Consolidated Financial Results for the Fiscal Year Ended March 31, 2025

(Figures are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2025 (From April 1, 2024 to March 31, 2025)

   1. Consolidated Results of Operations (% indicates year-on-year changes.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      Year ended March 31, 2025	42,075	-5.3	13,196	1.3	11,651	1.6	9,565	13.2
      Year ended March 31, 2024	44,433	-0.2	13,022	20.7	11,463	18.8	8,450	-7.5

      (Note) Comprehensive income:

      Year ended March 31, 2025: ¥7,405 million (-28.4%)

      Year ended March 31, 2024: ¥10,340 million (58.8%)

      	Earnings per share	Diluted earnings per share	Return on equity	Return on assets	Operating margin
      	Yen	Yen	%	%	%
      Year ended March 31, 2025	283.11	-	7.9	2.8	31.4
      Year ended March 31, 2024	236.13	-	6.9	2.9	29.3

      (Reference) Share of profit (loss) of entities accounted for using equity method: Year ended March 31, 2025: ¥- million

      Year ended March 31, 2024: ¥- million

   2. Consolidated Financial Position

      	Total assets	Net assets	Equity ratio	Net assets per share
      	Millions of yen	Millions of yen	%	Yen
      As of March 31, 2025	419,541	117,999	28.1	3,534.16
      As of March 31, 2024	405,979	125,645	30.9	3,510.66

      (Reference) Equity:

      As of March 31, 2025: ¥117,999 million As of March 31, 2024: ¥125,645 million

   3. Consolidated Cash Flows

      	Cash flows from operating activities	Cash flows from investing activities	Cash flows from financing activities	Cash and cash equivalents at end of period
      	Millions of yen	Millions of yen	Millions of yen	Millions of yen
      Year ended March 31, 2025	16,048	(24,839)	7,716	25,241
      Year ended March 31, 2024	19,584	(19,356)	280	26,316

2. Dividends

   	Annual dividends per share					Total dividends paid (annual)	Payout ratio (consolidated)	Dividends to net assets (consolidated)
   	End of 1Q	End of 2Q	End of 3Q	Year-end	Total
   	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
   Year ended March 31, 2024	-	58.00	-	108.00	166.00	5,969	70.3	4.9
   Year ended March 31, 2025	-	63.00	-	109.00	172.00	5,771	60.8	4.9
   Year ending March 31, 2026 (Forecast)	-	73.00	-	103.00	176.00		60.6

   (Note) Year-end dividends per share paid for the fiscal year ended March 31, 2025, were revised from ¥107 to ¥109. For details, please refer to the news release, "Notice of Revision to Planned Dividend" published today" published today, April 30, 2025.

   Year-end dividends paid for the fiscal year ended March 31, 2024:

   Ordinary dividend: ¥58.00 per share Special dividend: ¥50.00 per share

   Year-end dividends paid for the fiscal year ended March 31, 2025:

   Ordinary dividend: ¥79.00 per share Special dividend: ¥30.00 per share

   Year-end dividends paid for the fiscal year ending March 31, 2026:

   Ordinary dividend: ¥73.00 per share Special dividend: ¥30.00 per share

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2026 (From April 1, 2025 to March 31, 2026)

   (% indicates year-on-year changes.)

   	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent		Earnings per share
   Full year	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
   	49,000	16.5	13,900	5.3	11,700	0.4	9,700	1.4	290.43

   Notes:

   1. Significant changes in the scope of consolidation during the period under review: None Subsidiaries added to the scope of consolidation: None

      Subsidiaries removed from the scope of consolidation: None

      (Note) During the fiscal year ended March 31, 2025, Tokyo Nihonbashi Kabutocho Hotel Co., Ltd. was newly established and included in the scope of consolidation; however, it does not fall into the significant changes in the scope of consolidation.

   2. Changes in accounting policies, changes in accounting estimates, and corrections of errors

      1. Changes in accounting policies accompanying the revisions to items such as accounting standards: Yes

      2. Changes in accounting policies other than 1) above: Not applicable

      3. Changes in accounting estimates: Not applicable

      4. Corrections of errors: Not applicable

         (Note) For details, please refer to the section on page 17 entitled, "Notes to changes in accounting policies," under "(5) Notes to Consolidated Financial Statements" in "3. Consolidated Financial Statements and Notes."

   3. Total number of issued shares (common stock)

(Note) Treasury shares include the Heiwa Real Estate Co., Ltd.'s (the "Company") shares held in a trust account for a stock compensation plan for executive officers and managing officers of the Company and certain subsidiaries, and for a trust account for the Company's employee stock ownership plan.

(Reference) Non-Consolidated Financial Results

1. Non-Consolidated Financial Results for the Fiscal Year Ended March 31, 2025 (From April 1, 2024 to March 31, 2025)

   1. Non-Consolidated Results of Operations (% indicates year-on-year changes.)

      	Net sales		Operating profit		Ordinary profit		Profit
      	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      Year ended March 31, 2025	35,273	-9.3	11,358	-2.2	10,699	-3.2	9,249	8.4
      Year ended March 31, 2024	38,891	-1.2	11,610	21.4	11,052	19.6	8,534	-4.7

      	Earnings per share	Diluted earnings per share
      	Yen	Yen
      Year ended March 31, 2025	273.76	-
      Year ended March 31, 2024	238.46	-

   2. Non-Consolidated Financial Position

      	Total assets	Net assets	Equity ratio	Net assets per share
      	Millions of yen	Millions of yen	%	Yen
      As of March 31, 2025	407,694	111,846	27.4	3,349.88
      As of March 31, 2024	394,203	119,815	30.4	3,347.76

      (Reference) Equity:

      As of March 31, 2025: ¥111,846 million As of March 31, 2024: ¥119,815 million

      ・This report of financial results was not subject to an audit by certified public accountants or auditing firms.

      ・Explanations for the appropriate use of the forecast of financial results and other points to note

      1. Disclaimer: The forecast amounts and other forward-looking statements contained in this document are based on currently available information and certain assumptions deemed reasonable by the Company at the time of preparing this report. Accordingly, the Company offers no guarantee that such forecasts will be achieved. Actual results may differ substantially from these forecasts.

         For information on the forecasts, please see "1. Overview of Results of Operations (4) Forecast of Consolidated Financial Results" on page 4.

