For the Fiscal Year Ended September 30, 2020

Annual Select® 2020

Open House Co., Ltd.
2-4-1 Marunouchi, Chiyoda-ku, Tokyo(Securities Code: 3288)

Corporate Profile
Open House Co., Ltd. (hereinafter the “Company”) and its 19 subsidiaries and associates (18 consolidated
subsidiaries and 1 equity method affiliate; hereinafter collectively with the Company, the “Group”) are engaged in
the following businesses:(1) Single-family homes related businessIn the single-family homes related business, the Group has established an integrated system from purchase of landand construction to brokerage and sales in order to consistently ensure a stable and efficient supply of affordable
single-family homes in urban areas.
(2) Condominiums businessIn the condominiums business, the Group is engaged in the development and sale of newly-built condominiums.
We develop and offer compact condominiums targeted principally at single- or two-person households, whichshow a high preference for condominiums, in convenient and valuable locations mainly in urban areas in Tokyo
metropolitan, Nagoya and Fukuoka areas.
(3) Property resale businessIn the property resale business, the Group is engaged in the purchase, management and sale of real estate forinvestment. We mainly purchase income-generating real estate properties such as small office buildings and rental
condominiums in Tokyo metropolitan area and, after increasing their asset value through such means as leasing
and renovation, resell them to wealthy individuals and operating companies as real estate for investment.
(4) Others
In others segment, the Group is mainly engaged in the U.S. real estate business, through which we sell U.S. realestate properties and offer related services, including consulting, property management and financial services, towealthy class of customers residing in Japan.
(5) Pressance Corporation Co., Ltd. (equity method affiliate)
Pressance Corporation Co., Ltd. is engaged in the planning, development and sale of studio apartments (for rent
for single persons for investment) and condominiums for families (for family use).

I. Summary of Selected Financial Data (Consolidated)
Fiscal year

20th businessterm

21st business
term

22nd business
term

23rd businessterm

24th business
termYear end

Sept. 2016

Sept. 2017

Sept. 2018

Sept. 2019

Sept. 2020

Net sales(Millions of yen)

247,210

304,651

390,735

540,376575,951

Ordinary profit(Millions of yen)

29,15436,13146,052

54,92877,357

Profit attributable toowners of parent(Millions of yen)

18,70924,79731,80639,40759,491

Comprehensive income(Millions of yen)

18,73324,89432,09638,54058,812

Net assets(Millions of yen)

64,084

83,379113,486

138,067

233,695

Total assets(Millions of yen)

204,868

256,736

393,367

445,904

569,038

Net assets per share(Yen)

566.96743.60960.22

1,246.15

1,855.66

Earnings per share (EPS)(Yen)

166.04221.71285.08351.22525.36

Diluted earnings per
share (Diluted EPS)

(Yen)

165.28220.38282.88349.11522.37

Equity ratio

(%)

31.1

32.3

27.0

30.9

41.0

Return on equity (ROE)

(%)

33.7

33.8

33.6

32.3

32.1

(Times)

6.47

8.86

9.82

7.33

7.23

(Millions of yen)

9,817

(799)

(10,017)

14,344

48,793(Millions of yen)

(2,672)(1,337)(12,582)(4,800)(24,054)(Millions of yen)

17,332

25,181

50,696

7,186

59,430(Millions of yen)

67,50890,910118,978

135,345219,218

1,258

1,522

2,263

2,642

2,876

(125)

(173)

(248)

(240)

(242)

Price earnings ratio
Net cash provided by(used in) operating
activities
Net cash provided by(used in) investing
activities
Net cash provided by(used in) financing
activities
Cash and cash
equivalents at end of
periodNumber of employees(Average number of
temporary employees)(Persons)

Notes: 1. Net sales do not include consumption and other taxes.
2. Starting with the 23rd business term, the Group has applied ASBJ Statement No. 28 “Partial Amendments to AccountingStandard for Tax Effect Accounting” and ASBJ Guidance No. 28 “Implementation Guidance on Tax Effect Accounting.”
Accordingly, the figures for the 22nd business term represent results after retrospectively applying the said accounting
standard and guidance.
3. Starting with the 23rd business term, the Group has applied ASBJ Statement No. 29 “Accounting Standard for Revenue
Recognition” and ASBJ Guidance No. 30 “Implementation Guidance on Accounting Standard for Revenue Recognition.”
Accordingly, the figures for the 23rd business term represent results after applying the said standard.
4. The number of employees represents the number of persons in employment (excluding individuals seconded form theGroup (the Company and its consolidated subsidiaries) to companies outside the Group and including individuals
seconded from companies outside the Group to the Group), and the average number of temporary employees (including
temporary employees staffed from staff agencies) for each fiscal year is excluded from the number of employees andshown in parentheses.
The Group temporarily employs individuals planned to be regularly employed in April to provide them with training
before they formally join the Group. However, they are not included in the average number of temporary employees
above.
5. The Company conducted a 2-for-1 stock split of common stock with an effective date of October 1, 2019. Net assets per
share, EPS and Diluted EPS were calculated assuming the stock split was conducted at the beginning of the 20th business
term.

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II. CEO Message
Consolidated financial results for the fiscal year ended September 30, 2020
Record high net sales and income for the eighth consecutive year
As for the consolidated financial results for the fiscal year ended September 30, 2020, the Group achieved record
high net sales and income for the eighth consecutive year with net sales of 575.9 billion yen (up 6.6% year onyear) and ordinary income of 77.3 billion yen (up 40.8% year on year), both of which exceeded the financial
forecasts revised in May 2020.
The strong performance was mainly driven by an 11.5% year-on-year increase in net sales from the single-family
homes related business to 379.6 billion yen.
The demand for single-family homes has been strong in urban areas where the number of households has continued
to increase. Under such circumstances, given the rising prices and declining supply of newly-built condominiums,
the price advantage and abundant choice of newly-built single-family homes in urban areas have become more
widely known among customers considering purchasing a house.
Additionally, due to environmental changes caused by the novel coronavirus (COVID-19) outbreak, people are
spending more time at home with their families and more people are working from home, and such environmental
changes have brought more attention to single-family homes as they more easily meet the new house-related needs,
such as for securing a working place. As a result, the number of brokerage transactions entered into by the Groupfor single-family homes and other types of homes has increased, far exceeding the results for the previous fiscal
year since May 2020.
Further, in May 2020, the Company acquired shares of Pressance Corporation Co., Ltd. (hereinafter, “PressanceCorporation”), accounting for 31.9% of the aggregate number of voting rights, and converted PressanceCorporation to its equity-method affiliate. Accordingly, the Group recorded share of profit of entities accounted
for using equity method of 17.7 billion yen in non-operating income, which contributed to increases in profit inordinary income and items below.

