Annual Report 2019
Fiscal year ended March 31, 2019

Innovation for a New Lifestyle.
— ライフスタイルに、新常識を。—

Profile

CONTENTS

Since the foundation of the Takara Leben Group in 1972, our objective has always been to offer homes tocustomers under the principle of providing ideal, affordable housing that anyone can buy with confidence
and peace of mind. We began with the detached house business, transitioned to our core new built-for-salecondominium business to meet the needs of the age, and then, in 2001, became a listed company. We haveachieved continuous growth as a general real estate business developer by bringing to reality our corporate
vision: “THINK HAPPINESS AND MAKE THE HAPPINESS.” Now, as we approach the 50th anniversary of
the Group’s founding in 2022, our new Group slogan is “Innovation for a New lifestyle.” This means
proposing homes and services suited to the lifestyles of customers, despite what had until now been theexisting norm, raising corporate value and responding to the expectations of all of our stakeholders.

VISIONMISSION

THINK HAPPINESS AND
MAKE THE HAPPINESSCreating
Together

Origin of the Company Name

In this business segment the Groupleases the condominiums, officebuildings, hotels and other properties it holds. Leveraging theGroup’s real estate information network to the maximum extent, wehave been actively acquiring rental
properties throughout Japan.

The Takara Leben Group generates astable flow of earnings by marketing
electricity to electric power companies. The Group also works diligently
to contribute to society by producing
renewable energy. In addition to revenue gained from the sale of electric
power, we are also conducting salesof power generation facilities to
Takara Leben Infrastructure Fund Inc.

Real EstateManagement Business
Here, the Group is actively engaged in
the management and operations ofproperties. In addition to managing properties that it has constructed with its own
meticulous services, the Group also
manages properties for other companies
on a contract basis. In the real estate
management business, the number ofmanaged housing units continues togrow steadily.

Other Businesses
The Takara Leben Group receivescommissions derived from othersegments and is active across awide range of fields, including construction contracting and largescale repair work. Looking ahead,management fees are projected to
expand in line with the increase in
infrastructure fund, REIT, and otherassets.

4

Interview with the CEO

6

Interview with the CFO

8

At a Glance
Measures Adopted in Each Business
Real Estate Sales BusinessReal Estate Rental Business/
Real Estate Management
Business
Electric Power Generation
Business/Other Businesses

10
11
14
15
16

“leben” added following the change in our company name is German for “life, lifestyleand living,” which are keywords essential when discussing a home. This represents

CSR Initiatives

18

Corporate Governance

20

Introduction of Directors

24

the concept of hoping to offer homes that are the treasure of a lifetime to as many
people as possible.

Financial Section/Corporate Data

Flow Businesses
In addition to the Group’s new built-forsale condominiums for families and single
people in the Tokyo metropolitan area,
Takara Leben has positioned its new
built-for-sale condominium business totarget both active seniors residing in major
regional cities and its reconstruction
and redevelopment business as key
earnings pillars.

Company name: Takara Leben Co., Ltd.
Representative: K azuichi Shimada,
Representative Director
Established: September 1972
Capital stock: 4,819 million yen(As of March 31, 2019)
Net sales: 132,005 million yen(Fiscal year ended March 31, 2019)
No. of employees: 296
(male, 222; female, 74)(As of March 31, 2019)

Real Estate Sales Business
The real estate sales business accounts forover 80% of the Takara Leben Group’s total net
sales. In this business segment, the Group’s
activities largely revolve around the planning,development, and sale of new built-for-salecondominiums while addressing the diverse
needs of customers. Among a host of otherendeavors, we actively engage in the saleof detached houses, as well as the renovation and resale of condominiums andprofit-generating real estate of the­liquidation business in this­business segment.

2

Value Creation Process at the
Takara Leben GroupESG Initiatives

Company Profile

Electric Power
Generation Business1

History of the Takara Leben GroupThe “Takara” that we have used in our company name since the days of “Takara
Komuten” refers to “treasure,” as in a home is the treasure of a lifetime. The word

Main Businesses

Real Estate Rental
Business

ProfileStock and Fee-BasedBusinesses
In the stock business, the Takara
Leben Group is building stable revenue
from rent, and revenue generated
from over 50,000 properties managed
on consignment. In addition, in thefee-based business we listed two
investment corporations expanding into
areas such as investment management
fees and thereby established a systemthat does not rely on flow businesses.

Head office: TEKKO BUILDING 16F,
1-8–2 Marunouchi, Chiyoda-ku,
Tokyo, Japan 100-0005
TEL.: +81-3-6551-2100

Related companies
 Leben Community Co., Ltd.
 Takara Leben Tohoku Co., Ltd.
 Takara Leben West Japan Co., Ltd.
 Nikko Takara Corporation Co., Ltd.
 Takara Leben Realnet Co., Ltd.
 Leben Zestock Co., Ltd.
 Takara Property Co., Ltd.
 Leben Trust Co., Ltd.
 Takara Asset Management Co., Ltd.
 Takara PAG Real Estate Advisory Ltd.

Six-Year Financial Summary

25

Financial Review

26

Consolidated Balance Sheet
Consolidated Statements of Income
and Comprehensive Income
Consolidated Statement of Changes
in Shareholders’ Equity
Consolidated Statement of Cash
Flows

28

Stock Information

33

30
31
32

Other Disclosure Information
https://www.leben.co.jp/en/ Materials related to the Company’s Settlement of
Accounts
 Quarterly Financial Results Reports
 Business Report Ordinary General Meeting of Shareholders Information
 Other
Editorial Policy and Cautionary Statements
Regarding Forward-Looking Statements
This report, which for the most part provides details of the
Takara Leben Group’s operations in fiscal 2019, the fiscal
year ended March 31, 2019, has been designed to provide
stakeholders with a deeper understanding of our businessactivities, management strategies, performance,and other non-financial information, including interaction
with society and the environment.
This document was prepared to provide information
regarding the Company’s consolidated results in fiscal
2019 and should not be construed as a solicitation forinvestment in securities issued by Takara Leben Co., Ltd.
The information provided in this report is fundamentally
based on data available as of March 31, 2019. Any forward-looking statements including opinions and forecasts
are based on the best judgments of management as of thetime this report was prepared.
Accordingly, Takara Leben does not guarantee or promisethat any forward-looking statements will be realized or
achieved or provide any assurance as to the accuracy or
integrity of information. Moreover, the content of this report
is subject to change without prior notice.

 Sunwood Corporation

Takara Leben Annual Report 20191

Net Sales

History of the Takara Leben Group
Established as Takara Komuten Co., Ltd. in Itabashi-ku, Tokyo in 1972, Takara Leben began the sale ofproprietarily branded condominiums in the 1990s, which subsequently led to growth in the number ofunits supplied as well as net sales. We are a general real estate business developer that comprises 12Group subsidiaries, and our business area now extends broadly throughout Japan.

¥132

The Takara Leben Group’s symbol is the Harmonic Circle,
which is comprised of three rings, representing customers,
partners, and employees and expressing how they arelinked to one another and expanding organically to create
harmony while supporting each other. The three rings
convey our hope of carrying out our corporate vision to“THINK HAPPINESS AND MAKE THE HAPPINESS” while
resonating with one another. The gradation of striking blue
to deep navy expresses the intelligence and sincerity
pursued by everyone in the Group.

Harmonic Circle(Billions of yen)billion2018 number of supplied
condominium units
nationwide ranking

Surpassed

No.

¥100

billion mark8

*S tudy by Real Estate Economic
Institute Co., Ltd.

100
(10,000 units)

Net sales and cumulative number of new built-for-salecondominium units supplied

Surpassed¥50 billion
mark

Cumulative number of new built-for-salecondominium units supplied

50

Surpassed¥10 billion

Over

mark

10

year
anniversary

30

20

year
anniversary

year
anniversary

Over
0

1982

1972

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2005

units (as of the end of March 2019)

40

50

year
anniversary

10,000 units
2004

31,18020,000 units

2006

2007

2008

2009

2010

2011

2012

year
anniversary

2013

2014

2015

2016

2017

2018

2019

2020

2021

400
350
3
300
250
2
200
150
1
100
500
0
0

2022 (for the period

ended March 31)

History
1972 Established as Takara KomutenCo., Ltd. in Yamato-cho,Itabashi-ku

1994 Commenced sales of the “Leben
Heim” series of condominiums

2000 Changed the name of

Takara Komuten Co., Ltd.
to Takara Leben Co., Ltd.

2001 Relocated the Company’s head office to
Ikebukuro following completion of the
Takara Leben Head Office Building

2006 Relocated theCompany’s head office
to the ShinjukuSumitomo Building

2012 Launched the new LEBEN
condominium brand2008 Launched the new

Takara Leben brandMade the real estate rental
and managementbusiness Takara HousingCo., Ltd. (current Takara
Property Co., Ltd.) into a
subsidiary company

Listed on the JASDAQ market

1975 Purchased the Company’s head

1996 Changed the name of Takara Manage-

office to the Nakaitabashi Head
Office Buildings (Dai-ichi Takara
Building)

ment Co., Ltd. to Leben Community
Co., Ltd.

1982 Launched the real estate rental

2013 Entered the electric1999 Undertook the absorption-type merger of
Takara Jyuhan Co., Ltd.

business	Established TAFUKO Co., Ltd. as afinancial brokering business1986 Established Takara Jyuhan Co.,

2003 Listed on the Second Section of theLtd. in an effort to expand sales
and intermediary operations

Tokyo Stock Exchange

2004 Listed on the First Section of the1988 Established Takara

Tokyo Stock ExchangeManagement Co., Ltd. as areal estate managementcompany

2010 Launched the detached

power generation
business

2014 Set up the Hokuriku Office	Made Oasis Co., Ltd.
(current Takara Leben Realnet Co., Ltd.) into a
subsidiary company
	Made Nikko Kensetsu Co.,
Ltd. into a subsidiarycompany

2015 Made Live Net Home Co.,

Ltd. (current Takara Leben
Tohoku Co., Ltd.) into a
subsidiary company;
relocated to Sendai City,
Miyagi Prefecture	Made Jyutakujyouhoukan
Co., Ltd. into a subsidiarycompany

house business withdetached house built by
the Company in its own
right2018 Changed the name of	Changed the name of Nikko
Kensetsu Co., Ltd. to Nikko
Takara Corporation Co.,
Ltd.

	Made PAG Investment
Management Ltd. (current
Takara PAG Real Estate
Advisory Ltd.) into a
subsidiary company

Ltd. into a subsidiarycompany ompleted steps forC
Takara Leben Infrastructure Fund Inc. to be thefirst to list on the Tokyo
Stock Exchange Infrastructure Fund Market

2017 Set up the Osaka Branch	Set up the Sapporo Office	Changed the name of
Jyutakujyouhoukan Co.,
Ltd. to Takara Leben WestJapan Co., Ltd.

2011 Commenced sales of cus-

tom-built houses; exhibited
products at the Tachikawa
Housing Exhibition Center2016 Made Nikko Property Co.,

Established Takara AssetManagement Co., Ltd. as
an investment managementbusiness	Relocated the Company’shead office to the TEKKOBUILDING in Marunouchi,
Chiyoda-ku

Made Sunwood Corporation
into an affiliate accounted forby the equity method

TAFUKO Co., Ltd. to Leben
Zestock Co.,Ltd.

	
Launched the new NEBEL
condominium brand	Established representative
office of TAKARA LEBEN
CO., LTD. in Hanoi City akara Leben Real Estate
T
Investment Corporation
was listed on the Tokyo
Stock Exchange Real
Estate Investment Trust
Securities Market

2019 Changed the name of Nikko
Property Co., Ltd. to Leben
Trust Co., Ltd.

Real estate-related milestones

2

1970s

1980s

1990s

2001

2006

2008

2011

2016

The new availability of homeloans leads to the spread ofcondominiums as housing
for ordinary households

Land prices soar in the
bubble economy

After the bubble bursts,
corporate factories and housing
are sold off and the developmentof condominium buildings on
vacant land moves forward

The J-REIT market is establishedenabling real estate investment
trusts to list on the Tokyo Stock
Exchange for the first time.