      2. The supplementary information for this report was disclosed on the same date on the Company's website. Company's website URL: https://www.heiwa-net.co.jp/en/ir/ir_library/

         Table of Contents

         1. Overview of Results of Operations……………………………………………………………………………………………	2
         (1) Overview of Results of Operations for the Fiscal Year under Review……………………………………………………	2
         (2) Financial Position.…………………………………………………………………………………………………………	3
         (3) Cash Flows...………………………………………………………………………………………………………………	3
         (4) Forecast of Consolidated Financial Results.………………………………………………………………………………	4
         (5) Basic Profit Appropriation Policy and Dividends for Fiscal 2024 and Fiscal 2025………………………………………	5
         2. Basic Concept of Selecting Accounting Standards……………………………………………………………………………	6
         3. Consolidated Financial Statements and Notes...………………………………………………………………………………	7
         (1) Consolidated Balance Sheets...……………………………………………………………………………………………	7
         (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income.…………………………	9
         Consolidated Statements of Income...…………………………………………………………………………………	9
         Consolidated Statements of Comprehensive Income…………………………………………………………………	10
         (3) Consolidated Statements of Changes in Equity...…………………………………………………………………………	11
         (4) Consolidated Statements of Cash Flows..…………………………………………………………………………………	13
         (5) Notes to Consolidated Financial Statements………………………………………………………………………………	15
         Notes to going concern assumption...……………………………………………………………………………………	15
         Basis of presenting consolidated financial statements...…………………………………………………………………	15
         Notes to changes in accounting policies…………………………………………………………………………………	17
         Notes to consolidated balance sheets……………………………………………………………………………………	17
         Notes to consolidated statements of income..……………………………………………………………………………	19
         Notes to consolidated statements of changes in equity…………………………………………………………………	20
         Notes to consolidated statements of cash flows…………………………………………………………………………	22
         Notes to lease property, etc. ……………………………………………………………………………………………	23
         Notes to segment information……………………………………………………………………………………………	24
         Notes to per-share information..…………………………………………………………………………………………	26
         Notes to significant subsequent events..…………………………………………………………………………………	26

         1. Overview of Results of Operations

            1. Overview of Results of Operations for the Fiscal Year under Review

               In fiscal 2024, ended March 31, 2025, the Japanese economy continued to pick up moderately on the back of improved employment and income conditions as well as various economic measures implemented by the government. Nevertheless, the impacts of ongoing rising prices, the trends in U.S. policies such as trade policies, and financial capital market trends will need to be closely monitored going forward.

               Against this backdrop, conditions were favorable in Japan's real estate industry. In the office building leasing market, vacancy rates continued to decline in central Tokyo and average rents have increased, reflecting a rebound in demand for office space driven by improvements in workplace environments. In the real estate investment market, strong investment appetite for domestic real estate remained firm and stable despite the Bank of Japan's termination of negative interest rates and subsequent rate hikes. In this operating environment, the Company's consolidated financial results were mixed. Net sales totaled ¥42,075 million, a decrease of ¥2,357 million (5.3%) compared with the previous fiscal year. Operating profit increased by ¥174 million (1.3%) to

               ¥13,196 million, while ordinary profit rose by ¥188 million (1.6%) to ¥11,651 million. Profit attributable to owners of parent amounted to ¥9,565 million, up ¥1,115 million (13.2%) year on year.

               Consolidated financial results by business segment are as follows.

               (Millions of yen)

               Segment	Year ended March 31, 2024		Year ended March 31, 2025		Difference
               	Net sales	Operating profit	Net sales	Operating profit	Net sales	Operating profit
               Building Business	40,544	12,639	37,997	13,010	(2,547)	371
               Asset Management Business	3,888	2,197	4,078	2,355	189	157
               Adjustments	-	(1,814)	-	(2,169)	-	(355)
               Total	44,433	13,022	42,075	13,196	(2,357)	174

               1. Building Business

                  In the Building Business segment, leasing revenue increased by ¥1,135 million (4.3%) year on year to ¥27,517 million, primarily due to contributions from building opened in the previous fiscal year, namely the Mercure Hotel Tokyo Hibiya (in Chiyoda-ku, Tokyo) and buildings acquired in the previous fiscal year, as well as to the leasing of newly occupied office space and rent revisions. Revenue from sales of properties decreased by ¥3,815 million (29.9%) to ¥8,965 million, reflecting a year-on-year decrease in proceeds from the sell-off of properties designated as real estate for sale. These results combined with other net sales in this segment brought total net sales to ¥37,997 million, a decrease of ¥2,547 million (6.3%) compared with the previous fiscal year. On the other hand, segment operating profit rose by ¥371 million (2.9%) to ¥13,010 million.

                  As of March 31, 2025, the vacancy rate of buildings leased by the Heiwa Real Estate Group (excluding buildings for which leases have been suspended due to redevelopment) was 3.25%.

                  Breakdown of net sales (Millions of yen)

                  Classification	Year ended March 31, 2024	Year ended March 31, 2025	Difference
                  Leasing revenue	26,382	27,517	1,135
                  Revenue from sales of properties	12,780	8,965	(3,815)
                  Other revenues	1,382	1,514	132
                  Total	40,544	37,997	(2,547)

               2. Asset Management Business

                  In the Asset Management Business segment, asset management revenue increased by ¥215 million (8.4%) to ¥2,781 million, and brokerage commissions decreased by ¥25 million (1.9%) to ¥1,296 million. As a result, segment net sales came to ¥4,078 million, up ¥189 million (4.9%) year on year. Segment operating profit totaled ¥2,355 million, an increase of ¥157 million (7.2%) compared with the previous fiscal year.

                  Breakdown of net sales (Millions of yen)

                  Classification	Year ended March 31, 2024	Year ended March 31, 2025	Difference
                  Asset management revenue	2,565	2,781	215
                  Brokerage commissions	1,322	1,296	(25)
                  Total	3,888	4,078	189

            2. Financial Position

               Assets, liabilities, and net assets

               Total assets, total liabilities, and net assets as of March 31, 2024 and 2025, were as follows:

               (Millions of yen)

               	As of March 31, 2024	As of March 31, 2025	Difference
               Total assets	405,979	419,541	13,561
               Total liabilities	280,334	301,541	21,207
               Net assets	125,645	117,999	(7,646)
               Interest-bearing liabilities	231,323	254,072	22,749

               (Note) Interest-bearing liabilities comprise short-term borrowings, the current portion of bonds payable, the current portion of longterm borrowings, certain other current liabilities, bonds payable, long-term borrowings, and long-term accounts payable-other.

               Total assets

               As of March 31, 2025, total assets amounted to ¥419,541 million, an increase of ¥13,561 million compared with March 31, 2024. Among the main factors underlying this result, land decreased by ¥14,072 million, buildings and structures decreased by ¥5,238 million, construction in progress rose by ¥26,217 million, and real estate for sale increased by ¥9,175 million, which reflected reclassification from fixed assets to real estate for sale, reclassification of accounts and payment of participation fee following the approval of rights conversion for the Sapporo redevelopment project, construction cost outlays for Caption by Hyatt Kabutocho Tokyo (Chuo-ku, Tokyo), and the recording of depreciation expense.

               Total liabilities

               As of March 31, 2025, total liabilities amounted to ¥301,541 million, an increase of ¥21,207 million compared with March 31, 2024. Among the main factors underlying this result, interest-bearing liabilities rose by ¥22,749 million.

               Net assets

               As of March 31, 2025, net assets stood at ¥117,999 million, a decrease of ¥7,646 million compared with March 31, 2024. This mainly reflected the Company's purchase of treasury shares totaling ¥9,054 million, which more than offset an increase in retained earnings of ¥3,568 million.

            3. Cash Flows

               As of March 31, 2025, consolidated cash and cash equivalents amounted to ¥25,241 million, a decrease of ¥1,074 million compared with March 31, 2024.

               Fiscal 2024 consolidated results for each category of cash flows and main factors underlying the results are as follows.

               Cash flows from operating activities

               Net cash provided by operating activities totaled ¥16,048 million, compared with ¥19,584 million in the previous fiscal year. Major inflows included profit before income taxes of ¥12,434 million and a decrease in inventories of ¥3,584 million.

