This is an English translation of the official announcement in Japanese that was released on January 14, 2015. The translation
is prepared for the readers’ convenience only. All readers are strongly recommended to refer to the original Japanese version
for complete and accurate information. Should there be any inconsistency between the translation and the official Japanesetext, the latter shall prevail.

Consolidated Financial Results
for the Fiscal Year Ended November 30, 2014
<IFRS>
January 14, 2015
Company name: Tosei Corporation
Stock listing: TSE / SGX
Securities code number: 8923/S2D
URL: http://www.toseicorp.co.jp/english/
Representative: Seiichiro Yamaguchi, President and CEO
Contact: Noboru Hirano, Director and CFO
Phone: +81-3-3435-2864
Ordinary general shareholders’ meeting: February 25, 2015 (scheduled)
Commencement of dividend payments: February 26, 2015 (scheduled)
Submission of Securities Report (Yuka Shoken Hokokusho): February 27, 2015 (scheduled)
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting: Yes (for institutional investors and analysts)
Note: All amounts are rounded down to the nearest million yen.
1.

Consolidated Financial Results for the Fiscal Year Ended November 30, 2014
(December 1, 2013 – November 30, 2014)(1) Consolidated Operating Results
RevenueYear ended Nov. 30, 2014
Year ended Nov. 30, 2013(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

49,98135,070

42.5
44.9

5,560
3,914

42.1
37.0

4,663
3,222

44.7
45.2

2,874
2,006

43.2
36.9

Profit attributable toowners of the parent
Year ended Nov. 30, 2014
Year ended Nov. 30, 2013

(Percentages indicate year-on-year changes.)
Profit before tax
Profit for the year

Operating profit

Total comprehensive
income for the year

Basic earnings
per share

Diluted earnings
per share(¥ million)(%)(¥ million)

(%)

(¥)

(¥)

2,874
2,006

43.2
36.9

3,021
2,011

50.2
37.4

59.53
43.05

－
－

Ratio of profit to equity
Ratio of profit before tax Ratio of operating profit
attributable to owners of
to total assets
to revenue
the parent(%)

Year ended Nov. 30, 2014
Year ended Nov. 30, 2013
(Reference) Equity in earnings of affiliates

(%)

9.2
6.1
7.1
4.7
Year ended Nov. 30, 2014: ¥－million

(%)

11.1
11.2
Year ended Nov.30, 2013: ¥－million

Notes: 1.The figures above for the fiscal year ended November 30, 2013 are restatements in line with partial changes in accounting policies.
For details, please refer to “5. Consolidated Financial Statements, (6) Notes on Consolidated Financial Statements (Changes inaccounting polices)” on page 18 on the attached materials.
2.The Company split its shares by 100 for 1, effective July 1, 2013. Therefore, the basic earnings per share was calculated on theassumption that the share split was implemented at the beginning of the previous fiscal year.

1(2) Consolidated Financial Position
Total assets

Total equity

Ratio of equity
Equity per share
Equity attributable to attributable to owners
attributable toowners of the parent of the parent to total
owners of the parent
assets(¥ million)(¥ million)(¥ million)

(%)

(¥)

80,85871,28332,72730,09232,72730,09240.5
42.2

677.82623.24As of Nov. 30, 2014
As of Nov. 30, 2013

Notes: 1.The figures above as of November 30, 2013 are restatements in line with partial changes in accounting policies. For details, pleaserefer to “5. Consolidated Financial Statements, (6) Notes on Consolidated Financial Statements (Changes in accounting polices)” on
page 18 on the attached materials.
2.The Company split its shares by 100 for 1, effective July 1, 2013. Therefore, the equity per share attributable to owners of the parent
was calculated on the assumption that the share split was implemented at the beginning of the previous fiscal year.

(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end ofyear(¥ million)(¥ million)(¥ million)(¥ million)

344
2,772

(2,878)
(940)

3,891
3,456

16,10014,711

Year ended Nov. 30, 2014
Year ended Nov. 30, 2013

2. Dividends
Annual dividends per share

1Q-endYear ended Nov. 30,
2013
Year ended Nov. 30,
2014Year ending Nov. 30,
2015(projected)

2Q-end 3Q-end Year-end

Total

Ratio of dividend
to equity
Total dividends
Payout ratio
attributable toper share(Consolidated) owners of the(Total)parent(Consolidated)

(¥)

(¥)

(¥)

(¥)

(¥)

(¥ million)

(%)

(%)

－

0.00

－

8.00

8.00

386

18.6

1.3

－

0.00

－

12.00

12.00

579

20.2

1.8

－

0.00

－

14.00

14.00

20.7

3. Projected Consolidated Results for the Fiscal Year Ending November 30, 2015
(Percentages indicate year-on-year changes.)(December 1, 2014 – November 30, 2015)
Revenue(¥ million)

Year ending Nov.
30, 2015

Profit attributable
Basic earnings
Operating profit Profit before tax Profit for the year toowners of theper share
parent(%) (¥ million)(%) (¥ million)(%) (¥ million)(%) (¥ million)(%)(¥)

56,425 12.9

6,000

7.9

5,042

2

8.1

3,258

13.4

3,258 13.4

67.48

* Notes(1) Changes in significant subsidiaries during the year (changes in specified subsidiaries resulting in changes
in the scope of consolidation): No
Newly added: －Excluded: －(2) Changes in accounting policies and changes in accounting estimates(a) Changes in accounting policies required by IFRS: Yes(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates:
No
Note: For details, please refer to “5. Consolidated Financial Statements, (6) Notes on Consolidated Financial Statements (Changes inaccounting polices)” on page 18 on the attached materials.