With formulation and enactment of
the Basic Act for Housing, Japan’s
policy shifts to encourage use ofexisting housing stock withrefurbishment and renovation

The financial crisis
sparked by the Lehman
Shock leads to ongoing
consolidation among realestate companies

The Great East Japan Earthquake and otherdisasters spur strengthened efforts to adopt
seismic isolation and vibration control structures
for condominiums, as well as securing
emergency sources of power and other features

Compliance with energy conservation
standards becomes mandatory, in line withthe enactment of the Building Energy
Conservation Act, a law concerned withbuilding energy consumption performance

Takara Leben Annual Report 2019

Takara Leben Annual Report 20193

Value Creation Process at the Takara Leben Group
Takara Leben has positioned as its starting point the desire to offer homes to customers under the principle ofproviding ideal, affordable housing that anyone can buy with confidence and peace of mind. Moreover, it has responded to diversifying housing needs and achieved sustained growth as a general real estate business developer.
We will continue to provide new value to society through the creation of concepts that go beyond traditional norms.

Input

Value Chain
Businesses derived fromcondominiums equipped withsolar power systems

Financial Capital
Ability to generate
stable cash flow

Manufacturing
Capital
Buildings, equipment,social infrastructureIntellectual
CapitalTechnologies andexpertise that respondto customer requests

Derivedbusinesses

Housing lots
purchasing

Diverse humanresources thatpossess expertise

Number of units sold

Financial Capital

1,656 units

Mega-solar
Infrastructure funds
management(period ended March 31 2019)(period ended March 31 2019)

Development

Sales

Rebuilding andredevelopment

Real estate
management

A sound financial
foundation that enables
further investments
for growth

New built-for-saledetached houses

131 units
RepairBrokerage

Cumulative number ofunits supplied

31,180 units

Manufacturing
CapitalCreated Value

Creating Lifestyles
with Value
We contribute to improving
the richness of people’s
lifestyles by creating newvalue.

Providing high-quality
buildings*New built-for-sale condominiums(as of the end of March 31, 2019)

Number of managed
housing units■ Real Estate Sales BusinessRealestate rental■ Real Estate Management
Business

Rentalmanagement

RepairSales

54,036 units(as of the end of March 31, 2019)Intellectual Capital

Forming Communities

Advanced technologies
and services that respondto diversifying lifestyles

We form communities withstakeholders—such as local
communities, trading partners,
and employees—and aim for
growth together.

Rental revenues■ Electric Power Generation
Business■ Other Businesses

Derivedbusinesses

Social and
Relationship
CapitalREIT andprivate fundmanagement¥5.8 billion
Rentalmanagement(period ended March 31 2019)

Power generation(current)

About

Human Capital
Encouraging the strongroles of diverse employees

119 MW*Including wholesale portion(as of the end of March 31, 2019)

Trust and reliability,
brand strength anda collaborative
framework

ESG Management
System to support value creation
Key Issues for the Takara Leben Group

Natural Capital
Land, the global
environment

OutcomeNew built-for-salecondominiums

Real estate related
businesses■ Real Estate Rental Business

Human Capital

Facilities
management

Output▪ Support for diversifying lifestyles andglobalization▪ Responses to changes to business models

brought by an ageing society and depopulation▪ Urban development and creating towns▪ Construction and maintenance of a corporate

governance system▪ Promoting compliance▪ Employee health management▪ Encouraging the strong roles of diverse

human resources▪ Providing safe, secure products and services▪ Improving customer satisfaction▪ Improving value of buildings▪ Providing buildings and spaces that consider

the environment and culture▪ Responses to global warming▪ Initiatives for renewable energy▪ Effective use of resources▪ Responses to disasters

Power-generation
facilities nationwide

40*Including wholesale portion(as of the end of March 31, 2019)Social and
Relationship Capital
Building regional vitality
and relationships of trust
for the long term withall stakeholders

Providing Comfortable
Spaces of High Quality
We support the comfortable andsafe living of our customers byproviding products bringing greatsatisfaction to our customers.

Percentage of womenin management

9.46 %*Scope of calculation: Takara
Leben (as of the end of March
31, 2019)
Fiscal 2018

8.1%

Percentage of persons
with disabilities employed

2.19 %*Scope of calculation: Takara
Leben (as of the end of March
31, 2019)

Natural Capital
Effective use ofresources and initiatives
for renewable energy to
reduce environmental
impactDeveloping Environments and Cultures
We contribute to a sustainable
society by actively working on
environmental issues, and at
the same time, contribute toimproving quality of life byproviding opportunities for mental
activities such as learning andpracticing the arts.

Fiscal 2018

1.09%
4

Takara Leben Annual Report 2019

Takara Leben Annual Report 20195

Interview with the CEO
Theme of the Medium-Term Management Plan

Evolution through Sustainable Change
Basic Policy

Responding
to ESGInnn forovatioa New

Lifestyles.

Establishingstable andsustainablefoundations for
growthKazuichi Shimada
Representative Director,
CEO and President Executive Officer

Diversifying
the businessportfolio

Q2

We will establish a sustainable foundation for growth bystrengthening core businesses and increase corporate value by
diversifying our business portfolio from a medium to long term view.
With the first year of the Medium-Term Management Plan finished, we are clarifying the issues
that need to be addressed going forward.
We will achieve sustainable growth by clarifying target customers for the core new built-for-salecondominium business and diversifying derived businesses centered on the electric power­generation business.

Q1
Medium-Term Management Plan
(March 2019 – March 2021)
Please tell us about the progress andachievements made in the first year.
In the first year of the Medium-Term Management Plan,
both operating income and ordinary income were both
below target by around 6%, but net sales and net
income reached their targets.
In the new built-for-sale condominium business, sales
are increasingly being divided between weak and strong
results, with recent construction cost rises keeping
selling prices high. In light of this, we must build the kind

6

Takara Leben Annual Report 2019of properties that people desire to purchase because of
the Takara Leben brand no matter how expensive. In theyear under review, we nearly achieved our target for thenumber of delivered units, so despite the numerous
challenges we face this is a reasonable result for theplan’s first year.
In the liquidation business we achieved our target oflisting a REIT, with Takara Leben Real Estate Investment
Corporation being listed in July 2018. Elsewhere, growthof the electric power generation business is slower but
has generally progressed as planned. Under the
Medium-Term Management Plan, we will pursue
sustainable growth by implementing growth strategies,
prioritizing ongoing stock businesses, and developing
non-core businesses into key platforms.

Building on the accomplishments in the firstyear, please tell us about upcoming challenges
and initiatives.

purchase and product planning stages while taking steps
to achieve the Medium-Term Management Plan under theslogan, “Innovation for a New Lifestyles.”I believe that identifying and grasping changing customer
lifestyles in order to supply homes that meet thesechanging needs is critical for realizing stability and growth
for the new built-for-sale condominium business.
The lifestyle of our main target customer, the first-timehome buyer, has undergone significant change. Since
1980, the structure of households has experienced asignificant increase in dual-income and single-personhouseholds, and a steady decline for households withfull-time housewives. In addition, dwindling birthrates andan aging population have noticeably progressed.
Consequently, we target three new segments: dualincome, single-person, and senior citizen households.
For dual-income households, we have focused forseveral years on the purchase of housing lots at locations
that offer convenient lifestyles, product planning, and sales
strategies, all of which we will further clarify. For singleperson households, we have built new compact
condominiums under the NEBEL brand and opened apermanent salon in Ginza in 2018. For senior citizen
households, we are responding to the demand forrelocating from detached houses to condominiums
particularly in regional cities. There is a need to supply
desirable residences, which we will meet by accurately
identifying such needs based on the composition of eachhousehold and area characteristics. We are currently
pursuing these concepts starting at the housing lot

Q3
The Company is pursuing the third pillar of theMedium-Term Management Plan, “Responding
to ESG.” Please share your approach tosustainable growth.
In order to survive amid rapidly changing market
conditions, companies must accurately grasp thesechanges and steadfastly meet the needs of society. As
part of this, we have raised the pursuit of ESG initiatives
companywide in the Medium-Term Management Plan.
In order to understand and address social issues, wehave identified 15 key issues from the perspective of our
stakeholders that fall within the Company’s four key CSR
themes (see p.16 for details). In addition, every employee
shares an awareness about applying these CSR themes
to the Company’s SDGs-related initiatives.
Notably, in the area of corporate governance, weestablished nomination and compensation committees
as advisory bodies for the Board of Directors in March
2019 to increase the objectivity and transparency of thepersonnel and compensation decision-making
processes.
Looking ahead, we will pursue sustainable growthwith an awareness of the importance of engaging with
our stakeholders.

Takara Leben Annual Report 20197

Interview with the CFO

Q2Please discuss your forecasts based on the
management targets for the fiscal year ending
March 31, 2021, the final year of the MediumTerm Management Plan.

Masashi Yamamoto
Director, CFO and Executive Officer

We aim to raise total shareholder returns over the medium tolong term by pursuing capital cost-oriented management that
supports sustainable profit growth.
Q1
Please discuss performance during the fiscal
year ended March 31, 2019.

amid business expansion. As a result, operating income
and ordinary income were below target due to overbudget SG&A, but net income (net income attributableto owners of parent) was on target.
By business, the new built-for-sale condominium
business fell slightly short of its target for number ofunits delivered, but inventories have halved compared tothe end of the previous fiscal year, indicating solid sales
progress. The renewal resale business significantly
exceeded targets for purchases and net sales,
particularly the purchase and sale of one building
renovation. In the liquidation business, net sales andgross profit were both well above their targets.

In fiscal year ended March 31, 2019, we delivered
1,656 units in the core new built-for-sale condominium
business. In addition, we reached record-high net sales
by fostering a cycle of investment and returns in theliquidation business, including the listing of Takara
Leben Real Estate Investment Corporation. However, on
the costs side, selling costs increased in line with growthin sales areas and number units sold, while personnel
costs rose due to upgrading our HR system, which
includes raising headcount and average wages by 5.6%

FY2018/3(46th)

8

FY2019/3(47th)

250
200

24.1

25.6

30% (Fiscal year ended March 2021)

LTV (Loan to value) (%)

60.1

60.5

less than 60% (Every fiscal year ended March)

D/E ratio (Times)2.5

2.3

less than 3 times (Every fiscal year ended March)

(%)

18.6

14.3

15% (Every fiscal year)

Takara Leben Annual Report 2019

Please discuss the Company’s capital policy
and shareholder return approach.
We will adopt a capital policy that prioritizes internallyretained fund accumulation and soundness. Based on
its fundamental policy of returning profit to shareholders
in line with consolidated earnings (net income), theCompany aims to raise annual dividend per share by 3
yen from 16 yen for fiscal 2019 to 19 yen in fiscal 2020,
for a dividend payout ratio of 25-30%. In the final year of
the Medium-Term Management Plan, we target dividend
per share of 21 yen based on profit growth.
The Company will engage in capital cost-oriented
management to support sustainable profit growth.
Undertaking growth investment, we aim to increase total
shareholder returns over the medium to long term by
returning profits through dividends as well as cancellingtreasury stock, with a basic policy of cancelling over
10% treasury stock from total shares outstanding. In thefiscal year ended March 31, 2019, we cancelled three
million treasury shares.
We will take steps to increase corporate value byenhancing our engagement with a variety of
stakeholders beginning with shareholders and investors.