               Cash flows from investing activities

               Net cash used in investing activities amounted to ¥24,839 million, compared with ¥19,356 million in the previous fiscal year. Main outflows included ¥23,717 million for the purchase of property, plant and equipment and ¥1,908 million for the purchase of investment securities.

               Cash flows from financing activities

               Net cash provided by financing activities came to ¥7,716 million, compared with ¥280 million in the previous fiscal year. Main outflows included ¥17,008 million for repayments of long-term borrowings, ¥9,058 million for the purchase of treasury shares,

               ¥5,974 million for dividends paid, and ¥3,624 million for redemption of bonds, while main inflows included ¥43,639 million in proceeds from long-term borrowings.

               (Reference) Results for cash flow-related indicators

               Indicator	As of March 31, 2021	As of March 31, 2022	As of March 31, 2023	As of March 31, 2024	As of March 31, 2025
               Equity ratio	31.1%	31.7%	30.0%	30.9%	28.1%
               Market cap-to-assets ratio	33.7%	38.4%	34.0%	36.0%	37.4%
               Debt repayment period (years)	26.0	6.0	9.5	11.8	15.8
               Interest coverage ratio (times)	6.2	24.2	16.2	11.8	8.5
               Net debt-to-equity ratio	1.6	1.5	1.7	1.6	1.9

               (Note) The following formulae for calculating the indicators shown above are based on consolidated financial results: Equity ratio = shareholders' equity ÷ total assets

               Market cap-to-assets ratio = market capitalization ÷ total assets

               Debt repayment period = interest-bearing liabilities ÷ net cash provided by operating activities Interest coverage ratio = net cash provided by operating activities ÷ interest expenses

               Net debt-to-equity ratio = (interest-bearing liabilities - cash and deposits + securities) ÷ net assets

               Interest-bearing liabilities comprise short-term borrowings, the current portion of bonds payable, the current portion of longterm borrowings, certain other current liabilities, bonds payable, long-term borrowings, and long-term accounts payable-other, as stated in the consolidated balance sheets. Interest expenses used for the calculations are recorded in the consolidated statements of income.

               Net cash provided by operating activities used for the calculations are recorded in the consolidated statements of cash flows.

            4. Forecast of Consolidated Financial Results

               The Japanese economy continued to pick up moderately on the back of improved employment and income conditions as well as various economic measures implemented by the government. Nevertheless, the impacts of ongoing rising prices, the trends in

               U.S. policies such as trade policies, and financial capital market trends will need to be closely monitored going forward. In Japan, the urban landscape and lifestyles are undergoing major changes due to various factors, including the diversification and qualitative shifts in workstyles, expanded demand from inbound tourism, population decline, a dwindling birthrate and an aging society, and intensified competition between cities and between regions. Additionally, heightened expectations for improved capital efficiency, the advancement of sustainability management, progress in digital technology, and the increasing threat of natural disasters are all contributing to the rapidly evolving operating environment.

               After considering this operating environment, the Company announced the Heiwa Real Estate Group Purpose, "Enriching everyone's future with Bazukuri that draws people in," and the Heiwa Real Estate Group Long-term Vision, "WAY 2040," on March 29, 2024, followed by a new medium-term management plan, "WAY 2040 Stage 1," on April 30, 2024. In accordance with these plans, the group will work to expand its redevelopment business, cultivate profit growth while enhancing capital efficiency, boost social value, and strengthen its business foundations, in an effort to increase corporate value.

               In its forecast of consolidated financial results for fiscal 2025, ending March 31, 2026, the Company expects net sales of

               ¥49,000 million, an increase of ¥6,924 million (16.5%) compared with fiscal 2024. Operating profit is anticipated to increase by

               ¥703 million (5.3%) to ¥13,900 million, and ordinary profit is projected to increase by ¥48 million (0.4%) to ¥11,700 million.

               Profit attributable to owners of parent is forecast to increase by ¥134 million (1.4%) to ¥9,700 million.

               Forecast of consolidated financial results (Millions of yen)

               	Year ended March 31, 2025 (results)	Year ending March 31, 2026 (forecast)	Difference	Change (%)
               Net sales	42,075	49,000	6,924	16.5
               Operating profit	13,196	13,900	703	5.3
               Ordinary profit	11,651	11,700	48	0.4
               Profit attributable to owners of parent	9,565	9,700	134	1.4

               Forecast of financial results by segment (Millions of yen)

               Segment	Year ended March 31, 2025 (results)		Year ending March 31, 2026 (forecast)		Difference
               	Net sales	Operating profit	Net sales	Operating profit	Net sales	Operating profit
               Building Business	37,997	13,010	44,600	13,700	6,602	689
               Leasing revenue	27,517		28,200		682
               Revenue from sales of properties	8,965		14,900		5,935
               Other revenues	1,514		1,500		(14)
               Asset Management Business	4,078	2,355	4,400	2,500	321	144
               Asset management revenue	2,781		2,900		118
               Brokerage commissions	1,296		1,500		203
               Adjustments	-	(2,169)	-	(2,300)	-	(130)
               Total	42,075	13,196	49,000	13,900	6,924	703

               Disclaimer: The forecasts and other forward-looking statements in this report are based on available information and certain assumptions considered reasonable at the time of disclosure. Accordingly, the Company offers no guarantee that such forecasts will be achieved. Results in the future may differ significantly from the forecasts due to changing business conditions or other factors.

            5. Basic Profit Appropriation Policy and Dividends for Fiscal 2024 and Fiscal 2025

               The Company will return profits to shareholders based on the assumption that its businesses, particularly the redevelopment and building businesses, will operate stably over the long term, and sufficient internal reserves for raising shareholder value will be secured. As a basic policy on shareholder returns from fiscal 2024 to 2026, the Company will maintain a consolidated dividend payout ratio of 50% while considering the cost of shareholders' equity, capital efficiency, and other factors. The Company will also flexibly implement share buybacks, taking into account aspects such as the Company's stock price, investment plans, and financial condition.

               The Company had announced its plan to pay a fiscal year-end dividend of ¥107 per share for the fiscal year ending March 31, 2025, comprising ordinary dividends of ¥77 and a special dividend of ¥30. However, management has decided to increase this amount by ¥2 to ¥109 per share, comprising ordinary dividends of ¥79 and a special dividend of ¥30, in consideration of its consolidated financial performance and other factors. As a result, the total annual dividend per share will amount to ¥172, comprising ordinary dividends of ¥142 and a special dividend of ¥30, including the interim dividend of ¥63 already paid. Furthermore, the annual dividend per share will increase by ¥6 from the previous fiscal year's actual dividend of ¥166 per share, comprising ordinary dividends of ¥116 and a special dividend of ¥50, making the eighth consecutive year of dividend increases since the fiscal year ended March 2017.

               For details, please refer to the news release, "Notice of Revision to Planned Dividend," published today, April 30, 2025. Based on its forecast of financial results, the Company plans to pay an annual dividend of ¥176 per share for the fiscal year ending March 31, 2026, including an interim dividend of ¥73 per share, a year-end dividend of ¥73 per share, and a year-end special

               dividend of ¥30 per share, and to increase dividends for the ninth consecutive year since the fiscal year ended March 2017.

         2. Basic Concept of Selecting Accounting Standards

            Heiwa Real Estate and its group companies have adopted Japanese accounting standards in consideration of the comparability of consolidated financial statements between different accounting periods and companies in Japan.