Mid-term Business Plan
Shifting to “Ikouze 1 cho, 2023!” - “Jump to 1 trillion, 2023!” from “Hop Step 5000”
The Group formulated the Mid-term Business Plan “Hop Step 5000” (hereinafter the “Plan”) in November 2017and has implemented the Plan with an aim to achieve a net sales target of 500.0 billion yen for the fiscal year ended
September 30, 2020, the final year of the Plan. As a result, we achieved the target a year ahead of the schedulewith net sales of 540.3 billion yen in the fiscal year ended September 30, 2019, the second year of the Plan, andearned net sales of 575.9 billion yen in the fiscal year ended September 30, 2020, far exceeding the initial target.
This was due to steady growth of existing businesses led by the core single-family homes related business as wellas increased profits mainly from the conversion of Hawk One Corporation (hereinafter “Hawk One”) to a
consolidated subsidiary.
Meanwhile, from a financial standpoint, the Group also maintains a solid financial base with equity ratio of 41.0%(32.3% as of September 30, 2017) despite an increase in total asset to 569.0 billion yen as of September 30, 2020
from the commencement of the Plan (256.7 billion yen as of September 30, 2017). This was mainly due to anincrease in capital through public offerings totaling 44.6 billion yen in July and August 2020, in addition to the
expansion of the scope of business carried out on the premise of maintaining the healthy financial level.
The capital increase resulted in an 8.2% dilution for shareholders. However, we believed this was necessary tostrengthen financial capabilities and ensure strength and flexibility of financial position for the Group’s further
growth based on the core single-family homes related business and further expansion of business through M&A.
As a result, we have successfully secured the funds for growth to facilitate further business expansion while
maintaining a solid financial base.

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As the next stage, the Group formulated the new Mid-term Business Plan “Ikouze 1 cho, 2023!” - “Jump to 1
trillion, 2023!” in November 2020. We will continue to grow at a steady pace with an aim to achieve net sales of
1 trillion yen in the final year of this plan, the fiscal year ending September 30, 2023.

Initiatives for the fiscal year ending September 30, 2021
We aim to achieve net sales of 634.0 billion yen.
In the fiscal year ending September 30, 2021, the Group aims to achieve net sales of 634.0 billion yen by further
expanding its business, based on the core single-family homes related business.
In the single-family homes-related business, we will increase our market share in Tokyo metropolitan, Nagoya
and Fukuoka areas while expanding our business areas by such mean as opening new sales centers. We will also
aim at growth of the business by taking advantage of the Group’s strength of the integrated system from purchaseand construction to brokerage and sales while strengthening cooperation with Open House Architect Co., Ltd.
(hereinafter “Open House Architect”) and Hawk One.
In the condominiums business, we will strengthen the development and sale, especially of condominiums withcompact room layouts targeted at single- or two-person households in convenient locations in urban areas.
In the property resale business, although the demand for income-generating real estate properties is expected to bestrong against the backdrop of the continued easy monetary policy, we will run the business in a steady manner
while paying close attention to changes in the financial environment in the future.
In the U.S. real estate business in other segments, we will sell secondhand single-family homes and other properties
in the U.S. to Japanese wealthy individuals and corporations as pure investment products for diversified asset
allocation.
Through the above initiatives, we once again aim to achieve record high net sales and income for the ninth
consecutive year in the fiscal year ending September 30, 2021.

Shareholder return
The Company planned to pay a year-end dividend of 40 yen per share for the fiscal year ended September
2020.
The full-year dividend for the fiscal year ended September 30, 2020 is 80 yen per share (of which an interim
dividend of 40 yen per share). Meanwhile, the full-year dividend for the fiscal year ended September 30, 2019 was
126 yen per share. However, as the Company conducted a 2-for-1 stock split of common stock with an effective
date of October 1, 2019, the dividend amount adjusted for the said stock split is calculated to be 63 yen per share.
This means that the full-year dividend for the fiscal year ended September 30, 2020 has effectively increased by
17 yen from the previous fiscal year to 80 yen per share.
In addition, the payout ratio for the fiscal year ended September 30, 2020 is 15.2%. However, profit attributableto owners of parent for the fiscal year ended September 30, 2020 includes share of profit of entities accounted forusing equity method of 17.7 billion yen in connection with the conversion of Pressance Corporation to an equitymethod affiliate. Therefore, the payout ratio calculated by excluding such an effect is 21.7% (up 3.8 percentage
points year on year). Furthermore, the Company plans to pay a full-year dividend of 88 yen per share (of which
an interim dividend of 44 yen per share) for the fiscal year ending September 30, 2021, an increase of 8 yen fromthe previous fiscal year.
Open House Group will make an all-out effort to achieve further growth. Therefore, we sincerely ask ourshareholders for their continued and further support for the Group.

Masaaki Arai, President & CEO, Open House Co., Ltd.

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III. Management’s Analysis and Discussion of Financial Position,
Operating Results and Cash Flows(1) Overview of operating results, etc.
The overview of the Group’s financial position and operating results for the fiscal year ended September 30, 2020is as follows:(i) Financial position and operating resultsa. Financial position(a) Assets
As of September 30, 2020, the Group posted total assets of 569,038 million yen, a year-on-year increase of123,133 million yen. This was mainly due to an aggregate decrease of 12,766 million yen in real estate for saleand real estate for sale in process, which was more than offset by an increase in cash and deposits of 83,872
million yen and an increase in investment securities of 40,170 million yen mainly resulting from the acquisitionof shares of Pressance Corporation.
(b) Liabilities
Total liabilities amounted to 335,342 million yen, a year-on-year increase of 27,505 million yen. This was
mainly due to an aggregate increase of 23,307 million yen in short-term borrowings and long-term borrowings(including current portion of long-term borrowings).
(c) Net assets
Net assets amounted to 233,695 million yen, a year-on-year increase of 95,628 million yen. This was mainly
due to an aggregate increase of 44,984 million yen in share capital, capital surplus and treasury shares as well as
an increase in retain earnings of 51,417 million yen resulting from the financing through the issuance of newshares and disposal of treasury shares.
b. Operating results
For the fiscal year ended September 30, 2020, the Group posted net sales of 575,951 million yen (up 6.6% year
on year), operating profit of 62,129 million yen (up 7.5%), ordinary profit of 77,357 million yen (up 40.8%) andprofit attributable to owners of parent of 59,491 million yen (up 51.0%).
The overview of operating results by segment is as follows:(Single-family homes related business)
In the single-family homes related business, net sales stood at 379,656 million yen (up 11.5% year on year), andoperating profit amounted to 40,677 million yen (up 24.7%). This was due to strong sales driven by rising interestin single-family homes under the new lifestyle despite a temporary decline in the number of brokeragetransactions resulting from decreased sales opportunities amid the COVID-19 pandemic.
(a) Brokerage (Open House)
In July 2020, the Company opened the seventh sales center Ropponmatsu Sales Center in the fiscal year ended
September 30, 2020 in Chuo-ku, Fukuoka-shi, Fukuoka Prefecture. As such, with 49 sales centers in six
prefectures, including Tokyo, Kanagawa Prefecture, Aichi Prefecture, Saitama Prefecture and Chiba Prefecture,
we have striven to strengthen our sales capabilities.
As a result, the number of brokerage transactions increased steadily to 6,940 (up 26.1% year on year).

