Investment
Invincible Corporation

Audited Financial Statements
for the 36th Fiscal Period(from January 1, 2021 to June 30, 2021)

INDEX TO FINANCIAL STATEMENTS
Page

Independent Auditor’s Report ········································································································································· 1

Balance Sheet as of June 30, 2021 ······································································································································ 4Statement of Income and Retained Earnings for the six months ended June 30, 2021·············································· 6Statement of Changes in Net Assets for the six months ended June 30, 2021 ························································ 7Statement of Cash Flows for the six months ended June 30, 2021 ············································································ 9Notes to Financial Statements as of and for the six months ended June 30, 2021···················································· 10

INVINCIBLE INVESTMENT CORPORATIONBALANCE SHEETAs of June 30, 2021
As ofJune 30,
2021

December 31,
2020

June 30,2021(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 24)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

21,210,252
6,295,192
1,717,908
356,534
708,338
16‐
6,536
30,294,779¥

6,311,545
6,528,498
1,239,770
441,992
498,14414
268,549‐
15,288,515$

57,07659,038
11,211
3,997
4,504
0
2,428
‐
138,257

19,406,379
5,293,194
1,458
1,183,738
588,930
164,029,805

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

175,496
47,87913
10,735
5,765
1,484,602

33,102,139

33,384,159

301,900

233,505
2,727,329
245,560,970
472,127,451(31,197,821)
440,929,629

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

2,134
25,3282,220,663
4,274,519(316,952)
3,957,567

10,637,811
14,575,091
25,212,903

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

96,200131,456
227,656

17,856,387
1,362,721
681,990
66,417
22,667
19,990,184
486,132,717

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

161,479
12,323
4,473
146
204
178,627
4,363,851

62,85362,853
516,490,350

56,65256,652497,899,915

512
512
4,502,621¥$

4

As ofJune 30,
2021

December 31,
2020

June 30,2021(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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

846,058
34,847,000¥

917,33144,228,000

$

8,295
399,963

55,601,000

53,315,000

482,139

24,701
344,243605
578,858
580,016
11,143
92,833,627

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

242
2,255
5
‐
5,405
100
898,4088,200,000
163,940,000

8,200,000
143,455,000

74,154
1,297,296

1,672,037

1,657,369

14,987

170,488
32,977174,015,504
266,849,131

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

853
300
1,387,592
2,286,001

235,701,512

235,701,512

2,131,502

6,264,432

6,264,432

56,650(6,130)(6,130)(55)(5,524,006)(5,530,137)
734,294(5,524,006)(5,530,137)
734,294(49,954)(50,010)
6,640

13,371,340
14,105,635
249,807,147

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

79,15985,8002,217,302(165,929)(165,929)
249,641,218
516,490,350(75,395)(75,395)
245,113,891
497,899,915

(681)
(681)
2,216,620
4,502,621¥$

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

5

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the six months ended June 30, 2021

December 31,
2020

For the six months ended
June 30,2021

June 30,2021(inthousands 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∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange gains ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest on tax refund∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Gain on derivatives∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total non‐operating income ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Non‐operating expenses
Interest expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Foreign exchange losses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Loan‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Loss on derivatives ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other‐non‐operating expenses∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
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)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥¥

5,738,249
2,602,343
8,340,593¥

3,806,176‐
3,806,176$

34,420‐34,4205,044,533
983,288
300,000
4,800
25,68467,749223,692
6,649,749
1,690,843

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

42,691
8,000
2,712
43
227
443
1,473
55,594(21,173)107
12,878
1,498
81,626
3,272
99,382

96
‐
‐
‐
8,327
8,423

0
‐
‐
‐
75
76

654,685‐
28,2306,303
472,665‐
4,007
1,165,892
624,333
624,333

624,616
34,513
27,7696,200
508,348
64,638‐1,266,088(3,599,083)(3,599,083)

5,648
312
251
56
4,597
584
‐
11,449(32,547)(32,547)

605
605
623,728
12,747,612
13,371,340

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

5
5(32,552)
111,712$ 79,159¥

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

6

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CHANGES IN NET ASSETSFor the six months ended June 30, 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 July 1, 2020 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥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 December 31, 2020 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥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 June 30, 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 July 1, 2020 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

13,168,294¥

13,902,588¥

249,604,100¥(65,906)(65,906)

249,538,194

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(420,681)(420,681)(420,681)

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

623,728

623,728

623,728(420,681)
623,728

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙(100,022)
203,046

Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of December 31, 2020 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

13,371,340

203,046¥

14,105,635

203,046¥

249,807,147(100,022)(100,022)¥(165,929)(100,022)(100,022)¥(165,929)

103,024¥

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) ∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(4,617,860)¥

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

7

Unitholdersʹ equity
SurplusCapital surplus
Deduction of capital surplus

Unitholdersʹ
capitalCapital surplus

Allowance fortemporarydifferences
adjustment$

56,650$(55)$

56,650$(55)

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of U.S dollars)
Balance as of January1, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $2,131,502$(49,954)$(49,954)$(50,010)$(50,010)

$

6,640

$

6,640

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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ $‐2,131,502‐‐

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 January 1, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

120,920$

127,560

2,259,062$(1,500)(1,500)2,257,562

Changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Distributions from surplus ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(9,207)(9,207)(9,207)(9,207)

Net income (loss) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(32,552)(32,552)(32,552)(32,552)(41,760)(41,760)(41,760)

Changes other than unitholders’ equity(net) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total changes during the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Balance as of June 30, 2021 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

79,159$85,800$2,217,302

$

818

818

818

818

818

(40,941)

(681)

$

(681)

$

2,216,620

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

8

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CASH FLOWSFor the six months ended June 30, 2021
For the six months ended
June 30,
2021

December 31,
2020

June 30,2021(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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

624,333
3,992,787
6,303
472,665(107)
682,915(30)(81,626)(1,413,044)(94,026)
129,597
831,675
640,046
578,858(256,749)
68,632(420,200)(20,746)
8,284,271(104,384)
13,921,171
107(680,307)(605)¥(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)$(32,547)
35,176
56
4,597
（0）
5,899
0
584
4,323
(772)
0
(2,428)159(5,234)
149
(805)
160
(0)
0
1,166
10,4840(5,927)(5)

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

13,240,366

503,374

4,552

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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other, net ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,328,500)‐(139,812)(358,986)(99,182)
26,461
109,484(2,000,000)
1,328,500(53,356)(453,398)(53,590)
38,922‐(18,086)
12,013(482)(4,100)
(484)
351
‐

Net cash used in investing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,790,534)(1,192,923)(10,787)

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∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

34,847,000(880,000)
600,000(35,447,000)(287,367)(424,124)

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

107,026(22,192)‐(205,923)(2,151)(9,218)Net cash provided by (used in) financing activities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,591,491)(14,647,300)(132,458)

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

30
9,858,370
16,318,574
26,176,945(51)(15,336,901)
26,176,945
10,840,044（0)(138,695)
236,724
98,028¥$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 June 30, 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 securities
Other securities without fair market value are recorded at cost being determined by the moving average method.
(d) Property and Equipment
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:

11For the six months ended
June 30, 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 ∙∙∙∙∙∙∙∙∙∙∙

2‐33

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

10‐55

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

2‐20(e) Intangible Assets
Amortization of a domestic term leasehold interest for business use is calculated by the straight‐line method over the lease term.
(f)Long‐term Prepaid Expenses

Long‐term prepaid expenses are amortized on a straight‐line basis.
(g) 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.
(h) 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.
(i)

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.
(j)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.
(k) 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.
(l)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.
(m) Consumption Taxes
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.

12(n) 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 June 30, 2021.

3. Significant accounting estimates
1. Evaluation of fixed assets(1)Amounts recorded in the financial statements are as follows
As ofJune 30,2021

June 30,2021(in thousands of yen)(in thousands of
U.S. dollars)

Impairment loss ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ∙∙∙∙∙∙ ¥‐ $‐Property and equipment∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ∙∙∙∙∙∙ ¥462,164 $4,179

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 the fiscal year ending December 2021 and the business environment will gradually recover after
2022. However, it is difficult to predict with certainty when the spread of the new coronavirus will be eliminated and the extent of the
impact, any change in the spread of the new coronavirus could have an impact on the above estimate and an impairment loss may be
incurred.

4. Changes in presentation methods
The Company adopted “Accounting Standard for Disclosure of Accounting Estimates”(ASBJ statement No.31, March 31, 2020) to thefinancial statements for the six month ended June 30, 2021. and therefore significant accounting estimates are disclosed in the note to thefinancial statements.
The information for the previous fiscal period is not included in the note, in accordance with the transitional provision set out inparagraph 11 of the Accounting Standard.

