Consolidated Financial Results for the Year Ended …...1) Consolidated Results for the Year Ended...

Please note that this document is a translation of the official announcement in Japanese that was released on January 10, 2013. The translation is prepared and provided for the purpose of the readers’ convenience only. All readers are strongly recommended to refer to the original Japanese version for complete and accurate information.

Consolidated Financial Results for the Year Ended November 30, 2012

<under Japanese GAAP>

January 10, 2013 Company name: Tosei Corporation Stock listing: Tokyo Stock Exchange, First Section Securities code number: 8923 URL: http://www.toseicorp.co.jp/english/ Representative: Seiichiro Yamaguchi, President and CEO Contact: Noboru Hirano, Director and CFO Phone: +81-3-3435-2864 Ordinary general shareholders’ meeting: February 26, 2013 (scheduled) Commencement of dividend payments: February 27, 2013 (scheduled) Submission of Securities Report (Yuka Shoken Hokokusho): February 28, 2013 (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 Year Ended November 30, 2012

(December 1, 2011 – November 30, 2012) (1) Consolidated Operating Results (Percentages indicate year-on-year changes.)

Net sales Operating income Ordinary income Net income (¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) (%)

Year ended Nov. 30, 2012 24,539 (0.9) 3,030 26.9 2,274 44.5 1,405 86.9Year ended Nov. 30, 2011 24,759 (6.4) 2,389 38.4 1,574 96.0 751 78.4

(Note) Comprehensive income: Year ended November 30, 2012: ¥1,404 million (87.6%) Year ended November 30, 2011: ¥748 million (77.1%)

Net income per share

Net income per share (diluted)

Return on equity Ordinary income

/Total assets Operating income

/Net sales

(¥) (¥) (%) (%) (%) Year ended Nov. 30, 2012 3,076.34 – 5.5 3.6 12.3Year ended Nov. 30, 2011 1,646.05 – 3.0 2.6 9.6

(Reference) Equity in earnings of affiliates: Year ended November 30, 2012: ¥– million Year ended November 30, 2011: ¥– million (2) Consolidated Financial Position

Total assets Net assets Equity ratio Net assets per share

(¥ million) (¥ million) (%) (¥) As of Nov. 30, 2012 64,732 26,152 40.4 57,245.65As of Nov. 30, 2011 59,967 24,976 41.6 54,671.33

(Reference) Equity: As of November 30, 2012: ¥26,152 million As of November 30, 2011: ¥24,976 million (3) Consolidated Cash Flows

Cash flows from

operating activities Cash flows from

investing activities Cash flows from

financing activities

Cash and cash equivalents at end of

period (¥ million) (¥ million) (¥ million) (¥ million)

Year ended Nov. 30, 2012 (1,005) 17 2,090 9,410 Year ended Nov. 30, 2011 6,017 (116) (4,416) 8,306

2. Dividends Annual dividends per share

1Q-end 2Q-end 3Q-end Year-end Total

Total dividendsper share (Total)

Payout ratio (Consolidated)

Dividends on equity ratio (Consolidated)

(¥) (¥) (¥) (¥) (¥) (¥ million) (%) (%) Year ended Nov. 30, 2011 – 0.00 – 500.00 500.00 228 30.4 0.9Year ended Nov. 30, 2012 – 0.00 – 600.00 600.00 274 19.5 1.1Year ending Nov. 30, 2013 (Projected)

– 0.00 – 700.00 700.00 20.2

3. Projected Consolidated Results for the Year Ending November 30, 2013

(December 1, 2012 – November 30, 2013) (Percentages indicate year-on-year changes.)

Net sales Operating income Ordinary income Net income Net income per share

(¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) (%) (¥) Six months ending May 31, 2013

24,644 142.8 2,432 163.6 2,021 275.8 1,223 327.6 2,677.59

Year ending Nov. 30, 2013

37,121 51.3 3,387 11.8 2,606 14.6 1,580 12.5 3,459.54

* Notes

(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in the scope of consolidation): No Newly added: – Excluded: –

(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial

statements after error corrections (a) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes (b) Changes in accounting policies due to other reasons: No (c) Changes in accounting estimates: Yes (d) Restatement of prior period financial statements after error corrections: No (Note) These items fall in those set forth in Article 14-7 of the Ordinance on Terminology, Forms, and Preparation Methods of

Consolidated Financial Statements (cases in which changes in accounting policies are difficult to distinguish from changes in accounting estimates). For details, please see “(7) Change in Accounting Policy” in “4. Consolidated Financial Statements” on page 21 of the attached materials.

(3) Number of issued shares (common stock)

(a) Number of issued shares at the end of the period (including treasury stock) As of Nov. 30, 2012 456,840 sharesAs of Nov. 30, 2011 456,840 shares

(b) Number of shares of treasury stock at the end of the period As of Nov. 30, 2012 –As of Nov. 30, 2011 –

(c) Average number of outstanding shares during the period: Year ended Nov. 30, 2012 456,840 sharesYear ended Nov. 30, 2011 456,840 shares

(Reference) Summary of Non-consolidated Results 1. Non-consolidated Financial Results for the Year Ended November 30, 2012

(December 1, 2011 – November 30, 2012) (1) Non-consolidated Operating Results (Percentages indicate year-on-year changes.)

Net sales Operating income Ordinary income Net income

(¥ million) (%) (¥ million) (%) (¥ million) (%) (¥ million) (%) Year ended Nov. 30, 2012 19,423 (6.3) 2,666 13.7 1,975 23.3 1,141 14.9Year ended Nov. 30, 2011 20,719 (10.8) 2,345 40.7 1,601 97.9 993 129.3

Net income per shareNet income per share

(diluted) (¥) (¥)

Year ended Nov. 30, 2012 2,497.95 –Year ended Nov. 30, 2011 2,174.76 –

(2) Non-consolidated Financial Position Total assets Net assets Equity ratio Net assets per share

(¥ million) (¥ million) (%) (¥) As of Nov. 30, 2012 61,016 25,296 41.5 55,373.04As of Nov. 30, 2011 56,313 24,382 43.3 53,371.94

(Reference) Equity: As of November 30, 2012: ¥25,296 million As of November 30, 2011: ¥24,382 million 2. Projected Non-consolidated Results for the Year Ending November 30, 2013

(December 1, 2012 – November 30, 2013) (Percentages indicate year-on-year changes.)

Net sales Ordinary income Net income Net income per share

(¥ million) (%) (¥ million) (%) (¥ million) (%) (¥) Six months ending May 31, 2013

22,299 182.0 1,821 333.4 1,113 540.7 2,438.26

Year ending Nov. 30, 2013 31,436 61.9 2,169 9.8 1,324 16.1 2,900.13 * Information regarding execution of audit procedures This financial results report is exempt from the audit procedures pursuant to the Financial Instruments and Exchange Act. At the time 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 (Caution regarding forward-looking statements and others) The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual business and other results may differ substantially due to various factors. For the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof, please see “2) Outlook for the Year Ending November 30, 2013” in “1. Business Results, (1) Analysis of Business Results” on page 2. (How to access supplementary materials for financial results and the details of the financial results meeting) A financial results meeting will be held on January 10, 2013 for institutional investors and analysts. The presentation materials distributed at the meeting will be available on our website immediately after the disclosure of account settlement.

