Investment
Invincible Corporation

Audited Financial Statements
for the 35th Fiscal Period(from July 1, 2020 to December 31, 2020)

INDEX TO FINANCIAL STATEMENTS
Page

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

Balance Sheet as of December 31, 2020 ··························································································································· 4Statement of Income and Retained Earnings for the six months ended December 31, 2020 ································ 6Statement of Changes in Net Assets for the six months ended December 31, 2020 ·············································· 7Statement of Cash Flows for the six months ended December 31, 2020 ································································· 9Notes to Financial Statements as of and for the six months ended December 31, 2020 ······································· 10

INVINCIBLE INVESTMENT CORPORATIONBALANCE SHEETAs of December 31, 2020
As ofDecember 31,
2020

June 30,2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
ASSETS
Current assets:
Cash and bank deposits (Notes 6 and 18) ·····················¥····················· 10,190,672
Cash and bank deposits in trust (Notes 6 and 18) ··················································
6,127,902
Rental receivables ·············································································································
304,863
Deposits paid ·····················································································································
262,507
Prepaid expenses ··············································································································
582,415
Income taxes receivable····································································································
129,613
Consumption taxes receivable ·····················································································
831,675
Other ····································································································································· Total current assets ·········································································································
18,429,649
Non-current assets:
Property and equipment (Notes 7 and 8):
Buildings, at cost ···············································································································
19,392,579
Buildings and accompanying facilities, at cost ························································
5,292,840
Structures, at cost ················································································································
1,458
Tools, furniture and fixtures, at cost ·············································································
1,160,530
Construction in progress··································································································
486,479
Buildings in trust, at cost ································································································
167,743,709
Buildings and accompanying
33,693,125
facilities in trust, at cost ···································································································
Structures in trust, at cost ·······························································································
250,163
Tools, furniture and fixtures in trust, at cost ·······································
2,766,458
Land in trust ·······················································································································
250,271,308
Construction in progress in trust ···················································································
129,129
Subtotal ·······························································································································
481,187,782
Less: Accumulated depreciation ························································ (28,567,990)
Total property and equipment, net ············································································
452,619,792
Intangible assets:
Leasehold rights ················································································································
10,637,811
Leasehold rights in trust ·································································································
14,614,328
Total intangible assets ···································································································
25,252,140
Investments and other assets:
Investment securities (Note 19 and 23)··················································· 17,856,387
Guarantee deposits ···················································································
1,362,721
Long-term prepaid expenses ···································································
898,626
Derivatives assets (Note 20) ·····································································
152,275
Other ················································································································
22,667
Total investments and other assets ······················································ 20,292,677
Total non-current assets ··········································································· 498,164,611
Deferred assets:
Investment corporation bond issuance costs ·······································
69,157
Total deferred assets ····················································································
69,157
516,663,418¥
TOTAL ASSETS ····························································································¥¥

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

204,92960,823
16,598
3,444
6,843
0
63
292,703

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

187,501
51,141
14
11,437
5,690
1,584,829

33,102,139

319,827

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

2,256
26,351
2,372,569
4,561,617(301,428)
4,260,189

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

102,780
140,822
243,602

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

172,525
13,166
6,589
641
219
193,141
4,696,934

62,85362,853607
607

516,490,350$

4,990,2444

As ofDecember 31,
2020

June 30,2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
LIABILITIESCurrent liabilities:
Accounts payable ·····························································¥
Short-term loans payable (Notes 10 and 18) ············
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 10 and 18) ··Long-term loans payable (Notes 10 and 18) ············
Tenant leasehold and security deposits in trust(Note 18) ··············································································
Derivatives liabilities (Note 20) ···································
Asset retirement obligations (Note 21) ························
Total non-current liabilities ·········································TOTAL LIABILITIES ·······················································NET ASSETS (Note 12)Unitholders’ equity:
Unitholders’ capital ·························································
Surplus:Capital surplus ·································································
Allowance for temporary differences
Adjustment (Note 4) ······················································
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 ······································¥

142,330
880,000¥

846,058
34,847,000

$

8,174
336,685

57,380,000

55,601,000

537,207

301,280
269,814605
1,000,217
31,88960,006,137

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

238
3,326
5
5,592
5,604
107
896,943

8,200,000
197,008,000

8,200,000
163,940,000

79,227
1,583,961

1,749,862

1,672,037

16,154

128,466
32,756207,119,086
267,125,223

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

1,647
318
1,681,309
2,578,252

235,701,512

235,701,512

2,277,309

6,264,432

6,264,432

60,525(6,130)(6,130)(59)(5,524,006)(5,530,137)
734,294(5,524,006)(5,530,137)
734,294(53,372)(53,431)
7,094

13,168,294
13,902,588
249,604,100

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

129,191
136,286
2,413,595(65,906)(65,906)
249,538,194
516,663,418(165,929)(165,929)
249,641,218
516,490,350(1,603)(1,603)2,411,992
4,990,244¥$

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

5

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the six months ended December 31, 2020
For the six months ended
December 31,
2020

June 30,2020

December 31,
2020(in thousands of U.S.
dollars)(in thousands of yen)
Operating revenue
Rental revenue－real estate (Note 13) ·············································· ¥Management contract revenue (Note 14) ········································
Gain on sales of properties (Note 15) ·················································
Dividend income ·····················································································
Total operating revenue ·········································································
Operating expenses
Property related expenses (Note 13) ··················································
Management contract expenses (Note 14) ······································
Asset management fees ·········································································
Directors’ compensation ········································································
Asset custody fees ····················································································
Administrative service fees ···································································
Other ············································································································
Total operating expenses ·······································································
Operating income ·······················································································
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 ··················································································
Other-non-operating expenses····························································
Total non-operating expenses ···························································
Ordinary income ·······················································································
Extraordinary income
Subsidy income························································································
Total extraordinary income ·······························································
Extraordinary losses
Loss on reduction entry of non-current assets ·······························
Total extraordinary losses····································································
Income before income taxes ·································································
Income taxes (Note 16):
Current ···································································································
Total income taxes ·············································································Net income ··································································································
Retained earnings / losses brought forward ······························Unappropriated retained earnings / losses (Note 12)······················ ¥5,838,836
890,4422,046,294
634,651
9,410,225¥

5,738,249
2,602,343
8,340,593$

55,44225,14380,5856,801,584
535,279
300,000
4,800
26,23147,259198,092
7,913,247
1,496,977

5,044,533
983,288
300,000
4,800
25,68467,749223,692
6,649,749
1,690,843

48,739
9,500
2,898
46
248
654
2,161
64,24816,336114
7,712
47,743
1,613
57,183

107
12,878
1,498
81,626
3,272
99,382

1
124
14
788
31
960

702,917
31,67525,911
5,928
362,534670
1,129,639
424,522654,685
28,2306,303
472,665
4,007
1,165,892
624,333

6,325
272
60
4,566
38
11,264
6,032

73,11973,119--73,11973,119424,522624,333

6,032

605
605
423,917
12,744,377
13,168,294

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

5
5
6,026
123,165
129,191¥$

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

6

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CHANGES IN NET ASSETSFor the six months ended December 31, 2020
Unitholders' equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders'
capitalCapital surplus

Allowance fortemporarydifferences
adjustment¥

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

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of yen)
Balance as of January 1, 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 ············································································································································
Changes other than unitholders’ equity(net) ············································································
Total changes during the period ···································································································
Balance as of June 30, 2020 ···············································································································¥
235,701,512

-

-

-

-

-

Changes during the period ·············································································································
Distributions from surplus ··············································································································Net income ············································································································································
Changes other than unitholders’ equity(net) ············································································
Total changes during the period ···································································································
Balance as of December 31, 2020 ···································································································¥
235,701,512

-

-

-

Unitholders' equity-

Valuation and translation adjustments

SurplusRetainedearnings-

Total surplus

Total unitholders'equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets¥¥(in thousands of yen)
Balance as of January 1, 2020 ··········································································································¥
23,261,426¥

23,995,720¥

259,697,232¥

33,52533,525

259,730,758

Changes during the period ·············································································································
Distributions from surplus ··············································································································(10,517,049)(10,517,049)(10,517,049)

Net income ············································································································································
423,917423,917423,917(10,517,049)
423,917

Changes other than unitholders’ equity(net) ·········································································(99,432)

Total changes during the period ···································································································(10,093,131)
Balance as of June 30, 2020 ···············································································································¥
13,168,294(10,093,131)¥

13,902,588(10,093,131)¥

249,604,100(99,432)(99,432)¥(65,906)(99,432)(99,432)¥(65,906)(10,192,564)¥

249,538,194

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

Net income ············································································································································
623,728

623,728

623,728(420,681)
623,728

Changes other than unitholders’ equity(net) ·········································································(100,022)

Total changes during the period ···································································································
203,046
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

7

Unitholders' equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders'
capitalCapital surplus

Allowance fortemporarydifferences
adjustment$

60,525$(59)$

60,525$(59)

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of U.S dollars)
Balance as of July 1, 2020 ···················································································································$
2,277,309$(53,372)$(53,372)$(53,431)$(53,431)

$

7,094

$

7,094

Changes during the period ·············································································································
Distributions from surplus ··············································································································Net income ··········································································································································
Changes other than unitholders’ equity(net) ·········································································
Total changes during the period ···································································································
Balance as of December 31, 2020 ···································································································$
2,277,309---