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 ¥110.58 = US$1,
the effective rate of exchange prevailing at June 30, 2021. The inclusion of such U.S. dollar amounts associated with the fiscal six months

13

ended June 30, 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 December 31, 2020
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. Reason, related assets and amounts(in thousands of yen)
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

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

For the six months ended June 30, 2021
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. 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)

Related assets,
etc.

Reason for
occurrence

InitialamountBeginning

Allowance

Reversalbalanceset aside

duringduringperiodEndingbalance

Reason for reversal

14period

Leaseholdrights in trust

Amortizationofleasehold rights in$ (1,187)$ (55)-‐$ (55)$ (1,187)$ (55)-‐$ (55)

‐

trust

Total

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

7. Cash and Cash Equivalents
Cash and cash equivalents shown in the statements of cash flows consist of the following balance sheet items.
As ofDecember 31,
2020

June 30,2021

June 30,2021

21,210,252
6,295,192¥¥

6,311,545
6,528,498(in thousands of
U.S. dollars)
57,076$59,038$(1,328,500)¥(2,000,000)$(18,086)

26,176,945¥

10,840,044$

98,028(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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

8. Property and Equipment
The following tables show the summary of movement in property and equipment for the six months ended June 30, 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 ∙∙∙∙∙

5,293,194

1,362

‐

5,294,556

647,543

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

1,458

‐

‐

1,458

85

32

1,373

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

1,183,738

3,344

‐

1,187,082

233,535

58,203

953,547

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

10,637,811‐‐

10,637,811‐‐

10,637,811

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

588,930

52,538

3,888

637,580‐‐

637,580

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

164,029,805

137,562‐

164,167,367

21,027,435

2,273,211

143,139,931

33,102,139

282,020‐

33,384,159

10,817,809

951,096

22,566,350

233,505

2,482‐

235,988

104,094

5,754

131,893

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

2,727,329

73,724189

2,800,865

1,286,332

191,648

1,514,532

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

245,560,970‐‐

245,560,970‐‐

245,560,970

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

14,934,534‐‐

14,934,534

398,040

38,597

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

497,699,797¥‐

553,036

¥

¥

‐

4,078

¥

¥

19,406,379

498,248,756¥

931,763¥

35,446,640¥¥

218,5213,889,784¥

18,474,616
4,647,013

14,536,494¥

462,802,116

At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Net property andequipment

Depreciation forthe period(in thousands of U.S dollars)
Buildings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$

175,496

$

‐

$

‐

Buildings and accompanying facilities ∙∙∙∙∙

47,867

12‐$

175,496
47,879

$

8,426
5,855

$

1,976
1,381

$

167,070

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

13

‐

‐

13

‐

‐

12

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

10,70430‐

10,735

2,111

526

8,623

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

96,200‐‐96,200‐‐96,20042,02315

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

5,325

475

35

5,765

‐

‐

5,765

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

1,483,358

1,244

‐

1,484,602

190,155

20,557

1,294,446

299,350

2,550‐

301,900

97,8278,600

204,072

2,111

22

‐

2,134

941

52

1,192

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

24,663666

125,328

11,632

1,733

13,6962,220,663

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

2,220,663‐‐

2,220,663‐‐

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

135,056‐‐

135,056

3,599

349

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

4,500,812

$

5,001

$

36

$

4,505,776$

320,552$

35,176

131,456$

4,185,224

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 December 31, 2020 and June 30, 2021.
Residential
As of / For the six months ended

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

50,904,075

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(8,610,346)
42,293,729

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

54,237,000

42,293,729¥$(295,696)
41,998,033
55,024,000¥

382,471(2,674)
379,797$

497,594

Retail facilities
As of / For the six months ended

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

4,738,684

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(49,457)
4,689,226

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

6,040,000

4,689,226¥$(27,797)
4,661,429
6,040,000¥

42,405(251)42,154$54,621Hotel
As of / For the six months ended

December 31,
2020

June 30,2021(in thousands of yen)

June 30,2021(in thousands of
U.S. dollars)

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

421,613,565

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(3,042,918)
418,570,646

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

470,583,650¥

418,570,646$(3,065,573)
415,505,072¥

471,486,268

3,785,229(27,722)3,757,506$

4,263,757

Total
As of / For the six months ended

December 31,
2020

June 30,2021(in thousands of yen)

June 30,2021(in thousands of
U.S. dollars)

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

477,256,324¥

465,553,602$

4,210,10616

Net increase (decrease) during period ∙∙∙∙∙∙∙∙∙∙
Balance at the end of period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(11,702,721)
465,553,602

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

530,860,650(3,389,066)
462,164,535(30,648)
4,179,458

532,550,268¥

4,815,972$

Notes:
1.Fair value has been determined based on the appraisals or research provided by independent real estate appraisers.
2.For rental revenues and expenses for the six months ended December 31, 2020 and June 30, 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 June 30, 2021.
For the six months ended June 30, 2021
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

9,043

9,043

0.400

1,000,000

1,000,000

9,043

9,043

0.800

2,000,000

2,000,000

18,08618,0860.550

1,000,000

1,000,000

9,043

9,043

0.480

2,000,000

2,000,000

18,08618,0860.900

1,200,000

1,200,000

10,851

10,8510.850

8,200,000

8,200,000

74,154

74,154

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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

June 30,2021

June 30,2021(in thousands of yen)(in thousands of
U.S. dollars)‐$‐

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

1,000,000

9,043

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

2,000,000

18,086

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

1,000,000

9,043

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

‐

‐

17

11. Loans Payable
The following table shows the details of loans payable for the six months ended June 30, 2021.
For the six months ended June 30, 2021

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)

Short‐termloanspayableEndingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MizuhoBank, Ltd.

5,992,000‐‐

5,992,000

54,187‐‐54,1870.335

16‐Jul‐21

MUFG
Bank, Ltd.

6,660,000‐‐

6,660,000

60,227‐‐60,2270.335

16‐Jul‐21

Sumitomo
Mitsui
Banking
Corporation

5,992,000‐

1,550,000

4,442,000

54,187‐

14,01740,1700.335

16‐Jul‐21

Sumitomo
MitsuiTrust Bank,
Limited

2,670,000‐‐

2,670,000

24,145‐‐24,1450.335

16‐Jul‐21

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

3,000,000

27,129‐‐27,1290.335

16‐Jul‐21

ShinseiBank,
Limited.

3,330,000‐‐

3,330,000

30,113‐‐30,1130.335

16‐Jul‐21

ResonaBank,
Limited.

1,335,000‐‐

1,335,000

12,072‐‐

12,0720.335

16‐Jul‐21

Developme
nt Bank ofJapan Inc.

1,000,000‐

334,000

666,000

9,043

‐

3,020

6,022

0.335

20‐Jul‐21

Sumitomo
Mitsui
Banking
Corporation

3,000,000‐‐

3,000,000

27,129‐‐27,1290.335

14‐Sep‐21

MizuhoBank, Ltd.

328,500‐‐

328,500

2,970

‐

‐

2,970

0.335

13‐Oct‐21

Citibank,
N.A., Tokyo
Branch

355,000‐‐

355,000

3,210

‐

‐

3,210

0.335

13‐Oct‐21

ShinseiBank,
Limited.

355,000‐‐

355,000

3,210

‐

‐

3,210

0.335

13‐Oct‐21

ResonaBank,
Limited.

334,000‐‐

334,000

3,020

‐

‐

3,020

0.335

13‐Oct‐21

The
NomuraTrust andBankingCo., Ltd.

167,000‐‐

167,000

1,510

‐

‐

1,510

0.335

13‐Oct‐21

Sumitomo
MitsuiTrust Bank,
Limited328,500‐‐

328,500

2,970

‐

‐

2,970

0.335

13‐Oct‐21

Sumitomo
MitsuiTrust Bank,
Limited

‐3,400,000‐

3,400,000‐

30,746‐30,746

0.335

22‐Jan‐22

MUFG
Bank, Ltd.

‐

850,000‐

850,000

‐

7,686

‐

7,686

0.335

22‐Jan‐22

MizuhoBank, Ltd.

‐

1,215,500‐

1,215,500‐

10,992‐

10,9920.335

30‐Mar‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

18Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)

Short‐termloanspayableLong‐term
loans
payableEndingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

‐

199,000‐

199,000

‐

1,799

‐

1,799

0.335

30‐Mar‐22

Sumitomo
MitsuiTrust Bank,
Limited

‐447,500‐

447,500

‐

4,046

‐

4,046

0.335

30‐Mar‐22

ShinseiBank,
Limited.

‐25,000‐25,000

‐

226

‐

226

0.335

30‐Mar‐22

The Bank ofFukuoka,
Ltd.

‐525,000‐

525,000

‐

4,747

‐

4,747

0.335

30‐Mar‐22

The
NomuraTrust andBankingCo., Ltd.

