Consolidated Financial Results for the year ended March 31, 2026 [PDF: 487KB]

May 15, 2026

Company name:HASEKO Corporation Stock exchange listing:Tokyo Stock Exchange, Prime Market Code number:1808 URL:https://www.haseko.co.jp/hc/english

(Amounts are rounded to the nearest million yen)

1. Consolidated Financial Results

   1. Consolidated Operating Results (% indicates changes from the previous corresponding period.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      	Million yen	%	Million yen	%	Million yen	%	Million yen	%
      FY2025	1,273,136	8.1	98,743	16.6	94,051	12.8	54,839	59.2
      FY2024	1,177,353	7.6	84,701	(1.2)	83,408	0.1	34,450	(38.5)

      (Note) Comprehensive income: FY2025: ¥ 74,953 million 68.2% FY2024: ¥ 44,549 million (43.6%)

      	Basic earnings per share	Diluted earnings per share	Return on equity	Ratio of ordinary profit to total assets	Ratio of operating profit to net sales
      	Yen	Yen	%	%	%
      FY2025	204.54	—	10.0	6.8	7.8
      FY2024	126.20	—	6.6	6.1	7.2

      (Reference) Share of profit (loss) of entities accounted for using equity method:

      FY2025: ¥ (2,073) million FY2024: ¥ (779) million

   2. Consolidated Financial Position

      	Total assets	Net assets	Equity-to-asset ratio	Net assets per share
      As of	Million yen	Million yen	%	Yen
      March 31, 2026	1,417,724	563,451	39.7	2,126.38
      March 31, 2025	1,365,203	532,033	39.0	1,950.61

      (Reference) Equity: As of March 31, 2026: ¥ 562,735 million As of March 31, 2025: ¥ 532,033 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 the end of period
   FY2025 FY2024	Million yen 157,414 3,916	Million yen (53,225) (32,472)	Million yen (53,373) (20,545)	Million yen 288,134 235,798

2. Cash dividends

   	Annual dividends per share					Total cash dividends (Total)	Payout ratio (consolidated)	Ratio of dividends to net assets (consolidated)
   	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total
   	Yen	Yen	Yen	Yen	Yen	Million yen	%	%
   FY2024	—	40.00	—	45.00	85.00	23,583	67.4	4.4
   FY2025	—	45.00	—	50.00	95.00	25,680	46.4	4.7
   FY2026 (Forecast)	—	50.00	—	50.00	100.00		40.1

3. Consolidated Financial Results Forecast for FY2026

(% indicates changes from the previous corresponding period.)

* Notes:

1. Significant changes in the scope of consolidation during the period: Yes Newly Consolidated Companies: 6 companies

   WOOD FRIENDS Co., Ltd. and four of its subsidiaries, and HASEKO UK LIMITED Excluded Company from Consolidation: 1 company

   WOOD CONSTRUCTION Co., Ltd.

   (Note)

   On December 1, 2025, an absorption-type merger was carried out, with WOOD FRIENDS Co., Ltd. as the surviving company and its subsidiary, WOOD CONSTRUCTION Co., Ltd., as the dissolved company.

2. Changes in accounting policies, changes in accounting estimates and retrospective restatement

   1. Changes in accounting policies due to the revision of accounting standards and other regulations:No

   2. Changes in accounting policies due to other reasons: No

   3. Changes in accounting estimates: No

   4. Restatement: No

3. Number of issued shares (common shares)

   1. Total number of issued shares at the end of the period (including treasury shares): As of March 31, 2026: 292,479,897 shares

      As of March 31, 2025: 300,794,397 shares

   2. Number of treasury shares at the end of the period:

      As of March 31, 2026: 27,835,479 shares

      As of March 31, 2025: 28,041,754 shares

   3. Average number of shares outstanding during the period: FY2025: 268,101,795 shares

FY2024: 272,982,061 shares

(Note 1) For the number of shares used as the basis for the calculation of basic earnings per share (consolidated), please refer to “[Supplementary Materials] p.44 ‘5. Consolidated Financial Statements and Major Notes (5) Notes to Consolidated Financial Statements (Per Share Information).’”

(Note 2) The Company has introduced the “Board Benefit Trust (BBT)” and the “Share-Based ESOP” plans. Shares of the Company held by these trusts are included in the number of treasury shares at the end of the period, and the average number of shares during the period is calculated and presented taking into account the shares held by these trusts.

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results

   1. Non-consolidated Operating Results (% indicates changes from the previous corresponding period.)

      	Net sales		Operating profit		Ordinary profit		Profit
      	Million yen	%	Million yen	%	Million yen	%	Million yen	%
      FY2025	817,567	4.9	58,387	29.1	74,551	44.6	50,247	34.1
      FY2024	779,133	4.3	45,225	(12.3)	51,568	(18.6)	37,469	(20.6)

      	Basic earnings per share	Diluted earnings per share
      	Yen	Yen
      FY2025	187.42	—
      FY2024	137.26	—

   2. Non-consolidated Financial Position

   	Total assets	Net assets	Equity-to-asset ratio	Net assets per share
   As of	Million yen	Million yen	%	Yen
   March 31, 2026	1,123,361	435,840	38.8	1,646.89
   March 31, 2025	1,073,585	420,929	39.2	1,543.26

   (Reference) Equity: As of March 31, 2026: ¥ 435,840 million As of March 31, 2025: ¥ 420,929 million

2. Non-consolidated Financial Results Forecast for FY2026

(% indicates changes from the previous corresponding period.)

(Cautionary Note Regarding Forward-Looking Statements)

The forward-looking statements, including performance forecasts, contained in this document are based on information available as of the date of release of this document.

Actual results may differ from forecast figures due to a variety of factors.

For details regarding performance forecasts, please refer to “[Supplementary Materials] p.5 ‘1. Overview of Operating Results and Financial Position (5) Outlook.’”

(How to Obtain the Supplementary Financial Results Briefing Materials)

The supplementary financial results briefing materials were disclosed on TDnet on the same day. They were also posted on the Company’s website on the same day.

Table of contents of appendix

1. Overview of Operating Results, etc. 2

   1. Overview of Operating Results for the Fiscal Year 2

   2. Overview of Financial Position for the Fiscal Year 4

   3. Overview of Cash Flows for the Fiscal Year 4

   4. Basic Policy of Profit Distribution 5

   5. Outlook 5

2. Overview of the Corporate Group 7

3. Management Policies 9

   1. Basic Policies for Management 9

   2. Medium- to Long-Term Management Strategy and Issues to Be Addressed 9

4. Basic Concept for the Selection of Accounting Standards 13

5. Consolidated Financial Statements and Major Notes 14

   1. Consolidated Balance Sheets 14

   2. Consolidated Statements of Income and Comprehensive Income 16

      (Consolidated Statements of Income) 16

      (Consolidated Statements of Comprehensive Income) 18

   3. Consolidated Statements of Changes in Equity 19

   4. Consolidated Statements of Cash Flows 21

   5. Notes to Consolidated Financial Statements 23

      (Notes to Going Concern Assumption) 23

      (Significant Matters Serving as the Basis for Preparation of Consolidated Financial Statements) 23

      (Change in Presentation) 29

      (Notes to Consolidated Balance Sheets) 30

      (Notes to Consolidated Statements of Income) 32

      (Notes to Consolidated Statements of Comprehensive Income) 35

      (Notes to Consolidated Statements of Changes in Equity) 36

      (Notes to Consolidated statements of Cash Flows) 38

      (Business Combinations and Related Matters) 39

      (Segment Information, etc.) 41

      (Per Share Information) 44

6. Non-consolidated Financial Statements 45

   1. Non-Consolidated Balance Sheets 45

   2. Non-Consolidated Statements of Income 48

   3. Non-Consolidated Statements of Changes in Equity 50

7. Other information 52

   1. Consolidated Orders and Net Sales 52

   2. Non-consolidated Orders Received, Net sales and Backlog 53

   3. Changes in Directors 54

1. Overview of Operating Results, etc.

   1. Overview of Operating Results for the Fiscal Year

      1. Overview of the Consolidated Fiscal Year

         During the consolidated fiscal year under review, the domestic economy showed a moderate recovery overall, although the impact of U.S. trade policies remained. With regard to the outlook, while improvements in the employment and income environment and the effects of various policies are expected to support a moderate recovery, the Group recognizes the need to continue monitoring the impact of developments in the Middle East, fluctuations in financial and capital markets, and trends surrounding U.S. trade policies.