(3) Number of issued shares (ordinary shares)(a) Number of issued shares at the end of the year (including treasury shares)
48,284,000 shares
As of Nov. 30, 2014
48,284,000 shares
As of Nov. 30, 2013(b) Number of treasury shares at the end of the year–
As of Nov. 30, 2014
As of Nov. 30, 2013–(c) Average number of outstanding shares during the year
48,284,000 sharesYear ended Nov. 30, 2014
46,602,904 sharesYear ended Nov. 30, 2013
Note: The Company split its shares by 100 for 1, effective July 1, 2013. Therefore, the aforementioned numbers of shares were
calculated on the assumption that share split was implemented at the beginning of the previous fiscal year.

(Reference) Summary of Non-consolidated Results
1. Non-consolidated Financial Results for the Fiscal Year Ended November 30, 2014
(December 1, 2013 – November 30, 2014)(Percentages indicate year-on-year changes.)(1) Non-consolidated Operating Results
Net salesYear ended Nov. 30, 2014
Year ended Nov. 30, 2013

Operating income

Ordinary income(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

45,361
30,044

51.0
54.6

5,016
3,388

48.1
31.8

4,130
2,654

55.6
31.7

2,439
1,656

47.3
38.2

Net income per share
Year ended Nov. 30, 2014
Year ended Nov. 30, 2013

Net income

Net income per share(diluted)

(¥)

(¥)

50.52
35.54

－
－

Note: The Company split its shares by 100 for 1, effective July 1, 2013. Therefore, the net income per share was calculated on the assumptionthat the share split was implemented at the beginning of the previous fiscal year.

(2) Non-consolidated Financial Position
Total assets

Net assets(¥ million)(¥ million)

As of Nov. 30, 2014
76,218
As of Nov. 30, 2013
67,207(Reference) Equity As of November 30, 2014: ¥31,131 million

Equity ratio

Net assets per share(%)

31,131
40.8
29,01543.2
As of November 30, 2013: ¥29,015 million(¥)

644.76600.94

Note: The Company split its shares by 100 for 1, effective July 1, 2013. Therefore, the net assets per shares was calculated on the assumptionthat the share split was implemented at the beginning of the previous fiscal year.

32. Projected Non-consolidated Results for the Fiscal Year Ending November 30, 2015
(Percentages indicate year-on-year changes.)(December 1, 2014 – November 30, 2015)
Net salesYear ending Nov. 30, 2015

Ordinary income

Net income

Net income per share(¥ million)(%)(¥ million)(%)(¥ million)

(%)

(¥)

50,633

11.6

4,434

7.4

2,838

16.4

58.78

* Information on implementation of audit proceduresThis financial results report is exempt from the audit procedures pursuant to the Financial Instruments and Exchange Act. At thetime of disclosure of this financial results report, the audit procedures for the consolidated financial statements pursuant to the
Financial Instruments and Exchange Act have not been completed.
* Proper use of earnings forecasts and other notes(1) The forward-looking statements, including outlook of future performance, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable by theCompany. Actual performance and other results may differ substantially from these statements due to various
factors. For the assumptions on which the earnings forecasts are based and cautions concerning the use thereof,
please refer to “1. Analysis of Business Results and Financial Positions, (1) Analysis of Business Results, 2)
Outlook for the Fiscal Year Ending November 30, 2015” on page 8 of the attached materials.
(2) The Company split its shares by 100 for 1, effective July 1, 2013.
(3) A financial results meeting will be held on January 14, 2015 for institutional investors and analysts. The presentationmaterials distributed at the meeting will be available on our website immediately after the disclosure of accountsettlement.

4

Contents of Attached Materials
1. Analysis of Business Results and Financial Positions …………………………………………. 6(1) Analysis of Business Results ……………………………………..……………………………. 6(2) Analysis of Financial Position …..…………………………………………………………..…. 8(3) Fundamental Earnings Distribution Policy and Dividends for Fiscal 2014 and Fiscal 2015 ……. 9
2. Conditions of Corporate Group ………………………………………………………….………. 10
3. Management Policies ………………………………………………………….……………………. 13(1) Fundamental Management Policy ……………………………………………………………… 13(2) Performance Targets and Medium-to-Long-term Management Strategies ………………….. 13(3) Issues to Be Addressed ………………………………………………………………………… 13
4. Basic Concept Regarding Selection of Accounting Standards ………………………….……. 14
5. Consolidated Financial Statements ………………………………………………………….……. 14(1) Consolidated Statement of Financial Position ………………………………………………... 14(2) Consolidated Statement of Comprehensive Income ………………………………………….. 15(3) Consolidated Statement of Changes in Equity ………………………………………………. 16(4) Consolidated Statement of Cash Flows …………………………………………………….… 17(5) Notes on Going Concern Assumption ………………………………………………………... 18(6) Notes on Consolidated Financial Statements ………………………………………………… 18(Changes in accounting policies)………………………………………………………………. 18(Changes in presentation)……………………………………………………………………… 18(Segment information) …………………………………………………………………………. 19(Earnings per share) …………………………………………………………………………… 20(Significant subsequent events) ……………………………………………………………… 21

