Investment
Invincible Corporation

Audited Financial Statements
for the 37th Fiscal Period(from July 1, 2021 to December 31, 2021)

INDEX TO FINANCIAL STATEMENTS
Page

Independent Auditor’s Report ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 1

Balance Sheet as of December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 4

Statement of Income and Retained Earnings for the six months ended December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 6

Statement of Changes in Net Assets for the six months ended December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 7

Statement of Cash Flows for the six months ended December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 9

Notes to Financial Statements as of and for the six months ended December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ 10

INVINCIBLE INVESTMENT CORPORATIONBALANCE SHEET
December 31, 2021
As ofDecember 31,
2021

June 30,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
ASSETS
Current assets:
Cash and bank deposits (Notes 7 and 19) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Cash and bank deposits in trust (Notes 7 and 19) ∙∙∙∙∙∙∙
Rental receivables ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deposits paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Prepaid expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes receivable∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Consumption taxes receivable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐current assets:
Property and equipment (Notes 8 and 9):
Buildings, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures, at cost∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Tools, furniture and fixtures, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Construction in progress∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying
facilities in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Tools, furniture and fixtures in trust, at cost ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Subtotal ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Less: Accumulated depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total property and equipment, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Intangible assets:
Leasehold rights ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total intangible assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Investments and other assets:
Investment securities (Note 20 and 25)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Guarantee deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term prepaid expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Derivatives assets (Note 21) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total investments and other assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐current assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred assets:
Investment corporation bond issuance costs∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total deferred assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL ASSETS ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥6,311,545
6,528,498
1,239,770
441,992
498,14414
268,549‐
15,288,515¥

12,759,582
6,766,557
2,293,736
153,517642,21910‐259
22,615,883$

110,933
58,82919,942
1,334
5,583
0
‐
2
196,625

19,406,379
5,294,556
1,458
1,187,082
637,580
164,167,367

19,428,985
5,294,556
1,458
1,191,356
690,038
160,525,440

168,918
46,031
12
10,357
5,999
1,395,630

33,384,159

32,459,003

282,203

235,988
2,800,865
245,560,970
472,676,409(35,048,599)
437,627,809

206,135
2,876,215
242,197,743
464,870,935(37,511,682)
427,359,252

1,792
25,0062,105,701
4,041,653(326,131)
3,715,521

10,637,811
14,536,494
25,174,306

10,637,811
14,497,257
25,135,069

92,486
126,041
218,527

17,856,387
1,362,721
494,637
16,216
22,667
19,752,630
482,554,746

17,856,387
1,372,719
379,42228,054
22,667
19,659,251
472,153,573

155,245
11,934
3,298
243
197
170,920
4,104,969

56,65256,652497,899,915

50,34950,349494,819,805

437
437
4,302,032¥$4

As ofDecember 31,
2021

June 30,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
LIABILITIESCurrent liabilities:
Accounts payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Short‐term loans payable (Notes 11 and 19) ∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of long‐term loans payable(Notes 10 and 18) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Accounts payable‐other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Accrued expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Consumption taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Advances received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deposits received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total current liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐current liabilities:
Investment corporation bonds (Notes 11 and 19) ∙∙Long‐term loans payable (Notes 11 and 19) ∙∙∙∙∙∙∙∙∙∙∙∙
Tenant leasehold and security deposits in trust(Note 19) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Derivatives liabilities (Note 21) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset retirement obligations (Note 22) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐current liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙TOTAL LIABILITIES ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙NET ASSETS (Note 13)
Unitholders’ equity:
Unitholders’ capital ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Surplus:Capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Allowance for temporary differences
Adjustment (Note 6) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other deduction of capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total deduction of capital surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Capital surplus (net)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Voluntary reserve
Retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

917,33144,228,000¥

774,133
71,786,000

$

6,730
624,11753,315,000

48,667,000

423,117

26,843
249,410605‐
597,790
11,08399,346,064

6,235
291,883
605
540,868
558,777
8,813
122,634,316

54
2,537
5
4,702
4,858
76
1,066,199

8,200,000
143,455,000

8,200,000
116,292,000

71,291
1,011,058

1,657,369

1,519,983

13,214

94,39233,197
153,439,959
252,786,023

9,729
33,422126,055,134
248,689,451

84
290
1,095,941
2,162,140

235,701,512

235,701,512

2,049,221

6,264,432

6,264,432

54,463(6,130)(6,130)(53)(5,524,006)(5,530,137)
734,294(5,524,006)(5,530,137)
734,294(48,026)(48,079)
6,384

8,753,480
9,487,774
245,189,287

9,676,221
10,410,516
246,112,028

84,126
90,5102,139,732(75,395)(75,395)
245,113,891
497,899,915

18,32518,325
246,130,354
494,819,805

159
159
2,139,891
4,302,032¥$

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

5

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the six months ended December 31, 2021
For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Operating revenue
Rental revenue－real estate (Note 14) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥
Gain on sales of properties (Note 16) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total operating revenue ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Operating expenses
Property related expenses (Note 14) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Management contract expenses (Note 15) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset management fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Directors’ compensation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset custody fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Administrative service fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total operating expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Operating income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐operating income
Interest income∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest on tax refund∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐operating income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐operating expenses
Interest expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange losses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses on investment corporation bonds∙∙∙∙∙∙∙∙∙∙∙
Amortization of investment corporation bond issuancecosts ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loss on derivatives ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐operating expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Ordinary income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income (loss) before income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes (Note 17):
Current ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Retained earnings / losses brought forward ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Unappropriated retained earnings / losses (Note 13)∙∙∙∙∙∙∙∙∙∙∙¥

3,806,176‐
3,806,176¥

5,837,847
2,568,486
8,406,334$

50,75522,33073,0854,720,815
884,731300,000
4,800
25,20349,087
162,956
6,147,595(2,341,419)

4,777,042
709,774
300,000
4,800
24,73254,720242,924
6,113,994
2,292,339

41,532
6,170
2,608
41
215
475
2,112
53,15519,929

96
‐
8,327
8,423

70
1,118
5,887
7,076

0
9
51
61

624,616
34,513
27,769602,398
40,71828,230

5,237
354
245

6,200

6,303

54

508,348
64,6381,266,088(3,599,083)(3,599,083)

596,446
10,5201,284,617
1,014,799
1,014,799

5,185
91
11,168
8,822
8,822

605
605
(3,599,688)
12,353,168
8,753,480

605
605
1,014,194
8,662,027
9,676,221

5
5
8,817
75,30884,126¥$

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

6

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CHANGES IN NET ASSETSFor the six months ended December 31, 2021
Unitholdersʹ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholdersʹ
capitalCapital surplus

Allowance fortemporarydifferences
adjustment¥

6,264,432¥(6,130)¥6,264,432¥(6,130)¥6,264,432¥(6,130)

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of yen)
Balance as of January 1, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥235,701,512¥(5,524,006)¥(5,524,006)¥(5,524,006)¥(5,530,137)¥(5,530,137)¥(5,530,137)¥

734,294¥734,294¥734,294

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Balance as of June 30, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥235,701,512

‐

‐

‐

‐

‐

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Balance as of December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥235,701,512

‐

‐

‐

Unitholdersʹ equity‐

Valuation and translation adjustments

SurplusRetainedearnings‐

Total surplus

Total unitholdersʹ
equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets¥¥(in thousands of yen)
Balance as of January 1, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

13,371,340¥

14,105,635¥

249,807,147¥(165,929)(165,929)

249,641,218

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,018,172)(1,018,172)(1,018,172)

Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,599,688)(3,599,688)(3,599,688)(1,018,172)(3,599,688)

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙(4,617,860)

Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

8,753,480(4,617,860)¥

9,487,774(4,617,860)¥

245,189,287¥

90,53390,53390,53390,53390,533(4,527,327)(75,395)¥(75,395)¥

245,113,891

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(91,452)(91,452)(91,452)(91,452)

Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,014,194

1,014,194

1,014,194

1,014,194

922,741

922,741

922,741

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

9,676,221¥

10,410,516¥

246,112,028¥

93,72093,72093,72093,72093,7201,016,462

18,325¥18,325¥

246,130,354

7

Unitholdersʹ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholdersʹ
capitalCapital surplus

Allowance fortemporarydifferences
adjustment$

54,463$(53)$

54,463$(53)

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of U.S dollars)
Balance as of July1, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $2,049,221$(48,026)$(48,026)$(48,079)$(48,079)

$

6,384

$

6,384

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

Balance as of December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $‐2,049,221‐‐

Unitholdersʹ equity‐

Valuation and translation adjustments

SurplusRetainedearnings‐

Total
unitholdersʹ
equityTotal surplus

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets$$(in thousands of U.S dollars)
Balance as of July 1, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

76,103$82,4882,131,710

$

(655)

(655)

2,131,054

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

(795)

(795)

(795)

(795)

Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

8,817

8,817

8,817

8,817

8,022

8,022

8,022

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of December 31, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

84,126$

90,510$2,139,732

$

814

814

814

814

814

8,837

159

$

159

$

2,139,891

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

8

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CASH FLOWSFor the six months ended December 31, 2021
For the six months ended
December 31,
2021

June 30,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Cash flows from operating activities:
Income (loss) before income taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥
Depreciation and amortization ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Amortization of investment corporation bond issuance costs∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange losses (gains) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loss (gain) on derivatives ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in rental receivables ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in deposits paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in receivable income taxes∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease (increase) in consumption taxes receivable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accounts payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in consumption taxes payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accounts payable‐other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in accrued expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in advances received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in deposits received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Decrease in property and equipment in trust due to sale ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Subtotal ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest income received ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Income taxes paid ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,599,083)
3,889,784
6,200
508,348(96)
652,386
51
64,638478,137(85,458)1(268,549)
17,621(578,858)
16,542(89,059)
17,773(59)0
129,029
1,159,352
96(655,468)(605)¥

1,014,799
3,850,520
6,303
596,446(70)
630,628
9,934
10,520(1,053,965)
288,4753
365,052(91,712)444,366(17,672)
39,458(39,012)(2,270)6,996,756(100,064)
12,948,498
70(627,312)
(605)

$

8,822
33,476
54
5,185
（0）
5,482
86
91
(9,163)
2,508
0
3,173
(797)
3,863
(153)
343
(339)
(19)
60,830(869)
112,576
0(5,453)(5)

Net cash provided by operating activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

503,374

12,320,651

107,117

Cash flows from investing activities:
Payments into time deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from withdrawal of time deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Purchases of property and equipment ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Purchases of property and equipment in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of tenant leasehold and security deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(2,000,000)
1,328,500(53,356)(453,398)(53,590)
38,922‐‐(1,430,000)
630,000(79,337)(511,405)(183,308)
46,056(9,998)(23,203)(12,432)
5,477
(689)
(4,446)(1,593)
400
(86)
(201)

Net cash used in investing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,192,923)(1,561,196)(13,573)

Cash flows from financing activities:
Proceeds from short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of short‐term loans payable∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Proceeds from long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Repayments of long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments for loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Payments of distributions of earnings∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

11,835,000(2,454,000)‐(22,771,000)(237,904)(1,019,396)

61,091,000(33,533,000)
1,582,000(33,393,000)(527,105)(93,221)531,133(291,540)
13,754(290,323)(4,582)(810)

Net cash provided by (used in) financing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(14,647,300)(4,873,327)(42,369)

Effect of exchange rate change on cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net increase (decrease) in cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Cash and cash equivalents at beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(51)(15,336,901)
26,176,945(32)
5,886,095
10,840,044

051,174
94,244

Cash and cash equivalents at end of period (Note 7) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

10,840,044¥

16,726,139$

145,419

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

9

INVINCIBLE INVESTMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS
As of and for the six months ended December 31, 2021

