

181

Other

20

-

Subtotal deferred tax assets

861,856

896,855

Valuation allowance(861,856)(896,855)

Total deferred tax assets

¥

-

¥

-

Net deferred tax assets

¥

-

¥

-

14. ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations reported on balance sheets
1. Summary of the asset retirement obligations
The Investment corporation has recognized the original state restoration obligations assumed under the general fixed-term land leasehold
agreement as the asset retirement obligations in connection with Arute Ishiyagawa acquired on June 3, 2019.
2. Method of calculating asset retirement obligations
Asset retirement obligations are calculated based on a discount rate of 0.54711% and the useful life has been estimated to be 47 years and one
month based on the time period from the date of acquisition to the expiration of the agreement.
3. Changes in the amount of applicable asset retirement obligations consisted of the following
From August 1, 2019
to January 31, 2020

From February 1, 2019
to July 31, 2019(in thousands of yen)
Balance at the beginning of period¥67,338

Increase due to acquisition of tangible fixed assets-

Accretion adjustment
Balance at the end of period

16

¥

-

67,277

184

61¥67,522¥67,338

15. INVESTMENT AND RENTAL PROPERTIESThe Investment Corporation owns real estate for rental purposes in the Tokyo Metropolitan Area and other regional areas for the purpose ofgenerating rental revenues.
The book value and fair value concerning the above real estate for rental purposes are as follows.
16th Fiscal Period
from August 1, 2019
to January 31, 2020

15th Fiscal Period
from February 1, 2019
to July 31, 2019(in thousands of yen)Book value
Balance at the beginning of period¥233,496,342¥221,356,688

Changes during the period
Balance at the end of period

811,431234,307,773

12,139,653
233,496,342¥279,986,000¥273,676,000

Fair value at the end of period
Note 1: Book value excludes accumulated depreciation from acquisition costs.

Note 2: Among changes in the amount of real estate for rental purposes that occurred during the 16th fiscal period, the principal increase was theacquisition of real estate trust beneficiary interests in 2 properties totaling ¥2,006,136 thousand, and the principal decrease was the salesof real estate trust beneficiary interests in 1 property totaling ¥420,922 thousand and depreciation of ¥1,428,681 thousand , and during the15th fiscal period, the principal increase was the acquisition of real estate trust beneficiary interests in 6 properties totaling ¥13,400,965
thousand, and the principal decrease was the sales of real estate trust beneficiary interests in 1 property totaling ¥482,312 thousand anddepreciation of ¥1,391,231 thousand.
Note 3: The fair value is the appraisal value or the survey value determined by outside appraisers. In addition, the fair value at the end of 16th
fiscal period of KDX Residence Izumi Chuo, which was sold on February 28, 2020, is based on the sales prices (¥540,000 thousand)under the trust beneficiary interest sales contracts entered into on January 29, 2020.
Income and loss in the fiscal periods ended January 31, 2020 and July 31, 2019 for real estate for rental purposes is listed in Note 6 ”
BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REALESTATE PROPERTY”.

16. SEGMENT AND RELATED INFORMATION
Segment and related information for the period ended from August 1, 2019 to January 31, 2020 and from February 1, 2019 to July 31, 2019 is asfollows:(A) Segment information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment
subject to disclosure.
(B) Related information(1) Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income and retained earnings.
(2) Information about each geographic area(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income
and retained earnings.
(b) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property,
plant and equipment on the balance sheet.
(3) Information about each major customer
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement ofincome and retained earnings.

1717. PER UNIT INFORMATION
From August 1, 2019

From February 1, 2019

to January 31, 2020

to July 31, 2019

Net asset value per unit

¥130,584¥130,630

Net income per unit

¥3,981¥4,142

Weighted average number of units (units)

907,458

903,243

The weighted average number of units outstanding of 907,458 and 903,243 were used for the computation of the amount of net income per unit
as of January 31, 2020 and July 31, 2019, respectively.
Net income per unit after adjusting for residual units is not included because there were no residual investment units.
The basis for calculating net income per unit is as follows:
From August 1, 2019

From February 1, 2019

to January 31, 2020

to July 31, 2019

Net income (in thousands of yen)
Net income not available to ordinary unitholders (in thousands of yen)
Net income available to ordinary unitholders (in thousands of yen)
Weighted average number of units during the period (units)¥3,613,397¥3,741,258--¥3,613,397¥3,741,258