         During the consolidated fiscal year (fiscal year 2025), the number of newly supplied condominium units amounted to 21,659 units in the Tokyo metropolitan area (down 2.6% year on year) and 17,002 units in the Kansai area (up 8.2% year on year). In the Tokyo metropolitan area, as developers continued to restrict the number of units supplied, the number of newly supplied units fell below the previous year for the fourth consecutive year. In the Kansai area, the number of newly supplied units exceeded the previous year for the first time in four years. Looking at the characteristics of supplied properties, both the Tokyo metropolitan area and the Kansai area continued to see an upward trend in sales prices per square meter and average prices. In the Tokyo metropolitan area, the sales price per square meter reached ¥1,419 thousand (up 15.4% year on year) and the average price reached ¥93.83 million (up 15.3% year on year), marking record highs for the fifth consecutive year. In the Kansai area, the sales price per square meter reached ¥965 thousand (up 7.9% year on year) and the average price reached ¥54.18 million (up 7.0% year on year), with the sales price per square meter also reaching a record high for the fifth consecutive year.

         With respect to sales conditions, in the Tokyo metropolitan area, as developers increasingly adopted a sales approach that placed greater emphasis on longer selling periods, the initial contract ratio declined to 62.9% (down 3.9 percentage points year on year), and the number of units remaining for sale at the end of the fiscal year increased to 6,409 units (up 4.8% year on year). In the Kansai area, although the initial contract ratio declined to 72.4% (down 2.2 percentage points year on year), remaining above 70% and indicating generally steady sales, the number of units remaining for sale at the end of the fiscal year increased to 3,308 units (up 27.4% year on year), reflecting, among other factors, an increase in the number of newly supplied units.

         Under these business conditions, in the consolidated fiscal year under review, which marked the first year of the medium-term business plan “HASEKO Evolution Plan,” consolidated ordinary profit amounted to ¥ 94.1 billion, exceeding ¥90.0 billion, primarily due to an improvement in the gross profit margin on completed construction contracts.

         Consolidated Operating Results (Billions of Yen)

         	Fiscal year ended March 31,		Increase or Decrease	Ratio of change
         	2025	2026
         Net Sales	1,177.4	1,273.1	95.8	8.1%
         Operating profit	84.7	98.7	14.0	16.6%
         Ordinary profit	83.4	94.1	10.6	12.8%
         Profit attributable to owners of the parent	34.5	54.8	20.4	59.2%

         Non-Consolidated Operating Results (Billions of Yen)

         	Fiscal year ended March 31,		Increase or Decrease	Ratio of change
         	2025	2026
         Net Sales	779.1	817.6	38.4	4.9%
         Operating profit	45.2	58.4	13.2	29.1%
         Ordinary profit	51.6	74.6	23.0	44.6%
         Profit	37.5	50.2	12.8	34.1%
         Orders	586.6	726.7	140.1	23.9%

         For the fiscal year ended March 2026, net sales were up by 8.1% year on year at 1,273.1 billion yen reflected an increase in completed construction revenue and an increase in the volume of real estate transactions. In addition, due to an improvement in the gross profit margin on completed construction contracts, operating profit was up by 16.6% year on year at 98.7 billion yen, ordinary profit was up by 12.8% year on year at 94.1 billion yen and net profit attributable to owners of parents was up by 59.2% year on year at 54.8 billion yen, resulting in increased revenues and profits. In the consolidated fiscal year under review, the operating profit ratio was 7.8% (up by 0.6 percentage points year on year) and ordinary profit ratio came to 7.4% (up by 0.3 percentage points year on year).

      2. Segments Results

         Operating results by each reportable segment are as follow.

         From the first quarter of the consolidated fiscal year, the classification of reportable segments has been changed. The figures for the previous fiscal year have been reclassified in accordance with the revised reportable segment classification for comparison purposes. For details, please refer to “5. Consolidated Financial Statements and Major Notes (5) Notes to Consolidated Financial Statements (Segment Information, etc.).”

         Construction-Related Business

         Real estate-Related Business

         Net Sales	900.9	+59.2	293.2	+40.5	165.4	+13.4	4.3	+0.8
         Segment profit	68.5	+12.2	35.6	+3.0	8.2	+1.7	(6.1)	(0.4)

         Condominium Management and Operation Business

         Billions of yen Overseas Business

         Figures in parentheses show the amount of increase or decrease from the same period of the previous fiscal year.

         (Construction-Related Business)

         In building construction, while the Company’s capabilities in gathering land information and product planning, its approach to construction quality and adherence to construction schedules, as well as its efficient production system, continued to be evaluated by project owners, the gross profit margin on completed construction contracts for the current period improved, reflecting an improvement in profitability at the time of order receipt.

         With regard to orders for newly built condominium construction undertaken by the Company, the Company received orders for 45 projects in the Tokyo metropolitan area, including 22 large-scale projects with 200 units or more, and 19 projects in the Kansai and Tokai areas, including 14 large-scale projects with 200 units or more, for a total of 64 projects.

         As for completed construction projects undertaken by the Company, a total of 104 projects, including 12 rental apartment projects, were completed during the current period.

         In this segment, net sales amounted to 900.9 billion yen, up 7.0% year on year, and operating profit amounted

         68.5 billion yen, up by 21.6% year on year, resulting in increased revenues and profits.

         (Real Estate-Related Business)

         Reflecting an increase in the number of newly delivered condominiums and the sale of income properties, as well as an increase in the number of real estate brokerage transactions handled, in this segment, net sales amounted 293.2 billion yen, up by 16.0% year on year, and operating profit amounted 35.6 billion yen, up by 9.2% year on year, resulting in increased revenues and profits.

         (Condominium Management and Operation Business)

         In the rental apartment management and corporate housing management outsourcing businesses, the total number of units under management for both businesses combined amounted to 196,878 units, up by 1.4% compared with the end of the previous fiscal year, reflecting steady growth in new contracts and the continuation of existing contracts.

         In condominium management, new contracts progressed steadily, and the number of units under management amounted to 448,076 units, up by 1.1% compared with the end of the previous fiscal year.

         In services for senior residents, reflecting progress in occupancy at fee-based nursing homes and housing for the elderly, the number of operating units amounted to 2,786 units, up by 2.5% compared with the end of the previous fiscal year.

         In this segment, net sales amounted to 165.4 billion yen, up by 8.8% year on year, and operating profit amounted to 8.2 billion yen, up by 26.6% year on year, resulting in increased revenues and profits.

         (Overseas Business)

         On the island of Oahu in the State of Hawaii, the Company is engaged in the operation of commercial facilities and the development of new detached housing subdivision projects.

         In this segment, net sales amounted 4.3 billion yen (the sales were 3.5 billion yen in the previous fiscal year), and operating loss amounted 6.1 billion yen (operating loss of 5.7 billion yen in the previous fiscal year).

   2. Overview of Financial Position for the Fiscal Year

      Total assets at the end of the consolidated fiscal year ended March 2026 amounted to 1,417.7 billion yen, increased by 52.5 billion yen from the end of the previous fiscal year, primarily reflecting an increase in cash and deposits.

      Total liabilities were 854.3 billion yen, an increase of 21.1 billion yen from the end of the previous fiscal year, reflecting, among other factors, the procurement of borrowings.

      Consolidated net assets were 563.5 billion yen, an increase of 31.4 billion yen from the end of the previous fiscal year, primarily reflecting an increase in retained earnings as a result of the recognition of profit attributable to owners of parent.

      As a result of above, the equity ratio was 39.7% compared with 39.0% at the end of the previous fiscal year.

      Billions of yen

      	As of March 31,		Increase or Decrease	Ratio of change
      	2025	2026
      Total assets	1,365.2	1,417.7	52.5	3.8%
      Interest-bearing debt	420.5	425.9	5.4	1.3%
      Net assets	532.0	563.5	31.4	5.9%

   3. Overview of Cash Flows for the Fiscal Year

      Net cash provided by operating activities in the fiscal year ended March 2026 was 157.4 billion yen, fluctuated by

      153.5 billion yen from the net cash provided in operating activities totaling 3.9 billion yen in the previous fiscal year. This was mainly attributable to an increase in cash of ¥54.2 billion due to a decrease in inventories (a decrease in cash of ¥49.7 billion in the previous consolidated fiscal year).