○ Contents of attached materials

1. Business Results .................................................................................................................................................... 2

(1) Analysis of Business Results ............................................................................................................................ 2

(2) Analysis of Financial Position .......................................................................................................................... 4

(3) Fundamental Earnings Distribution Policy and Dividends for Fiscal 2012 and Fiscal 2013 ........................... 5

2. Conditions of Corporate Group ............................................................................................................................. 6

3. Management Policies............................................................................................................................................. 9

(1) Fundamental Management Policy .................................................................................................................... 9

(2) Performance Targets, Medium- to Long-term Management Strategies and Tasks to Be Addressed ................ 9

(3) Other Important Management Matters ............................................................................................................. 9

4. Consolidated Financial Statements...................................................................................................................... 10

(1) Consolidated Balance Sheets.......................................................................................................................... 10

(2) Consolidated Statements of Operations.......................................................................................................... 12

Consolidated Statements of Comprehensive Income ..................................................................................... 13

(3) Consolidated Statements of Changes in Net Assets........................................................................................ 14

(4) Consolidated Statements of Cash Flows......................................................................................................... 16

(5) Note on Going Concern Assumption.............................................................................................................. 18

(6) Significant Matters Forming the Basis of Preparing Consolidated Financial Statements .............................. 18

(7) Change in Accounting Policy ......................................................................................................................... 21

(8) Change in Presentation ................................................................................................................................... 21

(9) Additional Information ................................................................................................................................... 21

(10) Notes to Consolidated Financial Statements ................................................................................................ 22

(Segment Information) ................................................................................................................................... 22

(Per Share Information).................................................................................................................................. 26

(Significant Subsequent Events)..................................................................................................................... 26

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1. Business Results (1) Analysis of Business Results

1) Consolidated Results for the Year Ended November 30, 2012

During the year ended November 30, 2012 (December 1, 2011 to November 30, 2012), the Japanese economy began to recover, supported by factors such as government policies and earthquake rebuilding demand. Recently, however, the economy has shown signs of weakness due to a slowdown in overseas economies such as Europe and China. The economic outlook is likely to remain uncertain against a continued backdrop of instability in financial markets and deflationary risk in Japan.

In the real estate sector, where the Tosei Group operates, the total value of property acquisitions by J-REITs and other real estate funds reached roughly ¥750 billion between January and the end of October 2012, the highest level for four years. This reflected active buying driven by overseas fund flows into the domestic real estate market on expectations that real estate prices have bottomed. As a result, in the first half of fiscal 2012, the number of real estate transactions rebounded to 329 and real estate transaction value recovered to ¥853.3 billion, returning to the level seen in the first half of fiscal 2010 before the Great East Japan Earthquake (market research company data). In addition, from January 2010 to October 2012, the closing rate for condominium sales contracts in the greater Tokyo area essentially remained above the 70% level, which is viewed as a key indicator of favorable conditions in the condominium market. From January 2012 to October 2012, the number of condominium units supplied in the greater Tokyo area totaled 33,763 units, an increase of 2,074 units compared with the previous year (market research company data).

In the market for leased office buildings in Tokyo’s five business wards, the average vacancy rate increased at a modest pace in fiscal 2012, peaking at 9.43% at the end of June (up 0.62 percentage points year on year). The rate then saw a sustained improvement in the four months from July, falling back to 8.74% at the end of October due to progress with contract closings for new and existing buildings. The average asking rent for the same five wards continued to decline slowly, falling to ¥16,628/tsubo (1 tsubo=3.3m2) as of the end of October 2012, a decline of ¥383 year on year (market research company data).

In the market for securitized real estate, the balance of assets under management by real estate funds as of the end of June 2012 totaled ¥27.0 trillion, an increase of ¥0.9 trillion from the end of December 2011. This included an increase of ¥0.4 trillion to ¥8.7 trillion for J-REITs and a rise of ¥0.5 trillion to ¥18.3 trillion for private placement funds due to an upturn in activity in the real estate investment market and improving conditions for fund procurement (market research company data).

In this operating environment, the Tosei Group faced delays in selling some of the Restyling properties in the Revitalization business, but the Group sold five buildings it had refurbished. The development business handed over two condominiums and registered strong sales contracts for detached houses. In purchasing, the Group continued to focus on acquiring residential properties and land for residential properties, demand for which has become stronger, and it also resumed full-scale investment in office buildings and other properties for the Revitalization business. We also set up our first overseas base with the establishment of a local subsidiary in Singapore, and concluded a membership contract with NAI Global, a network of global commercial real estate brokers as well. The Group plans to reinforce its relationships with overseas investors going forward.

As a result, for the year under review, net sales totaled ¥24,539 million (a decrease of 0.9% compared with the previous year), operating income was ¥3,030 million (an increase of 26.9%), ordinary income was ¥2,274 million (an increase of 44.5%), and net income was ¥1,405 million (an increase of 86.9%).

Segment results were as follows:

Revitalization Business

During the year under review, the Company sold a total of 106 units in the Restyling properties. The properties sold included Hilltop Yokohama Negishi (Yokohama City, Kanagawa Prefecture), Hilltop Yokohama Higashi Terao (Yokohama City, Kanagawa Prefecture), Estage Kaminoge (Setagaya Ward, Tokyo), and Glenpark Ikedayama (Shinagawa Ward, Tokyo). In addition, the Company sold five properties it had refurbished, including Uchikanda Kitahara Building (Chiyoda Ward, Tokyo) and Belmidor Ebisu (Shibuya Ward, Tokyo).

As a result, net sales in this segment totaled ¥5,980 million, a decline of 50.3% compared with the previous year.

Also, due to the adoption of the Accounting Standard for Measurement of Inventories (the LCM method), the Company reduced the book value of two office buildings after lowering its projection for rental income for the vacant portion of the buildings. Book value for the two buildings was reduced by ¥265 million and charged to cost of sales. As a result, segment profit was ¥390 million, a decrease of 79.3% compared with the previous year.

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Development Business During the year under review, the Company focused on selling newly built condominiums and detached

houses, demand for which is strong. The Company sold a total of 154 newly built condominium units in properties such as THE Palms Tsukishima Luna Garden (Chuo Ward, Tokyo) and THE Palms Takadanobaba (Shinjuku Ward, Tokyo). The Company also sold 24 detached houses at Palms Court Setagaya Okamoto (Setagaya Ward, Tokyo), Palms Court Hatsudai (Shibuya Ward, Tokyo), and Palms Court Koishikawa (Bunkyo Ward, Tokyo).