‐

270,000‐

270,000

‐

2,441

‐

2,441

0.335

30‐Mar‐22

The
Shizuoka
Bank, Ltd.

‐375,000‐

375,000

‐

3,391

‐

3,391

0.335

30‐Mar‐22

MizuhoBank, Ltd.

‐902,000‐

902,000

‐

8,156

‐

8,156

0.335

30‐Mar‐22

MUFG
Bank, Ltd.

‐

692,000‐

692,000

‐

6,257

‐

6,257

0.335

30‐Mar‐22

Sumitomo
Mitsui
Banking
Corporation‐

681,000‐

681,000

‐

6,158

‐

6,158

0.335

30‐Mar‐22

Sumitomo
MitsuiTrust Bank,
Limited

‐617,000‐

617,000

‐

5,579

‐

5,579

0.335

30‐Mar‐22

Developme
nt Bank ofJapan Inc.

‐

147,000‐

147,000

‐

1,329

‐

1,329

0.335

30‐Mar‐22

ResonaBank,
Limited.

‐570,000

570,000

‐

‐

5,154

5,154

‐

0.335

30‐Jun‐21

Citibank,
N.A., Tokyo
Branch‐349,000‐

349,000

‐

3,156

‐

3,156

0.335

15‐Jun‐22

ResonaBank,
Limited.

‐570,000‐

570,000

‐

5,154

‐

5,154

0.335

30‐Dec‐21

Total
short‐termloanspayable34,847,000

11,835,000

2,454,000

44,228,000

315,129

107,026

22,192399,963

Sumitomo
MitsuiTrust Bank,
Limited

3,400,000‐

3,400,000‐

30,746‐30,746‐0.600

22‐Jan‐21

MUFG
Bank, Ltd.

850,000‐

850,000

‐

7,686

‐

7,686

‐

0.600

22‐Jan‐21

MizuhoBank, Ltd.

1,965,000‐

1,965,000‐

17,769‐17,769‐0.678

30‐Mar‐21

MUFG
Bank, Ltd.

1,125,000‐

1,125,000‐

10,173‐

10,173‐0.678

30‐Mar‐21

Sumitomo
MitsuiTrust Bank,
Limited

2,180,000‐

2,180,000‐

19,714‐

19,714‐0.678

30‐Mar‐21

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed(2)

Unsecured
andunguaranteed

19Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

ShinseiBank,
Limited.

570,000‐

570,000

‐

5,154

‐

5,154

‐

0.678

30‐Mar‐21

ResonaBank,
Limited.

570,000‐

570,000

‐

5,154

‐

5,154

‐

0.678

30‐Mar‐21

MUFG
Bank, Ltd.

650,000‐

650,000

‐

5,878

‐

5,878

‐

0.678

30‐Mar‐21

The Bank ofFukuoka,Ltd.

1,333,000‐

1,333,000‐

12,054‐

12,054‐0.678

30‐Mar‐21

The
Shizuoka
Bank, Ltd.

270,000‐

270,000

‐

2,441

‐

2,441

‐

0.678

30‐Mar‐21

The
KagawaBank, Ltd.

500,000‐

500,000

‐

4,521

‐

4,521

‐

0.678

30‐Mar‐21

The
Hiroshima
Bank, Ltd.

1,000,000‐

1,000,000

‐

9,043

‐

9,043

‐

0.678

30‐Mar‐21

The
NomuraTrust andBankingCo., Ltd.

270,000‐

270,000

‐

2,441

‐

2,441

‐

0.678

30‐Mar‐21

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

1,000,000

‐

9,043

‐

9,043

‐

0.685

15‐Jun‐21

AEON
Bank, Ltd.

3,000,000‐

3,000,000‐

27,129‐27,129‐0.685

30‐Jun‐21

The Tokyo
Star Bank,
Limited

1,700,000‐

118,000

1,582,000

15,373‐

1,067

14,3060.685

20‐Jul‐21

MizuhoBank, Ltd.

1,633,000‐

1,633,000‐

14,767‐

14,767‐0.578

14‐Mar‐21

ResonaBank,
Limited.

333,000‐

333,000

‐

3,011

‐

3,011

‐

0.578

14‐Mar‐21

The Bank ofFukuoka,Ltd.

333,000‐

333,000

‐

3,011

‐

3,011

‐

0.578

14‐Mar‐21

The
NomuraTrust andBankingCo., Ltd.

333,000‐

333,000

‐

3,011

‐

3,011

‐

0.578

14‐Mar‐21

The Towa
Bank, Ltd.

253,000‐

253,000

‐

2,287

‐

2,287

‐

0.578

14‐Mar‐21

The
Shizuoka
Bank, Ltd.

200,000‐

200,000

‐

1,808

‐

1,808

‐

0.578

14‐Mar‐21

The Gunma
Bank, Ltd.

165,000‐

165,000

‐

1,492

‐

1,492

‐

0.578

14‐Mar‐21

MizuhoBank, Ltd.

1,733,000‐‐

1,733,000

15,671‐‐

15,6710.685

14‐Mar‐22

ResonaBank,
Limited.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.685

14‐Mar‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed20Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.685

14‐Mar‐22

The
NomuraTrust andBankingCo., Ltd.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.685

14‐Mar‐22

AEON
Bank, Ltd.

900,000‐‐

900,000

8,138

‐

‐

8,138

0.685

14‐Mar‐22

The Towa
Bank, Ltd.

253,000‐‐

253,000

2,287

‐

‐

2,287

0.685

14‐Mar‐22

The
Shizuoka
Bank, Ltd.

200,000‐‐

200,000

1,808

‐

‐

1,808

0.685

14‐Mar‐22

The Dai‐ichi
Life
Insurancecompany,
Limited

500,000‐‐

500,000

4,521

‐

‐

4,521

0.685

14‐Mar‐22

The Gunma
Bank, Ltd.

165,000‐‐

165,000

1,492

‐

‐

1,492

0.685

14‐Mar‐22

MizuhoBank, Ltd.

4,321,000‐‐

4,321,000

39,075‐‐39,0750.635

29‐Nov‐21

The Dai‐ichi
Life
Insurancecompany,
Limited3,000,000‐

157,000

2,843,000

27,129‐1,419

25,7090.635

29‐Nov‐21

ShinseiBank,
Limited.

355,000‐‐

355,000

3,210

‐

‐

3,210

0.485

13‐Oct‐21

Citibank,
N.A., Tokyo
Branch

355,000‐‐

355,000

3,210

‐

‐

3,210

0.485

13‐Oct‐21

ResonaBank,
Limited.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.485

13‐Oct‐21

The Bank ofFukuoka,Ltd.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.485

13‐Oct‐21

AEON
Bank, Ltd.

190,000‐‐

190,000

1,718

‐

‐

1,718

0.485

13‐Oct‐21

The
NomuraTrust andBankingCo., Ltd.

167,000‐‐

167,000

1,510

‐

‐

1,510

0.485

13‐Oct‐21

The
Hiroshima
Bank, Ltd.

167,000‐‐

167,000

1,510

‐

‐

1,510

0.485

13‐Oct‐21

MizuhoBank, Ltd.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.685

13‐Oct‐22

Sumitomo
MitsuiTrust Bank,
Limited

500,000‐‐

500,000

4,521

‐

‐

4,521

0.685

13‐Oct‐22

Sumitomo
Mitsui
Banking
Corporation

500,000‐‐

500,000

4,521

‐

‐

4,521

0.685

13‐Oct‐22

ShinseiBank,
Limited.

355,000‐‐

355,000

3,210

‐

‐

3,210

0.685

13‐Oct‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

21

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Citibank,
N.A., Tokyo
Branch

355,000‐‐

355,000

3,210

‐

‐

3,210

0.685

13‐Oct‐22

ResonaBank,
Limited.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.685

13‐Oct‐22

Developme
nt Bank ofJapan Inc.

1,500,000‐‐

1,500,000

13,564‐‐

13,5640.685

13‐Oct‐22

The Bank ofFukuoka,Ltd.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.685

13‐Oct‐22

AEON
Bank, Ltd.

190,000‐‐

190,000

1,718

‐

‐

1,718

0.685

13‐Oct‐22

The
NomuraTrust andBankingCo., Ltd.

166,000‐‐

166,000

1,501

‐

‐

1,501

0.685

13‐Oct‐22

The
Hiroshima
Bank, Ltd.

166,000‐‐

166,000

1,501

‐

‐

1,501

0.685

13‐Oct‐22

The Dai‐ichi
Life
Insurancecompany,
Limited

500,000‐‐

500,000

4,521

‐

‐

4,521

0.685

13‐Oct‐22

MizuhoBank, Ltd.