      Net cash used for investing activities in the fiscal year was 53.2 billion yen, fluctuated by 20.8 billion yen from the net cash used in investing activities totaling 32.5 billion yen in the previous fiscal year. This was mainly attributable to a decrease in cash of ¥34.7 billion due to the acquisition of investment securities (a decrease in cash of ¥14.5 billion in the previous consolidated fiscal year).

      Net cash used for financing activities in the fiscal year was 53.4 billion yen, fluctuated by 32.8 billion yen from the net cash used in financing activities totaling 20.5 billion yen in the previous fiscal year. This was mainly attributable to a decrease in cash of ¥20.1 billion associated with the acquisition of treasury shares (a decrease in cash of ¥0.5 billion in the previous consolidated fiscal year).

      As a result of the above, the balance of cash and cash equivalents at the end of the consolidated fiscal year totaled

      288.1 billion yen, an increase of 52.3 billion yen from 235.8 billion yen at the end of the previous consolidated fiscal year.

      Billions of yen

      	Fiscal year ended March 31,		Increase or decrease
      	2025	2026
      Net cash provided by operating activities	3.9	157.4	153.5
      Net cash used in investing activities	(32.5)	(53.2)	(20.8)
      Net cash used in financing activities	(20.5)	(53.4)	(32.8)
      Cash and cash equivalents at end of year	235.8	288.1	52.3

      (Trends in Cash Flow Indicators)

      	As of March 31,2024	As of March 31,2025	As of March 31,2026
      Equity ratio (%)	37.8	39.0	39.7
      Total market value of Haseko’s shares to total assets (%)	38.3	39.3	54.6
      Interest-bearing debt to net cash provided by operating activities (years)	3.6	107.4	2.7
      Interest coverage ratio (times)	48.3	1.1	34.3

      (*) The calculation standards for each indicator are as follows. All indicators are calculated based on consolidated financial figures.

      Equity ratio: Shareholder’s equity divided by total assets

      Total market value of Haseko’s shares to total assets: Total market value of Haseko's shares (*1) divided by total assets Interest-bearing debt to net cash provided by operating activities: Interest-bearing debt (*2) divided by net cash provided by

      operating activities

      Interest coverage ratio: Net cash provided by operating activities divided by interest payments (*4)

      (*1) Total market value: Closing stock price at fiscal year end (TSE) multiplied by the number of shares issued at fiscal year end (excluding treasury stock)

      (*2) Cash flow refers to cash flows from operating activities as shown in the consolidated statement of cash flows. (*3) Interest-bearing debt covers all interest-bearing debt recorded on the consolidated balance sheet that pays interest. (*4) Interest payments: “Interests paid” on the consolidated statements of cash flows

   4. Basic Policy of Profit Distribution

      In the medium-term business plan (for the fiscal years from March 2026 to March 2031) formulated in February 2025, the Company has established the following shareholder return policy.

      1. A total payout ratio of approximately 50% of profit attributable to owners of parent for the six fiscal years combined

      2. Continuation of stable dividends and the implementation of progressive dividends during the plan period

      3. Flexible acquisition of treasury shares as necessary

         With respect to dividends of surplus for the current fiscal year, based on the above policy, the annual dividend is set at ¥95 per share (including an interim dividend of ¥45 per share).

         With respect to dividends for the next fiscal year, an annual dividend of ¥100 per share (including an interim dividend of ¥50 per share) is planned.

   5. Outlook

      Japan’s economy is experiencing a moderate recovery, although the impact of U.S. trade policies remains. Looking ahead, while improvements in the employment and income environment and the effects of various policies are expected to support a moderate recovery, the Group recognizes the need to continue closely monitoring the impact of developments in the Middle East, fluctuations in financial and capital markets, and trends surrounding U.S. trade policies.

      In the condominium market in fiscal year 2025, the number of newly supplied units amounted to 21,659 units in the Tokyo metropolitan area, falling below the previous year for the fourth consecutive year, and 17,002 units in the Kansai

      area, exceeding the previous year for the first time in four years. With regard to the number of newly supplied units in fiscal year 2026, as the launch of redevelopment projects and large-scale projects is scheduled, the number of units in the Tokyo metropolitan area is expected to exceed the previous year, while the Kansai area is expected to remain at approximately the same level as the previous year. In addition, condominium prices continued to show an upward trend in both the Tokyo metropolitan area and the Kansai area. In fiscal year 2025, the average price reached a record high of ¥93.83 million in the Tokyo metropolitan area. In the Kansai area, the average price also reached ¥54.18 million, remaining at a high level not seen since fiscal year 1991 (¥54.64 million).

      Sales conditions in fiscal year 2025 showed variations in progress by region, reflecting factors such as rising prices and condominium prices. On the other hand, supported by the continued low level of variable-rate mortgage interest rates and wage increases that helped underpin purchase sentiment, sales overall remained resilient. For fiscal year 2026, the Group recognizes the need to monitor economic conditions and trends in monetary policy, where uncertainty is increasing, more closely than ever.

      In the fiscal year ended March 2026, which marked the first year of the medium-term business plan “HASEKO Evolution Plan,” in the Construction-Related Business, while the Group’s capabilities in gathering land information and product planning, its approach to construction quality and adherence to construction schedules, as well as its efficient production system, were evaluated by customers and project owners, profitability at the time of order receipt improved. As a result, the gross profit margin on completed construction contracts increased, and consolidated ordinary profit amounted to 94.1 billion yen. In the construction industry, while stable construction demand continues to provide support, there are many challenges, including rising material and labor costs, the need to respond to work-style reforms following the application of caps on overtime work, structural issues such as a decline in skilled construction workers and equipment contractors and a shortage of successors, and initiatives toward decarbonization. In addition, the Group recognizes the need to sincerely address the expectations of society and investors toward listed companies.

      As changes in the social environment continue, management challenges are becoming increasingly diverse and sophisticated. By combining its uniqueness with its growth strategies, the Group aims to address social issues through its business activities and achieve sustainable growth and evolution. In addition, toward realizing its vision of being a leading company in “housing” and “living,” the Group **aims to enhance corporate value over the long term**.

      The performance forecast is as follows.

      Consolidated Financial Results Forecast for FY2026

      (% indicates changes from the previous corresponding period.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      	Billion yen	%	Billion yen	%	Billion yen	%	Billion yen	%
      Six months ending September 30, 2026	630.0	5.8	49.0	18.5	47.0	19.5	30.0	23.9
      Full year	1,380.0	8.4	110.0	11.4	105.0	11.6	66.0	20.4

      Non-consolidated Financial Results Forecast for FY2026

      (% indicates changes from the previous corresponding period.)

      	Net sales		Operating profit		Ordinary profit		Profit		Orders
      	Billion yen	%	Billion yen	%	Billion yen	%	Billion yen	%	Billion yen	%
      Six months ending September 30, 2026	410.0	2.1	35.0	26.2	59.0	36.9	53.5	59.0	3,300	7.8
      Full year	870.0	6.4	70.0	19.9	95.0	27.4	76.0	51.3	7,300	0.5

2. Overview of the Corporate Group

   The Company Group consists of the Company, 101 subsidiaries and 20 affiliates, and conducts its business activities with Construction-Related Business, Real Estate-Related Business, Condominium Management and Operation Business, and Overseas Business as its principal businesses.

   The positioning of each business within the Company Group is as follows.

   (Construction-Related Business)

   The Company operates as a general construction company engaged in the planning, design and construction of condominiums and other buildings.

   Subsidiaries including Fujikensetsu Co., Ltd., Hasec Inc., and Haseko Furnishing Co., Ltd. are engaged in construction contracting, as well as the sale and rental of construction materials and equipment. The Company outsources part of its operations and construction work, the planning, design and supervision of condominiums, office buildings and other structures, as well as construction materials and equipment, to affiliated companies.

   Haseko Reform Inc., a subsidiary, carries out large-scale refurbishment work and interior renovation of condominiums. Hosoda Corporation, a subsidiary, engages in the construction and sale of detached houses.

   Haseko Home Co., Ltd., a subsidiary, engages in the sale of detached houses.