1. Organization
Invincible Investment Corporation (the“Company”), a real estate investment corporation, was incorporated on January 18, 2002, underthe Act on Investment Trusts and Investment Corporations of Japan (the“Investment Trust Act”) with initial capital of ¥200 million.
The Company is externally managed by a registered asset management company, Consonant Investment Management Co., Ltd. (the“Asset Manager”). The Asset Manager is currently owned 100% by Calliope Godo Kaisha (Calliope). The Company was formed toinvest primarily in properties in Japan.
On May 17, 2004, the Company raised ¥3,377,250 thousand through an initial public offering of 9,000 investment units. As a“comprehensive investment REIT focusing on the Tokyo metropolitan area and on residential properties,” the Company was listed on
the Osaka Securities Exchange in May 2004.
On February 7, 2005, the Company completed its second public offering of 10,650 investment units at a price of ¥369,734 per unit inconnection with a public offering in Japan.
On July 31, 2006, the Company completed its third public offering of 25,000 investment units at a price of ¥332,045 per unit in connection
with a public offering in Japan. The Company was listed on the J‐REIT market of the Tokyo Stock Exchange in August 2006 (in order tofocus trading on one securities exchange and reduce administrative tasks and costs accompanying a duplicate listing, the Company
delisted from the Osaka Securities Exchange on October 6, 2007).
Effective on February 1, 2010, the Company executed a five‐to‐one unit split and 215,596 investment units were issued in connection
with the unit split. Effective on the same day, the Company also merged with LCP Investment Corporation (LCP) and allocated 367,200
investment units at a ratio of 4 units (post‐unit split) of the Company per one investment unit of LCP. As a result, investment units issued
and outstanding were 636,695 units as of February 1, 2010.
On July 29, 2011, the Company completed a third party allotment of 711,597 investment units at a price of ¥9,837 per unit.
On December 20, 2013, the Company completed a third party allotment of 224,887 investment units at a price of ¥13,340 per unit.
On July 16, 2014, the Company completed its fourth public offering totaling 1,040,000 new investment units at a price of ¥21,873 per unit.
527,322 of such units were issued in connection with a Domestic Public Offering, and the remaining 512,678 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 13,
2014, the Company issued 55,507 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥23.9 billion were used to repay the Company’s outstanding short term borrowings and in connection withthe acquisition of 18 properties during this fiscal period.
On July 15, 2015, the Company completed its fifth public offering totaling 500,000 new investment units at a price of ¥57,817 per unit.
211,250 of such units were issued in connection with a Domestic Public Offering, and the remaining 288,750 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 12,
2015, the Company issued 25,000 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥29.3 billion were used to repay the Company’s outstanding long term borrowings and in connection withthe acquisition of 14 properties during this fiscal period.
On March 30, 2016, the Company completed its sixth public offering totaling 459,512 new investment units at a price ¥81,217 per unit.
194,144 of such units were issued in connection with a Domestic Public Offering, and the remaining 265,368 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On April 27, 2016,
the Company issued 22,626 investment units domestically in connection with the exercise of an over‐allotment option. Net proceeds ofapproximately ¥37.9 billion were used to repay the Company’s outstanding long term borrowing and in connection with the acquisitionof 6 properties during this fiscal period.
On March 13, 2017, the Company completed its seventh public offering totaling 185,000 new investment units at a price ¥46,897 per unit
in connection with Japanese Primary Offering.

10

On October 12, 2017, the Company completed its eighth public offering totaling 887,959 new investment units at a price ¥44,118 per unit.
515,017 of such units were issued in connection with a Domestic Public Offering, and the remaining 372,942 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On November 1,
2017, the Company issued 44,398 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥39.8 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 preferred security during this fiscal period.
On August 1, 2018, the Company completed its ninth public offering totaling 909,524 new investment units at a price ¥45,776 per unit.
432,024 of such units were issued in connection with a Domestic Public Offering, and the remaining 477,500 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 21,
2018, the Company issued 45,476 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥42.2 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 TK investment during this fiscal period.
On July 18, 2019, the Company completed its ninth public offering totaling 409,524 new investment units at a price ¥56,939 per unit.
194,524 of such units were issued in connection with a Domestic Public Offering, and the remaining 215,000 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 15,
2019, the Company issued 20,476 investment units domestically in connection with the exercise of an over‐allotment option. Net
proceeds of approximately ¥24.4 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 18 properties during this fiscal period.

2. Summary of Significant Accounting Policies(a) Basis of Presentation
The Company maintains its accounts and records in conformity with accounting principles and practices generally accepted in Japan(“Japanese GAAP”), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial Instruments
and Exchange Act of Japan, and other related regulations, which are different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The financial statements are prepared based on the Japanese audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and filed with the Kanto Local Finance Bureau as required by the Financial Instruments and Exchange
Act of Japan. In preparing the accompanying financial statements, certain information in the notes has been added and certain
reclassifications have been made from the financial statements issued domestically for the convenience of the readers outside Japan.
The financial statements are not intended to present the financial position and the results of operations in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan.
The Company’s fiscal period is a six‐month period, which ends at the end of June and December of each year.

Amounts less than ¥1 thousand and US$1 thousand have been rounded down. As a result, the totals shown in the financial statements
and notes thereto do not necessarily agree with the sum of the individual amounts.
The Company does not prepare consolidated financial statements as it has no subsidiaries.
(b) Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short‐term investments which are highly liquid and readily convertible
to cash, have a low risk of price fluctuation, and mature within three months from the date of acquisition.
(c) Valuation standard and method for shares in an Affiliated Company
Shares in an Affiliated Company are recorded at cost being determined by the moving average method.
(d) Valuation standard and method for Claims and obligations from derivative transactions
Claims and obligations from derivative transactions are evaluated at the market values.
(e) Property and Equipment

11Property and equipment are recorded at cost. Depreciation of property and equipment, except for land, is calculated on a straight‐line
basis over the estimated useful lives of the assets as stated below:

For the six months ended
December 31, 2021

Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

16‐50

Buildings and accompanying facilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5‐29

Structures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

20

Tools, furniture and fixtures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3‐18

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

7‐67

Buildings and accompanying facilities in trust ∙∙∙∙∙∙∙∙∙∙∙

3‐33

Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

10‐55

Tools, furniture and fixtures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

2‐20

(f)

Intangible Assets

Amortization of a domestic term leasehold interest for business use is calculated by the straight‐line method over the lease term.
(g) Long‐term Prepaid Expenses
Long‐term prepaid expenses are amortized on a straight‐line basis.
(h) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the straight‐line method over the period through the redemption of thebonds.
(i)

Allowance for Doubtful Accounts

Allowance for doubtful accounts is provided based on past experience for normal receivables and on a valuation of any receivables fromcompanies and individuals with financial difficulties.
(j)

Conversion of assets and liabilities in foreign currency into Japanese yen

Receivables and payables denominated in foreign currencies are translated into yen at the exchange rate in effect at the balance sheet
date, and differences arising from the translation are included in the statements of income.
(k) Impairment of Fixed Assets
An assessment for impairment is carried out on an asset or group of assets, such as fixed assets, intangible assets and investments,
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the asset or group of assets isdeemed to be impaired, an impairment loss is recognized for the difference between the carrying amount and the recoverable value ofthe asset or group of assets using the discounted cash flow model.
(l)

Accounting Treatment of Trust Beneficiary Interests in Real Estate Trusts

For trust beneficiary interests in real estate trusts, which are commonly utilized to obtain ownership in investment properties in Japanand through which the Company holds all of its real estate, all assets and liabilities with respect to assets in trust, as well as all income
generated and expenses incurred with respect to assets in trust, are recorded in the relevant accounts of the balance sheet and statementof income and retained earnings of the Company in proportion to the percentage that such trust beneficiary interest represents. Certain
material accounts with respect to assets and liabilities in trust are presented separately from other accounts in the balance sheets of theCompany.
(m) Income Taxes
Deferred tax assets and liabilities are computed based on the temporary differences between the financial statement and income tax
basis of assets and liabilities using the applicable statutory tax rate.
(n) Consumption Taxes

12

Consumption taxes withheld and consumption taxes paid are not included in the statement of income and retained earnings.
Consumption taxes paid are generally offset against the balance of consumption taxes withheld. As such, the excess of payments overamounts withheld are included in current assets and the excess of amounts withheld over payments are included in current liabilities as
the case may be.
(o) Taxes on Property and Equipment
Property and equipment are subject to various taxes, such as property taxes and urban planning taxes on an annual basis. An owner of aproperty is registered in the record maintained by the local government in each jurisdiction, and such taxes are imposed on the ownerregistered in the record as of January 1 of each year based on the assessment made by the local government.
Under the above tax rules, a seller of a property at the time of disposal is liable for these taxes on the property from the date of disposal tothe end of the calendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued tax
liabilities and the amount of settlement reflects this adjustment. For the purchaser, a portion of such taxes calculated from the acquisition
date to the end of the calendar year is capitalized as a cost of the property in accordance with Japanese GAAP. In subsequent calendar
years, half of such taxes on property and equipment for each calendar year are charged as operating expenses in each fiscal period.
No taxes on property and equipment were capitalized for the six months ended December 31, 2021.
(p) Revenue Recognition
The details of main performance obligations concerning revenue generated from contracts between the Company and its customers andthe ordinary time to fulfil said performance obligations (ordinary time to recognize revenue) are as follows.
1.Sale of real estate property
Revenue from sale of real estate properties is recorded as revenue when a buyer who is a customer obtains control over a real estate
property following the seller’s fulfilment of its obligation to hand over the property which is stipulated in the contract associated withthe sale of real estate property(q) Method of hedge accounting
1.Method of hedge accounting
Deferred hedge accounting is applied.
2.Hedging instruments and hedged items
Hedging instruments : Interest rate swaps Hedged items : Interest rates on loans payable
3.Hedging policy
The Company enters into certain derivative transactions in accordance with its financial policy in order to manage risks, which isprovided in the Articles of Incorporation.
4.Method for assessing hedge effectiveness
The Company evaluates hedge effectiveness by comparing the cumulative changes in cash flow of hedging instruments and thehedged items and assessing the ratio between the changes.

3. Significant accounting estimates
1. Evaluation of fixed assets(1)Amounts recorded in the financial statements are as follows
As ofDecember 31,
2021

December 31,
2021(in thousands of yen)(in thousands of
U.S. dollars)

Impairment loss ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ∙∙∙∙∙∙ ¥‐ $‐Property and equipment∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ∙∙∙∙∙∙ ¥451,804 $

3,928

13

Although no impairment loss was recorded in this fiscal period, the Company has recognized the accounting estimates related to
impairment loss as a disclosure item in consideration of the possibility that it may have a material impact on the financial statements forthe next fiscal period.
(2)Information on the nature of significant accounting estimates for identified items
For real estate for rent, etc. owned by the Company, it is necessary to determine whether there are any indications that an impairment
loss may have occurred, and if so, to determine whether an impairment loss should be recognized. For the Companyʹs real estate for rent,
etc., no impairment loss is recognized because the undiscounted future cash flow exceeds the carrying amount of the real estate for rent.
In estimating future cash flows, the Company estimates the impact of the new coronavirus, assuming that the impact of the spread of
the new coronavirus will continue in 2022 and the business environment will gradually recover after 2023. However, it is difficult topredict with certainty when the spread of the new coronavirus will be eliminated and the extent of the impact, any change in the spreadof the new coronavirus could have an impact on the above estimate and an impairment loss may be incurred.

4. Changes in Accounting Policy
1. Application of Accounting Standard for Revenue Recognition, Etc.
The Company decided to apply the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29 issued on March 31, 2020.
referred to below as “the Revenue Recognition Accounting Standard”), etc. from the beginning of the current fiscal period, andrecognize revenue based on the amount which is expected to be received in exchange for the promised goods and services when thecontrol of such goods and services is transferred to customers. This has no impact on the financial statement for the current fiscal period.
Moreover, in accordance with the transitional treatment stipulated in Paragraph 89‐3 of the Revenue Recognition Accounting Standard,
the notes “related to revenue recognition” for the previous fiscal period are not stated.
2. Application of Accounting Standard for Fair Value Measurement, Etc.
The Company decided to apply the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019.
referred to below as “the Fair Value Measurement Accounting Standard”), etc. from the beginning of the current fiscal period, and apply
the new accounting policy stipulated in the Fair Value Measurement Accounting Standard, etc. over the future in accordance with thetransitional treatment stipulated in Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44‐2 of the“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10 issued on July 4, 2019). This has no impact on the financial
statement for the current fiscal period. In accordance with Article 2, paragraph 5 of the Supplementary Provision of the “Cabinet Office
Order to Amend the Regulation on Terminology, Forms and Preparation Methods of Financial Statements”(Cabinet Office Order No. 61,
September 24, 2021), the matters listed in Article 8‐6‐2, paragraph 1, item 3 of the amended Regulation on Terminology, Forms andPreparation Methods of Financial Statements are omitted.

5. U.S. Dollar Amounts
The Company maintains its accounting records in Japanese yen. The U.S. dollar amounts included in the accompanying financial
statements and notes there to represent the arithmetical result of translating Japanese yen into U.S. dollars at the rate of ¥115.02 = US$1,
the effective rate of exchange prevailing at December 31, 2021. The inclusion of such U.S. dollar amounts associated with the fiscal six
months ended December 31, 2021 is solely for the convenience of readers outside Japan. Such translations should not be construed as
representations that the Japanese yen amounts represent, or have been, or could be converted into, U.S. dollars at that or any other rate.