Unitholders' equity-

Valuation and translation adjustments

SurplusRetainedearnings-

Total
unitholders'equityTotal surplus

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets$$(in thousands of U.S dollars)
127,229
Balance as of July 1, 2020 ···················································································································$$

134,324$

2,411,633

$

(636)

(636)

2,410,997

Changes during the period ·············································································································
Distributions from surplus ··············································································································(4,064)(4,064)(4,064)

6,026
Net income ··········································································································································

6,026

6,026

(4,064)
6,026

Changes other than unitholders’ equity(net) ·········································································

(966)

(966)

Total changes during the period ···································································································
1,961

(966)

(966)

Balance as of December 31, 2020 ···································································································$
129,191

1,961$

136,286

1,961$

2,413,595$(1,603)$(1,603)

(966)
995
$

2,411,992

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

8

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CASH FLOWSFor the six months ended December 31, 2020
For the six months ended
June 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
Cash flows from operating activities:
Income before income taxes ··············································································································································¥
Depreciation and amortization ········································································································································
Loss on reduction entry of non-current assets ············································································································
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 ·································································································································································

424,522
3,999,589
73,1195,928
362,534(114)
728,828
9,864(47,743)2,798,340
219,998
7,942
1,594,835(13,390)(187,039)
163,143(1,411)
546,581(20,238)
2,269,720
726,442
13,661,453
114(729,698)(605)

Net cash provided by operating activities ··············································································································¥

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)

$

6,032
38,577
60
4,566
(1)
6,598
(0)
(788)
(13,652)
(908)
1,252
8,035
6,184
5,592
(2,480)663(4,059)(200)
80,041(1,008)
134,504
1(6,573)(5)

12,931,264

13,240,366

127,926

Cash flows from investing activities:
Payments into time deposits ·············································································································································
Purchases of property and equipment ··························································································································(458,135)
Purchases of property and equipment in trust ··········································································································· (16,523,212)
Purchases of leasehold rights in trust ······························································································································· (1,387,263)
Repayments of tenant leasehold and security deposits in trust ············································································(56,966)
Proceeds from tenant leasehold and security deposits in trust ················································
42,113
Payments of tenant leasehold and security deposits ··································································· ····························(559,000)
Other, net ··················································································································································································
43,852(1,328,500)(139,812)(358,986)(99,182)
26,461
109,484(12,835)(1,350)(3,468)
(958)
255
1,057

Net cash used in investing activities ·························································································································· (18,898,611)(1,790,534)(17,299)

Cash flows from financing activities:
Proceeds from short-term loans payable ······················································································································
880,000
Repayments of short-term loans payable ······················································································································· (2,686,000)
Proceeds from long-term loans payable ······················································································································· 19,583,000
Repayments of long-term loans payable ························································································································ (14,683,000)
Proceeds from issuance of investment corporation bonds·······················································································
1,184,469
Payments for loan-related costs ········································································································································(265,553)
Payments of distributions of earnings······························································································································ (10,514,410)

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

336,685(8,502)
5,797(342,483)(2,776)(4,097)(6,501,494)(1,591,491)(15,376)

Effect of exchange rate change on cash and cash equivalents ················································································
13
Net increase (decrease) in cash and cash equivalents ································································································ (12,468,828)
Cash and cash equivalents at beginning of period ···································································································· 28,787,403
Cash and cash equivalents at end of period (Note 6) ·································································································¥
16,318,574

30
9,858,370
16,318,574
26,176,945

0
95,249157,667
252,917

Net cash provided by (used in) financing activities ·····························································································¥$

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

9

INVINCIBLE INVESTMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS
As of and for the six months ended December 31, 2020

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
December 31, 2020

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 December 31, 2020.

3. 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 ¥103.50 = US$1,
the effective rate of exchange prevailing at December 31, 2020. The inclusion of such U.S. dollar amounts associated with the fiscal six
months ended December 31, 2020 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.

4. Allowance for temporary differences adjustment
For the six months ended June 30, 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)

Beginningbalance

Allowance
set aside
duringperiod¥ (131,332)¥ (6,130)--¥ (6,130)¥ (131,332)¥ (6,130)--¥ (6,130)

Related assets,
etc.

Reason for
occurrence

InitialamountLeaseholdrights in trust

Amortizationofleasehold rights in
trust

Total

ReversalduringperiodEndingbalance

Reason for reversal-

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 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)13

Beginningbalance

Allowance
set aside
duringperiod¥ (131,332)¥ (6,130)--¥ (6,130)¥ (131,332)¥ (6,130)--¥ (6,130)

Related assets,
etc.

Reason for
occurrence

InitialamountLeaseholdrights in trust

Amortizationofleasehold rights in
trust

Total

ReversalduringperiodEndingbalance

Reason for reversal-(in thousands of U.S dollars)

Related assets,
etc.

Reason for
occurrence

Leaseholdrights in trust

Amortizationofleasehold rights in
trust

Total

Beginningbalance

Allowance
set aside
duringperiod$ (1,268)$ (59)--$ (59)$ (1,268)$ (59)--$ (59)

InitialamountReversalduringperiodEndingbalance

Reason for reversal-

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

5. Advanced depreciation
Advanced depreciation amount for property, plant and equipment acquired by government subsidies, etc are as follows.

As ofJune 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)

Buildings and accompanying¥
facilities in trust ································

73,119¥-$-

6. Cash and Cash Equivalents
Cash and cash equivalents shown in the statements of cash flows consist of the following balance sheet items.
As ofJune 30,2020

December 31,
2020

10,190,672
6,127,902¥¥

21,210,252
6,295,192(in thousands of
U.S. dollars)$
204,929$60,823-¥(1,328,500)$(in thousands of yen)
Cash and bank deposits ······································ ¥Cash and bank deposits in trust ························· ¥Time deposits with maturities of more than¥
three months·····························································

December 31,
2020(12,835)

14

Cash and cash equivalents ·························¥

16,318,574¥

26,176,945$

252,917

7. Property and Equipment
The following tables show the summary of movement in property and equipment for the six months ended December 31, 2020.
At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of yen)
Buildings ··········································································¥
19,392,579¥

13,800

Buildings and accompanying facilities ················· 5,292,840

¥

-

¥

19,406,379¥

713,241¥

218,460¥

18,693,138

353-

5,293,194

494,825

152,682

1,458

-

-

1,458

52

32

1,406

Tools, furniture and fixtures ······································ 1,160,530

23,208-1,183,738

175,331

57,6991,008,406

Leasehold rights ····························································10,637,811--

10,637,811--

10,637,811

Construction in progress ············································ 486,479

102,450-

588,930--

588,930

Buildings in trust ···························································
167,743,709

269,087

3,982,991

164,029,805

18,754,443

2,308,236

145,275,361

216,797

807,783

33,102,139

9,866,713

1,013,377

23,235,425

Structures ·········································································

Buildings and accompanying facilities
33,693,125
in trust ···············································································
Structures in trust ·························································· 250,163

4,798,368

3,978

20,636

233,505

98,3396,157

135,165

Tools, furniture and fixtures in trust ······················· 2,766,458

46,891

86,0202,727,329

1,094,873

196,904

1,632,456

Land in trust ···································································
250,271,308-

4,710,337

245,560,970--

245,560,970

Leasehold rights in trust ·············································14,934,534--

14,934,534

359,442

39,237

14,575,091

Construction in progress in trust ····························· 129,129-

129,129---

Total ···················································································¥ 506,760,129¥

676,567¥

9,736,898¥

497,699,797¥

31,557,264¥

3,992,787¥

466,142,533

At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of U.S dollars)
Buildings ··········································································$
187,367

$

133

$

-

$

187,501

$

6,891

$

2,110

$

180,610

Buildings and accompanying facilities ·················

51,138

3-

51,141

4,780

1,475

Structures ·········································································

14

-

-

14

-

-

13

Tools, furniture and fixtures ······································

11,212

224-

11,437

1,694

557

9,743
102,780

Leasehold rights ···························································· 102,780

46,361

Leasehold- rights-

102,780

-

-

4,700

989

-

5,690

-

-

5,690

Buildings in trust ··························································· 1,620,712
Buildings and accompanying facilities
325,537
in trust ···············································································
Structures in trust ··························································
2,417

2,599

38,483

1,584,829

181,20222,301

1,403,626

2,094

7,804

319,827

95,3309,791

224,496

38

199

2,256

950

59

1,305

Tools, furniture and fixtures in trust ·······················

26,729453

831

26,351

10,578

1,902

15,772Land in trust ··································································· 2,418,080-

45,5102,372,569--

2,372,569

Leasehold rights in trust ············································· 144,295--

144,295

3,472

379

140,822

Construction in progress in trust ·····························

-

1,247

-

-

-

Construction in progress ············································

1,247

Total ···················································································$
4,896,233

$

6,536

$

94,076$

4,808,693$

304,901$

38,577$

4,503,792

8.Fair Value of Investment and Rental Properties
The following tables show the net book value and the fair value of the investment and rental properties in the aggregate for the six
months ended June 30, 2020 and December 31, 2020.
Residential
As of / For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ··············· ¥53,552,976

Net increase (decrease) during period ········
Balance at the end of period ····························(2,648,900)
50,904,075

Fair value ···································································· ¥65,438,000¥

