Financial Statements(8th Fiscal Period: From August 1, 2015 to January 31, 2016)(7th Fiscal Period: From February 1, 2015 to July 31, 2015)
Independent Auditor’s Report
Balance Sheets
Statements of Income and Retained Earnings
Statements of Changes in Net Assets
Statements of Cash Flows
Notes to Financial Statements

KENEDIX RESIDENTIAL INVESTMENT CORPORATION

Balance Sheets
As of January 31, 2016 and July 31, 2015
Eighth Fiscal Period
as of January 31, 2016

Seventh Fiscal Period
as of July 31, 2015

(in thousands of yen)
ASSETS
Current assets
Cash and deposits (Notes 6 and 8)
Cash and deposits in trust (Notes 6 and 8)
Operating accounts receivable
Prepaid expenses
Deferred tax assets (Note 10)
Consumption taxes receivable
Other (Note 8)
Total current assets
Noncurrent assets
Property, plant and equipment (Notes 12 and 17)
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment, net
Investments and other assets
Investment securities (Note 16)
Lease and guarantee deposits
Long-term prepaid expenses
Total investments and other assets
Total noncurrent assets
Deferred assets
Deferred organization costs¥4,448,589
3,618,286
25,0223,344
2,215
8,097,456¥5,058,518
3,666,427
18,5224,001
19535,1681,757
8,784,588

1,798,041
63,158,109(3,668,727)
59,489,382
393,840(61,776)
332,064
1,241,311(114,953)
1,126,358
125,547(4,331)
121,216
88,038,598
150,905,659

1,798,041
61,497,744(2,945,300)
58,552,444
384,396(50,866)
333,530
1,234,055(90,545)
1,143,510
53,370(1,695)51,67586,993,350
148,872,550

132,897
10,951
787,229
931,077
151,836,736

132,897
10,951
668,910
812,758
149,685,308

8,297

13,598Investment unit issuance costs

122,139

171,999

Total deferred assets

130,436

185,597¥160,064,628¥158,655,493

Total assets－2－

Eighth Fiscal Period
as of January 31, 2016

Seventh Fiscal Period
as of July 31, 2015

(in thousands of yen)
LIABILITIESCurrent liabilities
Operating accounts payable
Short-term loans payable (Note 8)
Current portion of long-term loans payable (Notes 8 and 9)
Accounts payable-otherAccrued expenses
Income taxes payable¥408,685
12,000,000
189,156
20,334605¥301,810
3,200,000
9,000,000
192,209
14,49542,141

Accrued consumption taxes

87,312-

Advances received
Deposits received

698,354
55,597

707,794
56,02013,460,043

13,514,469

Noncurrent liabilities
Long-term loans payable (Notes 8 and 9)
Tenant leasehold and security deposits in trust
Total noncurrent liabilities

Total current liabilities

62,800,000
1,415,066
64,215,066

61,300,000
1,457,261
62,757,261

Total liabilities

77,675,109

76,271,730

80,132,379

80,132,379

2,258,172

2,254,663

2,258,172
82,390,551

2,254,663
82,387,042

Deferred gains or losses on hedges (Notes 8 and 9)(1,032)(3,279)Total valuation and translation adjustments(1,032)(3,279)NET ASSETS
Unitholders' equity
Unitholders' capital
Surplus
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Valuation and translation adjustments

Total net assets (Note 3)

82,389,519

82,383,763

Total liabilities and net assets¥160,064,628¥158,655,493

See accompanying notes to the financial statements.

－3－

KENEDIX RESIDENTIAL INVESTMENT CORPORATIONStatements of Income and Retained Earnings
For the period from August 1, 2015 to January 31, 2016 and the period from February 1, 2015 to July 31, 2015
Eighth Fiscal Period
from August 1, 2015
to January 31, 2016

Seventh Fiscal Period
from February 1, 2015
to July 31, 2015

(in thousands of yen)
Operating revenues
Rent revenue-real estate (Note 4)
Other lease business revenue (Note 4)
Gain on sales of real estate property (Note 4)
Dividends income
Total operating revenues
Operating expenses
Expenses related to rent business (Note 4)
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Dividends and redemption-prescription
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Derivatives-related expenses
Borrowing expenses
Amortization of deferred organization costs
Amortization of investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes (Note 10)
Current
Deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings¥4,796,385
411,7529,284
9,212
5,226,633¥4,735,881
434,129
124,1108,334
5,302,454

1,936,375
355,327
10,93337,7384,500
164,677
2,509,550
2,717,083

1,952,263
318,706
9,175
32,7244,500
171,0672,488,435
2,814,019

255
1,246
16
1,517

210
116
326

370,333
3,391
104,645
5,301
49,861
533,5312,185,069
2,185,069

335,705
7,497
105,653
5,214
54,334508,4032,305,942
2,305,942

606
195
801
2,184,268
73,904¥2,258,172

51,578(178)
51,4002,254,542
121¥2,254,663

See accompanying notes to the financial statements.

－4－

KENEDIX RESIDENTIAL INVESTMENT CORPORATIONStatements of Changes in Net Assets
For the period from August 1, 2015 to January 31, 2016 and the period from February 1, 2015 to July 31, 2015
Valuation andtranslation
adjustments

Unitholders' equity
Surplus

Unitholders'
capitalUnappropriatedretainedearnings

Total
unitholders'equityTotal
surplusDeferred gains
or losses onhedgesTotal net assets(in thousands of yen)
Balance as of January 31, 2015¥

57,121,702 ¥

1,739,609 ¥

1,739,609 ¥

58,861,311 ¥(8,590) ¥ 58,852,721

Changes of items during the period
Issuance of new investment units

23,010,677--

23,010,677-

23,010,677

Dividends from surplus-(1,739,488)(1,739,488)(1,739,488)-(1,739,488)

Net income
Net changes of items other thanunitholders' equity-

2,254,542

2,254,542

2,254,542-

2,254,542

-

-

-

-

5,311

5,311

23,010,677

515,054515,054

23,525,731

5,311

23,531,042

80,132,379 \

2,254,663 \

2,254,663 \

82,387,042 \(3,279) \ 82,383,763

Total changes of items during the period
Balance as of July 31, 2015

(Note 5)\

Changes of items during the period
Dividends from surplus-(2,180,759)(2,180,759)(2,180,759)-(2,180,759)

Net income
Net changes of items other thanunitholders' equity-

2,184,268

2,184,268

2,184,268-

2,184,268

-

-

-

-

2,247

2,247

-

3,509

3,509

3,509

2,247

5,756

2,258,172 \2,258,172 \82,390,551 \Total changes of items during the period
Balance as of January 31, 2016

(Note 5)\80,132,379 \See accompanying notes to the financial statements.