6. Allowance for temporary differences adjustment
For the six months ended June 30, 2021
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
(a). Reason, related assets and amounts(in thousands of yen)

14

Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringrights in trust

Amortization

EndingduringReason for reversal

balanceperiodperiodLeaseholdReversalofleasehold rights in¥ (131,332)¥ (6,130)‐‐¥ (6,130)¥ (131,332)¥ (6,130)‐‐¥ (6,130)

‐

trust

Total

(b). Method of reversal(i ) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

For the six months ended December 31, 2021
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
(a). Reason, related assets and amounts(in thousands of yen)
Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringrights in trust

Amortization

EndingduringbalanceperiodperiodLeaseholdReversalReason for reversalofleasehold rights in¥ (131,332)¥ (6,130)‐‐¥ (6,130)¥ (131,332)¥ (6,130)‐‐¥ (6,130)

‐

trust

Total

(in thousands of U.S dollars)
Allowance
Related assets,

Reason for

InitialBeginning

set asideetc.

occurrence

amountbalanceduringrights in trust

Amortization

EndingduringbalanceperiodperiodLeaseholdReversalReason for reversalofleasehold rights in$ (1,141)$ (53)-‐$ (53)$ (1,141)$ (53)-‐$ (53)

‐

trust

Total

(b). Method of reversal(i ) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

15

7. Cash and Cash Equivalents
Cash and cash equivalents shown in the statements of cash flows consist of the following balance sheet items.
As ofJune 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Time deposits with maturities of more than¥
three months ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Cash and cash equivalents ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

6,311,545
6,528,498¥¥

12,759,582
6,766,557$$

110,933
58,829(2,000,000)¥(2,800,000)$(24,343)

10,840,044¥

16,726,139$

145,419

8. Property and Equipment
The following tables show the summary of movement in property and equipment for the six months ended December 31, 2021.
At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Net property andequipment

Depreciation forthe period(in thousands of yen)
Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

19,406,379¥

Buildings and accompanying facilities ∙∙∙∙∙

5,294,556‐‐

5,294,556

800,261

152,717Structures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,458

‐

‐

1,458

118

32

1,340

Tools, furniture and fixtures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,187,082

4,273

‐

1,191,356

292,045

58,509899,310

Leasehold rights ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

10,637,811‐‐

10,637,811‐‐

10,637,811

Construction in progress ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

637,580

59,4336,974

690,038‐‐

690,038

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities
in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

164,167,367

97,3803,739,307

160,525,440

22,562,657

2,260,023

137,962,783

33,384,159

262,734

1,187,891

32,459,003

11,144,094

928,719

21,314,908

235,988

1,180

31,032

206,135

100,953

5,448

105,182

Tools, furniture and fixtures in trust ∙∙∙∙∙∙∙∙∙∙

2,800,865

98,624

23,2742,876,215

1,461,143

187,185

1,415,071

Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

245,560,970‐

3,363,226

242,197,743‐‐

242,197,743

Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

14,934,534‐‐

14,934,534

437,277

39,237

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

498,248,756¥

22,605546,232¥¥‐

8,351,707¥¥

19,428,985

490,443,281¥

1,150,408¥

37,948,960¥¥

218,645

3,850,520¥

18,278,576
4,494,295

14,497,257¥

452,494,321

At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of U.S dollars)
Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

168,721$

Buildings and accompanying facilities ∙∙∙∙∙

46,031‐‐

46,031

6,957

1,327

Structures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

12

‐

‐

12

1

‐

11

Tools, furniture and fixtures ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

10,32037‐

10,357

2,539

508

7,818

Leasehold rights ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

92,486‐‐92,486‐‐92,486

Construction in progress ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5,543

516

60

5,999

‐

‐

5,999

Buildings in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Buildings and accompanying facilities
in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Structures in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,427,294

846

32,5101,395,630

196,162

19,648

1,199,467

290,246

2,284

10,327282,203

96,888

8,074

185,314

2,051

10

269

1,792

877

47

914

Tools, furniture and fixtures in trust ∙∙∙∙∙∙∙∙∙∙

24,351857

202

25,006

12,703

1,627

12,302Land in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

2,134,941‐

29,2402,105,701‐‐

2,105,701

Leasehold rights in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

129,842‐‐

129,842

3,801

341

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

4,331,844

$

196

4,749

$

$

‐

72,610$$168,918

4,263,982$$

10,001

329,933

$

$

1,900

33,476$

158,916
39,074

126,041$3,934,049

9.Fair Value of Investment and Rental Properties
The following tables show the net book value and the fair value of the investment and rental properties in the aggregate for the six
months ended June 30, 2021 and December 31, 2021.

16

Residential
As of / For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

42,293,729

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(295,696)
41,998,033

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

55,024,000

41,998,033¥

365,136$(4,304,561)
37,693,472
49,803,000¥(37,424)
327,712432,994$

Retail facilities
As of / For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

4,689,226

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(27,797)
4,661,429

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

6,040,000

4,661,429¥

40,527$(3,011,821)
1,649,608
2,380,000¥(26,185)
14,341
20,692$Hotel
As of / For the six months ended

June 30,
2021

December 31,
2021(in thousands of yen)

December 31,
2021(in thousands of
U.S. dollars)

Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

418,570,646

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,065,573)
415,505,072

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

471,486,268¥

415,505,072

3,612,459$(3,043,871)
412,461,201¥

471,512,500(26,463)
3,585,995
4,099,395$

Total
As of / For the six months ended

June 30,
2021

December 31,
2021(in thousands of yen)

December 31,
2021(in thousands of
U.S. dollars)

Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

465,553,602

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,389,066)
462,164,535

Fair value ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

532,550,268¥

462,164,535$(10,360,253)
451,804,282¥

523,695,500

4,018,123(90,073)
3,928,049$

4,553,082

Notes:
1.Fair value has been determined based on the appraisals or research provided by independent real estate appraisers. Six residential properties , for which the disposition agreement
was made dated December 8, 2021,were valued at the disposition price2.For rental revenues and expenses for the six months ended June 30, 2021 and December 31, 2021, please refer to “Note 14: Rent Revenues－Real Estate and Expenses Related toProperty Rental Business“

10.Investment corporation bonds
The following table shows the details of investment corporation bonds for the six months ended December 31, 2021.
For the six months ended December 31, 2021

17

Beginning

EndingBeginning

EndingInterestbalancebalancebalancebalancerate (%)(in thousands of yen)
1st unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2023)(1)(2)
2nd unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2028) (1)(2)(in thousands of U.S. dollars)

1,000,000

1,000,000

8,694

8,694

0.400

1,000,000

1,000,000

8,694

8,694

0.800

2,000,000

2,000,000

17,38817,3880.550

1,000,000

1,000,000

8,694

8,694

0.480

2,000,000

2,000,000

17,38817,3880.900

1,200,000

1,200,000

10,432

10,4320.850

8,200,000

8,200,000

71,291

71,291

3rd unsecured investment corporation bond(Issued on October 12, 2018 and due on October 12, 2023)(1)(3)
4th unsecured investment corporation bond(Issued on October 28, 2019 and due on October 28, 2024)(1)(4)
5th unsecured investment corporation bond(Issued on October 28, 2019 and due on October 26, 2029)(1)(4)
6th unsecured investment corporation bond(Issued on March 13, 2020 and due on March 13, 2030)(1)(3)
Total investment corporation bonds
Notes:(1)

The bonds were issued with pari passu conditions among specified investment corporation bonds.

(2)

The funds are mainly used to acquire properties in trust.

(3)

The funds are mainly used to repay existing borrowing.

(4)

The funds are mainly used for capital expenditures(5)

Repayment schedule of investment corporation bonds for the next five years after each balance sheet date are as follows:

As ofWithin 1 year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

December 31,
2021

December 31,
2021(in thousands of yen)(in thousands of
U.S. dollars)‐$‐

1‐2 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3,000,000

26,082

2‐3 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,000,000

8,694

3‐4 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐‐

4‐5 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

18

11. Loans Payable
The following table shows the details of loans payable for the six months ended December 31, 2021.
For the six months ended December 31, 2021

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MizuhoBank, Ltd.

5,992,000‐

5,992,000‐

52,095‐52,095‐0.335

16‐Jul‐21

MUFG
Bank, Ltd.

6,660,000‐

6,660,000‐

57,902‐

57,902‐0.335

16‐Jul‐21

Sumitomo
Mitsui
Banking
Corporation

4,442,000‐

4,442,000‐

38,619‐38,619‐0.335

16‐Jul‐21

Sumitomo
MitsuiTrust Bank,
Limited

2,670,000‐

2,670,000‐

23,213‐

23,213‐0.335

16‐Jul‐21

Citibank,
N.A., Tokyo
Branch3,000,000‐

3,000,000‐

26,082‐

26,082‐0.335

16‐Jul‐21

ShinseiBank,
Limited.

3,330,000‐

3,330,000‐

28,951‐

28,951‐

0.335

16‐Jul‐21

ResonaBank,
Limited.

1,335,000‐

1,335,000‐

11,606‐

11,606‐0.335

16‐Jul‐21

Developme
nt Bank ofJapan Inc.

666,000‐

666,000

‐

5,790

‐

5,790

‐

0.335

20‐Jul‐21

Sumitomo
Mitsui
Banking
Corporation

3,000,000‐

3,000,000‐

26,082‐

26,082‐

0.335

14‐Sep‐21

MizuhoBank, Ltd.

328,500‐

328,500

‐

2,856

‐

2,856

‐

0.335

13‐Oct‐21

Citibank,
N.A., Tokyo
Branch

355,000‐

355,000

‐

3,086

‐

3,086

‐

0.335

13‐Oct‐21

ShinseiBank,
Limited.

355,000‐

355,000

‐

3,086

‐

3,086

‐

0.335

13‐Oct‐21

ResonaBank,
Limited.

334,000‐

334,000

‐

2,903

‐

2,903

‐

0.335

13‐Oct‐21

The
NomuraTrust andBankingCo., Ltd.

167,000‐

167,000

‐

1,451

‐

1,451

‐

0.335

13‐Oct‐21

Sumitomo
MitsuiTrust Bank,
Limited328,500‐

328,500

‐

2,856

‐

2,856

‐

0.335

13‐Oct‐21

Sumitomo
MitsuiTrust Bank,
Limited

3,400,000‐‐

3,400,000

29,560‐‐29,5600.335

22‐Jan‐22

MUFG
Bank, Ltd.

850,000‐‐

850,000

7,390

‐

‐

7,390

0.335

22‐Jan‐22

MizuhoBank, Ltd.

1,215,500‐‐

1,215,500

10,567‐‐

10,5670.335

30‐Mar‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

19Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

199,000‐‐

199,000

1,730

‐

‐

1,730

0.335

30‐Mar‐22

Sumitomo
MitsuiTrust Bank,
Limited

447,500‐‐

447,500

3,890

‐

‐

3,890

0.335

30‐Mar‐22

ShinseiBank,
Limited.

25,000‐‐25,000

217

‐

‐

217

0.335

30‐Mar‐22

The Bank ofFukuoka,
Ltd.

525,000‐‐

525,000

4,564

‐

‐

4,564

0.335

30‐Mar‐22

The
NomuraTrust andBankingCo., Ltd.

270,000‐‐

270,000

2,347

‐

‐

2,347

0.335

30‐Mar‐22

The
Shizuoka
Bank, Ltd.

375,000‐‐

375,000

3,260

‐

‐

3,260

0.335

30‐Mar‐22

MizuhoBank, Ltd.

902,000‐‐

902,000

7,842

‐

‐

7,842

0.335

30‐Mar‐22

MUFG
Bank, Ltd.

692,000‐‐

692,000

6,016

‐

‐

6,016

0.335

30‐Mar‐22

Sumitomo
Mitsui
Banking
Corporation

681,000‐‐

681,000

5,920

‐

‐

5,920

0.335

30‐Mar‐22

Sumitomo
MitsuiTrust Bank,
Limited

617,000‐‐

617,000

5,364

‐

‐

5,364

0.335

30‐Mar‐22

Developme
nt Bank ofJapan Inc.

147,000‐‐

147,000

1,278

‐

‐

1,278

0.335

30‐Mar‐22

Citibank,
N.A., Tokyo
Branch349,000‐‐

349,000

3,034

‐

‐

3,034

0.335

15‐Jun‐22

ResonaBank,
Limited.