5

1. Analysis of Business Results and Financial Positions(1) Analysis of Business Results
1) Consolidated Results for the Fiscal Year Ended November 30, 2014
During the fiscal year ended November 30, 2014 (December 1, 2013 to November 30, 2014–“fiscal year
under review”), the Japanese economy followed a moderate recovery trend due to the effect of economic
measures by the government aimed at overcoming deflation as well as monetary easing by the Bank of Japan.
In the real estate industry where Tosei Group operates, corporate real estate transactions increased amid
expectations of rises in rents and low-interest rates. The total acquisition amount of properties acquired bylisted companies and others in the period from April 2014 to September 2014 was ¥2.1 trillion, an increaseof 10% compared with the same period of the previous fiscal year and the second-highest acquisition amountto date (according to a survey by a private research institution).
In the Tokyo metropolitan area condominium market, the contract rate in October 2014, the latest data
available, was 63.3%, remaining at a low level as a result of slowing consumer demand for condominium
purchases due to a jump in prices reflecting rising building costs. The supply of condominiums was also low,
showing a substantial decline due to a decrease in housing starts and a tendency among owners to hold backon selling. As a result, the number of condominium units sold in 2014 is expected to be approximately
43,000 units, down more than 20% from the corresponding period of the previous fiscal year (according to asurvey by a private research institution).
In the Tokyo metropolitan area build-for-sale detached house market, supply continued to decrease eachmonth compared with the previous year due to a prolonged backlash from the consumption tax hike. The
supply of detached houses in the period from January 2014 to September 2014 was down 6.1% comparedwith the previous period, fuelling concerns about a delayed market recovery (according to the Ministry ofLand, Infrastructure, Transport and Tourism data).
At the same time, in the office leasing market of Tokyo’s five business wards, the market situation
recovered further and the vacancy rate in October 2014 declined to the mid-5% range. The average asking
rent was ¥16,913/tsubo, an increase of ¥676 or 4.2% compared with the same month of the previous fiscal
year, showing a modest upward trend for ten consecutive months (according to a survey by a private research
institution).
In the real estate securitization market, although the financial inflow continued on the back of monetaryeasing and expectations of rises in rents, the pace of property acquisitions by J-REITs slowed down due to adecrease in yields resulting from property price increases. The total acquisition amount of properties in the
period from January 2014 to October 2014 was ¥1.2 trillion, down 32.5% year on year (according to asurvey by a private research institution).
As of the end of June 2014, the total value of assets under management in this market was ¥27.4 trillion,
comprising ¥11.9 trillion at J-REITs and ¥15.5 trillion at privately placed funds (according to a survey by a
private research institution).
Amid this operating environment, in the Revitalization Business, the Tosei Group made steady progresson the sale of assets such as income-generating office buildings and apartment buildings. In theDevelopment Business, the Group pushed ahead with sales of detached houses, condominiums and otherproducts. In addition, Tosei Reit Investment Corporation, which contracts out the management of its assets toTosei Asset Advisors, Inc., a wholly-owned subsidiary of Tosei Corporation, was listed on the Tokyo Stock
Exchange. We believe that this entry into the J-REIT sector will help to strengthen value chains in the Tosei
Group’s business portfolio, and will work to further increase the corporate value of the Group by supporting
improved medium- and long-term revenue and stable growth at the Investment Corporation.
As a result, consolidated revenue for the fiscal year under review totaled ¥49,981 million (up 42.5% year
on year), operating profit was ¥5,560 million (up 42.1%), profit before tax was ¥4,663 million (up 44.7%),
and profit for the year was ¥2,874 million (up 43.2%).
Performance by business segment is shown below.
Revitalization Business
During the fiscal year under review, the segment sold 31 properties it had renovated, including Tama
Center Tosei Building (Tama-shi, Tokyo), Inage Kaigan Building (Chiba-shi, Chiba), KM Shinjuku
Building (Shinjuku-ku, Tokyo), Akihabara Tosei Building (Chiyoda-ku, Tokyo), Ueno Takeuchi Building(Taito-ku, Tokyo), FLEG Nishiazabu (Minato-ku, Tokyo) and Yanagibashi Suzuwa Building (Taito-ku,
Tokyo), and a land lot in Shinjuku 6-chome (Shinjuku-ku, Tokyo). In addition, the segment sold 58 units
6

in the Restyling Business, including Hilltop Yokohama Negishi (Yokohama-shi, Kanagawa), Hilltop
Yokohama Higashi Terao (Yokohama-shi, Kanagawa) and Estage Kaminoge (Setagaya-ku, Tokyo). In thefiscal year ended November 30, 2014, it also acquired a total of 25 income-generating office buildings andapartment buildings and five land lots for renovation and sales purposes.
As a result, revenue in this segment was ¥34,743 million (up 213.1% year on year) and the segment
profit was ¥3,330 million (up 138.1%).
Development Business
During the fiscal year under review, the segment focused on the sale of newly-built condominiums anddetached houses. The segment sold 33 newly-built condominium units in THE Palms Nihonbashi
Kodenmacho Visage (Chuo-ku, Tokyo), as well as a total of 80 detached houses such as properties at
Palms Court Setagaya Okamoto (Setagaya-ku, Tokyo), Palms Court Okusawa 1-Chome (Setagaya-ku,
Tokyo), Palms Court Sanno 1-Chome (Ota-ku, Tokyo), THE Palms Court Yokohama Hakuraku(Yokohama-shi, Kanagawa) and THE Palms Court Kawasaki Daishi (Kawasaki-shi, Kanagawa). The
segment also acquired nine land lots for detached housing projects and one land lot for a store
development project.
As a result, revenue in this segment was ¥6,112 million (down 62.6% year on year) and the segment
profit was ¥432 million (down 70.1%).
Rental Business
During the fiscal year under review, while the segment sold 30 buildings of its inventory assets held forleasing purposes, it acquired a total of 23 income-generating office buildings and apartment buildings, andmade an effort to lease them out. The segment also focused on leasing activities for its preexisting noncurrent assets and inventory assets.
As a result, revenue in this segment was ¥4,153 million (up 56.9% year on year), and the segment
profit was ¥2,414 million (up 51.8%).
Fund and Consulting Business
During the fiscal year under review, while the segment obtained new asset management contracts in theamount of ¥130,896 million, the balance of assets under management decreased by ¥78,317 million, due
mainly to property disposition by funds.
As a result, revenue in this segment was ¥949 million (down 32.1% year on year) and the segment profit
was ¥174 million (down 73.9%).
The lower year-on-year revenue and profit results are primarily attributable to the segment having posted
brokerage fee income pertaining to transactions involving large projects in the previous fiscal year.
As of November 30, 2014, the balance of assets under management (Note) totaled ¥300,607 million.
Note: The balance of assets under management includes the balance of assets that were subject toconsulting contracts, etc.
Property Management Business
As of November 30, 2014, the number of properties managed by the segment including office buildings,
parking lots, schools and warehouses was 351, an increase of 8 from November 30, 2013, while thenumber of condominium and apartment buildings under management decreased by 10 to 193, making thetotal number of properties under management 544, a decrease of 2 from November 30, 2013.
As a result, revenue in this segment was ¥2,943 million (down 6.8% year on year) and segment profit was¥227 million (up 84.1%).
Revenue decreased due to a decline in business involving schools, however the segment profit increased
owing to increases in fee income and decreases in general and administrative expenses.
Alternative Investment Business
During the fiscal year under review, the segment focused on selling and leasing activities for properties
acquired by a substitute performance. Membership fees from Crystal Sports Club, which was acquired
through an M&A transaction in the third quarter, also contributed to income in this segment.
As a result, revenue in this segment was ¥1,078 million (up 157.4% year on year) and the segment
profit was ¥213 million (up 193.0%).
7