1,250,000‐‐

1,250,000

11,304‐‐

11,304

0.785

13‐Oct‐23

Sumitomo
MitsuiTrust Bank,
Limited

1,065,000‐‐

1,065,000

9,631

‐

‐

9,631

0.785

13‐Oct‐23

Sumitomo
Mitsui
Banking
Corporation

1,250,000‐‐

1,250,000

11,304‐‐

11,304

0.785

13‐Oct‐23

MizuhoBank, Ltd.

1,250,000‐‐

1,250,000

11,304‐‐

11,3040.885

11‐Oct‐24

Sumitomo
MitsuiTrust Bank,
Limited

1,060,000‐‐

1,060,000

9,585

‐

‐

9,585

0.885

11‐Oct‐24

Sumitomo
Mitsui
Banking
Corporation

1,250,000‐‐

1,250,000

11,304‐‐

11,3040.885

11‐Oct‐24

ShinseiBank,
Limited.

1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.750

27‐Jun‐23

MUFG
Bank, Ltd.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.750

27‐Jun‐23

MizuhoBank, Ltd.

2,442,000‐‐

2,442,000

22,083‐‐22,0830.385

17‐Jul‐21

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

20,075‐‐20,0750.385

17‐Jul‐21

Sumitomo
Mitsui
Banking
Corporation

1,998,000‐‐

1,998,000

18,068‐‐18,0680.385

17‐Jul‐21

ShinseiBank,
Limited.

1,110,000‐‐

1,110,000

10,037‐‐

10,0370.385

17‐Jul‐21

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

22Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

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

1,000,000

9,043

‐

‐

9,043

0.385

17‐Jul‐21

Sumitomo
MitsuiTrust Bank,
Limited

890,000‐‐

890,000

8,048

‐

‐

8,048

0.385

17‐Jul‐21

MizuhoBank, Ltd.

2,443,000‐‐

2,443,000

22,092‐‐22,0920.485

17‐Jul‐22

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

20,075‐‐20,0750.485

17‐Jul‐22

Sumitomo
Mitsui
Banking
Corporation

1,997,000‐‐

1,997,000

18,059‐‐18,0590.485

17‐Jul‐22

ShinseiBank,
Limited.

1,110,000‐‐

1,110,000

10,037‐‐

10,0370.485

17‐Jul‐22

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

1,000,000

9,043

‐

‐

9,043

0.485

17‐Jul‐22

Sumitomo
MitsuiTrust Bank,
Limited

890,000‐‐

890,000

8,048

‐

‐

8,048

0.485

17‐Jul‐22

MizuhoBank, Ltd.

2,442,000‐‐

2,442,000

22,083‐‐22,0830.585

14‐Jul‐23

MUFG
Bank, Ltd.

2,220,000‐‐

2,220,000

20,075‐‐20,0750.585

14‐Jul‐23

Sumitomo
Mitsui
Banking
Corporation

1,997,000‐‐

1,997,000

18,059‐‐18,0590.585

14‐Jul‐23

ShinseiBank,
Limited.

1,110,000‐‐

1,110,000

10,037‐‐

10,0370.585

14‐Jul‐23

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

1,000,000

9,043

‐

‐

9,043

0.585

14‐Jul‐23

Sumitomo
MitsuiTrust Bank,
Limited

890,000‐‐

890,000

8,048

‐

‐

8,048

0.585

14‐Jul‐23

MizuhoBank, Ltd.

766,000‐‐

766,000

6,927

‐

‐

6,927

0.385

02‐Aug‐21

Sumitomo
Mitsui
Banking
Corporation

766,000‐‐

766,000

6,927

‐

‐

6,927

0.385

02‐Aug‐21

MUFG
Bank, Ltd.

467,000‐‐

467,000

4,223

‐

‐

4,223

0.385

02‐Aug‐21

ShinseiBank,
Limited.

150,000‐‐

150,000

1,356

‐

‐

1,356

0.385

02‐Aug‐21

Citibank,
N.A., Tokyo
Branch120,000‐‐

120,000

1,085

‐

‐

1,085

0.385

02‐Aug‐21

The
NomuraTrust andBankingCo., Ltd.

30,000‐‐30,000

271

‐

‐

271

0.385

02‐Aug‐21

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

23

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

AEON
Bank, Ltd.

60,000‐‐60,000

542

‐

‐

542

0.385

02‐Aug‐21

MizuhoBank, Ltd.

2,521,500‐‐

2,521,500

22,802‐‐22,802

0.385

26‐Sep‐21

Sumitomo
Mitsui
Banking
Corporation

2,521,500‐‐

2,521,500

22,802‐‐22,802

0.385

26‐Sep‐21

MUFG
Bank, Ltd.

2,133,000‐‐

2,133,000

19,289‐‐19,2890.385

26‐Sep‐21

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.385

26‐Sep‐21

ShinseiBank,
Limited.

684,000‐‐

684,000

6,185

‐

‐

6,185

0.385

26‐Sep‐21

Citibank,
N.A., Tokyo
Branch546,000‐‐

546,000

4,937

‐

‐

4,937

0.385

26‐Sep‐21

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.385

26‐Sep‐21

ResonaBank,
Limited.

445,000‐‐

445,000

4,024

‐

‐

4,024

0.385

26‐Sep‐21

The
NomuraTrust andBankingCo., Ltd.

137,000‐‐

137,000

1,238

‐

‐

1,238

0.385

26‐Sep‐21

AEON
Bank, Ltd.

273,000‐‐

273,000

2,468

‐

‐

2,468

0.385

26‐Sep‐21

MizuhoBank, Ltd.

3,287,000‐‐

3,287,000

29,725‐‐29,7250.485

26‐Sep‐22

Sumitomo
Mitsui
Banking
Corporation

3,287,000‐‐

3,287,000

29,725‐‐29,7250.485

26‐Sep‐22

MUFG
Bank, Ltd.

2,600,000‐‐

2,600,000

23,512‐‐

23,5120.485

26‐Sep‐22

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.485

26‐Sep‐22

ShinseiBank,
Limited.

833,000‐‐

833,000

7,533

‐

‐

7,533

0.485

26‐Sep‐22

Citibank,
N.A., Tokyo
Branch

667,000‐‐

667,000

6,031

‐

‐

6,031

0.485

26‐Sep‐22

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.485

26‐Sep‐22

ResonaBank,
Limited.

445,000‐‐

445,000

4,024

‐

‐

4,024

0.485

26‐Sep‐22

The
NomuraTrust andBankingCo., Ltd.

167,000‐‐

167,000

1,510

‐

‐

1,510

0.485

26‐Sep‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

24Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

AEON
Bank, Ltd.

334,000‐‐

334,000

3,020

‐

‐

3,020

0.485

26‐Sep‐22

MizuhoBank, Ltd.

3,287,500‐‐

3,287,500

29,729‐‐29,7290.585

26‐Sep‐23

Sumitomo
Mitsui
Banking
Corporation

3,287,500‐‐

3,287,500

29,729‐‐29,7290.585

26‐Sep‐23

MUFG
Bank, Ltd.

2,600,000‐‐

2,600,000

23,512‐‐

23,512

0.585

26‐Sep‐23

Sumitomo
MitsuiTrust Bank,
Limited1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.585

26‐Sep‐23

ShinseiBank,
Limited.

833,000‐‐

833,000

7,533

‐

‐

7,533

0.585

26‐Sep‐23

Citibank,
N.A., Tokyo
Branch

667,000‐‐

667,000

6,031

‐

‐

6,031

0.585

26‐Sep‐23

Developme
nt Bank ofJapan Inc.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.585

26‐Sep‐23

ResonaBank,
Limited.

445,000‐‐

445,000

4,024

‐

‐

4,024

0.585

26‐Sep‐23

The
NomuraTrust andBankingCo., Ltd.

166,000‐‐

166,000

1,501

‐

‐

1,501

0.585

26‐Sep‐23

AEON
Bank, Ltd.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.585

26‐Sep‐23

MUFG
Bank, Ltd.

850,000‐‐

850,000

7,686

‐

‐

7,686

0.373

22‐Jan‐22

Sumitomo
MitsuiTrust Bank,
Limited

3,400,000‐‐

3,400,000

30,746‐‐30,7460.373

22‐Jan‐22

MizuhoBank, Ltd.

386,000‐‐

386,000

3,490

‐

‐

3,490

0.361

29‐Mar‐22

MUFG
Bank, Ltd.

1,275,000‐‐

1,275,000

11,530‐‐11,5300.361

29‐Mar‐22

Sumitomo
MitsuiTrust Bank,
Limited2,100,000‐‐

2,100,000

18,990‐‐18,9900.361

29‐Mar‐22

ShinseiBank,
Limited.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.361

29‐Mar‐22

ResonaBank,
Limited.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.361

29‐Mar‐22

Developme
nt Bank ofJapan Inc.

