トーセイ（8923） – Notice of the 72nd Ordinary General Meeting of Shareholders

(Translation) 8923: Tosei Corporation Note: This English document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translation and the Japanese original, the Japanese original shall prevail. Tosei Corporation assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. Tosei Corporation Securities Code: 8923 February 4, 2022 Dear Shareholders, Notice of the 72nd Ordinary General Meeting of Shareholders We are pleased to announce the 72nd Ordinary General Meeting of Shareholders of Tosei Corporation (the “Company”; this meeting, the “Meeting”), which will be held as described below. To prevent the further spread of infections of the novel coronavirus (COVID-19), the Company urges its shareholders to exercise their voting rights in advance in writing or by electromagnetic method (using the Internet, etc.) and refrain from attending the Meeting in person. Prior to voting, please examine the attached Reference Documents for the General Meeting of Shareholders and exercise your voting rights no later than 6:00 p.m. on Thursday, February 24, 2022 (JST). The Company will livestream the Meeting so that more shareholders will be able to view the proceedings of the Meeting from their homes or other places. Please note that while shareholders can comment during the livestreaming by using the chat function, shareholders will not be able to ask any questions pursuant to the Companies Act, exercise their voting rights, or propose a motion in the chat. The Company will also take questions from shareholders in advance on its dedicated website. For cautionary notes regarding the advance registration of questions and the livestreaming as well as information on electromagnetic methods for exercising voting rights (via the Internet), etc., please refer to page 2. Sincerely yours, Seiichiro Yamaguchi President and CEO Tosei Corporation 4-5-4 Shibaura, Minato-ku, Tokyo Friday, February 25, 2022, at 10:00 a.m. (JST) (The reception for attendees begins at 9:00 a.m.) Details 1. Date and Time: 2. Place: Jiji Press Hall (2nd Floor, Jiji Press Building) 5-15-8 Ginza, Chuo-ku, Tokyo 3. Purpose of the Meeting Matters to be reported: a. Business Report and Consolidated Financial Statements, as well as the audit reports of the Accounting Auditor and the Audit & Supervisory Board on Consolidated Financial Statements, for the 72nd term (from December 1, 2020 to November 30, 2021) b. Non-consolidated Financial Statements for the 72nd term (from December 1, 2020 to November 30, 2021) Matters to be resolved: Proposal 1: Appropriation of Surplus Proposal 2: Election of Nine (9) Directors 1 (Translation) 8923: Tosei Corporation If any changes are made to items in the Reference Documents for the General Meeting of Shareholders, Business Report, Non-consolidated Financial Statements, or Consolidated Financial Statements, such changes will be posted on the Company’s website (https://www.toseicorp.co.jp/) Prior to the Meeting, the Company will take questions from shareholders regarding the purpose of the Meeting. On the day of the Meeting, the Company plans to answer some of the questions registered in advance that are considered relevant to the purpose of the Meeting or considered to draw attention of many shareholders. Please be advised that the Company does not promise to answer all the questions it receives. Even if some questions remain unanswered at the Meeting, the Company will not respond to them individually. For the method of registering questions in advance, please refer to the enclosed attachment (Information on Advance Registration of Questions and Viewing the Livestreaming for the 72nd Ordinary General Meeting of Shareholders). Shareholders viewing the livestreaming will not be recognized as having attended the Meeting pursuant to the Companies Act. Accordingly, shareholders will not be allowed to ask questions, exercise their voting rights, or propose a motion, which shareholders are allowed to do at general meetings of shareholders, via the livestreaming. To exercise your voting rights, shareholders are asked to keep in mind the deadline for the exercise of voting rights and vote by postal mail using the Voting Form or by electromagnetic method (via the Internet) or take advantage of proxy voting on the day of the Meeting by granting power of attorney to a proxy. For the method of viewing the livestreaming, please refer to the enclosed attachment (Information on Registration of Prior Questions and Viewing the Livestreaming for the 72nd Ordinary General Meeting of Shareholders). Please be advised that if you send a comment online during the livestreaming, the Company may post the comment on its website after the closing of the Meeting. Depending on the environment of the PC used (PC model, functions, and the like) and the Internet connection environment (network circuit status, connectivity speed, and the like), you may experience problems with the images or sound of the livestreaming. Please be advised that the Company accepts no responsibility whatsoever for any disadvantage incurred by the shareholder as a result of these problems. Furthermore, communication charges to view the livestreaming will be at the viewer’s expense. When you attend the Meeting, you are kindly requested to present the enclosed Voting Form to the receptionist. The Company plans to livestream the Meeting. Please be advised that while the Company intends to pay due consideration to the shareholders’ privacy and film only the Chairman and the area surrounding the seats of the executives, images of attending shareholders may unavoidably appear on the stream. After the closing of the Meeting, the Business Strategy Presentation Meeting will be held (and livestreamed) in the same place. 2 (Translation) 8923: Tosei Corporation Reference Documents for the General Meeting of Shareholders Proposal 1: Appropriation of Surplus The Company proposes the appropriation of surplus as shown below: Year-end dividend Taking into account such factors as our operating results for the fiscal year under review and our future business development, the Company proposes the year-end dividend for the 72nd term as shown below. 1. Type of dividend property: Money 2. Dividend property allotment and total amount thereof Dividends per ordinary share of the Company: Total amount of dividends: ¥38 ¥1,815,783,564 3. Effective date of dividends from surplus: February 28, 2022 3 (Translation) 8923: Tosei Corporation Proposal 2: Election of Nine (9) Directors The terms of office of all nine (9) Directors will expire at the conclusion of the Meeting. Accordingly, we propose the election of nine (9) Directors. The candidates for Directors are as follows: No. Name Current positions and areas of responsibility in the Company 1 Reappointment Seiichiro Yamaguchi President and CEO 2 Reappointment Noboru Hirano 3 Reappointment Hideki Nakanishi 4 Reappointment Masaaki Watanabe 5 Reappointment Shunsuke Yamaguchi 6 Reappointment Hitoshi Oshima CFO Senior Executive Officer of Administrative Division In charge of Human Resource Department Director COO and Senior Executive Officer of Business Division In charge of Asset Solution Department 4 and Asset Solutions Business Promotion Department Director Managing Executive Officer Deputy Chief of Business Division In charge of Asset Solution Department 5 Director Executive Officer In charge of Finance Department and General Affairs Department Director Executive Officer In charge of Asset Solution Department 1 and Crowd Funding Department 7 8 9 Reappointment Outside Independent Reappointment Outside