570,000‐

570,000

‐

4,955

‐

4,955

‐

0.325

30‐Dec‐21

MizuhoBank, Ltd.

‐5,992,000‐

5,992,000‐

52,095‐52,0950.335

16‐Jul‐22

MUFG
Bank, Ltd.

‐6,660,000‐

6,660,000‐

57,902‐

57,9020.335

16‐Jul‐22

Sumitomo
Mitsui
Banking
Corporation‐

4,442,000‐

4,442,000‐

38,619‐38,6190.335

16‐Jul‐22

Sumitomo
MitsuiTrust Bank,
Limited

‐2,670,000‐

2,670,000‐

23,213‐

23,2130.335

16‐Jul‐22

Citibank,
N.A., Tokyo
Branch‐3,000,000‐

3,000,000‐

26,082‐

26,0820.335

16‐Jul‐22

ShinseiBank,
Limited.

‐3,330,000‐

3,330,000‐

28,951‐

28,951

0.335

16‐Jul‐22

ResonaBank,
Limited.

‐1,335,000‐

1,335,000‐

11,606‐

11,6060.335

16‐Jul‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed20Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Short‐termloanspayableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MizuhoBank, Ltd.

‐2,442,000‐

2,442,000‐

21,231‐

21,231

0.335

16‐Jul‐22

MUFG
Bank, Ltd.

‐2,220,000‐

2,220,000‐

19,300‐19,3000.335

16‐Jul‐22

Sumitomo
Mitsui
Banking
Corporation‐

1,998,000‐

1,998,000‐

17,370‐17,3700.335

16‐Jul‐22

Sumitomo
MitsuiTrust Bank,
Limited

‐890,000‐

890,000

‐

7,737

‐

7,737

0.335

16‐Jul‐22

Citibank,
N.A., Tokyo
Branch‐1,000,000‐

1,000,000

‐

8,694

‐

8,694

0.335

16‐Jul‐22

ShinseiBank,
Limited.

‐1,110,000‐

1,110,000

‐

9,650

‐

9,650

0.335

16‐Jul‐22

Developme
nt Bank ofJapan Inc.

‐

666,000‐

666,000

‐

5,790

‐

5,790

0.335

16‐Jul‐22

MizuhoBank, Ltd.

‐766,000‐

766,000

‐

6,659

‐

6,659

0.335

16‐Jul‐22

MUFG
Bank, Ltd.

‐

467,000‐

467,000

‐

4,060

‐

4,060

0.335

16‐Jul‐22

Sumitomo
Mitsui
Banking
Corporation‐

766,000‐

766,000

‐

6,659

‐

6,659

0.335

16‐Jul‐22

Citibank,
N.A., Tokyo
Branch‐120,000‐

120,000

‐

1,043

‐

1,043

0.335

16‐Jul‐22

ShinseiBank,
Limited.

‐150,000‐

150,000

‐

1,304

‐

1,304

0.335

16‐Jul‐22

Sumitomo
Mitsui
Banking
Corporation‐

3,000,000‐

3,000,000‐

26,082‐

26,082

0.335

14‐Sep‐22

MizuhoBank, Ltd.

‐2,521,500‐

2,521,500‐

21,922‐

21,922

0.335

27‐Sep‐22

MUFG
Bank, Ltd.

‐2,133,000‐

2,133,000‐

18,544‐

18,5440.335

27‐Sep‐22

Sumitomo
Mitsui
Banking
Corporation‐

2,521,500‐

2,521,500‐

21,922‐

21,922

0.335

27‐Sep‐22

Sumitomo
MitsuiTrust Bank,
Limited‐1,000,000‐

1,000,000

‐

8,694

‐

8,694

0.335

27‐Sep‐22

ShinseiBank,
Limited.

‐684,000‐

684,000

‐

5,946

‐

5,946

0.335

27‐Sep‐22

Developme
nt Bank ofJapan Inc.

‐

500,000‐

500,000

‐

4,347

‐

4,347

0.335

27‐Sep‐22

The
NomuraTrust andBankingCo., Ltd.

‐

137,000‐

137,000

‐

1,191

‐

1,191

0.335

27‐Sep‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

21

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Increase

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MizuhoBank, Ltd.

‐328,500‐

328,500

‐

2,856

‐

2,856

0.335

27‐Sep‐22

Sumitomo
MitsuiTrust Bank,
Limited‐328,500‐

328,500

‐

2,856

‐

2,856

0.335

27‐Sep‐22

ShinseiBank,
Limited.

‐560,000‐

560,000

‐

4,868

‐

4,868

0.335

27‐Sep‐22

ResonaBank,
Limited.

‐667,000‐

667,000

‐

5,798

‐

5,798

0.335

27‐Sep‐22

The
NomuraTrust andBankingCo., Ltd.

‐

320,000‐

320,000

‐

2,782

‐

2,782

0.335

27‐Sep‐22

The Bank ofFukuoka,Ltd.

‐150,000‐

150,000

‐

1,304

‐

1,304

0.335

27‐Sep‐22

MizuhoBank, Ltd.

‐

190,000‐

190,000

‐

1,651

‐

1,651

0.335

27‐Sep‐22

MUFG
Bank, Ltd.

‐

146,000‐

146,000

‐

1,269

‐

1,269

0.335

27‐Sep‐22

Sumitomo
Mitsui
Banking
Corporation‐

143,000‐

143,000

‐

1,243

‐

1,243

0.335

27‐Sep‐22

Sumitomo
MitsuiTrust Bank,
Limited

‐130,000‐

130,000

‐

1,130

‐

1,130

0.335

27‐Sep‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

Short‐termloanspayableLong‐term
loans
payableDevelopme
nt Bank ofJapan Inc.

‐

30,000‐30,000

‐

260

‐

260

0.335

27‐Sep‐22

Citibank,
N.A., Tokyo
Branch‐1,256,000‐

1,256,000‐

10,919‐10,9190.335

27‐Sep‐22

MizuhoBank, Ltd.

‐4,321,000‐

4,321,000‐

37,567‐37,5670.335

29‐Nov‐22

Total
short‐termloanspayable44,228,000

61,091,000

33,533,000

71,786,000

384,524

531,133

291,540

624,117

The Tokyo
Star Bank,
Limited

1,582,000‐

1,582,000‐

13,754‐

13,754‐0.685

20‐Jul‐21

MizuhoBank, Ltd.

1,733,000‐‐

1,733,000

15,066‐‐

15,0660.685

14‐Mar‐22

ResonaBank,
Limited.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.685

14‐Mar‐22

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.685

14‐Mar‐22

The
NomuraTrust andBankingCo., Ltd.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.685

14‐Mar‐22

AEON
Bank, Ltd.

900,000‐‐

900,000

7,824

‐

‐

7,824

0.685

14‐Mar‐22

22Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

The Towa
Bank, Ltd.

253,000‐‐

253,000

2,199

‐

‐

2,199

0.685

14‐Mar‐22

The
Shizuoka
Bank, Ltd.

200,000‐‐

200,000

1,738

‐

‐

1,738

0.685

14‐Mar‐22

The Dai‐ichi
Life
Insurancecompany,
Limited

500,000‐‐

500,000

4,347

‐

‐

4,347

0.685

14‐Mar‐22

The Gunma
Bank, Ltd.

165,000‐‐

165,000

1,434

‐

‐

1,434

0.685

14‐Mar‐22

MizuhoBank, Ltd.

4,321,000‐

4,321,000‐

37,567‐37,567‐0.625

29‐Nov‐21

The Dai‐ichi
Life
Insurancecompany,
Limited

2,843,000‐

2,843,000‐

24,717‐

24,717‐0.625

29‐Nov‐21

ShinseiBank,
Limited.

355,000‐

355,000

‐

3,086

‐

3,086

‐

0.485

13‐Oct‐21

Citibank,
N.A., Tokyo
Branch

355,000‐

355,000

‐

3,086

‐

3,086

‐

0.485

13‐Oct‐21

ResonaBank,
Limited.

333,000‐

333,000

‐

2,895

‐

2,895

‐

0.485

13‐Oct‐21

The Bank ofFukuoka,Ltd.

300,000‐

300,000

‐

2,608

‐

2,608

‐

0.485

13‐Oct‐21

AEON
Bank, Ltd.

190,000‐

190,000

‐

1,651

‐

1,651

‐

0.485

13‐Oct‐21

The
NomuraTrust andBankingCo., Ltd.

167,000‐

167,000

‐

1,451

‐

1,451

‐

0.485

13‐Oct‐21

The
Hiroshima
Bank, Ltd.

167,000‐

167,000

‐

1,451

‐

1,451

‐

0.485

13‐Oct‐21

MizuhoBank, Ltd.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.685

13‐Oct‐22

Sumitomo
MitsuiTrust Bank,
Limited

500,000‐‐

500,000

4,347

‐

‐

4,347

0.685

13‐Oct‐22

Sumitomo
Mitsui
Banking
Corporation

500,000‐‐

500,000

4,347

‐

‐

4,347

0.685

13‐Oct‐22

ShinseiBank,
Limited.

355,000‐‐

355,000

3,086

‐

‐

3,086

0.685

13‐Oct‐22

Citibank,
N.A., Tokyo
Branch

355,000‐‐

355,000

3,086

‐

‐

3,086

0.685

13‐Oct‐22

ResonaBank,
Limited.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.685

13‐Oct‐22

Developme
nt Bank ofJapan Inc.

1,500,000‐‐

1,500,000

13,041‐‐

13,041

0.685

13‐Oct‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

23

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

The Bank ofFukuoka,Ltd.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.685

13‐Oct‐22

AEON
Bank, Ltd.

190,000‐‐

190,000

1,651

‐

‐

1,651

0.685

13‐Oct‐22

The
NomuraTrust andBankingCo., Ltd.

166,000‐‐

166,000

1,443

‐

‐

1,443

0.685

13‐Oct‐22

The
Hiroshima
Bank, Ltd.

166,000‐‐

166,000

1,443

‐

‐

1,443

0.685

13‐Oct‐22

The Dai‐ichi
Life
Insurancecompany,
Limited

500,000‐‐

500,000

4,347

‐

‐

4,347

0.685

13‐Oct‐22

MizuhoBank, Ltd.

1,250,000‐‐

1,250,000

10,867‐‐

10,867

0.785

13‐Oct‐23

Sumitomo
MitsuiTrust Bank,
Limited

1,065,000‐‐

1,065,000

9,259

‐

‐

9,259

0.785

13‐Oct‐23

Sumitomo
Mitsui
Banking
Corporation

1,250,000‐‐

1,250,000

10,867‐‐

10,867

0.785

13‐Oct‐23

MizuhoBank, Ltd.

1,250,000‐‐

1,250,000

10,867‐‐

10,8670.885

11‐Oct‐24

Sumitomo
MitsuiTrust Bank,
Limited

1,060,000‐‐

1,060,000

9,215

‐

‐

9,215

0.885

11‐Oct‐24

Sumitomo
Mitsui
Banking
Corporation

1,250,000‐‐

1,250,000

10,867‐‐

10,8670.885

11‐Oct‐24

ShinseiBank,
Limited.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.750

27‐Jun‐23

MUFG
Bank, Ltd.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.750

27‐Jun‐23

MizuhoBank, Ltd.

2,442,000‐

2,442,000‐

21,231‐

21,231‐

0.385

17‐Jul‐21

MUFG
Bank, Ltd.

2,220,000‐

2,220,000‐

19,300‐19,300‐0.385

17‐Jul‐21

Sumitomo
Mitsui
Banking
Corporation

1,998,000‐

1,998,000‐

17,370‐17,370‐0.385

17‐Jul‐21

ShinseiBank,
Limited.

1,110,000‐

1,110,000

‐

9,650

‐

9,650

‐

0.385

17‐Jul‐21

Citibank,
N.A., Tokyo
Branch1,000,000‐

1,000,000

‐

8,694

‐

8,694

‐

0.385

17‐Jul‐21

Sumitomo
MitsuiTrust Bank,
Limited

890,000‐

890,000

‐

7,737

‐

7,737

‐

0.385

17‐Jul‐21

MizuhoBank, Ltd.

2,443,000‐‐

2,443,000

21,239‐‐21,2390.485

17‐Jul‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

24Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

19,300‐‐19,3000.485

17‐Jul‐22

Sumitomo
Mitsui
Banking
Corporation

1,997,000‐‐

1,997,000

17,362‐‐

17,3620.485

17‐Jul‐22

ShinseiBank,
Limited.