50,904,075$(8,610,346)
42,293,729¥

54,237,000

491,826(83,191)
408,635$

524,02815

Retail facilities
As of / For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ··············· ¥4,789,956

Net increase (decrease) during period ········
Balance at the end of period ····························(51,271)
4,738,684

Fair value ···································································· ¥6,120,000

4,738,684¥

45,784$(49,457)
4,689,226(477)
45,306

6,040,000¥

58,357$Hotel
As of / For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of yen)(in thousands of
U.S. dollars)

Balance at the beginning of period ··············· ¥407,240,188$

Net increase (decrease) during period ········
Balance at the end of period ····························

14,373,376
421,613,565

Fair value ···································································· ¥470,778,826

Net book value
421,613,565¥

4,073,561(3,042,918)
418,570,646(29,400)
4,044,160

470,583,650¥

4,546,701$

Total
As of / For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of yen)(in thousands of
U.S. dollars)

Balance at the beginning of period ··············· ¥465,583,121$

Net increase (decrease) during period ········
Balance at the end of period ····························

11,673,203
477,256,324

Fair value ···································································· ¥542,336,826

Net book value
477,256,324¥(11,702,721)
465,553,602(113,069)
4,498,102

530,860,650¥

4,611,172$

5,129,088

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 June 30, 2020 and December 31, 2020, please refer to “Note 13: Rent Revenues－Real Estate and Expenses Related toProperty Rental Business“

9.Investment corporation bonds
The following table shows the details of investment corporation bonds for the six months ended December 31, 2020.
For the six months ended December 31, 2020
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

9,661

9,661

0.400

1,000,000

1,000,000

9,661

9,661

0.800

2,000,000

2,000,000

19,323

19,3230.550

1,000,000

1,000,000

9,661

9,661

0.480

3rd unsecured investment corporation bond(Issued on October 12, 2018 and due on October 12, 2023)(1)(3)
4th unsecured investment corporation bond16

(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)

2,000,000

2,000,000

19,323

19,3230.900

1,200,000

1,200,000

11,594

11,5940.850

8,200,000

8,200,000

79,227

79,227(1)(4)
6th unsecured investment corporation bond(Issued on March 13, 2020 and due on March 13, 2030)(1)(3)
Total investment corporation bonds
Notes:(1)

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

(2)

The funds are mainly used to acquire properties in trust.

(3)

The funds are mainly used to repay existing borrowing.

(4)

The funds are mainly used for capital expenditures(5)

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

As ofWithin 1 year······················································

December 31,
2020

December 31,
2020(in thousands of yen)(in thousands of
U.S. dollars)¥

1-2 years·······························································

-

$

-

-

-

2-3 years··················································································

3,000,000

28,9853-4 years··················································································

1,000,000

9,661

4-5 years··················································································

-

-

17

10. Loans Payable
The following table shows the details of loans payable for the six months ended December 31, 2020.
For the six months ended December 31, 2020

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)
Sumitomo
MitsuiTrust Bank,
LimitedAverageinterest
rate (%)(1)(in thousands of U.S. dollars)

880,000-

880,000

-

8,502

-

8,502

-

0.288

MizuhoBank, Ltd.

-5,992,000-

5,992,000-

57,893-57,8930.338

MUFG
Bank, Ltd.

-6,660,000-

6,660,000-

64,347-64,3470.338-

5,992,000-

5,992,000-

57,893-57,8930.338-

2,670,000-

2,670,000-

25,797-

25,7970.338-

3,000,000-

3,000,000-

28,985-28,9850.338-

3,330,000-

3,330,000-

32,173-32,1730.338-

1,335,000-

1,335,000-

12,898-12,8980.338

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
Limited
Citibank,
N.A., Tokyo
BranchShinseiBank,
Limited.

ResonaBank,
Limited.
Short-termloanspayableEndingbalance

Decrease

Developme
nt Bank ofJapan Inc.
Sumitomo
Mitsui
Banking
Corporation

MizuhoBank, Ltd.

Citibank,
N.A., Tokyo
BranchShinseiBank,
Limited.

ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.
Sumitomo
MitsuiTrust Bank,
Limited
Total
short-termloanspayable-1,000,000-

1,000,000

-

9,661

-

9,661

0.338

-

3,000,000-

3,000,000-

28,985-28,985

0.338-

328,500-

328,500

-

3,173

-

3,173

0.338

-

355,000-

355,000

-

3,429

-

3,429

0.338

-

355,000-

355,000

-

3,429

-

3,429

0.338

-

334,000-

334,000

-

3,227

-

3,227

0.338

-

167,000-

167,000

-

1,613

-

1,613

0.338

-

328,500-

328,500

-

3,173

-

3,173

0.338

880,000

34,847,000

880,000

34,847,000

8,502

336,685

8,502

336,685

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

06-Jan-21(3)16-Jul-21

16-Jul-21

16-Jul-21

16-Jul-21

16-Jul-21

16-Jul-21

16-Jul-21

20-Jul-21

14-Sep-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

18

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

MizuhoBank, Ltd.

5,992,000-

5,992,000-

57,893-57,893

-

0.590

MUFG
Bank, Ltd.

5,992,000-

5,992,000-

57,893-57,893-0.590

5,992,000-

5,992,000-

57,893-57,893-0.590

3,330,000-

3,330,000-

32,173-32,173-0.590

3,000,000-

3,000,000-

28,985-28,985-0.590

2,670,000-

2,670,000-

25,797-

25,797-0.590

1,335,000-

1,335,000-

12,898-12,898-0.590

668,000-

668,000

-

6,454

-

6,454

-

0.590

3,400,000--

3,400,000

32,850--32,8500.600

MUFG
Bank, Ltd.

850,000--

850,000

8,212

-

-

8,212

0.600

MizuhoBank, Ltd.

1,965,000--

1,965,000

18,985--18,9850.688

MUFG
Bank, Ltd.

1,125,000--

1,125,000

10,869--10,8690.688

2,180,000--

2,180,000

21,062--

21,0620.688

570,000--

570,000

5,507

-

-

5,507

0.688

570,000--

570,000

5,507

-

-

5,507

0.688

650,000--

650,000

6,280

-

-

6,280

0.688

1,333,000--

1,333,000

12,879--12,8790.688

270,000--

270,000

2,608

-

-

2,608

0.688

500,000--

500,000

4,830

-

-

4,830

0.688

1,000,000--

1,000,000

9,661

-

-

9,661

0.688

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.

Citibank,
N.A., Tokyo
BranchSumitomo
MitsuiTrust Bank,
LimitedResonaBank,
Limited.

MUFG
Bank, Ltd.

Sumitomo
MitsuiTrust Bank,
LimitedLong-term
loans
payableIncrease

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.

The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.
The
Hiroshima
Bank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

22-Jan-21

22-Jan-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

19

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
The
NomuraTrust andBankingCo., Ltd.
Citibank,
N.A., Tokyo
BranchAEON
Bank, Ltd.

The Tokyo
Star Bank,
LimitedThe Towa
Bank, Ltd.

The Tokyo
Star Bank,
LimitedMizuhoBank, Ltd.

ResonaBank,
Limited.
The Bank ofFukuoka,Ltd.

Long-term
loans
payableThe
NomuraTrust andBankingCo., Ltd.
The Towa
Bank, Ltd.

Increase

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

270,000--

270,000

2,608

-

-

2,608

0.688

1,000,000--

1,000,000

9,661

-

-

9,661

0.688

3,000,000--

3,000,000

28,985--28,9850.688

600,000-

600,000

-

5,797

-

5,797

-

0.561

1,000,000-

1,000,000

-

9,661

-

9,661

-

0.561

1,700,000--

1,700,000

16,425--

16,4250.688

1,633,000--

1,633,000

15,777--

15,7770.588

333,000--

333,000

3,217

-

-

3,217

0.588

333,000--

333,000

3,217

-

-

3,217

0.588

333,000--

333,000

3,217

-

-

3,217

0.588

253,000--

253,000

2,444

-

-

2,444

0.588

200,000--

200,000

1,932

-

-

1,932

0.588

The Gunma
Bank, Ltd.

165,000--

165,000

1,594

-

-

1,594

0.588

MizuhoBank, Ltd.

1,733,000--

1,733,000

16,743--

16,7430.688

333,000--

333,000

3,217

-

-

3,217

0.688

333,000--

333,000

3,217

-

-

3,217

0.688

333,000--

333,000

3,217

-

-

3,217

0.688

AEON
Bank, Ltd.

900,000--

900,000

8,695

-

-

8,695

0.688

The Towa
Bank, Ltd.

253,000--

253,000

2,444

-

-

2,444

0.688

200,000--

200,000

1,932

-

-

1,932

0.688

The
Shizuoka
Bank, Ltd.

ResonaBank,
Limited.
The Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.

The
Shizuoka
Bank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

30-Mar-21

15-Jun-21

30-Jun-21

20-Jul-20

20-Jul-20

20-Jul-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

20

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
The Dai-ichi
Life
Insurancecompany,
LimitedThe Gunma
Bank, Ltd.
Sumitomo
Mitsui
Banking
Corporation
MizuhoBank, Ltd.
The Dai-ichi
Life
Insurancecompany,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Tokyo
BranchResonaBank,
Limited.
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.
Long-term
loans
payableThe
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.
ShinseiBank,
Limited.
Citibank,
N.A., Tokyo
BranchResonaBank,
Limited.
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.