Independent Reappointment Outside Independent Kenichi Shohtoku Outside Director Hiroyuki Kobayashi Outside Director Masao Yamanaka Outside Director Attendance at the meetings of the Board of Directors held in the fiscal year under review 19/19 (100% attendance rate) 19/19 (100% attendance rate) 19/19 (100% attendance rate) 19/19 (100% attendance rate) 19/19 (100% attendance rate) 19/19 (100% attendance rate) 19/19 (100% attendance rate) 19/19 (100% attendance rate) 19/19 (100% attendance rate) 4 1 2 (Translation) 8923: Tosei Corporation Number of the Company’s shares held 12,885,500 No. Name (Date of birth) Career summary, positions and areas of responsibility in the Company (Important concurrent positions outside the Company) Reappointment Seiichiro Yamaguchi (Jan. 5, 1961) Apr. 1983 Apr. 1986 Aug. 1990 Jun. 1994 Dec. 1995 Jul. 2004 Joined Mitsui Real Estate Sales Co., Ltd. Joined Tosei-Shoji Corporation Director of the Company President and Representative Director of the Company (current position) Representative Director of Palms Community Management Co. Ltd. (the predecessor of Tosei Community Co., Ltd.) President and CEO of the Company (current position) ≪Reasons for nomination as a candidate for Director≫ After being appointed as Representative Director of the Company in 1994, Seiichiro Yamaguchi has been leading the Company and the Group and has been committed to expanding its business scale and domains, and thus is essential for the management of the Company. In addition, as Chairman of the Board of Directors, he facilitates the efficient proceedings and actively seeks opinions from Outside Directors and Audit & Supervisory Board Members, playing the most important roles in promoting governance of the Company and the Group. Considering that he will continue to contribute to the Group’s sustainable growth and improvement of corporate value, we renominated him as a candidate for Director. Reappointment Noboru Hirano (Oct. 17, 1959) 60,000 Apr. 1982 Apr. 1991 May 1995 Mar. 2001 Joined Kokubu & Co., Ltd. Joined Tosei-Shoji Corporation Director of Tosei-Shoji Corporation General Manager of Finance and Accounting Department of the Company Oct. 2002 Managing Director of the Company Jul. 2004 Managing Executive Officer of the Company Mar. 2005 Apr. 2005 Sep. 2005 Feb. 2006 Dec. 2007 Jan. 2013 Feb. 2013 Feb. 2016 Apr. 2017 Feb. 2020 Audit & Supervisory Board Member of Tosei Revival Investment Co., Ltd. Audit & Supervisory Board Member of Tosei Community Co., Ltd. Representative Director of Tosei REIT Advisors, Inc. (the predecessor of Tosei Asset Advisors, Inc.) CFO and Senior Executive Officer of Administrative Division of the Company Representative Director of Tosei Revival Investment Co., Ltd. Director of Tosei Revival Investment Co., Ltd. Director of Tosei Community Co., Ltd. Director of Tosei Asset Advisors, Inc. (current position) CFO, Senior Executive Officer of Administrative Division and in charge of Human Resource Department of the Company (current position) Representative Director of Tosei Revival Investment Co., Ltd. (current position) ≪Reasons for nomination as a candidate for Director≫ After being appointed as Director of the Company in 2002, Noboru Hirano has been supporting Representative Director Seiichiro Yamaguchi in overall management of the Company, and is committed to growth of the Group, while being in charge of overall governance of the internal administrative division and each Group company. Considering that he is indispensable for the Group’s sustainable growth and improvement of the management quality in the future, we renominated him as a candidate for Director. 5 (Translation) 8923: Tosei Corporation No. Name (Date of birth) Career summary, positions and areas of responsibility in the Company (Important concurrent positions outside the Company) Number of the Company’s shares held Apr. 1990 Jun. 1999 Oct. 2001 Apr. 2006 Mar. 2013 Feb. 2016 Joined The Yasuda Trust & Banking Co., Ltd. (the predecessor of Mizuho Trust & Banking Co., Ltd.) Joined Gold Crest Co., Ltd. Joined HUSER Corporation Joined the Company Executive Officer of the Company Director of Tosei Revival Investment Co., Ltd. (current position) Reappointment Hideki Nakanishi (Jun. 17, 1967) Mar. 2017 Managing Executive Officer of the Company Feb. 2018 Dec. 2018 Director and Managing Executive Officer of the Company Director, Managing Executive Officer, Deputy Chief of Business Division of the Company Director, COO and Senior Executive Officer of Business Division and in charge of Asset Solution Department 4 and Asset Solutions Business Promotion Department (current position) ≪Reasons for nomination as a candidate for Director≫ Mar. 2021 After joining the Company in 2006, Hideki Nakanishi has been consistently engaged in the Revitalization Business and the Fund and Consulting Business of the Company. After being appointed as Executive Officer in 2013, he participated in deliberations related not only to assigned businesses but also to overall management as a member of the management meeting. After being appointed as Director in 2018, he has been sincerely working on management issues of the Company and the Group. Considering that he has been supervising the entire Business Division as Senior Executive Officer of Business Division, leading the entire business of the Company, and that he is indispensable for the Group’s business expansion and growth in the future, we renominated him as a candidate for Director. Reappointment Masaaki Watanabe (Jan. 25, 1963) Apr. 1986 Joined Towa Real Estate Development Co., Ltd. (the predecessor of Mitsubishi Jisho Residence Co., Ltd.) Joined Heisei Kouhatsu Co., Ltd. Seconded to Ohmon Club Co., Ltd. Joined the Company Dec. 1990 Apr. 1993 Feb. 1998 Aug. 2006 Director of Tosei Revival Investment Co., Ltd. Executive Officer of the Company Mar. 2008 Jun. 2015 Managing Executive Officer and Deputy Chief of Business Division of the Company Director, Managing Executive Officer and Deputy Chief of Business Division of the Company Director, Managing Executive Officer, Deputy Chief of Business Division and in charge of Asset Solution Department 5 of the Company (current position) Director of Tosei Community Co., Ltd. (current position) Feb. 2021 Feb. 2018 Dec. 2019 ≪Reasons for nomination as a candidate for Director≫ After joining the Company in 1998, Masaaki Watanabe has been consistently engaged in the Revitalization Business and the Rental Business of the Company. After being appointed as Executive Officer in 2008, he participated in deliberations related not only to assigned businesses but also to overall management as a member of the management meeting. After being appointed as Director in 2018, he has been sincerely working on management issues of the Company and the Group. Considering that he is indispensable for the Group’s business expansion and growth in the future, we renominated him as a candidate for Director. 