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(b) Sale of single-family homes in urban areas (Open House Development)
The results by type of sale are as follows:
Type of sale

Net sales(Millions of yen)

Number of units

YoY increase(%)

Newly built-for-sale house

2,804

116,697

18.2

Land

2,645

108,061

8.0

Built-to order house

1,597

23,622

7.8

Other

－

590

－

Total

－

248,971

12.5(c) Built-to order house (Open House Architect)
In addition to steady growth in built-to-order houses for built-for-sale housing corporations in the Tokyo
metropolitan area, the number of built-to-order houses entered into by the Group has also grown.
As a result, net sales including intra-group transaction stood at 55,508 million yen (up 15.2% year on year).
(d) Sale of single-family homes in quasi-urban areas (Hawk One)
The Group focused on the sale of newly built-for-sale houses, especially in quasi-urban areas in the Tokyo
metropolitan area. Gross profit improved significantly thanks to strong sales driven by growing interest in
single-family homes under the new lifestyle amid the COVID-19 pandemic, as well as to the revised purchasing
standard.
As a result, net sales stood at 87,094 million yen (up 5.8% year on year), and operating profit amounted to 6,504
million yen (up 43.9%).

(Condominiums business)
In the condominiums business, the Group offers newly-built condominiums for sale in urban areas in Tokyo’s
23 wards, Aichi Prefecture and Fukuoka Prefecture. The composition of deliveries in Aichi Prefecturesurpassed that in Tokyo’s 23 wards due to the hike in price of land for development, while increasing in theoverall number delivered. As such, we achieved the segment results as planned.
As a result, net sales stood at 58,169 million yen (down 4.6% year on year), and operating profit amounted to
9,608 million yen (down 11.2%).
The results by type of sale are as follows:
Type of sale

Net sales(Millions of yen)

Number of units

YoY increase(%)

Sale of condominiums

1,224

57,932

(4.5)

Other

－

237

－

Total

－

58,169(4.6)(Property resale business)
In the property resale business, there was a concern over the elaborate screening of investors and properties byfinancial institutions reflecting the challenging circumstances faced by the real estate industry in which theGroup operates, such as falls in rents and deterioration in transaction market conditions, amid the COVID-19
pandemic. However, the segment sales grew steadily, backed by strong demand for properties such as rental-5-

condominiums and office buildings to be purchased for investment by operating companies and wealthy
individuals who are target customers of the Group.
As a result, net sales stood at 112,154 million yen (up 3.5% year on year), and operating profit amounted to
10,485 million yen (down 8.7%).

(Others)
In others segment, although the business was adversely affected to some extent by the temporary decline ininvestment appetite for U.S. real estate due to the tax reform related to overseas real estate and decrease inbusiness meetings with customers to prevent the spread of COVID-19, the demand for diversified asset
investment remained firm.
As a result, net sales stood at 25,970 million yen (down 15.0% year on year), and operating profit amounted to2,314 million yen (down 38.7%).

(ii) Cash flows
Cash and deposits (hereinafter “net cash”) as of September 30, 2020 increased by 83,872 million yen year on
year to 219,218 million yen.

(Cash flows from operating activities)
Net cash provided by operating activities amounted to 48,793 million yen (compared to net cash provided of
14,344 million yen in the previous fiscal year). This was mainly due to income taxes paid of 20,593 million yen,which was more than offset by profit before income taxes of 77,357 million yen (of which share of profit ofentities accounted for using equity method of 17,786 million yen had no impact on net cash provided byoperating activities), as well as a decrease in inventories of 12,516 million yen.

(Cash flows from investing activities)
Net cash used in investing activities amounted to 24,054 million yen (compared to net cash used of 4,800 million
yen in the previous fiscal year). This was mainly due to purchase of shares of subsidiaries and associates of
22,973 million yen.

(Cash flows from financing activities)
Net cash provided by financing activities amounted to 59,430 million yen (compared to net cash provided of
7,186 million yen in the previous fiscal year). This was mainly due to dividends paid of 8,074 million yen,which was more than offset by net cash provided of 23,310 million yen from the sum of repayments ofborrowings and proceeds from borrowings, and net cash provided of 44,391 million yen from the sum of
proceeds from issuance of shares and proceeds from sales of treasury shares.

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(2) Results of production, orders received and sales(i) Results of production
As the Group’s production results are approximately the same as the results of sales, for details, refer to “Resultsof sales.”(ii) Results of orders received
The status of orders received for built-to order houses during the fiscal year ended September 30, 2020 is asfollows:
Segment
Single-family homes related business

Orders received(Millions of yen)

YoY change

61,7593.5(%)

Order backlog(Millions of yen)

YoY change(%)

42,145

3.5

Notes: 1. The above figures do not include consumption and other taxes.
2. The information on segments other than the above is omitted as the nature of services offered through suchsegments is not fit to describe the status of orders received.

(iii) Results of sales
For details of the results of sales, refer to the description of operating results by segment in “(1) Overview ofoperating results, etc.”(3) Management’s analysis and discussion of operating results, etc.
Management’s recognition, analysis and discussion of the Group’s operating results, etc. are as follows.
Any forward-looking statements in the following discussion are based on the judgement of management as of
September 30, 2020.