   Subsidiaries including WOOD FRIENDS Co., Ltd., FOREST NOTE Co., Ltd., and LUMBER LAND Co., Ltd. engage in the construction and sale of detached houses, as well as the manufacture and sale of construction materials.

   (Real Estate-Related Business)

   Haseko Real Estate Development Holdings, Inc., a subsidiary, oversees the condominium sales business. Subsidiaries including Haseko Real Estate Development Inc., Sohgoh Real Estate Co., Ltd., and Haseko Sohgoh Development Co., Ltd. engage in the sale and leasing of condominiums.

   Haseko Urbest, Inc., a subsidiary, engages in sales agency services for condominiums.

   Haseko Real Estate Inc., a subsidiary, engages in real estate brokerage and the condominium renovation business. Haseko Intech, Inc., a subsidiary, engages in interior sales.

   (Condominium Management and Operation Business)

   Haseko Property Management Holdings, Inc., a subsidiary, oversees the condominium management business. Subsidiaries including Haseko Community Inc. engage in building management of condominiums.

   Subsidiaries including Haseko Livenet, Inc. engage in the leasing and management of condominiums and other properties.

   Haseko Business Proxy, Inc., a subsidiary, provides corporate housing management services.

   Haseko Senior Well Design Co., Ltd., a subsidiary, operates fee-based nursing homes and provides long-term care insurance services.

   Subsidiaries including Haseko Systems, Inc. engage in related service businesses such as printing.

   The Company entrusts affiliated companies with building management, leasing management, and the sale and brokerage of real estate.

   (Overseas Business)

   Subsidiaries, including HASEKO America, Inc., engage in real estate development and sales as well as the operation of commercial facilities in countries including the United States.

   The matters described above are illustrated in the following business organization chart.

3. Management Policies

   1. Basic Policies for Management

      With respect to the management of the Group as a whole, the Company positions its operations around three core businesses: the Construction-related Business, the Real Estate-related Business, and the Condominium Management and Operation Business.

      By encouraging each business to compete and collaborate with one another and evolve in its respective field, the Company aims to create new businesses.

      The Company aims to expand these businesses from the three major metropolitan areas in Japan to major regional cities domestically and further overseas and seeks to achieve sustainable growth and enhance corporate value as a leading company in housing and living.

   2. Medium- to Long-Term Management Strategy and Issues to Be Addressed

The Company Group formulated the Medium-term Business Plan “HASEKO Evolution Plan” and commenced its implementation from the fiscal year ended March 2026.

In recent years, the pace of change in the environment surrounding the Company has accelerated, requiring companies to transform accordingly.

At the same time, it is necessary to further refine and pass on the strengths that the Company has cultivated to date.

With these two themes of “change” and “succession” as management imperatives, the Company has positioned their integration as “evolution” and named the plan the “HASEKO Evolution Plan.”

The Company Group has long advocated being a “corporate group for housing to create great living,” and under this plan, it will take a further step forward by clarifying what kind of housing and living it provides and where it provides them.

The Company aims to deliver environmentally friendly, safe and secure housing, as well as rich and comfortable living, both domestically and internationally, and will advance its initiatives under this management plan.

In addition, the Company will further review the business structure that has been advanced under a dual framework of construction-related business and service-related business, and transition to a structure centered on three businesses: the Construction-Related Business, the Real Estate-Related Business, and the Condominium Management and Operation Business.

By enabling each business to compete and collaborate with one another, the Company will create new businesses and expand its business fields from the three major metropolitan areas to major regional cities in Japan and further overseas.

Furthermore, with a focus on capital efficiency, the Company will pursue management that maximizes productivity and efficient utilization of its management resources—people, goods, capital, and information.

By continuing to advance and evolve, the Company Group will work as one to become a corporate group that earns the trust of its stakeholders, and to ensure that all stakeholders can say, “I am glad I chose Haseko.”

Haseko Group Corporate Philosophy, Vision, Basic Policy of Medium-Term Business Plan, Action Guidelines

Corporate Philosophy

To contribute to society by creating an optimal environment for cities and people

Vision

To continuously provide environmentally friendly, safe, and secure ‘housing’ and rich, comfortable ‘living’ both domestically and internationally

Basic Policy

As a leading company in ‘housing’ and ‘living,’ to achieve sustainable growth and enhance corporate value

Action Guidelines

To continue evolving with confidence and pride, and with comprehensive strength and action to meet the expectations of all stakeholders

To fulfill social responsibility from all ESG perspectives and contribute to the realization of a sustainable society through business activities themselves

Summary of Medium-Term Business Plan

Plan Name

HASEKO Group Medium-Term Business Plan “HASEKO Evolution Plan” Towards the Next Evolution Term

FY2025-FY2030

Business Strategy for achieve the vision

1. Promote further Construction business growth and deepening

   • Establish Sustainable Construction System

   • Expand Construction Field

   • Expand the Refurbishment and Maintenance Business

2. Expand and Improve of quality of Real estate Business

   • Initiatives to Improve Capital Efficiency

   • Differentiate through Product Development

   • Expand and Challenge to New Business area

3. Promote Condominium management and operation business growth

   • Develop New Condominium Management Methods and Resident Services

   • Reform Business through DX

   • Expand Services for Seniors

4. Monetize Overseas business

   • Develop Overseas Business as a next profit driver prepare for shrink of domestic housing market in the future

   • Plan to entry into the most suitable business among Construction, Real estate, and Condominium Management and Operation businesses according to the housing market characteristics in each country

5. Challenge to New business areas

   • Expand of Production Functions and Products

   • Initiatives to businesses with solve social issues

   • Create a Foundation for New Businesses

Strengthen the Management Foundation

1. Financial Strategy

   • Continue proactive investment for sustainable growth in conscious of capital costs

   • Pursue stable shareholder return under optimal control of debt and equity (total return ratio of approximately 50%)

   • Total net investment amount for 6 years 400 billion yen

     • Domestic Real Estate 120 billion yen

     • Overseas Real Estate 40 billion yen

     • Construction and R&D 100 billion yen

     • DX related 40 billion yen

     • New business M&A, etc. 100 billion yen

   • Leverage interest-bearing debt while trying to maintain D/E ratio below 1.0

2. Strengthen Technology Development

   • Promote Wooden Interior Decoration

   • Stock business and Renovation Technology

   • Measures Against Intensifying Disasters

3. Accelerate DX

   • Digitize Design and Construction Information and Utilize AI

   • Build and Utilize Group Data Sharing Platform

   • Talent Development for Sustainable Growth and Challenge Areas

4. Enhance Initiatives for Sustainability

   • Response to Climate Change

     • Plan and Execute Greenhouse gas (CO2) Emissions Reduction Plans, Indicators, and Targets

     • Initiatives at Construction Sites and Offices

     • Initiatives for Expanding Low-Carbon Construction and Decarbonized Housing

   • Enhance Human Capital Management

     • Secure Personnel and Strengthen Organizational Capabilities

     • Work Style Reform, D&I, and Health Management

     • Treatment and HR Systems

     • Human Resource and Career Development

   • Respect for Human Rights

     • Human Rights Due Diligence

     • Consideration for Increasing Foreign Workers

   • Supply Chain Management

     • CSR Procurement Guidelines

5. Strengthen Functions of Corporate division

   • Further Strengthening Corporate Governance

   • Enhance Communication with Stakeholders

   • Improve Productivity and Strengthening Functions of Corporate Management Division

     Management Goals and Shareholder Return Policy Management Goals

   • over 100 billion yen in FY2027

   • over 130 billion yen in FY2030

   • Establish a profit base that can stably post over 100 billion

   • ROE： Maintain a level above 10% and aim for approximately 13% by FY2030

     Shareholder Return Policy

   • Total return ratio of approximately 50% of profit attributable to parent company shareholders over 6 fiscal periods

   • Implement progressive dividends during the plan period

   • Purchase treasury stock flexibly as needed

Towards Sustainable Corporate Value Enhancement

1. Initiatives to Improve Market Evaluation

   • Strategic investment for growth

   • Sustainable returns for shareholders

   • Enhance initiatives for sustainability

   • Enhance communication with stakeholders

2. Initiatives to Improve ROE

   • Improve profitability

   • Improve capital efficiency

3. Establish Non-Financial KPIs

   • Climate change response

   • Human Capital

   • Respect for human rights

   • Supply Chain Management

     Note: Forward-looking statements are based on information available as of the end of the current consolidated fiscal year and are not intended as a guarantee of future performance.