－5－(1,032) \ 82,389,519

KENEDIX RESIDENTIAL INVESTMENT CORPORATIONStatements of Cash Flows
For the period from August 1, 2015 to January 31, 2016 and the period from February 1, 2015 to July 31, 2015
Eighth Fiscal Period
from August 1, 2015
to January 31, 2016

Seventh Fiscal Period
from February 1, 2015
to July 31, 2015

(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of deferred organization costs
Amortization of investment unit issuance costs
Interest income
Interest expenses
Derivatives-related expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Decrease in property and equipment in trust due to sale
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of investment securities
Proceeds from investment securities
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Decrease in short-term loans payable
Proceeds from long-term loans payable
Decrease in long-term loans payable
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period (Note 6)¥2,185,069
852,368
5,301
49,861(255)
370,333
3,391(6,500)35,168657
86,839(2,751)87,312(9,440)(118,319)
4,637,002(383)
8,175,653
255(364,495)(42,141)
7,769,272¥2,305,942
827,084
5,214
54,334(210)
335,705
7,497
26,132
21,261
7,249(47,989)
54,615
126,539(59,137)
989,336
13,294
4,666,866
210(337,369)(698)
4,329,009(7,502,839)(192,927)
150,732(7,545,034)(25,985,200)(133,807)
726,542(161,160)
343,195(25,210,430)(3,200,000)
10,000,000(5,500,000)(2,182,308)(882,308)(658,070)
8,724,945¥8,066,875

8,900,000(6,500,000)
22,895,147(1,739,276)
23,555,871
2,674,450
6,050,495¥8,724,945

See accompanying notes to the financial statements.

－6－

KENEDIX RESIDENTIAL INVESTMENT CORPORATION

Notes to Financial Statements
For the period from August 1, 2015 to January 31, 2016 and the period from February 1, 2015 to July 31, 2015

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Residential Investment Corporation (“the Investment Corporation”) was established on November 15, 2011 under the Act on Investment
Trusts and Investment Corporations of Japan (“the Investment Trust Act”). On April 26, 2012, the Investment Corporation was listed on the Real
Estate Investment Trust Market of the Tokyo Stock Exchange (Securities Code: 3278).The Investment Corporation additionally issued 67,900
investment units on February 4, 2015 through most recent public offerings, and 2,067 investment units on March 4, 2015 by way of a third-party
allotment. As the result, as of January 31, 2016, the end of the eighth fiscal period, the number of investment units issued and outstanding totaled
349,089 units.
The Investment Corporation is externally managed by Kenedix Real Estate Fund Management, Inc. (“the Asset Management Company”) , a
company that was formed with personnel from Kenedix, Inc. and adheres to the core philosophies of Kenedix, Inc., that is, to provide management
services from the perspective of real estate investors as an independent real estate management company. As the asset manager, the AssetManagement Company shall provide investment and management services based on the three core strategies of the Investment Corporation:“Consistent External Growth by Making Use of Good Judgment,” “Efficient Profit Management” and “Challenge to New Business Opportunities.”
During the seventh fiscal period, the Investment Corporation acquired 12 properties (total acquisition price of ¥24,711 million) and sold 1
property with a disposition price of ¥1,120 million. As the result, the Investment Corporation has a portfolio comprised of 103 properties (totalacquisition price of ¥145,874 million) as of July 31, 2015, the end of the seventh fiscal period.
During the eighth fiscal period, the Investment Corporation acquired 5 properties (total acquisition price of ¥6,901 million) and sold 3 properties
with a total disposition price of ¥4,673 million. As the result, the Investment Corporation has a portfolio comprised of 105 properties (totalacquisition price of ¥148,184 million) as of January 31, 2016, the end of the eighth fiscal period.
The occupancy rates of the overall portfolio excluding land with leasehold interest were 96.2% and 96.0% as of the end of the seventh andeighth fiscal period, respectively. Furthermore, the occupancy rates of the overall portfolio including land with leasehold interest were 96.3% and96.0% as of the end of the seventh and eighth fiscal period.
During the seventh and eighth fiscal period, the Investment Corporation made new borrowings of ¥2,400 million and ¥1,300 million uponacquiring properties and made borrowings of ¥6,500 million and ¥8,700 million for the repayment of debt matured. As a result, balance ofborrowings as of the end of the seventh and eighth fiscal period stood at ¥73,500 million and ¥74,800 million, respectively. The Investment
Corporation has worked to extend and diversify maturities continuously, including a 10 year maturity as for the borrowings made on August 31,
2015 (Series 15-G).
Basis of Presentation
The Investment Corporation maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (Japanese GAAP), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, theFinancial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Investment Corporation, which wereprepared in accordance with Japanese GAAP and were presented in the Securities Report of the Investment Corporation filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial
statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition, the notes tofinancial statements include certain information that might not be required under Japanese GAAP but is presented herein as additional information.
The Investment Corporation fiscal period is a six-month period which ends at the end of January or July. The Investment Corporation does notprepare consolidated financial statements because it has no subsidiaries.