(i) Recognition, analysis and discussion of financial position and operating results
a. Recognition, analysis and discussion of operating results, etc.
During the fiscal year ended September 30, 2020, the Japanese economy continued to face challenging
circumstances due to the effects of COVID-19. Under such circumstances, corporate earnings continued to
decline and capital expenditures and imports remained weak. Meanwhile, there were some signs of recovery
such as rebound of consumer spending, as well as of production and exports, in addition to robust public
investment.
In the real estate industry, in which the Group operates, the national average standard land prices of bothcommercial and residential areas started to fall according to the land price survey conducted in 2020. In general,
this was due to the concern over the effects of uncertainty on economic activities associated with the COVID19 pandemic. However, the extent of such effects on land prices varies according to the characteristics ofdemand for land and regional economic structure; therefore, the degree of changes in land price trends also
varies from case to case. The restriction on travel has weakened the demand for land for hotel and othercommercial uses, which are largely affected by foreign tourists. On the other hand, we are witnessing thegrowing demand for logistics facilities along with the rising demand for home delivery as well as a rise in actual
demand for housing and other forms of real estate.
Under such business environment, due to environmental changes caused by the COVID-19 outbreak, people
are spending more time at home with their families and more people are working from home, and suchenvironmental changes have brought more attention to single-family homes as they more easily meet the newhouse-related needs, such as for securing a working place. As a result, the number of brokerage transactions-7-

entered into by the Group for single-family homes and other types of homes has increased, far exceeding theresults for the previous fiscal year. Also, the Group recorded share of profit of entities accounted for using
equity method in connection with the conversion of Pressance Corporation to an equity-method affiliate
effective from the fiscal year ended September 30, 2020.
b. Analysis of operating results(a) Net sales
Net sales for the fiscal year ended September 30, 2020 increased by 35,574 million yen year on year to 575,951
million yen (up 6.6% year on year). This was mainly because the net sales from the single-family homes related
business increased by 39,128 million yen to 379,656 million yen (up 11.5%).
(b) Cost of sales, gross profit
Cost of sales for the fiscal year ended September 30, 2020 increased by 30,922 million yen year on year to481,638 million yen (up 6.9% year on year), while gross profit increased by 4,651 million yen to 94,312 million
yen (up 5.2%). Gross profit margin declined by 0.2 percentage points to 16.4% (compared to 16.6% in theprevious fiscal year). This was mainly due to the deliveries of properties with low gross profit margin against
the backdrop of the concern over the elaborate screening of investors and properties by financial institutions
reflecting the challenging circumstances faced by the property resale business, such as falls in rents anddeterioration in transaction market conditions amid the COVID-19 pandemic.
(c) Selling, general and administrative expenses, operating profit
Selling, general and administrative expenses increased by 304 million yen year on year to 32,183 million yen(up 1.0% year on year) whereas selling, general and administrative expense ratio declined by 0.3 percentage
points to 5.6% (compared to 5.9% in the previous fiscal year). This was mainly because the Group refrained
from holding events with a large number of participants from the perspective of preventing the spread of
COVID-19.
Operating profit increased by 4,347 million yen year on year to 62,129 million yen (up 7.5%). Meanwhile,
operating income margin increased by 0.1 percentage points to 10.8% (compared to 10.7% in the previous fiscal
year).
(d) Non-operating income and expenses, ordinary profit
Non-operating income increased by 17,944 million yen year on year to 18,356 million yen (up 4,352.0% year
on year). This was mainly due to the recording of 17,786 million yen in share of profit of entities accounted forusing equity method in connection with the conversion of Pressance Corporation to an equity-method affiliate.
Non-operating expenses decreased by 136 million yen year on year to 3,128 million yen (down 4.2%).
As a result, ordinary profit increased by 22,428 million yen year on year to 77,357 million yen (up 40.8% year
on year). In addition, ordinary income margin increased by 3.3 percentage points to 13.4% (compared to 10.2%
in the previous fiscal year).
(e) Extraordinary income or loss, profit attributable to owners of parent
Profit attributable to owners of parent increased by 20,083 million yen year on year to 59,491 million yen (up51.0% year on year). In addition, ratio of profit to net sales increased by 3.0 percentage points to 10.3%(compared to 7.3% in the previous fiscal year).

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(ii) Objective indicators to assess the achievement of management policies, strategies and targets
The Group formulated the Mid-term Business Plan “Hop Step 5000” (hereinafter the “Plan”) in November 2017
and set management targets of indicators to be achieved by the final year of the Plan, the fiscal year ended
September 30, 2020, with net sale of 500,000 million yen, ordinary profit of 60,000 million yen and profit
attributable to owners of parent of 40,000 million yen in terms of income, as well as ROE of 30.0%, equity ratioof 30.0% and dividend payout ratio of 20.0% or more in terms of capital policy.
The Group’s operating results for the fiscal year ended September 30, 2020, the final year of the Plan, far
exceeded the targets of most of these indicators with the following results: net sale of 575,951 million yen(achievement rate of the target of 115.2%), ordinary profit of 77,357 million yen (128.9%), profit attributableto owners of parent of 59,491 million yen (148.7%), ROE of 32.1% (exceeded by 2.1 percentage points), equity
ratio of 41.0% (exceeded by 11.0 percentage points), dividend payout ratio of 15.2% (missed by 4.8 percentage
points; provided, however, that dividend payout ratio is 21.7% if excluding share of profit of entities accounted
for using equity method related to Pressance Corporation).
The Group also achieved all of its forecast of operating results for the fiscal year ended September 30, 2020
(announced on May 15, 2020) with the following results: net sale of 575,951 million yen (achievement rate of
the forecast of 101.0%), operating profit of 62,129 million yen (100.2%), ordinary profit of 77,357 million yen(100.5%) and profit attributable to owners of parent of 59,491 million yen (100.8%).
Additionally, the Group achieved net sale targets of all segments with the following results: 379,656 million
yen (achievement rate of the target of 100.4%) in the single-family homes related business, 58,169 million yen(100.3%) in the condominiums business, 112,154 million yen (102.0%) in the property resale business and25,970 million yen (108.2%) in other business.

(iii) Capital resources and funding liquidity
The Group’s capital requirements are primarily to fund the acquisition of commercial land and properties,
construction works, investments to expand its business and working capital in each segment. The resources ofthese funds include shareholders’ equity and interest-bearing debt through borrowings from financial
institutions. Besides that, the Group strives to secure a wide range of funding means suitable for various uses offunds.

(iv) Significant accounting policies and estimates
The Group’s consolidated financial statements are prepared in accordance with accounting principles generally
accepted in Japan. In preparing these consolidated financial statements, the Group makes estimates andassumptions that affect reported amounts of assets and liabilities at the balance sheet date and those of income
and expenses during the reporting period. With respect to these estimates, the Group makes estimates by making
assumptions and gathering information based on historical experience and other factors considered reasonable
under the circumstances. However, actual results may differ from these estimates due to the uncertainty inherent
in these estimates.

