This is an English translation of the official announcement in Japanese that was released on January 13, 2016. The translation
is prepared for the readers’ convenience only. All readers are strongly recommended to refer to the original Japanese version
for complete and accurate information. Should there be any inconsistency between the translation and the official Japanesetext, the latter shall prevail.

Consolidated Financial Results
for the Fiscal Year Ended November 30, 2015
<IFRS>
January 13, 2016
Company name: Tosei Corporation
Stock listing: TSE / SGX
Securities code number: 8923/S2D
URL: http://www.toseicorp.co.jp/english/
Representative: Seiichiro Yamaguchi, President and CEO
Contact: Noboru Hirano, Director and CFO
Phone: +81-3-3435-2865
Ordinary general shareholders’ meeting: February 25, 2016 (scheduled)
Commencement of dividend payments: February 26, 2016 (scheduled)
Submission of Securities Report (Yuka Shoken Hokokusho): February 26, 2016 (scheduled)
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting: Yes (for institutional investors and analysts)
Note: All amounts are rounded down to the nearest million yen.
1.

Consolidated Financial Results for the Fiscal Year Ended November 30, 2015
(December 1, 2014 – November 30, 2015)(1) Consolidated Operating Results
RevenueYear ended Nov. 30, 2015
Year ended Nov. 30, 2014(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

43,00649,981(14.0)
42.5

6,891
5,560

23.9
42.1

6,040
4,663

29.5
44.7

4,135
2,874

43.9
43.2

Total comprehensive
income for the year

Profit attributable toowners of the parent
Year ended Nov. 30, 2015
Year ended Nov. 30, 2014

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

Operating profit

Basic earnings
per share

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

(%)

(¥)

(¥)

4,135
2,874

43.9
43.2

4,081
3,021

35.1
50.2

85.66
59.53

－
－

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

(%)

Year ended Nov. 30, 2015
12.0
6.9
Year ended Nov. 30, 2014
9.2
6.1
(Reference) Equity in earnings of affiliates
Year ended Nov. 30, 2015: ¥－million

(%)

16.0
11.1
Year ended Nov.30, 2014: ¥－million(2) Consolidated Financial Position
Total assets

As of Nov. 30, 2015
As of Nov. 30, 2014

Total equity

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

(%)

(¥)

93,19680,85836,22832,72736,22832,72738.9
40.5

750.32677.82

1

(3) Consolidated Cash Flows
Cash flows fromoperating activities
Year ended Nov. 30, 2015
Year ended Nov. 30, 2014

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end ofyear(¥ million)(¥ million)(¥ million)(¥ million)(4,443)344

481(2,878)

6,661
3,891

18,791
16,1002. Dividends
Annual dividends per share

1Q-endYear ended Nov. 30,
2014Year ended Nov. 30,
2015Year ending Nov. 30,
2016(Forecast)

2Q-end 3Q-end Year-end

Total

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

(¥)

(¥)

(¥)

(¥)

(¥)

(¥ million)

(%)

(%)

－

0.00

－

12.00

12.00

579

20.2

1.8

－

0.00

－

16.00

16.00

772

18.7

2.2

－

0.00

－

18.00

18.00

20.2

3. Consolidated Earnings Forecasts for the Fiscal Year Ending November 30, 2016
(Percentages indicate year-on-year changes.)(December 1, 2015 – November 30, 2016)
Revenue(¥ million)

Year ending Nov.
30, 2016

55,250

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

28.5

7,563

9.7

6,508

2

7.8

4,305

4.1

4,305

4.1

89.17

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

(3) Number of issued shares (ordinary shares)(a) Number of issued shares at the end of the year (including treasury shares)
48,284,000 shares
As of Nov. 30, 2015
48,284,000 shares
As of Nov. 30, 2014(b) Number of treasury shares at the end of the year
As of Nov. 30, 2015–
As of Nov. 30, 2014–(c) Average number of outstanding shares during the year
48,284,000 sharesYear ended Nov. 30, 2015
48,284,000 sharesYear ended Nov. 30, 2014
(Reference) Summary of Non-consolidated Results
1. Non-consolidated Financial Results for the Fiscal Year Ended November 30, 2015
(December 1, 2014 – November 30, 2015)(Percentages indicate year-on-year changes.)(1) Non-consolidated Operating Results
Net salesYear ended Nov. 30, 2015
Year ended Nov. 30, 2014

Operating income

Ordinary income

Net income(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

37,24245,361(17.9)
51.0

5,948
5,016

18.6
48.1

5,553
4,130

34.4
55.6

3,906
2,439

60.2
47.3

Net income per share
Year ended Nov. 30, 2015
Year ended Nov. 30, 2014

Net income per share(diluted)