20,100 36,100 3 4 6 (Translation) 8923: Tosei Corporation No. Name (Date of birth) Career summary, positions and areas of responsibility in the Company (Important concurrent positions outside the Company) Number of the Company’s shares held 5 6 Reappointment Shunsuke Yamaguchi (Jul. 26, 1964) Apr. 1988 Dec. 2001 Oct. 2006 Aug. 2007 Oct. 2007 Apr. 2008 Dec. 2012 Mar. 2013 Feb. 2018 Feb. 2020 Mar. 2021 Joined TOKYU CONSTRUCTION CO., LTD. Joined the Company Director in charge of Administrative Division of Fusion Partner, Inc. Joined the Company Director of Tosei Asset Management, Corp. Director of Tosei Asset Advisors, Inc. Director of NAI Tosei Japan, Inc. Executive Officer of the Company Audit & Supervisory Board Member of Tosei Asset Advisors, Inc. (current position) Director and Executive Officer of the Company Director, Executive Officer in charge of Finance Department and General Affairs Department of the Company (current position) ≪Reasons for nomination as a candidate for Director≫ After joining the Company in 2001, Shunsuke Yamaguchi has been consistently engaged in the operations of general affairs, legal affairs, IT systems, human resources. In addition, he has been playing effective roles in promoting compliance and strengthening internal control functions of the Company and Group companies as a listed company, a real estate broker, or a financial instruments business operator. Considering that he is an essential person for establishing an internal management system to support the Group’s expansion and growth, we renominated him as a candidate for Director. Reappointment Hitoshi Oshima (Nov. 19, 1964) Jan. 2009 Jun. 2006 Apr. 1988 Joined The Sanwa Bank, Ltd. (the predecessor of MUFG Bank, Ltd.) Joined J-REP Co. Ltd. (the predecessor of Goodman Japan Limited) Joined NATIONAL STUDENTS INFORMATION CENTER CO., LTD. Joined the Company Director of Tosei Revival Investment Co., Ltd. Dec. 2011 Jul. 2012 Mar. 2014 Managing Director of Tosei Community Co., Ltd. Dec. 2016 Mar. 2017 Feb. 2020 Dec. 2020 Director of Tosei Community Co., Ltd. Executive Officer of the Company Director and Executive Officer of the Company Director and Executive Officer in charge of Asset Solution Department 1 and Crowd Funding Department (current position) Director of Princess Square Co., Ltd. (current position) Director of Let’s Creation Co., Ltd. (current position) Sep. 2021 7,200 1,700 ≪Reasons for nomination as a candidate for Director≫ After joining the Company in 2011, Hitoshi Oshima served as Director of multiple subsidiaries, contributing to improvement of the management quality of those subsidiaries. After being appointed as General Manager of the Asset Solution Division in 2016, he was actively involved in logistics facility projects and real estate M&A projects mainly in the Revitalization Business by leveraging his career. His contribution to the Group’s operating results is extremely high. Considering that he is an essential person for business expansion and growth of the Group, we renominated him as a candidate for Director. 7 (Translation) 8923: Tosei Corporation No. Name (Date of birth) Career summary, positions and areas of responsibility in the Company (Important concurrent positions outside the Company) Number of the Company’s shares held Reappointment Outside Independent Kenichi Shohtoku (Jan. 20, 1971) 7 Oct. 1995 Sep. 1999 Sep. 2002 Nov. 2003 Sep. 2005 Dec. 2010 Feb. 2012 Jan. 2013 Joined Asahi & Co., Ltd. (the predecessor of KPMG AZSA LLC) Seconded to Arthur Andersen & Co., Kuala Lumpur Office Joined SCS Global Accounting Co., Ltd. (the predecessor of SCS Global Consulting (S) Pte Ltd) Representative Director of SCS Global Accounting Co., Ltd. (current position) Director of O-RID GLOBAL BPO PTE. LTD. Outside Audit & Supervisory Board Member of ROKI TECHNO CO., LTD. Director of the Company (current position) Outside Audit & Supervisory Board Member of ROKI GROUP HOLDINGS CO., LTD. (current position) – ≪Reasons for nomination as a candidate for Outside Director and expected roles≫ As a certified public accountant, Kenichi Shohtoku operates an accounting consulting firm mainly in foreign countries. In order to leverage the advice that he provides based on his expertise for the Company’s overseas development, we have been having him serve as Outside Director of the Company since 2012. After being appointed as Outside Director, he has provided invaluable advice on various occasions such as the Board of Directors’ meetings of the Company, liaison meetings with the Audit & Supervisory Board Members of the Company, etc. and has worked energetically to enhance the governance system of the Company and the Group as well as to ensure the appropriateness of financial reporting. He has also been serving as a member of the Nominating and Compensation Advisory Committee to participate in deliberations from an objective standpoint and contributing to securing appropriateness and fairness of compensation, etc. for Directors. Considering that he is indispensable for the maintenance and improvement of corporate governance structure for further expanding the Group and enhancing the checking functions in the future while paying attention to ESG issues, we renominated him as a candidate for Outside Director. 8 (Translation) 8923: Tosei Corporation No. Name (Date of birth) Career summary, positions and areas of responsibility in the Company (Important concurrent positions outside the Company) Number of the Company’s shares held Apr. 1987 Apr. 2002 Apr. 2003 Jul. 2005 Apr. 2006 Dec. 2006 Jun. 2008 Dec. 2011 Apr. 2014 Apr. 2015 Apr. 2017 Feb. 2018 Apr. 2018 Jun. 2019 Joined the Industrial Bank of Japan, Ltd. (the predecessor of Mizuho Bank, Ltd.) Seconded to Mizuho Securities Co., Ltd. Head of Advisory Department IV of Mizuho Securities Co., Ltd. Joined Sophia Corporation Vice President and Director of Sophia Corporation Joined Mizuho Securities Co., Ltd. Deputy Head of Corporate Planning Department of Mizuho Securities Co., Ltd. Head of Corporate Communications Department of Mizuho Securities Co., Ltd. Senior Corporate Officer attached to Head of Corporate Investment Services & Retail Business Division of Mizuho Securities Co., Ltd. Head of Wealth Management Division, Retail & Business Banking Division of Mizuho Securities Co., Ltd. President & CEO of Social Capital Management, Inc. (current position) Director of the Company (current position) Vice President and Director of Precious Square, Inc. (current position) Outside Auditor of Tohto Suisan Co., Ltd. (current position) Aug. 2019 Director of SEIWA Co., Ltd. (the predecessor of SEIWA HOLDINGS Co., Ltd.) (current position) Representative Director of WATASU, Inc. (current position) Dec. 2020 – Reappointment Outside Independent Hiroyuki Kobayashi (Mar. 3, 1965) 8 ≪Reasons for nomination as a candidate for Outside Director and expected roles≫ Hiroyuki Kobayashi was engaged in operations at the Industrial Bank of Japan, Ltd. and M&A advisory services during secondment to a securities company. Currently he has established a consulting firm specializing in business strategies for corporate clients, M&As and organization development, and serves as CEO. With his objective monitoring and proposals based on his abundant experience and expertise, he has been contributing to more active discussion at Board of Directors meetings and improves their effectiveness. He has also been serving as a member of the Nominating and Compensation Advisory Committee to participate in deliberations from an objective standpoint and contributing to securing appropriateness and fairness of compensation, etc. for Directors. Considering that he is indispensable for the maintenance and improvement of corporate governance structure for further expanding the Group and enhancing the checking functions in the future while paying attention to ESG issues, we renominated him as a candidate for Outside Director. ≪Supplemental Information on Independence≫ Hiroyuki Kobayashi served as an employee of the Industrial Bank of Japan, Ltd. (a predecessor of Mizuho Bank, Ltd.) until March 2002. However, his independence as Outside Director has been secured, as the Company has business transactions* with many other financial institutions as well as the said bank and he is not in the position to be influenced by the bank as it has been about 20 years since he ceased to be a business executor of the said bank. He satisfies the criteria for an independent director stipulated by the Tokyo Stock Exchange, and the Company notified the said Exchange of the appointment of Hiroyuki Kobayashi as an independent director as stated in Note 2. *Reference: Outstanding loans payable to the said bank as of November 30, 2021 (consolidated basis) accounted for approximately 6.4% of the Company’s total assets and approximately 11.0% of its total outstanding loans. 