（%）

The Medium-Term Management Plan

(%)

ROE

Q3

K Total shareholder returns (TSR)

K Management Index

Equity ratio

The Medium-Term Management Plan targets consolidated
net sales of 170,000 million yen and net income of 9,000
million yen in its final year, fiscal 2021, while its financial
targets are equity ratio of 30%, loan to value (LTV) of justunder 60%, debt-to-equity ratio of just under 3 times,
and ROE of 15%.
The Company believes that consistently generating
profits and cash flows above capital costs will raise
shareholder value. In addition, we aim to reach ROE ofabove 15% over the medium to long term by improving
profitability and asset efficiency.
Looking ahead, condominium demand is solid
centered on dual-income and single-person households
in the Tokyo Metropolitan Area, while in regional cities
there is a greater need among active seniors to move tocentrally located condominiums.
Against this backdrop, we expect condominium
investment to remain stable at between 45 and 50 billion
yen. We will maintain asset size at around 60 billion yen
as we invest 20-30 billion yen in liquidity assets(including earnings-generating buildings, hotels, andoffices) and continue the cycle of investment and return.
As for the electric power generation businesspotential, we expect ongoing demand owing to theJapanese government announcing targets for renewableenergy use of 22-24% by 2030.
To this end, we will proactively invest surplus funds

to realize future growth aimed at boosting ourcompetitiveness while believing that a healthy debt tocapital structure is most important for sustainability. To
maintain a healthy balance sheet, the Company targets
interest-bearing debt at just under 60% of total assets.

Takara Leben TSR

150
100

TOPIX: Share index (including dividends) of return on investment

5002015.32016.32017.32018.32019.3

Takara Leben Annual Report 20199

At a Glance

Measures Adopted in Each Business

Sales Ratio by Segment

Real Estate Sales BusinessReal Estate Sales
Business


−−

79.4%

104,823

Real Estate Rental
Business

4.4%

79,638

Consolidated
Net Sales

Real EstateManagement
Business

19.0%

million yen

Electric Power
Generation Business

8.2%

21.5%

The Takara Leben Group supplies real estate that flexibly addresses changes in lifestyles and customer
values. With the full-scale launch of the liquidation business utilizing the Group's real estate development
capabilities, the Company is also diversifying flow businesses beyond the new built-for-sale condominium business.

20.1%

New built-for-salecondominiums

20.1%20.1%
20.1%

Sales

New detachedhouses2017.3 2017.3
2018.3 2018.3
2019.3 2019.3
2017.32018.32019.32017.32018.32019.3

4.6%

Real Estate Rental Business
5,829
  Net sales(Millions of yen)
5,472

5,056
−− Gross profit margin

Renewal resales

Real Estate Management Business

−−

5,829
5,82920.7%
5,829
5,472
5,472

25.6% 25.6%
25.6%
25.6%
24.6% 24.6%
24.6%
24.6%

2018.3

104,823
104,823
104,823

21.5% 21.5%
21.5%
21.5%
19.0% 19.0%
19.0%
19.0%
2017.32018.32019.3Other Businesses

2017.379,341

79,638 79,638
79,341 79,341
79,63879,63879,341
79,341132,005

3.4%

25.6%
5,472
24.6%
5,472
5,056 5,056
5,056
5,056

Real Estate Sales BusinessNet sales (Millions of yen)
Gross profit margin

Net sales (Millions of yen)
Gross profit margin

3,665

4,000

4,512
4,512
4,51214.0%
4,512

4,000 4,000
14.2%
4,000
4,000
3,665 3,665
3,665
3,665
12.6%

20.7%20.7%
20.7%

14.2% 14.2%
14.2%
14.2%
12.6% 12.6%
12.6%
12.6%

2019.32017.32017.3 2017.3
2018.3 2018.3
2019.3 2019.3
2017.32018.32019.32017.32018.32019.32018.3

14.0%14.0%
14.0%

Liquidation

Purchase

Develop
Renovate
Increase Value

Sell

2019.32017.3 2017.3
2018.3 2018.3
2019.3 2019.3
2017.32018.32019.32017.32018.32019.3Fiscal 2019 Review and Strategies
Electric Power Generation Business
−−Net sales(Millions of yen)
18,239Gross profit margin30.8%

18,239 18,239
18,23918,239
11,108
10,794
30.8% 30.8%
30.8%
30.8%
28.9%
11,108 11,108
11,108
11,108
10,79410,794
10,794
28.9% 28.9%
28.9%
28.9% 13.2%

Other Businesses

−−

6,045
42.4%
6,045 6,045
6,045
41.3% 41.3%
4,130
41.3%
41.3%
3,797
42.4%42.4%
42.4%
36.5% 36.5%
36.5%
36.5%

Net sales (Millions of41.3%
yen)
Gross
profit margin
36.5%

4,130
4,130

4,130
4,130
3,797
3,797

2017.32018.3

3,797
3,797

13.2%13.2%
13.2%
2017.32018.32019.32017.3 2017.3
2018.3 2018.3
2019.3 2019.3
2017.32017.32018.32018.32019.32019.3

10

Takara Leben Annual Report 20192019.32017.3 2017.3
2018.3 2018.3
2019.3 2019.3
2017.32018.32019.32017.32018.32019.3In the fiscal year under review, the Takara Leben Group
expanded its area of operations to 31 prefectures byachieving new supply in Hokkaido, Iwate, Aichi, Osaka,
and Nagasaki prefectures. In 2018, the number of nationwide condominium units sold reached the 80,000 level forthe first time in four years. The Company also ranked
eighth in the condominium developer ranking based on
number of condominium units sold, ranking among the
top 10 for the sixth consecutive year, and plays the role ofa stable supplier in the real estate sales market as anindependent general real estate business developer. The
Company will continue to provide a stable supply and grownationwide by securing locations that prioritize convenience in the Tokyo metropolitan area and by striving toaccurately ascertain the supply-demand balance inregional cities.

Revenues from the real estate sales business for the
fiscal year under review amounted to 104,823 million yen,up 32.1% year on year, based on such revenues as 57, 203
million yen from the new built-for-sale condominium business,
8,817 million yen from the new detached house business,
3,305 million yen from the renewal resale business, and33,502 million yen from the liquidation business.
In fiscal 2020, the Company plans to sell 1,950 units inthe new built-for-sale condominium business by actively
advancing supply in both major metropolitan areas and inregional city centers. The Company will continue tosupply products that address changes in lifestyles andchanges in housing-related values. In order to supplement
the new built-for-sale condominium business, the Company
will expand business in the new detached house, renewal
resale, and liquidation businesses in line with market
trends.

Takara Leben Annual Report 201911

■

Measures Adopted in Each Business

Real Estate Sales Business

New Built-for-Sale Condominium BusinessIn fiscal 2018, the Company expanded its lineup adding
to the existing LEBEN brand by launching supply of the
NEBEL brand of new city-type compact condominiums
designed to address the needs of singles and DINKs.
Against a backdrop of a dwindling birthrate and aging
population, the ratio of the population accounted for by
the Tokyo metropolitan area is expected to continue
growing. Moreover, household composition will undergo
major changes, with a significant decline in householdswith full-time housewives and an increase in the numberof single-person and dual-income households. Along withdemand for convenient locations and lifestyles, thesechanges are driving an upward trend in the demand forcompact condominiums in the Tokyo metropolitan area.
Meanwhile, in part due to the trend towards developing
compact cities, regional city centers are seeing a continued deep-rooted demand to move from detached houses
to condominiums, primarily among active seniors.
More recently, in part due to steady purchases of housing
lots in regional cities, the Company expects to reduce themetropolitan area property ratio, which was 54.5% during
the fiscal year under review, to 47.3% in fiscal 2020. As inaverage years, the condominium completion schedule forfiscal 2020 is heavily weighted toward the second half,with scheduled completions of approximately 1,000 units
concentrated during the fourth quarter. Despite this,approximately 700 units are anticipated for completion
during the first half, leading to an outlook for a slight
improvement in concentration during the second half
compared with the fiscal year under review and helping tolevel out sales.

Liquidation BusinessAs a pillar of new earnings, the Company is growing
the real estate liquidation business, which maximizes
the Group's development capabilities, informationcollection capabilities, and other knowhow as a generalreal estate business developer. In addition to conventional
long-term holdings, the Company is diversifying the exit
channels for owned properties and establishing anappropriate investment and return cycle, for example
by selling properties to REIT and private funds after
increasing value and reconstruction.
In terms of REIT composition initiatives, Takara
Leben Real Estate Investment Corporation (TLR) was
listed on the Tokyo Stock Exchange Real Estate
Investment Trust Securities Market in July 2018. TLR(managed under contract by Takara PAG Real Estate
Advisory Limited) is backed with the investments offour companies: Takara Leben, PAG Real Estate
Holding Limited, Kyoritsu Maintenance Co., Ltd., andYamada Denki Co., Ltd. In the fiscal year under review, atotal of 5 properties worth 6,723 million yen were sold to
TLR. As a result, in the fiscal year under review both theinvestment and sales values exceed the planned values.

Along with assuming sales will be made to REIT
and private funds, the Company will also continue toreplace assets held while actively acquiring anddeveloping profit-generating real estate.

LEBEN ASAKUSA AYAGINU

Renewal Resale Business
The market for used condominiums has boomed,with the number of used condominium sales in theTokyo metropolitan area exceeding new built-for-salecondominium sales for three consecutive years. The
Company primarily focuses on purchasing usedcondominiums under lease (owner change properties),
and renovating and reselling them after the leaseholders
have vacated. This business model enables a stableearnings cycle because properties under lease can bepurchased less expensively than vacant properties,
while at the same time generating rental income fromthe leaseholder while occupied.
In the fiscal year under review, in addition to purchases
and sale of individual units, the Company purchased
and sold one building renovation (41 total units). At 257
units, the number of purchased units exceeded theplans by 107 units, where the number of owned units
at the end of the fiscal year was 229, exceeding theplans by 69 units. Due to this one building renovation,
the gross profit margin increased to 16.3%, 3.4 points

higher than the planned margin. Along with continuing
to make purchases, the Company will establish astable business cycle by further reducing the duration
between the time units are vacated and resold. Overthe near term, the Company will work to accumulate
units with a target of 500 owned units at the end of the
fiscal year.

Takara Leben Annual Report 2019

■ Performance Goals(Unit)

Fiscal 2018 Results

Condominiums
Units sold

Detached
housesFiscal 2019 Plan

Fiscal 2019 Results

Fiscal 2020 Forecast

1,619

1,700

1,656

1,950

116

190

131

200

Fiscal 2019 Results

Fiscal 2020 Forecast(millions of yen)

Breakdown by Segment(Net Sales / Gross Profit)

Fiscal 2018 Results
Net Sales

Gross
ProfitFiscal 2019 Plan
Net Sales

Gross
ProfitNet Sales

Gross
ProfitNet Sales

Gross
ProfitNew built-for-salecondominium business

60,36813,31360,00013,00057,203

11,97775,00015,500

New detached housebusiness

6,335

830

12,000

1,600

8,817

701

10,000

1,000

588

78

1,700

220

3,305

537

2,720

320

7,235

30,000

6,300

608

3,000

400

Renewal resale business
Liquidation business

9,707

2,322

30,0005,500

33,502Other businesses

2,340

541

2,000

340

1,993

Total
Lé Art HIGASHI RINKAN THE RESIDENCE

12

Dormy Inn Matsuyama

79,341 17,086 105,700 20,660 104,823 21,060 120,720 23,520

Takara Leben Annual Report 201913

■Real Estate Management BusinessElectric Power Generation Business

■

■

■

Measures Adopted in Each Business  Real Estate Rental Business

Other Businesses

Real Estate Rental BusinessElectric Power Generation Business

The Takara Leben Group develops its apartment, condominium, and office rental business nationwide.
Actively acquiring rental properties, we have established a REIT and are expanding our asset size.

The Takara Leben Group is engaged in power generation using renewable energy nationwide while aggressively acquiring and developing facilities to increase the scope of its infrastructure fund assets.

