Consolidated Financial Results for the Fiscal Year Ended March 31, 2026

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

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2026 (From April 1, 2025 to March 31, 2026)

   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, 2026	50,855	20.9	15,109	14.5	12,980	11.4	11,032	15.3
      Year ended March 31, 2025	42,075	–5.3	13,196	1.3	11,651	1.6	9,565	13.2

      (Note) Comprehensive income:

      Year ended March 31, 2026: ¥16,551 million (123.5%)

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

      	Earnings per share	Diluted earnings per share	Return on equity	Return on assets	Operating margin
      	Yen	Yen	%	%	%
      Year ended March 31, 2026	165.63	—	9.0	3.0	29.7
      Year ended March 31, 2025	141.55	—	7.9	2.8	31.4

      (Reference) Share of profit (loss) of entities accounted for using equity method: Year ended March 31, 2026: ¥— million

      Year ended March 31, 2025: ¥— million

      (Note) Heiwa Real Estate Co., Ltd. (the “Company”) conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. Earnings per-share was calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

   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, 2026	451,838	126,763	28.1	1,918.61
      As of March 31, 2025	419,541	117,999	28.1	1,767.08

      (Reference) Equity:

      As of March 31, 2026: ¥126,763 million As of March 31, 2025: ¥117,999 million

      (Note) The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. Net assets per share was calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

   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, 2026	14,852	(26,470)	10,802	24,425
      Year ended March 31, 2025	16,048	(24,839)	7,716	25,241

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, 2025	—	63.00	—	109.00	172.00	5,771	60.8	4.9
   Year ended March 31, 2026	—	36.00	—	62.00	98.00	6,551	59.2	5.3
   Year ending March 31, 2027 (Forecast)	—	44.00	—	59.00	103.00		59.2

   (Note) Year-end dividends per share paid for the fiscal year ended March 31, 2026 were revised from ¥61 to ¥62. For details, please refer to the news release, “Notice of Upward Revision to Planned Dividend (Dividend Increase)” published today, April 30, 2026.

   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 ended March 31, 2026:

   Ordinary dividend: ¥47.00 per share Special dividend: ¥15.00 per share

   Year-end dividends paid for the fiscal year ending March 31, 2027:

   Ordinary dividend: ¥44.00 per share Special dividend: ¥15.00 per share

   The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. For the fiscal year ended March 31, 2025, the actual amount of dividends prior to the stock split is stated in the table above. If the stock split is not taken into account, the annual dividends per share for the fiscal year ended March 31, 2026 would be ¥196.00, and the annual dividends per share for the fiscal year ending March 31, 2027 (Forecast) would be

   ¥206.00.

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2027 (From April 1, 2026 to March 31, 2027)

   (% 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
   	63,800	25.5	15,800	4.6	13,000	0.2	11,500	4.2	174.06

   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) CANVASS1 LLC was included in the scope of consolidation in the fiscal year ended March 31, 2026 as a result of the investment made by the Company to CANVASS1 LLC; 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: Not applicable

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

      3. Changes in accounting estimates: Not applicable

      4. Corrections of errors: Not applicable

   3. Total number of issued shares (common stock)

(Note) Treasury shares include 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.

The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. Total number of issued shares at end of period, total number of treasury shares at end of period, and average number of shares during the period were calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

(Reference) Non-Consolidated Financial Results

1. Non-Consolidated Financial Results for the Fiscal Year Ended March 31, 2026 (From April 1, 2025 to March 31, 2026)

   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, 2026	43,046	22.0	13,076	15.1	12,055	12.7	10,638	15.0
      Year ended March 31, 2025	35,273	–9.3	11,358	–2.2	10,699	–3.2	9,249	8.4

      	Earnings per share	Diluted earnings per share
      	Yen	Yen
      Year ended March 31, 2026	159.71	—
      Year ended March 31, 2025	136.88	—

      (Note) The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. Earnings per-share was calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

   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, 2026	435,862	120,243	27.6	1,819.93
      As of March 31, 2025	407,694	111,846	27.4	1,674.94

      (Reference) Equity:

      As of March 31, 2026: ¥120,243 million As of March 31, 2025: ¥111,846 million

      (Note) The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. Net assets per share was calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

      The difference between the non-consolidated financial results for the fiscal year ended March 31, 2026 and the actual results for the previous fiscal year was mainly due to an increase in net sales compared with the previous fiscal year, primarily reflecting an increase in revenue from sales of properties, an increase in hotel revenue, and rent revisions in the Building Business.