9 (Translation) 8923: Tosei Corporation Number of the Company’s shares held – No. Name (Date of birth) Career summary, positions and areas of responsibility in the Company (Important concurrent positions outside the Company) Apr. 1997 Reappointment Outside Independent Masao Yamanaka (Jul. 24, 1962) Registered as attorney-at-law (Daini Tokyo Bar Association) Established Yamanaka Law Office Joined RENAISS Law Office (current position) Outside Auditor of Chiyoda Co., Ltd. (current position) Outside Auditor of System Location Co., Ltd. (current position) Outside Director of ACE SECURITIES CO., LTD. Director of the Company (current position) ≪Reasons for nomination as a candidate for Outside Director and expected roles≫ Jan. 2003 Apr. 2008 May 2012 Jun. 2015 Jun. 2018 Feb. 2020 9 Masao Yamanaka has provided many companies with legal advice and involved in multiple large-scale corporate bankruptcy affairs. He possesses abundant experience as an attorney-at-law and a high level of expertise on corporate legal affairs. Furthermore, serving as outside auditor of multiple listed companies, he possesses considerable expertise in governance of listed companies, and he is he is a notably effective person for supervising governance of the Group, as we aim for expansion of the Group. Considering that he is indispensable for the maintenance and improvement of corporate governance structure for further expanding the Group and enhancing the checking functions in the future while paying attention to ESG issues, we renominated him as a candidate for Outside Director. Although he has never been involved in corporate management other than as an outside director or an outside auditor, we believe that he will be able to perform his duties as Outside Director appropriately based on the aforementioned reasons. (Notes) 1. Each of the candidates for Directors has no special interests in the Company. 2. Kenichi Shohtoku, Hiroyuki Kobayashi and Masao Yamanaka are candidates for Outside Directors. The Company notified the Tokyo Stock Exchange of Kenichi Shohtoku, Hiroyuki Kobayashi and Masao Yamanaka as independent directors pursuant to the regulations of the said Exchange, and they will continue to serve as independent directors if they are reelected as Directors. 3. Kenichi Shohtoku currently serves as Outside Director of the Company and will have served as such for ten (10) years as of the conclusion of the Meeting. Hiroyuki Kobayashi currently serves as Outside Director of the Company and will have served as such for four (4) years as of the conclusion of the Meeting. In addition, Masao Yamanaka currently serves as Outside Director of the Company and will have served as such for two (2) years as of the conclusion of the Meeting. 4. Kenichi Shohtoku, Hiroyuki Kobayashi and Masao Yamanaka currently serve as Outside Directors of the Company. The Company has concluded a contract for limitation of liability with each of them pursuant to the provisions of Article 427, paragraph 1 of the Companies Act for the liability for damages provided for in Article 423, paragraph 1 of the same, and limits their liability to the amount provided by relevant laws and regulations. The Company intends to maintain the contracts with them if they are reelected as proposed. 5. The Company has concluded a directors and officers liability insurance contract as stipulated in Article 430-3, paragraph 1 of the Companies Act with an insurance company. Directors included as insured in this insurance policy will receive compensation for damages arising from their liability borne from performance of their duties or arising from claims in pursuit of that liability. Other details of said insurance are as stated on page 31 of the Business Report. If a candidate becomes a Director, the candidate will be insured by said insurance contract. The Company is scheduled to renew said insurance contract with the same contents on March 2022. 10 (Translation) 8923: Tosei Corporation Skills matrix of candidates for Director Specialty, knowledge, and experience No. Name Internal/ Outside Corporate manage- ment Real estate business Finance/ Accounting Global business ESG IT/DX Human Resource/Labor Compliance/Risk manage- ment Nominating and Compen-sation Advisory Committee ESG Promotion Committee 1 2 3 4 5 6 7 8 9 Seiichiro Yamaguchi Noboru Hirano Hideki Nakanishi Masaaki Watanabe ShunsukeYamaguchi Hitoshi Oshima Internal Internal Internal Internal Kenichi Shohtoku Outside (Independent) Hiroyuki Kobayashi Masao Yamanaka Outside (Independent) Outside (Independent) Internal ● ● ● Internal ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ○ ○ ○ (Chair-person) ○ ○ ○ (Chair-person) ○ ○ End ● ● Observer 11 8923: Tosei Corporation (Translation) (Attachment) Business Report (From December 1, 2020 to November 30, 2021) 1. Matters regarding current status of the Group (1) Business developments and results During the fiscal year ended November 30, 2021, the Japanese economy remained on a weak recovery trend, despite the harsh conditions caused by COVID-19 being gradually mitigated. While expectations are high going forward for the effects of the huge economic stimulus package of the Kishida administration which came into office last year, it remains necessary to monitor such factors as the global trends of raw material prices of various resources as well as movements in global financial markets. In the real estate industry where Tosei Group operates, domestic real estate investments from January to September 2021 decreased 9% year on year to ¥3.1 trillion. Although investments decreased due to the shortage of properties supplied on the market, investments in office buildings including the large-scale buildings of Tokyo’s five business wards were on a recovery trend, reflecting the continuing proactive investment stance of the investors. While Tokyo fell to fourth place in the world ranking by city for the nine months from January to September 2021 (ranked first in the same period of the previous fiscal year), the real estate investment market is forecasted to remain active (according to a survey by a private research institute). The Tokyo metropolitan area condominium market has recovered to the levels of 2019 and the number of newly built units from January to October 2021 increased 26.1% year on year to 21,535 units. Behind this increase is the rebound from the substantial decline under the state of emergency introduced last year. The average contract rate for the first month has also remained at around the 70% threshold from which market conditions are viewed as favorable, thereby indicating a robust market. In addition, in the pre-owned condominium market, the number of units contracted from January to October 2021 increased 13.0% year on year to 33,515. However, in the build-for-sale detached house market, in the absence of a substantial sales decline in 2020 as seen in the condominium market, housing starts for the nine months from January to September 2021 numbered 41,000 units (up 1.8% year on year), remaining largely unchanged from the same period of the previous