As a lender, the Company leases out condominiums, officebuildings, and other real estate, and converts rental condominiums into guest houses as means of promoting businesses where the Company operates the property. In thefiscal year under review, revenues from the real estate rental
business amounted to 5,829 million yen, up 6.5% year on
year, including rent revenues from the rental of apartments,
condominiums, and offices. Although actual revenues
exceeded planned revenues, the impact of initial costs
incurred in connection with an increase in newly purchased
properties led the gross profit margin to temporarily fall
below the planned 25.5% to an actual margin of 20.7%. As
a result of accumulating owned units in the renewal resale
business, the Company expects to see revenues of 6,000
million yen for fiscal 2020. The Company also seeks toestablish a more stable stock business by continuing to
make carefully selected purchases.

In the fiscal year under review, revenues from the electric
power generation business amounted to 10,794 million yen,down 40.8% year on year, including revenue from sales ofpower generation facilities that were already operating andrevenues from the sale of electricity generated by power
generation facilities. Although the Company has sold facilities
to Takara Leben Infrastructure Fund for three consecutive
years, at 119 MW, cumulative generation capacity failed toreached the planned 147 MW. Cumulative generation capacity
was affected by reduced purchases in anticipation of revisions
to the FIT system in December 2018. After revision, purchases
resumed and the Company secured 150 MW, including
projects under development. Of this capacity, 73 MW were
accounted for by facilities that have been sold and 46 MW
were accounted for by facilities that are operating and havenot been sold. The remaining 31 MW were accounted for by
facilities that are under development. Cumulative generation
capacity for fiscal 2020 is scheduled to reach 150 MW,

Fiscal 2018 Results

Net sales(millions of yen)

LUXENA Heiwadai

Fiscal 2019 Plan

5,472

Fiscal 2019 Results

Fiscal 2020 Forecast

5,829

6,000

5,500

Fiscal 2018 Results(millions of yen)

Total power generation volume (MW)Real Estate Management Business

(MW)

119

120
103

100
80

80
60

51

40
20
0

16
2015.3

7,000
3,800
147

2016.32017.32018.32019.3Fiscal 2019 Results

Fiscal 2020 Forecast

6,100
4,694
119

17,0004,100
150

Other Businesses

We are engaged in comprehensive management services for condominium buildings, which includes
properties of not only the Takara Leben Group but also other company’s condominiums.

This segment consists of commissions and management fees derived from our other business segments,
and is currently promoting business development overseas.

In addition to its own properties, the Company also manages
and operates properties owned by other companies. In thefiscal year under review, the number of units under management grew significantly year on year by 4,386 units. Revenues
from the real estate management business representing
management fees from these 54,036 units under management
amounted to 4,512 million yen, up 12.8% year on year. In recent
years, the ratio accounted for by unowned properties undermanagement has trended upwards, where this ratio rose to47.4% in the fiscal year under review, a 0.7 point increase overthe plan. In the fiscal year under review, the Company won alarge replacement contract for its first tower condominium. In
fiscal 2020, the Company will continue to strengthen activities
to capture replacement contracts and raise the target for units
under management to 58,800 units, an increase of 1,200 units
from the initial plan. At the same time, the Company is working

Sale and brokerage fees, management compensation, revenue
from contract construction work, revenue from repair work,and other income not included in reportable segments is
included here. In the fiscal year under review, revenues fromother business totaled 6,045 million yen, up 59.2% year on
year, including revenues from contracts for construction
works, orders for large-scale repair works, and commission
income, etc. In addition to an upswing of 54.6% due to renovation work for one building compared with planned revenues
from repair work, accumulation of assets under management
led to an increase in management compensation of 72.9%
compared to the plan. Due to a steady increase in the numberof units under management as part of the real estate management businesses, the Company foresees growth in construction revenue related to repair work.
In the overseas business, the Company held an official
announcement ceremony to launch the THE MINATO

Fiscal 2018 Results

Net sales(millions of yen)

Number of managed units (Unit)

14■ Electrical generation by Mega-solar

Fiscal 2019 Plan

14,6873,552
103

Sale of Facilities (millions of yen)Net
sales Revenue from Sale of Electricity

while facility sales and revenues from the sale of electricity
generation are scheduled to proceed as planned. In regard towind power, biomass power, and other forms of renewableenergy generation, the Company will also closely investigate
service providers while considering their introduction.

Takara Leben Annual Report 2019

4,000
49,650to further expand peripheral businesses, including large-scale
repair work derived from managed properties.

■ Number of units of condominiums under management■ Takara Leben Group ■ Properties of other companies● Ratio of other companies(Unit)(%)

54,03660,00049,65050,00040,00038,70041,13150
48

44,65646

30,00044

20,00042

10,0000

Fiscal 2019 Plan

4,300
53,3002015.32016.32017.32018.32019.340

Fiscal 2019 Results

Fiscal 2020 Forecast

4,512
54,036

5,200
58,800Fiscal 2018 Results

Net sales(millions of yen)

3,797

RESIDENCE project, a joint venture between the Company
and Fujita Corporation and the first condominium development project led entirely by Japanese companies in
Haiphong, Vietnam. As a new area for growth, the Company
will continue to proceed with its overseas business while itinspects projects.

THE MINATO RESIDENCE (Image)Fiscal 2019 Plan

3,700

Fiscal 2019 Results

Fiscal 2020 Forecast

6,045

6,980

Takara Leben Annual Report 201915

ESG Initiatives
CSR Basic Policy
Key CSR Themes
The Takara Leben Group will achieve its corporate vision
of “THINK HAPPINESS AND MAKE THE HAPPINESS”
while working to earn the trust of various stakeholders
and society. We will contribute to solutions to social
issues and achieving the Sustainable Development Goals(SDGs) by undertaking CSR initiatives through ourbusiness including supplying housing and introducing
natural energy as we strive for continuous growth.

Key Issues

Related SDGs

Policies

Customers
Competitors

Shareholders
and investors

Local
communities,
NPOs, and
NGOs

Media

Governments

Q Support for diversifying

We contribute to improving therichness of people’s lifestyles bycreating new value.

Q Responses to changes toForming Communities● Urban development

We form communities withstakeholders—such as local
communities, trading partners, andemployees—and aim for growth
together.

● C onstruction andlifestyles andglobalization
business models brought
by an ageing society anddepopulation

J Provide products andservices that respond tochanging social issues andneeds.
J Provide lifestyles that

harmonize residents andsurrounding environments,
such as the LEBEN or NEBEL
brands.

Executives andemployees
Trading
partners

CSR Promotion Framework
To link CSR activities to the improvement of corporate
value for all Group companies, we are building a
promotion framework which spans across all companies.
We are also building a vertical promotion framework
unifying management with business activities by making
decisions and reporting at our Executive Committee
meetings as appropriate.
In addition, we are organizing training for executives of
all Group companies and staff in charge of CSR. We arealso considering opportunities for information sharing anddiscussion with ground staff.
Moving forward, we will create new value by creating
environments where employees can take ownership in
working on CSR, and further strengthen our activities byreaffirming awareness of critical issues.

Creating Lifestyles
with Value

Representative Director
Executive Committee
Frequency: Twice each month
Participants: Directors, auditors, and executive officers
Content: Decision on measures; confirmation of progress
Executive in Charge of CSR

and creating towns

maintenance of acorporate governancesystem● Promoting compliance● Employee health

CSR Promotion Teammanagement

Scope of work: Formulation of direction; proposal ofmeasures; implementation and awareness-raising of
measures; progress management

J Contributing to the revitalization ofregional areas through our regional
city revitalization business, whichconnects urban and regional areas.

J Improve our ability to respond torisk through thorough risk
assessment and management.

J Provide opportunities andenvironments where a diverse rangeof people can work energetically.

● Encouraging employment

J Corporate activities that can● Providing safe, secure

J Improve customer satisfactionof diverse humanresources

respond to social needs with anemphasis on dialogues with our
stakeholders.

Takara Leben Group CSR Staff
Business activities: Execution of policies
and progress management

Providing Comfortable
Spaces of High Quality
We support the comfortable andsafe living of our customers byproviding products bringing greatsatisfaction to our customers.

Process of Selecting Key CSR Themes and Identifying Key Issues

products and services● Improving customer

satisfaction● Improving value ofbuildings

At the Takara Leben Group, we have identified key CSR themes and key issues through the following steps.

We utilized questionnaires completed by all employees including management and officers to
identify relations between social issues and our business and Group philosophy, and rankthem in accordance with priority.

STEP 3 Evaluate importance from our stakeholders’ perspectives
We utilized questionnaires completed by customers, shareholders and investors, andbusiness partners and drew on international guidelines such as the GRI and the SDGs to rank
issues.

STEP 4 Identify key issues
Priorities were revised from the perspectives of the Takara Leben Group and our stakeholders,a review was conducted by management, and then the key issues were identified.

Priorities for stakeholders

STEP 2 Evaluate significance from the Takara Leben Group’s perspective

J C reate housing that combines

both design and habitability,
pursuing the performance of
housing.

J Improve building value

through regular repairs andrenovations to improvebuilding comfort,
functionality, and safety.

STEP 1 Grasp and organize social issues
We identified 31 issues relating to the business environment based on GRI, the Sustainable
Development Goals (SDGs), SASB and other international guidelines, as well as our Groupphilosophy and Medium-Term Management Plan and demands from our customers, shareholders
and investors, local communities, employees and other stakeholders.

levels through the use of our
proprietary Service Quality
Management System(SQMS®).

High

High

Priorities for
the Takara Leben Group

Developing Environments
and Cultures● Providing buildings andWe contribute to a sustainable society
by actively working on environmental
issues, and at the same time, contributeto improving quality of life by providing
opportunities for mental activities suchas learning and practicing the arts.

● Responses to global

spaces that consider theenvironment and culture
warming● Initiatives for renewableenergy● Effective use ofresources● Responses to disasters

J Reduce greenhouse gas

emissions through supplying
housing with highenvironmental performanceand our renewable energy
power generation business.

J Provide seismic-resistant andfire-resistant housing that canwithstand natural disasters.

J Provide opportunities for

cultural activities to ourstakeholders.

STEP 5 Set policies for key CSR themes
Policies were set for the four key CSR themes.

16

Takara Leben Annual Report 2019

Takara Leben Annual Report 201917

CSR Initiatives
Creating Lifestyles with Value

Providing Comfortable Spaces of High Quality

The Takara Leben Group aims to create lifestyles with value through providing housing pursuing
comfort and design under the concept of realizing the optimal form of harmony between occupants
and the surrounding environment.
“KOJIN BOSAI KIT (Individual Disaster
Preparedness Kit)” Project
The KOJIN BOSAI KIT (Individual Disaster PreparednessKit) Project develops and distributes disaster preparedness
kits for individuals that feature both good design andfunctionality to support disaster preparedness tailored toindividual convenience. Disaster preparedness supplies are
stored in a compact and lightweight
file-type box with a maximum size of an
A4 sheet of paper. The customizable
boxes are intended for continuous use
and can be refilled.
These kits not only enhance safety andsecurity measures within disasterresistant buildings and residences, but
Wrapping cloth
also raise awareness of disasterdisaster preparedness
kit “FUROSHIKI BOSAI
preparedness in day-to-day life at
KIT, ANSHIN,
workplaces and when going out through KANSHIN”
their design features.

“SOCOTAKU” Project
Installing delivery lockers with mailboxes
in apartment buildings makes it possible
to deliver mail that otherwise would haveto be collected at a post office, and
SOCOPOS won the 2017 Good Design Award. SOCOPOS
has evolved into SOCOTAKU, which allows for collection
by all home delivery companies. In addition to automaticallysending and receiving mail, it is possible for apartment
residents to have parcels collected by all delivery
companies including Yu-Pack and for delivered partials tobe held within the apartment building for 24 hours.

18

Takara Leben Annual Report 2019

For the purpose of improving the quality of ourcomprehensive support to customers in building
comfortable living environments, Leben Community andNikko Takara Corporation have prepared quality
management systems in accordance with ISO 9001, theinternational standard for quality management systems
formulated by the International Standards Organization,and obtained this certification.