(¥)

(¥)

80.91
50.52

－
－

(2) Non-consolidated Financial Position
Total assets

Net assets(¥ million)

Equity ratio(¥ million)

As of Nov. 30, 2015
88,071
As of Nov. 30, 2014
76,218(Reference) Equity As of November 30, 2015: ¥34,477 million

Net assets per share
(%)

(¥)

34,47839.1
31,131
40.8
As of November 30, 2014: ¥31,131 million

714.06644.76

2. Non-consolidated Earnings Forecasts for the Fiscal Year Ending November 30, 2016
(Percentages indicate year-on-year changes.)(December 1, 2015 – November 30, 2016)
Net salesYear ending Nov. 30, 2016

Ordinary income

Net income

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

(%)

(¥)

49,245

32.2

5,816

4.7

3,897

(0.2)

80.71

3

* Information on implementation of audit proceduresThis financial results report is exempt from the audit procedures pursuant to the Financial Instruments and Exchange Act. At thetime of disclosure of this financial results report, the audit procedures for the consolidated financial statements pursuant to the
Financial Instruments and Exchange Act have not been completed.
* Proper use of earnings forecasts and other notes(1) The forward-looking statements, including outlook of future performance, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable by theCompany. Actual performance and other results may differ substantially from these statements due to various
factors. For the assumptions on which the earnings forecasts are based and cautions concerning the use thereof,
please refer to “1. Analysis of Business Results and Financial Positions, (1) Analysis of Business Results, 2)
Outlook for the Fiscal Year Ending November 30, 2016” on page 8 of the attached materials.
(2) A financial results meeting will be held on January 13, 2016 for institutional investors and analysts. The presentationmaterials distributed at the meeting will be available on our website immediately after the disclosure of accountsettlement.

4

Contents of Attached Materials
1. Analysis of Business Results and Financial Positions …………………………………………. 6(1) Analysis of Business Results ……………………………………..……………………………. 6(2) Analysis of Financial Position …..…………………………………………………………..…. 8(3) Fundamental Earnings Distribution Policy and Dividends for Fiscal 2015 and Fiscal 2016 ……. 9
2. Conditions of Corporate Group ………………………………………………………….………. 10
3. Management Policies ………………………………………………………….……………………. 13(1) Fundamental Management Policy ……………………………………………………………… 13(2) Performance Targets and Medium-to-Long-term Management Strategies ………………….. 13(3) Issues to Be Addressed ………………………………………………………………………… 13
4. Basic Concept Regarding Selection of Accounting Standards ………………………….……. 14
5. Consolidated Financial Statements ………………………………………………………….……. 14(1) Consolidated Statement of Financial Position ………………………………………………... 14(2) Consolidated Statement of Comprehensive Income ………………………………………….. 15(3) Consolidated Statement of Changes in Equity ………………………………………………. 16(4) Consolidated Statement of Cash Flows …………………………………………………….… 17(5) Notes on Going Concern Assumption ………………………………………………………... 18(6) Notes on Consolidated Financial Statements ……………………………………………….… 18(Changes in accounting policies) …………………………………………………………...…. 18(Additional information) ………………………………………………………………………... 18(Segment information) …………………………………………………………………………. 19(Earnings per share) …………………………………………………………………………… 20(Significant subsequent events) ………………………………………………………..……… 20