fiscal year (according to a survey by a private research institute). Regarding construction costs for the ten months from January to October 2021, average costs per tsubo for reinforced concrete structure were ¥963 thousand per tsubo (1 tsubo = 3.30 square meters) (an increase of 6.0% year on year), and average costs per tsubo for wooden structure were ¥569 thousand (unchanged from the same period of the previous fiscal year). Currently, the prices of steel materials and timber are experiencing an upsurge due to the recovery of the global economy including growing demand in the U.S. and China, which has also begun to affect construction costs in certain areas (according to a survey by the Ministry of Land, Infrastructure, Transportation and Tourism). In the office leasing market of Tokyo’s five business wards, the average vacancy rate as of October 2021 was 6.4% (an increase of 2.5 percentage points year on year), against the backdrop of tenants cutting back on office space as a result of a slowdown in expansion of office space and the spread of teleworking lifestyle in certain areas. The average asking rent was ¥20,804 per tsubo (a decrease of ¥1,630 year on year), demonstrating a downturn in the office leasing market in the Tokyo metropolitan area, and it remains necessary to monitor future trends in supply and demand. Meanwhile, the condominium leasing market remained robust and the average asking rent of condominiums in the Tokyo metropolitan area as of October 2021 was ¥10,935 per tsubo (an increase of 4.6% year on year) and the average occupancy rate at condominiums held by J-REIT in the Tokyo Area as of August 31, 2021 was 96.6% (a decrease of 0.1 percentage points year on year) (according to a survey by a private research institute). 12 (Translation) 8923: Tosei Corporation In the Tokyo metropolitan area’s logistics facility leasing market, leasable stock in October 2021 amounted to 7.23 million tsubo (an increase of 14.4% year on year). The vacancy rate was 1.7%. Although this was a slight increase from the level of 1.3% observed in July 2021, rent continues to gradually increase and supply and demand remain tight. Leasing demand is expected to remain firm for the time being, despite an easing in the extraordinary demand stemming from the COVID-19 pandemic (according to a survey by a private research institute). In the real estate fund market, the market scale continues to expand. J-REIT assets under management in October 2021 totaled ¥21.2 trillion (an increase of ¥1.1 trillion year on year) and assets under management in private placement funds totaled ¥23.4 trillion (as of June 2021, an increase of ¥2.3 trillion year on year). Combining the two, the real estate securitization market scale grew to ¥44.6 trillion (according to a survey by a private research institute). In the Tokyo business hotel market, the average guest room occupancy rate in the nine months from January to September 2021 was 38.2% (83.6% in the same period of the fiscal year ended November 30, 2019, prior to the COVID-19 pandemic). The total number of hotel guests in Tokyo encompassing all types of accommodation in the nine months from January to September 2021 amounted to 24.34 million (58.32 million overnight stays in the same period of the fiscal year ended November 30, 2019). As the COVID-19 situation in Japan has been gradually brought under control, including the lifting of the state of emergency in October 2021, expectations are high for an influx of inbound visitors and other signs of recovery of the hotel market (according to a survey by the Japan Tourism Agency). Amid this operating environment, in the Revitalization Business, the Group made steady progress in selling assets such as income-generating office buildings and apartments, while in the Development Business, the Group pushed ahead with sales of detached houses and logistics facilities. In addition, the Group also proceeded with the acquisition of income-generating properties and various types of land for development as future sources of income. As a result, consolidated revenue for the fiscal year under review totaled ¥61,726million (down 3.5% year on year), operating profit was ¥10,965 million (up 70.6%), profit before tax was ¥10,302 million (up 74.6%), and profit attributable to owners of the parent was ¥6,721 million (up 86.6%). Performance by business segment is shown below. Revitalization Business During the fiscal year under review, the segment sold 46 properties which had been renovated, including Kannai Tosei Building Ⅲ (Yokohama-shi, Kanagawa), T’s garden Kiyose (Kiyose-shi, Tokyo), Ichikawashimamura Building (Ichikawa-shi, Chiba). In addition, the segment sold four unit in the Restyling Business from Isarakoplace Residence (Minato-ku, Tokyo), Rune Kamakura Ueki Residence (Kamakura-shi, Kanagawa). In addition, ICOMPANY, Inc. and its four subsidiaries (hereinafter collectively the “Princess Group”), which were included in the scope of consolidation from the fiscal year under review, sold 19 pre-owned condominium units. During the fiscal year under review, it also acquired a total of 31 income-generating office buildings and apartments for renovation and sales purposes and two land lots. Furthermore, in conjunction with the consolidation of the Princess Group, as of November 30, 2021, inventories increased, including a total of 25 income-generating office buildings and apartments and 127 pre-owned condominium units In addition, the Group reviewed the valuation of its income-generating properties, recording a reversal of inventories valuation loss of ¥1,408 million. As a result, revenue in this segment was ¥33,587 million (up 7.8% year on year) and the segment profit was ¥7,203 million (up 28.7%). 13 (Translation) 8923: Tosei Corporation (Note) From the fiscal year ending November 30, 2022, the Company has changed the name of its “Real Estate Securitization Business” (in Japanese. In English, the segment has been known as the “Revitalization Business” and will remain the same) to the “Revitalization Business.” In the Revitalization Business, the Company acquires properties whose asset value has declined, considers various “value-up plans” including improving the design, convenience and security, and introducing environment-friendly features that reflect local characteristics and tenant needs, boosts their value with the most suitable value-up plan and sells them as revitalized real estate to various investors. These revitalization projects contribute to the long-term use of buildings and promote the reduction of the environmental burden. Development Business During the fiscal year under review, the segment sold a newly built logistic facility, T’s Logi Hasuda (Hasuda-shi, Saitama) and a newly built commercial facility, THE Palms Sagamihara Park Brightia (Store section) (Sagamihara-shi, Kanagawa). In addition, the segment focused on the sale of detached houses, for which there was firm demand. The segment sold 84 detached houses at such properties as THE Palms Court Kamakura Shiromeguri (Kamakura-shi, Kanagawa) and THE Palms Court Hibarigaoka (Nishitokyo-shi, Tokyo). During the fiscal year under review, three land lots for apartment project, one land lot for commercial facility project, three land lots for income-generating office buildings, acquired two land lots for logistic facility and land lots for 67 detached houses. In addition, the Group reviewed the valuation of its income-generating properties, recording a valuation loss of ¥156 million and reversal of inventories valuation loss of ¥283 million. As a result, revenue in this segment was ¥11,962 