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

Buildings

From August 1, 2015
to January 31, 2016
3-65 years

From February 1, 2015
to July 31, 2015
3-62 years

Structures

3-45 years

3-45 years

Machinery and equipment

8-30 years

8-30 years

Tools, furniture and fixtures

10-30 years

30 years(C) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(D) Deferred Organization Costs
Deferred organization costs are amortized over a period of 5 years under the straight-line method.
(E) Unit Issuance Costs
Unit issuance costs are amortized over a period of 3 years under the straight-line method.
(F) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all relevant
assets and liabilities in trust are recorded on the balance sheet and the statement of income and retained earnings.
(G) Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues including
parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrual basis over the lifeof each lease.
(H) Taxes on Property and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar
year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to said period.
Under Japanese tax regulations, the seller of the property is liable for these taxes on the property from the date of disposal to the end of thecalendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued property-related tax
liabilities.
When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related to the period
following the purchase date of each property through the end of the calendar year. The amounts of those allocated portions of theproperty-related taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to－8－¥4,237 thousand and ¥87,364 thousand as of January 31, 2016 and July 31, 2015, respectively.

(I)

Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets
and liabilities using the statutory tax rates.

(J) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes
applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(K) Derivative Financial Instruments
The Investment Corporation enters into derivative transactions to hedge risks prescribed in its Articles of Incorporation based on its risk
management policies. The Investment Corporation hedges interest rate volatility risk of its interest payments on its borrowings by utilizing
interest rate cap transactions and interest rate swap transactions as hedging instruments.
As for the method of assessment of the effectiveness of the hedge in the period from the inception of the hedge to the time of judgment of its
effectiveness, the cumulative changes in cash flow of the hedged items and hedging instruments are compared and a judgment is madebased on changed amount, etc. However, an assessment of the effectiveness of hedging activities is omitted in the case of interest rate
swaps that meet the requirements for special treatment. Furthermore, assessment of the effectiveness of hedging activities is omitted in thecase of interest rate caps that do not meet the requirements for special treatment as the important conditions regarding hedged items andhedging instruments are the same and are clearly expected to have the effect of limiting the impact of interest rate volatility within a certain
range on an ongoing basis.
(L) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily
convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.
(M) Presentation of Amounts
Amounts are truncated in the Japanese financial statements prepared in accordance with Japanese GAAP and filed with regulatory
authorities in Japan, whereas amounts are rounded off in the accompanying financial statements. Totals shown in the accompanying financial
statements do not necessarily agree with the sums of the individual amounts.

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

4. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY
Rental and other operating revenues and property-related expenses for the periods from August 1, 2015 to January 31 2016 and from February 1,
2015 to July 31, 2015 consist of the following:
From August 1, 2015
to January 31, 2016

From February 1, 2015
to July 31, 2015

(in thousands of yen)

Rental and other operating revenues:
Rental revenues
Rental revenues from limited proprietary rights of landCommon area charges¥4,492,515¥4,417,741

43,75066,790260,120

251,350

4,796,385

4,735,881

Parking space rental revenues

177,492

175,099

Miscellaneous

234,260

259,030

Subtotal

411,752

434,129¥5,208,137¥5,170,010¥350,097¥368,881

Subtotal
Others:Total rental and other operating revenues
Property-related expenses:
Property management fees and facility management fees
Utilities

97,31299,444

Taxes

255,545

261,546

Repairs and maintenance

203,470

182,979

7,963

8,324

Insurance
Trust fees

39,331

38,692

Depreciation

852,368

827,084

OthersTotal property-related expenses

130,289

165,313¥1,936,375¥1,952,263

Gain on sales of real estate property:
From August 1, 2015 to January 31, 2016
KDX Yoyogi Residence
Revenue from sale of real estate property¥1,340,000

Cost of real estate property

1,328,749

Other sales expenses

7,946

Gain on sales of real estate property¥3,305

KDX Residence Tenjin-higashi I
Revenue from sale of real estate property¥381,000Cost of real estate property

377,077

Other sales expenses

2,482

Gain on sales of real estate property¥1,441－10－

KDX Residence Shirokane III
Revenue from sale of real estate property¥2,952,000

Cost of real estate property

2,931,176

Other sales expenses

16,285Gain on sales of real estate property¥4,539From February 1, 2015 to July 31, 2015
Nichii Home Tama Plaza(Land with leasehold interest)
Revenue from sale of real estate property¥1,120,000

Cost of real estate property

989,336

Other sales expenses

6,554

Gain on sales of real estate property¥124,110

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

Total number of authorized investment units

From August 1, 2015
To January 31, 2016
5,000,000

From February 1, 2015
To July 31, 2015
5,000,000

349,089

349,089

Total number of investment units issued and outstanding

6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of January 31, 2016 and July 31, 2015:
As of January 31, 2016

As of July 31, 2015

(in thousands of yen)

Cash and deposits¥4,448,589¥5,058,518

Cash and deposits in trust

3,618,286

3,666,427

Cash and cash equivalents¥8,066,875¥8,724,945

7. LEASES
The Investment Corporation, as lessor, has entered into leases whereby fixed monthly rents are due in advance with a lease term of generally
two years for residential properties. The future minimum rental revenues under existing non-cancelable operating leases as of January 31, 2016
and July 31, 2015 are as follows:
As of January 31, 2016