            Heiwa Real Estate has made no decision to adopt International Financial Reporting Standards.

         3. Consolidated Financial Statements and Notes

            1. Consolidated Balance Sheets

               		(Millions of yen)
               As of March 31, 2024		As of March 31, 2025
               Assets
               Current assets
               Cash and deposits	20,416	19,343
               Trade accounts receivable	*1 2,114	*1 2,291
               Securities	8,005	5,997
               Real estate for sale	*3, *5, *6 20,645	*3, *5, *6 29,821
               Real estate for sale in process	567	32
               Operating investments in capital	551	1,173
               Other	956	1,376
               Allowance for doubtful accounts	(0)	(0)
               Total current assets	53,257	60,036
               Non-current assets
               Property, plant and equipment
               Buildings and structures	*5180,769	*5172,277
               Accumulated depreciation	(96,211)	(92,957)
               Buildings and structures, net	*5, *6 84,557	*5, *6 79,319
               Machinery, equipment and vehicles	2,259	2,063
               Accumulated depreciation	(1,834)	(1,691)
               Machinery, equipment and vehicles, net	*6 425	*6 371
               Tools, furniture and fixtures	2,669	2,851
               Accumulated depreciation	(1,839)	(2,047)
               Tools, furniture and fixtures, net	*6 829	*6 804
               Land	*3, *6 184,669	*3, *6 170,597
               Construction in progress	5,039	31,257
               Total property, plant and equipment	275,522	282,350
               Intangible assets
               Leasehold interests in land	30,492	*6 30,374
               Goodwill	645	602
               Other	181	187
               Total intangible assets	31,320	31,164
               Investments and other assets
               Investment securities	*4 38,072	*4 37,027
               Deferred tax assets	250	243
               Other	7,175	8,391
               Total investments and other assets	45,498	45,662
               Total non-current assets	352,341	359,177
               Deferred assets
               Bond issuance costs	381	326
               Total deferred assets	381	326
               Total assets	405,979	419,541

               		(Millions of yen)
               As of March 31, 2024		As of March 31, 2025
               Liabilities
               Current liabilities
               Trade accounts payable	1,923	1,698
               Current portion of bonds payable	3,624	4,259
               Short-term borrowings	800	800
               Current portion of long-term borrowings	16,681	18,695
               Income taxes payable	1,674	2,560
               Accrued consumption taxes	1,738	123
               Provision for bonuses for directors (and other officers)	109	126
               Provision for bonuses	272	301
               Other	*1 2,228	*1 3,841
               Total current liabilities	29,052	32,407
               Non-current liabilities
               Bonds payable	27,864	23,605
               Long-term borrowings	173,703	198,320
               Long-term accounts payable - other	8,391	8,133
               Leasehold and guarantee deposits received	23,636	23,206
               Deferred tax liabilities	9,466	7,368
               Deferred tax liabilities for land revaluation	*3 7,186	*3 7,333
               Provision for share awards	213	310
               Retirement benefit liability	126	180
               Asset retirement obligations	683	675
               Other	9	-
               Total non-current liabilities	251,282	269,134
               Total liabilities	280,334	301,541
               Net assets
               Shareholders' equity
               Share capital	21,492	21,492
               Capital surplus	19,720	19,720
               Retained earnings	61,012	64,580
               Treasury shares	(9,989)	(19,043)
               Total shareholders' equity	92,235	86,749
               Accumulated other comprehensive income
               Valuation difference on available-for-sale securities	17,339	15,265
               Deferred gains or losses on hedges	(6)	54
               Revaluation reserve for land	*3 16,076	*3 15,928
               Total accumulated other comprehensive income	33,409	31,249
               Total net assets	125,645	117,999
               Total liabilities and net assets	405,979	419,541

            2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income

               		(Millions of yen)
               Year ended March 31, 2024		Year ended March 31, 2025
               Net sales	*1 44,433	*1 42,075
               Cost of sales	25,863	23,028
               Gross profit	18,569	19,046
               Selling, general and administrative expenses
               Salaries and allowances	1,610	1,618
               Provision for bonuses for directors (and other officers)	112	126
               Provision for bonuses	180	202
               Provision for share awards	87	100
               Retirement benefit expenses	24	103
               Commission expenses	848	915
               Other	2,683	2,783
               Total selling, general and administrative expenses	5,547	5,850
               Operating profit	13,022	13,196
               Non-operating income
               Interest income	17	18
               Dividend income	382	529
               Miscellaneous income	44	26
               Total non-operating income	444	575
               Non-operating expenses
               Interest expenses	1,664	1,891
               Amortization of bond issuance costs	50	52
               Miscellaneous losses	287	176
               Total non-operating expenses	2,003	2,120
               Ordinary profit	11,463	11,651
               Extraordinary income
               Gain on sale of investment securities	1,215	799
               Subsidy income	2	-
               Total extraordinary income	1,218	799
               Extraordinary losses
               Loss on retirement of non-current assets	*2 20	*2 16
               Impairment losses	*3 66	-
               Loss on tax purpose reduction entry of non-current assets	2	-
               Loss on valuation of investment securities	181	-
               Total extraordinary losses	271	16
               Profit before income taxes	12,409	12,434
               Income taxes - current	4,040	4,361
               Income taxes - deferred	(81)	(1,493)
               Total income taxes	3,959	2,868
               Profit	8,450	9,565
               Profit attributable to owners of parent	8,450	9,565

               Consolidated Statements of Comprehensive Income

               		(Millions of yen)
               Year ended March 31, 2024		Year ended March 31, 2025
               Profit	8,450	9,565
               Other comprehensive income
               Valuation difference on available-for-sale securities	1,896	(2,073)
               Deferred gains or losses on hedges	(6)	60
               Revaluation reserve for land	-	(147)
               Total other comprehensive income	1,889	(2,160)
               Comprehensive income	10,340	7,405
               Comprehensive income attributable to
               Comprehensive income attributable to owners of parent	10,340	7,405

            3. Consolidated Statements of Changes in Equity Year ended March 31, 2024

               (Millions of yen)
               	Shareholders' equity
               	Share capital	Capital surplus	Retained earnings	Treasury shares	Total shareholders' equity
               Balance at beginning of period	21,492	19,720	56,298	(9,997)	87,513
               Changes during period
               Dividends of surplus			(4,027)		(4,027)
               Profit attributable to owners of parent			8,450		8,450
               Purchase of treasury shares				(12)	(12)
               Disposal of treasury shares		0		20	20
               Reversal of revaluation reserve for land			290		290
               Net changes in items other than shareholders' equity
               Total changes during period	-	0	4,713	7	4,721
               Balance at end of period	21,492	19,720	61,012	(9,989)	92,235

               	Accumulated other comprehensive income				Total net assets
               	Valuation difference on available-for-sale securities	Deferred gains or losses on hedges	Revaluation reserve for land	Total accumulated other comprehensive income
               Balance at beginning of period	15,443	-	16,366	31,810	119,324
               Changes during period
               Dividends of surplus					(4,027)
               Profit attributable to owners of parent					8,450
               Purchase of treasury shares					(12)
               Disposal of treasury shares					20
               Reversal of revaluation reserve for land					290
               Net changes in items other than shareholders' equity	1,896	(6)	(290)	1,599	1,599
               Total changes during period	1,896	(6)	(290)	1,599	6,321
               Balance at end of period	17,339	(6)	16,076	33,409	125,645