million (down 26.0% year on year) and the segment profit was ¥1,060 million (in comparison with segment loss of ¥3,743 million in the same period of the previous fiscal year). Rental Business During the fiscal year under review, while the segment sold 24 properties of its inventory assets held for leasing purposes, it newly acquired 40 properties including income-generating office buildings and apartments. In addition, the segment made efforts to lease vacancies out following acquisitions and also focused on leasing activities for its existing non-current assets and inventory assets. As a result, revenue in this segment was ¥5,466 million (down 5.9% year on year) and the segment profit was ¥2,700 million (up 16.4%). Fund and Consulting Business During the fiscal year under review, while ¥121,111 million was subtracted from the balance of assets under management mainly due to property dispositions by funds, ¥418,571 million was added to the balance of assets under management (Note) of ¥1,123,406 million for the end of the previous fiscal year, due to new large asset management contracts. The balance of assets under management as of November 30, 2021, was ¥1,420,867 million. As a result, revenue in this segment was ¥4,934 million (down 13.1% year on year) and the segment profit was ¥3,137 million (down 25.2%). The lower year-on-year revenue and profit results are primarily attributable to the segment having posted brokerage fee income pertaining to transactions involving large projects in the previous fiscal year. (Note) The balance of assets under management includes the balance of assets that were subject to consulting contracts, etc. 14 (Translation) 8923: Tosei Corporation Property Management Business During the fiscal year under review, the segment worked to win new contracts and maintain existing contracts. Consequently, the total number of properties under management was 758 as of November 30, 2021, an increase of 63 from November 30, 2020 with that total comprising 470 office buildings, hotel, logistics facilities and other such properties, and 288 condominiums and apartments. As a result, revenue in this segment was ¥5,219 million (up 11.3% year on year) and segment profit was ¥672 million (up 0.8%). Hotel Business During the fiscal year under review, the Group opened TOSEI HOTEL COCONE Asakusa in July 2021 and TOSEI HOTEL COCONE Kamakura in October 2021. Despite endeavors including the improvement of occupancy rates at existing hotels, conditions remained harsh due to the renewed spread of COVID-19, with the temporary closure of some hotels. As a result, revenue in this segment was ¥555 million (up 27.1% year on year) and segment loss was ¥838 million (in comparison with segment loss of ¥673 million in the previous fiscal year). Business segment Revitalization Business Development Business Rental Business Fund and Consulting Business Property Management Business Hotel Business Total Revenue ¥33,587 million ¥11,962 million ¥5,466 million ¥4,934 million ¥5,219 million ¥555 million ¥61,726 million (2) Status of capital investments Capital investments for the Group executed during the fiscal year under review totaled ¥13,265 million. The Group raised funds of ¥49,831 million by means of non-current borrowings during the fiscal year under review. (3) Status of financing (4) Issues to be addressed Although the spread of COVID-19 infections in Japan seems to be waning for the time being, globally, there has been a resurgence and the pandemic, which initially was expected to end in about two years, is still not allowing for any predictions as to when it will be contained. Meanwhile, in the Tokyo metropolitan area real estate investment market, which is the Group’s mainstay market, real estate investors both in Japan and abroad continue to demonstrate their robust investment stance amid the protracted worldwide low-interest-rate environment, leading to robust transactions. While rising vacancy rates and falling rents in the office leasing market are becoming pronounced due to the progress of teleworking among others, real estate transaction prices remain high, reflecting the shortages in property supply in the investment market. In particular, income-15 (Translation) 8923: Tosei Corporation generating apartments, which have been the preferred targets by investors for their stable profitability, have witnessed a further decline in the investors’ expected yield from real estate. Although active transactions are expected going forward, we are aware that the real estate market will need to be watched for the possibility of entering an adjustment phase caused by further deterioration of the office market, changes in the lending attitude of financial institutions, and changes in the financial policies of European and U.S. financial institutions looking ahead to a post-COVID world. Amid this business environment, the Group has formulated and has been promoting its three-year medium-term management plan in an effort to enhance corporate value. The medium-term management plan, “Infinite Potential 2023,” which kicked off in the fiscal year ended November 30, 2021, covering the period from December 2020 to November 2023, upholds the main policy to “Pursue the Group’s infinite growth potential in all aspects of real estate and aim for a new stage as a comprehensive real estate company.” Under the plan, the Group is expanding existing businesses for the further growth of the Group and enhancing existing businesses through the promotion of DX, while making efforts to put ESG management into practice. The Group also plans to pursue its growth strategies based on this plan in the fiscal year ending November 30, 2022, which will be the second year of the plan. < Medium-term Management Plan “Infinite Potential 2023” (From December 2020 to November 2023> * Due to the uncertainty surrounding the impact of COVID-19 pandemic, the plans for consolidated revenue and profits for the second year onwards were not disclosed when the medium-term management plan was initially formulated. However, in light of the current outlook of the business environment and the performance trends for the initial year, the plan has been revised. The underlined sections indicate additions or revisions. (Main Policy) “Pursue the Group’s infinite growth potential in all aspects of real estate and aim for a new stage as a comprehensive real estate company.” (Basic Policies) Basic policy 1. Expand existing businesses and increase operating profit with a focus on environmental/social issues Basic policy 2. Enhance existing businesses and create new income-generating models through DX Basic policy 3. Implement a balance sheet strategy with a focus on increasing business scale, Group-Basic policy 4. Implement Group strategy and organizational strategy with a focus on achieving held assets and capital efficiency both governance and efficiency Basic policy 5. Improve operational and administrative efficiency through the promotion of utilization of IT and enhance employee satisfaction conducive to improving productivity Basic policy 6. Promote business, management and ESG with a focus on sustainability (Quantitative Plan) Growth potential: Consolidated revenue for the final fiscal year of the plan: ¥100 billion Consolidated profit before tax for the final fiscal year of the plan: ¥14 billion Capital efficiency: ROE of 12% or more in the final fiscal year of the plan Stability: Financial soundness: Equity ratio of around 35% Stable businesses ratio (operating profit-basis) around 50% Shareholder returns: Aim to gradually raise payout ratio from 25% to 30% over three years