5

1. Analysis of Business Results and Financial Positions(1) Analysis of Business Results
1) Consolidated Results for the Fiscal Year Ended November 30, 2015
During the fiscal year ended November 30, 2015, the Japanese economy remained on a moderate recovery
track despite apparent weaknesses in some areas, amid a trend of an improving employment and income
environment. Although we have concerns which include the risk of a business downturn in Asia’s emerging
markets and elsewhere as the U.S. moves toward normalization of its monetary policy, personal consumption
has been firm overall and we see signs of recovery in housing construction.
In the real estate industry where Tosei Group operates, J-REITs and private placement funds have been
actively making investments against a backdrop of expectations for higher rents and a favorable financing
environment, and foreign-owned corporations have been engaging in sizeable transactions. According to asurvey of private companies, in the first half of fiscal 2015, from April to September, domestic real estatetransactions by listed companies and other such entities slightly decreased 2.5% compared with the same
period of the previous fiscal year to ¥2.0898 trillion, and as such were largely unchanged year on year and attheir third-highest level ever for the first half (according to a survey by a private research institution).
In the Tokyo metropolitan area condominium market, despite overall strength driven by business in popularareas within wards of Tokyo, the number of condominium units sold from January to October 2015 fell 4.4%
year on year to just over 30,000 units amid an apparent trend of decreasing condominium supply due tosurging costs of building in the suburbs of the Tokyo metropolitan area. Meanwhile, the contract rate
hovered at around the 70% threshold from which market conditions are viewed as favorable, and moreover
the forecast of a private research institute currently projects sales of 45,000 units over the entire fiscal 2015,
which is the same level as last year. However, the outlook going forward remains uncertain, partially due tothe potential adverse impact of the piling scandal (according to a survey by a private research institution).
In the Tokyo metropolitan area build-for-sale detached house market, housing starts for the months January
to September 2015 decreased 4.2% year on year to 41,987 units. The market has been firm overall thanks inpart to the government’s move to expand Japan’s home loan tax deduction and other such policy
developments (according to the Ministry of Land, Infrastructure, Transport and Tourism data).
In the office leasing market of Tokyo’s five business wards, the vacancy rate continued on a downward pathto the mid-4% range, supported by strong demand largely fueled by companies expanding offices andintegrating business locations. Robust demand with respect to offices fueled progressive hikes in asking rents,
leading to modest gains in average asking rent ongoing since January 2014. After ending 2014 at around¥17,000 per tsubo, average asking rent was in the ¥17,600 territory as of autumn 2015 (according to a survey
by a private research institution).
In the real estate securitization market, the total acquisition amount of J-REIT properties over January to
September 2015 increased 19.9% year on year to ¥1.3 trillion amid a scenario of buyers scrambling to buy
properties in anticipation of higher real estate prices (according to a survey by a private research institution).
As of June 30, 2015, the total value of assets under management in the J-REIT market amounted to ¥13.5
trillion and private placement funds amounted to ¥15.1 trillion for a total market size of ¥28.6 trillion(according to a survey by a private research institution).
Amid this operating environment, in the Revitalization Business the Tosei Group made steady progress inselling assets such as income-generating office buildings and apartments, and in the Development Businessthe Group pushed ahead with sales of detached houses, while also moving forward with initiatives for
projects involving development of commercial facilities and other such properties. In addition, we
proactively acquired income-generating properties and land for development as future sources of income.
As a result, consolidated revenue for the fiscal year under review, totaled ¥43,006 million (down 14.0%
year on year), operating profit was ¥6,891 million (up 23.9%), profit before tax was ¥6,040 million (up29.5%), and profit for the year was ¥4,135 million (up 43.9%).
Performance by business segment is shown below.
Revitalization Business
During the fiscal year under review, the segment sold 24 properties it had renovated, including
Toyocho Tosei Building (Koto-ku, Tokyo), Shinjuku 6-chome Building (Shinjuku-ku, Tokyo),
Ogawamachi Tosei Building (Chiyoda-ku, Tokyo), Shibuya 4-chome Building (Shibuya-ku, Tokyo), SEA
SCAPE Chiba-minato (Chiba-shi, Chiba) and Kannai Tosei Building II (Yokohama-shi, Kanagawa). In
addition, the segment sold 68 units in the Restyling Business, including Hilltop Yokohama Negishi
6