1,110,000‐‐

1,110,000

9,650

‐

‐

9,650

0.485

17‐Jul‐22

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.485

17‐Jul‐22

Sumitomo
MitsuiTrust Bank,
Limited

890,000‐‐

890,000

7,737

‐

‐

7,737

0.485

17‐Jul‐22

MizuhoBank, Ltd.

2,442,000‐‐

2,442,000

21,231‐‐

21,231

0.585

14‐Jul‐23

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

19,300‐‐19,3000.585

14‐Jul‐23

Sumitomo
Mitsui
Banking
Corporation

1,997,000‐‐

1,997,000

17,362‐‐

17,3620.585

14‐Jul‐23

ShinseiBank,
Limited.

1,110,000‐‐

1,110,000

9,650

‐

‐

9,650

0.585

14‐Jul‐23

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.585

14‐Jul‐23

Sumitomo
MitsuiTrust Bank,
Limited

890,000‐‐

890,000

7,737

‐

‐

7,737

0.585

14‐Jul‐23

MizuhoBank, Ltd.

766,000‐

766,000

‐

6,659

‐

6,659

‐

0.385

02‐Aug‐21

Sumitomo
Mitsui
Banking
Corporation

766,000‐

766,000

‐

6,659

‐

6,659

‐

0.385

02‐Aug‐21

MUFG
Bank, Ltd.

467,000‐

467,000

‐

4,060

‐

4,060

‐

0.385

02‐Aug‐21

ShinseiBank,
Limited.

150,000‐

150,000

‐

1,304

‐

1,304

‐

0.385

02‐Aug‐21

Citibank,
N.A., Tokyo
Branch120,000‐

120,000

‐

1,043

‐

1,043

‐

0.385

02‐Aug‐21

The
NomuraTrust andBankingCo., Ltd.

30,000‐30,000

‐

260

‐

260

‐

0.385

02‐Aug‐21

AEON
Bank, Ltd.

60,000‐60,000

‐

521

‐

521

‐

0.385

02‐Aug‐21

MizuhoBank, Ltd.

2,521,500‐

2,521,500‐

21,922‐

21,922‐

0.385

26‐Sep‐21

Sumitomo
Mitsui
Banking
Corporation

2,521,500‐

2,521,500‐

21,922‐

21,922‐

0.385

26‐Sep‐21

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

25Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

2,133,000‐

2,133,000‐

18,544‐

18,544‐0.385

26‐Sep‐21

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐

1,000,000

‐

8,694

‐

8,694

‐

0.385

26‐Sep‐21

ShinseiBank,
Limited.

684,000‐

684,000

‐

5,946

‐

5,946

‐

0.385

26‐Sep‐21

Citibank,
N.A., Tokyo
Branch546,000‐

546,000

‐

4,747

‐

4,747

‐

0.385

26‐Sep‐21

Developme
nt Bank ofJapan Inc.

500,000‐

500,000

‐

4,347

‐

4,347

‐

0.385

26‐Sep‐21

ResonaBank,
Limited.

445,000‐

445,000

‐

3,868

‐

3,868

‐

0.385

26‐Sep‐21

The
NomuraTrust andBankingCo., Ltd.

137,000‐

137,000

‐

1,191

‐

1,191

‐

0.385

26‐Sep‐21

AEON
Bank, Ltd.

273,000‐

273,000

‐

2,373

‐

2,373

‐

0.385

26‐Sep‐21

MizuhoBank, Ltd.

3,287,000‐‐

3,287,000

28,577‐‐28,5770.485

26‐Sep‐22

Sumitomo
Mitsui
Banking
Corporation

3,287,000‐‐

3,287,000

28,577‐‐28,5770.485

26‐Sep‐22

MUFG
Bank, Ltd.

2,600,000‐‐

2,600,000

22,604‐‐22,6040.485

26‐Sep‐22

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.485

26‐Sep‐22

ShinseiBank,
Limited.

833,000‐‐

833,000

7,242

‐

‐

7,242

0.485

26‐Sep‐22

Citibank,
N.A., Tokyo
Branch

667,000‐‐

667,000

5,798

‐

‐

5,798

0.485

26‐Sep‐22

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.485

26‐Sep‐22

ResonaBank,
Limited.

445,000‐‐

445,000

3,868

‐

‐

3,868

0.485

26‐Sep‐22

The
NomuraTrust andBankingCo., Ltd.

167,000‐‐

167,000

1,451

‐

‐

1,451

0.485

26‐Sep‐22

AEON
Bank, Ltd.

334,000‐‐

334,000

2,903

‐

‐

2,903

0.485

26‐Sep‐22

MizuhoBank, Ltd.

3,287,500‐‐

3,287,500

28,581‐‐

28,581

0.585

26‐Sep‐23

Sumitomo
Mitsui
Banking
Corporation

3,287,500‐‐

3,287,500

28,581‐‐

28,581

0.585

26‐Sep‐23

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

26

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

2,600,000‐‐

2,600,000

22,604‐‐22,6040.585

26‐Sep‐23

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.585

26‐Sep‐23

ShinseiBank,
Limited.

833,000‐‐

833,000

7,242

‐

‐

7,242

0.585

26‐Sep‐23

Citibank,
N.A., Tokyo
Branch

667,000‐‐

667,000

5,798

‐

‐

5,798

0.585

26‐Sep‐23

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.585

26‐Sep‐23

ResonaBank,
Limited.

445,000‐‐

445,000

3,868

‐

‐

3,868

0.585

26‐Sep‐23

The
NomuraTrust andBankingCo., Ltd.

166,000‐‐

166,000

1,443

‐

‐

1,443

0.585

26‐Sep‐23

AEON
Bank, Ltd.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.585

26‐Sep‐23

MUFG
Bank, Ltd.

850,000‐‐

850,000

7,390

‐

‐

7,390

0.373

22‐Jan‐22

Sumitomo
MitsuiTrust Bank,
Limited

3,400,000‐‐

3,400,000

29,560‐‐29,5600.373

22‐Jan‐22

MizuhoBank, Ltd.

386,000‐‐

386,000

3,355

‐

‐

3,355

0.361

29‐Mar‐22

MUFG
Bank, Ltd.

1,275,000‐‐

1,275,000

11,085‐‐

11,0850.361

29‐Mar‐22

Sumitomo
MitsuiTrust Bank,
Limited2,100,000‐‐

2,100,000

18,257‐‐

18,2570.361

29‐Mar‐22

ShinseiBank,
Limited.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.361

29‐Mar‐22

ResonaBank,
Limited.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.361

29‐Mar‐22

Developme
nt Bank ofJapan Inc.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.361

29‐Mar‐22

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.361

29‐Mar‐22

The
Shizuoka
Bank, Ltd.

1,270,000‐‐

1,270,000

11,041‐‐

11,0410.361

29‐Mar‐22

The
NomuraTrust andBankingCo., Ltd.

270,000‐‐

270,000

2,347

‐

‐

2,347

0.361

29‐Mar‐22

The Senshu
Ikeda Bank,
Ltd.

288,000‐‐

288,000

2,503

‐

‐

2,503

0.361

29‐Mar‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed27

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

AozoraBank, Ltd.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.594

29‐Mar‐24

THE
NISHI‐NI
PPON
CITY
BANK,
LTD.

921,000‐‐

921,000

8,007

‐

‐

8,007

0.594

29‐Mar‐24

The Tochigi
Bank, Ltd.

480,000‐‐

480,000

4,173

‐

‐

4,173

0.594

29‐Mar‐24

Kiraboshi
Bank, Ltd.

961,000‐‐

961,000

8,355

‐

‐

8,355

0.885

29‐Mar‐29

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.340

17‐Jun‐22

Developme
nt Bank ofJapan Inc.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.334

17‐Jun‐22

MizuhoBank, Ltd.

571,400‐‐

571,400

4,967

‐

‐

4,967

0.400

16‐Jan‐23

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

12,735‐‐

12,7350.400

16‐Jan‐23

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

11,573‐‐

11,5730.400

16‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,465

‐

‐

5,465

0.400

16‐Jan‐23

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.400

16‐Jan‐23

ShinseiBank,
Limited.

200,000‐‐

200,000

1,738

‐

‐

1,738

0.400

16‐Jan‐23

ResonaBank,
Limited.

600,000‐‐

600,000

5,216

‐

‐

5,216

0.400

16‐Jan‐23

MizuhoBank, Ltd.

571,400‐‐

571,400

4,967

‐

‐

4,967

0.499

16‐Jan‐24

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

12,735‐‐

12,7350.499

16‐Jan‐24

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

11,573‐‐

11,5730.499

16‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,465

‐

‐

5,465

0.499

16‐Jan‐24

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.499

16‐Jan‐24

ShinseiBank,
Limited.

200,000‐‐

200,000

1,738

‐

‐

1,738

0.499

16‐Jan‐24

ResonaBank,
Limited.

600,000‐‐

600,000

5,216

‐

‐

5,216

0.499

16‐Jan‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed28

Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MizuhoBank, Ltd.

1,171,400‐‐

1,171,400

10,184‐‐

10,1840.563

16‐Jul‐24

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

12,735‐‐

12,7350.563

16‐Jul‐24

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

11,573‐‐

11,5730.563

16‐Jul‐24

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,465

‐

‐

5,465

0.563

16‐Jul‐24

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.563

16‐Jul‐24

ShinseiBank,
Limited.

200,000‐‐

200,000

1,738

‐

‐

1,738

0.563

16‐Jul‐24

MizuhoBank, Ltd.

2,171,400‐‐

2,171,400

18,878‐‐18,8780.635

16‐Jan‐25

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

12,735‐‐

12,7350.635

16‐Jan‐25

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

11,573‐‐

11,573

0.635

16‐Jan‐25

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,465

‐

‐

5,465

0.635

16‐Jan‐25

ShinseiBank,
Limited.

200,000‐‐

200,000

1,738

‐

‐

1,738

0.635

16‐Jan‐25

MizuhoBank, Ltd.

2,170,400‐‐

2,170,400

18,869‐‐18,8690.785

16‐Jul‐25

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

12,735‐‐

12,7350.785

16‐Jul‐25

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

11,573‐‐

11,5730.785

16‐Jul‐25

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,465

‐

‐

5,465

0.785

16‐Jul‐25

ShinseiBank,
Limited.

200,000‐‐

200,000

1,738

‐

‐

1,738

0.785

16‐Jul‐25

MizuhoBank, Ltd.

1,085,000‐‐

1,085,000

9,433

‐

‐

9,433

0.413

16‐Jan‐23

MUFG
Bank, Ltd.

987,000‐‐

987,000

8,581

‐

‐

8,581

0.413

16‐Jan‐23

Sumitomo
Mitsui
Banking
Corporation

987,000‐‐

987,000

8,581

‐

‐

8,581

0.413

16‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

5,946

‐

‐

5,946

0.413

16‐Jan‐23

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

29Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

4,347

‐

‐

4,347

0.413

16‐Jan‐23

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.413

16‐Jan‐23

AEON
Bank, Ltd.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.413

16‐Jan‐23

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

869

‐

‐

869

0.413

16‐Jan‐23

MizuhoBank, Ltd.

712,000‐‐

712,000

6,190

‐

‐

6,190

0.525

16‐Jan‐24

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,572

‐

‐

8,572

0.525

16‐Jan‐24

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,572

‐

‐

8,572

0.525

16‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

5,946

‐

‐

5,946

0.525

16‐Jan‐24

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

4,347

‐

‐

4,347

0.525

16‐Jan‐24

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.525

16‐Jan‐24

AEON
Bank, Ltd.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.525

16‐Jan‐24

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

869

‐

‐

869

0.525

16‐Jan‐24

AozoraBank, Ltd.

237,000‐‐

237,000

2,060

‐

‐

2,060

0.525

16‐Jan‐24

MizuhoBank, Ltd.

712,000‐‐

712,000

6,190

‐

‐

6,190

0.580

16‐Jul‐24

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,572

‐

‐

8,572

0.580

16‐Jul‐24

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,572

‐

‐

8,572

0.580

16‐Jul‐24

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

5,946

‐

‐

5,946

0.580

16‐Jul‐24

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

4,347

‐

‐

4,347

0.580

16‐Jul‐24

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.580

16‐Jul‐24

AEON
Bank, Ltd.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.580

16‐Jul‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed30Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Increase

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

869

‐

‐

869

0.580

16‐Jul‐24

AozoraBank, Ltd.

375,000‐‐

375,000

3,260

‐

‐

3,260

0.580

16‐Jul‐24

MizuhoBank, Ltd.