4. Basic Concept for the Selection of Accounting Standards

   The Company Group has adopted a policy of preparing its consolidated financial statements in accordance with Japanese GAAP for the time being, taking into consideration the comparability of consolidated financial statements across periods and the comparability with other companies.

   Looking ahead, the Company Group will continue to consider the application of IFRS (International Financial Reporting Standards), taking into account trends in the adoption of IFRS by domestic peer companies.

5. Consolidated Financial Statements and Major Notes

1. Consolidated Balance Sheet

   (Millions of yen)

   As of March 31, 2025 As of March 31, 2026

   Assets

   Current assets

   Cash and deposits		235,976		279,968
   Electronically recorded monetary claims, accounts receivable from completed construction contracts	*1	148,607	*1	137,572
   and other
   Securities		3,305		11,760
   Costs on construction contracts in progress		13,578		13,869
   Real estate for sale		312,779		254,820
   Costs on real estate business		281,933		296,445
   Real estate for development		36,912		35,452
   Other		20,232		22,206
   Allowance for doubtful accounts		(121)		(126)
   Total current assets		1,053,200		1,051,966
   Non-current assets

   Property, plant and equipment

   Buildings and structures *3 77,922 *3 90,373

(Millions of yen)

As of March 31, 2025 As of March 31, 2026

Liabilities

Current liabilities

1. Consolidated Statements of Income and Comprehensive Income

   (Consolidated Statement of Income)		(Millions of yen)
   	For the fiscal year ended March 31, 2025	For the fiscal year ended March 31, 2026
   Net sales
   Net sales of completed construction contracts	599,150	625,243
   Net sales of design and supervision	14,250	15,684
   Net sales of leasing and management	94,107	98,131
   Real estate sales	448,688	511,128
   Other operating revenue	21,158	22,950
   Total net sales	1,177,353	1,273,136

   Cost of sales

   Cost of sales of completed construction contracts	*1		524,507	*1*2	536,960
   Cost of design and supervision		*1	7,012	*1	7,903
   Cost of leasing and management			73,382		76,880
   Cost of sales - real estate	*2		388,016	*2	443,404
   Other business expenses			17,911		18,148
   Total cost of sales			1,010,828		1,083,295
   Gross profit
   Gross profit on completed construction contracts			74,642		88,283
   Gross profit design and supervision			7,239		7,781
   Gross profit leasing and management			20,725		21,251
   Gross profit - real estate sales			60,673		67,725
   Gross profit - other business			3,247		4,801
   Total gross profit			166,525		189,841
   Selling, general and administrative expenses	*3, *4		81,825	*3, *4	91,098
   Operating profit			84,701		98,743
   Non-operating income
   Interest income			346		763
   Dividend income			2,805		667
   Foreign exchange gains			-		986
   Other			1,462		1,349
   Total non-operating income			4,613		3,765
   Non-operating expenses
   Interest expenses			3,549		4,746
   Share of loss of entities accounted for using equity			779		2,073
   method
   Incidental expenses for loan	1,231			1,195
   Other	346			443
   Total non-operating expenses	5,905			8,457
   Ordinary profit	83,408			94,051

   (Millions of yen)

   	For the fiscal year ended March 31, 2025				For the fiscal year ended March 31, 2026
   Extraordinary income
   Gain on sale of non-current assets	*5			12	*5	19
   Gain on sale of investment securities				191		90
   National subsidies				40		48
   Other				0		-
   Total extraordinary income				243		156
   Extraordinary losses
   Loss on disposal of non-current assets		*6	64	*6	338
   Impairment losses	*7		16,861	*7	4,079
   Loss on valuation of investment securities			2,990		-
   Provision for loss on litigation			3,006		-
   Other			40		335
   Total extraordinary losses			22,960		4,752
   Profit before income taxes			60,692		89,455
   Income taxes - current			26,888		36,440
   Income taxes - deferred			(647)		(1,886)
   Total income taxes			26,241		34,555
   Profit			34,450		54,901
   Profit attributable to non-controlling interests			-		62
   Profit attributable to owners of parent			34,450		54,839

   (Consolidated Statement of Comprehensive Income)		(Millions of yen)
   	For the fiscal year ended March 31, 2025	For the fiscal year ended March 31, 2026
   Profit	34,450	54,901
   Other comprehensive income
   Valuation difference on available-for-sale securities	(237)	10,628
   Foreign currency translation adjustment	11,836	1,220
   Remeasurements of defined benefit plans, net of tax	(1,501)	8,204
   Total other comprehensive income	* 10,098	* 20,052
   Comprehensive income	44,549	74,953
   Comprehensive income attributable to
   Comprehensive income attributable to owners of 44,549			74,891
   Comprehensive income attributable to non-controlling -			62

   parent interests

2. Consolidated Statement of Changes in Equity

For the fiscal year ended March 31, 2025

(Millions of yen)

For the fiscal year ended March 31, 2026

(Millions of yen)

Proceeds from sale of property, plant and equipment and intangible assets

28 31

Proceeds from sales and withdrawal of investment

securities

4,331 4,993

Other, net (85) (97)

Net cash provided by (used in) investing activities (32,472) (53,225)

For the fiscal year ended March 31, 2025

(Millions of yen)

For the fiscal year ended March 31, 2026

Cash flows from financing activities

Net increase (decrease) in short-term borrowings 15,000 (19,625)

Proceeds from long-term borrowings - 80,150

Repayments of long-term borrowings (10,000) (26,789)

Redemption of bonds - (40,977)

Purchase of treasury shares (545) (20,055)

Incidental expenses for loan (1,236) (1,189)

Dividends paid (23,597) (24,710)

Other, net (168) (177)

Net cash provided by (used in) financing activities (20,545) (53,373)

Effect of exchange rate change on cash and cash

equivalents

1,407

1,521

Net increase (decrease) in cash and cash equivalents (47,695) 52,336

Cash and cash equivalents at beginning of period 283,493 235,798

Cash and cash equivalents at end of period *1 235,798 *1 288,134

1. Notes to Consolidated Financial Statements (Notes to Going Concern Assumption)

   Not applicable.

   (Significant Matters Serving as the Basis for Preparation of Consolidated Financial Statements)

   1. Matters Related to the Scope of Consolidation

      1. Number of Consolidated subsidiaries 77 consolidated companies

         Names of Major consolidated subsidiaries Fujikensetsu Co., Ltd.

         Hasec Inc.

         Haseko Furnishing Co., Ltd. Haseko Reform Inc.

         Hosoda Corporation Haseko Home, Co., Ltd. WOOD FRIENDS Co., Ltd. FOREST NOTE Co., Ltd. LUMBER LAND Co., Ltd.

         Haseko Real Estate Development Holdings Inc. Haseko Real Estate Development, Inc.

         Sohgoh Real Estate Co., Ltd.

         Haseko Sohgoh Development Co., Ltd. Haseko Urbest Inc.

         Haseko Real Estate, Inc. Haseko Intech Inc.

         Haseko Anesis Corporation

         Haseko Property Management Holdings Inc. Haseko Community, Inc.

         Haseko Community Kyushu Inc. Haseko Community Okinawa Inc. Haseko Livenet, Inc.

         Joint Property Co., Ltd. Haseko Business Proxy, Inc.

         Haseko Senior Well Design Co., Ltd. Haseko Systems Inc.

         SHINRIN KOEN GC Co., Ltd.

         HASEKO America, Inc. HASEKO (Hawaii), Inc. HASEKO North America, Inc. HASEKO UK LIMITED

         During the fiscal year under review, the Company acquired shares of WOOD FRIENDS Co., Ltd. and therefore included WOOD FRIENDS Co., Ltd., FOREST NOTE Co., Ltd., LUMBER LAND Co., Ltd. and SHINRIN

         KOEN GC Co., Ltd. as consolidated subsidiaries.

         In addition, as HASEKO UK LIMITED was newly established, it was included as a consolidated subsidiary. Haseko Community West Japan Inc., which had been a consolidated subsidiary in the previous fiscal year, was merged into Haseko Community Inc., with Haseko Community Inc., as the surviving company and Haseko

         Community West Japan Co., Ltd. as the dissolved company.