      ・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 2025 and Fiscal 2026………………………………………	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 consolidated balance sheets……………………………………………………………………………………	18
         Notes to consolidated statements of income..……………………………………………………………………………	20
         Notes to consolidated statements of changes in equity…………………………………………………………………	21
         Notes to consolidated statements of cash flows…………………………………………………………………………	23
         Notes to lease property, etc. ……………………………………………………………………………………………	24
         Notes to segment information……………………………………………………………………………………………	25
         Notes to per-share information..…………………………………………………………………………………………	27
         Notes to significant subsequent events..…………………………………………………………………………………	27

         1. Overview of Results of Operations

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

               In the fiscal year ended March 31, 2026, the Japanese economy continued to recover moderately, although the impact of U.S. trade policies persisted. At the same time, developments such as the situation in the Middle East, fluctuations in financial and capital markets, and trends in U.S. trade policies need to be closely monitored.

               In the real estate industry, strong demand for expansion in the office building leasing market for purposes such as business expansion, talent acquisition, workplace improvement, and operational efficiency was observed, resulting in an increase in average rents. In the real estate investment market, despite the Bank of Japan’s policy rate hike, active investment by both domestic and overseas investors continued due to strong investor appetite supported by factors such as rising rents.

               Under this operating environment, the Company’s consolidated financial results were as follows: Net sales totaled ¥50,855 million (an increase of 20.9% year on year). Operating profit was ¥15,109 million (an increase of 14.5% year on year), while ordinary profit was ¥12,980 million (an increase of 11.4% year on year). Profit attributable to owners of parent amounted to

               ¥11,032 million (an increase of 15.3% year on year).

               Consolidated financial results by business segment are as follows.

               (Millions of yen)

               Segment	Year ended March 31, 2025		Year ended March 31, 2026		Difference
               	Net sales	Operating profit	Net sales	Operating profit	Net sales	Operating profit
               Building Business	37,997	13,010	46,236	14,657	8,239	1,646
               Asset Management Business	4,078	2,355	4,619	2,737	540	381
               Adjustments	—	(2,169)	—	(2,284)	—	(114)
               Total	42,075	13,196	50,855	15,109	8,779	1,913

               1. Building Business

                  In the Building Business segment, leasing revenue was ¥28,932 million (a year-on-year increase of 5.1%), primarily due to revenue contributions from Caption by Hyatt Kabutocho Tokyo (in Chuo-ku, Tokyo), which opened in the current fiscal year, and Mercure Tokyo Hibiya (in Chiyoda-ku, Tokyo), as well as to an increase in leasing revenue owing to rent revisions. Revenue from sales of properties amounted to ¥15,675 million (a year-on-year increase of 74.8%), reflecting a year-on-year increase in proceeds from the sales of properties designated as real estate for sale. These results, combined with other net sales in this segment, brought total net sales to ¥46,236 million (a year-on-year increase of 21.7%). Segment operating profit was ¥14,657 million (a year-on-year increase of 12.7%).

                  As of March 31, 2026, the vacancy rate of buildings leased by the Heiwa Real Estate Group (excluding buildings for which leases have been suspended due to redevelopment) was 2.27%.

                  Breakdown of net sales (Millions of yen)

                  Classification	Year ended March 31, 2025	Year ended March 31, 2026	Difference
                  Leasing revenue	27,517	28,932	1,414
                  Revenue from sales of properties	8,965	15,675	6,710
                  Other revenues	1,514	1,628	114
                  Total	37,997	46,236	8,239

               2. Asset Management Business

                  In the Asset Management Business segment, asset management revenue was ¥3,152 million (a year-on-year increase of 13.3%), and brokerage commissions amounted to ¥1,466 million (a year-on-year increase of 13.1%). As a result, segment net sales came to ¥4,619 million (a year-on-year increase of 13.3%). Segment operating profit totaled ¥2,737 million (a year-on-year increase of 16.2%).