               Year ended March 31, 2025

               (Millions of yen)
               	Shareholders' equity
               	Share capital	Capital surplus	Retained earnings	Treasury shares	Total shareholders' equity
               Balance at beginning of period	21,492	19,720	61,012	(9,989)	92,235
               Changes during period
               Dividends of surplus			(5,997)		(5,997)
               Profit attributable to owners of parent			9,565		9,565
               Purchase of treasury shares				(9,058)	(9,058)
               Disposal of treasury shares		0		4	4
               Reversal of revaluation reserve for land			-		-
               Net changes in items other than shareholders' equity
               Total changes during period	-	0	3,568	(9,054)	(5,485)
               Balance at end of period	21,492	19,720	64,580	(19,043)	86,749

               	Accumulated other comprehensive income				Total net assets
               	Valuation difference on available-for-sale securities	Deferred gains or losses on hedges	Revaluation reserve for land	Total accumulated other comprehensive income
               Balance at beginning of period	17,339	(6)	16,076	33,409	125,645
               Changes during period
               Dividends of surplus					(5,997)
               Profit attributable to owners of parent					9,565
               Purchase of treasury shares					(9,058)
               Disposal of treasury shares					4
               Reversal of revaluation reserve for land					-
               Net changes in items other than shareholders' equity	(2,073)	60	(147)	(2,160)	(2,160)
               Total changes during period	(2,073)	60	(147)	(2,160)	(7,646)
               Balance at end of period	15,265	54	15,928	31,249	117,999

            4. Consolidated Statements of Cash Flows

               		(Millions of yen)
               Year ended March 31, 2024		Year ended March 31, 2025
               Cash flows from operating activities
               Profit before income taxes	12,409	12,434
               Depreciation	5,778	5,636
               Loss on retirement of non-current assets	20	16
               Impairment losses	66	-
               Amortization of goodwill	7	42
               Loss (gain) on valuation of investment securities	181	-
               Increase (decrease) in allowance for doubtful accounts	(24)	0
               Increase (decrease) in provision for bonuses	15	29
               Increase (decrease) in retirement benefit liability	(108)	54
               Interest and dividend income	(400)	(548)
               Interest expenses	1,664	1,891
               Amortization of bond issuance costs	50	52
               Loss (gain) on sale of investment securities	(1,215)	(799)
               Decrease (increase) in trade receivables	(147)	(176)
               Decrease (increase) in inventories	6,273	3,584
               Decrease (increase) in operating investments in capital	475	(621)
               Decrease (increase) in prepaid expenses	(10)	20
               Decrease (increase) in accounts receivable - other	264	(1,020)
               Increase (decrease) in trade payables	(144)	(105)
               Increase (decrease) in advances received	(46)	1,394
               Increase (decrease) in accrued consumption taxes	1,096	(1,615)
               Increase (decrease) in deposits received	26	117
               Increase (decrease) in leasehold and guarantee deposits received	(181)	(909)
               Other, net	(253)	1,355
               Subtotal	25,798	20,832
               Interest and dividends received	422	548
               Interest paid	(1,650)	(1,864)
               Income taxes paid	(4,984)	(3,467)
               Net cash provided by (used in) operating activities	19,584	16,048

               		(Millions of yen)
               Year ended March 31, 2024		Year ended March 31, 2025
               Cash flows from investing activities
               Purchase of securities	(4,000)	-
               Proceeds from sale and redemption of securities	4,000	2,005
               Purchase of investment securities	(1,290)	(1,908)
               Proceeds from sale and redemption of investment securities	1,816	1,039
               Payments for acquisition of businesses	*2 (1,231)	-
               Purchase of property, plant and equipment	(18,190)	(23,717)
               Purchase of intangible assets	(74)	(900)
               Purchase of long-term prepaid expenses	(396)	(1,408)
               Payments of guarantee deposits	(65)	(248)
               Proceeds from refund of guarantee deposits	73	288
               Other, net	1	10
               Net cash provided by (used in) investing activities	(19,356)	(24,839)
               Cash flows from financing activities
               Net increase (decrease) in short-term borrowings	(3,000)	-
               Proceeds from long-term borrowings	19,827	43,639
               Repayments of long-term borrowings	(16,050)	(17,008)
               Proceeds from issuance of bonds	3,500	-
               Redemption of bonds	(3,648)	(3,624)
               Proceeds from increased long-term accounts payable	3,800	-
               Repayments of long-term accounts payable	-	(258)
               Purchase of treasury shares	(14)	(9,058)
               Dividends paid	(4,012)	(5,974)
               Other, net	(120)	(0)
               Net cash provided by (used in) financing activities	280	7,716
               Effect of exchange rate change on cash and cash equivalents	-	-
               Net increase (decrease) in cash and cash equivalents	508	(1,074)
               Cash and cash equivalents at beginning of period	25,807	26,316
               Cash and cash equivalents at end of period	*1 26,316	*1 25,241

            5. Notes to Consolidated Financial Statements Notes to going concern assumption

         Not applicable.

         Basis of presenting consolidated financial statements

         1. Scope of consolidation

            1. Consolidated subsidiaries: 6

               Names of consolidated subsidiaries:

               Heiwa Real Estate Property Management Co., Ltd. Housing Service Co., Ltd.

               HEIWA REAL ESTATE Asset Management Co., Ltd. The Tokyo Shoken Building Incorporated

               Tokyo Hibiya Hotel Corporation

               Tokyo Nihonbashi Kabutocho Hotel Co., Ltd.

               Tokyo Nihonbashi Kabutocho Hotel Co., Ltd. was newly established and included in the scope of consolidation during the fiscal year ended March 31, 2025.

            2. Names, etc., of major non-consolidated subsidiaries Major non-consolidated subsidiaries

               The Company has no major non-consolidated subsidiaries to report. (Reason for exclusion from scope of consolidation)

               The non-consolidated subsidiaries are small-scale businesses and their aggregated total assets, net sales, profit/loss (corresponding to the equity owned by the Company), and retained earnings (corresponding to the equity owned by the Company) have no significant effect on the overall results of the consolidated financial statements.

         2. Application of the equity method

            1. Names of major non-consolidated subsidiaries not accounted for using the equity method The Company has no major non-consolidated subsidiaries to report.

            2. Reason for exclusion from application of equity method accounting

               A non-consolidated subsidiary not accounted for using the equity method is excluded from the scope of application of equity method accounting because its profit/loss (corresponding to the equity owned by the Company) and retained earnings (corresponding to the equity owned by the Company), etc., have an immaterial effect on the consolidated financial statements and is insignificant as a whole.

         3. Matters related to the fiscal year period of consolidated subsidiaries

            The accounting year of consolidated subsidiaries Tokyo Hibiya Hotel Corporation and Tokyo Nihonbashi Kabutocho Hotel Co., Ltd. ends on the last day of February.

            This closing date was used for the preparation of these consolidated financial statements; however, if any significant transactions occur between March 1 and the end of the consolidated fiscal year on March 31, adjustments for the consolidated financial statements will be implemented as necessary.