MizuhoBank, Ltd.

Increase

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

500,000--

500,000

4,830

-

-

4,830

0.688

165,000--

165,000

1,594

-

-

1,594

0.688

3,000,000-

3,000,000-

28,985-28,985-0.500

4,321,000--

4,321,000

41,748--41,7480.638

3,000,000--

3,000,000

28,985--28,9850.638

355,000-

355,000

-

3,429

-

3,429

-

0.380

355,000-

355,000

-

3,429

-

3,429

-

0.380

334,000-

334,000

-

3,227

-

3,227

-

0.380

300,000-

300,000

-

2,898

-

2,898

-

0.380

190,000-

190,000

-

1,835

-

1,835

-

0.380

167,000-

167,000

-

1,613

-

1,613

-

0.380

167,000-

167,000

-

1,613

-

1,613

-

0.380

355,000--

355,000

3,429

-

-

3,429

0.488

355,000--

355,000

3,429

-

-

3,429

0.488

333,000--

333,000

3,217

-

-

3,217

0.488

300,000--

300,000

2,898

-

-

2,898

0.488

190,000--

190,000

1,835

-

-

1,835

0.488

167,000--

167,000

1,613

-

-

1,613

0.488

167,000--

167,000

1,613

-

-

1,613

0.488

500,000--

500,000

4,830

-

-

4,830

0.688

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

14-Mar-22

14-Mar-22

14-Sep-20

29-Nov-21

29-Nov-21

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-22

21

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Tokyo
BranchResonaBank,
Limited.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Long-term
loans
payableThe
Hiroshima
Bank, Ltd.
The Dai-ichi
Life
Insurancecompany,
LimitedIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

500,000--

500,000

4,830

-

-

4,830

0.688

500,000--

500,000

4,830

-

-

4,830

0.688

355,000--

355,000

3,429

-

-

3,429

0.688

355,000--

355,000

3,429

-

-

3,429

0.688

333,000--

333,000

3,217

-

-

3,217

0.688

1,500,000--

1,500,000

14,492--

14,4920.688

300,000--

300,000

2,898

-

-

2,898

0.688

190,000--

190,000

1,835

-

-

1,835

0.688

166,000--

166,000

1,603

-

-

1,603

0.688

166,000--

166,000

1,603

-

-

1,603

0.688

500,000--

500,000

4,830

-

-

4,830

0.688

1,250,000--

1,250,000

12,077--

12,0770.788

1,065,000--

1,065,000

10,289--10,2890.788

1,250,000--

1,250,000

12,077--

12,0770.788

1,250,000--

1,250,000

12,077--

12,0770.888

1,060,000--

1,060,000

10,241--

10,2410.888

1,250,000--

1,250,000

12,077--

12,0770.888

1,000,000--

1,000,000

9,661

-

-

9,661

0.750

MUFG
Bank, Ltd.

500,000--

500,000

4,830

-

-

4,830

0.750

MizuhoBank, Ltd.

2,442,000--

2,442,000

23,594--

23,5940.388

MizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
MizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-23

13-Oct-23

13-Oct-23

11-Oct-24

11-Oct-24

11-Oct-24

27-Jun-23

27-Jun-23

17-Jul-21

22

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

MUFG
Bank, Ltd.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,220,000--

2,220,000

21,449--21,4490.388

1,998,000--

1,998,000

19,304--

19,3040.388

1,110,000--

1,110,000

10,724--

10,7240.388

1,000,000--

1,000,000

9,661

-

-

9,661

0.388

890,000--

890,000

8,599

-

-

8,599

0.388

MizuhoBank, Ltd.

2,443,000--

2,443,000

23,603--23,6030.488

MUFG
Bank, Ltd.

2,220,000--

2,220,000

21,449--21,4490.488

1,997,000--

1,997,000

19,294--

19,2940.488

1,110,000--

1,110,000

10,724--

10,7240.488

1,000,000--

1,000,000

9,661

-

-

9,661

0.488

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Tokyo
BranchSumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.

Long-term
loans
payableIncrease

Citibank,
N.A., Tokyo
BranchSumitomo
MitsuiTrust Bank,
Limited

890,000--

890,000

8,599

-

-

8,599

0.488

MizuhoBank, Ltd.

2,442,000--

2,442,000

23,594--

23,594

0.588

MUFG
Bank, Ltd.

2,220,000--

2,220,000

21,449--21,4490.588

1,997,000--

1,997,000

19,294--

19,2940.588

1,110,000--

1,110,000

10,724--

10,7240.588

1,000,000--

1,000,000

9,661

-

-

9,661

0.588

890,000--

890,000

8,599

-

-

8,599

0.588

766,000--

766,000

7,400

-

-

7,400

0.388

766,000--

766,000

7,400

-

-

7,400

0.388

467,000--

467,000

4,512

-

-

4,512

0.388

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Tokyo
BranchSumitomo
MitsuiTrust Bank,
LimitedMizuhoBank, Ltd.
Sumitomo
Mitsui
Banking
Corporation
MUFG
Bank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

02-Aug-21

02-Aug-21

02-Aug-21

23

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
ShinseiBank,
Limited.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

150,000--

150,000

1,449

-

-

1,449

0.388

120,000--

120,000

1,159

-

-

1,159

0.388

30,000--30,000

289

-

-

289

0.388

AEON
Bank, Ltd.

60,000--60,000

579

-

-

579

0.388

MizuhoBank, Ltd.

2,521,500--

2,521,500

24,362--

24,3620.388

2,521,500--

2,521,500

24,362--

24,3620.388

2,133,000--

2,133,000

20,608--20,6080.388

1,000,000--

1,000,000

9,661

-

-

9,661

0.388

684,000--

684,000

6,608

-

-

6,608

0.388

546,000--

546,000

5,275

-

-

5,275

0.388

Citibank,
N.A., Tokyo
BranchThe
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation
MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.

Long-term
loans
payableIncrease

Citibank,
N.A., Tokyo
BranchDevelopme
nt Bank ofJapan Inc.

500,000--

500,000

4,830

-

-

4,830

0.388

445,000--

445,000

4,299

-

-

4,299

0.388

137,000--

137,000

1,323

-

-

1,323

0.388

AEON
Bank, Ltd.

273,000--

273,000

2,637

-

-

2,637

0.388

MizuhoBank, Ltd.

3,287,000--

3,287,000

31,758--31,7580.488

3,287,000--

3,287,000

31,758--31,7580.488

2,600,000--

2,600,000

25,120--25,1200.488

1,000,000--

1,000,000

9,661

-

-

9,661

0.488

833,000--

833,000

8,048

-

-

8,048

0.488

667,000--

667,000

6,444

-

-

6,444

0.488

ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation
MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Tokyo
BranchMaturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

02-Aug-21

02-Aug-21

02-Aug-21

02-Aug-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

24

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
Developme
nt Bank ofJapan Inc.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

500,000--

500,000

4,830

-

-

4,830

0.488

445,000--

445,000

4,299

-

-

4,299

0.488

167,000--

167,000

1,613

-

-

1,613

0.488

AEON
Bank, Ltd.

334,000--

334,000

3,227

-

-

3,227

0.488

MizuhoBank, Ltd.

3,287,500--

3,287,500

31,763--31,7630.588

3,287,500--

3,287,500

31,763--31,7630.588

2,600,000--

2,600,000

25,120--25,1200.588

1,000,000--

1,000,000

9,661

-

-

9,661

0.588

833,000--

833,000

8,048

-

-

8,048

0.588

667,000--

667,000

6,444

-

-

6,444

0.588

ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation
MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.

Long-term
loans
payableIncrease

Citibank,
N.A., Tokyo
BranchDevelopme
nt Bank ofJapan Inc.

500,000--

500,000

4,830

-

-

4,830

0.588

445,000--

445,000

4,299

-

-

4,299

0.588

166,000--

166,000

1,603

-

-

1,603

0.588

AEON
Bank, Ltd.

333,000--

333,000

3,217

-

-

3,217

0.588

MUFG
Bank, Ltd.

850,000--

850,000

8,212

-

-

8,212

0.373

3,400,000--

3,400,000

32,850--32,8500.373

MizuhoBank, Ltd.

386,000--

386,000

3,729

-

-

3,729

0.361

MUFG
Bank, Ltd.

1,275,000--

1,275,000

12,318--12,3180.361

2,100,000--

2,100,000

20,289--20,2890.361

500,000--

500,000

4,830

-

-

4,830

0.361

ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

22-Jan-22

22-Jan-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

25

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
ResonaBank,
Limited.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

500,000--

500,000

4,830

-

-

4,830

0.361

1,000,000--

1,000,000

9,661

-

-

9,661

0.361

333,000--

333,000

3,217

-

-

3,217

0.361

1,270,000--

1,270,000

12,270--12,2700.361

270,000--

270,000

2,608

-

-

2,608

0.361

300,000--

300,000

2,898

-

-

2,898

0.361

1,000,000--

1,000,000

9,661

-

-

9,661

0.594

1,000,000--

1,000,000

9,661

-

-

9,661

0.594

The Tochigi
Bank, Ltd.

500,000--

500,000

4,830

-

-

4,830

0.594

Kiraboshi
Bank, Ltd.

1,000,000--

1,000,000

9,661

-

-

9,661

0.888

Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Senshu
Ikeda Bank,
Ltd.