2) Outlook for the Fiscal Year Ending November 30, 2015
In the operating environment in the coming fiscal year ending November 30, 2015, corporate and otherreal estate transactions are expected to continue to increase against a backdrop of moderate economic
recovery, mainly reflecting continued monetary easing under Abenomics and optimism following thedecision to hold the 2020 Olympics in Tokyo. On the other hand, there are concerns about a delayed
recovery in the market for detached houses because of a prolonged backlash from the consumption tax hike.
In addition, it is expected that investment money from overseas will continue to flow into the Japanese realestate market on the back of factors such as a weakening yen and higher stock prices. Consequently, theoperating environment is expected to remain favorable overall. Against this backdrop, the Tosei Group willconcentrate on the renovation and sale of various income-generating properties for a wide range ofcustomers from private investors to REITs and privately placed funds in the Revitalization Business. The
Group will also make vigorous efforts in the development and sale of newly-built detached houses for end
users, from whom demand is firm, and further develop Tosei’s original income-generating properties in theDevelopment Business. In addition, in our three stable businesses, we will aim to increase the number ofproperties we hold for leasing purposes and improve the occupancy rate in the Rental Business, build up thevolume of assets under management in the Fund and Consulting Business, and further increase the numberof properties managed by the Company in the Property Management Business, thus working to growrevenue in all each segments.
In addition, the Tosei Group will further accelerate its acquisitions of medium- and large-sized incomegenerating properties as well as land for development with a view to supporting Tosei Reit Investment
Corporation following its listing on the Tokyo Stock Exchange. At the same time, taking the current
favorable real estate market situation as a good opportunity for growth in the Tosei Group and businessexpansion, the Group will endeavor to set up a new real estate fund by attracting both domestic and overseas
investment money, and to reinforce its global business utilizing a subsidiary company in Singapore and othernetworks, with the concentrated support of the whole Group. As a result of the aforementioned measures, inthe fiscal year ending November 30, 2015, the Tosei Group projects that consolidated revenue will be¥56,425 million (an increase of 12.9% from the previous fiscal year), operating profit will be ¥6,000 million(an increase of 7.9%), profit before tax will be ¥5,042 million (an increase of 8.1%), and profit for the year
will be ¥3,258 million (an increase of 13.4%).

(2) Analysis of Financial Position
1) Assets, Liabilities and Equity
As of November 30, 2014, total assets were ¥80,858 million, an increase of ¥9,575 million comparedwith November 30, 2013. This mainly reflected increases of ¥3,524 million in inventories, ¥1,154 million
in investment properties, and ¥1,635 million in available-for-sale financial assets.
Total liabilities increased by ¥6,939 million to ¥48,130 million compared with November 30, 2013.
This mainly reflected an increase in borrowings, whereby loan proceeds associated with property
acquisitions exceeded loan repayments associated with property sales.
Total equity increased by ¥2,635 million to ¥32,727 million compared with November 30, 2013, mainly
due to an increase in retained earnings.
2) Cash Flows
Cash and cash equivalents (hereinafter “cash”) as of November 30, 2014 totaled ¥16,100 million, an
increase of ¥1,388 million compared with November 30, 2013.
The cash flows for the fiscal year under review and factors contributing to those amounts are as
follows:
Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥344 million (down 87.6% year on year). This ismainly due to profit before tax of ¥4,663 million as well as an increase in inventories of ¥3,378 million,
which was a result of the Revitalization Business and Development Business segments purchasing
properties at a steady pace surpassing that of the decrease in inventories associated with property sales.
Cash Flows from Investing Activities
Net cash used in investing activities totaled ¥2,878 million (up 206.0% year on year). This is primarily
due to purchases of available-for-sale financial assets totaling ¥2,196 million and purchases of investment8

properties totaling ¥1,125 million.
Cash Flows from Financing Activities
Net cash provided by financing activities totaled ¥3,891 million (up 12.6% year on year). This mainlyreflected a situation where loan proceeds exceeded repayments, as the Revitalization Business andDevelopment Business segments purchased properties at a steady pace surpassing that of property sales.
(Reference) Trends in cash flow indicators for the Tosei Group

Ratio of equity attributable to owners of theparent to total assets (%)
Market value ratio of equity attributable toowners of the parent to total assets (%)

Year ended
Nov. 30, 2012

Year ended
Nov. 30, 2013

Year ended
Nov. 30, 2014

40.6

42.2

40.5

25.1

52.6

43.0

–

12.6

117.3

Interest-bearing debt to cash flows ratio (years)–
Interest coverage ratio (times)
Ratio of equity attributable to owners of the parent to total assets:
Market value ratio of equity attributable to owners of the parent tototal assets:
Interest-bearing debt to cash flows ratio:
Interest coverage ratio:

3.8
0.3
Equity attributable to owners of the parent to total
assets/Total assets
Market capitalization/Total assets
Interest-bearing debt/Cash flows
Cash flows/Interest expenses

Notes:(1) All indicators are calculated using consolidated financial figures.
(2) Market capitalization is calculated based on the number of issued shares, excluding treasury shares.
(3) The figure for cash flows employs cash flows from operating activities.
(4) Interest-bearing debt includes all liabilities recorded on the Consolidated Statement of Financial Position on which interest is
paid.
(5) Interest-bearing debt to cash flows ratio and interest coverage ratio are not presented for the year ended November 30, 2012
because cash flows from operating activities on the consolidated statements of cash flows were negative.