As of July 31, 2015

(in thousands of yen)Due in 1 year

¥640,615¥692,766

Due after 1 year

4,540,139

5,193,660

Total¥5,180,754¥5,886,426－11－

8. FINANCIAL INSTRUMENTS(A). Overview(1) Policy for financial instruments
The Investment Corporation procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans fromfinancial institutions, issuance of investment units and other means. With regard to the procurement of interest-bearing debts, the Investment
Corporation ensures that it can effectively combine stable long-term funds with flexible short-term funds. Management of surplus funds isundertaken through various bank deposits focusing on safety, liquidity and effectiveness. The Investment Corporation uses derivatives for the
purpose of hedging its exposure to changes in interest rates and other risks and does not enter into derivative transactions for speculative or
trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing the Investment Corporation’s surplus funds and are exposed to credit risk such as the bankruptcy of financial
institutions at which funds are deposited. Investment securities represent equity investments in an anonymous association and are exposed tocredit risk of the issuer and interest rate fluctuation risk.
Borrowings, which are made primarily for the purpose of procuring funds for the acquisition of real estate and trust beneficiary interests in realestate and have a repayment date of a maximum of 9 years and 7 months as of January 31, 2016, the end of the eighth fiscal period, are exposed
to liquidity risk where alternative funds may not be procured by the repayment date. Also, borrowings with floating interest rates are exposed tointerest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk for a certain portion of the borrowings.
(3) Risk management for financial instruments
a. Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored
by deposits in non-interest bearing ordinary savings accounts or with financial institutions with credit ratings above a certain level. Investment
securities represent equity investments in an anonymous association and are exposed to credit risk of the issuer and interest rate fluctuation risk.
To manage this credit risk, the Investment Corporation regularly evaluates the results of operations and the financial condition of the issuer, etc. In
utilizing derivatives, the Investment Corporation aims to mitigate counterparty risk such as by transacting with financial institutions with favorable
ratings.
b.

Market risk

While borrowings with floating rates are exposed to interest rate volatility risk, such risk is monitored by adjusting the rate of the balance ofborrowings with floating rates against the total borrowings according to the financial environment, interest rate forecasts by continuous monitoring,etc. and by using derivatives, etc. A risk management policy is established with regard to the execution and management of derivatives and suchtransactions are conducted based on this policy.
c.

Liquidity risk

Though borrowings are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates and by
diversifying financial institutions. Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.
(4) Supplementary explanation of the estimated fair value of financial instruments

The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market priceavailable, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value,
different assumptions and factors could result in a different fair value.

－12－

(B). Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet and estimated fair value are shown in the following table.
As of January 31, 2016
Carrying amount

Estimated fair value

Difference(in thousands of yen)

(1) Cash and deposits¥4,448,589¥4,448,589(2) Cash and deposits in trust

3,618,286

3,618,286-

8,066,875

8,066,875

-

-

-

-

(2) Current portion of long-term loans payable

12,000,000

11,995,817(4,183)(3) Long-term loans payable

62,800,000

63,113,900

313,900

74,800,000

75,109,717

309,717

¥612

¥612

Subtotal(1) Short-term loans payable

Subtotal
Derivative transactions

¥

-

¥

-

As of July 31, 2015
Carrying amount

Estimated fair value

Difference(in thousands of yen)

(1) Cash and deposits(2) Cash and deposits in trust
Subtotal¥5,058,518
3,666,427¥5,058,518
3,666,427¥-

8,724,945

8,724,945-(1) Short-term loans payable

3,200,000

3,200,000-(2) Current portion of long-term loans payable

9,000,000
61,300,000

9,000,000
60,738,783(561,217)

73,500,000

72,938,783(561,217)¥1,757¥1,757(3) Long-term loans payable
Subtotal
Derivative transactions¥-

Note 1: Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying amount approximates fair value.
Liabilities(1)Short-term loans payable
Since these items are settled in a short period of time with floating interest rates, their carrying amount approximates fair value.
(2)Current portion of long-term loans payable and (3) Long-term loans payable
Among these items, the fair value of loans payable with fixed interest rates is calculated based on the present value, which is the total amount ofprincipal and interest discounted by the estimated interest rate to be applied in the event that the Investment Corporation conducts new borrowingsof the same type. As for the fair value of loans payable with floating interest rates, it is based on the carrying amount since market interest rates
are reflected in the short term and the fair value is believed to approximate the carrying amount as the credit standing of the Investment
Corporation has not changed significantly since the loans were made. (However, the fair value of long-term loans payable subject to the special
treatment for interest-rate swaps is based on the present value of the total of principal and interest, accounted for together with the applicableinterest-rate swaps, discounted by the estimated interest rate to be applied in the event that the Investment Corporation conducts new borrowingsof the same type.)－13－

Derivative transactions
Please refer to Note 9 “DERIVATIVE TRANSACTIONS”.
Note 2: Financial instruments whose fair values are recognized to be extremely difficult to grasp(in thousands of yen)Classification

As of January 31, 2016

As of July 31, 2015

132,897

Investment securities *132,897*Fair values of investment securities are not subject to disclosure of fair value as they have no market value and their fair values are recognized to
be extremely difficult to grasp.
Note 3: Redemption schedule for financial assets with maturities
As of January 31, 2016
Due in 1 year or
less

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years¥¥(in thousands of yen)

Cash anddeposits
Cash anddeposits in trust
Total¥4,448,589¥

3,618,286

-

¥

-

-

¥8,066,875

¥

¥

-

-

¥

-

-

¥

-

-

¥

-

-

¥

-

As of July 31, 2015
Due in 1 year or
less

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years¥¥(in thousands of yen)

Cash anddeposits
Cash anddeposits in trust
Total¥5,058,518¥

3,666,427

-

¥

-

-

¥8,724,945

¥

¥

-

-

¥

-

-

¥

-

-

¥

-

-

¥

-

Note 4: Redemption schedule for loans payable
As of January 31, 2016
Due in 1 year or
less

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years(in thousands of yen)

Short-term loans
payableLong-term loans
payable
Total

¥

-

¥

-

12,000,000

11,000,000

12,000,000¥ 11,000,000

Due in 1 year or
less

Due after 1 year
through 2 years

¥

¥

-

¥

-

11,000,000¥¥-

1,500,000

11,000,000¥¥

3,600,000

1,500,000¥

3,600,000

35,700,000¥

35,700,000

As of July 31, 2015
Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years(in thousands of yen)

Short-term loans
payableLong-term loans
payable
Total

¥

¥

3,200,000¥-

9,000,000

8,500,000

12,200,000¥ 8,500,000

¥

-

¥

11,000,000¥

11,000,000

－14－

-

¥

-

11,000,000¥

11,000,000¥

1,500,000¥

1,500,000

29,300,000¥

29,300,000

9. DERIVATIVE TRANSACTIONS
The contract amount and the fair value of interest-rate cap transactions and interest-rate swap transactions as of January 31, 2016 are shown in
the following table.
(1)