      2. Names of Major Non-Consolidated Subsidiaries Haseko Navie Corporation

         Haseko-techno Corporation

      3. Reason for Exclusion of Non-Consolidated Subsidiaries from the Scope of Consolidation

      Each of the non-consolidated subsidiaries is small in scale, and their total assets, net sales, profit or loss for the fiscal year (amount corresponding to the Company’s equity interest), and retained earnings (amount corresponding to the Company’s equity interest) do not have a material impact on the consolidated financial statements. Accordingly, they are excluded from the scope of consolidation.

   2. Matters Related to Application of the Equity Method

      1. Number of Companies Accounted for Using the Equity Method 15 affiliated companies

         HASEKO Homeloans, LLC Duarte Multifamily, LLC. Duarte Multifamily II LLC. Anaheim Multifamily LLC. Morgan Hill Multifamily LLC. Murrieta II Multifamily LLC. Santa Maria II Multifamily LLC. KW-HAS Vancouver JV, LLC GS HNA Elk Grove JV, LLC HASTHC Lakemont JV LLC

         There are no non-consolidated subsidiaries accounted for using the equity method.

      2. Names of Major Non-Consolidated Subsidiaries and Affiliates Not Accounted for Using the Equity Method Major Non-Consolidated Subsidiaries Not Accounted for Using the Equity Method

         Haseko Navie Corporation Haseko-techno Corporation

      3. Reason for Exclusion of Non-Consolidated Subsidiaries and Affiliates from the Scope of the Equity Method

         With respect to non-consolidated subsidiaries and affiliates not accounted for using the equity method, the impact on the consolidated financial statements of excluding them from the scope of application of the equity method is immaterial when considering their profit or loss for the fiscal year (amount corresponding to the Company’s equity interest) and retained earnings (amount corresponding to the Company’s equity interest). In addition, they are not material in aggregate. Accordingly, they are excluded from the scope of application of the equity method.

   3. Matters Related to Fiscal Year-End of Consolidated Subsidiaries

      Among the consolidated subsidiaries, HASEKO America, Inc. and its consolidated subsidiaries, 48 subsidiaries in total, have a fiscal year-end of December 31. In preparing the consolidated financial statements, the financial statements as of December 31 are used for each of such subsidiaries. However, necessary adjustments are made on consolidation for significant transactions that occurred during the period from January 1 to the consolidated closing date of March 31.

      The fiscal years of the other consolidated subsidiaries are the same as that of the Company submitting the consolidated financial statements.

   4. Matters Related to Significant Accounting Policies

1. Standards and Methods for Valuation of Important Assets (a)Securities

   1. Bonds held to maturity

      The amortized cost method is applied. (ii)Other securities:

      1. Securities other than stocks without market value

         These securities are stated at fair value based on market prices, etc. as of the balance sheet date.

         (Unrealized gains and losses are recorded directly in net assets, and the cost of securities sold is calculated using the moving average method.)

      2. Stocks without market value

         These securities are stated at cost determined using the moving average method. (b)Inventories

         1. Construction contracts in process, Real estate for sale, Costs on real estate business, and Real estate for development

            They are stated at cost determined mainly by the individual cost method (The book value of inventories on the balance sheets is written down based on the fall in profitability).

            Real estate for lease included in inventories is depreciated using the same method as that applied to property, plant and equipment.

         2. Raw materials

            Materials are valued at cost using the moving-average method (The book value of inventories on the balance sheets is written down based on the fall in profitability).

         3. Supplies

         Supplies are stated at cost determined by the individual cost method (The book value of inventories on the balance sheets is written down based on the fall in profitability)

2. Depreciation Methods for Important Depreciable Assets

   1. Tangible fixed assets (excluding leased assets) The declining-balance method is applied.

      However, buildings (excluding building fixtures) acquired on or after April 1, 1998, and building fixtures and structures acquired on or after April 1, 2016, are depreciated using the straight-line method.

      Some consolidated subsidiaries apply the straight-line method.

   2. Intangible fixed assets (excluding leased assets) The straight-line method is applied.

      Software for internal use is amortized using the straight-line method based on the estimated useful life within the Company (five years).

   3. Lease assets

   Lease assets related to finance lease transactions that transfer ownership are depreciated using the same method as that applied to owned fixed assets.

   Lease assets related to finance lease transactions that do not transfer ownership are depreciated using the straight-line method over the lease period, with no residual value.

3. Standards for Recording Significant Provisions

   1. Allowance for doubtful accounts

      To provide for losses from uncollectible receivables, an allowance is provided for general receivables based on historical bad debt ratios.

      For specific receivables, such as doubtful receivables, the allowance is provided based on individually assessed estimated uncollectible amounts.

   2. Provision for warranties for completed construction

      To provide for future expenditures for free repairs borne by the Company after delivery related to defects and contractual nonconformities of construction work recorded as completed construction, a provision is recorded based on estimated repair costs.

   3. Provision for loss on construction contracts

      To provide for future losses on construction contracts, an estimated loss is recorded for construction work not yet delivered as of the end of the fiscal year when a loss is expected to occur and the amount can be reasonably estimated.

   4. Provision for bonuses

      To provide for bonus payments to employees, a provision is recorded based on the estimated amount of bonuses to be paid.

   5. Provision for bonuses for directors (and other officers)

      To provide for bonus payments to directors, a provision is recorded based on the estimated amount of bonuses to be paid.

   6. Provision for share awards

      To provide for the delivery of the Company’s shares based on share awards regulations, a provision is recorded based on the estimated amount of share awards payment obligations as of the end of the fiscal year.

   7. Provision for share awards for directors (and other officers)

   To provide for the delivery of the Company’s shares to directors based on share awards for directors payment regulations, a provision is recorded based on the estimated amount of share awards for directors payment obligations as of the end of the fiscal year.

4. Accounting treatment of retirement benefits

   1. Method of attributing estimated retirement benefit amounts to periods

      In calculating retirement benefit obligations, the estimated retirement benefit amounts are attributed to the period up to the end of the fiscal year using the benefit formula method.

   2. Method of amortizing actuarial gains and losses and prior service costs

      Prior service costs are amortized mainly using the straight-line method over the average remaining service period of employees at the time the costs arise (5 to 13 years).

      Actuarial gains and losses are amortized mainly using the straight-line method over the average remaining service period of employees at the time the gains or losses arise (5 to 18 years), with amortization commencing from the fiscal year following the year in which they arise.

   3. Adoption of the simplified method for small-sized entities

   Some consolidated subsidiaries apply a simplified method for calculating retirement benefit obligations and retirement benefit expenses, under which the amount payable upon voluntary retirement at the fiscal year-end is deemed to be the retirement benefit obligation.

5. Accounting standards for significant revenues and expenses

   The principal performance obligations in the major businesses related to revenue arising from contracts with customers of the Company and its consolidated subsidiaries, and the timing at which such performance obligations are typically satisfied, are as follows.

   1. Construction-Related business

      The Company and its consolidated subsidiaries engage in comprehensive construction business primarily targeting the market for new housing supply, providing services ranging from planning and design to construction of condominiums and other buildings, as well as undertaking large-scale refurbishment work mainly for existing housing. Revenue is recognized as follows.

      (Construction contracts, large-scale refurbishment work, interior remodeling, etc.)

      These performance obligations are satisfied over time, as the value of the property increases as the contracted

      construction work progresses and the customer controls the asset. Accordingly, revenue is recognized based on the progress of construction work.

      Progress toward satisfaction of the performance obligation is measured using the input method based on costs incurred.

      The transaction price is determined by the construction contract, and consideration is received in stages at the times specified in the contract.

      However, for construction contracts where the period from the contract inception date to the point at which complete satisfaction of the performance obligation is expected to be very short, revenue is recognized at the point in time when the performance obligation is completely satisfied.

      (Design and supervision)

      For design services, the performance obligation consists of delivering the deliverables to the customer, and revenue is recognized at the point in time when the services are completed.

      The transaction price is determined by the service contract, and consideration is received at the times specified in the contract.

      For supervision services, the performance obligation consists of providing supervision services related to construction work to the customer over the contract period, and revenue is recognized over the contract period.

      The transaction price is determined by the service contract, and consideration is received at the times specified in the contract.

      (Real estate sales, etc.)

      These performance obligations are satisfied at a point in time when the real estate sales transaction is completed, and revenue is recognized at that point in time.