907,458

903,243

18. SIGNIFICANT SUBSEQUENT EVENTSIssuance of New Investment Units
On February 10, 2020 and February 19, 2020, the Board of Directors of the Investment Corporation resolved to issue new investment units as thefunds for acquiring specified assets and other use. Payments for the issuance of new investment units through public offering have been
completed on February 26, 2020 .
As a result of the issuance of new investment units, the Investment Corporation had total unitholders’ capital of ¥108,550,294,003 with 951,258
investment units outstanding as of February 26, 2020.
With regard to the secondary offering through over-allotment, the allottee SMBC Nikko Securities Inc. decided not to subscribe for any new
investment units. As a result, no units were issued through third party allotment.
(Issuance of New Investment Units through Public Offering)Issuance of new investment units: 43,800 units

Issue price (Offer price): ¥208,065 per unit

Aggregate issue price (Total offer price): ¥9,113,247,000

Issue amount (Paid-in value): ¥201,342 per unit

Total issue amount (Aggregate paid-in value): ¥8,818,779,600

Payment date

: February 26, 2020

19. SECURITIES PORTFOLIO
Securities portfolio consists of the following as of January 31, 2020:(1)

Stock Not applicable(2)

Securities other than shares Not applicable

Securities portfolio consists of the following as of July 31, 2019:(1) Stock Not applicable(2) Securities other than shares

Type

Name

Face value
Book value
total

Accruedinterest(in thousands of yen)
Prepaid AssessedGain
accruedvalue(Loss) on Remarks
interest （Note 2） valuation

SubordinatedEquity interests in TK property fund with
Silent Partnership
2,398
2,398
G.K. Tropic III as operator (Note 1)
Equity Interests
Total
2,398
2,398
Note 1: TK property fund owns trust beneficiary interests in real estate for “Serabi Ebisu” and “Arute Ishiyagawa.” Furthermore, the Investment
Corporation acquired real estate beneficiary interests in trust for the above two mentioned properties on June 3, 2019
Note 2: The assessed value is stated at the book value. Furthermore, loss on valuation of investment securities of ¥5,942 thousand wasrecognized in the fiscal period ended July 31, 2019.

18

20. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASEETS
Property, plant and equipment consist of the following as of January 31, 2020
Type of asset

Property,plant andequipment

Intangible
assetsLand
Sub total
Buildings in trust
Structures in trust
Machinery andequipment in trust
Tools, furnitureand fixtures intrust
Land in trust
Sub total
Total
Leasehold right in
trust
Other
Total

Balance atthe beginningof period¥1,798,041
1,798,041
99,911,220
1,073,137
1,436,362

Increaseduring theperiodDecreaseduring theperiod

¥¥1,067,512
15,874
11,920Depreciation
Depreciation
for theperiod(in thousands of yen)
¥1,798,041¥¥
1,798,041
100,799,661
11,698,397
1,346,387
1,089,011
223,450
32,087
1,448,282
353,874
32,697

Balance atthe end of
period179,071-

Accumulated
depreciation

523,059

47,786236

570,610

81,223

15,784

138,484,736
241,428,516
243,226,558
1,229,487

1,519,804
2,662,898
2,662,898-

272,617451,924
451,924-

139,731,924
243,639,490
245,437,532
1,229,487

12,356,945
12,356,945
2,299

1,426,956
1,426,956
1,724

7,762
¥1,237,249

¥

-

7,762
¥1,237,249

2,975¥5,275776¥2,501-¥Netbalance at
end of theperiodRemarks¥1,798,041
1,798,041
89,101,264 Notes 1 and 2
865,561
1,094,407
489,387
139,731,924 Notes 1 and 2
231,282,545
233,080,586
1,227,187
4,787¥1,231,974

Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
Note2: The amount of decrease during the period is primarily attributable to the sales of the real estate property.
Property, plant and equipment consist of the following as of July 31, 2019:
Type of asset

Property,plant andequipment

Intangible
assetsLand
Sub total
Buildings in trust
Structures in trust
Machinery andequipment in trust
Tools, furnitureand fixtures intrust
Land in trust
Sub total
Total
Leasehold right in
trust
Other
Total

Balance atthe beginningof period¥1,798,041
1,798,041
95,077,289
947,729

Increaseduring theperiodDecreaseduring theperiod¥¥5,144,241
127,706

Depreciation
Depreciation
for theperiod(in thousands of yen)
¥1,798,041¥¥
1,798,041
99,911,220
10,381,143
1,313,277
1,073,137
191,362
30,813

Balance atthe end of
period310,310
2,298

Accumulated
depreciation

Netbalance at
end of theperiod¥1,798,041
1,798,041
89,530,077 Notes 1 and 2
881,774

1,429,327

7,035

-

1,436,362

321,177

32,586

1,115,184

473,61449,958513

523,059

65,444

13,978457,614130,189,152
228,117,113
229,915,155

8,521,826
13,850,768
13,850,768

226,242539,365
539,365

138,484,736
241,428,516
243,226,558

10,959,127
10,959,127

1,390,656
1,390,656

1,067,058

162,428-

1,229,487

574

574

1,228,912

7,762¥1,074,821¥162,428-

7,762¥1,237,249

2,199¥2,774776¥1,351

5,563¥1,234,475¥

Remarks

138,484,736 Notes 1 and 2
230,469,388
232,267,430

Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
Note2: The amount of decrease during the period is primarily attributable to the sales of the real estate property.

