2. Strength of OJR
  3. Distribution Policy

Distribution Policy

OJR shall carry out monetary distributions exclusively based on the following policy after the latest amendments to Articles of Incorporation on Nov. 29, 2017.

(1) Distribution of profits

a. Out of the total amount for distribution to unitholders, the amount of profit, or the amount obtained by subtracting the unitholders’ capital, etc. from the net assets on OJR’s balance sheet, as stipulated by the Investment Trust Law, in cases where net assets exceeds the total of unitholders’ capital etc. (the same applies hereinafter.), shall be calculated in accordance with Japanese GAAP.
b. When OJR makes a distribution up to the profit amount, as a rule, it shall exceed the amount equivalent to 90% of the amount of OJR’s account profit available for distribution, stipulated in Article 67-15 of the Special Measures for Taxation Law and Article 39-32-3 of the Enforcement Ordinance for the Special Measures for Taxation Law (in case the criteria for determining such amount changes due to the revision of laws and/or regulations, an amount based on the criteria determined after the change shall be applied). Provided, the above may not necessarily apply in cases where there is a tax loss or where income for tax purpose does not arise due to accumulated loss carried forward. In such case the amount OJR can determine the amount under a reasonable basis.
c. OJR may accumulate allowances for long-term repairs, payment reserves and distribution reserves as well as similar reserves and other necessary amounts such as allowances that are deemed necessary to maintain and improve the value of its assets under management, and may reserve them or treat them otherwise.

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(2) Distributions in excess of profits

If the board of directors considers it appropriate, OJR may make a distribution to unitholders within the scope of the regulations of The Investment Trusts Association, Japan, a general incorporated association (ITA) in excess of profit based on a statement of cash dividends authorized in accordance with the Act on Investment Trusts and Investment Corporations; provided, however, OJR shall consider whether tax liabilities will arise as a result of such distribution under the Corporation Tax Law, and the effect on tax liabilities after the fiscal period to which such in-excess distribution relates. Furthermore, distributions in excess of profit (exceeding the amount OJR has determined) can be possible when OJR deems appropriate for the objective to prevent arising tax burden to OJR.

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(3) Method of distributions

Distributions shall be made in cash to unitholders and registered pledgeholders of investment units who are recorded or registered in the final register of unitholders as of the Account Closing Date, and will, as a rule, be paid within three months of the day following the Account Closing Date and in accordance with the number of investment units held or the investment units subject to the registered pledge.

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(4) Period of exclusion of distributions

The obligation to pay the distribution stipulated in 3 above will be void after a period of three years from the date of commencement of payments. The payment of distributions shall not include interest.

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(5) Regulations of The Investment Trusts Association, Japan

In addition to either (1) to (4) above, OJR shall abide by the “Regulations concerning Real Estate Investment Trusts and Real Estate Investment Corporations” (enacted in March 2001 and including later revisions) established by The Investment Trusts Association, Japan for the distribution of monetary proceeds.

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