      The transaction price is determined by the contract with the customer, and consideration is received based on that contract.

   2. Real Estate-Related Business

      The Company and its consolidated subsidiaries engage primarily in real estate sales of newly built condominiums, sales agency services for condominiums, and real estate brokerage services.

      Revenue is recognized as follows. (Real estate sales, brokerage and renovation)

      These performance obligations are satisfied at a point in time when the real estate sales transaction is completed, and revenue is recognized at that point in time.

      The transaction price is determined by the contract with the customer, and consideration is received based on that contract.

      (Sales agency services for condominiums)

      The performance obligation consists of selling, contracting and delivering condominium units to end users on behalf of the client.

      As a series of performance obligations is satisfied upon delivery of each individual unit, revenue is recognized at the time each unit is delivered.

      The transaction price is determined by the contract with the customer, and consideration is received based on that contract.

   3. Condominium Management and Operation Business

      The Company and its consolidated subsidiaries engage mainly in condominium management, rental apartment management, interior remodeling and related services for existing housing.

      Revenue is recognized as follows.

      (Condominium management, rental apartment management, etc.)

      Depending on the nature of the performance obligations related to condominium management, performance obligations are satisfied either at a point in time or over a period of time, and revenue is recognized accordingly.

      The transaction price is determined by the contract with the customer, and consideration is received based on that contract.

      (Interior remodeling, etc.)

      These performance obligations are satisfied over time, as the value of the property increases as the contracted construction work progresses and the customer controls the asset.

      Accordingly, revenue is recognized based on the progress of construction work.

      Progress toward satisfaction of the performance obligation is measured using the input method based on costs incurred.

      The transaction price is determined by the construction contract, and consideration is received at the times specified in the contract.

      However, for construction contracts where the period from the contract inception date to the point at which complete satisfaction of the performance obligation is expected to be very short, revenue is recognized at the point in time when the performance obligation is completely satisfied.

   4. Overseas Business

   The Company and its consolidated subsidiaries engage in overseas real estate development and sales operations. Revenue is recognized as follows.

   (Real Estate Sales, etc.)

   These performance obligations are satisfied at a point in time when the real estate sales transaction is completed, and revenue is recognized at that point in time.

   The transaction price is determined by the contract with the customer, and consideration is received based on that contract.

6. Translation of Significant Foreign Currency Assets and Liabilities into Japanese Yen

   Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the spot exchange rate at the consolidated balance sheet date, and translation differences are recognized in profit or loss.

   Assets and liabilities, as well as revenues and expenses, of overseas consolidated subsidiaries are translated into Japanese yen at the spot exchange rate at the consolidated balance sheet date, and translation differences are included in “Foreign currency translation adjustments” in net assets.

7. Significant Hedge Accounting Policies Hedge accounting method:

   The Company applies the special treatment for interest rate swap transactions.

   Hedging instruments and hedged items

   Hedging instruments … Interest rate swaps Hedged items … Interest on borrowings

   Hedging policy

   The Company and its consolidated subsidiaries use derivative instruments in order to hedge against interest rate fluctuations

   Method of evaluation of hedge effectiveness

   The Company omitted the evaluation of the effectiveness as the requirements for the special treatment of interest-rate swaps are satisfied.

8. Method and Period for Amortization of Goodwill

   Goodwill is amortized on a straight-line basis over the period during which its effects are estimated to be realized at the time of occurrence.

   However, immaterial amounts of goodwill are charged to income as incurred.

9. Scope of Cash and Cash Equivalents in the Consolidated Statement of Cash Flows

   Funds consist of cash on hand, deposits that can be withdrawn at any time, negotiable certificates of deposit

   with maturities of three months or less from the date of acquisition, and time deposits and other investments that are readily convertible into cash and subject to insignificant risk of changes in value.

10. Other Significant Matters for Preparing Consolidated Financial Statements

1. Accounting treatment of deferred assets

   Bond issuance costs are expensed in full at the time of payment.

2. Accounting treatment of interest expenses

   Some consolidated subsidiaries have incorporated the interest paid on funds used for the real-estate development business into the costs of real estate for sale.

3. Group tax sharing system

   The Company has applied Group Tax Sharing System.

4. Accounting treatment for advertising expenses

The Company and some of its consolidated subsidiaries capitalize advertising expenses and other selling expenses for sales of real estate incurred before delivery in real estate inventories and expense them upon delivery.

(Change in Presentation) (Consolidated Balance Sheet)

With respect to “Notes receivable and accounts receivable from completed construction contracts, etc.” presented under “Current assets” in the previous consolidated fiscal year, the account name has been changed to “Electronically recorded monetary claims and accounts receivable from completed construction contracts, etc.” in the consolidated fiscal year under review, as there was no balance of notes receivable.

(Consolidated Statement of Cash Flows)

Up to the previous consolidated fiscal year, “Foreign exchange losses(gains),” which had been included in “Other” under “Cash flows from operating activities,” are presented separately in the consolidated fiscal year under review as its importance has increased. To reflect this change in presentation, the consolidated financial statements for the previous consolidated fiscal year have been reclassified.

As a result, in the consolidated statement of cash flows for the previous consolidated fiscal year, the amount of

¥2,013 million previously presented as “Other” under “Cash flows from operating activities” has been reclassified into “Foreign exchange losses(gains)” of ¥149 million and “Other” of ¥1,864 million.

(Notes to Consolidated Balance Sheets)

*1 The amounts of the receivables arising from contracts with customers and the contract assets included in the electronically recorded monetary claims, accounts receivable from completed construction contracts and other as of March 31, 2025 and 2026 were as follows:

(Millions of yen)

*2 Assets in non-consolidated subsidiaries and affiliates were as follows:

(Millions of yen)

*3 Tax Purpose Reduction Entry

The amounts of tax basis reduction applied to the acquisition costs of non-current assets due to government subsidies, etc. as of March 31, 2025 and 2026 are as follows.

(Millions of yen)

*4 The amounts of contract liabilities included in advances received on construction contracts in progress, deposits received - real estate business and other current liabilities (other) as of March 31, 2025 and 2026 are as follows:

(Millions of yen)

5 Contingent Liabilities (guarantee obligations, etc.)

The Company was contingently liable for guarantees on bank loans and other guarantees as of March 31, 2025 and 2026 as follows:

Bank borrowings of customers using affiliated housing loan programs 2,547 cases

As of March 31, 2025

95,503

Bank borrowings of customers using affiliated housing loan programs 2,604 cases

(Millions of yen)

As of March 31, 2026

110,581

Bank borrowings of customers purchasing real estate 1 case

Bank borrowings of owners of fee-based elderly care facilities 1 case

Borrowings of overseas affiliates 3 cases (Note)

12 Bank borrowings of customers purchasing real estate 1 case

208 Bank borrowings of owners of fee-based elderly care facilities 1 case

8,435 Borrowings of overseas affiliates 3 cases (Note)

8

184

8,404

Total 104,157 Total 119,176

Note: Total amount of joint and several guarantees is stated.

6 The Company has entered into a commitment line agreement with five financial institutions under a syndicated loan to ensure stable and flexible borrowings for working capital as of March 31, 2025 and 2026.

The unused balances of borrowings under this agreement as of March 31, 2025 and 2026 were as follows:

(Millions of yen) As of March 31, 2025 As of March 31, 2026

(Notes to Consolidated Statements of Income)

*1 Provision for loss on construction contracts included in cost of sales for the years ended March 31, 2025 and 2026 were as follows:

For the fiscal year ended March 31, 2025

(Millions of yen)

For the fiscal year ended March 31, 2026

Cost of sales of completed construction contracts 324 45

Cost of sales of design and supervision 116 122

*2 Losses on valuation of inventories included in cost of sales for the years ended March 31, 2025 and 2026 were as follows:

For the fiscal year ended March 31, 2,025

(Millions of yen)

For the fiscal year ended March 31, 2,026

Cost of sales of completed construction contracts - 339

Cost of sales - real estate 2,800 10,953

*3 The Major expense items and their amounts in Selling, general and administrative expenses for the years ended March 31, 2025 and 2026 were as follows:

(Millions of yen)

*4 Research and development costs included in selling, general and administrative expenses for the years ended March 31, 2025 and 2026 were as follows:

For the fiscal year ended March 31, 2025

(Millions of yen)

For the fiscal year ended March 31, 2026

Research and development costs 4,209 3,890

*5 Gain on sales of non-current assets for the years ended March 31, 2025 and 2026 consisted of the following:

(Millions of yen)

*6 Loss on disposal of non-current assets for the years ended March 31, 2025 and 2026 consisted of the following:

(Millions of yen)

*7 Impairment losses

The Company and its consolidated subsidiaries recognized impairment losses on the following non-current assets for the years ended March 31, 2025 and 2026.