Public section

and delivered evenwhen residents are nothomeI I mmediately sending

Service Quality Management System (SQMS ®)Leben Community, which is responsible for ourcondominium management operation, adopts our uniqueservice quality management system (SQMS®) to continue
managing our customers’ important assets over the
long-term. This system was adapted from ISO 9001, theinternational standard for quality management systems,
and was born from continuously adding feedback fromour many years of experience to become an original
management foundation of expertise of our Company.
Quality management and operations management are
carried out in parallel, and it is possible to maintain thequality standard of services being provided even when
consultants and management staff change.

Privatesectionand receiving fromhome

Developing Environments and Cultures

The Takara Leben Group works on regional revitalization — such as participation in redevelopment andlocal events — and the strengthening of communications with customers, employees, and shareholders.
We build ties with stakeholders, and contribute to the formation and growth of communities.

The Takara Leben Group places its corporate and individual
customers, local communities, trading partners, employees,
and shareholders and investors among its stakeholders, andworks to strengthen communication with these groups. The
Company provides opportunities for dialogue withcondominium and detached house contract parties throughsupport representatives, membership organizations, andpublication of informational magazines, and for dialogue withlocal communities through participation in and sponsorshipof local events and community events at managed
properties. The Company conducts fair and justtransactions with its trading partners; provides humanresources interviews, educational and training programs,
and helplines for its employees;
and discloses IR information to its
shareholders and investors
through ordinary general meetingsof shareholders, financial results
briefings, one-on-one meetings,
Free newspaper “Smilax”
and the website.

Initiative to Improve Quality Through Obtaining
ISO 9001 Certification

I Parcels can be collected

Delivery &Collection

Forming Communities

Relationships with Stakeholders

For everyone to live with peace of mind. The Takara Leben Group pursues the needed performance of
housing to support the happiness of families. We provide definite quality, combining both design and habitability, and comfortable spaces where people can live with peace of mind all the time.

Social Contribution Activities/Recovery Support
Since November 2018, theTakara Leben has been
distributing vegetables
cultivated at the Leben
Village, a farm that is energetically worked by those withdisabilities, to anyone within the company who desires. At
the same time, the Company collects 20 yen for each bagof vegetables at the time of distribution to raise funds for
donation to TABLE FOR TWO International, an NPO that
supports school lunches in developing countries.
In addition, since December 2018, Takara AssetManagement has been using the Regional Revitalization
Support Tax Program (Enterprise Furusato Tax Payments)
to donate to the Miyagi Disaster Prevention Forest
Partnership Promotion Project, which seeks to restore theforests, contributing to regional recovery and environmental
preservation.

The Takara Leben Group not only improves the environment through adopting renewable energy, butalso contributes to improving energy self-sufficiency and regional revitalization including the use ofidle land. In addition, we work on improving the quality of life for people by providing opportunities
for cultural and social activities.
Electric Power Supply to Minna-denryoku Starts

Support for Sports and Culture

The LS Mie Yokkaichi and LS Shizuoka Omaezaki powergeneration facilities began supplying electric power to
Minna-denryoku, Inc., a social energy company, in January
2019. Through Minna-denryoku, which enables electric
power consumers to select their energy power supplier, weare providing electric power to consumers who want to
use renewable energy.

Takara Leben and Takara Leben Tohoku were sponsorsof the Tohoku-Miyagi Revive Marathon 2018 organized
by Sendai Television Inc. and JAAF Miyagi to support
recovery efforts in Tohoku. Takara Leben employees
participated as runners in the event, which was held on
October 13 and 14, 2018 in Miyagi Prefecture, andcompleted the 42.195 km course.
The Takara Leben Group also contributes to the
spread and development of sports and culture bysponsoring events like the Hakkiyoi KITTE Grand Sumo
Tournament, Eiosen Shogi
Competition, and thegrape Award 2018.

Minna-denryoku
LS Mie Yokkaichi powergeneration facility

Electric Power Consumers
Who Want to Use
Renewable Energy

Tohoku-Miyagi Revive Marathon 2018

Takara Leben Annual Report 201919

Corporate Governance
Basic Approach to Corporate Governancewhile responding in ways that keep in mind what our company should achieve and for whom will lead to sound andefficient business management as a going concern.
Furthermore, by not limiting ourselves to a systematic
check and balance function but rather by spreading theroots as indexes or systems, we will work so that the checkand balance across the entire company will function in sync
with each person’s awareness.

Rather than simply pursuing profit, Takara Leben strongly
believes that it must comply with laws and corporate ethics
and carry out its duties as a responsible member of society.
While maintaining close relationships with customers,
shareholders, and employees—our core stakeholders—
we continuously consider how we can deliver further satisfaction. In addition, we believe that reflecting the feedback
received from various other stakeholders in our businessCorporate Governance Systemmanagement supervisory roles of directors and thebusiness execution responsibilities of executive officers.

In addition to prudent and swift decision-making by the
Board of Directors, Takara Leben has built a system toensure management proprieties, such as appropriate
mutual supervision by directors over the state of business execution, and audit and supervision by auditors
over directors’ state of business execution. We also
introduced an executive officer system to clarify the

Board of Directors
Takara Leben has appointed 13 directors, three of whom
are outside directors. All three outside directors have been
designated as independent officers. In addition to carrying

Corporate Governance System

Ordinary General Meeting of Shareholders
Election

Representative
Director

Reports

Reports

Direction

Reports

Internal Audit Office

Reports

Audit

Audit

Accounting Auditor

Election/
Supervise

Business
Departments

AdviceCollaboration
Reports(outside auditors)
Audit

Reports

Compliance &Risk Management
Committee

Audit &
Supervisory Board Collaboration

Audit(including outside
directors)

Election

Administrative
Departments

Compensation
Committee

Board of Directors

AdviceExecutive
Officers

Nomination
Committee

Election

Collaboration

Subsidiaries and Affiliates

20

Takara Leben Annual Report 2019

Evaluating the Effectiveness of the Board of Directors
All Takara Leben directors including outside directors andcorporate auditors complete self-evaluation questionnaires
and the Board of Directors analyzes and evaluates theeffectiveness of the Board of Directors. With regard to theevaluation of effectiveness during the 47th fiscal term, eachdirector and corporate auditor suggested that even morevigorous debate be conducted within the Board of Directors, but expressed the opinion that overall, the Board
operates appropriately and effectiveness is achieved. To
ensure that adequate deliberations take place within the
Board of Directors, we will continue to provide feedback to
the Board based on future analysis and evaluation results.

Takara Leben Tohoku Co., Ltd.
Nikko Takara Corporation Co., Ltd.
Leben Zestock Co., Ltd.
Leben Trust Co., Ltd.
Takara PAG Real Estate Advisory Ltd.

Executive Officer System
Having introduced an executive officer system, Takara
Leben has clarified its directors’ management oversight
responsibilities and the business execution responsibilities
of its executive officers and is working to further speed up
its decision making and strengthen its business execution.
Audit & Supervisory Board
As a system for check and balance of decision making, allthree auditors of Takara Leben are outside corporate
auditors. Each auditor is equipped with adequate background, experience, and mettle to objectively carry out
assessments and verifications. Besides audits for Takara
Leben, the auditors are also involved in audits for ourGroup companies, such as attending their board meetingsand interviewing their directors, maintaining firm relationships
with these companies. Furthermore, the auditors and theaccounting auditor work to further improve the effectivenessand efficiency of audits by understanding and adjustingeach other’s annual schedules; going together to events
such as ground inspections and checks on display homes,
and exchanging information as appropriate.
Internal Audit Office
Takara Leben also formulated guidelines on internal
audits and established an Internal Audit Office as anindependent organization reporting directly to the representative director to enhance and strengthen internal
audits. In the proposal and execution of the internal audit
plan, the office coordinates the schedules of auditors andthe Accounting Auditor and adjusts the scopes of audits
to seek efficient operation of various functions. Auditors
accompany and witness operation audits conducted by
the Internal Audit Office, and work on building an effective
and efficient audit system by means such as verifying thescope of the audit and collecting opinions as appropriate.

Reasons for Nominations of Outside Directors and Frequency of Attendance at Board of Directors’ Meetings
Position

Name

Reason for Nomination

Attendance at Board of
Directors’ Meetings

26 / 26

OutsideDirector

Hitoshi
Shida

Mr. Shida possesses an abundance of experience and achievements inmanagement at financial institutions and business firms. In his capacity
as advisor, he provides the Company with accurate advice and guidance and therefore Mr. Shida has been appointed as an Outside
Director.

OutsideDirector

KatsumiKasahara

As Mr. Kasahara has built up a wealth of experience and achievements
as a lawyer, possesses extensive knowledge and insight, and is highly
mindful of compliance with laws and regulations, the Company appointed him as an Outside Director.

25 / 26

OutsideDirector

Kenji Kawada

Having been involved in management at a financial institution and abusiness firm, Mr. Kawada possesses abundant experience of andachievements in management as well as extensive knowledge andinsight. He has therefore been reappointed as an Outside Director.

24 / 26

Audit

Audit

Leben Community Co., Ltd.
Takara Leben West Japan Co., Ltd.
Takara Leben Realnet Co., Ltd.
Takara Property Co., Ltd.
Takara Asset Management Co., Ltd.
Sunwood Corporationout prudent and swift decision making, directors mutually
supervise the status of business execution at Board of
Directors’ meetings, which in principle are held once amonth, and also at extraordinary board meetings which areheld on an as-required basis.
Auditors are always in attendance at the Board of Directors’ meetings and state their opinions as necessary. At thesame time, auditors work closely with outside directors
and, as necessary, audit and oversee the running of theBoard of Directors’ meetings and the status of businessexecution. Also in attendance at the Board of Directors’
meetings are executive officers, the head of the Internal
Audit Office, and the heads of other departments, whohave received requests from the Board of Directors basedon internal regulations, and express their opinions on eachissue or reporting matter. Moreover, the Company holds
Executive Committee meetings to deliberate on topics withregard to management, and a Sales Conference to discusssales progress. In addition to sharing the achievement
status of management targets among each department,
the Company gleans information on problem areas andissues in the form of business reports from each department
and deliberates on important matters relating to overallmanagement. The content of those reports is raised at
Board of Directors’ meetings on an as-required basis.

Audit

Takara Leben Annual Report 201921

Corporate Governance

Executive Remuneration
Directors’ remuneration is determined on the basis of thedegree of each director’s contribution to business expansion and improvement in corporate value toward the Company’s sustainable growth. The limit of the annual amount of
remuneration is deemed to be 600 million yen or less (notincluding, however, the employee portion of the salary), andthe limitation of the special stock option remuneration to
300 million yen or less annually which is decided by aresolution at an Ordinary General Meeting of Shareholders.
The remuneration of the Audit & Supervisory Board member is determined at the Ordinary General Meeting of Shareholders limited to an annual amount of 60 million yen or less.
Amounts of Director and Auditor Remuneration(As of March 31, 2019)
Number of people

Amount of remuneration (Millions of yen)

Directors

11

446

Auditors

5

22

Total

16

468

Position(Notes) 1. The amount paid to directors does not include the employee salaries of
directors concurrently serving as employees.
2. The remuneration limit for directors is up to a limit of 600 million yen per year
(excluding any salaries as employees), as approved at the 45th Ordinary
General Meeting of Shareholders held on June 27, 2017. In addition, at the43rd Ordinary General Meeting of Shareholders, held on June 24, 2015, it
was resolved that the annual amount of stock option remuneration would be
up to a limit of 300 million yen.
3. At the Extraordinary General Meeting of Shareholders held on July 16, 1999, a
remuneration limit of 60 million yen per year was decided for corporate auditors.
4. The total amounts of the aforementioned remuneration, etc. include thefollowing amounts as the amount of expenses in the fiscal year related tostock acquisition rights allocated as stock option remuneration.
• Seven directors 71 million yen

Support Structure for Outside Officers
The Company has put in place a structure capable ofoffering to outside directors and outside auditors, upon theirrequest and at any time, support for their duties or operations. It is the role of the Corporate Planning Department toprovide such support services. It also makes available
advance briefings or materials concerning agenda items at

the Board of Directors’ meetings or other various structured
meetings, upon request by outside officers, as well as giving
notice of these meetings’ schedules, adjusting itineraries,
and performing other tasks.
Nomination and Remuneration Committees
With the objectives of increasing objectivity and transparency
in decision-making processes relating to personnel
appointments and compensation of directors and others
and further enhancing and reinforcing corporate governancestructures by providing appropriate opportunities for outside
directors to participate and give advice, Takara Leben
established Nomination and Remuneration Committees asvoluntary advisory bodies of the Board of Directors.
Each committee comprises three or more directors
selected by resolution of the Board of Directors, of which amajority are independent, outside directors. The chairmanof each committee is also selected by resolution of theBoard of Directors.
The committees deliberate and submit reports primarilyon the matters indicated below based on advice fromdirectors.
Nomination Committee(1) Matters relating to nomination of candidate directors,
executive officers, and others;(2) Matters relating to nomination and succession of therepresentative director;(3) Matters relating to basic policies and criteria on
nomination of directors and others; and(4) Other matters referred to the Nomination Committeeby the Board of Directors.
Remuneration Committee(1) Matters relating to remuneration of directors andexecutive officers;(2) Matters relating to basic policies and criteria on
remuneration of directors and others; and(3) Other matters referred to the Remuneration Committeeby the Board of Directors.