As for office buildings, the Company sold Nihonbashi Hongokucho Tosei Building (Chuo Ward, Tokyo). As a result, net sales in this segment came to ¥10,985 million, an increase of 109.0% compared with the

previous year, and segment profit came to ¥2,318 million (segment loss in the previous year was ¥22 million).

Rental Business During the year under review, the Company focused on leasing activities for its noncurrent assets and

inventories and worked to maintain occupancy rates. As a result, segment revenues were essentially steady compared with the previous year.

As a result, net sales in this segment were ¥2,446 million, a decrease of 0.5% compared with the previous year, and segment profit was ¥1,192 million, an increase of 0.8%.

Fund Business

During the year under review, the balance of assets under management grew steadily, but total asset management fees declined due to a drop in the level of fees charged.

As a result, net sales in this segment were ¥776 million, a decrease of 44.4% compared with the previous year while segment profit was ¥184 million, a decrease of 71.8%.

The main reason for the sharp decline in segment income year on year was the absence of brokerage fees and other income related to large-scale transactions that were booked in the previous year.

As of November 30, 2012, the balance of assets under management* totaled ¥311,335 million. *Note: The balance of assets under management includes a part of the balance of assets that were subject to consulting contracts,

etc. based on the Company’s internal rules.

Property Management Business During the year under review, the number of office buildings, parking lots and schools under management

declined by two properties year on year to 306, while the number of condominiums and rental apartments increased by 13 properties to 216. As a result, the total number of properties under management increased by 11 year on year to 522.

As a result, although net sales in this segment rose year on year, increasing by 2.5% to ¥3,512 million, segment profit was down 34.7% to ¥68 million, as allowance for doubtful accounts regarding certain transactions were recorded in general and administrative expenses.

Alternative Investment Business

During the year under review, the Company focused on the sale of properties acquired through M&A and the leasing of properties that the Company acquired through the collection and payment in kind of claims.

As a result, net sales in this segment came to ¥838 million, an increase of 363.7% compared with the previous year, and segment profit was ¥59 million (segment loss in the previous year was ¥190 million).

2) Outlook for the Year Ending November 30, 2013

In the Tosei Group’s operating environment, the economy overall has entered a recovery phase, supported by earthquake rebuilding demand and government policies. However, the outlook remains uncertain due to a slowdown in overseas economies, such as the financial crisis in Europe and the sluggish Chinese economy. In the real estate sector, the market in the greater Tokyo area has largely recovered from the downturn caused by the Great East Japan Earthquake, and overseas funds are flowing into the real estate market on expectations that prices have bottomed. Against this backdrop, J-REITs and other players are becoming increasingly active in the market and the recovery in real estate prices is gaining momentum.

In this environment, in the Revitalization business, the Company will continue to work to sell existing condominium units for appropriate prices in the “Restyling Business,” which will enter its fourth year of operations in the year ending November 30, 2013. In income-generating real estate for investors, which is becoming an increasingly active field, the Company will step up property purchases and revitalize and sell properties rapidly.

In the Development business, the Company will focus on selling new condominiums and detached houses scheduled for completion during the next year, as well as step up operations at its new Kichijoji Center and Ikebukuro Center, opened in the year under review. It will also actively purchase prime land.

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The Company will also work to steadily expand its fee business, which generates stable income without relying on asset growth.

In the Fund business, the Company will continue to capture more business for managing fund assets, an area it has been developing since the financial crisis, as investment funds switch to contractors to manage their assets. Tosei will also aim to establish new funds, with a particular focus on stepping up activities at its subsidiary in Singapore. In addition, the Company will more actively promote its consulting business (CRE operations), which helps to improve the profitability of real estate owned by other companies.

In the Property Management business, the Company will work to boost the level of stable fee income by increasing the number of properties under management, leveraging the expertise it has built up through its wholly owned subsidiary Tosei Community Co., Ltd.

As a result of the above, in the year ending November 30, 2013, the Tosei Group projects that net sales will be ¥37,121 million (an increase of 51.3% compared with the previous year), operating income will be ¥3,387 million (an increase of 11.8%), ordinary income will be ¥2,606 million (an increase of 14.6%), and net income will be ¥1,580 million (an increase of 12.5%).

(2) Analysis of Financial Position

1) Assets, Liabilities and Net Assets as of November 30, 2012 Total assets increased by ¥4,765 million to ¥64,732 million compared with the previous year. Primary factors

included an increase in cash and deposits which totaled ¥1,104 million and an increase in real estate for sale totaling ¥4,141 million.

Total liabilities increased by ¥3,589 million to ¥38,580 million compared with the previous year. Primary factors included an increase in notes and accounts payable-trade totaling ¥864 million and an increase in long-term and short-term loans payable totaling ¥2,319 million.

Net assets increased by ¥1,176 million to ¥26,152 million compared with the previous year. Primary factors included an increase in retained earnings.

2) Cash Flows for the Year ended November 30, 2012

Cash and cash equivalents (hereinafter “cash”) as of November 30, 2012 totaled ¥9,410 million, an increase of ¥1,104 million from the end of the previous year, as a result of ¥2,172 million in income before income taxes and minority interests and ¥15,777 million in proceeds from long-term loans payable despite a decrease of ¥4,129 million due to an increase in inventories and ¥13,841 in repayment of long-term loans payable.

The respective cash flow positions and the factors thereof for the year under review are as follows.

Cash Flows from Operating Activities Net cash used in operating activities totaled ¥1,005 million (net cash provided by operating activities totaled

¥6,017 million in the previous year). This is a result of an increase due to the recording of ¥2,172 million in income before income taxes and minority interests and a decrease of ¥4,129 million due to an increase in inventories.

Cash Flows from Investing Activities

Net cash provided by investing activities totaled ¥17 million (net cash used in investing activities totaled ¥116 million in the previous year). This is primarily due to proceeds from sales of property, plant and equipment totaling ¥216 million and purchase of property, plant and equipment totaling ¥140 million.

Cash Flows from Financing Activities

Net cash provided by financing activities totaled ¥2,090 million (net cash used in financing activities in the previous year was ¥4,416 million). This mainly reflected ¥15,777 million in proceeds from long-term loans payable related to the purchase of new properties, and ¥13,841 million in repayment of long-term loans payable related to the sale of properties.

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5

(Reference) Trends in cash flow indicators for the Tosei Group are as follows.

Year ended

Nov. 30, 2009

Year ended Nov. 30, 2010



Equity ratio (%) 35.7 39.0 41.6 40.4

Market value equity ratio (%) 13.6 23.7 14.2 25.3

Interest-bearing debt to cash flows ratio (years)

2.9 – 5.0 –

Interest coverage ratio (times) 12.5 – 6.8 –

Equity ratio: Equity/Total assets Market value equity ratio: Market capitalization/Total assets Interest-bearing debt to cash flows ratio: Interest-bearing debt/Cash flows Interest coverage ratio: 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 stock. (3) The figure for cash flows employs cash flows from operating activities. (4) Interest-bearing debt includes all liabilities recorded on the consolidated balance sheets 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, 2010 and

the year ended November 30, 2012 because cash flows from operating activities on the consolidated statements of cash flows were negative.