1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.361

29‐Mar‐22

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.361

29‐Mar‐22

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

25Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

The
Shizuoka
Bank, Ltd.

1,270,000‐‐

1,270,000

11,484‐‐

11,4840.361

29‐Mar‐22

The
NomuraTrust andBankingCo., Ltd.

270,000‐‐

270,000

2,441

‐

‐

2,441

0.361

29‐Mar‐22

The Senshu
Ikeda Bank,
Ltd.

300,000‐

12,000288,000

2,712

‐

108

2,604

0.361

29‐Mar‐22

AozoraBank, Ltd.

1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.594

29‐Mar‐24

THE
NISHI‐NI
PPON
CITY
BANK,
LTD.

1,000,000‐

79,000921,000

9,043

‐

714

8,328

0.594

29‐Mar‐24

The Tochigi
Bank, Ltd.

500,000‐

20,000480,000

4,521

‐

180

4,340

0.594

29‐Mar‐24

Kiraboshi
Bank, Ltd.

1,000,000‐

39,000961,000

9,043

‐

352

8,690

0.885

29‐Mar‐29

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

1,000,000

9,043

‐

‐

9,043

0.340

17‐Jun‐22

Developme
nt Bank ofJapan Inc.

1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.334

17‐Jun‐22

MizuhoBank, Ltd.

571,400‐‐

571,400

5,167

‐

‐

5,167

0.400

16‐Jan‐23

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

13,246‐‐

13,2460.400

16‐Jan‐23

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

12,038‐‐12,0380.400

16‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,684

‐

‐

5,684

0.400

16‐Jan‐23

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

1,000,000

9,043

‐

‐

9,043

0.400

16‐Jan‐23

ShinseiBank,
Limited.

200,000‐‐

200,000

1,808

‐

‐

1,808

0.400

16‐Jan‐23

ResonaBank,
Limited.

600,000‐‐

600,000

5,425

‐

‐

5,425

0.400

16‐Jan‐23

MizuhoBank, Ltd.

571,400‐‐

571,400

5,167

‐

‐

5,167

0.499

16‐Jan‐24

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

13,246‐‐

13,2460.499

16‐Jan‐24

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

12,038‐‐12,0380.499

16‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,684

‐

‐

5,684

0.499

16‐Jan‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

26

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

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

1,000,000

9,043

‐

‐

9,043

0.499

16‐Jan‐24

ShinseiBank,
Limited.

200,000‐‐

200,000

1,808

‐

‐

1,808

0.499

16‐Jan‐24

ResonaBank,
Limited.

600,000‐‐

600,000

5,425

‐

‐

5,425

0.499

16‐Jan‐24

MizuhoBank, Ltd.

1,171,400‐‐

1,171,400

10,593‐‐

10,5930.563

16‐Jul‐24

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

13,246‐‐

13,2460.563

16‐Jul‐24

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

12,038‐‐12,0380.563

16‐Jul‐24

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,684

‐

‐

5,684

0.563

16‐Jul‐24

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

1,000,000

9,043

‐

‐

9,043

0.563

16‐Jul‐24

ShinseiBank,
Limited.

200,000‐‐

200,000

1,808

‐

‐

1,808

0.563

16‐Jul‐24

MizuhoBank, Ltd.

2,171,400‐‐

2,171,400

19,636‐‐

19,6360.635

16‐Jan‐25

Long‐term
loans
payableMUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

13,246‐‐

13,2460.635

16‐Jan‐25

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

12,038‐‐12,0380.635

16‐Jan‐25

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,684

‐

‐

5,684

0.635

16‐Jan‐25

ShinseiBank,
Limited.

200,000‐‐

200,000

1,808

‐

‐

1,808

0.635

16‐Jan‐25

MizuhoBank, Ltd.

2,170,400‐‐

2,170,400

19,627‐‐

19,6270.785

16‐Jul‐25

MUFG
Bank, Ltd.

1,464,800‐‐

1,464,800

13,246‐‐

13,2460.785

16‐Jul‐25

Sumitomo
Mitsui
Banking
Corporation

1,331,200‐‐

1,331,200

12,038‐‐12,0380.785

16‐Jul‐25

Sumitomo
MitsuiTrust Bank,
Limited628,600‐‐

628,600

5,684

‐

‐

5,684

0.785

16‐Jul‐25

ShinseiBank,
Limited.

200,000‐‐

200,000

1,808

‐

‐

1,808

0.785

16‐Jul‐25

MizuhoBank, Ltd.

1,085,000‐‐

1,085,000

9,811

‐

‐

9,811

0.413

16‐Jan‐23

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed27

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

MUFG
Bank, Ltd.

987,000‐‐

987,000

8,925

‐

‐

8,925

0.413

16‐Jan‐23

Sumitomo
Mitsui
Banking
Corporation

987,000‐‐

987,000

8,925

‐

‐

8,925

0.413

16‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

6,185

‐

‐

6,185

0.413

16‐Jan‐23

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

4,521

‐

‐

4,521

0.413

16‐Jan‐23

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.413

16‐Jan‐23

AEON
Bank, Ltd.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.413

16‐Jan‐23

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

904

‐

‐

904

0.413

16‐Jan‐23

MizuhoBank, Ltd.

712,000‐‐

712,000

6,438

‐

‐

6,438

0.525

16‐Jan‐24

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,916

‐

‐

8,916

0.525

16‐Jan‐24

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,916

‐

‐

8,916

0.525

16‐Jan‐24

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

6,185

‐

‐

6,185

0.525

16‐Jan‐24

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

4,521

‐

‐

4,521

0.525

16‐Jan‐24

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.525

16‐Jan‐24

AEON
Bank, Ltd.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.525

16‐Jan‐24

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

904

‐

‐

904

0.525

16‐Jan‐24

AozoraBank, Ltd.

375,000‐

138,000

237,000

3,391

‐

1,247

2,143

0.525

16‐Jan‐24

MizuhoBank, Ltd.

712,000‐‐

712,000

6,438

‐

‐

6,438

0.580

16‐Jul‐24

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,916

‐

‐

8,916

0.580

16‐Jul‐24

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,916

‐

‐

8,916

0.580

16‐Jul‐24

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

6,185

‐

‐

6,185

0.580

16‐Jul‐24

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed28

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturity
date

Citibank,
N.A., Tokyo
Branch

500,000‐‐

500,000

4,521

‐

‐

4,521

0.580

16‐Jul‐24

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.580

16‐Jul‐24

AEON
Bank, Ltd.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.580

16‐Jul‐24

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

904

‐

‐

904

0.580

16‐Jul‐24

AozoraBank, Ltd.

375,000‐‐

375,000

3,391

‐

‐

3,391

0.580

16‐Jul‐24

MizuhoBank, Ltd.

1,212,000‐‐

1,212,000

10,960‐‐10,9600.635

16‐Jan‐25

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,916

‐

‐

8,916

0.635

16‐Jan‐25

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,916

‐

‐

8,916

0.635

16‐Jan‐25

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

6,185

‐

‐

6,185

0.635

16‐Jan‐25

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.635

16‐Jan‐25

AEON
Bank, Ltd.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.635

16‐Jan‐25

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

904

‐

‐

904

0.635

16‐Jan‐25

AozoraBank, Ltd.

375,000‐‐

375,000

3,391

‐

‐

3,391

0.635

16‐Jan‐25

MizuhoBank, Ltd.

1,211,000‐‐

1,211,000

10,951‐‐

10,951

0.785

16‐Jul‐25

MUFG
Bank, Ltd.

986,000‐‐

986,000

8,916

‐

‐

8,916

0.785

16‐Jul‐25

Sumitomo
Mitsui
Banking
Corporation

986,000‐‐

986,000

8,916

‐

‐

8,916

0.785

16‐Jul‐25

Sumitomo
MitsuiTrust Bank,
Limited

684,000‐‐

684,000

6,185

‐

‐

6,185

0.785

16‐Jul‐25

Developme
nt Bank ofJapan Inc.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.785

16‐Jul‐25

AEON
Bank, Ltd.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.785

16‐Jul‐25

The
NomuraTrust andBankingCo., Ltd.

100,000‐‐

100,000

904

‐

‐

904

0.785

16‐Jul‐25

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

29Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

AozoraBank, Ltd.

375,000‐‐

375,000

3,391

‐

‐

3,391

0.785

16‐Jul‐25

The Tokyo
Star Bank,
Limited

700,000‐‐

700,000

6,330

‐

‐

6,330

0.785

16‐Jul‐25

MizuhoBank, Ltd.