(3) Fundamental Earnings Distribution Policy and Dividends for Fiscal 2014 and Fiscal 2015
Tosei’s fundamental earnings distribution policy is to strive to continuously provide stable dividends while
comprehensively considering operating results, the future operating environment and progress in its businessplan to balance dividends with the need for internal capital resources to generate long-term growth in corporate
value by taking advantage of highly profitable business opportunities.
For the fiscal year ended November 30, 2014 and the fiscal year ending November 30, 2015, Tosei plans to
pay cash dividends per share of ¥12 and ¥14 respectively.

92. Conditions of Corporate GroupThe Tosei Group is composed of Tosei Corporation (“Tosei” or the “Company”) and 8 subsidiaries(including 7 consolidated subsidiaries). Its main businesses are the Revitalization Business, the Development
Business, the Rental Business, the Fund and Consulting Business, the Property Management Business, and theAlternative Investment Business. The operations of each business segment and the main subsidiaries and/or
affiliates conducting those operations are as follows.
Main
Segment
Operations
Companies
Revitalization
Business

The Tosei Group acquires office buildings, commercial facilities, apartments and otherproperties whose asset value has declined, boosts their value though “value-up plans”(*) judged to best match the characteristics of the properties’ areas and tenantrequirements, and sells them as revitalized real estate to buyers including investors, realestate funds and individual end users. In the “Restyling Business,” the Group acquires
income-generating condominiums and sells their units to end-users after boosting thevalue of common and private areas by renovation (the Group continues to hold andmanage the occupied units as rental properties).
The Tosei Group’s “value-up” activities go beyond just renewing properties and involve
realizing comprehensive regenerations of their values. This entails not only improving
the convenience and functionality of properties but also focusing on providing
satisfaction to owners and giving end users a sense of pride.
(*) Plans primarily look 10 or 20 years ahead and consist of improved designs torefurbish/renovate internal and external elements that have deteriorated or become
obsolete, functional improvement of facilities including renovation, adding new
functions to premises and equipment and conversions, and boosting lease income
by such means as renting out vacant space, collecting overdue rent and raising rent.

Tosei
Corporation

Development
Business

In the main districts of Tokyo, which form the Tosei Group’s core operating area, there
is a mixture of needs for office, commercial and residential space and other uses, andthese different uses create significant differences between land values. Tosei verifies thecharacteristics of land it acquires including area, shape, intended purpose, relevant
needs, rent, and selling price. Based on this, Tosei carries out development and new
construction to maximize the value of the land, and then sells whole buildings orindividual units.
The Group is able to respond to diverse needs by developing office buildings,
commercial buildings (T’s BRIGHTIA series) and mixed-use buildings, condominiums(the Palms series), as well as detached houses (Palms Court series). Once development
is complete or tenants have been found, the properties are sold to buyers including
investors, real estate funds, and end-users.

Tosei
Corporation

RentalBusiness

The Tosei Group has expanded the scope of its business primarily in the main districtsof Tokyo by acquiring office buildings, condominiums, stores and parking lots, andrenting them out to end-users and others.
As a landlord, the Tosei Group is capable of swiftly gathering accurate information on
tenant needs to further enhance “value-up plans” by reflecting these needs.

Tosei
Corporation

Fund andConsulting
Business

The Tosei Group conducts business as a type II financial instruments business as well as
an investment advisory and agency business and an investment management business asprovided for in the Financial Instruments and Exchange Act. Specifically, in addition tosuch work as purchasing, selling and brokering trust beneficiary rights in accordancewith a wide variety of investor needs, the Group provides advice regarding theacquisition, holding and disposition of properties, and asset management services forreal estate funds that carry out discretionary investment.
The Tosei Group’s management approach is to provide high distributions to investors bytaking full advantage of its “value-up,” leasing and maintenance capabilities with theaim of maximizing rental income and reducing its own rent costs. Revenues areprimarily derived from acquisition fees upon the purchase of properties and asset
management fees for properties held.

Tosei
Corporation

10

Tosei Asset
Advisors, IncMain
Companies

Segment

Operations

Property
Management
Business

This business carries out comprehensive property management that meets a wide varietyof real estate needs including administration, facility management, cleaning and security
for condominiums, office buildings and their facilities, repair work for the private
portions of condominiums and office buildings, as well as contract work of officeinterior renovation.
In the management of condominiums, this business makes full use of the expertise it has
accumulated over a number of years to provide consultancy and advisory services tounit owners and condominium management associations, and provides a total support tothe associations from their launch to smooth operation.
With respect to managing office buildings, in order to streamline the operations ofbuilding owners, the business provides meticulous management services including
building maintenance and the management of equipment, water supply and drainage,
sanitation and cleaning. The business also maintains the asset values of buildings byimplementing precise maintenance plans regarding the age-related deterioration ofbuildings.

Tosei
CommunityCo., Ltd.

Alternative
Investment
Business

This business invests in real estate collateralized loans and acquires collateral throughcollecting receivables and accepting substitute performances by negotiating withmortgaged property owners/debtors, and acquires businesses including companies withreal estate holdings and real estate business operators. The business also utilizes theexpertise of the Tosei Group to boost the value of the real estate it acquires before
selling it.The business also manages sports club facilities.

Tosei
RevivalInvestment
Co., Ltd.