                  Breakdown of net sales (Millions of yen)

                  Classification	Year ended March 31, 2025	Year ended March 31, 2026	Difference
                  Asset management revenue	2,781	3,152	370
                  Brokerage commissions	1,296	1,466	169
                  Total	4,078	4,619	540

            2. Financial Position

               Assets, liabilities, and net assets

               Total assets, total liabilities, and net assets as of March 31, 2025 and 2026 were as follows:

               (Millions of yen)

               	As of March 31, 2025	As of March 31, 2026	Difference
               Total assets	419,541	451,838	32,297
               Total liabilities	301,541	325,075	23,533
               Net assets	117,999	126,763	8,764
               Interest-bearing liabilities	254,072	272,683	18,610

               (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, long-term non-recourse loans payable and long-term accounts payable–other.

               Total assets

               As of March 31, 2026, total assets amounted to ¥451,838 million, an increase of ¥32,297 million compared with March 31, 2025. This increase was mainly attributable to increases of ¥6,750 million in buildings and structures and ¥2,358 million in construction in progress, primarily due to the payment of a participation fee for the Sapporo redevelopment project and construction cost outlays for Caption by Hyatt Kabutocho Tokyo (Chuo-ku, Tokyo), as well as increases of ¥8,614 million in investment securities and ¥5,186 million in securities, mainly reflecting higher market values.

               Total liabilities

               As of March 31, 2026, total liabilities amounted to ¥325,075 million, an increase of ¥23,533 million compared with March 31, 2025. Among the main factors underlying this result, interest-bearing liabilities rose by ¥18,610 million.

               Net assets

               As of March 31, 2026, net assets stood at ¥126,763 million, an increase of ¥8,764 million compared with March 31, 2025. This mainly reflected an increase in valuation difference on available-for-sale securities of ¥5,260 million.

            3. Cash Flows

               As of March 31, 2026, consolidated cash and cash equivalents amounted to ¥24,425 million, a decrease of ¥815 million compared with March 31, 2025.

               Fiscal 2025 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 ¥14,852 million, compared with ¥16,048 million in the previous fiscal year. Main inflows included profit before income taxes of ¥15,898 million, while main outflows included an increase in inventories of ¥1,115 million.

               Cash flows from investing activities

               Net cash used in investing activities amounted to ¥26,470 million, compared with ¥24,839 million in the previous fiscal year. Main outflows included ¥20,777 million for the purchase of property, plant and equipment and ¥7,000 million for the purchase of securities.

               Cash flows from financing activities

               Net cash provided by financing activities came to ¥10,802 million, compared with ¥7,716 million in the previous fiscal year. Main outflows included ¥19,053 million for repayments of long-term borrowings, ¥6,050 million for dividends paid, and ¥4,259 million for redemption of bonds, while main inflows included ¥38,971 million in proceeds from long-term borrowings.

               (Reference) Results for cash flow-related indicators

               Indicator	As of March 31, 2022	As of March 31, 2023	As of March 31, 2024	As of March 31, 2025	As of March 31, 2026
               Equity ratio	31.7%	30.0%	30.9%	28.1%	28.1%
               Market cap-to-assets ratio	38.4%	34.0%	36.0%	37.4%	35.3%
               Debt repayment period (years)	6.0	9.5	11.8	15.8	18.4
               Interest coverage ratio (times)	24.2	16.2	11.8	8.5	5.9
               Net debt-to-equity ratio	1.5	1.7	1.6	1.9	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, long-term non-recourse loans payable, 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 is recorded in the consolidated statements of cash flows.

            4. Forecast of Consolidated Financial Results

               The moderate recovery in Japanese economy is expected to be supported by improved employment and income conditions as well as various economic measures implemented by the government. Nevertheless, developments such as the situation in the Middle East, fluctuations in financial and capital markets, and the trends in U.S. trade policies 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 has set forth the Heiwa Real Estate Group Purpose, “Enriching everyone’s future with Bazukuri that draws people in.” In line with the Heiwa Real Estate Group Long-term Vision, “WAY 2040,” the Heiwa Real Estate Group has been implementing the medium-term management plan, “WAY 2040 Stage 1.” 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 2026, ending March 31, 2027, the Company expects net sales of

               ¥63,800 million (a year-on-year increase of 25.5%). Operating profit is anticipated to be ¥15,800 million (a year-on-year increase of 4.6%), and ordinary profit is projected to be ¥13,000 million (a year-on-year increase of 0.2%). Profit attributable to owners of parent is forecast to be ¥11,500 million (a year-on-year increase of 4.2%).