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IV. Mid-term Business Plan
Formulated the new Mid-term Business Plan “Ikouze 1 cho, 2023!” - “Jump to 1 trillion, 2023!”
In order for the Group to grow continuously, based on the core single-family homes related business, towardachieving the net sale target of 1 trillion yen for the fiscal year ending September 30, 2023, the final year of the
new Mid-term Business Plan “Ikouze 1 cho, 2023!” - “Jump to 1 trillion, 2023!” we will work to further increase
our market shares in existing business areas, including Tokyo metropolitan, Nagoya and Fukuoka areas, as well
as expand the single-family homes related business to tap into the Kansai region. In other business areas, in orderto achieve synergy with Pressance Corporation, we will integrate the Group’s strong purchasing power in theTokyo metropolitan area with Pressance Corporation’s planning and sales capabilities to develop a business lineof new condominiums for investment in the Tokyo metropolitan area. Besides that, we will also proactively pursue
M&As opportunities and make strategic investments, and develop our new business, the real estate fund business
which primarily manages residential properties.
Major initiatives for achieving the Mid-term Business Plan
Strategies

Major initiatives-Continued growth based on single-family
homes business-Further expansion of shares in existing areas-Single-family homes business to tap into Kansai region-Synergies with Pressance Corporation-Develop a business line of new condominiums for investmentin the Tokyo metropolitan area

-M&A Strategic Investment-Proactive M&A and strategic investments-New Business-Develop a real estate fund business primarily managing
residential properties- 10 -

V. Sustainability
Approach to sustainability efforts
The Group promotes “sustainable efforts” aiming to contribute to realizing a sustainable society through its
business activities while achieving sustainable corporate growth. Guided by the Group’s corporate philosophy of“Committed to pursuing ‘Houses that customers want’ honestly and constantly,” the Group is working to createshared value, which means to pursue both social and business value, in practice by providing single-family homes
in urban areas at an affordable price so that ordinary working people can have houses in urban areas. The Groupalso identifies material issues based on the stakeholders’ interest as well as the Group’s priority and moves forwardwith initiative to address such issues.

ESG

Material Issues

Environment

Environmental conservation

Product safety and security,
Promoting customer
satisfaction

Talent development
SocialWork-style reforms

Supply chain management

GovernanceCompliance- 11 -

Relevant SDGs

VI. Corporate Governance[Information about corporate governance, etc.](1) [Overview of corporate governance](i) Basic approach to corporate governance
Under the Group’s corporate philosophy of “Committed to pursuing ‘Houses that customers want’ honestly andconstantly,” the Company aims to be a real estate company needed by society. To this end, we believe that it isimportant to make efforts to establish and improve our organizational structure to ensure the appropriateness oforganizational management and thereby establish an organizational foundation to achieve the Group’s
sustainable growth and maximization of corporate value in the medium- to long-term. Based on such
recognition, the Company discloses the “Basic Policy on Corporate Governance,” which was formulated to set
forth its basic approach to and policy on corporate governance.
Regarding this policy as the Group’s highest code of corporate governance, the Company will manage its
business based on this policy, while fully taking into account the purpose and background of the Corporate
Governance Code.
(ii) Overview of corporate governance structure and reasons for adoption of this structure(a) Overview of corporate governance structure
The Company’s corporate governance structure is as follows:

General Meeting of Shareholders
Election and removal

Nomination Advisory Committee

Election and removalElection and removal

Audit
Cooperation

Consultation/recomm

Board of Directors

Cooperation

Audit &
Supervisory Board

President & CEO

Cooperation
ReportingDirection
Internal audit

Risk Management
Committee

Consultation

Business departments andsubsidiaries
AdviceCorporate lawyer

Reporting

Audit

Direction

Executive officers

Cooperation

Internal Audit
OfficeDirection

Reporting

Reporting

Legal Department

Appointment and dismissal

Reporting

ReportingAccounting Auditor

Reporting<Board of Directors and Executive Officer system>
With Masaaki Arai, President & CEO, as the Chairman, the Board of Directors of the Company consists of a
total of eight Directors, of which five are internal Directors (Masaaki Arai, Kazuhiko Kamata, Hitoshi Imamura,
Ryosuke Fukuoka and Kotaro Wakatabi) and three are Outside Directors (Hitoshi Ishimura, Yuko Omae andMaoko Kotani). As a management decision-making body, the Board of Directors deliberates and makes
decisions on management policies and other important management matters based on the Board of Directors- 12 -

Rules, and supervises the execution of duties by Directors. In addition to regular meetings held once a month,
the Board of Directors holds meetings as needed and has lively discussions over various issues related to theCompany’s business activities.
The Company’s Articles of Incorporation limit the number of Directors to the minimum necessary from theperspective of pursuing swift decision-making and full management function of the Board of Directors
simultaneously. The Board of Directors helps management make quick and drastic decisions based on such astructure.
The Company also adopts the Executive Officer system to increase flexibility and efficiency in bothmanagement decision-making and business execution and delegates business execution to Executive Officers.
Executive Officers are responsible for practical execution of business in accordance with basic management
policies and business plans resolved by the Board of Directors.

<Audit & Supervisory Board>
With Koichi Matsumoto, Full-time Audit & Supervisory Board Member, as the Chairman, the Audit &Supervisory Board consists of three Outside Audit & Supervisory Board Members (Koichi Matsumoto, Yuzo
Toyama and Mieko Hosaka), and, in addition to regular meetings held, in principle, once a month, holds
meetings as needed. Among the members, two Audit & Supervisory Board Members (Koichi Matsumoto andYuzo Toyama) are Outside Audit & Supervisory Board Members with extensive knowledge and insight into
finance and accounting as well as a wealth of experience as auditors. Such member composition ensures anobjective and neutral supervisory structure.
In accordance with audit policies and plans drawn up and formulated by the Audit & Supervisory Board at the
beginning of the fiscal year, Audit & Supervisory Board Members conduct audits of the execution of duties byDirectors from a standpoint independent from Directors through their attendance at the Board of Directors’
meetings and interviews with Directors and other officers on the status of business operations. Throughinformation exchange, shared recognition and cooperation with the Internal Audit Division and Accounting
Auditor, the Audit & Supervisory Board also strives to strengthen its auditing function by supplementing
operational audits and accounting audits.
Further, the Audit & Supervisory Board assesses the appropriateness of the Accounting Auditor in accordancewith the “Standards for Appointment and Evaluation of Accounting Auditor,” and determines the details of a
proposal concerning matters including the election of the Accounting Auditor to be submitted at a general
meeting of shareholders.

<Nomination Advisory Committee>
With Hitoshi Ishimura, Outside Director, as the Chairman, the Nomination Advisory Committee consists of six
members, including all three Audit & Supervisory Board Members and Outside Directors of the Company. The
Nomination Advisory Committee deliberates matters related to the Group’s corporate governance, including
the selection of officers and Executive Officers, and supplements the Board of Directors’ decision-making froman objective and neutral standpoint that keeps a certain distance from business execution, in order to contributeto enhancing the corporate governance of the entire Group.