1,212,000‐‐

1,212,000

10,537‐‐

10,5370.635

16‐Jan‐25

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,572

‐

‐

8,572

0.635

16‐Jan‐25

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,572

‐

‐

8,572

0.635

16‐Jan‐25

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

5,946

‐

‐

5,946

0.635

16‐Jan‐25

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.635

16‐Jan‐25

AEON
Bank, Ltd.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.635

16‐Jan‐25

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

869

‐

‐

869

0.635

16‐Jan‐25

AozoraBank, Ltd.

375,000‐‐

375,000

3,260

‐

‐

3,260

0.635

16‐Jan‐25

Long‐term
loans
payableMizuhoBank, Ltd.

1,211,000‐‐

1,211,000

10,528‐‐

10,5280.785

16‐Jul‐25

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,572

‐

‐

8,572

0.785

16‐Jul‐25

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,572

‐

‐

8,572

0.785

16‐Jul‐25

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

5,946

‐

‐

5,946

0.785

16‐Jul‐25

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.785

16‐Jul‐25

AEON
Bank, Ltd.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.785

16‐Jul‐25

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

869

‐

‐

869

0.785

16‐Jul‐25

AozoraBank, Ltd.

375,000‐‐

375,000

3,260

‐

‐

3,260

0.785

16‐Jul‐25

The Tokyo
Star Bank,
Limited

700,000‐‐

700,000

6,085

‐

‐

6,085

0.785

16‐Jul‐25

MizuhoBank, Ltd.

2,882,000‐‐

2,882,000

25,056‐‐25,0560.462

16‐Jan‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed31Classificati
onName oflender

Beginningbalance

Increase

Decrease

Endingbalance

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Decrease

Endingbalance(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

San ju San
Bank, Ltd.

662,000‐‐

662,000

5,755

‐

‐

5,755

0.462

16‐Jan‐24

San ju San
Bank, Ltd.

1,700,000‐‐

1,700,000

14,780‐‐14,7800.486

15‐Apr‐24

San ju San
Bank, Ltd.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.635

15‐Apr‐25

THE
NISHI‐NI
PPON
CITY
BANK,
LTD.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.785

15‐Oct‐25

Sumitomo
MitsuiTrust Bank,
Limited

1,550,000‐‐

1,550,000

13,475‐‐

13,4750.417

06‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited

3,050,000‐‐

3,050,000

26,517‐‐

26,5170.643

06‐Jan‐25

MomijiBank,Ltd.

961,000‐‐

961,000

8,355

‐

‐

8,355

0.643

06‐Jan‐25

The Kiyo
Bank, Ltd.

480,000‐‐

480,000

4,173

‐

‐

4,173

0.643

06‐Jan‐25

MizuhoBank, Ltd.

634,000‐‐

634,000

5,512

‐

‐

5,512

0.487

16‐Mar‐25

ResonaBank,
Limited.

300,000‐‐

300,000

2,608

‐

‐

2,608

0.487

16‐Mar‐25

Developme
nt Bank ofJapan Inc.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.487

16‐Mar‐25

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.487

16‐Mar‐25

The
NomuraTrust andBankingCo., Ltd.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.487

16‐Mar‐25

The
Shizuoka
Bank, Ltd.

200,000‐‐

200,000

1,738

‐

‐

1,738

0.487

16‐Mar‐25

The
Yamaguchi
Bank, Ltd.

411,000‐‐

411,000

3,573

‐

‐

3,573

0.487

16‐Mar‐25

MUFG
Bank, Ltd.

850,000‐‐

850,000

7,390

‐

‐

7,390

0.385

16‐Mar‐23

Sumitomo
MitsuiTrust Bank,
Limited

1,090,000‐‐

1,090,000

9,476

‐

‐

9,476

0.385

16‐Mar‐23

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

2,895

‐

‐

2,895

0.385

16‐Mar‐23

MizuhoBank, Ltd.

582,000‐‐

582,000

5,059

‐

‐

5,059

0.585

16‐Mar‐25

MUFG
Bank, Ltd.

628,000‐‐

628,000

5,459

‐

‐

5,459

0.585

16‐Mar‐25

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed32Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)

Long‐term
loans
payableEndingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Sumitomo
MitsuiTrust Bank,
Limited

1,090,000‐‐

1,090,000

9,476

‐

‐

9,476

0.585

16‐Mar‐25

ShinseiBank,
Limited.

570,000‐‐

570,000

4,955

‐

‐

4,955

0.585

16‐Mar‐25

ResonaBank,
Limited.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.585

16‐Mar‐25

The
NomuraTrust andBankingCo., Ltd.

270,000‐‐

270,000

2,347

‐

‐

2,347

0.585

16‐Mar‐25

AozoraBank, Ltd.

1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.585

16‐Mar‐25

The
Shizuoka
Bank, Ltd.

270,000‐‐

270,000

2,347

‐

‐

2,347

0.585

16‐Mar‐25

The
KagawaBank, Ltd.

500,000‐‐

500,000

4,347

‐

‐

4,347

0.585

16‐Mar‐25

The
Yamaguchi
Bank, Ltd.

550,000‐‐

550,000

4,781

‐

‐

4,781

0.585

16‐Mar‐25

The Chukyo
Bank, Ltd.

961,000‐‐

961,000

8,355

‐

‐

8,355

0.585

16‐Mar‐25

Citibank,
N.A., Tokyo
Branch1,000,000‐‐

1,000,000

8,694

‐

‐

8,694

0.335

17‐Jun‐22

The Tokyo
Star Bank,
Limited

600,000‐‐

600,000

5,216

‐

‐

5,216

0.335

20‐Jul‐22

The Tokyo
Star Bank,
Limited

‐1,582,000‐

1,582,000‐

13,754‐

13,7540.435

20‐Jul‐24

Total
long‐term
loans
payable196,770,000

1,582,000

33,393,000

164,959,000

1,710,745

13,754

290,323

1,434,176

240,998,000

62,673,000

66,926,000

236,745,000

2,095,270

544,887

581,864

2,058,294

Total loans payable

Use ofproceeds

Remarks(2)

Unsecured
andunguarante
ed

‐

‐

Notes:(1)

The average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to three decimal places.

(2)

The funds are mainly used to acquire properties in trust and for repayment of loans payable.

(3)

Long‐term loans payable include current portion.

(4)

Repayment schedule of long‐term loans payable (except for the current portion) for the next five years after each balance sheet date are as follows:

As of

December 31,

December 31,

2021

2021
(in thousands of
U.S. dollars)(in thousands of yen)
1‐2 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥42,405,000

2‐3 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

34,127,000$

296,704

368,675

3‐4 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

38,799,000

337,323

4‐5 years∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

33

12. Net Assets
The Company issues only non‐par value units in accordance with the Investment Trust Act, and the entire amount of the issue price of
new investment units is allocated to unitholders’ capital within net assets. The Company is required to maintain net assets of at least¥50,000 thousand (US$434 thousand) as required by Article 67‐4 of the Investment Trust Act.
The number of investment units authorized was 10,000,000 units as of June 30, 2021 and December 31, 2021.
The number of investment units issued and outstanding were 6,096,840 units as of June 30, 2021 and December 31, 2021, respectively.

13.Appropriation of Retained Earnings
In accordance with the distribution policy in Article 17, Paragraph 1, of the Company’s articles of incorporation which stipulates making
distributions in excess of 90% of distributable profit as defined in Article 67‐15, Paragraph 1 of the Special Taxation Measures Act of Japanfor the fiscal period.
The following table shows the appropriation of retained earnings for the six months ended June 30, 2021 and December 31, 2021.
For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Unappropriated retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥8,753,480

Distributions ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(91,452)

Retained earnings / losses carried forward ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥8,662,027¥

9,676,221$

84,126(1,012,075)¥

8,664,146(8,799)$75,327The distribution in respect of the six months ended December 31, 2021 of ¥166 (US$1.4) per investment unit, amounting to a total
distribution of ¥1,012,075thousand (US$8,799thousand) was proposed and approved at the Board of Directors meeting on February 24,
2022. These financial statements do not reflect these distributions payable.
Cash distributions per investment unit were ¥15 and ¥166 (US$1.4) for the six months ended June 30, 2021 and December 31, 2021
respectively.
Notes related to provision and reversal of allowance for temporary differences adjustment is below.
For the six months ended June 30, 2021
Not Applicable
For the six months ended December 31, 2021
Not Applicable

14. Rent Revenues － Real Estate and Expenses Related to Property Rental Business
Rent revenue – real estate and expenses related to property rental business for the six months ended June 30, 2021 and December 31,
2021 consist of the following:
For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Rental revenue – real estate:
Rental revenue and common area charges (*)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total rental revenue – real estate ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥3,599,611
206,564
3,806,176¥

Expenses related to property rental business:
Facility management fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Property related taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

497,596603,133
19,0123,460,619
140,454¥¥

5,636,467
201,380
5,837,847$

465,075
753,548
20,2563,420,925
117,236$$

49,004
1,750
50,755

4,043
6,551
176
29,742
1,019

34

Total expenses related to property rental business ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income from property leasing activities∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥4,720,815(914,639)¥¥

4,777,042
1,060,805$$

41,532
9,222(*)Variable rental revenue of hotels ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥37,496¥

1,280,015$

11,128

15. Management Contract Revenue
For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)Management contract revenue:
Hotel management revenue∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Hotel management expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Management contract revenue ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥388,076
740,915‐¥

Management contract expenses:
Loss for management contract(*1) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total management contract expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income (loss) from management contract ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥352,838
101,793429,164934
884,731(884,731)

¥

¥

¥
¥

819,087995,357‐$

176,269
103,910429,594‐
709,774(709,774)

$

7,121
8,653
‐

$

$
$

1,532
903
3,734
‐
6,170
(6,170)(*1) In the case that Hotel management expenses exceed Hotel management revenue, the excess of such expenses over revenues isrecorded as a loss for management contract.

16. Breakdown of Gain on sales of Properties
For the six months ended June 30, 2021
Not Applicable
For the six months ended December 31, 2021
Lexington Plaza Hachiman(in thousands of yen)
Revenue from sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Cost of properties sold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other sale‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Gain or loss on sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥

Revenue from sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Cost of properties sold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other sale‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Gain or loss on sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

3,660,000
2,982,382
86,632590,985(in thousands of
U.S. dollars)$
31,82025,929753$
5,138

Invoice Shin‐Kobe Residence, Cosmo Court
Motomachi, Vendir Hamaotsu Ekimae, Salvo Sala,
Winntage Kobe Motomachi, Corp Higashinotoin,
HERMITAGE NANBA WEST(*)(in thousands of(in thousands of yen)
U.S. dollars)¥
6,150,000$
53,4684,014,374
34,901
158,123
1,374¥
1,977,501$
17,192(*) The sale price of individual properties are not disclosed as the transferees’ consent has not been obtained for disclosure.

17. Income Taxes
The Company is subject to corporate income taxes in Japan. The Company may deduct from its taxable income the amounts distributed
to its unitholders, provided the requirements are met under the Special Taxation Measures Act of Japan. Under this act, the Company
must meet a number of tax requirements, including a requirement to distribute in excess of 90% of distributable profit for the fiscal

35

period in order to be able to deduct such amounts. If the Company does not satisfy all of the requirements, the entire taxable income of
the Company will be subject to regular corporate income taxes in Japan.
The Company has a policy of making distributions in excess of 90% of its distributable profit for the fiscal period to qualify for conditions
set forth in the Special Taxation Measures Act of Japan to achieve a deduction of distributions for income tax purpose and it distributes
approximately 100% of distributable profit. Hence, the Company has treated the distributions as a tax allowable deduction as defined in
the Special Taxation Measures Act of Japan.
(a) Reconciliations of the Company’s effective tax rates and statutory tax rates are as follows:
For the six months ended

June 30,
2021

December 31,
2021(Rate)

Statutory tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in valuation allowance ∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐ %
‐
‐

31.46 %
(31.46)0.06

Effective tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐ %0.06 %(*) In the prior fiscal period, the Company posted a net loss before income taxes, so this information is omitted.
(b) Deferred tax assets and liabilities consist of the following:
As ofJune 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
Deferred tax assets:
Enterprise tax payable
Buildings and other (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Land (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net loss carried forward(*1) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset retirement obligations ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

615
307,217¥¥615
186,136

5
1,618

$

472,381
1,662,026
10,443
125,223
461,428

116,724
1,810,135
10,514
137,567
457,482

1,014
15,737
91
1,196
3,977

Subtotal ‐ deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Valuation allowance for tax loss carried forward
Valuation allowance for the sum of deductible temporary differences

3,039,336(1,662,026)(1,377,309)

2,719,176(1,810,135)(909,041)

23,640(15,737)(7,903)

Subtotal ‐ valuation allowance(*2) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,039,336)(2,719,176)(23,640)

Total ‐ deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

-

Fixed‐term leasehold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Adjustment of acquisition price (Overseas properties)(*1)The amounts of tax loss carried forward and the deferred tax assets are indicated by carry‐forward period.
For the six months ended June 30, 2021

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of yen)
‐
‐

‐
‐

‐

‐

522,444(522,444)‐

1,139,582(1,139,582)

1,662,026(1,662,026)

‐

‐

‐

‐

‐

‐

‐

Tax loss carried forward (a)‐Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(a)Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
For the six months ended December 31, 2021

Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of yen)
320,467(320,467)

‐
‐

‐
‐

‐

Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

201,072(201,072)‐

1,288,595(1,288,595)

1,810,135(1,810,135)

Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐

‐

‐

‐

‐

‐

‐

Tax loss carried forward (a)36Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years

Total(in thousands of U.S. dollars)
Tax loss carried forward (a)Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,748(1,748)2,786(2,786)

‐
‐

‐

‐

‐

‐
‐
‐

‐
‐
‐

11,203(11,203)‐

15,737(15,737)‐(a) Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
(*2)The valuation allowance decreased by 320,159 thousand yen (US$2,783thousand). This decrease is mainly due to sales of buildings,
etc and land.