1921. INVESTMENT CORPORATION BONDS
Outstanding Investment corporation bonds as of January 31, 2020 are as follows.
Balance at
Decrease
Balance at
Date of
Seriesthe beginningduring thethe end ofissue
of period
periodperiod(in thousands of yen)First series of unsecured
August 30,
investment corporation¥ ¥1,000,000¥1,000,000
2016
bonds (Note 1)
Second series ofAugust 30,
unsecured investment
1,000,000
1,000,000
corporation bonds
2016(Note 1)
Third series of unsecured
August 30,
investment corporation
1,000,000
1,000,000
2016
bonds (Note 1)
Fourth series ofNovember 30,
unsecured investment
1,000,000
1,000,000
corporation bonds
2018(Note 1)Fifth series of unsecured
November 30,
investment corporation
1,000,000
1,000,000
2018
bonds (Note 1)
Sixth series of unsecured
December 20,
investment corporation
2,000,000
bonds(Social bond)2019(Note 1)
¥ Total¥5,000,000¥7,000,000

Interest
rate

Repayment date

Use

Remarks(Note2)

Unsecured(Note3)

Unsecured

August 30,

0.200%

2021
August 28,

0.540%

2026
August 30,

0.800%

2028
November 30,

0.410%

2023
November 30,

0.850%

2028
December 20,

0.750%

2029

Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate andrepayment of debts.
Note 3: Investment corporation bonds were used as the funds for the acquisition of social eligible assets.
Note 4: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows
Due in 1 year
Due after 1 year
Due after 2 years
Due after 3 years
Due after 4 years
or less
through 2 years
through 3 years
through 4 years
through 5 years
Investment
corporation bonds(in thousands of yen)

¥ -¥1,000,000¥ -Outstanding Investment corporation bonds as of July 31, 2019 are as follows.
Balance at
Decrease
Balance at
Date of
Seriesthebeginning
duringthethe end ofissue
of period
periodperiod(in thousands of yen)First series of unsecured
August 30,
investment corporation¥ ¥1,000,000¥1,000,000
2016
bonds (Note 1)
Second series ofAugust 30,
unsecured investment
1,000,000
1,000,000
corporation bonds
2016(Note 1)
Third series of unsecured
August 30,
investment corporation
1,000,000
1,000,000
2016
bonds (Note 1)
Fourth series ofNovember 30,
unsecured investment
1,000,000
1,000,000
corporation bonds
2018(Note 1)Fifth series of unsecured
November 30,
investment corporation
1,000,000
1,000,000
2018
bonds (Note 1)
Total¥ ¥5,000,000¥5,000,000¥1,000,000

Interest
rate

0.200%
0.540%
0.800%
0.410%
0.850%¥ -Repayment date

Use

Remarks(Note2)

Unsecured

August 30,
2021
August 28,
2026
August 30,
2028
November 30,
2023
November 30,
2028

Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate andrepayment of debts.
Note 3: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year
or less
Investment corporation bonds¥ -Due after 1 year
through 2 years¥ -20

Due after 2 years
through 3 years(in thousands of yen)

¥1,000,000

Due after 3 years
through 4 years

Due after 4 years
through 5 years¥ -¥1,000,000

22. SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt and long-term debt consist of the following as of January 31, 2020
Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)-¥1,000,000

0.422%

February 28, 2020

Decreaseduring theperiodUse

Remarks(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)

Short-termloanspayableCurrent
portion of
long-term
loans
payableLong-term
loans
payableSumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sub total
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation(Note 8)MUFG Bank,
Ltd .(Note 8)
Mizuho Bank, Ltd.
(Note 8)
Shinsei Bank, Limited
Resona Bank, Limited(Note 8)
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.
The Bank of Fukuoka,
Ltd.
Shinsei Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
MUFG Bank,
Ltd .(Note 2)
Sumitomo Mitsui
Banking Corporation(Note 2)
Aozora Bank, Ltd.
(Note 2)
MUFG Bank, Ltd.
(Note 2)
MUFG Bank,
Ltd .(Note 2)
Sub total
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
MUFG Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