AozoraBank, Ltd.
THE
NISHI-NI
PPON
CITY
BANK,
LTD.

Long-term
loans
payableIncrease

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

1,000,000

9,661

-

-

9,661

0.340

1,000,000--

1,000,000

9,661

-

-

9,661

0.334

MizuhoBank, Ltd.

571,400--

571,400

5,520

-

-

5,520

0.400

MUFG
Bank, Ltd.

1,464,800--

1,464,800

14,152--

14,1520.400

1,331,200--

1,331,200

12,861--

12,861

0.400

628,600--

628,600

6,073

-

-

6,073

0.400

1,000,000--

1,000,000

9,661

-

-

9,661

0.400

200,000--

200,000

1,932

-

-

1,932

0.400

600,000--

600,000

5,797

-

-

5,797

0.400

571,400--

571,400

5,520

-

-

5,520

0.499

Developme
nt Bank ofJapan Inc.

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
Limited
Citibank,
N.A., Tokyo
BranchShinseiBank,
Limited.
ResonaBank,
Limited.

MizuhoBank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-24

29-Mar-24

29-Mar-24

29-Mar-29

17-Jun-22

17-Jun-22

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-24

26

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

MUFG
Bank, Ltd.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

1,464,800--

1,464,800

14,152--

14,1520.499

1,331,200--

1,331,200

12,861--

12,861

0.499

628,600--

628,600

6,073

-

-

6,073

0.499

1,000,000--

1,000,000

9,661

-

-

9,661

0.499

200,000--

200,000

1,932

-

-

1,932

0.499

600,000--

600,000

5,797

-

-

5,797

0.499

MizuhoBank, Ltd.

1,171,400--

1,171,400

11,317--

11,3170.563

MUFG
Bank, Ltd.

1,464,800--

1,464,800

14,152--

14,1520.563

1,331,200--

1,331,200

12,861--

12,861

0.563

628,600--

628,600

6,073

-

-

6,073

0.563

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
Limited
Citibank,
N.A., Tokyo
BranchShinseiBank,
Limited.
ResonaBank,
Limited.

Sumitomo
Mitsui
Banking
Corporation

Long-term
loans
payableIncrease

Sumitomo
MitsuiTrust Bank,
Limited
Citibank,
N.A., Tokyo
Branch1,000,000--

1,000,000

9,661

-

-

9,661

0.563

200,000--

200,000

1,932

-

-

1,932

0.563

MizuhoBank, Ltd.

2,171,400--

2,171,400

20,979--20,9790.638

MUFG
Bank, Ltd.

1,464,800--

1,464,800

14,152--

14,1520.638

1,331,200--

1,331,200

12,861--

12,861

0.638

628,600--

628,600

6,073

-

-

6,073

0.638

200,000--

200,000

1,932

-

-

1,932

0.638

MizuhoBank, Ltd.

2,170,400--

2,170,400

20,970--20,9700.788

MUFG
Bank, Ltd.

1,464,800--

1,464,800

14,152--

14,1520.788

1,331,200--

1,331,200

12,861--

12,861

0.788

ShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
Corporation

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jul-25

16-Jul-25

16-Jul-25

27

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
Sumitomo
MitsuiTrust Bank,
LimitedEndingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

628,600--

628,600

6,073

-

-

6,073

0.788

200,000--

200,000

1,932

-

-

1,932

0.788

MizuhoBank, Ltd.

1,085,000--

1,085,000

10,483--

10,4830.413

MUFG
Bank, Ltd.

987,000--

987,000

9,536

-

-

9,536

0.413

987,000--

987,000

9,536

-

-

9,536

0.413

684,000--

684,000

6,608

-

-

6,608

0.413

500,000--

500,000

4,830

-

-

4,830

0.413

300,000--

300,000

2,898

-

-

2,898

0.413

300,000--

300,000

2,898

-

-

2,898

0.413

100,000--

100,000

966

-

-

966

0.413

ShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
Limited
Citibank,
N.A., Tokyo
BranchDevelopme
nt Bank ofJapan Inc.

AEON
Bank, Ltd.

Long-term
loans
payableIncrease

The
NomuraTrust andBankingCo., Ltd.
MizuhoBank, Ltd.

712,000--

712,000

6,879

-

-

6,879

0.525

MUFG
Bank, Ltd.

986,000--

986,000

9,526

-

-

9,526

0.525

986,000--

986,000

9,526

-

-

9,526

0.525

684,000--

684,000

6,608

-

-

6,608

0.525

500,000--

500,000

4,830

-

-

4,830

0.525

300,000--

300,000

2,898

-

-

2,898

0.525

300,000--

300,000

2,898

-

-

2,898

0.525

100,000--

100,000

966

-

-

966

0.525

AozoraBank, Ltd.

375,000--

375,000

3,623

-

-

3,623

0.525

MizuhoBank, Ltd.

712,000--

712,000

6,879

-

-

6,879

0.580

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
Limited
Citibank,
N.A., Tokyo
BranchDevelopme
nt Bank ofJapan Inc.

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-25

16-Jul-25

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-23

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jan-24

16-Jul-24

28

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

MUFG
Bank, Ltd.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

986,000--

986,000

9,526

-

-

9,526

0.580

986,000--

986,000

9,526

-

-

9,526

0.580

684,000--

684,000

6,608

-

-

6,608

0.580

500,000--

500,000

4,830

-

-

4,830

0.580

300,000--

300,000

2,898

-

-

2,898

0.580

300,000--

300,000

2,898

-

-

2,898

0.580

100,000--

100,000

966

-

-

966

0.580

AozoraBank, Ltd.

375,000--

375,000

3,623

-

-

3,623

0.580

MizuhoBank, Ltd.

1,212,000--

1,212,000

11,710--11,7100.638

MUFG
Bank, Ltd.

986,000--

986,000

9,526

-

-

9,526

0.638

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
Limited
Citibank,
N.A., Tokyo
BranchDevelopme
nt Bank ofJapan Inc.

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Long-term
loans
payableIncrease

Sumitomo
Mitsui
Banking
Corporation

986,000--

986,000

9,526

-

-

9,526

0.638

684,000--

684,000

6,608

-

-

6,608

0.638

300,000--

300,000

2,898

-

-

2,898

0.638

300,000--

300,000

2,898

-

-

2,898

0.638

100,000--

100,000

966

-

-

966

0.638

AozoraBank, Ltd.

375,000--

375,000

3,623

-

-

3,623

0.638

MizuhoBank, Ltd.

1,211,000--

1,211,000

11,700--11,7000.788

MUFG
Bank, Ltd.

986,000--

986,000

9,526

-

-

9,526

0.788

986,000--

986,000

9,526

-

-

9,526

0.788

684,000--

684,000

6,608

-

-

6,608

0.788

Sumitomo
MitsuiTrust Bank,
LimitedDevelopme
nt Bank ofJapan Inc.

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation
Sumitomo
MitsuiTrust Bank,
LimitedMaturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jul-24

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jan-25

16-Jul-25

16-Jul-25

16-Jul-25

16-Jul-25

29

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)
Developme
nt Bank ofJapan Inc.

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

300,000--

300,000

2,898

-

-

2,898

0.788

300,000--

300,000

2,898

-

-

2,898

0.788

100,000--

100,000

966

-

-

966

0.788

375,000--

375,000

3,623

-

-

3,623

0.788

700,000--

700,000

6,763

-

-

6,763

0.788

MizuhoBank, Ltd.

2,882,000--

2,882,000

27,845--27,845

0.462

The Daisan
Bank, Ltd.

800,000--

800,000

7,729

-

-

7,729

0.462

The Daisan
Bank, Ltd.

1,700,000--

1,700,000

16,425--

16,425

0.486

The Daisan
Bank, Ltd.

1,000,000--

1,000,000

9,661

-

-

9,661

0.638

1,000,000--

1,000,000

9,661

-

-

9,661

0.788

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
AozoraBank, Ltd.

The Tokyo
Star Bank,
LimitedLong-term
loans
payableIncrease

THE
NISHI-NI
PPON
CITY
BANK,
LTD.
Sumitomo
MitsuiTrust Bank,
Limited

1,550,000--

1,550,000

14,975--

14,9750.417

3,050,000--

3,050,000

29,468--29,468

0.643

MomijiBank,Ltd.

1,000,000--

1,000,000

9,661

-

-

9,661

0.643

The Kiyo
Bank, Ltd.

500,000--

500,000

4,830

-

-

4,830

0.643

MizuhoBank, Ltd.

634,000--

634,000

6,125

-

-

6,125

0.487

300,000--

300,000

2,898

-

-

2,898

0.487

1,000,000--

1,000,000

9,661

-

-

9,661

0.487

333,000--

333,000

3,217

-

-

3,217

0.487

333,000--

333,000

3,217

-

-

3,217

0.487

200,000--

200,000

1,932

-

-

1,932

0.487

Sumitomo
MitsuiTrust Bank,
LimitedResonaBank,
Limited.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.
The
Shizuoka
Bank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Jul-25

16-Jul-25

16-Jul-25

16-Jul-25

16-Jul-25

16-Jan-24

16-Jan-24

15-Apr-24

15-Apr-25

15-Oct-25

06-Jan-23

06-Jan-25

06-Jan-25

06-Jan-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

30

Classificati
onName oflender

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)
The
Yamaguchi
Bank, Ltd.