         4. Accounting policy

            1. Method and basis of valuation of significant assets

               1. Securities

                  Held-to-maturity bonds

                  Held-to-maturity bonds are valued at cost, with cost being determined using the amortized cost method (straight-line method).

                  Available-for-sale securities

                  1. Investments other than stocks without quoted market prices

                     The market value method is used for investments other than stocks without quoted market prices (differences in valuation are included directly in net assets, and costs of securities sold are calculated using the moving-average method).

                  2. Stocks without quoted market prices

                     They are mainly valued at cost, determined using the moving-average method.

               2. Inventories

                  Inventories are valued at cost, determined by the specific identification method (the value on the consolidated balance sheet is appraised by the write-down of the book value of inventories based on the deterioration of profitability).

            2. Depreciation method for significant depreciable assets

               1. Property, plant and equipment (excluding leased assets)

                  Depreciation of property, plant and equipment is computed using the declining-balance method. The straight-line method, however, is used for the Tokyo Stock Exchange Building and one other building, as well as for buildings (excluding attached facilities) acquired on or after April 1, 1998, and facilities and structures attached to buildings acquired on or after April 1, 2016.

                  Depreciation of consolidated subsidiaries' property, plant and equipment is computed using the straight-line method.

                  The principal useful lives of property, plant and equipment are as follows:

                  Buildings and structures: 2-65 years Machinery, equipment and vehicles: 2-30 years Tools, furniture and fixtures: 2-20 years

               2. Intangible assets (excluding leased assets)

                  Amortization of intangible assets is computed using the straight-line method. The cost of software for internal use is amortized using the straight-line method based on the expected useful life of the software (five years).

               3. Leased assets

                  Leased assets are depreciated to a residual value of zero using the straight-line method over the lease period.

            3. Method of accounting for significant deferred assets Bond issuance costs

               Bond issuance costs are amortized using the straight-line method over the period until bond redemption.

            4. Basis of accounting for significant allowances and provisions

               1. Allowance for doubtful accounts

                  An allowance for doubtful accounts is provided to cover losses on trade accounts receivable and bad debts at an amount estimated based on the historical write-off ratio for general accounts receivables. For doubtful accounts receivable, the allowance is determined at the amount estimated to be uncollectible on an individual basis.

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

                  Provision for bonuses for directors (and other officers) is calculated based on the total amount of estimated bonus payments.

               3. Provision for bonuses

                  Provision for bonuses for employees is calculated based on the total amount of estimated bonus payments.

               4. Provision for share awards

                  The provision of share awards was calculated based on the expected amount of stock compensation obligations as of the end of the fiscal year under review in order to provide the Company's stock as compensation to directors and executive officers of the Company and certain subsidiaries in accordance with its share-based remuneration rules, and as compensation to its employees in accordance with share-based remuneration rules concerning the trust for the Company's stock ownership plan for employees.

            5. Accounting for retirement benefits

               In order to provide the retirement benefits of employees and pension recipients, retirement benefit liability is calculated at an amount equal to the projected benefit obligation as of the end of the fiscal year under review minus the fair value of pension assets. Retirement benefit liability is not calculated at any consolidated subsidiary that has a defined contribution retirement plan.

            6. Basis for calculating significant revenues and expenses

               Details about the primary performance obligations of the Heiwa Real Estate Group's main businesses that generate revenue from contracts with customers, and the points in time when such performance obligations are generally satisfied (the points in time when revenues are generally recognized) are as follows:

               1. Building Business

                  Revenue from sales of properties

                  The Company generates revenue from sales of properties by increasing the value of properties it has acquired through redevelopment, lease-ups, and renovations, and then selling them for prices that exceed their acquisition prices. The Company has performance obligations to deliver properties based on real estate sales agreements.

                  These performance obligations are satisfied at the time of delivering a property, and revenue is recognized once the property is delivered.

               2. Asset Management Business

                  Asset management revenue from management fees

                  The Company generates asset management revenue from management fees obtained through asset management services provided to Heiwa Real Estate REIT, Inc. Based on property lease agreements, the Company has performance obligations to manage properties, handle leasing and financing, and acquire and transfer ownership of properties.

                  Its performance obligations to manage properties and handle leasing and financing are satisfied by providing these services over their specified periods of time, and revenue is recognized in proportion to the degree these performance obligations are satisfied.

                  Its performance obligations to acquire and transfer ownership of properties are satisfied once an acquisition or transfer of a property has been completed, and revenue is recognized at either of those points in time.

            7. Method of significant hedge accounting

               1. Method of hedge accounting

                  The Company applies deferred hedge accounting. The special treatment applies to interest rate swaps because they meet the requirements.

               2. Hedging instruments and hedged items Hedging instruments: Interest rate swaps Hedged items: Interest rates of borrowings

               3. Policy of hedging transactions

                  Interest rate swap transactions are conducted to reduce the exposure to fluctuations in the interest rates of borrowings.

               4. Method of assessing hedge effectiveness

                  Hedge effectiveness is assessed by comparing the percentage differences between amounts of cash flow items subject to hedging and cash flow items for which hedging instruments are applied.

                  Interest rate swaps for which special treatment is applied, however, are excluded from this assessment of effectiveness.

            8. Method and period of goodwill amortization

               Goodwill is amortized using the straight-line method over the period in which it has an effect.

            9. Scope of cash and cash equivalents in the consolidated statements of cash flows

               Cash and cash equivalents consist of cash on hand, cash in banks that can be withdrawn on demand, and short-term investments with maturities of three months or less from the acquisition date, which are highly liquid instruments that can be easily converted into cash and are exposed to little risk of change in value.

            10. Other important matters for the preparation of consolidated financial statements Accounting for consumption taxes

         In principle, non-deductible consumption taxes were charged as expenses in the fiscal year under review.

         Notes to changes in accounting policies

         Application of the Accounting Standard for Current Income Taxes

         Effective from April 1, 2024, the Company applied the revised Accounting Standard for Current Income Taxes (Statement No. 27) issued by the Accounting Standards Board of Japan (ASBJ) on October 28, 2022.

         Accordingly, the Company applied the revised classification of income taxes, specifically taxation related to other comprehensive income, in accordance with the transitional accounting treatment subject to Paragraph 20-3 of this standard, as well as Paragraph 65-2 (2) of the revised Guidance on Accounting Standard for Tax Effect Accounting (Guidance No. 28) issued by the ASBJ on October 28, 2022. This change in accounting policy did not impact results posted in the consolidated financial statements for the period under review.

         Notes to consolidated balance sheets

         *1. Net balances of receivables from contracts with customers, contract assets, and contract liabilities are as follows:

         (Millions of yen)

         As of March 31, 2024	As of March 31, 2025
         Receivables from contracts with customers (Note 1) Contract assets (Note 1) Contract liabilities (Note 2)	281 510 44	539 519 192

         (Notes) 1. Receivables from contracts with customers and contract assets are included in "trade accounts receivable."

         2. Contract liabilities are included in "other" under "current liabilities."

         *2. Guarantee liabilities

         The Company-guaranteed loans owed by employees to financial institutions are as follows:

         (Millions of yen)

         As of March 31, 2024		As of March 31, 2025
         Housing loans for employees of Heiwa Real Estate Co., Ltd.	91	Housing loans for employees of Heiwa Real Estate Co., Ltd.	69

         *3. Pursuant to the Act on Revaluation of Land (Act No. 34 of March 31, 1998) and the Act for Partial Revision of the Act on Revaluation of Land (Act No. 19 of March 31, 2001), the Company revalued its land held for business. Corporation taxes equivalent to net unrealized gains are reported as "deferred tax liabilities for land revaluation" in liabilities, and net unrealized gains, net of deferred taxes, are reported as "revaluation reserve for land" in net assets.