Transactions not subject to hedge accounting
Not applicable(2)

Transactions subject to hedge accounting
Hedge
Type of derivative
Hedged items
accounting
transactions
methodAccounting
method, inprinciple
Specialtreatment forinterest-rate
swapsInterest-rate cap
transaction:

Long-termloans payable

Contract amount(in thousands of yen)
Maturing after 1
year¥3,500,000¥-

Fair value(in thousands of yen)Calculation method for
applicable fair value¥612

Based on the amountprovided by counterparty
financial institutions

Interest rate swap Long-termtransaction:loans payable¥65,800,000¥57,300,000*
Receive/floating
and pay/fixed
Total¥69,300,000¥57,300,000¥612*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fairvalue is included in the fair value of the hedged long-term loans payable.
The contract amount and the fair value of interest-rate cap transactions and interest-rate swap transactions as of July 31, 2015 are shown in thefollowing table.
(1)

Transactions not subject to hedge accounting
Not applicable(2)

Transactions subject to hedge accounting
Hedge
Type of derivative
Hedged items
accounting
transactions
methodAccounting
method, inprinciple
Specialtreatment forinterest-rate
swapsInterest-rate cap
transaction:

Long-termloans payable

Contract amount(in thousands of yen)
Maturing after 1
year¥3,500,000¥-

Fair value(in thousands of yen)Calculation method for
applicable fair value¥1,757

Based on the amountprovided by counterparty
financial institutions

Interest rate swap Long-termtransaction:loans payable¥56,800,000¥56,800,000*
Receive/floating
and pay/fixed
Total¥60,300,000¥56,800,000¥1,757*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fairvalue is included in the fair value of the hedged long-term loans payable.

－15－10. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 32%. However, the Investment
Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements under the Special Taxation
Measures Law of Japan are met, including a requirement that it currently distributes in excess of 90% of its net income for the fiscal period in order
to be able to deduct such amounts. If the Investment Corporation does not satisfy all of the requirements, the entire taxable income of theInvestment Corporation will be subject to regular corporate income taxes. Since the Investment Corporation distributed in excess of 90% of its
distributable income in the form of cash distributions totaling ¥2,175 million and ¥2,181 million for the periods ended January 31, 2016 and July 31,
2015, respectively, the distributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on theInvestment Corporation’s income were 0.04% and 2.23% for the periods ended January 31, 2016 and July 31, 2015, respectively. The following
table summarizes the significant differences between the statutory tax rate and the effective tax rate:

Statutory tax rate

32.31%

From February 1,2015
To July 31,2015
37.11%

Deductible cash distributions(32.13)(35.10)

Others(0.14)

0.22

Effective tax rate

0.04%

2.23%

From August 1,2015
To January 31,2016

The significant components of deferred tax assets and liabilities as of January 31, 2016 and July 31, 2015 are as follows:
As of January 31, 2016

As of July 31, 2015

(in thousands of yen)

Deferred tax assets:
Enterprise tax payable¥

Deferred gains or losses on hedges
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets¥-¥4,026

334

1,059

334

5,085

334

4,890

-

¥195

11. RELATED-PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other
Eighth Fiscal Period (August 1, 2015 to January 31, 2016) and Seventh Fiscal Period (February 1, 2015 to July 31, 2015): Not applicable
2．Affiliated companies and other
Eighth Fiscal Period (August 1, 2015 to January 31, 2016) and Seventh Fiscal Period (February 1, 2015 to July 31, 2015): Not applicable
3．Fellow subsidiary companies and other
Eighth Fiscal Period (August 1, 2015 to January 31, 2016) and Seventh Fiscal Period (February 1, 2015 to July 31, 2015): Not applicable
4．Directors, major individual unitholders and other
Eighth Fiscal Period (August 1, 2015 to January 31, 2016) and Seventh Fiscal Period (February 1, 2015 to July 31, 2015): Not applicable－16－12. INVESTMENT AND RENTAL PROPERTIESThe Investment Corporation owns real estate for rental purposes in the Tokyo Metropolitan Area and other regional areas for the purpose ofgenerating rental revenues.
The book value and fair value concerning the above real estate for rental purposes are as follows.
Eighth Fiscal Period
from August 1, 2015
to January 31, 2016

Seventh Fiscal Period
from February 1, 2015
to July 31, 2015

(in thousands of yen)Book value
Balance at the beginning of period
Changes during the period
Balance at the end of period
Fair value at the end of period¥148,872,550
2,033,109¥124,680,483
24,192,067

150,905,659¥169,702,000

148,872,550¥163,849,000

Note 1: Book value excludes accumulated depreciation from acquisition costs.
Note 2: Among changes in the amount of real estate for rental purposes that occurred during the eighth fiscal period, principal increases were theacquisition of real estate trust beneficiary interests in 5 properties totaling ¥7,355,020 thousand and the principal decreases were thedisposition of real estate trust beneficiary interests in 3 property (¥4,637,002 thousand) and depreciation ¥852,368 thousand and during
the seventh fiscal period, principal increases were the acquisition of real estate trust beneficiary interests in 12 properties totaling¥25,861,909 thousand and the principal decreases were the disposition of real estate trust beneficiary interests in 1 property (¥989,336
thousand) and depreciation ¥827,084 thousand.
Note 3: The fair value is the appraisal value or the survey value determined by outside appraisers.
Income and loss in the fiscal periods ended January 31, 2016 and July 31, 2015 for real estate for rental purposes is listed in Note 4 ”
BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REALESTATE PROPERTY”.