2,882,000‐‐

2,882,000

26,062‐‐

26,062

0.462

16‐Jan‐24

San ju San
Bank,Ltd.(4)800,000‐

138,000

662,000

7,234

‐

1,247

5,986

0.462

16‐Jan‐24

San ju San
Bank,Ltd.(4)1,700,000‐‐

1,700,000

15,373‐‐

15,3730.486

15‐Apr‐24

San ju San
Bank,Ltd.(4)1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.635

15‐Apr‐25

THE
NISHI‐NI
PPON
CITY
BANK,
LTD.

1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.785

15‐Oct‐25

Sumitomo
MitsuiTrust Bank,
Limited

1,550,000‐‐

1,550,000

14,017‐‐

14,0170.417

06‐Jan‐23

Sumitomo
MitsuiTrust Bank,
Limited

3,050,000‐‐

3,050,000

27,581‐‐

27,581

0.643

06‐Jan‐25

MomijiBank,Ltd.

1,000,000‐

39,000961,000

9,043

‐

352

8,690

0.643

06‐Jan‐25

The Kiyo
Bank, Ltd.

500,000‐

20,000480,000

4,521

‐

180

4,340

0.643

06‐Jan‐25

MizuhoBank, Ltd.

634,000‐‐

634,000

5,733

‐

‐

5,733

0.487

16‐Mar‐25

ResonaBank,
Limited.

300,000‐‐

300,000

2,712

‐

‐

2,712

0.487

16‐Mar‐25

Developme
nt Bank ofJapan Inc.

1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.487

16‐Mar‐25

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.487

16‐Mar‐25

The
NomuraTrust andBankingCo., Ltd.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.487

16‐Mar‐25

The
Shizuoka
Bank, Ltd.

200,000‐‐

200,000

1,808

‐

‐

1,808

0.487

16‐Mar‐25

The
Yamaguchi
Bank, Ltd.

450,000‐

39,000411,000

4,069

‐

352

3,716

0.487

16‐Mar‐25

MUFG
Bank, Ltd.

850,000‐‐

850,000

7,686

‐

‐

7,686

0.385

16‐Mar‐23

Sumitomo
MitsuiTrust Bank,
Limited

1,090,000‐‐

1,090,000

9,857

‐

‐

9,857

0.385

16‐Mar‐23

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed30Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Long‐term
loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

Maturitydate

The Bank ofFukuoka,Ltd.

333,000‐‐

333,000

3,011

‐

‐

3,011

0.385

16‐Mar‐23

MizuhoBank, Ltd.

582,000‐‐

582,000

5,263

‐

‐

5,263

0.585

16‐Mar‐25

MUFG
Bank, Ltd.

628,000‐‐

628,000

5,679

‐

‐

5,679

0.585

16‐Mar‐25

Sumitomo
MitsuiTrust Bank,
Limited

1,090,000‐‐

1,090,000

9,857

‐

‐

9,857

0.585

16‐Mar‐25

ShinseiBank,
Limited.

570,000‐‐

570,000

5,154

‐

‐

5,154

0.585

16‐Mar‐25

ResonaBank,
Limited.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.585

16‐Mar‐25

The
NomuraTrust andBankingCo., Ltd.

270,000‐‐

270,000

2,441

‐

‐

2,441

0.585

16‐Mar‐25

AozoraBank, Ltd.

1,000,000‐‐

1,000,000

9,043

‐

‐

9,043

0.585

16‐Mar‐25

The
Shizuoka
Bank, Ltd.

270,000‐‐

270,000

2,441

‐

‐

2,441

0.585

16‐Mar‐25

The
KagawaBank, Ltd.

500,000‐‐

500,000

4,521

‐

‐

4,521

0.585

16‐Mar‐25

The
Yamaguchi
Bank, Ltd.

550,000‐‐

550,000

4,973

‐

‐

4,973

0.585

16‐Mar‐25

The Chukyo
Bank, Ltd.

1,000,000‐

39,000961,000

9,043

‐

352

8,690

0.585

16‐Mar‐25

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

1,000,000

9,043

‐

‐

9,043

0.335

17‐Jun‐22

The Tokyo
Star Bank,
Limited

600,000‐‐

600,000

5,425

‐

‐

5,425

0.335

20‐Jul‐22

Total
long‐term
loans
payable219,541,000‐

196,770,000

1,985,359‐

205,923

1,779,435

240,998,000

2,300,488

107,026

228,115

2,179,399

Total loans payable

254,388,000

11,835,000

22,771,000

25,225,000

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)

The Daisan Bank, Ltd. merged with The Mie Bank, Ltd. and changed its name to The San ju San Bank, Ltd. as of May 1, 2021.

(5)

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 ofJune 30,

June 30,

2021

2021

(in thousands of yen)(in thousands of31

U.S. dollars)
44,807,000 $

405,199

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

44,589,000

403,228

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

40,661,000

367,706

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

12,437,000

112,470

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

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$452 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 December 31, 2020 and June 30, 2021.
The number of investment units issued and outstanding were 6,096,840 units as of J December 31, 2020, and June 30, 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 December 31, 2020 and June 30, 2021.
For the six months ended

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Unappropriated retained earnings ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥13,371,340

Distributions ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,018,172)

Retained earnings / losses carried forward ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥12,353,168¥

8,753,480$

79,159(91,452)¥

8,662,027(827)$

78,332The distribution in respect of the six months ended June 30, 2021 of ¥15 (US$0.1) per investment unit, amounting to a total distribution of¥91,452thousand (US$827thousand) was proposed and approved at the Board of Directors meeting on August 25, 2021. These financial
statements do not reflect these distributions payable.
Cash distributions per investment unit were ¥167 and ¥15 (US$0.1) for the six months ended J December 31, 2020 and June 30, 2021
respectively.
Notes related to provision and reversal of allowance for temporary differences adjustment is below.
For the six months ended December 31, 2020
Not Applicable
For the six months ended June 30, 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 December 31, 2020 and June 30,
2021 consist of the following:
For the six months ended

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Rental revenue – real estate:
Rental revenue and common area charges (*)∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

5,530,201
208,047¥

3,599,611
206,564$

32,552
1,868

32

Total rental revenue – real estate ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥5,738,249¥

3,806,176$

34,420

Expenses related to property rental business:
Facility management fees ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Property related taxes ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total expenses related to property rental business ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income from property leasing activities∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥548,085
779,062
19,7193,564,224
133,441
5,044,533
693,715¥$¥¥

497,596603,133
19,0123,460,619
140,454
4,720,815(914,639)

$
$

4,499
5,454
171
31,295
1,270
42,691(8,271)(*)Variable rental revenue of hotels ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥1,105,021¥

37,496$339

15. Management Contract Revenue
For the six months ended

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)Management contract revenue:
Hotel management revenue∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Hotel management expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Management contract revenue ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥323,764
774,406‐¥

Management contract expenses:
Loss for management contract(*1) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Insurance expense ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Depreciation ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Total management contract expenses ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Operating income (loss) from management contract ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥450,641
101,221428,5632,862
983,288(983,288)

¥

¥

¥
¥

388,076
740,915‐$352,838
101,793429,164934
884,731(884,731)

$

3,509
6,700
‐

$

$
$

3,190
920
3,881
8
8,000
(8,000)(*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 December 31, 2020
Nisshin Palacestage
Higashi‐Nagasaki,
Nishiwaseda Cresent Mansion,
Neo Prominence, City Court
Kitaichijo(in thousands of yen)
Revenue from sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥7,870,163
Cost of properties sold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
6,183,306
Other sale‐related costs ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
176,967
Gain or loss on sales of properties ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥1,509,889

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

Lexington Square
Akebonobashi, Lexington
SquareDaitabashi(in thousands of yen)¥
3,270,294
2,100,964
76,876¥
1,092,453(*) The sale price of individual properties are not disclosed as the transferees’ consent has not been obtained for disclosure.

33

For the six months ended June 30, 2021
Not Applicable

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
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

December 31,
2020

June 30,
2021(Rate)
Statutory tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Increase (decrease) in valuation allowance ∙∙∙∙∙∙∙∙∙∙∙
Other ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

31.46 %
(31.46)
0.10

‐ %
‐
‐

Effective tax rates ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

0.10 %‐ %(*) In the this 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 of

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Deferred tax assets:
Enterprise tax payable

731
312,445472,381532,677¥

Buildings and other (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Land (merger) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙Net loss carried forward(*1) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Asset retirement obligations ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Fixed‐term leasehold ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Adjustment of acquisition price (Overseas properties)¥

615
307,217472,381
1,662,026

$

5
2,778
4,271
15,03010,374
113,080
465,374

10,443
125,223461428

94
1,132
4,172

1,907,065(532,677)(1,374,387)

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

27,485(15,030)(12,455)

Subtotal ‐ valuation allowance(*2) ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙(1,907,065)(3,039,336)(27,485)

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

‐

‐

‐

Subtotal ‐ deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Valuation allowance for tax loss carried forward
Valuation allowance for the sum of deductible temporary differences(*1)The amounts of tax loss carried forward and the deferred tax assets are indicated by carry‐forward period.
For the six months ended December 31, 2020

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)

‐
‐

‐

‐

201,976(201,976)‐

10,232(10,232)

532,677(532,677)

‐

‐

‐

‐

‐

‐

‐

Tax loss carried forward (a)‐Valuation allowance ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Deferred tax assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

34

(a)Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

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 ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

‐
‐
‐

‐
‐

4,724
(4,724)
‐

‐
‐
‐

‐

‐
‐
‐

10,305(10,305)

15,030(15,030)‐‐(a) Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.