18. Leases(a) Lease rental revenues
The future minimum rental revenues pursuant to existing rental contracts as of June 30, 2021 and December 31, 2021 scheduled to bereceived are summarized as follows:
As ofJune 30,
2021

December 31,
2021(in thousands of yen)
Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

13,055,492
64,085,583¥(*1)12,867,086
56,997,263

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

77,141,076¥

69,864,350

December 31,
2021(in thousands of
U.S. dollars)(*1)111,868$
495,542
607,410$(*1) The effect of ʺNote 28 Subsequent Events (Conclusion of Memorandum of Understanding with Major Tenant for Amendment of Term Building Lease and Management
Service Agreement)ʺ below is not included.

(b) Lease rental expenses
The future minimum rental expenses pursuant to existing rental contracts as of June 30, 2021 and December 31, 2021 scheduled to be
paid are summarized as follows:
As ofJune 30,
2021

December 31,
2021

December 31,
2021

Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

319,859
8,686,455¥

319,8598,526,526(in thousands of
U.S. dollars)
2,780$
74,130Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

9,006,315¥

8,846,385$(in thousands of yen)

76,911

19. Financial Instruments(a) Qualitative information for financial instruments(i) Policy for financial instrument transactions
The Company raises funds through loans payable , investment corporation bonds, and the issuance of investment units toacquire real estate properties, pay property maintenance expenses and/or repay existing loans payable. Surplus funds aremanaged carefully through investments in financial instruments taking into account liquidity and safety in light of the current
financial market conditions. Derivative instruments are used only for hedging purposes and not for speculation.
(ii) Nature and extent of risks arising from financial instruments and risk management
The funds raised through loans payable and investment corporation bonds are mainly used to acquire real estate properties orproperties in trust and for the repayment of existing loans payable. Liquidity risks relating to loans payable are managed by the37

finance department of the Asset Manager by preparing monthly plans for funds, and monitoring the covenants defined in loan
agreements.
(iii) Supplemental information for financial instruments
The fair value of financial instruments is estimated using valuation techniques which contain various assumptions. If othervaluation models or assumptions were used, the estimated value may differ.
(b) Quantitative information for financial instruments
The following table shows the carrying amounts, fair values and valuation differences of financial instruments for which fairvalue is available as of June 30, 2021 and December 31, 2021. Furthermore, “cash and deposits” and “short‐term loans payable”
are omitted as they are settled with cash and in a short span of time and are therefore similar in fair value to the book value. Also,“tenant leasehold and security deposits in trust” is omitted as it lacks in significance.
As ofJune 30,
2021
Carrying
amounts

December 31,
2021

Fair value

Carrying
amounts

Difference

December 31,
2021

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Assets:Current:(1) Investment securities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥17,856,387

¥

‐

¥

‐

¥

17,856,387¥

17,320,018¥(536,369)$

155,245$

150,582$(4,663)

Total assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥17,856,387

¥

‐

¥

‐

¥

17,856,387¥

17,320,018¥(536,369)$

155,245$

150,582$(4,663)Liabilities:(2) Current portion of long‐term loans
payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

53,315,000

53,315,000‐

48,667,000

48,667,000‐

423,117423,117‐(3) Investment corporation bonds ∙∙∙∙∙∙∙∙

8,200,000

7,556,240(643,760)

8,200,000

7,657,040(542,960)

71,291

66,571(4,720)(4) Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

143,455,000

143,455,000‐

116,292,000

116,292,000‐

1,011,058

1,011,058‐

Total liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥204,970,000¥

204,326,240¥(643,760)¥

173,159,000¥

172,616,040¥(542,960)$

1,505,468$

1,500,748$(4,720)(5) Derivatives∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥(78,176)¥(78,176)¥‐¥

18,325¥18,325

¥

‐

$

159

$

159

$

‐

Notes

(i)The methods and assumptions used to estimate fair value are as follows:(1) Investment securities
For preferred securities, the market value is the amount equivalent to the equity interest in the net assets at market value obtained by valuing the assets and liabilities of theinvestee at market value.
(2)Current portion of long‐term loans payable(4)Long‐term loans payable
Long‐term loans payable with floating interest rates reflecting changes in market rates within a short term period are stated at their carrying amounts as their carrying
amounts approximate their fair values.
(3)Investment corporation bonds
The fair values of investment corporate bonds are determined based on the present value of contractual cash flows discounted at current market interest rates which would
be applicable to new investment corporate bonds under the same conditions and terms.
(5)Derivatives
Please refer to the “21. Derivatives” below.

(ⅱ) Cash flow schedule of financial liabilities after the balance sheet dateWithin 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years(in thousands of yen)
As of June 30, 2021:
Current portion of long‐term loans payable ∙∙∙Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

53,315,000‐‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

53,315,000‐
1,000,000
44,807,000¥

45,807,000‐
2,000,000
44,589,000¥

46,589,000‐
1,000,000
40,661,000¥

41,661,000‐‐
12,437,000¥

12,437,000‐
4,200,000
961,000¥

5,161,000

As of December 31, 2021:
Current portion of long‐term loans payable ∙∙∙48,667,000‐

Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

3,000,000

1,000,000

Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐

42,405,000

34,127,000

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

48,667,000¥

45,405,000‐¥

35,127,000

‐

¥

‐

‐

‐

‐

4,200,000

38,799,000‐

38,799,000¥‐

961,000¥

5,161,00038Within 1 year

1‐2 years

2‐3 years

3‐4 years

4‐5 years

Over 5 years(in thousands of U.S. dollars)
As of December 31, 2021:
Current portion of long‐term loans payable ∙∙∙Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

423,117‐‐

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

423,117‐
26,082368,675$

394,757‐
8,694
296,704$‐‐
337,323

305,399$‐‐‐

337,323$‐
36,5158,355‐$

44,87020. Investment securities
As ofJune 30,
2021
Carrying
amounts

December 31,
2021

Fair value

Carrying
amounts

Difference

December 31,
2021

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Shares in an Affiliated Company ∙∙∙∙¥

17,856,387

¥

‐

¥

‐

¥

17,856,387¥

17,320,018¥(536,369)$

155,245$

150,582$(4,663)

Total ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

17,856,387

¥

‐

¥

‐

¥

17,856,387¥

17,320,018¥(536,369)$

155,245$

150,582$(4,663)

21. Derivatives
Information on derivative transactions undertaken by the Company as of June 30, 2021 and December 31, 2021 is as follows.
(a) Transactions for which hedge accounting is not applied
As of June 30, 2021:
Contract amount
Category

Type ofderivativetransaction

Fair
Value
(*1)

Over 1
year

Total

Valuation
gains orlosses(in thousands of yen)Transacti
ons otherthanmarkettransacti
ons

Currency
options
Sell –USD Call(Optionpremium)
Currency
options
Buy –USD Put
Optionpremium¥

952,820¥‐¥(23,788)¥‐¥952,820¥‐¥

39,407¥‐¥ (15,962)

¥

7,825

¥

¥

(26,226)

13,181(*1) Calculation of fair value is based on information provided by financial institutions.

As of December 31, 2021:
Not Applicable(b) Transactions for which hedge accounting is applied
As of June 30, 2021:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Principle
accounting
methodInterest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)

Long‐term
borrowings¥

64,648,000¥ 50,476,000¥(75,395)(*1) The interest rate swap contract amount is based on the notional principal amount.

39

(*2) Calculation of fair value is based on information provided by financial institutions.

As of December 31, 2021:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Principle
accounting
methodInterest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of U.S. dollars)(in thousands of yen)

Long‐term
borrowings¥

64,648,000

Fair
Value
(*2)

Over 1
year

Total¥ 50,476,000¥

18,325$562,058$

438,845$(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

22. Asset Retirement Obligations
The Company has an obligation under a fixed‐term leasehold agreement to restore its leased land, which represents the land where
COMFORT HOTEL MAEBASHI, owned by the Company, is located upon the termination of agreement. The estimated period of useof property is estimated at 43 years based on the lease period per the agreement. The assets retirement obligation for the restoration isrecognized as a liability using discount rate at 1.342%.
Movements of asset retirement obligations for the six months ended June 30, 2021 and December 31, 2021 are as follows.

For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021(in thousands of
U.S. dollars)(in thousands of yen)
32,977

Balance at the beginning of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥33,197¥288$

Liabilities incurred due to the acquisition of properties ∙∙∙∙∙∙∙

‐

‐

‐

Accretion expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

219

224

1

Balance at the end of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥33,19733,422¥290$

23. Revenue Recognition(a) Information from analysis of revenues generated from contracts with customers
For the six months ended December 31, 2021
Revenues generated from

Sales to external customers

contracts with customers (*1)
(in thousands of yen)
Revenue from sale of real estate property(in thousands of
U.S. dollars)(in thousands of yen)(in thousands of
U.S. dollars)

3,660,000

31,820(*2)590,985(*2)5,138

Other

27,870242

7,815,349

67,947

Total

3,687,870

32,062

8,406,334

73,085(*1)The rental revenues, etc. subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13), the dividend income subject to the “Accounting Standards for
Financial Instruments” (ASBJ statement No. 10), and the sale of real estate, etc. subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real Estate Using
Special Purpose Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified Public Accountants) are not included in the above amount as they
are not applied to the Revenue Recognition Accounting Standard. Moreover, the main revenue from contracts with customers are revenue from sale of real estate.
(*2) Sales of real estate properties are recorded as gains or losses on sales of real estate properties in the statements of income in accordance with Article 48‐2 of the Regulations on
Accounting of Investment Corporation (Cabinet Office Ordinance No. 47 of 2006), and therefore the amount is the proceeds from sales of real estate properties, less the cost of realestate properties sold and other sales expenses.

(b) Foundational information for understanding revenues generated from contracts with customers
For the six months ended December 31, 2021

40

159

The information is described in the notes on the Summary of Significant Accounting Policies(c) Information on relationship of fulfillment of performance obligations based on contracts with customers with cashflow
generated from said contracts and amount and period of revenue expected to be recognized in the next fiscal period or
thereafter from contracts with customers existing at the end of the fiscal period(i )Balance of contract assets and contract liabilities, etc.
For the six months ended

December 31,
2021

December 31,
2021(in thousands of yen)(in thousands of
U.S. dollars)

Claims generated from contracts with customers (balance¥at beginning of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Claims generated from contracts with customers (balance¥at end of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Contract assets (balance at beginning of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙

1,534

$

13

2,114

$

18

‐

‐

Contract assets (balance at end of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐‐

Contract liabilities (balance at beginning of fiscal year) ∙∙∙∙∙‐‐

Contract liabilities (balance at end of fiscal year) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐‐(i i)Transaction value allocated to remaining performance obligations

Not Applicable

24. Segment Information
Segment information for the six months ended June 30, 2021 and December 31, 2021 are as follows :(a) Operating Segment Information
Disclosure is omitted as the Company is comprised of a single reportable segment engaged in the property rental business.
(b) Enterprise‐wide Disclosures(i) Information about Products and Services
Disclosure is not required as revenues from external customers for the single segment are in excess of 90% of total revenues.
(ii) Information about Geographic Areas(1) Revenues from Overseas Customers:
Disclosure is not required as revenues from external customers in Japan are in excess of 90% of total revenues.
(2)Tangible Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers
Information about major clients for the six‐month periods ended June 30, 2021 and December 31, 2021 were as follows:
For the six months ended June 30, 2021

Name of client

Mystays Hotel Management Co., Ltd.