13. SEGMENT INFORMATION
Segment information for the period ended from August 1, 2015 to January 31, 2016 and from February 1, 2015 to July 31, 2015 is as follows:(A) Segment information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment
subject to disclosure.
(B) Related information(1) Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income and retained earnings.
(2) Information about each geographic area(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income
and retained earnings.
(b) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property,
plant and equipment on the balance sheet.
(3) Information about each major customer
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement ofincome and retained earnings.

－17－14. PER UNIT INFORMATION
From August 1, 2015
to January 31, 2016
¥ 236,013

Net asset value per unit

From February 1, 2015
to July 31, 2015
¥235,996

Net income per unit

¥6,257¥6,485Weighted average number of units (units)

349,089

347,610

The weighted average number of units outstanding of 349,089 and 347,610 were used for the computation of the amount of net income per unit
as of January 31, 2016 and July 31, 2015.
Net income per unit after adjusting for residual units is not included because there were no residual investment units.
The basis for calculating net income per unit is as follows:
From August 1, 2015
to January 31, 2016
Net income (in thousands of yen)

From February 1, 2015
to July 31, 2015

¥2,184,268¥2,254,542--¥2,184,268¥2,254,542

349,089

347,610Net income not available to ordinary unitholders (in thousands of yen)
Net income available to ordinary unitholders (in thousands of yen)
Weighted average number of units during the period (units)

15. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable

16. SECURITIES PORTFOLIO
Securities portfolio consists of the following as of January 31, 2016:(1)

Stock Not applicable(2)

Securities other than shares(in thousands of yen)

Type

Name

Silent Partnership

Equity interests in TK property fund with

Equity Interests

G.K. Bohemian as operator (Note 1)

Face value
total-Book value

Accruedinterest

132,897

Prepaid

Assessed

accrued

value

Gain
(Loss) on Remarks

interest （Note 2） valuation--

132,897-

Total
132,897
132,897
Note 1: TK property fund owns the real estate beneficiary interests in trust for “KDX Residence Azabu Sendaizaka,” “KDX Residence Nishi-azabu,”“KDX Residence Bunkyo Yushima,” “KDX Residence Waseda Tsurumaki,” “KDX Residence Kamishakujii,” “KDX Residence Sumiyoshi,”“KDX Residence Urayasu,” “KDX Residence Noborito.”
Note 2: The assessed value is stated at the book value.
Securities portfolio consists of the following as of July 31, 2015:(1)

Stock Not applicable(2)

Securities other than shares(in thousands of yen)

Type

Name

Silent Partnership

Equity interests in TK property fund with

Equity Interests

G.K. Bohemian as operator (Note 1)

Face value
total-Book value

132,897

Accruedinterest

Prepaid

Assessed

accrued

value

Gain
(Loss) on Remarks

interest （Note 2） valuation--

132,897-

Total
132,897
132,897
Note 1: TK property fund owns the real estate beneficiary interests in trust for “KDX Residence Azabu Sendaizaka,” “KDX Residence Nishi-azabu,”“KDX Residence Bunkyo Yushima,” “KDX Residence Waseda Tsurumaki,” “KDX Residence Kamishakujii,” “KDX Residence Sumiyoshi,”“KDX Residence Urayasu,” “KDX Residence Noborito.”
Note 2: The assessed value is stated at the book value.

－18－17. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following as of January 31, 2016:
Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodDepreciation
Accumulated
depreciation

Depreciation
for theperiodNetbalance at
end of theperiodRemarks(in thousands of yen)
Land

Property,plant andequipment¥1,798,041

¥

-

¥

-

¥1,798,041

¥

-

¥

-

¥1,798,041

Sub total

1,798,041--

1,798,041--

1,798,041

Buildings in trust

61,497,744

3,047,181

1,386,816

63,158,109

3,668,727

809,247

59,489,382

Structures in trust

384,396

20,283

10,839393,840

61,776

12,521

332,064

Machinery andequipment in trust

1,234,055

39,97032,714

1,241,311

114,953

27,943

1,126,358

Tools, furnitureand fixtures intrust

53,37073,066889

125,547

4,331

2,657

121,216

Land in trust

86,993,350

4,342,374

3,297,126

88,038,598--

88,038,598

Sub total

150,162,915

7,522,874

4,728,384

152,957,405

3,849,787

852,368

149,107,618¥151,960,956¥7,522,874¥ 4,728,384¥154,755,446¥3,849,787¥852,368¥150,905,659

Total

Notes 1
and 2

Notes 1
and 2

Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
Note 2: The amount of decrease during the period is primarily attributable to the sales of the real estate property.
Property, plant and equipment consist of the following as of July 31, 2015:

Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodDepreciation
Accumulated
depreciation

Netbalance at
end of theperiodRemarks-¥1,798,041

Note 3

Depreciation
for theperiod(in thousands of yen)
Land

Property,plant andequipment¥2,787,377¥-¥ 989,336¥1,798,041

¥

-

¥

Sub total

2,787,377-

989,336

1,798,041--

1,798,041

Buildings in trust

51,759,151

9,738,593-

61,497,744

2,945,300

786,586

58,552,444

Structures in trust

330,640

53,756-384,396

50,866

12,120333,530

Machinery andequipment in trust

801,885

432,170-

1,234,055

90,54527,659

1,143,510

Tools, furnitureand fixtures intrust

34,00319,367-53,3701,695

719

51,675Land in trust

71,228,749

16,753,937

989,336

86,993,350--

86,993,350

Sub total

124,154,428

26,997,823

989,336

150,162,915

3,088,406

827,084

147,074,509¥126,941,805¥26,997,823¥ 1,978,672¥151,960,956¥3,088,406¥827,084¥148,872,550

Total

Note 3Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
Note 2: The amount of decrease during the period is primarily attributable to the sales of the real estate property.
Note 3: Because the ownership of Nichii home Tama Plaza (Land with leasehold interest) was changed from real estate to the trust beneficiaryinterest, land is decreased and land in trust is increased.