(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

450,000--

450,000

4,347

-

-

4,347

0.487

850,000--

850,000

8,212

-

-

8,212

0.388

1,090,000--

1,090,000

10,531--

10,5310.388

333,000--

333,000

3,217

-

-

3,217

0.388

MizuhoBank, Ltd.

582,000--

582,000

5,623

-

-

5,623

0.588

MUFG
Bank, Ltd.

628,000--

628,000

6,067

-

-

6,067

0.588

1,090,000--

1,090,000

10,531--

10,531

0.588

570,000--

570,000

5,507

-

-

5,507

0.588

500,000--

500,000

4,830

-

-

4,830

0.588

MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedThe Bank ofFukuoka,Ltd.

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.

Long-term
loans
payableEndingbalance

Decrease

ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.
AozoraBank, Ltd.

The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.
The
Yamaguchi
Bank, Ltd.

The Chukyo
Bank, Ltd.

Citibank,
N.A., Tokyo
BranchThe Tokyo
Star Bank,
LimitedTotal
long-term
loans
payableTotal loans payable

270,000--

270,000

2,608

-

-

2,608

0.588

1,000,000--

1,000,000

9,661

-

-

9,661

0.588

270,000--

270,000

2,608

-

-

2,608

0.588

500,000--

500,000

4,830

-

-

4,830

0.588

550,000--

550,000

5,314

-

-

5,314

0.588

1,000,000--

1,000,000

9,661

-

-

9,661

0.588

1,000,000--

1,000,000

9,661

-

-

9,661

0.338

-

600,000-

600,000

-

5,797

-

5,797

0.338

254,388,000

600,000

35,447,000

219,541,000

2,457,855

5,797

342,483

2,121,169

255,268,000

35,447,000

36,327,000

254,388,000

2,466,357

342,483

350,985

2,457,855-

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured
andunguaranteed

16-Mar-25

16-Mar-23

16-Mar-23

16-Mar-23

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

16-Mar-25

17-Jun-22

20-Jul-22---

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.

31

(3)

Due to the receipt of consumption taxes refunds The principal was repaid on October 30, 2020.

(4)

Long-term loans payable include current portion.

(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 of
December 31,
2020

1-2 years·······························································

December 31,
2020(in thousands of(in thousands of yen)
U.S. dollars)
48,679,000
470,328¥$

2-3 years··················································································

42,405,000

409,710

3-4 years··················································································

32,920,000

318,067

4-5 years··················································································

38,936,000

376,193

11. 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$483 thousand) as required by Article 67-4 of the Investment Trust Act.
The number of investment units authorized was 10,000,000 units as of June 30, 2020 and December 31, 2020.
The number of investment units issued and outstanding were 6,096,840 units as of June 30, 2020 and December 31, 2020 respectively.

12.Appropriation of Retained Earnings
In accordance with the distribution policy in Article 17, Paragraph 1, of the Company’s articles of incorporation which stipulates making
distributions in excess of 90% of distributable profit as defined in Article 67-15, Paragraph 1 of the Special Taxation Measures Act of Japanfor the fiscal period.
The following table shows the appropriation of retained earnings for the six months ended June 30, 2020 and December 31, 2020.
For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
Unappropriated retained earnings ····································································· ¥13,168,294

Distributions ···············································································································(420,681)

Retained earnings / losses carried forward························································· ¥12,747,612¥

13,371,340$(1,018,172)¥

12,353,168

129,191(9,837)$

119,354

The distribution in respect of the six months ended December 31, 2020 of ¥167 (US$1.6) per investment unit, amounting to a total
distribution of ¥1,018,172thousand (US$9,837 thousand) was proposed and approved at the Board of Directors meeting on February 25,
2020. These financial statements do not reflect these distributions payable.
Cash distributions per investment unit were ¥69 and ¥167 (US$1.6) for the six months ended June 30, 2020, and December 31, 2020,
respectively.
Notes related to provision and reversal of allowance for temporary differences adjustment is below.
For the six months ended June 30, 2020
Not Applicable
For the six months ended December 31, 2020
Not Applicable

13. Rent Revenues － Real Estate and Expenses Related to Property Rental Business
Rent revenue – real estate and expenses related to property rental business for the six months ended June 30, 2020 and December 31,
2020 consist of the following:32

For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
Rental revenue – real estate:
Rental revenue and common area charges (*)················································ ¥Other ·························································································································
Total rental revenue – real estate ······································································ ¥5,604,840
233,996
5,838,836¥

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······································ ¥2,452,700
598,839
19,721
3,578,589
151,732
6,801,584(962,747)¥(*)Variable rental revenue of hotels····································································· ¥1,246,746

5,530,201
208,047
5,738,249

$

$

¥
¥

548,085
779,062
19,7193,564,224
133,441
5,044,533
693,715

$
$

5,295
7,527
190
34,436
1,289
48,7396,702¥

1,105,021$

10,676¥$53,431
2,010
55,442

14. Management Contract Revenue
For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)Management contract revenue:
Hotel management revenue················································································
Hotel management expenses ···········································································
Management contract revenue ········································································

¥

¥

¥

2,912,073
2,021,630
890,442Management contract expenses:
Loss for management contract(*1) ·································································· ¥Management fee ····································································································
Insurance expense ····························································································
Depreciation ···········································································································
Other ·························································································································
Total management contract expenses ····························································· ¥Operating income (loss) from management contract·································· ¥4,096
109,853
420,999329
535,279
355,162¥¥¥¥

323,764
774,406-$

450,641
101,221428,5632,862
983,288(983,288)

$

3,128
7,482
-

$

$
$

4,354
977
4,140
27
9,500
(9,500)(*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.

15. Breakdown of Gain on sales of Properties
For the six months ended June 30, 2020

Revenue from sales of properties ····································································
Cost of properties sold ·························································································
Other sale-related costs ·······················································································
Gain or loss on sales of properties ···································································

City House Tokyo
Shinbashi(in thousands of yen)¥
4,474,757
2,269,720
158,741¥
2,046,294

For the six months ended December 31, 2020
Nisshin Palacestage Higashi-Nagasaki,
Nishiwaseda Cresent Mansion, Neo Prominence,
City Court Kitaichijo(in thousands of(in thousands of yen)
U.S. dollars)
Revenue from sales of properties ···································································· ¥7,870,163$
76,04033

Cost of properties sold ·························································································
Other sale-related costs ·······················································································
Gain or loss on sales of properties ··································································· ¥6,183,306
176,967
1,509,889

59,742
1,709
14,588$

Lexington Square Akebonobashi, Lexington Square
Daitabashi(in thousands of(in thousands of yen)
U.S. dollars)
Revenue from sales of properties ···································································· ¥3,270,294$
31,597
Cost of properties sold ·························································································
2,100,964
20,299Other sale-related costs ·······················································································
76,876742
Gain or loss on sales of properties ··································································· ¥1,092,453$
10,555(*) The sale price of individual properties are not disclosed as the transferees’ consent has not been obtained for disclosure.

16. 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

June 30,2020

December 31,
2020(Rate)

Statutory tax rates ··············································································31.46 %Deductible cash distributions ·······················································(8.87)(16.98)
Increase (decrease) in valuation allowance ·······························
Deductible dividends received ··················································(5.61)
Other ····································································································· 0.15

31.46 %
(31.46)0.10

Effective tax rates ··············································································· 0.14 %0.10 %(b) Deferred tax assets and liabilities consist of the following:
As ofJune 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
Deferred tax assets:
Enterprise tax payable
Buildings and other (merger) ······························
Land (merger)···························································Net loss carried forward(*1) ·······························
Asset retirement obligations ······························
Fixed-term leasehold ············································
Adjustment of acquisition price (Overseas properties)
Deposits received
Subtotal - deferred tax assets ··································
Valuation allowance for tax loss carried forward
Valuation allowance for the sum of deductible temporary differences¥

731
301,485693,693
522,444
10,305
100,736
469,3214,762
2,103,480(522,444)(1,581,036)¥

731
312,445472,381532,677
10,374
113,080
465,374
1,907,065(532,677)(1,374,387)

$

7
3,018
4,564
5,146
100
1,092
4,496
18,425(5,146)(13,279)34

Subtotal - valuation allowance ·······························(2,103,480)(1,907,065)(18,425)

Total - deferred tax assets···········································

-

-

-

(*1)The amounts of tax loss carried forward and the deferred tax assets are indicated by carry-forward period.
For the six months ended June 30, 2020

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Total(in thousands of yen)
Valuation allowance ········································································--

522,444(522,444)

Deferred tax assets ··············································································---Tax loss carried forward (a)

-

-

-

-

-

522,444--(522,444)

-

-

-

-

(a)Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
For the six months ended December 31, 2020

Within 1 year

1-2 years

2-3 years

201,976(201,976)
Valuation allowance ········································································Tax loss carried forward (a)320,467(320,467)-

Deferred tax assets ··············································································-

Within 1 year-

1-2 years

3-4 years

4-5 years(in thousands of yen)--

3-4 years

Total

-

10,232(10,232)

532,677(532,677)

-

-

-

-

-

2-3 years

Over 5 years

4-5 years

Over 5 years

Total(in thousands of U.S. dollars)
3,096(3,096)

Tax loss carried forward (a)1,951Valuation allowance ········································································(1,951)
Deferred tax assets ··············································································
-

-

-

-

98
(98)

5,146
(5,146)--(a) Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.