(*2)The valuation allowance increased by 1,132,271 thousand yen (US$10,239thousand). This increase is mainly due to an increase in tax
loss carryforwards.

18. Leases(a) Lease rental revenues
The future minimum rental revenues pursuant to existing rental contracts as of December 31, 2020 and June 30, 2021 scheduled to bereceived are summarized as follows:
As of

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

12,885,947
69,716,320¥

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

82,602,268¥(*1)13,055,492$

64,085,583
77,141,076(*1)118,063

579,540$

697,604(*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 December 31, 2020 and June 30, 2021 scheduled to be
paid are summarized as follows:
As of

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Due within one year ∙∙∙∙∙∙∙∙∙∙∙∙¥
Due over one year ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

317,915
8,769,532¥

319,859
8,686,455$

2,892
78,553

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

9,087,447¥

9,006,315$

81,446

19. Financial Instruments(a) Qualitative information for financial instruments

35

(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 thefinance 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 based on quoted market prices if available. When quoted market prices are notavailable, fair value is estimated using valuation techniques which contain various assumptions. If other valuation models orassumptions 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 December 31, 2020 and June 30, 2021.
As ofDecember 31,
2020
Carrying
amounts

June 30,2021

Fair value

Carrying
amounts

Difference

June 30,2021

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Assets:Current:(1) Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥21,210,252(2) Cash and bank deposits in trust. ∙∙∙∙∙

6,295,192

Total assets ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥27,505,445¥

21,210,252¥‐

6,295,192¥¥

27,505,445¥‐

6,311,545¥

6,528,498‐¥

12,840,044

6,311,545¥

6,528,498¥

12,840,044

‐

$

¥

‐

57,076$59,038‐$116,115

57,076$‐59,038$116,115‐$‐

Liabilities:
44,228,000

44,228,000

53,315,000

53,315,000(3) Short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

34,847,000

34,847,000‐(4) Current portion of long‐term loans
payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

55,601,000

55,601,000‐(5) Investment corporation bonds ∙∙∙∙∙∙∙∙

8,200,000

7,467,240(732,760)

8,200,000

7,556,240‐

143,455,000

143,455,000

163,940,000‐‐

399,963

399,963482,139

482,139(643,760)

74,154

68,332‐

1,297,296

1,297,296‐‐(5,821)(6) Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

163,940,000

Total liabilities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥262,588,000¥

261,855,240¥(732,760)¥

249,198,000¥

248,554,240¥(643,760)$

2,253,553$

2,247,732$(5,821)‐(7) Derivatives∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥(104,071)¥(104,071)¥‐¥(78,176)¥(78,176)

¥

‐

$

（706）

$

(706)

$

‐

Notes

(i)The methods and assumptions used to estimate fair value are as follows:(1)Cash and bank deposits and(2)Cash and bank deposits in trust(3)Short‐term loans payable
Because of their short maturities, the carrying amounts approximate their fair value.
(4)Current portion of long‐term loans payable(6)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.
(5)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.
(7)Derivatives
Please refer to the “21. Derivatives” below.

(ii) Financial instruments for which fair value is difficult to determine are as follows:
As of

December 31,

June 30,

June 30,

36

2020

2021

2021
(in thousands of
U.S. dollars)(in thousands of yen)
Tenant leasehold and security deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙¥
Investment securities ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥

1,672,037¥

1,657,369$

14,987

17,856,387¥

17,856,387$

161,479

Tenant leasehold and security deposits are not publicly traded, and it is difficult to determine their fair value based on estimated future cash flows because the repayment datesof those deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
Fair values of preferred securities are not subject to disclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

(iii) Cash flow schedule of financial assets 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 December 31,2020:
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

21,210,252
6,295,192

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

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

27,505,445

¥

‐

¥

‐

¥

‐

¥

‐

¥

‐

As of June 30, 2021:
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙¥Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

6,311,545
6,528,498

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

¥

‐
‐

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

12,840,044

¥

‐

¥

‐

¥

‐

¥

‐

¥

‐

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 June 30, 2021:
Cash and bank deposits ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙$Cash and bank deposits in trust ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

57,07659,038

$

‐
‐

$

‐
‐

$

‐
‐

$

‐
‐

$

‐
‐

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

116,115

$

‐

$

‐

$

‐

$

‐

$

‐

(iv) 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 December 31,2020:
Short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Current portion of long‐term loans payable ∙∙∙Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

34,847,000
55,601,000‐‐

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

90,448,000‐‐‐
48,679,000¥

48,679,000

¥

-

-

-

-

3,000,000
42,405,000

1,000,000
32,920,000‐
38,936,000

4,200,000
1,000,000

45,405,000¥

33,920,000¥

38,936,000‐¥

5,200,000

As of June 30, 2021:
Short‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

44,228,000‐

Current portion of long‐term loans payable ∙∙∙53,315,000‐

Investment corporation bonds ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙
Long‐term loans payable ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙‐‐

1,000,000
44,807,000

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

97,543,000¥

Within 1 year

45,807,000

‐

‐

‐

‐

‐

‐

2,000,000
44,589,000

1,000,000
40,661,000‐
12,437,000

4,200,000
961,000‐¥

1‐2 years

46,589,000¥

2‐3 years

41,661,000¥

3‐4 years

12,437,000‐¥

4‐5 years

5,161,000

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

399,963482,139‐‐

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

882,103‐‐
9,043
405,199$414,243‐‐
18,086403,228$

421,314‐‐9,043
367,706$

376,749‐‐‐
112,470$

112,470‐‐
37,981
8,690$

46,67237

20. Investment securities
As of December 31, 2020
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand are not subject to disclosure of fair value as they
have no market value and their fair values are extremely difficult to recognize.
As of June 30, 2021
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand (US$161,479thousand) are not subject todisclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

21. Derivatives
Information on derivative transactions undertaken by the Company as of December 31, 2020 and June 30, 2021 is as follows.
(a) Transactions for which hedge accounting is not applied
As of December 31, 2020:
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¥

596,860¥(23,788)¥(14,921)¥952,820¥

596,860¥

39,407¥25,719¥(4,323)¥

19,464¥

66,180¥26,773(*1) Calculation of fair value is based on information provided by financial institutions.

As of June 30, 2021:
Contract amount
Category

Type ofderivativetransaction

Fair
Value
(*1)

Over 1
year

Total

Valuation
gains orlossesTransacti
ons otherthanmarkettransacti
ons

Currency
options
Buy –USD Put
Optionpremium¥

952,820¥‐¥(23,788)¥‐¥952,820¥‐¥

39,407¥‐¥ (15,962)¥

13,181

Valuation
gains orlosses(in thousands of U.S. dollars)(in thousands of yen)
Currency
options
Sell –USD Call(Optionpremium)

Fair
Value
(*1)

Over 1
year

Total

¥

¥

7,825

(26,226)

$

8,616

$

‐

$

(215)

$

‐

$

8,616

$

‐

$

‐

$

356

$

(144)

$

70

$

119

$

(237)

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

(b) Transactions for which hedge accounting is applied
As of December 31, 2020:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
item

Total

Over 1
year

Fair
Value
(*2)

38

(in thousands of yen)

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

Long‐term
borrowings¥

69,383,000¥ 65,133,000¥(165,929)(*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.

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

Fair
Value
(*2)

Over 1year

Total(in thousands of U.S. dollars)¥ 50,476,000¥(75,395)$

584,626$

456,465$(*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 December 31, 2020 and June 30, 2021 are as follows.

For the six months ended

December 31,
2020

June 30,2021

June 30,2021(in thousands of
U.S. dollars)(in thousands of yen)
Balance at the beginning of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥32,756¥32,977$298

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

‐

‐

‐

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

221

219

1

Balance at the end of the period ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥32,977¥33,197$300

23. Segment Information
Segment information for the six months ended December 31, 2020 and June 30, 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:

39

(681)

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 December 31, 2020 and June 30, 2021 were as follows:
For the six months ended December 31, 2020

Name of client

Operating Revenues

Related segment(in thousands of yen)

Undisclosed (1)2,602,343

Real estate investing business

Mystays Hotel Management Co., Ltd.