－19－

18. SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt and long-term debt consists of the following as of January 31, 2016
Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 3）（Note 4）

Balance atthe end of
periodPayment due
date（Note 7）Use

Remarks

August 31,
2015
August 31,
2015(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)
Short-termloanspayableCurrent
portion of
long-term
loans
payableLong-term
loans
payableAozora Bank, Ltd.

¥1,600,000

Resona Bank, Ltd.
Sub total
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Ltd.
Mizuho Trust &Banking Co., Ltd
Mizuho Bank, Ltd.
Sub total
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui
Banking Corporation¥-¥1,600,000

1,600,000-

3,200,000¥-

0.480%

1,600,000-

0.480%-

3,200,000-

1,750,000-

1,750,000-

1,500,000-

1,500,000-

500,000
500,000-

500,000
500,000-

500,000-

500,000-

500,000-

500,000-

250,000-

250,000-

2,500,000--

2,500,000

1,000,000--

1,000,000

3,000,000--

3,000,000

2,000,000--

2,000,000

1,000,000--

1,000,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

500,000
17,500,000-

5,500,000

500,000
12,000,000

4,000,000--

4,000,000

2,500,000--

2,500,000

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

1,500,000
1,000,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

3,250,000--

3,250,000

2,000,000--

2,000,000

1,000,000
500,000--

1,000,000
500,000

500,000--

500,000

500,000--

500,000

0.580%

August 31,
2015

1.042%

April 30,
2016

0.787%

August 31,
2016(Note 2)0.910%

August 31,
2017

1.052%

August 31,
2018

250,000--

250,000

3,000,000--

3,000,000

1.088%（Note 5）

August 31,
2018

1,000,000--

1,000,000

1.109%

January 31,
2021

1,000,000--

1,000,000

1.221%

July 31,
2021

－20－

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

Payment due
date（Note 7）Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)

Long-term
loans
payableMarch 31,2021
April 30,
2022
April 30,
2022

Aozora Bank, Ltd.

1,350,000--

1,350,000

1.183%

Sumitomo Mitsui
Banking Corporation

2,000,000--

2,000,000

1.267%

Aozora Bank, Ltd.

1,500,000--

1,500,000

1.267%The Bank ofTokyo-Mitsubishi UFJ,Ltd.

1,000,000--

1,000,000

1.267%

April 30,
2022

Resona Bank, Ltd.

1,000,000--

1,000,000

1.267%

April 30,2022

1,100,000--

1,100,000

1,100,000--

1,100,000

600,000
350,000
300,000--

600,000
350,000
300,000

0.916%

August 7,
2021

300,000--

300,000

1,000,000--

1,000,000

0.996%(Note 5)

August 7,
2021

400,000--

400,000

400,000--

400,000

300,000
200,000--

300,000
200,000

1.254%

August 7,2023

200,000--

200,000

150,000--

150,000

500,000--

500,000

1.320%(Note 5)600,000--

600,000

0.945%

Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
The Mizuho Trust andBanking Co., Limited
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.
Mizuho Bank, Ltd.
Resona Bank, Ltd.
The Mizuho Trust andBanking Co., LimitedAozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.

August 7,
2023
August 31,
2021
August 31,
2021

600,000--

600,000

0.945%

Aozora Bank, Ltd.

500,000--

500,000

0.945%

Mizuho Bank, Ltd.

950,000--

950,000

1.083%

2,000,000--

2,000,000

0.804%

1,500,000--

1,500,000

0.689%

November 30,
2019

1,200,000--

1,200,000

0.875%

January 31,
2022

1,200,000--

1,200,000

1.105%

January 31,
2024

Aozora Bank, Ltd.

2,000,000--

2,000,000

0.875%

Resona Bank, Ltd.

1,500,000--

1,500,000

0.987%

2,000,000--

2,000,000

1.100%

1,000,000--

1,000,000

1.265%

Aozora Bank, Ltd.

-

300,000-

300,000

0.678%

Resona Bank, Ltd.

-

1,100,000-

1,100,000

0.923%-

700,000-

700,000

0.923%-

950,000-

950,000

1.047%-

1,700,000-

1,700,000

1.169%

Sumitomo Mitsui
Banking Corporation
Mitsubishi UFJ Trustand Banking
Corporation
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.

The Bank ofTokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui
Banking Corporation

The Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui Trust
Bank, Limited
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.

－21－

August 31,
2021
November 30,
2022
November 30,
2020

April 30,
2022
April 30,
2023
April 30,
2024
April 30,
2025
August 31,
2020
August 31,
2022
August 31,
2022
August 31,
2023
August 31,
2024

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 3）（Note 4）

Balance atthe end of
periodPayment due
date（Note 7）Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Sub total

Long-term
loans
payableTotal

August 31,
2024
August 31,
2025
August 31,
2024-

950,000-

950,000

1.169%-

2,000,000-

2,000,000

1.345%-

1,000,000-

1,000,000

1.193%(Note 5)-300,000-

300,000

0.624%

October 27,
2020-

1,000,000-

1,000,000

1.156%

April 27,2025

52,800,000¥73,500,000

10,000,000¥10,000,000¥8,700,000

62,800,000¥74,800,000

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled for the next five years
after the balance sheet date are as follows:
Due after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

through 2 years

through 3 years

through 4 years

through 5 years(in thousands of yen)
Long-term loans payable¥11,000,000¥11,000,000¥1,500,000¥3,600,000

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

Short-term debt and long-term debt consists of the following as of July 31, 2015:
Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate
（Note 3）（Note 4）

¥1,600,000

0.480%

Payment due
date（Note 7）Use

Remarks

August 31,
2015
August 31,
2015(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)
Short-termloanspayableCurrent
portion of
long-term
loans
payableAozora Bank, Ltd.

¥1,600,000

¥

-

¥

-

Resona Bank, Ltd.

1,600,000--

1,600,000

Sub total
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.