(3) Fundamental Earnings Distribution Policy and Dividends for Fiscal 2012 and Fiscal 2013 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 business plan 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 year ended November 30, 2012 and the year ending November 30, 2013, Tosei plans to pay cash dividends per share of ¥600 and ¥700 respectively.

2. Conditions of Corporate Group The 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 business, the Property Management business, and the Alternative Investment business. The operations of each business segment and the main subsidiaries and/or affiliates conducting those operations are as follows.

Segment Operations Main

Companies

Revitalization Business

The Tosei Group acquires office buildings, commercial facilities, rental condominiums and other properties whose asset value has declined, boosts their value though “value-up plans” (*) judged to best match the characteristics of the properties’ areas and tenant requirements, and sells them as revitalized real estate to buyers including investors, real estate funds and individual end users. In the “Restyling Business,” the Group acquires income-producing condominium complexes and sells units in them to end users after boosting the value of common and private areas (the Group continues to hold and manage 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 to refurbish internal and external elements that have deteriorated or become obsolete, functional improvement of facilities including refurbishment, 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, and these different uses create significant differences between land values. Tosei verifies the characteristics 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 complexes or individual units.

The Group is able to respond to diverse needs by developing office buildings, commercial buildings (T’s BRIGHTIA series) and mixed-use buildings, residential condominiums (the Palms series), as well as detached housing (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

Rental Business

The Tosei Group has expanded the scope of its business primarily in the main districts of Tokyo by acquiring office buildings, apartment buildings, stores and parking lots, and renting 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 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 as provided for in the Financial Instruments and Exchange Act. Specifically, in addition to such work as purchasing, selling and brokering trust beneficiary rights in accordance with a wide variety of investor needs, the Group provides advice regarding the acquisition, holding and disposition of properties, and asset management services for real estate funds that carry out discretionary investment.

The Tosei Group’s management approach is to provide high distributions to investors by taking full advantage of its “value-up,” leasing and maintenance capabilities with the aim of maximizing rental income and reducing its own rent costs. Revenues are primarily derived from acquisition fees upon the purchase of properties and asset management fees for properties held.

Tosei Corporation

Tosei Asset Advisors, Inc

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Segment Operations Main

Companies

Property Management Business

This business carries out comprehensive property management that meets a wide variety of real estate needs including administration, facility management, cleaning and security for condominium complexes, office buildings and facilities, building and equipment repair work in the private portions of condominium complexes and office interior renovation contracting.

In the management of condominium complexes, this business makes full use of the knowhow it has accumulated over a number of years to provide consulting and advice to condominium unit owners and condominium management associations, and provides total support to associations from their launch to helping them operate smoothly once they are started up.

With respect to managing office buildings, in order to streamline the operations of building 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 by implementing precise maintenance plans regarding the age-related deterioration of buildings.

Tosei Community Co., Ltd.


This business invests in real estate collateralized loans and acquires collateral through collecting receivables and accepting substitute performances by negotiating with mortgaged property owners/debtors, and acquires businesses including companies with real estate holdings and real estate business operators. The business also utilizes the knowhow of the Tosei Group to boost the value of the real estate it acquires before selling it.

Tosei Revival Investment Co., Ltd.

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A schematic diagram of the businesses of the Tosei Group is shown below.

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End users

Investors

REITs

.

Land

Buildings

Beneficiary rights to trusts

Purchase

Bidding

Tosei Corporation

Revitalization Business Development Business Rental Business Fund Business

“Value-up” Revitalized real estate

Developed real

estate

Sale

Rental

Funds

Investors Investment

Dividends

Real estate funds

Investment advisor and agency

Type II financial

instruments business

Tosei Asset Advisors, Inc.

Fund Business

* Wholly owned subsidiary

Tosei Community Co., Ltd.

Property Management Business

Property management

Building maintenanceManaged properties Management

Funds

Building owners

Tenants

Real estate collateralized

loans

Companies with real estate holdings

Purchase

M&A

Tosei Revivial Investment Co., Ltd.


“Value-up”

Research title

Revitalize

Real estate collateralized loans

Real estate acquired by

accepting substitute performances

Stock of companies with real estate holdings

Collection Debtors

Property management

Investment management business

Investment advisor and agency

Type II financial instruments business



Sale

Property sale

Investors

End users

3. Management Policies (1) Fundamental Management Policy

The Tosei Group’s mission is to create new value and inspiration in all aspects of real estate as a 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, Funds, Property Management and Alternative Investment. The Group is also aiming to contribute to society and increase its corporate value by restoring the value of real estate based on a timeframe of 10 to 20 years.

(2) Performance Targets, Medium- to Long-term Management Strategies and Tasks to Be Addressed

In the real estate sector, where the Tosei Group operates, the real estate trading market is showing signs of further recovery. The market in the greater Tokyo area has largely recovered from the stagnation triggered by the Great East Japan Earthquake and overseas funds are flowing into the real estate market on expectations that prices have bottomed.

In this operating environment, the Tosei Group has developed and started implementing Next Stage 2014, its current three-year medium-term management plan. The year ended November 30, 2012 was the plan’s first year.

Under this management plan, the Group aims to become a world-class real estate firm by setting three key policies: expand and grow the existing six business segments, move into overseas markets, and reform the management infrastructure.

In order to expand and grow the existing six business segments, the Group will carefully monitor the constantly changing trends in the real estate market and continuously respond to customer needs. To achieve this, the Group will reinforce the revitalization and Development businesses further, with a particular focus on expanding business with end users and investors. In the Fund business, the Group will aim to benefit from an upturn in the investment market by increasing the balance of assets under management and expanding fee income. In particular, it will seek to capture opportunities of the establishment of new funds.

As part of moves into overseas markets, the Group will work to reinforce relationships with global investors in the Fund business and other segments. In January 2012, the Group established Tosei Singapore Pte. Ltd. as a local subsidiary. The following November, it concluded a membership contract with NAI Global, a network of global commercial real estate brokers. Membership of this network will give the Tosei Group opportunities to diversify its real estate portfolio. We plan to step up efforts to generate earnings from these initiatives.

In order to reform the management infrastructure, the Group aims to build an organization and infrastructure that supports the development of human resources and the implementation of strategy, maintain a sound financial structure, and establish an organization capable of meeting the challenges of globalization and a disclosure system.

While tackling these areas under its three key policies, the Group will also continue to place emphasis on compliance, risk management, and timely and appropriate disclosure in order to create a world-class management structure by stepping up efforts to enhance group-wide corporate governance.