               Forecast of consolidated financial results (Millions of yen)

               	Year ended March 31, 2026 (results)	Year ending March 31, 2027 (forecast)	Difference	Change (%)
               Net sales	50,855	63,800	12,944	25.5
               Operating profit	15,109	15,800	690	4.6
               Ordinary profit	12,980	13,000	19	0.2
               Profit attributable to owners of parent	11,032	11,500	467	4.2

               Forecast of financial results by segment (Millions of yen)

               Segment	Year ended March 31, 2026 (results)		Year ending March 31, 2027 (forecast)		Difference
               	Net sales	Operating profit	Net sales	Operating profit	Net sales	Operating profit
               Building Business	46,236	14,657	58,900	15,300	12,663	642
               Leasing revenue	28,932		30,900		1,967
               Revenue from sales of properties	15,675		26,400		10,725
               Other revenues	1,628		1,600		(28)
               Asset Management Business	4,619	2,737	4,900	2,900	280	162
               Asset management revenue	3,152		3,400		247
               Brokerage commissions	1,466		1,500		33
               Adjustments	—	(2,284)	—	(2,400)	—	(115)
               Total	50,855	15,109	63,800	15,800	12,944	690

               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 2025 and Fiscal 2026

               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 ¥61 per share for the fiscal year ended March 31, 2026, comprising ordinary dividends of ¥46 and a special dividend of ¥15. However, management has decided to increase this amount by ¥1 to ¥62 per share, comprising ordinary dividends of ¥47 and a special dividend of ¥15, in consideration of its consolidated financial performance and other factors. As a result, the total annual dividend per share will amount to ¥98, comprising ordinary dividends of ¥83 and a special dividend of ¥15, including the interim dividend of ¥36 already paid. Furthermore, the annual dividend per share will increase by ¥12 from the previous fiscal year’s actual dividend of ¥86 per share, after taking into account a 2-for-1 stock split for the Company’s common shares conducted on July 1, 2025, comprising ordinary dividends of ¥71 and a special dividend of ¥15, making the ninth consecutive year of dividend increases since the fiscal year ended March 2017.

               For details, please refer to the news release, “Notice of Upward Revision to Planned Dividend (Dividend Increase),” published today, April 30, 2026.

               Based on its forecast of financial results, the Company plans to pay an annual dividend of ¥103 per share for the fiscal year ending March 31, 2027, including an interim dividend of ¥44 per share, a year-end dividend of ¥44 per share, and a year-end special dividend of ¥15 per share, and to increase dividends for the tenth 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, 2025		As of March 31, 2026
               Assets
               Current assets
               Cash and deposits	19,343	19,931
               Trade accounts receivable	*1 2,291	*1 2,114
               Securities	5,997	11,183
               Real estate for sale	*3, *6, *7 29,821	*3, *6, *7, *8 55,822
               Real estate for sale in process	32	245
               Operating investments in capital	1,173	2,299
               Other	1,376	1,776
               Allowance for doubtful accounts	(0)	(0)
               Total current assets	60,036	93,373
               Non-current assets
               Property, plant and equipment
               Buildings and structures	*6 172,277	*6 181,899
               Accumulated depreciation	(92,957)	(95,829)
               Buildings and structures, net	*6, *7 79,319	*6, *7 86,069
               Machinery, equipment and vehicles	2,063	*6 2,104
               Accumulated depreciation	(1,691)	(1,661)
               Machinery, equipment and vehicles, net	*7 371	*6, *7 443
               Tools, furniture and fixtures	2,851	3,617
               Accumulated depreciation	(2,047)	(2,330)
               Tools, furniture and fixtures, net	*7 804	*7 1,287
               Land	*3, *7 170,597	*3, *7 150,627
               Construction in progress	31,257	33,616
               Total property, plant and equipment	282,350	272,043
               Intangible assets
               Leasehold interests in land	*7 30,374	30,374
               Goodwill	602	560
               Other	187	179
               Total intangible assets	31,164	31,113
               Investments and other assets
               Investment securities	*5 37,027	*4, *5 45,641
               Deferred tax assets	243	228
               Other	8,391	9,155
               Total investments and other assets	45,662	55,026
               Total non-current assets	359,177	358,184
               Deferred assets
               Bond issuance costs	326	280
               Total deferred assets	326	280
               Total assets	419,541	451,838