Committee Composition

22

No. of Standing
No. of Internal No. of Outside No. of Outside
Committee
Directors
Directors
Experts
Members

Committee
Name

Total No. ofMembers

Voluntary committee equivalent to
the Nomination
Committee

3

0

1

2

Voluntary committee equivalent to
the Remuneration
Committee

3

0

1

2

Takara Leben Annual Report 2019

OthersCommittee
Head(Chairman)

00OutsideDirector

00OutsideDirector

Risk Management

Business Risks

Basic Policy
The fundamental risk management policies of the Takara
Leben Group are to ensure to safety of customers, business
partners, officers, employees, and their family members, fulfill
our social responsibilities, protect the global environment,
maintain ongoing business activities, and raise corporate
value. To this end, we identify and manage individual risks. We
established the Compliance & Risk Management Committee
as a body to carry out these measures, and we implement
comprehensive risk management throughout the Group.

The following items present potential risk for the operating
results, share price, financial position, etc. of the Takara Leben
Group. Forward-looking statements hereby are based on theassessment by the Takara Leben Group as of the end of thecurrent consolidated fiscal year.

Management Structures
The Takara Leben Group established a Compliance & Risk
Management Committee chaired by the representative
director. The Committee verifies and reports on all business-related risks, deliberates and makes decisions on
measures and management to avoid or mitigate risks, andtakes comprehensive measures to strengthen internal controls and prevent misconduct, non-compliance, and othersimilar incidents. In addition, subcommittees—such as forbusiness strategy, finance, IT & administration, and compliance— are established as necessary to establish systems
that make proactive proposals appropriate to managementof individual risks.
Furthermore, the scope of deliberations within each subcommittee is reported to and verified by the Compliance &Risk Management Committee as appropriate in accordancewith the Compliance & Risk Management Committee Rules.
These matters are also reported to the Board of Directors
as necessary, forming a structure for timely decision-making
in preparation for the occurrence of risks.
Preventive Approach to Risk
In order to respond promptly to the occurrence of emergency
situations such as corporate scandals, accidents, natural
disasters, administrative action, serious criminal conduct by
employees, and so on, the Takara Leben Group has established crisis management structures and adopted Crisis
Management Rules and a Crisis Management Manual. The
Crisis Management Rules define crises and specify procedures from initial responses to formation and disbanding of
response organizations. There are also two sets of detailedcrisis control rules regarding crisis responses and disastercountermeasures. With regard to crisis responses, rules
specify crisis management levels, responsibilities andauthority, and information sharing lines, as well as responsive
measures to be implemented as disaster countermeasuresduring a disaster.
In addition, each division works with the division responsible
for crisis management to formulate risk recovery and prevention plans and makes reports to the Compliance & Risk
Management Committee at its monthly meetings. As a part ofour business continuity planning (BCP), we adopt a preventive
approach to risk management including the preparation ofmanuals for the continuation and recovery of business operations in the event an emergency situation occurs.

Natural disaster such as earthquake
Earthquakes and other natural disasters may directly damage
the Takara Leben Group or the construction companies used
for execution, or may make it difficult for these construction
companies to procure building materials. Any of these events
may delay construction work, as well as hamper sales andcollection activity of the Takara Leben Group, and thus
impact the performance and financial position of the Takara
Leben Group.
Effects from purchaser attitudes
The Takara Leben Group’s core business, new built-for-salecondominiums, tends to be swayed by changes in homebuyer sentiment, which is affected by factors such as theoverall economy, residential tax regulations, consumption
taxes, land prices, and interest rates. A pronounced deterioration in home buyer sentiment may impact the performanceand financial position of the Takara Leben Group.
Effects from housing loans
In the purchase of condominiums, etc., our customers often
make use of home loans from home financing support
organizations and financial institutions, and therefore credit
crunches caused by unfavorable changes in financial conditions may potentially impact the performance and financial
position of the Takara Leben Group.
Effects from competition, etc.
The Group sells real estate on a nationwide basis, but anexcessive price competition may prolong marketing activities
or cause sales at the estimated price to be difficult. Suchsituations may potentially impact the performance andfinancial position of the Takara Leben Group.
Other risks are identified as follows.
• Legal restrictions• Overreliance on borrowed funds• Effects from supply trends• Subcontractors• Opposition by neighboring residents when constructing
condominiums• Possibility of litigation, etc.
• Personal information

Takara Leben Annual Report 201923

Introduction of Directors(As of June 26, 2019)

Six-Year Financial Summary
Millions of yen

YoshioMurayama

KazuichiShimadaKazuyuki
Shimizu

Director andChairman

Representative Director,
CEO and President
Executive Officer

Director, COO andVice President
Executive Officer

Sep. 1972	Established the Company, Senior Managing
Director
Mar. 1973	Representative Director and President
Apr. 2012	Representative Director and President andCEO
Apr. 2014	Representative Director and Chairman
Jun. 2016	Director and Chairman (Incumbent)

May 1987	Joined the Company
Jun. 2006	Representative Director, Vice President andExecutive General Manager of Development
Division
Apr. 2014	Representative Director, President, CEO,COO and CFO
Jun. 2019	Representative Director, CEO and President
Executive Officer (Incumbent)

Oct. 2004	Joined Leben Community Co., Ltd.
May 2014	Senior Managing Director, Leben Community
Co., Ltd.
May 2016	Representative Director and Vice President,
Leben Community Co., Ltd.
Jun. 2018 	Representative Director, Takara Leben WestJapan Co., Ltd. (Incumbent)
Director and Vice President
Jun. 2019	Director, COO and Vice President Executive
Officer (Incumbent)

Yoshitaka
TejimaMasahiro
YoshidaMasashi
Yamamoto

Director and Senior
Managing Executive
Officer

Director andManaging Executive
Officer

Director, CFO and
Executive Officer

Mar. 1997	Joined the Company
Jun. 2014	Director, Sunwood Corporation (Incumbent)
Apr. 2018	Senior Managing Director, Executive Officer andExecutive General Manager of Development DivisionJun. 2018	Director, Takara Leben West Japan Co., Ltd. (Incumbent)
Jun. 2019	Director, Senior Managing Executive Officer,
Executive General Manager of Development Division, andGeneral Manager of Eco-Energy Division (Incumbent)

ShoichiAkisawa
Director andExecutive Officer
May 2019	
Representative Director, Leben Zestock Co.,
Ltd. (Incumbent)
Jun. 2019	
Director, Executive Officer, and Executive
General Manager of Investment Development
Division (Incumbent)

Mar. 2001	Joined the Company
Oct. 2011	General Manager of 2nd Sales Division, Sales Division
Apr. 2014	Executive Officer and General Manager of 2nd Group of
Sales Division
Jan. 2015	Representative Director, Takara Leben Tohoku Co., Ltd.
Jun. 2019	Director, Managing Executive Officer, and Executive
General Manager of Sales Division (Incumbent)

May 2016	Joined the Company
May 2017 	Director, Leben Community Co., Ltd. (Incumbent)
Jun. 2017	Director, Executive Officer, Executive General Manager ofGeneral Planning Division,
General Manager of Control Group of Corporate Planning
Division,
General Manager of Personnel and General Manager ofCorporate Planning Division
Apr. 2019	Director, CFO, Executive Officer, and Executive General
Manager of General Planning Division (Incumbent)

Mika Takaara
Director andExecutive Officer

Jan. 2000 	Joined the Company
Jun. 2016 	Director, Executive Officer,
General Manager of Overall Sales Group – Sales
Division, General Manager of Sales
Promotion Division, and General Manager ofBusiness Division
Apr. 2019		Director, Executive Officer and Vice
Executive General Manager of Sales Division(Incumbent)

2014.32015.32016.32017.32018.32019.3

Net sales¥71,963¥76,956¥76,268¥103,599¥110,851¥132,005

Gross profit

18,19918,311

17,835

21,86925,77926,886

Operating income

9,798

9,257

7,563

10,34912,597

10,046

Ordinary income

9,181

8,540

6,708

9,496

11,792

9,027

Net income

5,869

5,718

4,308

6,107

7,367

6,426

Cash flows from operating activities

22,996( 8,155)

2,428

22,644

9,869

22,428Cash flows from investing activities( 4,567)(7,998)(19,816)( 27,540)( 34,463)(34,347)

Cash flows from financing activities( 366)

6,314

19,6636,129

24,012

3,427

Capital expenditure

4,163

8,095

22,756

20,81430,302

29,902

437

717

1,192

2,397

1,943

2,447

Total assets

95,891

101,738

129,744

139,874

177,588

184,893

Current assets

72,52467,31975,75386,585102,931

98,512

Cash and deposits

35,964

26,281

28,51529,78029,223

21,165Inventory

33,44535,34540,20849,93368,43868,681

1,156

4,901

4,073

9,658

20,27918,821

Depreciation and amortization   Real estate for sale
Power generation facilities for sale
  

—

—

—

7,885

4,090

—

   Real estate for sale in progress

32,28830,44436,13432,39044,06849,860

Fixed assets

23,366

34,40053,94553,237

74,61886,286

Net assets

27,13831,18933,67736,792

42,90747,734

Interest-bearing debt

37,765

48,81270,396

79,864

106,663

111,821

Per Share Information:
Net income per share (Yen)

50.64

50.61

38.99

56.14

68.12

59.33

Net assets per share (Yen)

237.53279.11304.71

339.29394.90436.68Dividends per share (Yen)

5.0

6.0

13.0

15.0

16.0

16.0

14.3

Operating Indices:
Takeshi Okabe

Tadayuki Hara

Director(non-permanent)

Director(non-permanent)

Apr. 1998	Joined the Company
Apr. 2015 	Senior Managing Director, Executive Officer,
and Executive General Manager of Sales
Division
May 2019	
Representative Director, Takara Leben
Realnet Co., Ltd. (Incumbent)
Jun. 2019	
Director (Incumbent)

Hitoshi Shida
Director (Outside)

Aug. 2002 	Joined the Company
Apr. 2017 	Managing Director, Executive Officer, Executive
General Manager of Sales Division,
General Manager of 1st Group of Sales Division,
General Manager of 1st Sales Division, and General
Manager of 2nd Sales DivisionJun. 2019 	Representative Director, Takara Leben Tohoku Co.,
Ltd. (Incumbent)
Director (Incumbent)

KatsumiKasahara

ROE (%)