(3) Other Important Management Matters None

9

4. Consolidated Financial Statements (1) Consolidated Balance Sheets

(Thousands of yen, rounded down to the nearest thousand)

As of November 30, 2011 As of November 30, 2012

Assets

Current assets

Cash and deposits 8,326,305 9,430,622

Notes and accounts receivable-trade 399,856 314,348

Short-term investment securities 10,000 10,000

Real estate for sale 27,360,973 31,502,387

Real estate for sale in process 6,374,335 5,675,757

Purchased receivables 81,361 2,951

Supplies 3,254 2,426

Deferred tax assets 966,545 990,487

Other 391,300 1,211,089

Allowance for doubtful accounts (5,697) (6,109)

Total current assets 43,908,234 49,133,960

Noncurrent assets

Property, plant and equipment

Buildings and structures 5,337,567 5,579,356

Accumulated depreciation (947,482) (1,106,822)

Buildings and structures, net 4,390,084 4,472,533

Tools, furniture and fixtures 120,979 122,220

Accumulated depreciation (88,678) (90,878)

Tools, furniture and fixtures, net 32,301 31,342

Land 10,175,285 10,031,990

Other 6,777 21,629

Accumulated depreciation (4,895) (5,187)

Other, net 1,882 16,441

Total property, plant and equipment 14,599,553 14,552,308

Intangible assets

Software 65,816 41,202

Leasehold right - 346,164

Telephone subscription right 1,889 1,889

Total intangible assets 67,705 389,256

Investments and other assets

Investment securities 380,612 403,001

Long-term loans receivable 10,325 3,355

Deferred tax assets 870,404 83,194

Other 145,100 254,175

Allowance for doubtful accounts (14,332) (86,286)

Total investments and other assets 1,392,110 657,440

Total noncurrent assets 16,059,369 15,599,004

Total assets 59,967,603 64,732,965

10

11


As of November 30, 2011 As of November 30, 2012

Liabilities

Current liabilities

Notes and accounts payable-trade 806,396 1,670,415

Short-term loans payable - 384,400

Current portion of long-term loans payable 6,170,937 7,356,272

Income taxes payable 79,271 72,921

Advances received 545,967 990,100

Provision for bonuses 150,520 125,659

Other 1,038,122 684,780

Total current liabilities 8,791,215 11,284,548

Noncurrent liabilities

Long-term loans payable 23,904,245 24,654,459

Deferred tax liabilities 15,200 -

Provision for retirement benefits 133,154 147,211

Provision for directors’ retirement benefits 312,586 328,667

Guarantee deposits 1,810,439 2,130,063

Asset retirement obligations 24,710 24,842

Other - 11,071

Total noncurrent liabilities 26,200,336 27,296,315

Total liabilities 34,991,552 38,580,864

Net assets

Shareholders’ equity

Capital stock 5,454,673 5,454,673

Capital surplus 5,538,149 5,538,149

Retained earnings 13,985,597 15,162,573

Total shareholders’ equity 24,978,420 26,155,396

Accumulated other comprehensive income

Valuation difference on available-for-sale securities (2,369) (926)

Deferred gains or losses on hedges - (3,751)

Foreign currency translation adjustment - 1,382

Total accumulated other comprehensive income (2,369) (3,295)

Total net assets 24,976,051 26,152,100

Total liabilities and net assets 59,967,603 64,732,965

(2) Consolidated Statements of Operations (Thousands of yen, rounded down to the nearest thousand)

Year ended November 30, 2011

(Dec. 1, 2010 - Nov. 30, 2011)


(Dec. 1, 2011 - Nov. 30, 2012)

Net sales 24,759,291 24,539,823

Cost of sales 19,290,132 18,291,818

Gross profit 5,469,158 6,248,005

Selling, general and administrative expenses 3,080,121 3,217,373

Operating income 2,389,037 3,030,631

Non-operating income

Interest income 2,797 1,679

Dividends income 2,861 2,861

Amortization of negative goodwill 1,490 -

Penalty income 34,035 -

Miscellaneous income 30,724 18,209

Total non-operating income 71,908 22,750

Non-operating expenses

Interest expenses 885,646 775,254

Foreign exchange losses - 1,448

Miscellaneous loss 799 2,310

Total non-operating expenses 886,445 779,013

Ordinary income 1,574,500 2,274,369

Extraordinary loss

Loss on sales of noncurrent assets - 18,874

Loss on retirement of noncurrent assets - 2,377

Loss on valuation of membership 16,976 4,366

Loss on adjustment for changes of accounting standard for asset retirement obligations 19,932 -

Special contribution at the time of withdrawal from employee pension funds - 76,442

Total extraordinary losses 36,909 102,061

Income before income taxes and minority interests 1,537,591 2,172,307

Income taxes-current 65,899 110,535

Income taxes-deferred 719,708 656,376

Total income taxes 785,608 766,911

Income before minority interests 751,982 1,405,395

Net income 751,982 1,405,395

12

Consolidated Statements of Comprehensive Income (Thousands of yen, rounded down to the nearest thousand)


(Dec. 1, 2010 - Nov. 30, 2011)


(Dec. 1, 2011 - Nov. 30, 2012)

Income before minority interests 751,982 1,405,395

Other comprehensive income

Valuation difference on available-for-sale securities (3,143) 1,442

Deferred gains or losses on hedges - (3,751)

Foreign currency translation adjustment - 1,382

Total other comprehensive income (3,143) (926)

Comprehensive income 748,839 1,404,469

Comprehensive income attributable to

Comprehensive income attributable to owners of the parent

748,839 1,404,469

13

(3) Consolidated Statements of Changes in Net Assets (Thousands of yen, rounded down to the nearest thousand)


(Dec. 1, 2010 - Nov. 30, 2011)


(Dec. 1, 2011 - Nov. 30, 2012)

Shareholders’ equity

Capital stock

Balance at the beginning of current period 5,454,673 5,454,673

Balance at the end of current period 5,454,673 5,454,673

Capital surplus



Retained earnings


Changes of items during the period

Dividends from surplus (228,420) (228,420)

Net income 751,982 1,405,395

Total changes of items during the period 523,562 1,176,975


Total shareholders’ equity




Net income 751,982 1,405,395



Accumulated other comprehensive income

Valuation difference on available-for-sale securities

Balance at the beginning of current period 774 (2,369)


Net changes of items other than shareholders’ equity (3,143) 1,442

Total changes of items during the period (3,143) 1,442

Balance at the end of current period (2,369) (926)

Deferred gains or losses on hedges

Balance at the beginning of current period - -


Net changes of items other than shareholders’ equity - (3,751)

Total changes of items during the period - (3,751)

Balance at the end of current period - (3,751)

Foreign currency translation adjustment

Balance at the beginning of current period - -


Net changes of items other than shareholders’ equity - 1,382

Total changes of items during the period - 1,382

Balance at the end of current period - 1,382

Total accumulated other comprehensive income

Balance at the beginning of current period 774 (2,369)


Net changes of items other than shareholders’ equity (3,143) (926)

Total changes of items during the period (3,143) (926)