Net debt-to-equity ratio: about 1.3 times 16 (Translation) 8923: Tosei Corporation Consider repurchase of own shares with a focus on capital efficiency In this plan, the Group sets out “pursue the Group’s infinite growth potential” as the main policy, and will strive for further growth, business transformation through the use of digital technology, contribution to SDGs through business and promotion of ESG management to improve corporate value. Specifically, the Group aims to promote initiatives Group-wide by incorporating efforts on environmental/social issues in the individual measures of each business. The Revitalization Business aims to extend the service life of buildings by renovating existing real estate, as well as differentiate and improve profitability of products by creating added value through upgrades focusing on comfort and safety. The Development Business will incorporate elements such as eco-friendliness and crime prevention/disaster preparedness in product planning with aiming to increase the brand value of each product through product planning that will be supported by customers. Both the Revitalization Business and the Development Business will leverage IT to promote sales activities, strengthen decision-making capabilities in investments and Group-wide cooperation to reinforce the structure toward expanding business scale. In the Stock and Fee Business, the stable source of income, the Group will aim to expand business scale and improve profitability through initiatives such as providing high-quality services and enhancing customer satisfaction with a focus on ESG as well as reviews of operational processes by leveraging IT in each of the Rental Business, Fund and Consulting Business, Property Management Business and Hotel Business. Recognizing that the fusion of DX and real estate presents a new business opportunity, the Group will expand assets under management in the crowd funding business, commercialize an investment scheme using security tokens, and other projects as initiatives to create new income-generating models. On the financial front, the Group will work on effective investments while strengthening funding capabilities and maintaining a sound financial structure to support the expansion in business scale and asset balance. In addition, as a Group organizational strategy in line with the business which is both expanding in scale and diversifying in nature, the Group will streamline and reconstruct the organization, further enhance the quality of internal control, and maintain an optimal corporate governance structure to extend Group-wide cooperation and comprehensive capabilities. Furthermore, to fully activate human resources, which are the Group’s most important assets, the Group will promote human resources development aiming for the growth of all officers and employees and productivity enhancement while improving employee satisfaction Group-wide. 17 The Group’s business and financial issues to be addressed preferentially are as follows: 8923: Tosei Corporation (Translation) 1. Business issues Segment Revitalization Business Development Business Rental Business Fund and Consulting Business Property Management Business Hotel Business 2. Financial issues Segment Financial strategy Issues to be addressed preferentially Note: “E” and “S” stand for environmental and social aspects of ESG, respectively. 1. Revise acquisition policy according to the exit strategy (by size and area) on a regular basis and expand investment target; gather information efficiently and strengthen acquisitions 2. Review value-up guidelines; resolve issues in E and S; implement the most appropriate value-up activities suited to property characteristics and customer needs 3. Expand sales channels and sales methods and pursue efficiency 4. Strengthen investment judgment by leveraging IT; nurture persons who can make investment 5. Strengthen the business of condominium unit sales through stronger coordination among the decisions Group 6. Research value-up plan in awareness of E and S; increase sales price and enhance brand value 1. Revise acquisition policy according to property type and usage on a regular basis; gather information efficiently and strengthen acquisitions 2. Expand sales channels and sales methods according to property characteristics and exit strategy (such as size and area) and conduct efficient sales 3. Research the latest specs and tenant needs toward the development of Tosei’s original, small- and medium-sized office buildings 4. Pursue planning and supply of products in awareness of E and S 1. Increase non-current assets; manage property and acquire environmental certifications in awareness of E and S Improve occupancy rates early and continue stable occupancy 2. 3. Enhance property management capability as a building owner; transform operation process by promoting use of IT and leveraging DX Increase the balance of assets under management (REIT, private placement funds, and CRE) 1. 2. Maximize investor returns through stronger coordination among the Group 3. Establish system for implementing ESG and SDGs required of a real estate asset management company 1. Strengthen capacity for new acquisition that accommodates increase in number of properties under management as well as work on improving operation quality and CS; establish implementation system for SDGs befitting a company that provides one-stop service for property management and building management 2. Strengthen asset management capacity aiming for increase in property management of logistics facilities Increase profit margin by streamlining operation through leveraging IT and reducing cost 3. 1. Achieve early recovery of occupancy rate and record operating profit; improve occupancy rate by appealing to non-price factors (expand sales channel, improve brand recognition, differentiate with competitors) 2. Establish and strengthen management system to expand hotel business 3. Provide appealing menus in awareness of E and S; increase repeat customers; increase daily rate Issues to be addressed preferentially 1. Enhance funding capabilities commensurate with the expansion of business (Increase credit line, improve funding terms for acquiring non-current assets, implement bank formation strategy) Implement capital allocation that balances growth investment, financial discipline, and return of profits to shareholders (Equity ratio of around 35%, net debt-to-equity ratio of about 1.3 times, ratio of stable businesses (operating profit basis) of around 50%) 2. 