         • Method of revaluation: Fair values are determined by applying appropriate adjustments to values computed using the method published by the Commissioner of the National Tax Agency for the calculation of land values that serve as the basis for taxable amounts of land-holding tax set forth in Article 16 of the Land-holding Tax Act as set forth in Article 2, Item 4 of the Order for Enforcement of Act on Revaluation of Land (Cabinet Order No. 119 of March 31, 1998).

         • Date of revaluation: March 31, 2001

         • Since the fair value of the revalued land exceeded the carrying value of the land after the revaluation as of March 31, 2023, and March 31, 2024, the difference between the amounts has not been stated.

         *4. Assets included under investment securities are as follows:

         (Millions of yen)

         As of March 31, 2024		As of March 31, 2025
         Investment units of Heiwa Real Estate REIT, Inc.	21,596 (151,979 units)	19,984 (157,979 units)

         *5. Amount of reduction entry associated with national subsidies, etc.

         Due to the receipt of national subsidies, the following amounts of reduction entry were deducted from acquisition costs:

         (Millions of yen)

         As of March 31, 2024	As of March 31, 2025
         Real estate for sale	41	10
         Buildings and structures	244	243
         Total	285	253

         *6. The amounts below were transferred due to a change in their purpose of ownership

         (Millions of yen)

         As of March 31, 2024		As of March 31, 2025
         Transferred from non-current assets to real estate for sale	13,035	12,233

         Notes to consolidated statements of income

         *1. Revenue from contracts with customers

         Revenue from contracts with customers and revenues other than those from contracts with customers are not recorded separately under net sales. Revenue from contracts with customers is shown as follows:

         (Millions of yen)

         Year ended March 31, 2024	Year ended March 31, 2025
         19,719	17,649

         *2. Details of loss on retirement of non-current assets are as follows:

         (Millions of yen)

         Year ended March 31, 2024	Year ended March 31, 2025
         Buildings and structures	19	14
         Other	0	2
         Total	20	16

         *3. Impairment losses

         Year ended March 31, 2024

         Location	Principal use	Category	Impairment losses
         Abiko-shi, Chiba	Stores and other commercial facilities	Land and buildings	¥66 million

         The Company recorded impairment losses on the asset group above. To calculate impairment losses, assets are grouped according to the smallest unit of assets that generates cash flows that are largely independent of the cash flows provided from other assets or asset groups.

         The book values of real estate for rent whose profitability substantially decreased were written down to a recoverable amount, and the decreased amounts were recorded as impairment losses of ¥66 million under extraordinary losses.

         The recoverable amount of this asset group was determined by its net realizable value, which was based on amounts assessed by real estate appraisers.

         Year ended March 31, 2025 Not applicable.

         Notes to consolidated statements of changes in equity Year ended March 31, 2024

         1. Type and number of shares issued and treasury shares

            (Number of shares)

            	At the beginning of the fiscal year	Increase in the fiscal year	Decrease in the fiscal year	At the end of the fiscal year
            Shares issued
            Common shares	38,859,996	-	-	38,859,996
            Total	38,859,996	-	-	38,859,996
            Treasury shares
            Common shares (Notes 1, 2, and 3)	3,073,514	3,168	6,338	3,070,344
            Total	3,073,514	3,168	6,338	3,070,344

            (Notes) 1. The increase of 3,168 common shares of treasury shares composed of 3,168 odd-lot shares acquired.

         2. The decrease of 6,338 common shares of treasury shares composed of 4,000 shares provided to and 1,700 shares sold by the trust for the Company's stock compensation plan for directors and executive officers, 300 shares provided to and 300 shares sold by the trust for the Company's stock compensation plan for employees, and 38 odd-lot shares sold.

         3. The total number of common shares of treasury shares as of March 31, 2024, included 169,000 shares held in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

2. Dividends

   1. Payments of dividends

      Approval	Type of shares	Total amount of dividends (millions of yen)	Dividend per share (yen)	Record date	Effective date
      Meeting of Board of Directors held on May 17, 2023	Common shares	1,941	54.0	March 31, 2023	June 5, 2023
      Meeting of Board of Directors held on October 31, 2023	Common shares	2,085	58.0	September 30, 2023	December 1, 2023

      (Notes) 1. The total amount of dividends approved at the Board of Directors' meeting held on May 17, 2023, included ¥9 million in dividends for the Company's stock held as trust assets in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

      2. The total amount of dividends approved at the Board of Directors' meeting held on October 31, 2023, included ¥9 million in dividends for the Company's stock held as trust assets in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

   2. Dividends with a record date falling on the fiscal year ended March 31, 2024, and an effective date falling on the fiscal year ended March 31, 2025

(Notes) 1. The total amount of dividends included ¥18 million in dividends for the Company's stock held as trust assets in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

2. The dividend per share amount includes a special dividend of ¥50 per share.

Year ended March 31, 2025

1. Type and number of shares issued and treasury shares

   (Number of shares)

   	At the beginning of the fiscal year	Increase in the fiscal year	Decrease in the fiscal year	At the end of the fiscal year
   Shares issued
   Common shares	38,859,996	-	-	38,859,996
   Total	38,859,996	-	-	38,859,996
   Treasury shares
   Common shares (Notes 1, 2, and 3)	3,070,344	2,402,503	1,073	5,471,774
   Total	3,070,344	2,402,503	1,073	5,471,774

   (Notes) 1. The increase of 2,402,503 common shares of treasury shares composed of 2,400,000 shares acquired by the Company pursuant to a resolution of the Board of Directors and 2,503 odd-lot shares acquired.

2. The decrease of 1,073 common shares of treasury shares composed of 600 shares provided to and 400 shares sold by the trust for the Company's stock compensation plan for employees and 73 odd-lot shares sold.

3. The total number of common shares of treasury shares as of March 31, 2025, included 168,000 shares held in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

1. Dividends

   1. Payments of dividends

      Approval	Type of shares	Total amount of dividends (millions of yen)	Dividend per share (yen)	Record date	Effective date
      Meeting of Board of Directors held on May 17, 2024	Common shares	3,883	108.0	March 31, 2024	June 3, 2024
      Meeting of Board of Directors held on October 31, 2024	Common shares	2,114	63.0	September 30, 2024	December 2, 2024

      (Notes) 1. The total amount of dividends approved at the Board of Directors' meeting held on May 17, 2024, included ¥18 million in dividends for the Company's stock held as trust assets in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

      1. The dividend per share amount approved at the Board of Directors' meeting held on May 17, 2024, includes a special dividend of ¥50 per share.