Balance at the end of current period (2,369) (3,295)

14



(Dec. 1, 2010 - Nov. 30, 2011)


(Dec. 1, 2011 - Nov. 30, 2012)

Total net assets




Net income 751,982 1,405,395

Net changes of items other than shareholders’ equity (3,143) (926)



15

(4) Consolidated Statements of Cash Flows (Thousands of yen, rounded down to the nearest thousand)


(Dec. 1, 2010 - Nov. 30, 2011)


(Dec. 1, 2011 - Nov. 30, 2012)

Net cash provided by (used in) operating activities

Income before income taxes and minority interests 1,537,591 2,172,307

Depreciation and amortization 336,398 328,464

Amortization of negative goodwill (1,490) -

Increase (decrease) in provision 17,654 77,642

Interest and dividends income (5,658) (4,540)

Interest expenses paid on loans and bonds 885,646 775,254

Loss on retirement of property, plant and equipment - 2,377

Loss (gain) on sales of property, plant and equipment - 18,874

Loss on adjustment for changes of accounting standard for asset retirement obligations

19,932 -

Loss on valuation of membership 16,976 4,366

Decrease (increase) in notes and accounts receivable-trade

64,280 11,241

Decrease(increase) in purchased receivables 5,106 78,409

Decrease (increase) in inventories 3,305,302 (4,129,276)

Decrease (increase) in advance payments (220,082) 147,853

Increase (decrease) in notes and accounts payable-trade 438,233 864,185

Increase (decrease) in advances received 260,461 444,132

Increase (decrease) in guarantee deposits received (76,084) 319,624

Decrease (increase) in other current assets 67,194 (964,675)

Other, net 265,944 (254,899)

Subtotal 6,917,407 (108,659)

Interest and dividends income received 4,923 4,530

Interest expenses paid (881,503) (778,399)

Income taxes paid (23,098) (122,725)

Net cash provided by (used in) operating activities 6,017,729 (1,005,254)

Net cash provided by (used in) investing activities

Net decrease (increase) in time deposits 286,136 -

Purchase of property, plant and equipment (61,532) (140,303)

Proceeds from sales of property, plant and equipment - 216,965

Purchase of intangible assets (36,717) (4,560)

Purchase of investment securities (353,350) (22,000)

Proceeds from sales of investment securities 0 -

Collection of investment securities 15,347 150

Decrease (increase) in deposits and guarantee money (17,740) (38,927)

Collection of loans receivable 51,705 7,466

Other, net - (1,490)

Net cash provided by (used in) investing activities (116,149) 17,300

16

17



(Dec. 1, 2010 - Nov. 30, 2011)


(Dec. 1, 2011 - Nov. 30, 2012)

Net cash provided by (used in) financing activities

Net increase (decrease) in short-term loans payable - 384,400

Proceeds from long-term loans payable 11,474,100 15,777,100

Repayment of long-term loans payable (15,661,377) (13,841,551)

Cash dividends paid (227,718) (227,857)

Other, net (1,567) (1,219)

Net cash provided by (used in) financing activities (4,416,563) 2,090,871

Effect of exchange rate change on cash and cash equivalents

- 1,399

Net increase (decrease) in cash and cash equivalents 1,485,016 1,104,317

Cash and cash equivalents at beginning of period 6,821,288 8,306,305

Cash and cash equivalents at end of period 8,306,305 9,410,622

(5) Note on Going Concern Assumption

None

(6) Significant Matters Forming the Basis of Preparing Consolidated Financial Statements

1. Scope of consolidation

(1) Number of consolidated subsidiaries: 6 Names of consolidated subsidiaries: Tosei Community Co., Ltd. Tosei Asset Advisors, Inc. Tosei Singapore Pte. Ltd. Tosei Revival Investment Co., Ltd. Hestia Capital Limited Company Green House Limited Company

Of the above consolidated subsidiaries, Tosei Singapore Pte. Ltd. was included in the scope of consolidation since it was newly established during the year under review.

Metis Capital Co., Ltd., which was a consolidated subsidiary of the Company until the previous year, was excluded from the scope of consolidation from the year under review, since it was merged into Tosei Revival Investment Co., Ltd. on May 31, 2012.

(2) Name and others of unconsolidated subsidiary Sannomiya Real Estate Sales LLC

(Reason for exclusion from scope of consolidation) The unconsolidated subsidiary is small, and total assets, net sales, net income or loss, retained earnings and others have no significant impact on the consolidated financial statements.

2. Fiscal year-end of consolidated subsidiaries All consolidated subsidiaries have the same fiscal year-end as the consolidated closing date. From the year under review, the closing date of Tosei Community Co., Ltd. was changed from October

31 to the consolidated closing date for the purpose of improvement of efficiency of management and business operation of the Group. Accordingly, the accounting period of the subsidiary was for 13 months, and the difference was adjusted through the consolidated statement of operations.

3. Accounting policies

(1) Valuation standards and methods for significant assets

1) Securities Available-for-sale securities i. With market value

Stated at fair value based on market value and others as of the consolidated closing date (unrealized gains and losses, net of applicable taxes, are reported in a separate component of net assets, and costs of securities sold are determined by the moving-average method).

ii. Without market value Stated at cost determined by the moving-average method.

2) Inventories The cost method (the carrying amounts on the consolidated balance sheets are written down due to

a decline in profitability) is used as the valuation standard. i. Real estate for sale and real estate for sale in process

Specific identification method ii. Purchased receivables

18

Specific identification method iii. Supplies

Last purchase price method

(2) Depreciation of significant depreciable assets

1) Property, plant and equipment (excluding lease assets) Property, plant and equipment are depreciated by the declining-balance method. However, buildings acquired on or after April 1, 1998 (excluding facilities attached to buildings) are

depreciated by the straight-line method. Useful lives are summarized as follows:

Buildings 3 to 50 years Structures 10 to 30 years Machinery and equipment 8 years Tools, furniture and fixtures 3 to 20 years

2) Intangible assets (excluding lease assets) Intangible assets are amortized by the straight-line method. Internal use software is amortized over the estimated useful life (5 years).

3) Lease assets Lease assets are depreciated by the straight-line method over the lease term with no residual value. Finance leases that do not transfer ownership and commenced on or before March 31, 2008 are

accounted for in a similar manner with ordinary rental transactions.

(3) Significant allowances

1) Allowance for doubtful accounts To cover losses from bad debts, allowance for doubtful accounts is provided in the amount expected

to be uncollectible based on historical experience of bad debt for general receivables and individual collectability for specific receivables such as doubtful receivables.

2) Provision for bonuses To cover bonus payments to employees, provision for bonuses is provided in the amount for the

fiscal year based on the estimated amount of payment.

3) Provision for retirement benefits To cover retirement benefits to employees, the amount that would be required to pay if all eligible

employees retired at the fiscal year-end is provided based on the estimated amount of retirement benefit obligations as of the fiscal year-end.