3. Achieve ROE of 12% or higher which exceeds cost of capital (Target for the final year of the medium-term management plan) 4. Reduce cost and administrative burden through efficient Group-wide fund management 18 (Translation) 8923: Tosei Corporation (5) Status of operating results and assets a. Trends in operating results and assets of the Group 69th term (Year ended November 30, 2018) 70th term (Year ended November 30, 2019) 71st term (Year ended November 30, 2020) 72nd term (Year under review) (Year ended November 30, 2021) 61,543,319 10,171,017 60,727,704 12,090,095 63,939,781 5,901,313 61,726,449 10,302,616 6,852,237 8,447,032 3,602,339 6,721,305 Revenue (Thousands of yen) Profit before tax (Thousands of yen) Profit attributable to owners of the parent (Thousands of yen) Basic earnings per share (Yen) 141.36 176.40 76.05 142.56 Total assets (Thousands of yen) 138,768,538 161,894,056 161,684,503 195,010,899 Total equity (Thousands of yen) 52,021,782 58,306,499 58,969,524 65,958,740 (Note) The above table has been made under International Financial Reporting Standards (IFRS). b. Trends in operating results and assets of the Company 69th term (Year ended November 30, 2018) 70th term (Year ended November 30, 2019) 71st term (Year ended November 30, 2020) 72nd term (Year under review) (Year ended November 30, 2021) Net sales (Thousands of yen) 48,061,639 48,861,295 51,958,230 47,452,190 Ordinary income (Thousands of yen) Net income (Thousands of yen) Net income per share (Yen) 6,770,624 5,054,356 104.27 9,770,383 7,273,194 151.89 3,382,780 2,594,607 54.77 9,690,159 7,452,678 158.08 Total assets (Thousands of yen) 127,844,930 149,812,509 148,071,547 171,076,831 Net assets (Thousands of yen) 46,965,634 52,076,260 51,737,131 59,467,346 (Notes) 1. The above table has been made under Japanese GAAP. 2. The Partial Amendments to Accounting Standard for Tax Effect Accounting (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018), etc. have been applied from the beginning of the 70th term, and indicators for the 69th term were adjusted retrospectively in accordance with the said accounting standard, etc. 19 (Translation) 8923: Tosei Corporation (6) Status of significant subsidiaries Name of company Capital or investments in capital Equity ownership [Indirect equity ownership] Tosei Community Co., Ltd. ¥99,500 thousand 100.0% Tosei Asset Advisors, Inc. ¥100,000 thousand 100.0 Tosei Revival Investment Co., Ltd. ¥50,000 thousand 100.0 Major lines of business Property management business Fund and consulting business Real estate consulting business Tosei Urban Home Corporation ¥100,000 thousand 100.0 Development business ICOMPANY, Inc. ¥5,000 thousand 100.0 Other Princess Holdings Co., Ltd. ¥5,000 thousand Revitalization business Princess Square Co., Ltd. ¥96,000 thousand Revitalization business G.P. Asset Co., Ltd. ¥10,000 thousand Revitalization business Let’s Creation Co., Ltd. ¥10,000 thousand Revitalization business 100.0 (74.3) 100.0 (100.0) 100.0 (100.0) 100.0 (100.0) Kishino Corporation Masuda Kenzai-ten Co., Ltd. Sanki-shoji Co., Ltd. Tosei Chintai Hosho LLC Tosei Singapore Pte. Ltd. ¥10,000 thousand 100.0 Rental business ¥60,500 thousand 100.0 Revitalization business ¥30,000 thousand 100.0 Revitalization business ¥3,000 thousand 100.0 Property management business S$4,000,000 100.0 Rental business Tosei Hotel Management Co., Ltd. ¥100,000 thousand 100.0 Hotel business Tosei Hotel Service Co., Ltd. ¥10,000 thousand 100.0 Hotel business (Notes) 1. TREC MOON LLC was included in the scope of consolidation due to the acquisition of equity in the silent partnership during the fiscal year under review. However, it has been excluded from the scope of consolidation for the reason that the said investment was repaid for the full amount. 2. During the fiscal year under review, the Company acquired all of the shares in ICOMPANY, Inc. and all shares issued by its subsidiary, Princess Holdings Co., Ltd., which are not held by ICOMPANY, Inc., and accordingly, has included ICOMPANY, Inc., Princess Holdings Co., Ltd., and its subsidiaries, Princess Square Co., Ltd., G.P. Asset Co., Ltd., and Let’s Creation Co., Ltd. in the scope of consolidation. 3. On November 19, 2021, Princess Holdings Co., Ltd. concluded an absorption-type merger agreement with Princess Square Co., Ltd., with Princess Square Co. Ltd. as the surviving company, and will cease to exist on January 1, 2022, the effective date of the agreement. 20 (Translation) 8923: Tosei Corporation (7) Major lines of business (As of November 30, 2021) Operations Segment Revitalization Business The Tosei Group acquires office buildings, commercial facilities, apartments and other properties whose asset value has declined through buying and selling real estate and M&A of companies with real estate holdings, boosts their value through “value-up plans” (“improved designs,” “enhanced security functions, etc.,” “increased eco-friendliness,” and “improved profitability”) 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 business entities that acquire real estate for private use. The Tosei Group’s “value-up” activities go beyond just renewing properties and involve realizing comprehensive regenerations of their values. This puts a focus on not only improving the convenience and functionality of properties but also providing satisfaction to owners and giving end users a sense of pride. In the main districts of Tokyo, there is a mixture of needs for offices, commercial facilities, residences, logistics facilities, hotels and others, and the Tosei Group verifies the characteristics of land it acquires including area, shape, intended purpose, relevant needs, rent, and selling price. Based on this, the Tosei Group carries out development and new construction to maximize the value of the land. The Group is able to respond to diverse needs by developing office buildings, commercial buildings (T’s BRIGHTIA series) and mixed-use buildings, hotels, condominiums (the Palms series), as well as detached houses (Palms Court series and Comodo Casa series). Once development is complete or tenants have been found, the properties are sold to buyers including investors, real estate funds, and end-users. The Tosei Group has expanded the scope of its business primarily in the main districts of Tokyo by acquiring office buildings, condominiums, 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. 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 providing Tosei Reit Investment Corporation’s asset management services, the Tosei Group also provides services such as selling and brokering trust beneficiary rights, and management of income-generating properties as asset management services for real estate funds. Also, the Tosei Group provides consulting services and real estate brokerage related to corporate real estate held by business entities. Development Business Rental Business Fund and Consulting Business Property Management Business This business carries out building and equipment management, and security (building maintenance) for office buildings, apartments, hotels, commercial facilities, and educational facilities; owner proxy services, tenant management, tenant solicitation, and building management (property management); and management services for condominiums. Hotel Business The Tosei Group is engaged in planning and operation of its TOSEI HOTEL COCONE brand as well as hotel development and conversion of used office buildings into hotels. 21 (Translation) 8923: Tosei Corporation (8) Major business offices (As of November 30, 2021) Name Business office and its location Tosei Corporation (the Company) Head office: Minato-ku, Tokyo Tosei Community Co., Ltd. Tosei Asset Advisors, Inc. Head office: Minato-ku, Tokyo Head office: Minato-ku, Tokyo Tosei Revival Investment Co., Ltd. Head office: Minato-ku, Tokyo Tosei Urban Home Corporation Head office: Machida-shi, Tokyo ICOMPANY, Inc. Head office: Minato-ku, Tokyo Princess Holdings Co., Ltd. Head office: Shibuya-ku, Tokyo Princess Square Co., Ltd. Head office: Shibuya-ku, Tokyo G.P. Asset Co., Ltd. Let’s Creation Co., Ltd. Kishino Corporation Head office: Shibuya-ku, Tokyo Head office: Minato-ku, Tokyo Head office: Minato-ku, Tokyo Masuda Kenzai-ten Co., Ltd. Head office: Minato-ku, Tokyo Sanki-shoji Co., Ltd. Head office: Minato-ku, Tokyo Tosei Hotel Management Co., Ltd. Head office: Minato-ku, Tokyo Tosei Hotel Service Co., Ltd. Head office: Minato-ku, Tokyo Tosei Chintai Hosho LLC Tosei Singapore Pte. Ltd. Head office: Minato-ku, Tokyo Head office: Singapore (Notes) 1. The Company relocated its head office from 4-2-3 Toranomon, Minato-ku, Tokyo to 4-5-4 Shibaura, Minato-ku, Tokyo on April 14, 2021. In addition, Tosei Commu