(Yokohama-shi, Kanagawa), Hilltop Yokohama Higashi Terao (Yokohama-shi, Kanagawa) and Renai
Kamakura Ueki (Kamakura-shi, Kanagawa). In the fiscal year under review, the segment also acquired atotal of 25 income-generating office buildings, commercial facilities and apartments and eight land lots forrenovation and sales purposes. In addition, consolidated subsidiary TOSEI SINGAPORE PTE. LTD.
started acquiring properties in Malaysia with the acquisition of five units of income-generating officebuildings and apartments under sectional ownership in Kuala Lumpur.
As a result, revenue in this segment was ¥25,986 million (down 25.2% year on year) and the segment
profit was ¥4,187 million (up 25.7%).
Development Business
During the fiscal year under review, the segment focused on the sale of detached houses, for which
there was firm demand. The segment sold 105 detached houses at such properties as THE Palms Court
Kashiwa Hatsuishi (Kashiwa-shi, Chiba), THE Palms Court Mitsuike Kouen (Yokohama-shi, Kanagawa),
THE Palms Court Bunkyo Honkomagome (Bunkyo-ku, Tokyo) and THE Palms Court Kawasaki Daishi(Kawasaki-shi, Kanagawa). In addition, the segment sold THE Palms Nishidai, which is a newly-built
apartment, and six land lots. In the fiscal year under review, it also acquired eight land lots for detachedhousing projects.
As a result, revenue in this segment was ¥6,605 million (up 8.1% year on year) and the segment profit
was ¥534 million (up 23.7%).
Rental Business
During the fiscal year under review, while the segment sold 14 buildings of its inventory assets held forleasing purposes, 20 properties including newly acquired income-generating office buildings, commercial
facilities and apartments contributed to income in this segment. In addition, the segment also focused onleasing activities for its existing holdings of non-current assets and inventory assets.
As a result, revenue in this segment was ¥4,084 million (down 1.7% year on year) and the segment
profit was ¥1,730 million (down 28.4%).
Fund and Consulting Business
During the fiscal year under review, while ¥182,329 million was subtracted from the balance of assets
under management, due mainly to property dispositions by funds, ¥303,513 million was added to thebalance of assets under management, due mainly to new asset management contracts of large projects thesegment obtained. The acquisition of such large project contracts increased asset management fees andcontributed to revenue.
As a result, revenue in this segment was ¥2,339 million (up 146.4% year on year) and the segment
profit was ¥1,373 million (up 685.1%).
As of November 30, 2015, the balance of assets under management (Note) totaled ¥421,792 million.
Note: The balance of assets under management includes the balance of assets that were subject toconsulting contracts, etc.
Property Management Business
During the fiscal year under review, the segment worked to win new contracts and maintain existing
contracts as some customers terminated contracts partially as a result of their disposing of such managed
properties. Consequently, the total number of properties under management was 547 as of November 30,
2015, an increase of three properties from November 30, 2014, with that total comprising 351 officebuildings, parking lots, schools and other such properties, and 196 condominiums and apartments.
As a result, revenue in this segment was ¥3,069 million (up 4.3% year on year) and the segment profit
was ¥146 million (down 35.4%).
Alternative Investment Business
During the fiscal year under review, membership fees from running a sports club contributed to incomein this segment. In addition, the segment also focused on leasing activities for properties acquired by a
substitute performance.
As a result, revenue in this segment was ¥921 million (down 14.6% year on year) and the segment
profit was ¥322 million (up 50.9%).
7

2) Outlook for the Fiscal Year Ending November 30, 2016

As for the operating environment in the new fiscal year, in the real estate investment market, theCompany’s primary target market, transactions have been on the rise and business continues to be brisk due
to a favorable financing environment and expectations of higher rents. The Tosei Group deems that theoperating environment will continue to be strong, given that the influx of investment funds from overseas is
likely to continue against a backdrop of continued monetary easing under Abenomics policies and yen
depreciation.
In the Revitalization Business, the Company perceives good opportunities with respect to the Tosei Group’s
phase of expansion in the currently strong real estate market. In that regard, we will continually monitor
market trends and prepare for a reversal in market conditions, but at the same time we intend to focus onrenovating and selling income-generating properties geared toward investors ranging from private investors
to REITs and private placement funds, leveraging our strengths with respect to wide-ranging exit strategies.
On the other hand, we have concerns regarding the prospect of falling demand going forward, due to factorsthat include rising prices in the market targeting end users mainly resulting from intensifying competition forland acquisitions and surging construction costs, and declining consumer confidence brought about by thepiling scandal. Given this situation, in the Development Business we will promote development and sales ofdetached houses while keeping a cautious eye on supply and demand trends in the housing market, and will
also consider flexible options for developing commercial facilities, office buildings, hotels and other suchproperties. Moreover, in our stock and fee businesses that we position as sources of consistent revenues, wewill work to increase revenues in each of the respective segments. To that end, we will pursue the aims ofincreasing the number of properties we hold for leasing purposes and improving occupancy rates in the
Rental Business, amassing more assets under management in the Fund and Consulting Business, and further
increasing the number of properties that we manage in the Property Management Business.
As a result of the aforementioned measures, in the fiscal year ending November 30, 2016, we project that
consolidated revenue will be ¥55,250 million (up 28.5% year on year), operating profit will be ¥7,563
million (up 9.7%), profit before tax will be ¥6,508 million (up 7.8%), and profit for the year will be ¥4,305
million (up 4.1%).