1,389,730

Real estate investing business

851,447

Real estate investing business

Naqua Hotel & Resorts Management
Co., Ltd.

For the six months ended June 30, 2021

Name of client

Operating Revenues

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

Mystays Hotel Management Co., Ltd.

867,619

7,846

Related segment

Real estate investing business

Notes

(1)

The name of the client (a Japanese TMK (Tokutei Mokuteki Kaisha)) is not disclosed, as the client’s consent has not been obtained for disclosure. The
client is not included in the group entities of the Company and the Asset Manager.

24. Profit or Loss from Equity Method, etc
For the six months ended December 31, 2020
(in thousands of yen)
Investments in affiliates

17,856,387

Investments, if equity method was adopted

17,620,960

Investment gains (losses), if equity method was adopted(235,426)

For the six months ended June 30, 2021
(in thousands of yen)(in thousands of US dollars)

Investments in affiliates

17,856,387

161,479

Investments, if equity method was adopted

17,555,222

158,755(65,738)(594)

Investment gains (losses), if equity method was adopted

25. Related‐Party Transactions

40

Parent Company and Major Corporate Unitholders(a)

For the six months ended December 31, 2020
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

Type oftransactions

Amounts(1)(inthousandsof yen)Balancesheet
account

Rentalrevenues¥851,447

Rentalreceivables¥402,013

Rentalrevenues¥1,389,730

Rentalreceivables¥966,790

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.

For the six months ended June 30, 2021

Share capital
Type ofrelated‐party

Interested
party of the
Asset
Manager

Transactions for the period
Votinginterest intheCompany

Relationshipwith theCompany

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

Hotelmanagementbusiness

¥10

$90

‐

Leaseholder andoperator of hotelHotelmanagementbusiness

¥100

$904

‐

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¥38,627$349

Rentalrevenues¥867,619$7,846

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

Rentalreceivables¥42,489$384

Rentalreceivables¥945,735$8,552

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 December 31, 2020
Not Applicable
For the six months ended June 30, 2021
Not Applicable(c) Board of Directors and Major Individual Unitholders
For the six months ended December 31, 2020

Type ofrelated‐party

Directors
and close
relatives

Name

Naoki
FukudaBusiness / Occupation

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

Votinginterest intheCompany‐

Transactions for the period

Balance at the end of period
Amounts(3)Type of transactions(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)

Balance sheet
account

Amounts(3)(in thousands ofyen)¥333,417

Accruedexpenses¥201,758¥1,100Accruedexpenses¥880

41

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 June 30, 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)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)(inthousandsof yen)(inthousandsof U.S.
dollars)¥300,000$2,712

¥600

$5

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

Accruedexpenses¥165,000$1,492

Accruedexpenses¥330$2

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.

(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.

26. 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 June 30, 2021 is Kingdom TMK. Summary of financial statements are as follows:
Kingdom TMK
December 31, 2020

As of / For the six months ended
June 30, 2021

(in thousands of yen)
Total specified assets
Total other assets
Total current liabilities

June 30, 2021
(in thousands of US dollars)

100,174,273

100,129,595

905,494

2,043,010

2,191,726

19,82018,728356,926

3,227

Total non‐current liabilities

66,258,918

66,158,918

598,290

Total net assets

35,939,637

35,805,477

323,797

Operating revenue

201,274

547,658

4,952

Income before income taxes(479,858)(133,555)(1,207)

Net income(480,463)(134,160)(1,213)27. Per Unit Information
The following table shows net asset value per unit as of December 31, 2020 and June 30, 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 the42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

December 31,
2020

June 30,2021

June 30,
2021

(Yen)
Net asset value per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥40,946¥102¥

Net income (loss) per unit ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙ ¥Weighted average number of units ∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙∙

6,096,840(U.S. dollars)
40,203

$

363

(590)

$

(5)

6,096,840‐

28．Subsequent Events(a) Sale of Assets
The Company completed sale of the following one property on July 2, 2021.
Property Number : B17

Property Name: Lexington Plaza Hachiman

Sale Date

July 2, 2021

Location

Sendai‐shi, Miyagi

Book Value (Note 1)

JPY 2,982 million

Sale Price (Note 2)

JPY 3,660 million

Estimated Gain on Sale (Note 3)

JPY 590 million

Transferee

Kubota Holdings

Legal Form of Asset

Trust beneficiary interest(Note 1) Book Value shows a figure as of June 30, 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.
(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
September 10, 2021 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 July 1, 2021 to September 30, 2021
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 July 1, 2021 to September 30, 2021 as follows.
Items subject to

Calculated based on the Original

Tentative Measures

ChangeLeasing Terms and Conditions（July 1, 2021 to September 30, 2021）

Fixed rent (Total rent for 3

JPY 3,783 million

JPY 1,000 million

months for 73 properties)(Approx. 26% 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 3 months.

The amount obtained by deducting (i)The amount obtained by deducting (i)the above
total fixed rent (the total rent for 3 months for 73

43the total amount of expenses, management

properties) from (ii)the aggregate of the amountservices fees, and fixed rents of the hotel

for 3 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 November 11, 2021, 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 calculation 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 2,783 million yen in the fiscal
period ending December 31, 2021. However, as the variable rent recorded in operating revenue is determined by the GOP for the period
from July 1, 2021 to September 30, 2021, the amount of impact cannot be estimated as of today

29．Unapplied Accounting Standard
・“Accounting Standard for Revenue Recognition” (Corporate Accounting Standards No. 29 issued by Accounting Standards Board ofJapan (“ASBJ”) on March 31, 2020)
・“Implementation Guidance on Accounting Standard for Revenue Recognition” (Implementation Guidance of Corporate AccountingStandards No. 30 issued by ASBJ on March 31, 2020)(1) Overview
The International Accounting Standard Board (“IASB”) and the Financial Accounting Standards Board (“FASB”) have jointly developed
the comprehensive accounting standard for revenue recognition, and have published “Revenue from Contracts with Customers”(International Financial Reporting Standards (“IFRS”) 15 issued by IASB and Topic 606 issued by FASB) in May 2014. As IFRS 15 iseffective for annual periods beginning on or after January 1, 2018 and Topic 606 is effective for annual periods beginning after December
15, 2017, ASBJ has developed and published the comprehensive accounting standard and implementation guidance for revenue
recognition accordingly.
As the basic policy of ASBJ for the development of accounting standard for revenue recognition, the accounting standard in Japan havebeen established while adopting the basic principal of IFRS 15 from the point of view of the comparability between the financial
statements based on IFRS or U.S. GAAP and Japanese GAAP as a benefit for the consistency with IFRS 15. In addition, in the case that
there is an item that the actual practice conducted in Japan is considered, the alternate treatments are added within the scope not to failthe comparability.
(2) Scheduled date of the application
Company will adopt the accounting standard, etc. from the beginning of the period ending December 31, 2021.
(3) Impact of the application of the respective accounting standard, etc.
Company is currently evaluating the effect on its financial statements by applying the “Accounting Standard for Revenue
Recognition”,etc.

・“Accounting Standard for Fair Value Measurement” (Corporate Accounting Standards No. 30 issued by ASBJ on July 4, 2019)44

・“Accounting Standard for Financial Instruments” (Corporate Accounting Standards No. 10 issued by ASBJ on July 4, 2019)
・“Implementation Guidance on Accounting Standard for Fair Value Measurement” (Implementation Guidance of Corporate
Accounting Standards No. 31 issued by ASBJ on July 4, 2019)
・“Implementation Guidance on Disclosure about Fair Value of Financial Instruments” (Implementation Guidance of Corporate
Accounting Standards No. 19 issued by ASBJ on March 31, 2020)(1) Overview
IASB and FASB have established detailed guidance for fair value measurement (IFRS 13 “Fair Value Measurement” by IFRS and Topic
820 “Fair Value Measurement” by FASB). In order to improve the comparability between the international accounting standard andJapanese accounting standard, ASBJ has mainly considered guidance and disclosure on fair value of financial instruments andpublished the accounting standard and implementation guidance for fair value measurement accordingly.
As the basic policy of ASBJ for the development of accounting standard for fair value measurement, ASBJ basically adopted all
provisions of IFRS 13 by using a unified calculation method, from the point of view of improving the comparability between thefinancial statements based on IFRS or U.S. GAAP and Japanese GAAP. Moreover, in consideration of the actual practice conducted inJapan, other treatments for individual items are established within the scope not to fail the comparability.
(2) Scheduled date of the application
Company will adopt the accounting standard, etc. from the beginning of the period ending December 31, 2021.
(3) Impact of the application of the respective accounting standard, etc.
Company is currently evaluating the effect on its financial statements by applying the “Accounting Standard for Fair Value
Measurement”, etc.

45