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

December 31,
2020(in thousands of yen)
13,074,353
Due within one year ································¥
Due over one year ···································· 76,516,655
89,591,008
Total ······························································¥¥(*1) 12,885,947
69,716,320¥

82,602,268

December 31,
2020(in thousands of
U.S. dollars)(*1) 124,501$
673,587$

798,089(*1) The effect of "Note 27 Subsequent Events (Conclusion of Memorandum of Understanding with Major Tenant for Amendment of Term Building Lease and Management
Service Agreement)" below is not included.

(b) Lease rental expenses
The future minimum rental expenses pursuant to existing rental contracts as of June 30 , 2020 and December 31, 2020 scheduled to be
paid are summarized as follows:
As ofJune 30,2020

December 31,
2020

December 31,
2020

35

Due within one year ································¥
315,287
Due over one year ···································· 8,822,415¥

317,915
8,769,532(in thousands of
U.S. dollars)
3,071$
84,729Total ······························································¥
9,137,702¥

9,087,447$(in thousands of yen)

87,801

18. Financial Instruments(a) Qualitative information for financial instruments(i) Policy for financial instrument transactions
The Company raises funds through loans payable , investment corporation bonds, and the issuance of investment units toacquire real estate properties, pay property maintenance expenses and/or repay existing loans payable. Surplus funds aremanaged carefully through investments in financial instruments taking into account liquidity and safety in light of the current
financial market conditions. Derivative instruments are used only for hedging purposes and not for speculation.
(ii) Nature and extent of risks arising from financial instruments and risk management
The funds raised through loans payable and investment corporation bonds are mainly used to acquire real estate properties orproperties in trust and for the repayment of existing loans payable. Liquidity risks relating to loans payable are managed by 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 June 30, 2020 and December 31, 2020.
As ofJune 30,
2020
Carrying
amounts

December 31,
2020

Fair value

Carrying
amounts

Difference

December 31,
2020

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 ···················································¥
10,190,672¥(2) Cash and bank deposits in trust. ··································
6,127,902
Total assets ··················································································¥
16,318,574

10,190,672¥-

6,127,902¥

16,318,574

¥

¥

-

21,210,252¥

6,295,192¥

27,505,445

21,210,252¥¥

27,505,445

-

$

-

6,295,192¥-

204,929$60,823$

265,753

204,929$-60,823$

265,753$-

Liabilities:(3) Short-term loans payable ················································
880,000

880,000-

34,847,000

34,847,000-

336,685336,685-(4) Current portion of long-term loans
57,380,000
payable ·························································································

57,380,000-

55,601,000

55,601,000-

537,207537,207-(5) Investment corporation bonds ······································
8,200,000

7,351,740(848,260)

8,200,000

7,467,240(732,760)

79,227

72,147(7,079)(6) Long-term loans payable···················································
197,008,000

197,008,000-

163,940,000

163,940,000-

1,583,961

1,583,961

Total liabilities ·············································································¥
263,468,000¥

262,619,740¥(848,260)¥(7) Derivatives···············································································¥
23,808¥23,808¥-¥262,588,000¥(104,071)¥

261,855,240¥(732,760)$

2,537,082$(104,071)¥-$(1,005)$-2,530,002$(7,079)(1,005)

$

-

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.

36

(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 “20. Derivatives” below.

(ii) Financial instruments for which fair value is difficult to determine are as follows:
As ofJune 30,2020

December 31,
2020

December 31,
2020

Tenant leasehold and security deposits in trust ······················¥

1,749,862¥

1,672,037(in thousands of
U.S. dollars)
16,154$

Investment securities ·······································································¥

17,856,387¥

17,856,387$(in thousands of yen)

172,525

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 June 30, 2020
Cash and bank deposits ··································································¥ 10,190,672
Cash and bank deposits in trust ···················································
6,127,902

¥

-

¥

-

¥

-

¥

-

¥

-

Total ·······································································································¥ 16,318,574

¥

-

¥

-

¥

-

¥

-

¥

-

As of December 31, 2020:
Cash and bank deposits ··································································¥ 21,210,252
6,295,192
Cash and bank deposits in trust ···················································

¥

-

¥

-

¥

-

¥

-

¥

-

Total ·······································································································¥ 27,505,445

¥

-

¥

-

¥

-

¥

-

¥

-

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of U.S. dollars)
As of December 31, 2020:
204,929
Cash and bank deposits ··································································$
60,823
Cash and bank deposits in trust ···················································

$

-

$

-

$

-

$

-

$

-

265,753
Total ·······································································································
$

$

-

$

-

$

-

$

-

$

-

(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 June 30, 2020:
Short-term loans payable ·······························································
880,000
Current portion of long-term loans payable ····························
57,380,000
Investment corporation bonds ······················································· Long-term loans payable ································································ Total ·······································································································¥ 58,260,000

53,602,000¥

53,602,000

1,000,000
44,207,000¥

45,207,000

2,000,000
44,964,000¥

46,964,000

1,000,000
40,798,000¥

41,798,000

4,200,000
13,437,000¥

17,637,000

As of December 31, 2020:
34,847,000
Short-term loans payable ·······························································-

55,601,000
Current portion of long-term loans payable ····························

-

-

-

-

-

Investment corporation bonds ······················································· Long-term loans payable ································································ -48,679,000

3,000,000
42,405,000

1,000,000
32,920,000

38,936,000

4,200,000
1,000,000

Total ·······································································································¥ 90,448,000¥

48,679,000¥

45,405,000¥

33,920,000¥

38,936,000-¥

5,200,000

37Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of U.S. dollars)
As of December 31, 2020:
336,685
Short-term loans payable ·······························································
537,207
Current portion of long-term loans payable ····························
Investment corporation bonds ······················································· Long-term loans payable ································································ 873,893
Total ·······································································································$

470,328
470,328$

28,985
409,710438,695$

9,661
318,067$

376,193

327,729

376,193$

40,5799,661
50,241$

19. Investment securities
As of June 30, 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 December 31, 2020
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand (US$172,525thousand) are not subject todisclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

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

3,271,290¥ 1,890,460¥(79,014)¥¥

3,271,290¥ 1,890,460¥

109,770¥(46,376)

70,605¥(48,852)¥

30,162¥

138,567¥

28,797(*1) Calculation of fair value is based on information provided by financial institutions.

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¥

952,820¥

596,860¥(23,788)¥(14,921)¥952,820¥

596,860¥(4,323)

Fair
Value
(*1)

Over 1
year

Total

Valuation
gains orlosses(in thousands of U.S. dollars)¥

19,464

$

9,205

$

5,766

$

(229)

$

(144)

$

9,205

$

5,766

$

(41)

$

38

188

Optionpremium¥

39,407¥25,719¥66,180¥26,773

$

380

$

248

$

639

$

258

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

(b) Transactions for which hedge accounting is applied
As of June 30, 2020:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)

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

Long-term
borrowings¥

98,362,000¥ 65,133,000¥(65,906)(*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 December 31, 2020:
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¥

69,383,000

Fair
Value
(*2)

Over 1year

Total(in thousands of U.S. dollars)¥ 65,133,000¥(165,929)$

670,367$

629,304$(*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.

21. Asset Retirement Obligations
The Company has an obligation under a fixed-term leasehold agreement to restore its leased land, which represents the land where
COMFORT HOTEL MAEBASHI, owned by the Company, is located upon the termination of agreement. The estimated period of useof property is estimated at 43 years based on the lease period per the agreement. The assets retirement obligation for the restoration isrecognized as a liability using discount rate at 1.342%.
Movements of asset retirement obligations for the six months ended June 30, 2020 and December 31, 2020 are as follows.

For the six months ended

June 30,2020

December 31,
2020

December 31,
2020(in thousands of
U.S. dollars)(in thousands of yen)
Balance at the beginning of the period ······································· ¥32,539¥32,756$316

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

-

-

-

Accretion expense ·············································································

217

221

2

Balance at the end of the period ··················································· ¥32,756¥32,977$318

22. Segment Information
Segment information for the six months ended June 30, 2020 and December 31, 2020 are as follows :39(1,603)

(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:
For the six months ended June 30, 2020
(in thousands of yen)
Japan

Grand Cayman
8,519,782

Total
890,442

9,410,225

For the six months ended December 31, 2020

Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.(2)Tangible
Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers
Information about major clients for the six-month periods ended, June 30, 2020 and December 31, 2020 were as follows:
For the six months ended June 30, 2020

Name of client

Operating Revenues(in thousands of yen)

Related segment

Mystays Hotel Management Co.,Ltd.

¥2,205,610

Real estate investing business

Undisclosed (1)¥2,046,294

Real estate investing business

For the six months ended December 31, 2020

Name of client

Operating Revenues(in thousands of yen)

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

Related segment

Undisclosed (2)2,602,343

25,143

Real estate investing business

Mystays Hotel Management Co., Ltd.

1,389,730

13,427

Real estate investing business

Naqua Hotel & Resorts Management
Co., Ltd.

851,447

8,226

Real estate investing business

Notes

(1)

The name of the client (an affiliate of a foreign real estate fund) 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.

(2)

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.