(2) Analysis of Financial Position
1) Assets, Liabilities and Equity
As of November 30, 2015, total assets were ¥93,196 million, an increase of ¥12,337 million comparedwith November 30, 2014. This mainly reflected increases of ¥4,590 million in inventories and ¥4,927
million in investment properties, and a decrease of ¥1,220 million in available-for-sale financial assets.
Total liabilities increased by ¥8,837 million to ¥56,967 million compared with November 30, 2014.
This mainly reflected an increase in borrowings, whereby loan proceeds associated with property
acquisitions exceeded loan repayments associated with property sales.
Total equity increased by ¥3,500 million to ¥36,228 million compared with November 30, 2014, mainly
due to an increase in retained earnings.
2) Cash Flows
Cash and cash equivalents (hereinafter “cash”) as of November 30, 2015 totaled ¥18,791 million, an
increase of ¥2,690 million compared with November 30, 2014.
The cash flows for the fiscal year under review and factors contributing to those amounts are as
follows:
Cash Flows from Operating Activities
Net cash used in operating activities totaled ¥4,443 million (net cash provided by operating activities
totaled ¥344 million in the previous fiscal year). This is mainly due to profit before tax of ¥6,040 million
as well as an increase in inventories of ¥8,845 million, which was a result of the Revitalization Businessand Development Business segments purchasing properties at a steady pace surpassing that of the decrease
in inventories associated with property sales.
Cash Flows from Investing Activities
Net cash provided by investing activities totaled ¥481 million (net cash used in investing activities
totaled ¥2,878 million in the previous fiscal year). This is primarily due to collection of available-for-sale8

financial assets totaling ¥757 million and purchases of investment properties totaling ¥750 million.
Cash Flows from Financing Activities
Net cash provided by financing activities totaled ¥6,661 million (up 71.2% year on year). This mainlyreflected a situation where loan proceeds exceeded repayments, as the Revitalization Business andDevelopment Business segments purchased properties at a steady pace surpassing that of property sales.
(Reference) Trends in cash flow indicators for the Tosei Group

Ratio of equity attributable to owners of theparent to total assets (%)
Market value ratio of equity attributable toowners of the parent to total assets (%)
Interest-bearing debt to cash flows ratio (years)

Year ended
Nov. 30, 2013

Year ended
Nov. 30, 2014

Year ended
Nov. 30, 2015

42.2

40.5

38.9

52.6

43.0

39.2

12.6

117.3

－

3.8
Interest coverage ratio (times)
Ratio of equity attributable to owners of the parent to total assets:
Market value ratio of equity attributable to owners of the parent tototal assets:
Interest-bearing debt to cash flows ratio:
Interest coverage ratio:

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

Notes:(1) All indicators are calculated using consolidated financial figures.
(2) Market capitalization is calculated based on the number of issued shares, excluding treasury shares.
(3) The figure for cash flows employs cash flows from operating activities.
(4) Interest-bearing debt includes all liabilities recorded on the Consolidated Statement of Financial Position on which interest is
paid.
(5) Interest-bearing debt to cash flows ratio and interest coverage ratio are not presented for the year ended November 30, 2015
because cash flows from operating activities on the consolidated statements of cash flows were negative.

(3) Fundamental Earnings Distribution Policy and Dividends for Fiscal 2015 and Fiscal 2016
Tosei’s fundamental earnings distribution policy is to strive to continuously provide stable dividends while
comprehensively considering operating results, the future operating environment and progress in its businessplan to balance dividends with the need for internal capital resources to generate long-term growth in corporate
value by taking advantage of highly profitable business opportunities.
For the fiscal year ended November 30, 2015 and the fiscal year ending November 30, 2016, Tosei plans to
pay cash dividends per share of ¥16 and ¥18 respectively.

92. Conditions of Corporate GroupThe Tosei Group is composed of Tosei Corporation (“Tosei” or the “Company”) and 7 subsidiaries(including 6 consolidated subsidiaries). Its main businesses are the Revitalization Business, the Development
Business, the Rental Business, the Fund and Consulting Business, the Property Management Business, and theAlternative Investment Business. The operations of each business segment and the main subsidiaries and/or
affiliates conducting those operations are as follows.
Main
Companies

Segment

Operations

Revitalization
Business

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

Tosei
Corporation

Development
Business

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

Tosei
Corporation

RentalBusiness

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

Tosei
Corporation

Fund andConsulting
Business

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

Tosei
Corporation

10

Tosei Asset
Advisors, IncMain
Companies

Segment

Operations

Property
Management
Business

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

Tosei
CommunityCo., Ltd.

Alternative
Investment
Business

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

Tosei
RevivalInvestment
Co., Ltd.