Operating Revenues(in thousands of yen)
867,619

Related segment

Real estate investing business

For the six months ended December 31, 2021

Name of client

Mystays Hotel Management Co., Ltd.

Operating Revenues

Operating Revenues(in thousands of yen)(in thousands of U.S. dollars)

2,182,504

18,975

Related segment

Real estate investing business

41

Kansai Residence Tokutei Mokuteki

1,977,501

Kaisha17,192

Real estate investing business

25. Profit or Loss from Equity Method, etc
For the six months ended June 30, 2021
(in thousands of yen)
Investments in affiliates

17,856,387

Investments, if equity method was adopted

17,555,222

Investment gains (losses), if equity method was adopted(65,738)

For the six months ended December 31, 2021
(in thousands of yen)(in thousands of US dollars)

Investments in affiliates

17,856,387

155,245

Investments, if equity method was adopted

17,487,459

152,038(67,763)(589)

Investment gains (losses), if equity method was adopted

26. Related‐Party Transactions(a) Parent Company and Major Corporate Unitholders
For the six months ended June 30, 2021
SharecapitalType ofrelated‐party

Interested
party of the
Asset
ManagerCompany
nameLocation

Business(inmillionsof yen)Voting interestin the Company

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato‐ku,
Tokyo

Hotel
managementbusiness¥10‐

Mystays
HotelManagement
Co., Ltd.(2)Minato‐ku,
Tokyo

Hotel
managementbusiness¥100‐

Relations
hip withtheCompanyLeaseholder
andoperator of
hotel
Leaseholder
andoperator of
hotel

Transactions for the period

Balance at the end of period

Amounts(1)(inthousandsof yen)Balancesheet
account

Rentalrevenues¥38,627

Rentalreceivables¥42,489

Rentalrevenues¥867,619

Rentalreceivables¥945,735

Type oftransactions

Amounts(1)(in thousands ofyen)

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds
that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we
treat , Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management as a related party.

42

For the six months ended December 31, 2021
Transactions for the period

Share capital
Type ofrelated‐party

Interested
party of the
Asset
Manager

Votinginterest intheCompany

Relationshipwith theCompany

Type oftransactions(inmillionsof yen)(inthousandsof U.S.
dollars)

Hotelmanagementbusiness

¥10

$86

‐

Leaseholder andoperator of hotelHotelmanagementbusiness

¥100

$869

‐

Leaseholder andoperator of hotel

Company
nameLocation

Business

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato‐ku,
Tokyo

Mystays
HotelManagement
Co., Ltd.(2)Minato‐ku,
Tokyo

Balance at the end of period

Amounts (1)Amounts(1)(inthousandsof yen)(inthousandsof U.S.
dollars)

Rentalrevenues¥721,419$6,272

Rentalrevenues¥2,182,504$18,975

Balancesheet
account(inthousandsof yen)(in thousandsof U.S.
dollars)

Rentalreceivables¥422,909$3,676

Rentalreceivables¥1,436,837$12,492

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds
that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we
treat , Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management as a related party.

(b) Affiliates
For the six months ended June 30, 2021
Not Applicable
For the six months ended December 31, 2021
Not Applicable(c) Board of Directors and Major Individual Unitholders
For the six months ended June 30, 2021

Type ofrelated‐party

Directors
and close
relatives

Name

Naoki
FukudaVotinginterest intheCompany

Business / Occupation

Executive officer of theCompany andmanagement director ofConsonant Investment
Management Co., Ltd.

‐

Transactions for the period

Balance at the end of period
Amounts(3)(in thousands of yen)
Payment of the assets management
fee to Consonant Investment
Management Co., Ltd.(1)Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Amounts(3)Balance sheet
account

Type of transactions(in thousands ofyen)¥300,000

Accruedexpenses¥165,000¥600

Accruedexpenses¥330

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of period.

For the six months ended December 31, 2021
Transactions for the period
Type ofrelated‐party

Directors
and close
relatives

Name

Naoki
FukudaBusiness /Occupation

Executive officer of
the Company andmanagement
director ofConsonantInvestment
Management Co.,Ltd.

Votinginterest intheCompany‐

Balance at the end of period

Amounts(3)Type of transactions

Payment of the assets
management fee to Consonant
Investment Management Co.,
Ltd.(1)
Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Amounts(3)(inthousandsof yen)(inthousandsof U.S.
dollars)¥329,430$2,864¥1,100$9(inthousandsof yen)(inthousandsof U.S.
dollars)

Accruedexpenses¥185,295$1,610Accruedexpenses¥880$7

Balance sheet
account

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

43

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of period.

27. Parent company and/or significant affiliates(a) Information on the parent company
Not Applicable.

(b) Summary of financial statements of the significant affiliates
The significant affiliates in the year ended December 31, 2021 is Kingdom TMK. Summary of financial information is as follows:
Kingdom TMK
As of / For the six months ended
September 30, 2021

March 31, 2021

(in thousands of yen)
Total specified assets

September 30, 2021
(in thousands of US dollars)

100,129,595

100,199,285

871,146

Total other assets

2,191,726

1,713,274

14,895

Total current liabilities

356,926

86,508752

Total non‐current liabilities

66,158,918

66,158,866

575,194

Total net assets

35,805,477

35,667,184

310,095

Operating revenue

547,658

525,288

4,566

Income before income taxes(133,555)(137,687)(1,197)

Net income(134,160)(138,292)(1,202)

28. Per Unit Information
The following table shows net asset value per unit as of June 30, 2021 and December 31, 2021 and net income (loss) per unit for the six
months then ended. Net income (loss) per unit is calculated by dividing the net income attributable to unitholders by the weighted
average number of units outstanding. In regard to diluted net income per unit for the previous fiscal year, there were no dilutive units.
Accordingly, diluted net income per unit for the previous fiscal year is not presented. In regard to diluted net income per unit for the
subject fiscal year, there was a net loss per unit, and there were no dilutive units. Accordingly, diluted net income per unit for the subject
fiscal year is not presented.
As of / For the six months ended

June 30,
2021

December 31,
2021

December 31,
2021

(Yen)

(U.S. dollars)

Net asset value per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥40,203¥40,370$350

Net income (loss) per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥

(590)

¥

166

$

1

Weighted average number of units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

6,096,840

6,096,840‐

29．Subsequent Events(a) Sale of Assets
The Company completed sale of the following 6 properties on January 12, 2022.
Property Number : A79

Property Name: Revest Honjin

Sale Date

January 12, 2022

Location

Nagoya‐shi, Aichi

Book Value (Note 1)

JPY 569 million

44

Sale Price (Note 2)

Undisclosed

Estimated Gain on Sale (Note 3)

Undisclosed

TransfereeKansai Residence Tokutei Mokuteki Kaisha

Legal Form of Asset

Trust beneficiary interest

Property Number : A80

Property Name: Revest Matsubara

Sale Date

January 12, 2022

Location

Nagoya‐shi, Aichi

Book Value (Note 1)

JPY 559 million

Sale Price (Note 2)

Undisclosed

Estimated Gain on Sale (Note 3)

Undisclosed

TransfereeKansai Residence Tokutei Mokuteki Kaisha

Legal Form of Asset

Trust beneficiary interest

Property Number : A82

Property Name: Alba Noritake Shinmachi

Sale Date

January 12, 2022

Location

Nagoya‐shi, Aichi

Book Value (Note 1)

JPY 509 million

Sale Price (Note 2)

Undisclosed

Estimated Gain on Sale (Note 3)

Undisclosed

TransfereeKansai Residence Tokutei Mokuteki Kaisha

Legal Form of Asset

Trust beneficiary interest

Property Number : A83

Property Name: Revest Meieki Minami

Sale Date

January 12, 2022

Location

Nagoya‐shi, Aichi

Book Value (Note 1)

JPY 498 million

Sale Price (Note 2)

Undisclosed

Estimated Gain on Sale (Note 3)

Undisclosed

TransfereeKansai Residence Tokutei Mokuteki Kaisha

Legal Form of Asset

Trust beneficiary interest

Property Number : A88

Property Name: Luna Court Edobori

Sale Date

January 12, 2022

Location

Osaka‐shi, Osaka

Book Value (Note 1)

JPY457 million

Sale Price (Note 2)

Undisclosed

Estimated Gain on Sale (Note 3)

Undisclosed

TransfereeKansai Residence Tokutei Mokuteki Kaisha

Legal Form of Asset

Trust beneficiary interest

Property Number : A98

Property Name: Little River Honmachibashi

Sale Date

January 12, 2022

Location

Osaka‐shi, Osaka

Book Value (Note 1)

JPY272 million

Sale Price (Note 2)

Undisclosed

Estimated Gain on Sale (Note 3)

Undisclosed

TransfereeKansai Residence Tokutei Mokuteki Kaisha

Legal Form of Asset

Trust beneficiary interest(Note 1) Book Value shows a figure as of December 31, 2021.
(Note 2) Sale Price does not include transfer related cost, adjustments for fixed asset taxes or city planning taxes, or national or local
consumption taxes. Sale price of individual properties are not disclosed as the transferee’s consent has not been obtained for45

disclosure. Accordingly, the expected gain on sale of individual properties is not disclosed either. The total sale price of theabove six properties is JPY4,450 million , and the total estimated gain/loss on transfer is JPY1,454 million.
(Note 3) Estimated Gain on Sale is calculated by deducting the Book Value and estimated transfer related cost from Sale Price.

(b) Conclusion of Memorandum of Understanding to Amend the Fixed‐term Building Lease and Property Management
Agreement with Major Tenant
Under the impact of the spread of the new coronavirus infection, the Company decided at its board of director’s meeting held on March
11, 2022 to enter into a Memorandum of Understanding (the “MOU”) to amend each fixed‐term building lease and property
management agreement(ʺMLPM Agreementsʺ) pertaining to the rent conditions for the period from January 1, 2022 to June 30, 2022 for
73 domestic hotels owned by the Company with main tenant, MyStays Hotel Management Co., Ltd. (“MHM”) and its affiliates (theʺMHM Groupʺ), who operate the hotels, in order to avoid the inability of MHM Group to make payments and to maintain hotel
operations by MHM Group, and concluded on the same date.
Based on the MOU, the Company decided to amend the MLPM Agreement (the ʺOriginal LeasingTerms and Conditionsʺ) as a tentative
measure for the period from January 1, 2022 to June 30, 2022 as follows.
Items subject to

Calculated based on the Original

Tentative Measures

ChangeLeasing Terms and Conditions（January 1, 2022 to June 30, 2022）

Fixed rent (Total rent for 6

JPY 4,970 million

JPY 900 million

months for 73 properties)(Approx. 18% of the amount under theOriginal Leasing Terms and Conditions)(hereinafter referred to as the “total fixed rent”)

Variable rent

Calculated on a 3‐month basis for each hotel.

Calculated by summing up the rent of all 73
properties for 6 months.

The amount obtained by deducting (i)The amount obtained by deducting (i)the above
total fixed rent (the total rent for 6 months for 73

the total amount of expenses, management

properties) from (ii)the aggregate of the amountservices fees, and fixed rents of the hotelfor 6 months for 73 properties, which amount isproperty from (ii) the total monthly sales ofobtained by deducting the management services

the hotel property (if the calculation results

fees for the hotel for each month from theare negative, the amount shall be JPY 0).

monthly GOP (operating gross profit calculated
by subtracting expenses from total monthly
sales) for each hotel for the same month (if thecalculation results are negative, the amount shallbe JPY 0). (hereinafter referred to as the “total
variable rent”)

Payment method of rent

Paid on the hotel‐by‐hotel basis.

Paid on a total basis of 73 hotel properties.

The due date is the 11th of the month which

On August 10, 2022, the sum of the total fixed

is two months from the month in which therent and the total variable rent shall be paid.

last day of the fiscal period falls (for the fixed
rent, every month, and for the variable rent,
every three months).

As a result of this MOU, the fixed rent to be recorded in operating revenue is expected to decrease by 4,070 million yen (US$35 million)in the fiscal period ending June 30, 2022. However, as the variable rent recorded in operating revenue is determined by the GOP for theperiod from January 1, 2022 to June 30, 2022, the amount of impact cannot be estimated as of today

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