               		(Millions of yen)
               As of March 31, 2025		As of March 31, 2026
               Liabilities
               Current liabilities
               Trade accounts payable	1,698	1,871
               Current portion of bonds payable	4,259	714
               Short-term borrowings	800	800
               Current portion of long-term borrowings	18,695	30,269
               Income taxes payable	2,560	2,644
               Accrued consumption taxes	123	104
               Provision for bonuses for directors (and other officers)	126	148
               Provision for bonuses	301	353
               Asset retirement obligations	—	11
               Other	*1 3,841	*1 5,054
               Total current liabilities	32,407	41,972
               Non-current liabilities
               Bonds payable	23,605	22,890
               Long-term borrowings	198,320	206,665
               Long-term non-recourse loans payable	—	3,210
               Long-term accounts payable – other	8,133	7,760
               Leasehold and guarantee deposits received	23,206	23,952
               Deferred tax liabilities	7,368	9,952
               Deferred tax liabilities for land revaluation	*3 7,333	*3 7,368
               Provision for share awards	310	441
               Retirement benefit liability	180	190
               Asset retirement obligations	675	671
               Total non-current liabilities	269,134	283,103
               Total liabilities	301,541	325,075
               Net assets
               Shareholders’ equity
               Share capital	21,492	21,492
               Capital surplus	19,720	19,720
               Retained earnings	64,580	57,720
               Treasury shares	(19,043)	(9,016)
               Total shareholders’ equity	86,749	89,916
               Accumulated other comprehensive income
               Valuation difference on available-for-sale securities	15,265	20,526
               Deferred gains or losses on hedges	54	311
               Revaluation reserve for land	*3 15,928	*3 16,008
               Total accumulated other comprehensive income	31,249	36,846
               Total net assets	117,999	126,763
               Total liabilities and net assets	419,541	451,838

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

               		(Millions of yen)
               Year ended March 31, 2025		Year ended March 31, 2026
               Net sales	*1 42,075	*1 50,855
               Cost of sales	23,028	29,536
               Gross profit	19,046	21,319
               Selling, general and administrative expenses
               Salaries and allowances	1,618	1,758
               Provision for bonuses for directors (and other officers)	126	150
               Provision for bonuses	202	231
               Provision for share awards	100	180
               Retirement benefit expenses	103	69
               Commission expenses	915	996
               Other	2,783	2,822
               Total selling, general and administrative expenses	5,850	6,209
               Operating profit	13,196	15,109
               Non-operating income
               Interest income	18	79
               Dividend income	529	636
               Miscellaneous income	26	26
               Total non-operating income	575	742
               Non-operating expenses
               Interest expenses	1,891	2,510
               Amortization of bond issuance costs	52	44
               Miscellaneous losses	176	316
               Total non-operating expenses	2,120	2,872
               Ordinary profit	11,651	12,980
               Extraordinary income
               Gain on sale of non-current assets	—	*2 40
               Gain on sale of investment securities	799	2,690
               Subsidy income	—	85
               Compensation income	—	*4 73
               Tax refund	—	*5 359
               Total extraordinary income	799	3,248
               Extraordinary losses
               Loss on retirement of non-current assets	*3 16	*3 5
               Loss on tax purpose reduction entry of non-current assets	—	145
               Tax refund expenses	—	*6 179
               Total extraordinary losses	16	330
               Profit before income taxes	12,434	15,898
               Income taxes – current	4,361	4,771
               Income taxes – deferred	(1,493)	94
               Total income taxes	2,868	4,865
               Profit	9,565	11,032
               Profit attributable to owners of parent	9,565	11,032

               Consolidated Statements of Comprehensive Income

               		(Millions of yen)
               Year ended March 31, 2025		Year ended March 31, 2026
               Profit	9,565	11,032
               Other comprehensive income
               Valuation difference on available-for-sale securities	(2,073)	5,260
               Deferred gains or losses on hedges	60	257
               Revaluation reserve for land	(147)	0
               Total other comprehensive income	(2,160)	5,518
               Comprehensive income	7,405	16,551
               Comprehensive income attributable to
               Comprehensive income attributable to owners of parent	7,405	16,551