11

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

End-users“Value-up”

Land
Buildings
Beneficiaryrights to trusts

Purchase・
Bidding

Revitalization
Business

Revitalized
real estate

Tosei
Development
Corporation Business

Developed
Real estate

Sale
Investors
Rental
REITs
・
Funds

Rental Business
Fund andConsulting
Business

Investment Advisor andAgency/ TypeⅡ
Financial Instrument
Business

Real estate
funds

Investment
Dividends

Investors*Wholly owned subsidiary
Investment Management
Business

Tosei Asset
Advisors, Inc.
Fund and Consulting
Business

Investment Advisor and Agency
TypeⅡ Financial Instrument
Business

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

Real estate
Collateralized
Loans・

Companies
withReal estateholdings

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

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

Managed
Properties

Management

Funds
Building Owners
Tenants

Real estate
Collateralized
LoansCollection

Debtors

Real estate
Acquired by accepting
substitute performance

Sale

Revitalized*Wholly owned subsidiary

Investors
Stock of companies
with real estate holdings

NAI Tosei Japan, Inc.

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

12

Property Sale

End-users

3. Management Policies(1) Fundamental Management Policy
The Tosei Group’s corporate philosophy is to create new value and inspiration in all aspects of real estate asa group of global-minded and experienced professionals. With constant commitment to quality construction,
the Group is striving to integrate real estate and finance in its six business segments: Revitalization,
Development, Rental, Fund and Consulting, Property Management and Alternative Investment. The Group isalso aiming to contribute to society and increase its corporate value by restoring the value of real estate with aview to a timeframe of 10 to 20 years.
(2) Performance Targets and Medium- to Long-term Management Strategies
Under the aforementioned corporate philosophy, the Tosei Group established its current three-year mediumterm management plan, whose first year is the fiscal year ending November 30, 2015.
Under this management plan named “Advancing Together 2017”, the Group aims to become a group of realestate businesses with a sustainable competitive advantage and high quality manegement by setting four key
policies: (1)further expand the existing business segments/consider and advance into peripheral businesses,(2)establish optimal governance and an efficient operating structure, (3)develop human resources while
increasing Group employee satisfaction, and (4)enhance customer satisfaction while building Tosei’s brandrecognition.
(3) Issues to Be Addressed
Issues the Tosei Group needs to address in order to achieve objectives of the medium-term management
plan include the following.
1)We need to take steps toward achieving further expansion in our six existing areas of business. This
involves strengthening of purchases of properties for renovation and development and land for projects, while
enhancing our strengths for renovating, developing, selling and leasing, and also increasing our balances ofleasing properties, assets under management and real estate under management. To that end, we will identify
trends in the real estate investment and housing markets and the domestic and foreign financial markets, while
also promptly responding to changes in the real estate market.
2)We need to adjust our internal operations to reflect our expanded business operations and the heightening
public demand for more stringent governance practices. To that end, we will rebuild the Tosei Group’s overallsystems to ensure effective and efficient internal controls and strengthen operations of our divisions that handle
internal administration.
3)We need to secure a diverse workforce and implement education and training in view of businessexpansion. To that end, we will increase levels of employee satisfaction by encouraging sophistication ofcompany operations, delegating authority, creating new types of operations and other such means.
4)We need to further reinforce our continuous efforts (supplying products, providing services andcontributing to society) geared toward establishing the “Tosei brand” as one that conveys the combined notionsof “innovation and challenge” and “assurance and reliability.”

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

13

5. Consolidated Financial Statements(1) Consolidated Statement of Financial Position(¥ thousand)As of Nov. 30, 2014
AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets

As of Nov. 30, 2015

16,100,795
2,049,710
41,565,148
166,612

18,791,081
2,914,639
46,156,041
27,01059,882,266

67,888,773

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

3,315,747
18,785,986
96,6481,225,047
1,098,687
781,146
4,014

20,975,814

25,307,278

80,858,080

93,196,052

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

2,590,792
5,380,269
1,393,664
267,2812,734,006
9,492,795
1,150,089
442,303

Total current liabilities

Total current assets
Non-current assets
Property, plant and equipment
Investment properties
Intangible assets
Available-for-sale financial assets
Trade and other receivables
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

9,632,009

13,819,195

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

2,697,083
35,024,707
697,680
78,7643,510,413
39,175,846
383,31278,905

Total non-current liabilities

38,498,235

43,148,478

48,130,244

56,967,673

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

6,421,392
6,373,881
23,327,875
105,228

32,727,836

36,228,378

80,858,080

93,196,052

Total Liabilities
EquityShare capital
Capital reserves
Retained earnings
Other components of equity
Total equity
Total liabilities and equity14(2) Consolidated Statement of Comprehensive Income(¥ thousand)Year ended Nov. 30, 2014
Year ended Nov. 30, 2015
(Dec. 1, 2013 – Nov. 30, 2014) (Dec. 1, 2014 – Nov. 30, 2015)
Revenue
Cost of revenue