<Internal Audit Division>
The Internal Audit Division (one staff member), which is placed directly under the President, conducts internal
audits on the legality and appropriateness of the operation of internal systems and business executions in all
aspects of management, in accordance with an internal audit plan and other such documents drawn up andformulated at the beginning of the fiscal year.

- 13 -

In principle, the Internal Audit Division conducts internal audits of all departments of the Group and reports theresults to each Group company’s President & Representative Director and departments subject to the audits.
The Internal Audit Division also gives improvement instructions to departments subject to the audits andmonitors their improvement on an ongoing basis. Furthermore, the Internal Audit Division strives to strengthen
its internal audit function by supplementing internal audits through information exchange, shared recognitionand cooperation with Audit & Supervisory Board Members and the Accounting Auditor.
<Accounting Auditor>
The Company has appointed Deloitte Touche Tohmatsu LLC as its Accounting Auditor, and certified public
accountants (CPAs) from the auditing firm conduct audits in a fair manner under the Companies Act and the
Financial Instruments and Exchange Act of Japan. Additionally, CPAs from the said auditing firm also conduct
accounting audits of the Company’s significant subsidiaries.
The Accounting Auditor reports the audit plans and audit results to the Audit & Supervisory Board and Internal
Audit Division as needed to ensure cooperation within the three-way audit system in which the Audit &Supervisory Board, Internal Audit Division and Accounting Auditor mutually cooperate each other.

(b) Reasons for adoption of this structure
The Company believes that swift decision-making is especially important in appropriately adapting to thebusiness environment surrounding the Group and consistently enhancing its corporate value. The Company
adopts the current corporate governance structure from the perspective of ensuring the transparency and fairnessof management by establishing an objective and neutral management monitoring function while enablingflexible decision-making by taking into account the Group’s business size and business plans.

(2) [Remuneration for officers](i) Matters related to determination of the remuneration amount for officers or the calculation method(a) Details of the policy on determining the remuneration amount for officers or the calculation method andthe determination method thereof
The Board of Directors of the Company has set the policy on determining the remuneration amount for
officers or the calculation method as follows:a.

Remuneration for Directors
Remuneration for Directors consists of fixed-base remuneration, performance-based remuneration andshare-based remuneration. Performance-based remuneration and share-based remuneration are not paid
to Outside Directors from the perspective of their role and independence.
In order to strongly motivate Directors to achieve financial targets for every single fiscal year, we adopt
a policy to make flexible and fluid decisions concerning the performance-based remuneration using
indicators, consolidated ordinary profit and consolidated profit, for the previous fiscal year, taking into
account the details of Directors’ duties, the state of execution of their duties and their responsibilities.
As for the share-based remuneration, we adopt a policy to grant shares with a restriction on transfer(hereinafter “restricted shares”) to Directors every fiscal year with an aim to motivate them to further
contribute to increasing the Company’s corporate value over the medium- to long-term by sharing thebenefits and risks of share price fluctuations with shareholders
The amounts of remuneration are determined upon resolution by the Board of Directors within the
maximum limit of the total amount resolved at a general meeting of shareholders.

b.

Remuneration for Audit & Supervisory Board Members
Remuneration for Audit & Supervisory Board Members consists of fixed-base remuneration.

- 14 -

The amount of remuneration is determined in discussions among Audit & Supervisory Board Members
within the maximum limit of the total amount resolved at a general meeting of shareholders.

(b)

Policy on determining the remuneration amount for officers or the calculation method by position

The Company divides Directors into three categories - Director with specific title, full-time Director(excluding those with specific titles; the same applies hereinafter in this section) and part-time Director - andAudit & Supervisory Board Members into two categories - full-time Audit & Supervisory Board Member
and part-time Audit & Supervisory Board Member. The specific amounts of remuneration for officers are
determined within the predetermined maximum amount for each category.
In addition to fixed-based remuneration and performance-based remuneration, share-based remuneration ispaid to Directors with specific titles as necessary. Meanwhile, fixed-based remuneration and share-based
remuneration are paid to full-time Directors whereas only fixed-base remuneration is paid to part-time
Directors.

(c)

Details of resolutions on remuneration for officers at general meetings of shareholdersa.

The followings are resolutions on remuneration for officers passed at past general meetings ofshareholders. The Company stipulates in its Articles of Incorporation that the number of Directors shallbe up to eight.
i. The total amount of remuneration for Directors to be paid for a fiscal year was resolved to be up to
1,500 million yen per year (of which up to 200 million yen per year is for Outside Directors; excluding
employee’s salary portion) (24th Ordinary General Meeting of Shareholders held on December 23,2020).
ii. The total amount of monetary compensation claims to be paid as remuneration in restricted sharesfor Directors (excluding Outside Directors) was resolved to be set at up to 200 million yen per year,
separately from the amount resolved in i (21st Ordinary General Meeting of Shareholders held on
December 20, 2017).

b. The amount of remuneration for Audit & Supervisory Board Members was resolved to be up to 100
million yen per year at the 6th Ordinary General Meeting of Shareholders held on December 26, 2002.
In addition, the Company stipulates in its Articles of Incorporation that the number of Audit &Supervisory Board Members shall be up to four.

(ii) Remuneration amounts for officers(a) Total amount of remuneration by officer category, total amount of remuneration by type of remunerationand the number of eligible officers

Officer category
Director(excl. Outside Director)
Audit & Supervisory
Board Member(excl. Outside Audit &Supervisory Board
Member)Outside officer

Total amount of remuneration by type of remuneration
Total(Millions of yen)
Number ofamount of
Restrictedeligible officers
remuneration
Base
Retirement
share-based
Bonuses(Persons)(Millions of
remuneration
benefitsyen)remuneration
521

487

34

–

–

5

7

7

–

–

–

1

42

42

–

–

–

4

- 15 -

Notes:1

The Board of Directors resolved to leave the decisions on remuneration for Directors for the fiscal year ended September 30, 2020,
including decisions on the total amount of remuneration and specific remuneration allocation” entirely to the Representative Director, andthese decisions are made based on the said resolution. The decisions on the remuneration for Audit & Supervisory Board Members are
made in discussions among Audit & Supervisory Board Members.
2. The target figures of the indicators used for calculating the performance-based remuneration paid in the fiscal year ended September
30, 2020 were projected consolidated financial results for the same fiscal year, including ordinary profit of 77,000 million yen and profitof 59,000 million yen. Meanwhile, the consolidated financial results for the same fiscal year were ordinary profit of 77,357 million yen
and profit of 59,491 million yen.