11

A schematic diagram of the businesses of the Tosei Group is as follows:

End-users“Value-up”

Land
Buildings
Beneficiaryrights to trusts

Revitalization
Business

Revitalized
real estate

Tosei
Development
Corporation Business

Developed
Real estate

Sale
Investors

Purchase・
Bidding

Rental
REITs
・
Funds

Rental Business
Fund andConsulting
Business

Investment Advisor andAgency/ TypeⅡ
Financial Instrument
Business

Real estate
funds

Investment
Dividends

Investors*Wholly owned subsidiary
Investment Management
Business

Tosei Asset
Advisors, Inc.
Fund and Consulting
Business

Investment Advisor and Agency
TypeⅡ Financial Instrument
Business

Property Management*Wholly owned subsidiary
Tosei Community
Co., Ltd.
Property Management
Business

Real estate
Collateralized
Loans・
Companies
withReal estateholdings

Property Management
Building Maintenance*Wholly owned subsidiary
Purchase
M&A

Tosei Revival
Investment Co.,Ltd.
Alternative Investment
Business“Value-up” ・Coordinate title

Managed
Properties

Management

Funds
Building Owners
Tenants

Real estate
Collateralized
LoansCollection

Debtors

Real estate
Acquired by accepting
substitute performance

Sale

Revitalized*Wholly owned subsidiary

Investors
Stock of companies
with real estate holdings

NAI Tosei Japan, Inc.

*Wholly owned subsidiaryTOSEI SINGAPORE
PTE.LTD*Wholly owned subsidiary
Crystal Sports Club

12

Property Sale

End-users

3. Management Policies(1) Fundamental Management Policy
The Tosei Group’s corporate philosophy is to create new value and inspiration in all aspects of real estate asa group of global-minded and experienced professionals. With constant commitment to quality construction,
the Group is striving to integrate real estate and finance in its six business segments: Revitalization,
Development, Rental, Fund and Consulting, Property Management and Alternative Investment. The Group isalso aiming to contribute to society and increase its corporate value by restoring the value of real estate with aview to a timeframe of 10 to 20 years.
(2) Performance Targets and Medium- to Long-term Management Strategies
Under the aforementioned corporate philosophy, the Tosei Group established its current three-year mediumterm management plan, whose first year is the fiscal year ending November 30, 2015.
Under this management plan named “Advancing Together 2017”, the Group aims to become a group of realestate businesses with a sustainable competitive advantage and high quality manegement by setting four key
policies: further expand the existing business segments/consider and advance into peripheral businesses,
establish optimal governance and an efficient operating structure, develop human resources while increasing
Group employee satisfaction, and enhance customer satisfaction while building Tosei’s brand recognition.
(3) Issues to Be Addressed
Business confidence followed a moderate recovery trend in line with a weakening yen and higher stock prices
due to the effects of the economic measures under Abenomics. Consequently, the Japanese real estate market
also recovered with rising real estate transaction prices and rents in addition to low vacancy rates. On the other
hand, although the housing market has shown consistent firmness, these trends need to be monitored in view ofthe effects on the market of the consumption tax hike and rising building costs and the consequent slowdown
in the pace of supply and downward trend in the contract rate.
Against this backdrop, the Group regards the following matters as issues to be addressed to achieve the four
key policies in the new medium-term management plan: i) strengthening of purchases of income-generating
properties for renovation and land for development in view of changes in the real estate market and realizationof the optimum investment balance, ii) further strengthening of the group’s governance in addition toestablishment and operation of an efficient operating structure to increase productivity, looking ahead toorganizational growth in line with business expansion at Tosei Corporation and its group companies, iii)
improvement in the satisfaction of all Group employees, including securing the personnel necessary for the
expansion of the Group as well as human resources development for the next generation, and iv) establishingTosei’s brand recognition by combining “innovation and challenge” with “assurance and reliability” throughoriginal products and high quality services.

4. Basic Concept Regarding Selection of Accounting Standards
Tosei Group has adopted IFRS.
The Group expects that adoption of IFRS will bring numerous benefits in facilitating its overseas expansion
going forward, such that include improving its creditworthiness abroad, ensuring flexibility in fund raising,and enhancing comparability of financial information for overseas investors.
Meanwhile, another benefit is that the adoption of IFRS enables Tosei Corporation to submit IFRS-based
financial statements, as is, for matters involving the Singapore Exchange where the Company maintains
multiple listings.

13

5. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(¥ thousand)As of Nov. 30, 2013
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Investment properties
Intangible assets
Available-for-sale financial assets
Trade and other receivables
Deferred tax assets
Other non-current assets

As of Nov. 30, 2014

14,711,997
902,131
38,040,625
24,781

16,100,795
2,049,710
41,565,148
166,61253,679,536

59,882,266

3,304,792
12,703,600
31,598810,105
188,884
560,541
4,014

3,293,308
13,858,329
77,6752,445,963
780,758
515,765
4,014

17,603,536

20,975,814

71,283,073

80,858,080

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Borrowings
Current income tax liabilities
Provisions

2,323,705
7,587,433
865,256
209,124

2,590,792
5,380,269
1,393,664
267,281

Total current liabilities

Total non-current assets
Total assets

10,985,520

9,632,009

Non-current liabilities
Trade and other payables
Borrowings
Retirement benefits obligations
Provisions

2,107,809
27,449,160
624,154
24,003

2,697,083
35,024,707
697,680
78,764

Total non-current liabilities

30,205,126

38,498,235

41,190,647

48,130,244

6,421,392
6,375,317
17,294,366
1,348

6,421,392
6,375,317
19,776,474
154,652

Total Liabilities
EquityShare capital
Capital reserves
Retained earnings
Other components of equity
Total equity
Total liabilities and equity

14

30,092,426

32,727,836

71,283,073

80,858,080

(2) Consolidated Statement of Comprehensive Income(¥ thousand)Year ended Nov. 30, 2013
(Dec. 1, 2012 – Nov. 2013)