22.9

19.7

13.3

17.4

18.6

ROA (%)

6.9

5.8

3.7

4.5

4.6

3.5

Operating income margin (%)

13.6

12.0

9.9

10.0

11.4

7.6

Debt ratio (Times)

2.5

2.3

2.9

2.8

3.1

2.9

Current ratio (%)

192.3

193.4

176.7

171.5

182.0

168.3

Inventory turnover (Times/Year)

2.1

2.2

2.0

2.3

1.9

1.9

Equity ratio (%)

28.2

30.6

25.8

26.2

24.1

25.6

Dividend payout ratio (%)

9.9

11.9

33.3

26.7

23.5

27.0

Kenji Kawada
Director (Outside)

Director (Outside)
Apr. 1961 	Joined Nippon-Sogo Bank, Ltd. (Now
Sumitomo Mitsui Banking Corporation)
Jun. 1994 	President, The Taiheiyo Bank Ltd.
(Now Sumitomo Mitsui Banking Corporation)
Jun. 1997 	Representative Director, Yoei Co., Ltd.
Jun. 2014 	Outside Director, Takara Leben Co., Ltd.
(Incumbent)

24

Takara Leben Annual Report 2019

May1973	Registered in the Roll of Attorneys (registration no.:13897); joined the Tokyo Bar Association
May1979	Established the Lawyer Kasahara Katsumi Law
Office (now Lawyer Kasahara Katsumi Limelight
Law Office) (Incumbent)
Apr.2013	Legal Counsel and Member of the Ethics
Committee, The Society for Preservation ofJapanese Art Swords (Incumbent)
Jun.2015	Outside Director, Takara Leben Co., Ltd. (Incumbent)

Representative Director and President,
May 2003	Resona Holdings, Inc.
Jan. 2016	
Representative of TMA KAWADA OFFICE(Incumbent)
Jun. 2017	
Outside Director, PE&HR Co., Ltd. (Incumbent)
Outside Director, Takara Leben Co., Ltd.
(Incumbent)
Jun. 2018	Outside Auditor, Konishi Co., Ltd.
(Incumbent)

Takara Leben Annual Report 201925

Financial Review
Summary of Overall Results
During the fiscal year ended March 31, 2019, the Japanese
economy continued to recover moderately amid improved corporate earnings, employment and income, due to a range of fiscal
measures implemented by the government. Meanwhile, the global
economy still required attention, given factors such as uncertainty
due to geopolitical risks in neighboring countries, the trends of US
economic policies and growing tension in international situations,among others.
In the real estate sales market in which the Company operates, sales
are increasingly divided between weak and strong results due topersistently high selling prices caused by soaring condominium construction costs. Rising trends are seen in demand for locations that areconvenient for daily life and for compact condominiums, reflectingchanges in every end-user lifestyle caused by an increase in single-person households and dual-income households and changes in consumer values. On the other hand, there is noticeably high demand inregional city centers, due in part to the demand of active seniors, which
continues to be high, and the trend of compact city development.
The number of nationwide condominium units sold reached the
80,000 level for the first time in four years, reflecting a slight increasein the number of units sold in the Tokyo metropolitan area. The
Company ranked eighth in the condominium developer ranking
based on the number of condominium units sold, ranking among
the top 10 for the sixth consecutive year, and plays the role of astable supplier in the real estate sales market as an independent
general real estate business developer.

Profit and Loss
In the fiscal year under review, the Company recorded consolidated
net sales of ¥132,005 million, up 19.1% year on year, consolidated
operating income of ¥10,046 million, down 20.3%, consolidated
ordinary income of ¥9,027 million, down 23.4%, and net income
attributable to owners of parent of ¥6,426 million, down 12.8%.
In performance by business segment, revenues from the realestate sales business amounted to ¥104,823 million, up 32.1%
year on year. This was the result of revenues of ¥57,203 million
from the sales of new built-for-sale condominiums, revenues of¥33,502 million from the sale of profit-generating real estate, andrevenues of ¥14,117 million gained from the sales of new detachedhouses and used condominiums, among others.
Net sales from the real estate rental business amounted to¥5,829 million, up 6.5% year on year, including rental income fromapartments, condominium units and offices.
Net sales from the real estate management business representing management fees from 54,036 units under management
amounted to ¥4,512 million, up 12.8% year on year.
Net sales from the electric power generation business amounted
to ¥10,794 million, down 40.8% year on year, including revenue
from sales of power generation facilities that were already operating
and revenues from the sale of electricity generated by other power
generation facilities.
Net sales from other business totaled ¥6,045 million, up 59.2%
year on year, including revenues from contracts for construction
works, orders for large-scale repair works, and various commission

income, among others.
Cost of sales increased 23.6% year on year, to ¥105,119 million,
mainly due to an increase in sales of the real estate sales business.
Gross profit was also up 4.3%, to ¥26,886 million, and the gross profit
margin fell 2.9 percentage points from the previous fiscal year, to 20.4%.
Selling, general and administrative expenses increased 27.7%
year on year, to ¥16,839 million, chiefly owing to higher advertisingexpenses associated with an increase in units sold and an increasein personnel associated with business expansion.
As a result, consolidated operating income came to ¥10,046
million, down 20.3% year on year, and the operating income margin
declined 3.8 percentage points year on year, to 7.6%.
Non-operating income decreased 21.0% year on year, to ¥310
million, due largely to a decrease of equity in profit of equity method
affiliates. Non-operating expenses, on the other hand, rose 10.9%
from the previous fiscal year, to ¥1,328 million, which is attributable
to equity method investment loss of affiliates and an increase inborrowed average balance during the year associated with new
borrowings for project funds.
Extraordinary income amounted to ¥312 million due to therecording of sales of investment securities and compensation
received for damage. Extraordinary losses decreased 98.5% year
on year, to ¥14 million, reflecting the posting of Group company
office relocation expenses. As a result, net income attributable toowners of parent was ¥6,426 million, down 12.8% year on year, inthe fiscal year under review.

Dividend Policy
Takara Leben considers that the return of profits to shareholders is
one of its most important management issues. With this in mind,
the Company’s basic policy is to undertake the proper, stable, andcontinuous payment of dividends in line with operating results whilebalancing the need for retaining earnings geared toward future growth.
Looking ahead, Takara Leben will continue to promote stable
management as the basis of its operations, pursue renewed
growth, and undertake the payment of dividends commensuratewith its business performance in accordance with its basic policy.
On this basis, the annual dividend for the fiscal year under review
has been set at 16 yen per share. This represents an interim
dividend of 5 yen per share and a period-end dividend of 11 yen
per share, which equates to a dividend payout ratio of 27.0%.

Financial Position
Funding Demand and Management of Liquidity
While recognizing that such factors as the market environment canhave a significant impact on the Group’s operating results, Takara
Leben pays particular attention to monitoring its dependence onborrowings. As far as the core real estate sales business is concerned, operations are largely predicated on the level of borrowings. In principle, we target a borrowing dependency level of lessthan 60% in order to ensure stable business growth while securing
the proper amount of shareholders’ equity.
Turning to the source of the Takara Leben Group’s capital as wellas its overall funding liquidity, steps are taken to procure a portion of
the finance necessary to fund activities undertaken by the core realestate sales business from financial and other institutions. These
activities include the purchase of housing lots as well as construction.
In addition, Takara Leben has concluded a commitment line of credit

agreement totaling 60,118 million yen with its major banks and otherinstitutions, enabling the Company to procure funds in a timely
manner. While borrowings have increased in recent years in line withefforts to expand the scope of the Group’s business and engage ininvestment activities, energies have been channeled toward putting
in place an investment and return cycle while at the same time
improving the equity ratio. Coupled with efforts to build an optimal
portfolio, these endeavors are helping to secure stable funding.
The balance of interest-bearing debt stood at 111,821 million yen
as of the end of the fiscal year under review, compared with 106,663
million yen as of March 31, 2018. The ratio of interest-bearing debt tototal assets and the current ratio as of the end of fiscal 2019 were60.5% and 168.3%, respectively. Based on the aforementioned, theequity ratio came in at 25.6%.

Cash Flows
Cash and cash equivalents as of March 31, 2019 amounted to
20,642 million yen, a decrease of 8,399 million yen from March 31,
2018.
Cash Flows from Operating Activities
Cash flows from operating activities was ¥22,428 million (cashprovided of ¥9,869 million in the previous fiscal year). The major
component was a decrease in inventories.

Future Outlook
Based on the new medium-term management plan announced on
May 14, 2018, the Company has estimated the following businesstargets for the next fiscal year.
In the sales operation of new built-for-sale condominiums in thereal estate sales business, the Company expects the delivery of
1,950 units by promoting active supply in the regional city centers. In
the new detached house segment, the Company expects thedelivery of 200 units. In the renewal resale segment, the Company
plans to accumulate the number of units held for the time being withthe aim of building stable business cycles. In the liquidation segment,
the Company will replace assets held while actively acquiring anddeveloping profit-generating real estate.
In the real estate rental business, the Company will seek to establish
a more stable stock business through carefully selected purchases.

Cash Flows from Investing Activities
Net cash used in investing activities was ¥34,347 million (cash usedof ¥34,463 million in the previous fiscal year), mainly due to thepurchase of property, plant and equipment.
Cash Flows from Financing Activities
Net cash provided by financing activities was 3,427 million yen(cash provided of 24,012 million yen in the previous fiscal year),which was primarily attributable to an increase in loans payable.

In the real estate management business, the Company has set
the target number of units under management at 58,800 units andaims to further expand peripheral operations such as large-scale
repair works.
In the electric power generation business, the Company willpurchase carefully selected properties and sell power generation
facilities that are already in operation.
As a result of the above, the Company forecasts the financial
results for the next fiscal year as follows:
Net sales: ¥160,000 million (up 21.2% year on year)
Operating income: ¥13,000 million (up 29.4% year on year)
Ordinary income: ¥11,800 million (up 30.7% year on year)
Net income attributable to owners of parent: ¥8,000 million (up24.5% year on year)

Net sales/Operating income margin

Net income/ROE

Dividends per share/
Dividend payout ratio

Total assets/Interest-bearing debt

Net assets/Equity ratio

LL  Net sales (left axis)
P Operating income margin (right axis)(Billions of yen)
150

(%)
15

LL  Net income (left axis)
P ROE (right axis)(Billions of yen)

(%)

LL  Dividends per share (left axis)
P Dividend payout ratio (right axis)(Yen)(%)

LL Total assets
LL Interest-bearing debt
(Billions of yen)

LL  Net assets (left axis)
P Equity ratio (right axis)(Billions of yen)

(%)

LL Capital expenditure
LL Depreciation and amortization(Billions of yen)

8

24

20.0

200

60

40

40

6

18

150

30

10

45

30

100

4

12

100

30

20

20

50

5
2

6

50

15

10

10

0

0

0

0
2015.3 2016.3 2017.3 2018.3 2019.3

26

retaining the funds necessary to expand its business and strengthen its business operations.
As a part of this basic policy, Takara Leben undertakes the
distribution of surplus twice yearly through the payment of aninterim and period-end dividend.
In the fiscal year under review, energies were directed toward
ensuring the stability of profits and restructuring the Company’s
financial condition in a bid to secure the corporate stamina required toovercome changes in the external environment. Emphasis was
especially placed on profitability. In fiscal 2019, Takara Leben adopted
a stringent approach toward profitability when determining businessplans while working diligently to reduce costs. Through these means,positive steps were taken to secure stable profits. Against this backdrop, the Company plans to undertake the payment of dividends while

Takara Leben Annual Report 201900
2015.3 2016.3 2017.3 2018.3 2019.3

40

20

10.0

0

0.0
2015.3 2016.3 2017.3 2018.3 2019.3

02015.3 2016.3 2017.3 2018.3 2019.3

02015.3 2016.3 2017.3 2018.3 2019.3

Capital expenditure/
Depreciation and amortization

2015.3 2016.3 2017.3 2018.3 2019.3

Takara Leben Annual Report 201927

Consolidated Balance Sheet
Millions of yen
2018.3

Assets2019.3Current liabilities   Notes and accounts payable – trade¥ 29,223¥ 21,165¥ 15,786¥  7,790   Notes and accounts receivable–trade