(b) Total amount of consolidated remuneration by officer and type of remuneration

Name

Total
amount ofconsolidated Officer
remuneration category

Company
category(Millions ofyen)

MasaakiArai
Kazuhiko
Kamata332 Director
151 Director

Amount of consolidated remuneration by type of
remuneration (Millions of yen)
RestrictedBaseshare-based
remuneration
remuneration

ReportingentityReportingentity

332

–

–

–

130

21

–

–

Note: The above table only includes those who received consolidated remuneration of 100 million yen or more.

- 16 -

Retirement
benefits

BonusesVII. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
As of September 30, 2019

As of September 30, 2020

135,354219,227498

620

Real estate for sale

70,45764,372

Real estate for sale in process

179,596

172,914

Operating loans

28,924

37,463

Other

10,167

12,787

(232)

(262)

424,766

507,123

4,077

4,430

Accumulated depreciation(1,359)(1,578)

Buildings and structures, net

2,718

2,851

Land

1,845

1,778

Other

1,183

1,258

Accumulated depreciation

(755)

(877)

Other, net

427

381

4,990

5,010

3,456

3,080

Investment securities

7,084

47,255

Deferred tax assets

2,475

3,032

Other

3,121

3,529

Allowance for doubtful accounts

(22)

(18)

Total investments and other assets

12,65953,798

21,106

61,890Bond issuance costs

31

24

Total deferred assets

31

24

445,904

569,038

AssetsCurrent assets
Cash and deposits
Trade accounts receivable

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Total property, plant and equipment
Intangible assets
Investments and other assets

Total non-current assets
Deferred assets

Total assets- 17 -

(Millions of yen)
As of September 30, 2019

As of September 30, 2020

Notes payable - trade

4,257

4,831

Trade accounts payable

16,913

17,525

Short-term borrowings

89,933103,930

372

242

Current portion of long-term borrowings

12,976

8,912

Income taxes payable

11,461

10,831

Advances received

14,053

15,531

Guarantee deposits received

1,250

1,248

Provision for bonuses

2,404

2,773

932

998

7,793

9,889

162,348

176,713

1,089

847

143,972

157,347

Retirement benefit liability

326

328

Asset retirement obligations

100

105

Total non-current liabilities

145,488

158,628

307,837

335,342

Share capital

4,234

19,741

Capital surplus

8,206

28,877Retained earnings

134,629

186,047

Treasury shares(8,806)(0)Total shareholders’ equity

138,263234,666

Valuation difference on available-for-salesecurities

87

Foreign currency translation adjustment(517)(1,195)

Total accumulated other comprehensive income(508)(1,188)312217

138,067

233,695

445,904

569,038

Liabilities
Current liabilities

Current portion of bonds payable

Provision for warranties for completed
construction
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

Share acquisition rights
Total net assets
Total liabilities and net assets- 18 -

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income(Consolidated Statements of Income)(Millions of yen)
Fiscal year ended
September 30, 2019

Fiscal year ended
September 30, 2020

Net sales

540,376575,951

Cost of sales

450,715

481,638

Gross profit

89,661

94,312

Selling, general and administrative expenses

31,87932,183Operating profit

57,781

62,129Interest income

6870

Dividend income

20

1

Rental income from buildings

146

148

Gain on sales of investment securities－

109

Share of profit of entities accounted for using equity
method－17,786

Other

176

240

Total non-operating income

412

18,356

1,817

2,298

Commission expenses

871

224

Share issuance costs

－

327

576

278

3,265

3,128

54,92877,357

Gain on sales of non-current assets

772－

Total extraordinary income

772－

Profit before income taxes

55,701

77,357

Income taxes - current

16,942

18,421

Income taxes - deferred

(648)

(555)

Total income taxes

16,293

17,865

Profit39,40759,491

Profit attributable to owners of parent

39,40759,491Non-operating income

Non-operating expenses
Interest expenses

Other
Total non-operating expenses
Ordinary profit
Extraordinary income- 19 -

(Consolidated Statements of Comprehensive Income)(Millions of yen)
Fiscal year ended
September 30, 2019
ProfitFiscal year ended
September 30, 2020

39,40759,491

(7)

(1)

(860)

(663)

－

(13)

(867)

(679)

38,54058,81238,54058,812Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparent- 20 -

(3) Consolidated Statements of Changes in Equity
Fiscal year ended September 30, 2019
(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
period4,094

Capital surplus

Retained earnings

Treasury shares

4,481

103,324(6,102)

Total shareholders’equity105,798

Cumulative effects of(1,853)changes in accounting(1,853)

policies
Restated balance

4,094

4,481

101,471(6,102)103,944

104

104

208

35

35

71

Changes during period
Issuance of new shares exercise of shareacquisition rights
Issuance of restricted
sharesDividends of surplus
Profit attributable toowners of parent(6,249)(6,249)39,40739,407Purchase of treasury
shares(6,411)(6,411)

3,707

7,292

Change in ownershipinterest of parent due to3,585

transactions with noncontrolling interests
Net changes in items otherthan shareholders’ equity
Total changes during period

139

3,724

33,158(2,704)34,318

Balance at end of period

4,234

8,206

134,629(8,806)138,263- 21 -

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of
period15

Total
accumulated

Share acquisitionNon-controllingtranslationotherrightsinterests

adjustment

comprehensive

Foreign currency

Total net assets

income
342

358

388

6,941

113,486

Cumulative effects of(1,853)changes in accounting
policies
Restated balance

15

342

358

388

6,941

111,633

Changes during period
Issuance of new shares 208

exercise of shareacquisition rights
Issuance of restricted

71

shares(6,249)Dividends of surplus
Profit attributable to39,407owners of parent
Purchase of treasury(6,411)sharesChange in ownershipinterest of parent due to7,292

transactions with noncontrolling interests
Net changes in items other

(7)

(860)

(867)

(75)

(6,941)(7,884)

Total changes during period

(7)

(860)

(867)

(75)

(6,941)

26,434

Balance at end of period

8

(517)

(508)

312

－

138,067

than shareholders’ equity- 22 -

Fiscal year ended September 30, 2020
(Millions of yen)
Shareholders’ equity
Share capital
Balance at beginning of
periodTotal shareholders’Capital surplus

Retained earnings

Treasury shares

4,234

8,206

134,629(8,806)15,32915,32930,658

137

137

275

40

40

80

equity138,263

Changes during period
Issuance of new shares
Issuance of new shares exercise of shareacquisition rights
Issuance of restricted
sharesDividends of surplus
Profit attributable toowners of parent(8,074)(8,074)59,49159,491

Purchase of treasury
shares
Disposal of treasury

5,164

shares

(0)

(0)