            3. Consolidated Statements of Changes in Equity 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
               Cancellation of treasury shares		—		—	—
               Transfer from retained earnings to capital surplus		—	—		—
               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
               Cancellation of treasury shares					—
               Transfer from retained earnings to capital surplus					—
               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

               Year ended March 31, 2026

               (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	64,580	(19,043)	86,749
               Changes during period
               Dividends of surplus			(6,073)		(6,073)
               Profit attributable to owners of parent			11,032		11,032
               Purchase of treasury shares				(1,757)	(1,757)
               Disposal of treasury shares		0		44	44
               Cancellation of treasury shares		(11,740)		11,740	—
               Transfer from retained earnings to capital surplus		11,740	(11,740)		—
               Reversal of revaluation reserve for land			(78)		(78)
               Net changes in items other than shareholders’ equity
               Total changes during period	—	(0)	(6,859)	10,027	3,167
               Balance at end of period	21,492	19,720	57,720	(9,016)	89,916

               	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	15,265	54	15,928	31,249	117,999
               Changes during period
               Dividends of surplus					(6,073)
               Profit attributable to owners of parent					11,032
               Purchase of treasury shares					(1,757)
               Disposal of treasury shares					44
               Cancellation of treasury shares					—
               Transfer from retained earnings to capital surplus					—
               Reversal of revaluation reserve for land					(78)
               Net changes in items other than shareholders’ equity	5,260	257	79	5,596	5,596
               Total changes during period	5,260	257	79	5,596	8,764
               Balance at end of period	20,526	311	16,008	36,846	126,763

            4. Consolidated Statements of Cash Flows

               		(Millions of yen)
               Year ended March 31, 2025		Year ended March 31, 2026
               Cash flows from operating activities
               Profit before income taxes	12,434	15,898
               Depreciation	5,636	5,825
               Loss on retirement of non-current assets	16	5
               Amortization of goodwill	42	42
               Increase (decrease) in allowance for doubtful accounts	0	0
               Increase (decrease) in provision for bonuses	29	52
               Increase (decrease) in retirement benefit liability	54	9
               Interest and dividend income	(548)	(715)
               Interest expenses	1,891	2,510
               Amortization of bond issuance costs	52	44
               Loss (gain) on sale of investment securities	(799)	(2,690)
               Loss (gain) on sale of non-current assets	—	(40)
               Decrease (increase) in trade receivables	(176)	177
               Decrease (increase) in inventories	3,584	(1,115)
               Decrease (increase) in operating investments in capital	(621)	(1,125)
               Decrease (increase) in prepaid expenses	20	(7)
               Decrease (increase) in accounts receivable – other	(1,020)	(410)
               Increase (decrease) in trade payables	(105)	481
               Increase (decrease) in advances received	1,394	1,050
               Increase (decrease) in accrued consumption taxes	(1,615)	(19)
               Increase (decrease) in deposits received	117	27
               Increase (decrease) in leasehold and guarantee deposits received	(909)	683
               Other, net	1,355	646
               Subtotal	20,832	21,330
               Interest and dividends received	548	712
               Interest paid	(1,864)	(2,486)
               Income taxes paid	(3,467)	(4,703)
               Net cash provided by (used in) operating activities	16,048	14,852

               		(Millions of yen)
               Year ended March 31, 2025		Year ended March 31, 2026
               Cash flows from investing activities
               Decrease (increase) in time deposits	—	(1,400)
               Purchase of securities	—	(7,000)
               Proceeds from sale and redemption of securities	2,005	2,000
               Purchase of investment securities	(1,908)	(2,207)
               Proceeds from sale and redemption of investment securities	1,039	3,756
               Purchase of property, plant and equipment	(23,717)	(20,777)
               Proceeds from sale of property, plant and equipment	—	46
               Purchase of intangible assets	(900)	(65)
               Purchase of long-term prepaid expenses	(1,408)	(417)
               Payments of guarantee deposits	(248)	(632)
               Proceeds from refund of guarantee deposits	288	222
               Other, net	10	5
               Net cash provided by (used in) investing activities	(24,839)	(26,470)
               Cash flows from financing activities
               Proceeds from long-term borrowings	43,639	38,971
               Repayments of long-term borrowings	(17,008)	(19,053)
               Proceeds from long-term non-recourse loans payable	—	3,210
               Redemption of bonds	(3,624)	(4,259)
               Repayments of long-term accounts payable	(258)	(258)
               Purchase of treasury shares	(9,058)	(1,756)
               Dividends paid	(5,974)	(6,050)
               Other, net	(0)	(1)
               Net cash provided by (used in) financing activities	7,716	10,802
               Effect of exchange rate change on cash and cash equivalents	—	—
               Net increase (decrease) in cash and cash equivalents	(1,074)	(815)
               Cash and cash equivalents at beginning of period	26,316	25,241
               Cash and cash equivalents at end of period	* 25,241	* 24,425