1,000,000¥-¥

1,000,000--

1,000,000

0.374%

July 31, 2020

500,000--

500,000

0.324%

July 31, 2020-

800,000-

800,000

0.419%

January 31, 2021

2,500,000
1,500,000

800,000-

1,500,000

3,300,000-

0.689%

November 30, 20191,500,000-

1,500,000-

1,400,000-

1,400,000-

900,000-

900,000-

500,000-

500,000-

400,000-

400,000-

0.447%

January 31, 2020

300,000-

300,000-

300,000-

300,000-

200,000-

200,000-

200,000-

200,000-

1,750,000--

1,750,000

1,750,000--

1,750,000

1,000,000
500,000
500,000--

1,000,000
500,000
500,000

500,000--

500,000

1,000,000--

2,000,000-

300,000

0.729%

July 29, 2020

1,000,000

1.109%

January 31, 2021-

2,000,000

0.804%

November 30, 2020--

300,000

0.678%

August 31, 2020

300,000--

300,000

0.624%

October 27, 2020

500,000--

500,000

0.447%

August 31, 2020

17,300,000-

7,200,000

10,100,000

1,000,000--

1,000,000

1.221%

July 31, 2021

1,350,000--

1,350,000

1.183%March 31, 2021

2,000,000--

2,000,000

1.267%

April 30, 2022

1,500,000
1,000,000
1,000,000--

1,500,000
1,000,000
1,000,000

1.267%
1.267%
1.267%

April 30, 2022
April 30, 2022
April 30, 2022

1,100,000--

1,100,000

1,100,000
600,000
350,000
300,000--

1,100,000
600,000
350,000
300,000--

300,000--

1,000,000--

400,000--

400,000

300,000
1,000,000
400,000
400,000

21

0.916%

August 7, 2021

0.996%(Note 5)

August 7, 2021

1.254%

August 7, 2023

Classification
LenderLong-term
loans
payableMizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Aozora Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sompo Japan
Insurance Inc.(Note 9)
Resona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
MUFG Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation

Balance atthebeginning of
period300,000
200,000

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
period(in thousands of yen)--

300,000
200,000

Averageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)1.254%

August 7, 2023

200,000--

200,000

150,000--

150,000

500,000--

500,000

1.320%(Note 5)

August 7, 2023

600,000--

600,000

0.945%

August 31, 2021

600,000
500,000
950,000--

600,000
500,000
950,000

0.945%
0.945%
1.083%

August 31, 2021
August 31, 2021
November 30, 2022

1,200,000--

1,200,000

0.875%

January 31, 2022

1,200,000
2,000,000
1,500,000
2,000,000--

1,200,000
2,000,000
1,500,000
2,000,000

1.105%
0.875%
0.987%
1.100%

January 31, 2024
April 30, 2022
April 30, 2023
April 30, 2024

1,000,000--

1,000,000

1.265%

April 30, 2025

1,100,000--

1,100,000

1,100,000--

1,100,000

1,000,000
300,000--

1,000,000
300,000

1.115%

July 29, 2022

1,000,000--

1,000,000

1,100,000--

1,100,000

0.923%

August 31, 2022

700,000--

700,000

0.923%

August 31, 2022

950,000--

950,000

1.047%

August 31, 2023

1,700,000
950,000--

1,700,000
950,000

1.169%
1.169%

August 31, 2024
August 31, 2024

2,000,000--

2,000,000

1.345%

August 31, 2025

1,000,000--

1,000,000

1,000,000
1,000,000--

1,000,000
1,000,000

1.193%(Note 5)
1.156%
0.819%

2,500,000--

2,500,000

0.903%

August 31, 2024
April 27, 2025
April 28, 2025
April 30, 2026

MUFG Bank, Ltd.

1,000,000--

1,000,000

Mizuho Bank, Ltd.

1,500,000--

1,500,000

Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

1,000,000--

1,000,000

0.660%(Note 5)0.816%(Note 5)0.713%

1,000,000--

1,000,000

0.797%

August 31, 2025

500,000--

500,000

2,000,000--

2,000,000

500,000--

500,000

0.797%
0.670%(Note 5)0.751%(Note 5)

August 31, 2025

MUFG Bank, Ltd.