49,981,563
40,018,772

43,006,964
31,091,794

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

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

11,915,169
5,099,064
126,357
50,499Operating profit
Finance income
Finance costs

5,560,774
3,514
900,581

6,891,963
22,840874,493

Profit before tax
Income tax expense

4,663,706
1,789,479

6,040,311
1,904,494

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

2,874,226

4,135,816(5,847)(5,006)(5,847)(5,006)32,455(14,420)

118,610(28,020)

2,236(6,982)

153,303(49,423)

147,455(54,430)

3,021,682

4,081,386

Profit attributable to:
Owners of the parent

2,874,226

4,135,816

Total comprehensive income attributable to:
Owners of the parent

3,021,682

4,081,386

59.53

85.66

－

－

Earnings per share attributable to owners of the parent
Basic earnings per share (yen)Diluted earnings per share (yen)15(3) Consolidated Statement of Changes in Equity
Year ended November 30, 2014 (Dec. 1, 2013 – Nov. 30, 2014)(¥ thousand)Other
components ofequityTotal equity

17,294,366

1,348

30,092,426－

2,874,226－

2,874,226－－－

147,455

147,455

Total comprehensive income
for the year－－

2,874,226

147,455

3,021,682

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

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

5,847－

Balance at Nov. 30, 2014

6,421,392

6,375,317

19,776,474

154,652

32,727,836

Share capital

Capital reserves

6,421,392

6,375,317

Profit for the year－

Other comprehensive income

Balance at Dec. 1, 2013

Retainedearnings

Year ended November 30, 2015 (Dec. 1, 2014 – Nov. 30, 2015)(¥ thousand)Other
components ofequityTotal equity

19,776,474

154,652

32,727,836－

4,135,816－

4,135,816－－－(54,430)(54,430)

Total comprehensive income
for the year－－

4,135,816(54,430)

4,081,386

Dividends from surplus－－(579,408)－(579,408)－(1,435)－－(1,435)－－(5,006)

5,006－

6,421,392

6,373,881

23,327,875

105,228

36,228,378

Share capital

Capital reserves

6,421,392

6,375,317

Profit for the year－

Other comprehensive income

Balance at Dec. 1, 2014

Share-based paymenttransaction
Transfer from othercomponents of equity toretained earnings
Balance at Nov. 30, 201516

Retainedearnings

(4) Consolidated Statement of Cash Flows(¥ thousand)Year ended Nov. 30, 2014
Year ended Nov. 30, 2015
(Dec. 1, 2013 – Nov. 30, 2014) (Dec. 1, 2014 – Nov. 30, 2015)
Cash flows from operating activities
Profit before tax
Depreciation expense
Increase (decrease) in provisions and retirement
benefits obligations
Interest and dividends income
Interest expenses
Gain on disposal of available-for-sale financial assets
Loss on retirement of property, plant and equipment
Decrease (increase) in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Other, net
SubtotalInterest and dividends income received
Income taxes paid
Net cash from (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of investment properties
Purchase of intangible assets
Purchase of available-for-sale financial assets
Collection of available-for-sale financial assets
Proceeds from sales of available-for-sale financial
assetsPayments of loans receivableCollection of loans receivable
Proceeds from purchase of investments in
subsidiaries resulting in change in scope of
consolidation
Other, net

4,663,706
188,916

6,040,311
222,440

68,424(164,709)(3,514)
900,581(531)
1,597(1,588,666)(3,378,869)
781,843(4,921)(22,840)
874,493－
2,372(1,097,514)(8,845,226)
930,567(28,424)

1,628,567
3,513(1,287,543)(2,088,530)
22,832(2,377,395)

344,537(4,443,093)(140,000)－(19,666)(1,125,123)(59,106)(2,196,590)
750,002(100,000)
240,000(71,303)(750,033)(37,610)(5,020)757,951

1,156

444,960(300,000)
68－
64

210,317

－

174

2,596

Net cash from (used in) investing activities(2,878,766)

481,605

Cash flows from financing activities
Net increase (decrease) in current borrowings
Proceeds from non-current borrowings
Repayments of non-current borrowings
Cash dividends paid
Interest expenses paid
Other, net

183,000
32,389,000(27,206,985)(384,763)(1,086,000)(2,355)(95,000)
31,627,000(23,273,064)(578,436)(1,015,655)(3,745)

Net cash from (used in) financing activities

3,891,894

6,661,097

1,357,665
14,711,997

2,699,610
16,100,795

31,131(9,323)

16,100,795

18,791,081

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of exchange rate change on cash and cash
equivalents
Cash and cash equivalents at end of year17(5) Notes on Going Concern Assumption
No item to report.
(6) Notes on Consolidated Financial Statements(Changes in accounting policies)
The Group applied the following standards effective from the fiscal year ending November 30, 2015.
Standard

Name of standard

Overview of new establishment and amendment

IFRIC 21

Levies

Accounting of a liability for a levy

IFRS 10(Revised)
IFRS 12(Revised)

Consolidated Financial
Statements
Disclosure of Interests in Other
Entities

Exception to consolidation of a subsidiaries by an entity that
qualifies as an investment entity
Revision of the disclosure method for entities that qualify as
investment entities

The above standards have no material impact on the consolidated financial statements.