3,200,000--

3,200,000

2,000,000-

2,000,000-

2,000,000
1,500,000-

2,000,000
1,500,000-

1,000,000-

1,000,000-

2,500,000--

2,500,000

1,000,000--

1,000,000

1,750,000--

1,750,000

1,500,000--

1,500,000－22－0.480%

1.063%

April 30,2015

1.044%

April 30,
2016
(Note 2)0.580%

August 31,
2015Classification
LenderCurrent
portion of
long-term
loans
payableLong-term
loans
payableAozora Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sub total
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Resona Bank, Ltd.
Mizuho Trust &Banking Co., Ltd
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Limited
Mizuho Trust &Banking Co., Ltd
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui
Banking Corporation

Balance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
period500,000
500,000(in thousands of yen)--

500,000
500,000

500,000--

500,000

500,000--

500,000

250,000
15,500,000-

6,500,000

250,000
9,000,000

3,000,000--

3,000,000

2,000,000--

2,000,000

1,000,000--

1,000,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

500,000--

500,000

4,000,000--

4,000,000

2,500,000--

2,500,000

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

1,500,000
1,000,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

3,250,000--

3,250,000

2,000,000--

2,000,000

1,000,000
500,000--

1,000,000
500,000

500,000--

500,000

500,000--

500,000

Averageinterest rate
（Note 3）（Note 4）

Payment due
date（Note 7）Use

Remarks

0.580%

August 31,
2015(Note 6)

Unsecured/
Unguaranteed

0.787%

August 31,
2016

0.910%

August 31,
2017

1.052%

August 31,
2018(Note 6)

Unsecured/
Unguaranteed

250,000--

250,000

3,000,000--

3,000,000

1.088%（Note 5）

August 31,
2018

1,000,000--

1,000,000

1.109%

January 31,
2021

1,000,000--

1,000,000

1.221%

Aozora Bank, Ltd.

1,350,000--

1,350,000

1.183%

Sumitomo Mitsui
Banking Corporation

2,000,000--

2,000,000

1.267%

Aozora Bank, Ltd.

1,500,000--

1,500,000

1.267%The Bank ofTokyo-Mitsubishi UFJ,Ltd.

1,000,000--

1,000,000

1.267%

April 30,
2022

Resona Bank, Ltd.

1,000,000--

1,000,000

1.267%

April 30,2022

1,100,000--

1,100,000

1,100,000--

1,100,000

600,000
350,000
300,000--

600,000
350,000
300,000

0.916%

August 7,
2021

300,000--

300,000

Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
The Mizuho Trust andBanking Co., Limited－23－

July 31,2021
March 31,2021
April 30,
2022
April 30,
2022

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

Payment due
date（Note 7）

0.996%(Note 5)

August 7,2021

1.254%

August 7,
2023

Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.
Mizuho Bank, Ltd.
Resona Bank, Ltd.
The Mizuho Trust andBanking Co., LimitedAozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.
Long-term
loans
payable1,000,000--

1,000,000

400,000--

400,000

400,000--

400,000

300,000
200,000--

300,000
200,000

200,000--

200,000

150,000--

150,000

500,000--

500,000

1.320%(Note 5)600,000--

600,000

0.945%

600,000--

600,000

0.945%

Aozora Bank, Ltd.

500,000--

500,000

0.945%

Mizuho Bank, Ltd.

950,000--

950,000

1.083%

2,000,000--

2,000,000

0.804%

1,500,000--

1,500,000

0.689%

November 30,
2019-

1,200,000-

1,200,000

0.875%

January 31,
2022-

1,200,000-

1,200,000

1.105%

January 31,
2024

Aozora Bank, Ltd.

-2,000,000-

2,000,000

0.875%

Resona Bank, Ltd.

-1,500,000-

1,500,000

0.987%-

2,000,000-

2,000,000

1.100%

April 30,2024-

1,000,000-

1,000,000

1.265%

April 30,
2025

52,400,000¥71,100,000

8,900,000¥8,900,000¥6,500,000

61,300,000¥73,500,000

Sumitomo Mitsui
Banking Corporation
Mitsubishi UFJ Trustand Banking
Corporation
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,Ltd.

The Bank ofTokyo-Mitsubishi UFJ,
Ltd.
Sumitomo Mitsui
Banking Corporation
Sub total
Total

August 7,
2023
August 31,
2021
August 31,
2021
August 31,
2021
November 30,
2022
November 30,
2020

April 30,
2022
April 30,2023

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled for the next five years
after the balance sheet date are as follows:
Due after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

through 2 years

through 3 years

through 4 years

through 5 years(in thousands of yen)
Long-term loans payable¥8,500,000¥11,000,000¥11,000,000¥1,500,000

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

－24－

19. DISTRIBUTIONS
Eighth Fiscal Period(From August 1, 2015 to January 31, 2016)¥2,258,172,370¥2,254,662,743¥2,175,173,559¥2,180,758,983¥6,231¥6,247¥82,998,811¥73,903,760

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount of distribution shall exceed
the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special Taxation
Measures Law, and shall not exceed its accounting
profits as the maximum amount. Following this policy,
internal reserves as of the end of the seventh fiscal
period and the ¥9,284,400 in gain on sale of real estate
property, reported as unappropriated retained earnings
will be allocated to internal reserves, and of theremaining amount, the Investment Corporation has
decided that it shall distribute ¥2,175,173,559 which is
the maximum integral multiple of 349,089 units issued
and outstanding as the distribution of earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In theeighth fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount of distribution shall exceed
the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special Taxation
Measures Law, and shall not exceed its accounting
profits as the maximum amount. Following this policy,of the ¥124,110,143 in gain on sale of real estate
property, net of tax, reported as unappropriated retained
earnings will be allocated to internal reserves, and of theremaining amount, the Investment Corporation has
decided that it shall distribute ¥2,180,758,983 which is
the maximum integral multiple of 349,089 units issued
and outstanding as the distribution of earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In theseventh fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

I. Retained earnings at the end of period
II. Total distributions
Distributions per unit
III. Retained earnings brought forward to
the next period

Method of calculating distribution amount

Seventh Fiscal Period(From February 1, 2015 to July 31, 2015)－25－