Year ended Nov. 30, 2014
(Dec. 1, 2013 – Nov. 30, 2014)

Revenue
Cost of revenue

35,070,345
26,392,097

49,981,563
40,018,772

Gross profit
Selling, general and administrative expenses
Other income
Other expenses

8,678,247
4,777,097
33,004
19,695

9,962,791
4,381,177
45,08465,924

Operating profit
Finance income
Finance costs

3,914,459
3,467
695,799

5,560,774
3,514
900,581

Profit before tax
Income tax expense

3,222,127
1,215,656

4,663,706
1,789,479

Profit for the year
Other comprehensive income
Items that will not be reclassified to net profit or loss
Remeasurements of defined benefit pension plans
Total items that will not be reclassified to net profit orloss
Items that may be reclassified to net profit or loss
Exchange differences on translation of foreign
operations
Net change in fair values of available-for-salefinancial assets
Net change in fair values of cash flow hedges
Total items that may be reclassified to net profit orloss
Other comprehensive income for the period, net oftax
Total comprehensive income for the year

2,006,471

2,874,226

664(5,847)664(5,847)3,776

32,455

1,299

118,610

(431)

2,236

4,644

153,303

5,309

147,455

2,011,780

3,021,682

Profit attributable to:
Owners of the parent

2,006,471

2,874,226

Total comprehensive income attributable to:
Owners of the parent

2,011,780

3,021,682

43.05

59.53

－

－

Earnings per share attributable to owners of the parent
Basic earnings per share (yen)Diluted earnings per share (yen)15(3) Consolidated Statement of Changes in Equity
Year ended November 30, 2013 (Dec. 1, 2012 – Nov. 30, 2013)(¥ thousand)Other
components ofequityTotal equity

15,562,315(3,295)26,530,193－

2,006,471－

2,006,471

－

－

－

5,309

5,309

－

－

2,006,471

5,309

2,011,780

Issuance of new shares

966,719

858,818－－

1,825,537

Dividends from surplus－－(274,104)－(274,104)

Retained earnings from newly
consolidated subsidiaries
Transfer from othercomponents of equity toretained earnings

－

－

(981)

－

(981)

－

－

664

(664)

－

6,421,392

6,375,317

17,294,366

1,348

30,092,426

Share capital

Capital reserves

5,454,673

5,516,499

Profit for the year－

Other comprehensive income
Total comprehensive income
for the year

Balance at Dec. 1, 2012

Balance at Nov. 30, 2013

Retainedearnings

Year ended November 30, 2014 (Dec. 1, 2013 – Nov. 30, 2014)(¥ thousand)Other
components ofequityTotal equity

17,294,366

1,348

30,092,426－

2,874,226－

2,874,226－－－

147,455

147,455

Total comprehensive income
for the year－－

2,874,226

147,455

3,021,682

Dividends from surplus－－(386,272)－(386,272)

Transfer from othercomponents of equity toretained earnings－－(5,847)

5,847－

Balance at Nov. 30, 2014

6,421,392

6,375,317

19,776,474

154,652

32,727,836

Share capital

Capital reserves

6,421,392

6,375,317

Profit for the year－

Other comprehensive income

Balance at Dec. 1, 201316

Retainedearnings

(4) Consolidated Statement of Cash Flows
Year ended Nov. 30, 2013
(Dec. 1, 2012 – Nov. 2013)(¥ thousand)Year ended Nov. 30, 2014
(Dec. 1, 2013 – Nov. 30, 2014)

3,222,127
173,480

4,663,706
188,916

107,989

68,424(3,467)695,799(3,514)
900,581(7,323)(531)

183
908,464(1,118,535)(1,021,652)
(682)

1,597
(1,588,666)(3,378,869)
781,843(4,921)

SubtotalInterest and dividends income received
Income taxes paid

2,956,384
3,566(187,336)

1,628,567
3,513(1,287,543)

Net cash from (used in) operating activities

2,772,614

344,537－(11,064)(525,736)(4,490)(667,000)
216,700(140,000)(19,666)(1,125,123)(59,106)(2,196,590)
750,00250,782

1,156

－
83

(300,000)68－

210,317

Cash flows from operating activities
Profit before tax
Depreciation expense
Increase (decrease) in provisions and retirement
benefits obligations
Interest and dividends income
Interest expenses
Net gain on disposal of available-for-sale financial
assetsLoss on retirement of property, plant and equipment
Decrease (increase) in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Other, net

Cash flows from investing activities
Payments into time deposits
Purchase of property, plant and equipment
Purchase of investment properties
Purchase of intangible assets
Purchase of available-for-sale financial assets
Collection of available-for-sale financial assets
Proceeds from sales of available-for-sale financial
assetsPayments of loans receivableCollection of loans receivable
Proceeds from purchase of investments in
subsidiaries resulting in change in scope of
consolidation
Other, net
Net cash from (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in current borrowings
Proceeds from non-current borrowings
Repayments of non-current borrowings
Proceeds from issuance of new shares
Cash dividends paid
Interest expenses paid
Other, net
Net cash from (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of exchange rate change on cash and cash
equivalents
Increase in cash and cash equivalents from newly
consolidated subsidiaries
Cash and cash equivalents at end of year

17

－

174

(940,724)(2,878,766)(378,400)
20,869,988(17,855,004)
1,825,537(273,717)

183,000
32,389,000(27,206,985)(729,954)(1,771)－(384,763)(1,086,000)(2,355)3,456,677

3,891,894

5,288,567
9,410,622

1,357,665
14,711,997

3,770

31,131

9,036－

14,711,997

16,100,795

(5) Notes on Going Concern Assumption
No item to report.
(6) Notes on Consolidated Financial Statements(Changes in accounting policies)
The Group applied the following standards effective from the fiscal year ending November 30, 2014.
Standard
Name of standard
Overview of new establishment and amendment
Recognition of actuarial gains and losses and past
IAS 19
Employee Benefits
service cost, and presentation and disclosure of postemployment benefits
Clarification and application of the concept of control
Consolidated Financial
IFRS 10as a basis to determine which entities are to be
Statements
consolidated
Principles for the financial reporting by parties to a
IFRS 11
Joint Arrangements
joint arrangement, and supersedence of former IAS
31 and SIC 13
Disclosure requirements on interests in subsidiaries,
Disclosure of Interests in
IFRS 12
joint arrangements, associates and unconsolidated
Other Entities
structured entities
Establishment of a framework when other standards
IFRS 13
Fair Value Measurement
require fair value measurement
The above standards have no material impact on the condensed quarterly consolidated financial statements.
Among the above standards, for IAS 19, the comparative data have been adjusted retroactively inaccordance with transitional measures.