23. Profit or Loss from Equity Method, etc
For the six months ended June 30, 202040

(in thousands of yen)
Investments in affiliates

17,856,387

Investments, if equity method was adopted

17,856,387

Investment gains (losses), if equity method was adopted

558,924

For the six months ended December 31, 2020
(in thousands of yen)(in thousands of US dollars)

Investments in affiliates

17,856,387

172,525

Investments, if equity method was adopted

17,620,960

170,250

Investment gains (losses), if equity method was adopted(235,426)(2,274)

24. Related-Party Transactions
Parent Company and Major Corporate Unitholders(a)

For the six months ended June 30, 2020
SharecapitalType ofrelated-party

Interested
party of the
Asset
ManagerCompany
nameLocation

Business(inmillionsof yen)Voting interestin the Company

Adria
TMK(3)

Minato-ku,
Tokyo

Investment
managementbusiness

¥0.1

-

Heijo
TMK(3)

Minato-ku,
Tokyo

Investment
managementbusiness¥0.1-

Naqua Hotel& Resorts
Management
Co., Ltd.(3)Mystays
HotelManagement
Co., Ltd.(3)Minato-ku,
Tokyo

Minato-ku,
Tokyo

Hotel
managementbusinessHotelmanagementbusiness

¥10

¥760

-

--

Relations
hip withtheCompanySeller ofreal estate
trust
beneficiaryinterests
Seller ofreal estate
trust
beneficiaryinterests

Leaseholder
andoperator of
hotel

Leaseholder
andoperator of
hotel

Transactions for the period

Balance at the end of period

Amounts(1)(inthousandsof yen)Balancesheet
account¥10,593,000--¥5,643,000--

Rentalrevenues¥112,358

Rentalreceivables¥40,124

Property
management
costs andmanagement
fees (2)¥273,674--

Rentalrevenues¥2,205,610

Rentalreceivables¥93,116

Property
management
costs andmanagement
fees (2)¥985,476

Accounts
payable-other¥93,109

Type oftransactions
Acquisition ofreal estate
trust
beneficiaryinterests (2)(4)Acquisition ofreal estate
trust
beneficiaryinterests (2)(4)

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)

Terms and conditions are decided pursuant to the Asset Manager's Regulations on Transactions with Sponsor-related Persons and the Management Manual regarding
Transactions with Sponsor-related Persons.

(3)

The seller, Adria TMK, Heijo TMK, 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 , Adria TMK, Heijo TMK , Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management as a related
party.

41

The transaction amount is stated based on the transaction price under the purchase and sale agreement of trust beneficiary interests, and does not include the expenses in the(4)transaction, property tax, city planning tax, and consumption taxes.
Acquisition of real estate trust beneficiary interests are relating to below
Property name

Property No.

Acquisition cost(in thousands of yen)
10,593,000

SellerD82

Hotel MyStays Premier Narita

Adria TMK

D83

Art Hotel Morioka

Heijo TMK

5,643,000

Total

16,236,000

For the six months ended December 31, 2020

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

$96

-

Leaseholder andoperator of hotelHotelmanagementbusiness¥760$7,342-

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¥851,447$8,226

Rentalrevenues¥1,389,730$13,427

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

Rentalreceivables¥402,013$3,884

Rentalreceivables¥966,790$9,340Notes:(1)

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

(2)

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

(b) Affiliates
For the six months ended June 30, 2020
Not Applicable
For the six months ended December 31, 2020
Not Applicable(c)

Board of Directors and Major Individual Unitholders

For the six months ended June 30, 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)¥315,018

Accruedexpenses¥165,238¥600

Accruedexpenses¥330

Notes:(1)

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

(2)

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

(3)

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

For the six months ended December 31, 2020
Type of

Name

Business /VotingTransactions for the period

Balance at the end of period42related-party

Directors
and close
relatives

Occupation

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

interest intheCompany-

Amounts(3)Type of transactions

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

Amounts(3)(inthousandsof yen)(inthousandsof U.S.
dollars)¥333,417$3,221¥1,100$10(inthousandsof yen)(inthousandsof U.S.
dollars)

Accruedexpenses¥201,758$1,949Accruedexpenses¥880$8Balance 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.

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

(b) Summary of financial statements of the significant affiliates
The significant affiliates in the year ended December 31, 2020 is Kingdom TMK. Summary of financial statements are as follows:
Kingdom TMK
As of / For the six months ended
December 31, 2020

June 30, 2020

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

December 31, 2020
(in thousands of US dollars)

100,194,569

100,174,273

967,867

3,724,184

2,043,010

19,739Total current liabilities

79,072

18,728180

Total non-current liabilities

66,278,918

66,258,918

640,182

Total net assets

37,560,763

35,939,637

347,242

Operating revenue

1,748,867

201,274

1,944

Income before income taxes

1,141,544(479,858)(4,636)

Net income

1,140,663(480,463)(4,642)

26. Per Unit Information
The following table shows net asset value per unit as of June 30, 2020 and December 31, 2020 and net income per unit for the six months
then ended. Net income per unit is calculated by dividing the net income attributable to unitholders by the weighted average number ofunits outstanding. The Company has no potentially dilutive units.
As of / For the six months ended

June 30,2020

December 31,
2020

December 31,
2020

(Yen)

(U.S. dollars)

Net asset value per unit ··································································· ¥40,929¥40,946$395

Net income per unit ········································································· ¥

70

¥

102

$

0

Weighted average number of units ············································

6,096,840

6,096,840-

27．Subsequent Events (Conclusion of Memorandum of Understanding to Amend the Fixed-term Building Lease andProperty Management Agreement with Major Tenant)43

Under the impact of the spread of the new coronavirus infection, the Company decided at its board of director’s meeting held on March
11, 2021 to enter into a Memorandum of Understanding (the “MOU”) to amend each fixed-term building lease and property
management agreement("MLPM Agreements") pertaining to the rent conditions for the period from January 1, 2021 to June 30, 2021 for
73 domestic hotels owned by the Company with main tenant, MyStays Hotel Management Co., Ltd. (“MHM”) and its affiliates (the"MHM Group"), 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 "Original LeasingTerms and Conditions") as a tentative
measure for the period from January 1, 2021 to June 30,2021 as follows.
Items subject to

Calculated based on the Original

Tentative Measures

ChangeLeasing Terms and Conditions（January 1, 2021 to June 30, 2021）

Fixed rent (Total rent for 6

JPY 4,970 million

JPY 1,000 million

months for 73 properties)(Approx. 20% of the amount under theOriginal Leasing Terms and Conditions)(hereinafter referred to as the “total fixed rent”)

Variable rent

Calculated on a 3-month basis for each hotel.

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

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

the total amount of expenses, management

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

the hotel property (if the calculation results

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

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

Payment method of rent

Paid on the hotel-by-hotel basis.

Paid on a total basis of 73 hotel properties.

The due date is the 11th of the month which

On August 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 3,970 million yen in the fiscal
period ending June 2021. However, as the variable rent recorded in operating revenue is determined by the GOP for the period fromJanuary 1, 2021 to June 30, 2021, the amount of impact cannot be estimated as of today

28．Additional Information (Impact related to the Spread of new coronavirus)
In applying impairment accounting for fixed assets, the Company estimates the impact of the new coronavirus, assuming that the
impact of the spread of the new coronavirus will be gradually controlled and the business environment will recover after the next fiscal
period. Since 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 Company's financial position and results ofoperations after the next fiscal period.

29．Unapplied Accounting Standard

44

・ “Accounting Standard for Revenue Recognition” (Corporate Accounting Standards No. 29 issued by Accounting Standards Boardof Japan (“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)・“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

・ “Accounting Standard for Disclosure of Accounting Estimates” (Corporate Accounting Standards No. 31 issued by ASBJ on March
31,2020)(1) Overview
With regard to “sources of estimation uncertainty” which are required to be disclosed under Paragraph 125 of International AccountingStandard (“IAS”) 1 “Presentation of Financial Statements” (“IAS 1”) issued in 2003 by IASB, ASBJ was requested to examine disclosuresof such information under Japanese GAAP as useful information for users of financial statements. Accordingly, ASBJ has developed andpublished the accounting standard for disclosures of accounting estimates (the “Accounting Standard”).
The basic policy of ASBJ for the development of the Accounting Standard was to provide general principles (disclosure objectives)
instead of expanding required information in the notes, and an entity shall determine specific disclosures in accordance with its
disclosure objectives. The development of this standard is based on Paragraph 125 of IAS 1.
(2) Scheduled date of the application
Company will adopt the accounting standard from the end of the period ending June 30, 2021.
・ “Accounting Standard for Accounting Policy Disclosures, Accounting Changes, and Error Corrections” (Corporate AccountingStandards No. 24 issued by ASBJ on March 31, 2020)(1) Overview
Following the recommendation to examine enhancements to note information concerning “application of principles of accounting
policies and procedures where provisions of related accounting standards are not available,” necessary amendments were made and theaccounting standard for accounting policy disclosures, accounting changes, and error corrections was published by ASBJ.
When enhancing note information concerning “application of principles of accounting policies and procedures where provisions ofrelated accounting standards are not available,” in order to ensure consistency with past actual practice in case the provisions of related
accounting standards are clear, the provisions in the Notes on Corporate Accounting Principles (Note 1-2) have been followed.
(2) Scheduled date of the application
Company will adopt the accounting standard from the end of the period ending June 30, 2021

46