4) Provision for directors’ retirement benefits Provision for directors’ retirement benefits is provided in the amount required as of the fiscal year-

end to cover retirement benefit payments to directors and corporate auditors according to the rule for retirement benefits to directors and corporate auditors.

(4) Translation of significant assets and liabilities denominated in foreign currencies into Japanese

currency Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen

at the spot exchange rate prevailing at the consolidated closing date, and differences arising from such translation are recognized in the consolidated statement of operations. Assets and liabilities of consolidated foreign subsidiaries are translated into Japanese yen at the spot exchange rate prevailing at the consolidated closing date, and revenues and expenses of consolidated foreign subsidiaries are translated into Japanese yen at the average exchange rate during the period. Differences arising from such translation are recorded in foreign currency translation adjustment in net assets.

19

20

(5) Significant hedge accounting

1) Hedge accounting Deferral hedge accounting is applied.

2) Hedging instruments and hedged items

Hedging instruments: Interest rate swaps Hedged items: Loans payable

3) Hedging policy Hedging is undertaken to the extent of hedged liabilities to reduce interest rate risk.

4) Assessment of hedge effectiveness The Company and its consolidated subsidiaries assess the hedge effectiveness by comparing the

cumulative changes in fair value of the hedged item with the corresponding changes in fair value of the hedging instrument to date from the inception of the hedge.

(6) Scope of funds in consolidated statements of cash flows Cash and cash equivalents consist of cash on hand, readily available deposits, and highly liquid short-

term investments with original maturities of three months or less that are exposed to an insignificant risk of changes in value.

(7) Other significant matters for preparing consolidated financial statements

1) Accounting for consumption taxes Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. However, non-deductible consumption taxes related to noncurrent assets and others are recorded as

long-term prepaid expenses (amortized over 5 years), and other non-deductible consumption taxes are recorded as expenses for the term in which they arise.

2) Accounting for investments in silent partnership For investments in an investment limited partnership and other similar partnerships (considered

securities according to Article 2-2 of Financial Instruments and Exchange Act), an amount equivalent to the equity interest in the property of the silent partnership is recorded as “Investment securities.” “Investment securities” is recorded at the time of contribution to a silent partnership. An amount equivalent to the equity interest in profit and loss earned from operating activities by the silent partnership is recorded as “Operating income or loss,” and the same amount is added to or deducted from “Investment securities.” For the repayment of the contribution (including the amount equivalent to the equity interest in profit and loss earned from operating activities) from a business operator, “Investment securities” is reduced.

3) Accounting for purchased receivables When a payment for purchased receivables is collected, the amount collected is deducted from the

acquisition cost of the purchased receivables for each receivable, and the amount collected for each receivable in excess of the acquisition cost is recorded as revenue on a net basis.

However, as for the amount collected that the division between principal and interest is defined, the principal portion is deducted from the acquisition cost, and the interest portion is recorded as revenue.

(7) Change in Accounting Policy (Change in Depreciation Method)

From the year under review, following the revision of the Corporation Tax Act, the Group adopted the depreciation method in accordance with the revised Corporation Tax Act for property, plant and equipment acquired on or after April 1, 2012.

The impact of this change on profit and loss for the year under review was immaterial.

(8) Change in Presentation (Consolidated Statements of Cash Flows)

“Decrease (increase) in other current assets” included in “Other, net” in “Net cash provided by (used in) operating activities” for the previous year was reported as a separate line item from the year under review due to the increased materiality. The consolidated statement of cash flows for the previous year was reclassified due to this change in presentation.

Consequently, 333,139 thousand yen included in “Other, net” in “Net cash provided by (used in) operating activities” on the consolidated statement of cash flows for the previous year was reclassified to 67,194 thousand yen of “Decrease (increase) in other current assets” and 265,944 thousand yen of “Other, net.”

(9) Additional Information (Application of Accounting Standard for Accounting Changes and Error Corrections)

The Group adopted the “Accounting Standard for Accounting Changes and Error Corrections” (Accounting Standards Board of Japan Statement No. 24, issued on December 4, 2009) and the “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (Accounting Standards Board of Japan Guidance No. 24, issued on December 4, 2009) for the accounting changes and corrections of prior period errors made after the beginning of the year under review. (Change in Holding Purpose)

Leasehold property previously held as real estate for sale (Buildings and structures: 194,770 thousand yen, Leasehold right: 346,164 thousand yen) was transferred to noncurrent assets due to the change in business policy.

21

(10) Notes to Consolidated Financial Statements

(Segment Information)

a. Segment information

1. Summary of reportable segments The Group’s reportable segments are components of the Company for which separate financial

information is available that is evaluated regularly by the Board of Directors to determine allocation of management resources and assess performance. The Group’s head office draws up comprehensive domestic strategies for each business, and the Group conducts business activities accordingly. Consequently, the Group is made up of segments based on business, as determined by the head office, and has six reportable segments: “Revitalization Business,” “Development Business,” “Rental Business,” “Fund Business,” “Property Management Business” and “Alternative Investment Business.” In the “Revitalization Business,” the Group increases the value of properties whose asset value has declined and resells them. In the “Development Business,” the Group sells condominium units and detached houses in lots to individual customers, and rental apartments and office buildings to investors. In the “Rental Business,” the Group rents office buildings and condominiums. The “Fund Business” mainly provides REIT fund asset management services. The “Property Management Business” provides comprehensive property management services. In the “Alternative Investment Business,” the Group acquires real estate collateralized loans and sells properties acquired by collecting receivables and accepting substitute performances.

2. Method for calculating net sales, profit or loss, assets, liabilities and other items by reportable segment Accounting policies of reported business segments are consistent with those disclosed in “Significant

Matters Forming the Basis of Preparing Consolidated Financial Statements.” The reported segment profit is calculated on an operating income basis. Intersegment sales or transfers

are based on actual market prices.

22

3. Information about net sales, profit or loss, assets, liabilities and other items by reportable segment

(1) Year ended November 30, 2011 (from December 1, 2010 to November 30, 2011) (Thousands of yen, rounded down to the nearest thousand)

Reportable segments

Revitalization

Business

Development

Business

Rental

Business

Fund

Business

Property

Management

Business

Alternative

Investment

Business

Total

Reconciliations (Note 1)

Amount recorded on

the consolidated

financial statements(Note 2)

Net sales

Sales from external customers

12,040,886 5,256,145 2,459,614 1,396,347 3,425,416 180,880 24,759,291 - 24,759,291

Intersegment sales or transfers

- - 48,119 18,017 485,731 - 551,869 (551,869) -

Total 12,040,886 5,256,145 2,507,733 1,414,365 3,911,147 180,880 25,311,160 (551,869) 24,759,291

Segment profit (loss)

1,891,898 (22,238) 1,182,925 652,879 104,845 (190,258) 3,620,051 (1,231,014) 2,389,037

Segment assets 19,048,273 13,562,936 13,258,186 856,286 1,669,912 2,433,173 51,098,768 8,868,835 59,967,603

Others

Depreciation - - 254,418 2,281 24,509 16,657 297,866 38,532 336,398

Increase in property, plant and equipment and intangible assets

- - 44,049 3,605 5,376 2,661 55,693 49,204 104,897

Notes: 1. The details of reconciliations are as follows: (1) Reconciliations of segment profit (loss) of (1,231,014) thousand yen include eliminations of intersegment

transactions of (20,063) thousand yen and corporate expenses that are not allocated to any particular reportable segment of (1,210,951) thousand yen. Corporate expenses mainly consist of selling, general and administrative expenses of the parent company that are not attributable to any particular reportable segment.