(Changes in presentation)
In the past, sales expenses such as advertising costs for real estate for sale were posted in “Cost ofrevenue”, but from the fiscal year ending November 30, 2014, such expenses are being posted in “Selling,
general and administrative expenses.”This change was made in order to more accurately present the actual situation, due to the fact that the
aforementioned sales expenses more resemble sales costs than cost of goods sold these days.
To reflect this change in presentation, reclassification of accounts has been made for the consolidated
statement of comprehensive income for the fiscal year ended November 30, 2013. As a result, ¥1,367,002
thousand included in “Cost of revenue” in the consolidated statement of comprehensive income for the
fiscal year ended November 30, 2013 were reclassified to “Selling, general and administrative expenses”.

18

(Segment information)(1) Summary of reportable segments
The Group’s reportable segments are components of the Group about which separate financial
information is available that the Board of Directors regularly conducts deliberations to determine theallocation of management resources and to assess the performance. The Group draws up comprehensive
strategies for each of the following business segments and conducts business activities accordingly;“Revitalization Business”, “Development Business”, “Rental Business”, “Fund and Consulting
Business”, “Property Management Business”, and “Alternative Investment Business”. In the
Revitalization Business, the Group acquires the properties whose asset values have declined, renovates,
and resells them. In the Development Business, the Group sells condominium units and detached houses
to individual customers as well as apartment and office buildings to investors. In the Rental Business, theGroup rents office buildings and apartments. The Fund and Consulting Business mainly provides asset
management services for the properties placed in real estate funds. The Property Management Businessprovides comprehensive property management services. In the Alternative Investment Business, theGroup acquires real estate collateralized loans and sells the properties acquired through collection ofdebt and acceptance of substitute performance.
(2) Method for calculating revenue, profit or loss and other items by reportable segment
The methods of accounting applied in the reported operating segments are consistent with theaccounting policies adopted by the Group.
The reported segment profit is calculated on an operating profit basis. Intersegment revenue ortransfers are based on actual market prices.

19

The Group’s revenue and profit by reportable segment are as follows:Year ended November 30, 2013
(Dec.1, 2012 – Nov 30, 2013)(¥ thousand)
Revitalization Development
Business
Business

RentalBusiness

Fund andConsulting
Business

Alternative
Property
Management Investment
Business
Business

Adjustment

Total

Revenue
Revenue from externalcustomers

11,098,020

16,347,700

2,647,153

1,398,239

3,160,312

418,918－

35,070,345

Intersegment revenue－－

56,55921,654

381,595

21,195(481,004)－

11,098,020

16,347,700

2,703,713

1,419,893

3,541,908

440,113(481,004)

35,070,345

1,398,665

1,447,316

1,590,390

669,997

123,565

73,024(1,388,500)

3,914,459

Total
Segment profit
Finance income/costs, net(692,332)

Profit before tax

3,222,127

Note: As described in the subsection “Changes in accounting policies,” changes in accounting policies made in the fiscal year
under review have been applied retroactively, and the consolidated financial statements for the previous fiscal year
present figures after the retroactive application.

Year ended November 30, 2014
(Dec.1, 2013 – Nov 30, 2014)(¥ thousand)
Revitalization Development
Business
Business

RentalBusiness

Fund andConsulting
Business

Alternative
Property
Management Investment
Business
Business

Adjustment

Total

Revenue
Revenue from externalcustomers

34,743,813

6,112,575

4,153,421

949,437

2,943,854

1,078,462－

49,981,563

Intersegment revenue－－

57,161

9,242

516,012－(582,416)－

34,743,813

6,112,575

4,210,582

958,680

3,459,867

1,078,462(582,416)

49,981,563

3,330,667

432,323

2,414,670

174,963

227,423

213,949(1,233,224)

5,560,774

Total
Segment profit
Finance income/costs, net(897,067)

Profit before tax

4,663,706(Earnings per share)
Year ended
November 30, 2013
(Dec. 1, 2012 – Nov. 30, 2013)

Year ended
November 30, 2014
(Dec. 1, 2013 – Nov. 30, 2014)

Profit attributable to owners of the parent (¥ thousand)

2,006,471

2,874,226

Weighted average number of outstanding ordinary shares(shares)

46,602,904

48,284,000

43.05

59.53

Basic earnings per share (¥)

Notes: 1. Basic earnings per share is calculated by dividing profit attributable to owners of the parent, by the weighted average
number of outstanding ordinary shares during the reporting period.
2. Information on diluted earnings per share is omitted due to an absence of potential shares.
3. The Company split its shares by 100 for 1, effective July 1, 2013. Therefore, the basic earnings per share wascalculated on the assumption that the share split was implemented at the beginning of the previous fiscal year.
4. As described in the subsection “Changes in accounting policies,” changes in accounting policies made in the fiscal
year under review have been applied retroactively, and the consolidated financial statements for the previous fiscal

20year present figures after the retroactive application. Consequently, basic earnings per share for the previous fiscal
year have increased by ¥0.06 compared with the figure before the retroactive application.

(Significant subsequent events)
No item to report.

21