(Additional information)(Abolition of Retirement Benefits Plan for Officers)
At the Ordinary General Meeting of Shareholders held on February 25, 2015, the Company resolved tomake final payments of retirement benefits to retiring officers upon abolition of its Retirement Benefits Plan
for Officers.
Accordingly, the full amount of the Company’s “Provision for directors’ retirement benefits” has been
reversed and an unpaid portion of ¥360,711 thousand in final payments has been presented included in“Trade and other payables” in non-current liabilities.

18

(Segment information)(1) Summary of reportable segments
The Group’s reportable segments are components of the Group about which separate financial
information is available that the Board of Directors regularly conducts deliberations to determine theallocation of management resources and to assess the performance. The Group draws up comprehensive
strategies for each of the following business segments and conducts business activities accordingly;“Revitalization Business”, “Development Business”, “Rental Business”, “Fund and Consulting
Business”, “Property Management Business”, and “Alternative Investment Business”. In the
Revitalization Business, the Group acquires the properties whose asset values have declined, renovates,
and resells them. In the Development Business, the Group sells condominium units and detached houses
to individual customers as well as apartment and office buildings to investors. In the Rental Business, theGroup rents office buildings and apartments. The Fund and Consulting Business mainly provides asset
management services for the properties placed in real estate funds. The Property Management Businessprovides comprehensive property management services. In the Alternative Investment Business, theGroup acquires real estate collateralized loans and sells the properties acquired through collection ofdebt and acceptance of substitute performance.
(2) Method for calculating revenue, profit or loss and other items by reportable segment
The methods of accounting applied in the reported operating segments are consistent with theaccounting policies adopted by the Group.
The reported segment profit is calculated on an operating profit basis. Intersegment revenue ortransfers are based on actual market prices.
The Group’s revenue and profit by reportable segment are as follows:Year ended November 30, 2014
(Dec.1, 2013 – Nov 30, 2014)(¥ thousand)
Revitalization Development
Business
Business

RentalBusiness

Fund andConsulting
Business

Property
Alternative
Management Investment
Business
Business

Adjustment

Total

Revenue
Revenue from externalcustomers

34,743,813

6,112,575

4,153,421

949,437

2,943,854

1,078,462－

49,981,563

Intersegment revenue－－

57,161

9,242

516,012－(582,416)－

34,743,813

6,112,575

4,210,582

958,680

3,459,867

1,078,462(582,416)

49,981,563

3,330,667

432,323

2,414,670

174,963

227,423

213,949(1,233,224)

5,560,774

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

Profit before tax

4,663,706

Year ended November 30, 2015
(Dec.1, 2014 – Nov 30, 2015)(¥ thousand)
Revitalization Development
Business
Business

RentalBusiness

Fund andConsulting
Business

Property
Alternative
Management Investment
Business
Business

Adjustment

Total

Revenue
Revenue from externalcustomers

25,986,125

6,605,956

4,084,886

2,339,184

3,069,740

921,071－

43,006,964

Intersegment revenue－－

50,5084,726

504,491－(559,726)－

25,986,125

6,605,956

4,135,394

2,343,911

3,574,232

921,071(559,726)

43,006,964

4,187,845

534,965

1,730,098

1,373,606

146,925

322,798(1,404,277)

6,891,963

Total
Segment profit
Finance income/costs, net(851,652)

Profit before tax

6,040,311

19

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

Year ended
November 30, 2015
(Dec. 1, 2014 – Nov. 30, 2015)

Profit attributable to owners of the parent (¥ thousand)

2,874,226

4,135,816

Weighted average number of outstanding ordinary shares(shares)

48,284,000

48,284,000

59.53

85.66

Basic earnings per share (¥)

Notes: 1. Basic earnings per share is calculated by dividing profit attributable to owners of the parent, by the weighted average
number of outstanding ordinary shares during the reporting period.
2. Diluted earnings per share is not presented because there were no potential shares that have dilutive effects.

(Significant subsequent events)
No item to report.

20