3,000,000--

3,000,000

0.906%

August 31, 2026

Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Development Bank ofJapan Inc.
Mizuho Bank, Ltd.
The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation

July 31, 2025
August 31, 2026
August 31, 2024

August 31, 2025
August 31, 2025

1,000,000--

1,000,000

1,000,000--

1,000,000

0.773%(Note 5)0.900%

1,000,000--

1,000,000

0.900%

August 22, 2027

1,000,000--

1,000,000

August 22, 2027

1,200,000--

1,200,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

0.900%
0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)1,500,000--

1,500,000

0.501%

February 28, 2023

22

October 31, 2025
August 22, 2027

August 22, 2027
August 22, 2027
August 22, 2027
August 22, 2027

Use

Remarks(Note 6)

Unsecured/
UnguaranteedClassification
LenderLong-term
loans
payableBalance atthebeginning of
periodMUFG Bank, Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
Nippon Life Insurance
Company
Resona Bank, Limited
Shinsei Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.
The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.

1,500,000
1,500,000

MUFG Bank, Ltd.
Nippon Life Insurance
Company
Shinsei Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Trust &Banking Co., Ltd.

Decreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)(in thousands of yen)-

1,500,000
1,500,000

0.501%
0.582%

February 28, 2023
February 29, 2024

Increaseduring theperiod1,000,000--

1,000,000

0.582%

February 29, 2024

1,000,000
500,000--

1,000,000
500,000

February 29, 2024
August 31, 2024

500,000--

500,000

0.582%
0.624%
0.661%(Note 5)1,500,000--

1,500,000

0.665%

February 28, 2025

1,000,000--

1,000,000

0.749%

February 28, 2026

1,000,000--

1,000,000

0.749%

February 28, 2026

1,000,000--

1,000,000

0.409%

July 31, 2021

1,000,000
500,000
500,000--

1,000,000
500,000
500,000

July 31, 2021
July 31, 2021
July 31, 2021

500,000--

500,000

0.409%
0.409%
0.409%
0.900%(Note 5)1,500,000--

1,500,000

1,400,000
900,000--

1,400,000
900,000

500,000--

500,000

500,000--

500,000

400,000
400,000--

400,000
400,000

400,000--

400,000

400,000--

400,000

300,000--

300,000

300,000--

300,000

1,000,000--

1,000,000

0.509%

August 31, 2022

0.509%
0.498%(Note 5)

August 31, 2022

0.799%-

400,000--

1,600,000

1,200,000--

1,200,000

0.592%

August 31, 2023

1,000,000
800,000--

1,000,000
800,000

0.592%
0.592%

August 31, 2023
August 31, 2023

1,050,000--

1,050,000

0.914%

February 28, 2027

500,000--

500,000

0.914%

February 28, 2027

500,000--

500,000

0.914%

February 28, 2027

500,000--

500,000

0.914%

February 28, 2027

250,000--

250,000

February 28, 2027

1,400,000--

1,400,000

800,000--

800,000

700,000--

700,000

1,000,000--

1,000,000

0.914%
0.884%(Note 5)0.825%(Note 5)0.920%(Note 5)1.031%

800,000--

800,000

1.031%

September 30, 2028

500,000--

500,000

1.031%

September 30, 2028

400,000--

400,000

0.363%

November 30, 2024--

2,000,000

Shinsei Bank, Limited
Shinsei Bank, Limited

500,000
500,000--

500,000
500,000

23

Unsecured/
Unguaranteed

February 2, 2026-

2,000,000(Note 6)

January 30, 2027

400,000

Mizuho Bank, Ltd.

Remarks

August 31, 2024

1,600,000

0.330%(Note 5)0.484%
0.272%

Use

August 31, 2022

February 28, 2027
February 28, 2027
September 30, 2026
September 30, 2028

May 31, 2025
November 30, 2025
January 31, 2023

Classification
LenderLong-term
loans
payableDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)(in thousands of yen)-

800,000

0.299%

July 31, 2023-

1,000,000-

1,000,000

0.572%

August 31, 2026

Balance atthebeginning of
periodIncreaseduring theperiodMizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

800,000-

500,000-

500,000

0.325%

April 30, 2023

Resona Bank, Limited-

450,000-

450,000

0.336%

April 30, 2024

MUFG Bank, Ltd.

-1,500,000-

1,500,000

0.600%

November 30, 2026

MUFG Bank, Ltd.

-

900,000-

900,000

0.444%

July 31, 2021

Mizuho Bank, Ltd.