            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. CANVASS1 LLC

               CANVASS1 LLC was included in the scope of consolidation as a result of the investment made by the Company in the fiscal year ended March 31, 2026.

            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, affiliates and other entities not accounted for using the equity method The Company has no major non-consolidated subsidiaries and affiliates 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 subsidiary CANVASS1 LLC ends on the last day of January, while the accounting year of consolidated subsidiaries Tokyo Hibiya Hotel Corporation and Tokyo Nihonbashi Kabutocho Hotel Co., Ltd. ends on the last day of February.

            These closing dates are used for the preparation of the consolidated financial statements; however, if any significant transactions occur between these closing dates 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 and the declining balance 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 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

                  Management fees included in asset management revenue from management fees

                  The Company generates management fees included in asset management revenue 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 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, 2025	As of March 31, 2026
         Receivables from contracts with customers (Note 1) Contract assets (Note 1) Contract liabilities (Note 2)	539 519 192	532 561 200

         (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, 2025		As of March 31, 2026
         Housing loans for employees of Heiwa Real Estate Co., Ltd.	69	Housing loans for employees of Heiwa Real Estate Co., Ltd.	63

         *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. Investment securities in non-consolidated subsidiaries and affiliates are as follows:

         (Millions of yen)

         As of March 31, 2025	As of March 31, 2026
         Investment securities	—	240

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

         (Millions of yen)

         As of March 31, 2025		As of March 31, 2026
         Investment units of Heiwa Real Estate REIT, Inc.	19,984 (157,979 units)	23,630 (165,479 units)

         *6. 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, 2025	As of March 31, 2026
         Real estate for sale	10	52
         Buildings and structures	243	334
         Machinery, equipment and vehicles	—	1
         Total	253	388

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

         (Millions of yen)

         As of March 31, 2025		As of March 31, 2026
         Transferred from non-current assets to real estate for sale	12,233	25,116
         Transferred from real estate for sale to non-current assets	—	16

         *8. Assets corresponding to non-recourse liabilities are as follows:

         (Millions of yen)

         As of March 31, 2025	As of March 31, 2026
         Real estate for sale	—	4,723

         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, 2025	Year ended March 31, 2026
         17,649	25,990

         *2. Details of gain on sale of non-current assets are as follows:

         (Millions of yen)

         Year ended March 31, 2025	Year ended March 31, 2026
         Buildings, structures and other assets	—	19
         Land	—	20
         Total	—	40

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

         (Millions of yen)

         Year ended March 31, 2025	Year ended March 31, 2026
         Buildings and structures	14	4
         Other	2	0
         Total	16	5

         *4 Compensation income

         Compensation income represents compensation received for damage to equipment.

         *5 Tax refund

         Tax refund represents the refund of property taxes paid in prior fiscal years.

         *6 Tax refund expenses

         Tax refund expenses represent expenses incurred in connection with the refund of property taxes paid in prior fiscal years.

         Notes to consolidated statements of changes in equity

         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.

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, 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, included 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

(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 included a special dividend of ¥30 per share.

Year ended March 31, 2026

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 (Notes 1, 2, and 3)	38,859,996	38,859,996	6,700,000	71,019,992
   Total	38,859,996	38,859,996	6,700,000	71,019,992
   Treasury shares
   Common shares (Notes 1, 4, 5, and 6)	5,471,774	6,202,318	6,724,358	4,949,734
   Total	5,471,774	6,202,318	6,724,358	4,949,734

   (Notes) 1. The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025.