(2) Reconciliations of segment assets of 8,868,835 thousand yen include corporate assets that are not allocated to any particular reportable segment of 9,783,874 thousand yen. Corporate assets mainly consist of surplus funds that are not attributable to any particular reportable segment (cash and deposits and short-term investment securities) and assets related to the administrative division of the Company.

(3) Reconciliations of depreciation of 38,532 thousand yen consist of corporate expenses that are not attributable to any particular reportable segment.

(4) Reconciliations of increase in property, plant and equipment and intangible assets of 49,204 thousand yen consist of increase in corporate assets that are not attributable to any particular reportable segment.

2. Segment profit (loss) is reconciled to operating income on the consolidated statement of operations.

23

(2) Year ended November 30, 2012 (from December 1, 2011 to November 30, 2012) (Thousands of yen, rounded down to the nearest thousand)

Reportable segments

Revitalization

Business

Development

Business

Rental

Business

Fund

Business

Property

Management

Business

Alternative

Investment

Business

Total

Reconciliations (Note 1)

Amount recorded on

the consolidated

financial statements(Note 2)

Net sales

Sales from external customers

5,980,183 10,985,270 2,446,682 776,723 3,512,228 838,736 24,539,823 - 24,539,823

Intersegment sales or transfers

- 274,003 55,044 23,065 343,859 2,269 698,243 (698,243) -

Total 5,980,183 11,259,274 2,501,727 799,788 3,856,087 841,006 25,238,066 (698,243) 24,539,823

Segment profit 390,895 2,318,788 1,192,557 184,135 68,442 59,189 4,214,010 (1,183,378) 3,030,631

Segment assets 23,114,013 14,643,328 13,583,668 942,624 1,349,101 1,905,916 55,538,653 9,194,311 64,732,965

Others

Depreciation - - 240,391 5,424 21,488 15,822 283,125 45,338 328,464

Increase in property, plant and equipment and intangible assets

- - 114,531 10,079 2,412 714 127,737 17,125 144,863

Notes: 1. The details of reconciliations are as follows: (1) Reconciliations of segment profit of (1,183,378) thousand yen include eliminations of intersegment transactions of

(12,536) thousand yen and corporate expenses that are not allocated to any particular reportable segment of (1,170,841) thousand yen. Corporate expenses mainly consist of selling, general and administrative expenses of the parent company that are not attributable to any particular reportable segment.

(2) Reconciliations of segment assets of 9,194,311 thousand yen include corporate assets that are not allocated to any particular reportable segment of 10,387,815 thousand yen. Corporate assets mainly consist of surplus funds that are not attributable to any particular reportable segment (cash and deposits and short-term investment securities) and assets related to the administrative division of the Company.

(3) Reconciliations of depreciation of 45,338 thousand yen consist of corporate expenses that are not attributable to any particular reportable segment.

(4) Reconciliations of increase in property, plant and equipment and intangible assets of 17,125 thousand yen consist of increase in corporate assets that are not attributable to any particular reportable segment.

2. Segment profit is reconciled to operating income on the consolidated statement of operations.

b. Related information

I Year ended November 30, 2011 (from December 1, 2010 to November 30, 2011)

1. Information by product and service Information by product and service is omitted since similar information is disclosed in segment

information. 2. Information by geographical area

(1) Net sales Information about net sales is omitted since sales from external customers in Japan exceeded 90%

of net sales on the consolidated statement of operations. (2) Property, plant and equipment

Information about property, plant and equipment is omitted since the amount of property, plant and equipment located in Japan exceeded 90% of property, plant and equipment on the consolidated balance sheet.

3. Information by major customer Information by major customer is omitted since there were no sales from a single external

customer accounting for 10% or more of net sales on the consolidated statement of operations.

24

25

II Year ended November 30, 2012 (from December 1, 2011 to November 30, 2012)

1. Information by product and service Information by product and service is omitted since similar information is disclosed in segment

information. 2. Information by geographical area

(1) Net sales Information about net sales is omitted since sales from external customers in Japan exceeded 90%

of net sales on the consolidated statement of operations. (2) Property, plant and equipment

Information about property, plant and equipment is omitted since the amount of property, plant and equipment located in Japan exceeded 90% of property, plant and equipment on the consolidated balance sheet.

3. Information by major customer Information by major customer is omitted since there were no sales from a single external

customer accounting for 10% or more of net sales on the consolidated statement of operations.

c. Information about impairment loss on noncurrent assets by reportable segment

Year ended November 30, 2011 (from December 1, 2010 to November 30, 2011) None


d. Information about amortization of goodwill and balance of unamortized goodwill by reportable segment

Year ended November 30, 2011 (from December 1, 2010 to November 30, 2011) Information about amortization of goodwill and balance of unamortized goodwill by reportable

segment is omitted since their amounts are immaterial.


e. Information about gain on negative goodwill by reportable segment



(Per Share Information)

Year ended November 30, 2011(Dec. 1, 2010 - Nov. 30, 2011)


Net assets per share 54,671.33 yen 57,245.65 yen

Net income per share 1,646.05 yen 3,076.34 yen

Notes: 1 Diluted net income per share is not disclosed since there were no potential shares. 2 The basis for calculation of net income per share is as follows:

Item Year ended November 30, 2011(Dec. 1, 2010 - Nov. 30, 2011)


Net income per share

Net income (Thousand yen) 751,982 1,405,395

Amount not attributable to common shareholders (Thousand yen)

- -

Net income related to common stock (Thousand yen) 751,982 1,405,395

Average number of shares of common stock outstanding (Shares)

456,840 456,840

3 The basis for calculation of net assets per share is as follows:

Item As of November 30, 2011 As of November 30, 2012

Total net assets (Thousand yen) 24,976,051 26,152,100

Deduction from total net assets (Thousand yen) - -

Net assets related to common stock at fiscal year-end (Thousand yen)

24,976,051 26,152,100

Number of shares of common stock outstanding at fiscal year-end used for calculation of net assets per share (Shares)

456,840 456,840

(Significant Subsequent Events)

None

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Consolidated Financial Results for the Year Ended …...1) Consolidated Results for the Year Ended...

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Transcript of Consolidated Financial Results for the Year Ended …...1) Consolidated Results for the Year Ended...