-

500,000-

500,000

0.444%

July 31, 2021

Shinsei Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
The Bank of Fukuoka,Ltd.
Sub total-

500,000-

500,000

0.329%

July 31, 2023-

300,000-

300,000

0.329%

July 31, 2023-

300,000-

300,000

0.329%

July 31, 2023-

200,000-

200,000

0.329%

July 31, 2023

101,100,000¥120,900,000

6,150,000¥6,950,000¥7,200,000

107,250,000¥120,650,000

Total

Use

Remarks(Note 6)

Unsecured/
Unguaranteed

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled for the next five years
after the balance sheet date are as follows:
Due after 1 year
through 2 years
Long-term loans payable¥14,400,000

Due after 2 years
through 3 years

Due after 3 years
through 4 years(in thousands of yen)
¥18,250,000¥14,400,000

Due after 4 years
through 5 years

Due after 5 years¥12,000,000¥48,200,000

Note 2: Borrowings listed in the current portion of long-term loans payable were listed in long-term loans payable in the previous fiscal period.
Note 3: All debts except for the following Note 5 are borrowing at a floating rate.
Note 4: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions were implemented in order to hedge the interest rate volatility risk, theweighted average interest rates taking into consideration the effects of the interest rate swaps are indicated.
Note 5: Borrowings is applied at a fixed rate.
Note 6: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 7: All the repayment methods of debt financing except for the following Note 8 are lump-sum repayments on the due date.
Note 8: Partial prepayment of 2,000,000 thousand yen was made on December 30, 2019.
Note 9: Sompo Japan Nipponkoa Insurance Inc. changed its corporate name to Sompo Japan Insurance Inc. on April 1, 2020.

24

Short-term debt and long-term debt consist of the following as of July 31, 2019
Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)Use

Remarks(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)

Short-termloanspayableCurrent
portion of
long-term
loans
payableLong-term
loans
payableSumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sub total
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Shinsei Bank, Limited
Resona Bank,Limited.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.
The Bank of Fukuoka,
Ltd.
Shinsei Bank, Limited(Note 2)
Sumitomo Mitsui
Banking Corporation(Note 2)
MUFG Bank, Ltd.
(Note 2)
Mizuho Bank, Ltd(Note 2).
Resona Bank, Limited(Note 2).
Mizuho Trust &Banking Co., Ltd(Note 2).
Sub total
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
MUFG Bank, Ltd.
Resona Bank, Limited.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited.
Mizuho Trust &Banking Co., Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited.

¥1,250,000-¥ 1,250,000-

0.412%

July 31, 2019

800,000¥-

800,000¥-

0.412%

July 31, 2019-

1,000,000-

1,000,000

0.413%

February 28, 2020-

1,000,000-

1,000,000

0.374%

July 31, 2020-

500,000-

500,000

0.324%

July 31, 2020

2,050,000
1,500,000

2,500,000-

2,050,000-

2,500,000
1,500,000

0.689%

November 30, 2019

1,000,000-

1,000,000-

0.486%

February 28, 2019

500,000-

500,000-

0.486%

February 28, 2019

500,000-

500,000-

0.362%

July 31, 2019

500,000-

500,000-

0.362%

July 31, 20191,500,000--

1,500,000

1,400,000
900,000
500,000
400,000--

1,400,000
900,000
500,000
400,000

300,000--

300,000

0.437%

January 31, 2020

300,000--

300,000

200,000--

200,000

200,000--

200,000

1,750,000--

1,750,000

1,750,000--

1,750,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

500,000--

500,000

15,700,000
1,000,000-

2,500,000-

0.729%

July 29, 2020

13,200,000
1,000,000

1.109%

January 31, 2021

1,000,000--

1,000,000

1.221%

July 31, 2021

1,350,000--

1,350,000

1.183%March 31, 2021

2,000,000--

2,000,000

1.267%

April 30, 2022

1,500,000
1,000,000
1,000,000--

1,500,000
1,000,000
1,000,000

1.267%
1.267%
1.267%

April 30, 2022
April 30, 2022
April 30, 2022

1,100,000--

1,100,000

1,100,000
600,000
350,000
300,000--

1,100,000
600,000
350,000
300,000

300,000--

300,000

1,000,000--

400,000-

400,000
300,000
200,000-25

0.916%

August 7, 2021

1,000,000

0.996%(Note 5)

August 7, 2021-

400,000

1.254%

August 7, 2023-

400,000
300,000
200,000

1.254%

August 7, 2023

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)

Long-term
loans
payableMizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Aozora Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited.
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sompo Japan
Nipponkoa InsuranceInc.
Aozora Bank, Ltd.
Resona Bank, Limited.
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
MUFG Bank, Ltd.
MUFG Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation

200,000--

200,000

150,000--

150,000

500,000--

500,000

1.320%(Note 5)