      2. The total amount of dividends approved at the Board of Directors' meeting held on October 31, 2024, included ¥10 million

         in dividends for the Company's stock held as trust assets in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

   2. Dividends with a record date falling on the fiscal year ended March 31, 2025, and an effective date falling on the fiscal year ending March 31, 2026

      The following resolution for approval is scheduled:

      Approval	Type of shares	Total amount of dividends (millions of yen)	Source of dividends	Dividend per share (yen)	Record date	Effective date
      Meeting of Board of Directors to be held on May 16, 2025	Common shares	3,657	Retained earnings	109.0	March 31, 2025	June 2, 2025

      (Notes) 1. The total amount of dividends included ¥18 million in dividends for the Company's stock held as trust assets in the trust for the Company's stock compensation plan for directors and executive officers, and the trust for the Company's stock compensation plan for employees.

      1. The dividend per share amount includes a special dividend of ¥30 per share.

Notes to consolidated statements of cash flows

*1. Reconciliation of the balance of cash and cash equivalents for the years ended March 31, 2024 and 2025, and account items in the consolidated balance sheets, are as follows:

(Millions of yen)

*2. Breakdown of main assets and liabilities associated with acquisitions of businesses for which cash and cash equivalents are valued.

Year ended March 31, 2024

The breakdown of assets and liabilities from business acquisitions, value of acquisitions of business, and payments for acquisition of businesses is as follows:

(Millions of yen)

Year ended March 31, 2025 Not applicable.

Notes to lease property, etc.

The Company and some consolidated subsidiaries own lease properties such as office buildings and commercial facilities in Tokyo and other areas for the purpose of earning leasing revenue. Some lease office buildings used by the Company and consolidated subsidiaries are presented as the real estate that includes the portion used as lease property, etc.

The amounts of such lease property, etc., and real estate that includes the portion used as lease property, etc., in the consolidated balance sheets, increase and decrease during the year, and their market values are as follows:

(Millions of yen)

(Notes) 1. The amount in the consolidated balance sheets is equal to the acquisition cost minus the accumulated depreciation and impairment losses.

1. The main factors underlying increase (decrease) in the fiscal year ended March 31, 2024, were ¥4,323 million spent on outlays for construction in progress and completed, ¥4,319 million spent on acquisitions of real estate, and ¥13,009 million transferred to "Real estate for sale." The main factors underlying increase (decrease) in the fiscal year ended March 31, 2025, were ¥13,236 million spent on outlays for construction in progress and completed, ¥5,902 million spent on acquisitions of real estate, and ¥12,211 million transferred to "Real estate for sale."

2. The market values of principal properties as of March 31, 2025, are based on the standards of real estate appraisal by independent real estate appraisers, and those of other properties are calculated by the Company based on the Real Estate Appraisal Standard. If, however, certain appraisal values and indices considered to appropriately reflect the fair values have not changed significantly from the time of acquisition from a third party or the latest appraisal, an amount appropriately adjusted using the appraisal values and indices is used.

Profit and loss on lease property, etc., and real estate that includes the portion used as lease property, etc., are as follows.

(Millions of yen)

(Notes) 1. Because the real estate that includes the portion used as lease property, etc. includes portions used by the Company and some consolidated subsidiaries for the delivery of services and business management, the relevant leasing revenue was not reported. Expenses for real estate (depreciation, repair expenses, insurance expenses, taxes and dues, etc.) were included in the leasing expenses.

1. Other loss composed a loss on retirement of non-current assets and impairment losses.

   Notes to segment information

   1. Reportable segments overview

      The reportable segments of the Company are the business units for which the separate financial information is available in order for the Board of Directors to conduct periodic reviews to determine the distribution of management resources and evaluate their business results.

      The Company's two reportable segments are the Building Business segment and Asset Management Business segment.

      The Building Business segment deals with the development, leasing, management, and sale of stock exchange buildings, office buildings, commercial facilities, and residential buildings. The Asset Management Business segment manages the properties of Heiwa Real Estate REIT, Inc., and provides real estate brokerage services through Housing Service Co., Ltd.

   2. Methods of calculating the amounts of net sales, profit/loss, assets, liabilities, and other items by reportable segments The accounting methods for the reportable segments are the same as those described in "Basis of presenting consolidated financial statements."

      The amounts of reportable segment profit are based on operating profit. Intersegment sales are based on prevailing market prices.

   3. Information on net sales, profit/loss, assets, liabilities, and other items by reportable segments Year ended March 31, 2024

      (Millions of yen)
      	Reportable segments			Adjustments (Note 1)	Amount in consolidated financial statements (Note 2)
      	Building Business	Asset Management Business	Total
      Net sales
      Net sales from external customers	40,544	3,888	44,433	-	44,433
      Intersegment sales and transfers	47	-	47	(47)	-
      Total	40,592	3,888	44,480	(47)	44,433
      Segment profit	12,639	2,197	14,836	(1,814)	13,022
      Segment assets	341,445	24,653	366,098	39,881	405,979
      Other items
      Depreciation (Note 3)	5,687	11	5,698	79	5,778
      Increase in property, plant and equipment and intangible assets (Note 3)	15,625	32	15,657	11	15,668

      (Notes) 1. Details of adjustments are as follows:

      1. The negative adjustments to segment profit of ¥1,814 million mainly include corporate expenses amounting to ¥1,814 million that belong to the administration division and are not allocated to any of the reportable segments.

      2. Adjustments to segment assets of ¥39,881 million mainly include unallocated corporate assets amounting to ¥42,134 million, which primarily consist of cash and deposits, marketable securities, and investment securities that belong to the administration division.

      3. The adjusted amounts of increases in property, plant and equipment and intangible assets are the amount of increase of the unallocated corporate assets that have not been assigned to the reportable segments.

1. Segment profit is adjusted with operating profit in the consolidated statements of income.

2. The depreciation and increases in property, plant and equipment and intangible assets in the other items include the amortization of and an increase in long-term prepaid expenses.

Year ended March 31, 2025

(Notes) 1. Details of adjustments are as follows:

1. The negative adjustments to segment profit of ¥2,169 million mainly include corporate expenses amounting to ¥2,169 million that belong to the administration division and are not allocated to any of the reportable segments.

2. Adjustments to segment assets of ¥38,310 million mainly include unallocated corporate assets amounting to ¥41,664 million, which primarily consist of cash and deposits, marketable securities, and investment securities that belong to the administration division.

3. The adjusted amounts of increases in property, plant and equipment and intangible assets are the amount of increase of the unallocated corporate assets that have not been assigned to the reportable segments.

1. Segment profit is adjusted with operating profit in the consolidated statements of income.

2. The depreciation and increases in property, plant and equipment and intangible assets in the other items include the amortization of and an increase in long-term prepaid expenses.

Notes to per-share information

(Yen)

(Notes) 1. Diluted earnings per share is not presented, as there are no potentially dilutive shares.

1. To calculate net assets per share and earnings per share, the Company's stock held in the trust for its stock compensation plan for directors and officers and in the trust for its employee stock ownership plan was included in the amount of treasury shares subtracted from calculations of the total number of shares issued as of March 31 of the respective fiscal year and the average number of shares outstanding during each respective fiscal year. The number of such treasury shares issued as of the end of the period subtracted from calculations of the total number of shares issued as of the end of the period came to 169,000 shares in fiscal 2023 and 168,000 shares in fiscal 2024, and the average number of such treasury shares during the period subtracted from calculations of the average number of shares outstanding during the period was 170,000 shares in fiscal 2023 and 168,000 shares in fiscal 2024.

2. Earnings per share is calculated based on the following:

Notes to significant subsequent events Not applicable.