2. The increase of 38,859,996 common shares of shares issued represents an increase of 38,859,996 shares due to the stock split.

3. The decrease of 6,700,000 common shares of shares issued represents a decrease of 6,700,000 shares (after the stock split) due to the cancellation of treasury shares.

4. The increase of 6,202,318 common shares of treasury shares composed of 5,468,144 shares, which is an increase as a result of the stock split, 406,300 shares (after the stock split) acquired by the Company pursuant to a resolution of the Board of Directors, 325,000 shares (after the stock split) acquired through the trust for the Company’s stock compensation plan for directors and executive officers, and 2,874 odd-lot shares (674 odd-lot shares before the stock split and 2,200 odd-lot shares after the stock split) acquired.

5. The decrease of 6,724,358 common shares of treasury shares composed of 6,700,000 shares (after the stock split) of the cancellation of treasury shares, 19,800 shares (after the stock split) provided to and 4,200 shares (before the stock split) sold by the trust for the Company’s stock compensation plan for directors and executive officers, 100 shares (after the stock split) provided to and 200 shares (100 shares before the stock split and 100 shares after the stock split) sold by the trust for the Company’s stock compensation plan for employees, and 58 odd-lot shares (4 odd-lot shares before the stock split and 54 odd-lot shares after the stock split)sold.

6. The total number of common shares of treasury shares as of March 31, 2026, included 632,400 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 16, 2025	Common shares	3,657	109.0	March 31, 2025	June 2, 2025
      Meeting of Board of Directors held on October 31, 2025	Common shares	2,415	36.0	September 30, 2025	December 1, 2025

      (Notes) 1. The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. The dividend per share amount approved at the Board of Directors’ meeting held on May 16, 2025 shows the amount before the stock split.

      1. The total amount of dividends approved at the Board of Directors’ meeting held on May 16, 2025, 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 approved at the Board of Directors’ meeting held on May 16, 2025, included a special dividend of ¥30 per share.

      3. The total amount of dividends approved at the Board of Directors’ meeting held on October 31, 2025, included ¥11 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, 2026, and an effective date falling on the fiscal year ending March 31, 2027

      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 15, 2026	Common shares	4,135	Retained earnings	62.0	March 31, 2026	June 3, 2026

      (Notes) 1. The total amount of dividends included ¥39 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 included a special dividend of ¥15 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, 2025 and 2026, and account items in the consolidated balance sheets, are as follows:

(Millions of yen)

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, 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.” The main factors underlying increase (decrease) in the fiscal year ended March 31, 2026, were ¥10,050 million spent on outlays for construction in progress and completed, ¥535 million spent on acquisitions of real estate, and ¥25,102 million transferred to “Real estate for sale.”

2. The market values of principal properties as of March 31, 2026, 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 gain (loss) is mainly composed of a gain on sale of non-current assets, a loss on retirement of non-current assets and tax refund.

   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.

      (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	37,997	4,078	42,075	—	42,075
      Intersegment sales and transfers	49	—	49	(49)	—
      Total	38,046	4,078	42,124	(49)	42,075
      Segment profit	13,010	2,355	15,366	(2,169)	13,196
      Segment assets	358,049	23,181	381,230	38,310	419,541
      Other items
      Depreciation (Note 3)	5,556	16	5,572	64	5,636
      Increase in property, plant and equipment and intangible assets (Note 3)	24,451	2	24,454	59	24,514

   3. Information on net sales, profit/loss, assets, liabilities, and other items by reportable segments 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, 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, 2026

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

1. The negative adjustments to segment profit of ¥2,284 million mainly include corporate expenses amounting to ¥2,284 million that belong to the administration division and are not allocated to any of the reportable segments.

2. Adjustments to segment assets of ¥47,634 million mainly include unallocated corporate assets amounting to ¥51,288 million, which primarily consist of cash and deposits, 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. The Company conducted a 2-for-1 stock split for the Company’s common shares on July 1, 2025. Net assets pr share and earnings per share were calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

2. 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 336,000 shares in fiscal 2024 and 632,000 shares in fiscal 2025, 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 336,000 shares in fiscal 2024 and 449,000 shares in fiscal 2025.

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

Notes to significant subsequent events Not applicable.