August 7, 2023

600,000--

600,000

0.945%

August 31, 2021

600,000
500,000
950,000--

600,000
500,000
950,000

0.945%
0.945%
1.083%

August 31, 2021
August 31, 2021
November 30, 2022

2,000,000--

2,000,000

0.804%

November 30, 2020

1,200,000--

1,200,000

0.875%

January 31, 2022

1,200,000
2,000,000
1,500,000
2,000,000--

1,200,000
2,000,000
1,500,000
2,000,000

1.105%
0.875%
0.987%
1.100%

January 31, 2024
April 30, 2022
April 30, 2023
April 30, 2024

1,000,000--

1,000,000

1.265%

April 30, 2025

1,100,000--

1,100,000

1,100,000--

1,100,000

1,000,000
300,000--

1,000,000
300,000

1.115%

July 29, 2022

1,000,000--

1,000,000

300,000
1,100,000--

300,000
1,100,000

0.678%
0.923%

August 31, 2020
August 31, 2022

700,000--

700,000

0.923%

August 31, 2022

950,000--

950,000

1.047%

August 31, 2023

1,700,000
950,000--

1,700,000
950,000

1.169%
1.169%

August 31, 2024
August 31, 2024

2,000,000--

2,000,000

1.345%

August 31, 2025

1,000,000--

1,000,000

300,000
1,000,000
1,000,000--

300,000
1,000,000
1,000,000

1.193%(Note 5)0.624%
1.156%
0.819%

October 27, 2020
April 27, 2025
April 28, 2025

2,500,000--

2,500,000

0.903%

April 30, 2026

August 31, 2024

MUFG Bank, Ltd.

1,000,000-

Mizuho Bank, Ltd.

1,500,000--

1,500,000

Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited.

1,000,000--

1,000,000

0.660%(Note 5)0.816%(Note 5)0.713%

1,000,000--

1,000,000

0.797%

August 31, 2025

500,000--

500,000

2,000,000--

2,000,000

500,000--

500,000

0.797%
0.670%(Note 5)0.751%(Note 5)

August 31, 2025

MUFG Bank, Ltd.

3,000,000--

3,000,000

0.906%

August 31, 2026

Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Resona Bank, Limited.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Development Bank ofJapan Inc.
Mizuho Bank, Ltd.

-

1,000,000

July 31, 2025
August 31, 2026
August 31, 2024

August 31, 2025
August 31, 2025

1,000,000--

1,000,000

1,000,000--

1,000,000

0.773%(Note 5)0.900%

1,000,000--

1,000,000

0.900%

August 22, 2027

1,000,000--

1,000,000

August 22, 2027

1,200,000--

1,200,000

1,000,000--

1,000,000

500,000--

500,000

0.900%
0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)26

October 31, 2025
August 22, 2027

August 22, 2027
August 22, 2027
August 22, 2027

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)

Long-term
loans
payableThe Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
Resona Bank, Limited.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
Nippon Life Insurance
Company
Resona Bank, Limited.
Shinsei Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.
The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Resona Bank, Limited.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
MUFG Bank, Ltd.
Nippon Life Insurance
Company
Shinsei Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
MUFG Bank, Ltd

500,000--

500,000

0.928%(Note 5)