1,539

2,071

   Short-term loans payable

18,38917,831   Real estate for sale

20,27918,821   Current portion of long-term loans payable

12,83819,743   Power generation facilities for sale

4,090

—

   Real estate for sale in progress

44,06849,860  Lease obligations

55

40   Income taxes payable

3,547

2,760

   Power generation facilities in progress

29—  Advance received

2,177

4,274

   Costs incurred on uncompleted contracts

129

519

   Provision for bonuses

363

454

3,680

6,192

   Provision for warranties for completed construction

525

447

(110)

( 118)  Other

3,193

5,195

102,931

98,512   Total current liabilities

56,87658,539  Other   Allowance for doubtful accounts   Total current assets

Fixed liabilities

Fixed assets   Long-term loans payable   Property, plant and equipment

75,01573,882   Buildings and structures

20,866

19,933  Bonds payable

200

200

    Accumulated depreciation( 2,584)( 1,871)  Lease obligations

164

123

    Buildings and structures, net

18,281

18,061   Provision for directors’ retirement benefits7399    Machinery, equipment and vehicles

5,550

16,176   Net defined benefit liability

436

543

    Accumulated depreciation( 881)( 1,960)   Asset retirement obligations

22

23     Machinery, equipment and vehicles, net

4,669

14,216   Deferred tax liabilities

17

134

    Tools, furniture and fixtures

291

334

  Other

1,873

3,613

    Accumulated depreciation(115)( 175)   Total fixed liabilities

77,80478,619134,681

137,1584,819     Tools, furniture and fixtures, net   Land176

159

35,89935,602   Lease assets

273

255

    Accumulated depreciation( 92)( 109)    Lease assets, net

Total liabilities

180

145

   Construction in progress

7,132

7,039

    Total property, plant and equipment

66,34075,224

1,265

1,375

   Lease assets

27

13  Capital stock

4,819   Other

516

451  Capital surplus

4,823

4,817

1,808

1,840

  Retained earnings

38,71742,299

2,501

4,597

  Intangible assets   Goodwill   Total intangible assets

Net assets   Investments and other assets   Investment securities   Long-term loans receivable   Deferred tax assets   Other    Allowance for doubtful accounts

Shareholders’ equity  Treasury stock( 5,875)( 4,695)   Total shareholders’ equity

42,48547,241121

10Accumulated other comprehensive income

265

727

   Valuation difference on available-for-sale securities

262

3,707

3,904

   Remeasurements of defined benefit plans

—

( 21)

( 6)

( 9)

   Total accumulated other comprehensive income

262

100
196

    Total investments and other assets

6,468

9,220

Share acquisition rights

159   Total fixed assets

74,61886,286

Non-controlling interests

—

197

38

94

42,90747,734¥177,588¥184,893¥177,588¥184,893

Deferred assets
Total assets

28

2018.3Liabilities

Current assets   Cash and deposits

Millions of yen

2019.3

Takara Leben Annual Report 2019

Total net assets
Total liabilities and net assets

Takara Leben Annual Report 201929

Consolidated Statements of Income and Comprehensive Income

Consolidated Statement of Changes in Shareholders’ Equity

Consolidated Statement of Income
2018.3

Millions of yen
2019.3

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Commission fee
Share of income of entities accounted for using equity
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expense
Share of loss of entities accounted for using equity
Miscellaneous loss
Total non-operating expense
Ordinary income
Extraordinary income
Compensation received for damage
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on sales of fixed assets
Impairment loss
Loss from compensation for complete work
Office transfer expenses
Loss on transfer of receivables¥110,851
85,072
25,77913,182
12,597¥132,005
105,119
26,886
16,83910,046

1
95
109
46
139
393

0
160
99
—
50
310

1,067
—
131
1,198
11,792

1,103
72
152
1,328
9,027

—
—
—

121
191
312

42
4
593
174
93

—
—
—
—
14

66

—

Total extraordinary losses
Net income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Income attributable to non-controlling interests
Net income attributable to owners of parent

974
10,817
4,501(1,051)
3,449
7,367
—
¥  7,367

14
9,326
3,130
( 374)
2,755
6,570
143
¥  6,426

Millions of yen
2018.3
Shareholders’ equity

Balance at beginning of current period
Changes of items during period Dividends of surplus Net income attributable to owners of parent Disposition of treasury stock Retirement of treasury stock Transfer to capital surplus from retained earnings 
Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at end of current period

Capital stock

Capital surplus

Retained earnings¥4,819¥4,817¥32,970

Treasury stock Total shareholders’ equity¥( 5,976)¥36,630(1,620)(1,620)7,367
6—¥4,819

7,367
108
—
—

101

6
¥4,823

5,747¥38,717101¥( 5,875)

5,855¥42,485
Millions of yen
2018.3

Accumulated other comprehensive income
Valuation difference Remeasurements Total accumulated
on available-for-sale of defined benefit
other compresecurities
plans
hensive income

Balance at beginning of current period
Changes of items during period Dividends of surplus Net income attributable to owners of parent Disposition of treasury stock Retirement of treasury stock Transfer to capital surplus from retained earnings 
Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at end of current period

¥  4

¥—

Share acquisitionrightsNon-controllinginterests

Total net assets

¥157

¥—

¥36,792¥  4(1,620)

257
257
¥262

—
—
¥—

257
257
¥262

2
2
¥159

—
—
¥—

Millions of yen
2019.3
Shareholders’ equity

Balance at beginning of current period
Changes of items during period Dividends of surplus Net income attributable to owners of parent Disposition of treasury stock Retirement of treasury stock Transfer to capital surplus from retained earnings 
Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at end of current period

Capital stock

Capital surplus

Retained earnings¥4,819¥4,823¥38,717

Treasury stock Total shareholders’ equity¥( 5,875)( 1,732)( 1,119)—¥4,8191,112( 1,112)( 6)¥4,817

3,582¥42,299

61
1,119

6,426
61
—
—

1,180
¥( 4,695)

4,755¥47,241
Millions of yen
2019.32018.3

Millions of yen
2019.3

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income¥7,367¥6,570Comprehensive income257—( 140)

257( 161)

7,624

6,408

7,624
—

6,264
143

( 21)

Net income attributable to30

Takara Leben Annual Report 2019

¥42,485( 1,732)

6,426

Consolidated Statement of Comprehensive Income

Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

7,367
108
—
—
259
6,114
¥42,907

Accumulated other comprehensive income
Valuation difference Remeasurements Total accumulated
on available-for-sale of defined benefit
other compresecurities
plans hensive income

Balance at beginning of current period
Changes of items during period Dividends of surplus Net income attributable to owners of parent Disposition of treasury stock Retirement of treasury stock Transfer to capital surplus from retained earnings 
Net changes of items other than shareholders’ equity
Total changes of items during period
Balance at end of current period

¥262

¥  —

¥262

Share acquisitionrightsNon-controllinginterests

Total net assets

¥159

¥ —

¥42,907( 1,732)( 140)( 140)

¥121

( 21)
( 21)
¥ ( 21)( 161)( 161)

¥100

36
36
¥196

197
197
¥197

6,426
61
—
—
72
4,827
¥47,734

Takara Leben Annual Report 201931

Consolidated Statement of Cash Flows

Stock Information
2018.3

Cash flows from operating activities
Net income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in provision
Increase (decrease) in net defined benefit liability
Interest and dividend income
Share-based compensation expenses
Interest expense
Loss on retirement of fixed assets
Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in operating loans receivable
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable–trade
Increase (decrease) in advances received
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Decrease (increase) in short-term loans receivable
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of shares of subsidiaries and associates
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from sales of shares of subsidiaries
Purchase of shares of subsidiaries
Outflow from acquisition of subsidiaries’ stock resulting in change in the scope of consolidation
Other
Net cash used in investing activities
Cash flows from financing activities
Net increase in short-term borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Redemption of bonds
Repayment of lease obligations
Cash dividends paid
Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting from change of scope of consolidation
Cash and cash equivalent at end of year

32

Takara Leben Annual Report 2019

Millions of yen
2019.3

Securities code

8897

Stock exchange listingFirst Section, Tokyo Stock Exchange

Shareholder registryadministrator

Sumitomo Mitsui Trust Bank, Ltd.
1-4-1, Marunouchi, Chiyoda-ku, Tokyo¥10,817
1,943
593
176
160
105
( 97)
110
1,067
42
—
(180)
274
( 3,379)
3,613
( 57)
( 483)
14,70397(1,010)( 3,922)9,869¥ 9,326
2,447
—
230
50
76
( 160)
100
1,103—( 191)( 514)—
20,064( 7,995)
2,097
658
27,291160( 1,107)( 3,915)
22,428(167)( 171)

142
4( 30,144)
9(132)( 541)( 929)—
70( 491)( 2,321)37( 34,463)

186
0( 30,484)3( 34)( 225)( 2,625)200——( 1,195)( 0)( 34,347)

1,839
62,190( 36,829)(1,500)( 67)(1,619)24,012( 581)
29,623—¥29,042( 596)

40,00040,00057,468( 51,657)—( 56)( 1,730)
3,427( 8,491)
29,042
91¥20,642

30,00030,000Total number of shares
outstanding (As of March 31, 2019) 121,000,000 shares
Trading unit of shares

100 shares

Number of shareholders(As of March 31, 2019)44,450Major shareholders (Top 10) (As of March 31, 2019)

Number of shares held by investor segment (As of March 31, 2019)
Financial instrument trader (Securities companies)

Shares(Thousands)

Percentage
share (%)

Yoshio Murayama

25,633

21.18

1.22%
1,481 Thousand shares

Takara Leben Co., Ltd.

12,587

10.40

Treasury stock

Individuals and others

The Master Trust Bank of Japan, Ltd. (Trust Account)

4,806

3.97

Thousand shares

Thousand shares

Name of shareholder

JPMC GOLDMAN SACHS TRUST JASDEC
LENDING ACCOUNT

2,482

2.05

Murayama Kikaku Co., Ltd.

2,000

1.65

10.40%
12,58756.57%
68,444

Non-Japanese
investors

12.99%
15,713

Japan Trustee Services Bank, Ltd. (Trust Account 5)

1,807

1.49

Japan Trustee Services Bank, Ltd. (Trust Account)

1,688

1.40

Thousand shares

JP MORGAN CHASE BANK 385151

1,318

1.09

SSBTC CLIENT OMNIBUS ACCOUNT

1,260

1.04

Other domestic
corporate investors

Japan Trustee Services Bank, Ltd. (Trust Account 1)

1,229

1.02

Financial institutions

14.30%
17,301 Thousand shares

4.52%
5,472

Thousand shares

Share price trends
Share price (yen)

1,000
1,000
750
750
500
500
250
250
0
0


Trading volume (thousand shares)

50,00050,00020,00020,00010,00010,00044 55 66 77 88 99 10
10 11
1112
12 11 22 33 44 55 66 77 88 99 10
1011
1112
12 11 22 33 44 55 66 7 7 8 8 9 91010111112121 1 2 2 3 3
1011
1112
12 11 22 33 44 55 66 77 88 99 10
10 11
11 12
12 11 22 33 44 55 66 77 88 99 10
2014
2014

2015
2015

2016
2016

2017
2017

2018
2018

00

2019
2019

Takara Leben Annual Report 201933

Takara Leben Co., Ltd.
TEKKO BUILDING 16F, 1-8-2 Marunouchi,
Chiyoda-ku, Tokyo, Japan 100-0005
Office of the President
TEL.: +81-3-6551-2130

FAX: +81-3-6551-2139

https://www.leben.co.jp/en/

Printed in Japan