From the first quarter of the consolidated fiscal year, the Group has changed the classification of reportable segments. The figures for the previous consolidated fiscal year have been reclassified in accordance with the revised reportable segment classification for comparative purposes.

Previous Fiscal Year (April 1, 2024 – March 31, 2025)

Impairment losses were recognized for real estate for the Construction-Related Business, real estate for the Real Estate-Related Business, assets for the Real Estate-Related Business, real estate for the Condominium Management and Operation Business, assets for the Condominium Management and Operation Business, and real estate for the Overseas Business. These assets are grouped on an individual property basis.

Reflecting factors such as a decline in profitability, the carrying amounts of the above assets were reduced to their recoverable amounts, and the resulting decrease of ¥16,861 million was recognized as an impairment loss and recorded as an extraordinary loss.

The breakdown of the impairment loss is as follows: buildings and structures ¥15,324 million; machinery, vehicles, and tools and equipment ¥1,448 million; and land ¥89 million.

The recoverable amounts of real estate for the Construction-Related Business, real estate for the Real Estate-Related Business, and assets for the Real Estate-Related Business were measured based on net selling prices calculated using real estate appraisals and other valuation methods.

The recoverable amounts of real estate for the Condominium Management and Operation Business and assets

for the Condominium Management and Operation Business were measured based on value in use. As the valuation based on future cash flows resulted in a negative amount, the value in use was measured at zero. In addition, as undiscounted future cash flows were negative, the discount rate is not disclosed.

The recoverable amount of real estate for the Overseas Business was measured at fair value.

Current Fiscal Year (April 1, 2025 – March 31, 2026)

Impairment losses were recognized for real estate for the Construction-Related Business, assets for the Construction-Related Business, real estate for the Condominium Management and Operation Business, assets for the Condominium Management and Operation Business, and assets for the Overseas Business. In principle, these assets are grouped on an individual property basis, while assets of certain consolidated subsidiaries are grouped on a business unit basis.

Reflecting factors such as a decline in profitability, the carrying amounts of the above assets were reduced to their recoverable amounts, and the resulting decrease of ¥4,079 million was recognized as an impairment loss and recorded as an extraordinary loss.

The breakdown of the impairment loss is as follows: buildings and structures ¥820 million; machinery, vehicles, and tools and equipment ¥2,365 million; land ¥588 million; lease assets ¥33 million; other intangible assets ¥269 million; and others ¥4 million.

The recoverable amounts of real estate for the Construction-Related Business and assets for the Construction-Related Business were measured based on net selling prices calculated using real estate appraisals and other valuation methods.

The recoverable amounts of real estate for the Condominium Management and Operation Business and assets for the Condominium Management and Operation Business were measured based on value in use. As the valuation based on future cash flows resulted in a negative amount, the value in use was measured at zero. In addition, as undiscounted future cash flows were negative, the discount rate is not disclosed.

The recoverable amounts of assets for the Overseas Business were measured at fair value. As the fair value was assessed at zero, the carrying amounts were recognized as impairment losses.

(Notes to Consolidated Statements of Comprehensive Income)

*Reclassification adjustments, income taxes and tax effects relating to other comprehensive income for the years ended March 31, 2025 and 2026 were as follows:

Valuation difference on available-for sale securities:

For the fiscal year ended March 31, 2025

(Millions of yen)

For the fiscal year ended March 31, 2026

Amount arising during the current period 38 15,927

Reclassification adjustments for gains (losses) recognized in profit

(191) (345)

(Notes to Consolidated Statements of Changes in Equity) FY2024 (April 1, 2024- March 31, 2025)

1. Matters concerning the classes and number of issued shares and treasury shares

   	Number of shares at beginning of year (thousands)	Increase in number of shares during the year (thousands)	decrease in number of shares during the year (thousands)	Number of shares at end of year (thousands)
   Issued shares:
   Common stock	300,794	—	—	300,794
   Total	300,794	—	—	300,794
   Treasury shares:
   Common stock (Note:1,2, and 3)	28,009	293	261	28,041
   Total	28,009	293	261	28,041

   Note 1: The number of treasury shares at the beginning of the consolidated fiscal year includes 4,822 thousand shares of the Company held as trust assets under the “Board Benefit Trust (BBT)” and the “Stock Grant ESOP” plans. The number of treasury shares at the end of the consolidated fiscal year includes 4,561 thousand shares of the Company held as trust assets under these plans.

   2: The increase of 293 thousand shares in treasury shares of common stock was mainly attributable to the acquisition of 290 thousand shares of treasury stock from subsidiaries based on resolutions of the Board of Directors.

   3: The decrease of 261 thousand shares in treasury shares of common stock was mainly attributable to the delivery, etc. of 261 thousand shares of the Company’s stock held as trust assets under the “Board Benefit Trust (BBT)” and the “Stock Grant ESOP” plans.

   4: The numbers of shares presented are rounded down to the nearest thousand shares.

2. Matters concerning dividends

   1. Amount of dividends paid

      Resolution	Type of shares	Total amount of dividend (Millions of yen)	Dividend per share (yen)	Record date	Effective date
      Annual general meeting of shareholders on June 27, 2024 (Note 1)	Common stock	12,492	45.00	March 31, 2024	June 28, 2024
      Board of Directors on November 12, 2024 (Note 2)	Common stock	11,104	40.00	September 30, 2024	December 6, 2024

      Note 1: The total amount of dividends includes ¥217 million as dividends to the Company’s shares held by the BBT and the Stock-Grant ESOP as trust assets.

      2: The total amount of dividends includes ¥182 million as dividends to the Company’s shares held by the BBT and the Stock-Grant ESOP as trust assets.

   2. Dividends with record date in the current consolidated fiscal year and effective date in the next consolidated fiscal year

FY2025 (April 1, 2025- March 31, 2026)

1. Matters concerning the classes and number of issued shares and treasury shares

   	Number of shares at beginning of year (thousands)	Increase in number of shares during the year (thousands)	decrease in number of shares during the year (thousands)	Number of shares at end of year (thousands)
   Issued shares:
   Common stock	300,794	—	8,314	292,479
   Total	300,794	—	8,314	292,479
   Treasury shares:
   Common stock (Note:1,2, and 3)	28,041	8,332	8,538	27,835
   Total	28,041	8,332	8,538	27,835

   Note1: The number of treasury shares at the beginning of the consolidated fiscal year includes 4,561 thousand shares of the Company held as trust assets under the “Board Benefit Trust (BBT)” and the “Stock Grant ESOP” plans. The number of treasury shares at the end of the consolidated fiscal year includes 4,337 thousand shares of the Company held as trust assets under these plans.

   2: The increase of 8,332 thousand shares in treasury shares of common stock was mainly attributable to the acquisition of 8,314 thousand shares of treasury stock based on resolutions of the Board of Directors.

   3: The decrease of 8,538 thousand shares in treasury shares of common stock was mainly attributable to the cancellation of 8,314 thousand shares of treasury stock.

   4: The numbers of shares presented are rounded down to the nearest thousand shares.

2. Matters concerning dividends

   1. Amount of dividends paid

      Resolution	Type of shares	Total amount of dividend (Millions of yen)	Dividend per share (yen)	Record date	Effective date
      Annual general meeting of shareholders on June 27, 2025(Note 1)	Common stock	12,479	45.00	March 31, 2025	June 30, 2025
      Board of Directors on November 12, 2025 (Note 2)	Common stock	12,231	45.00	September 30, 2025	December 8, 2025

      Note 1: The total amount of dividends includes ¥205 million as dividends to the Company’s shares held by the BBT and the Stock-Grant ESOP as trust assets.

      2: The total amount of dividends includes ¥195 million as dividends to the Company’s shares held by the BBT and the Stock-Grant ESOP as trust assets.

   2. Dividends with record date in the current consolidated fiscal year and effective date in the next consolidated fiscal year