August 22, 2027

1,500,000--

1,500,000

0.501%

February 28, 2023

1,500,000
1,500,000--

1,500,000
1,500,000

0.501%
0.582%

February 28, 2023
February 29, 2024

1,000,000--

1,000,000

0.582%

February 29,2024

1,000,000
500,000--

1,000,000
500,000

February 29, 2024
August 31, 2024

500,000--

500,000

0.582%
0.624%
0.661%(Note 5)1,500,000--

1,500,000

0.665%

February 28, 2025

1,000,000--

1,000,000

0.749%

February 28, 2026

1,000,000--

1,000,000

0.749%

February 28, 2026

1,000,000--

1,000,000

0.409%

July 31, 2021

1,000,000
500,000
500,000--

1,000,000
500,000
500,000

July 31, 2021
July 31, 2021
July 31, 2021

500,000--

500,000

0.409%
0.409%
0.409%
0.900%(Note 5)1,500,000--

1,500,000

1,400,000
900,000--

1,400,000
900,000

500,000--

500,000

500,000--

500,000

400,000
400,000--

400,000
400,000

400,000--

400,000

400,000--

400,000

300,000--

300,000

300,000--

300,000

1,000,000--

1,000,000

0.509%

August 31, 2022

400,000--

400,000

August 31, 2022

1,600,000--

1,600,000

0.509%
0.498%(Note 5)1,200,000--

1,200,000

0.592%

August 31, 2023

1,000,000
800,000--

1,000,000
800,000

0.592%
0.592%

August 31, 2023
August 31, 2023

1,050,000--

1,050,000

0.914%

February 28, 2027

500,000--

500,000

0.914%

February 28, 2027

500,000--

500,000

0.914%

February 28, 2027

500,000--

500,000

0.914%

February 28, 2027
February 28, 2027

250,000--

250,000

1,400,000--

1,400,000

800,000--

800,000

0.799%

August 31, 2024

January 30, 2027

February 2, 2026

August 31, 2022

700,000--

700,000

1,000,000--

1,000,000

0.914%
0.884%(Note 5)0.825%(Note 5)0.920%(Note 5)1.031%

800,000--

800,000

1.031%

September 30, 2028

500,000--

500,000

1.031%

September 30, 2028-

500,000-

500,000

0.438%

August 31, 202027

February 28, 2027
February 28, 2027
September 30, 2026
September 30, 2028

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)0.363%

November 30, 2024

Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)

Long-term
loans
payableMizuho Trust &Banking Co., Ltd.

-

400,000-

400,000

Mizuho Bank, Ltd.

-2,000,000-

2,000,000

Shinsei Bank, Limited-

500,000-

Shinsei Bank, Limited-

500,000

100,500,000¥118,250,000

800,000
4,700,000¥7,200,000

Mizuho Bank, Ltd.
Sub total
Total

500,000

0.330%(Note 5)0.484%

November 30,2025-

500,000

0.272%

January 31, 2023

¥4,550,000

800,000
105,200,000¥120,900,000

0.299%

July 31, 2023

May 31, 2025

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled for the next five years
after the balance sheet date are as follows:
Due after 1 year
through 2 years
Long-term loans payable¥9,450,000

Due after 2 years
through 3 years

Due after 3 years
through 4 years(in thousands of yen)
¥19,650,000¥11,550,000

Due after 4 years
through 5 years

Due after 5 years¥12,800,000¥51,750,000

Note 2: Borrowings listed in the current portion of long-term loans payable were listed in long-term loans payable in the previous fiscal period.
Note 3: All debts except for the following Note 5 are borrowing at a floating rate.
Note 4: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions were implemented in order to hedge the interest rate volatility risk, theweighted average interest rates taking into consideration the effects of the interest rate swaps are indicated.
Note 5: Borrowings is applied at a fixed rate.
Note 6: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 7: All the repayment methods of debt financing are lump-sum repayments on the due date.

28

23. DISTRIBUTIONS
16th Fiscal Period(From August 1, 2019 to January 31, 2020)

I. Retained earnings at the end of period

15th Fiscal Period(From February 1, 2019 to July 31, 2019)¥4,072,277,167¥4,125,881,528¥20,000,000¥20,000,000¥3,687,909,312¥3,687,001,854¥4,064¥4,063¥404,367,855¥458,879,674

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount of distribution shall exceed
the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special Taxation
Measures Law, and shall not exceed its accounting
profits as the maximum amount. Following this policy, theInvestment Corporation has decided that it shall
distribute ¥3,687,909,312, which is the amount of¥3,613,397,493 in net income,¥54,511,819 from retained
earnings brought forward and reversal of reserve fortemporary difference adjustments, as the distribution of
earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In the
16th fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount of distribution shall exceed
the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special Taxation
Measures Law, and shall not exceed its accounting
profits as the maximum amount. Following this policy, theInvestment Corporation has decided that it shall distribute¥3,687,001,854, which is the amount deducting a part ofgain on sale of real estate property and otheradjustments from net income and added reversal ofreserve for temporary difference adjustments, as the
distribution of earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In the
15th fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

II. Reversal of voluntary retained earnings
Reversal of reserve for temporary
difference adjustments (Note 1)
III. Total distributions
Distributions per unit
IV. Retained earnings brought forward to
the next period

Method of calculating distribution amount

Note 1: Reserve for temporary difference adjustments
16th Fiscal Period (August 1, 2019 to January 31, 2020)
The Investment Corporation has reserved ¥2,000,000,000 as reserve for temporary difference adjustments from gain on negative goodwill in
the 13th fiscal period. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal
period applied to distribution starting from the 14th fiscal period distribution. It has been decided that ¥20,000,000 shall be reversed and applied
to distribution in the 16th fiscal period distribution.
15th Fiscal Period (February 1, 2019 to July 31, 2019)
The Investment Corporation has reserved ¥2,000,000,000 as reserve for temporary difference adjustments from gain on negative goodwill in
the 13th fiscal period. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal
period applied to distribution starting from the 14th fiscal period distribution. It has been decided that ¥20,000,000 shall be reversed andapplied to distribution in the 15th fiscal period distribution.

29