8,806

13,970Net changes in items otherthan shareholders’ equity
Total changes during period

15,507

20,671

51,417

8,806

96,402

Balance at end of period

19,741

28,877

186,047(0)234,666- 23 -

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities
Balance at beginning of
periodForeign currencytranslation adjustment

8

(517)

Total accumulated

Share acquisition

other comprehensive

rightsTotal net assets

income(508)

312

138,067

Changes during period
Issuance of new shares

30,658Issuance of new shares 275

exercise of shareacquisition rights
Issuance of restricted

80

sharesDividends of surplus(8,074)

Profit attributable to59,491owners of parent
Purchase of treasury(0)

shares
Disposal of treasury

13,970sharesNet changes in items other

(0)

(678)

(679)

(94)

(773)

Total changes during period

(0)

(678)

(679)

(94)

95,628

Balance at end of period

7(1,195)(1,188)217

233,695

than shareholders' equity- 24 -

(4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal year ended
September 30, 2019

Fiscal year ended
September 30, 2020

Cash flows from operating activities
Profit before income taxes

55,701

77,357

Depreciation

517

534

Share-based remuneration expenses

39

66

Increase (decrease) in provision for bonuses

442

368

64

25

166

66

Increase (decrease) in retirement benefit liability

25

1Loss (gain) on sales of investment securities

–

(109)

Share of loss (profit) of entities accounted for using
equity method–(17,786)

Interest and dividend income

(89)

(72)

Foreign exchange losses (gains)

(17)

18

1,817

2,298

Commission for syndicated loans

653–

Amortization of bond issuance costs

9

6

Share issuance costs

–

327

(320)

(264)

Decrease (increase) in inventories(17,456)

12,516

Increase (decrease) in trade payables

1,809

1,186

(14,679)(8,539)

2,719

1,508

Increase (decrease) in guarantee deposits received

(22)

6

Increase (decrease) in deposits received

47

2,200

Other, net

(919)

(156)

Subtotal

30,50871,561

83

70

Interest paid

(1,782)(2,244)

Income taxes paid

(14,465)(20,593)

Net cash provided by (used in) operating activities

14,344

48,793

Payments into time deposits(9,039)(1,310)

Proceeds from withdrawal of time deposits

9,118

1,310

Purchase of property, plant and equipment

(983)

(617)

Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for warranties forcompleted construction

Interest expenses

Decrease (increase) in trade receivables

Decrease (increase) in operating loans receivable
Increase (decrease) in advances received

Interest and dividends received

Cash flows from investing activities- 25 -

Proceeds from sales of property, plant andequipment

1,823

1

Purchase of intangible assets

(185)

(138)

(5,539)(2,010)

Proceeds from sales and redemption of investment
securities

510

2,544

Purchase of shares of subsidiaries and associates–(22,973)

Payments for investments in capital(0)–

Proceeds from divestments

30

Payments of leasehold and guarantee deposits

(434)

(582)

Proceeds from refund of leasehold and guarantee
deposits

46

162

(120)

(440)

(4,800)(24,054)

Purchase of investment securities

Other, net
Net cash provided by (used in) investing activities- 26 -

(Millions of yen)
Fiscal year ended
September 30, 2019

Fiscal year ended
September 30, 2020

Cash flows from financing activities
Proceeds from short-term borrowings

169,917295,859

Repayments of short-term borrowings(191,567)(281,860)

Proceeds from long-term borrowings

123,463

134,341

Repayments of long-term borrowings(80,887)(125,029)

Commission for syndicated loans paid

(653)

–

Redemption of bonds

(532)

(372)

–

30,420130

175(6,425)(0)–

13,970(6,249)(8,074)

(9)

–

7,186

59,430

(364)

(296)

Net increase (decrease) in cash and cash equivalents

16,366

83,872

Cash and cash equivalents at beginning of period

118,978

135,345

Cash and cash equivalents at end of period

135,345219,218

Proceeds from issuance of shares
Proceeds from exercise of employee share options
Purchase of treasury shares
Proceeds from sales of treasury shares
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents- 27 -

VIII. Issuance, Redemption or Acquisition of Shares
Changes in the total number of shares issued, share capital, etc.
Date

Change in the
total number ofshares issued

Balance of thetotal number ofshares issued(Shares)(Shares)

Change inshare capital

Balance ofshare capital(Millions of yen)

(Millions of yen)

Change inlegal capitalsurplus

Balance oflegal capitalsurplus(Millions of yen)

(Millions of yen)

October 1, 2016 to
September 30, 2017
Note 1

63,60057,463,600

50

4,032

50

3,815

February 14, 2018
Note 29,300

57,472,900

29

4,061

29

3,845

February 15, 2018 toSeptember 30, 2018
Note 1

39,60057,512,500

32

4,094

32

3,877

October 1, 2018 toNovember 30, 2018
Note 140,00057,552,500

63

4,158

63

3,941

February 14, 2019
Note 3

9,100

57,561,600

19

4,178

19

3,961

February 15, 2019 toMarch 31, 2019
Note 1

33,20057,594,800

27

4,205

27

3,988

April 5, 2019
Note 4

8,100

57,602,900

16

4,221

16

4,004

April 6, 2019 to
September 30, 201915,60057,618,500
13
4,234
13
4,017
Note 1
October 1, 201957,618,500
115,237,000
4,234
4,017
Note 5October 1, 2019 to
December 31, 201921,200115,258,200
8
4,242
8
4,026
Note 1February 5, 2020
25,500115,283,700
40
4,283
40
4,066
Note 6
February 6, 2020 toMarch 31, 2020
72,800115,356,500
32
4,315
32
4,098
Note 1
July 28, 2020
9,617,200
124,973,700
14,31018,625
14,31018,408Note 7
August 25, 2020
684,600
125,658,300
1,019
19,644
1,019
19,427Note 8August 26, 2020 to
September 30, 2020
160,800
125,819,100
97
19,741
97
19,524Note 1
Notes: 1. The increase was due to the exercise of share acquisition rights.
2. The increase was due to the issuance of new shares with compensation for the purpose of granting restricted sharebased remuneration.
Issue price: 6,320 yen
Additional paid-in capital: 3,160 yen
3. The increase was due to the issuance of new shares with compensation for the purpose of granting restricted sharebased remuneration.
Issue price: 4,265 yen
Additional paid-in capital: 2,132.5 yen
4. The increase was due to the issuance of new shares with compensation for the purpose of granting restricted sharebased remuneration.
Issue price: 3,990 yen
Additional paid-in capital: 1,995 yen
5. The increase was due to a 2-for-1 stock split.

- 28 -

6. The increase was due to the issuance of new shares with compensation for the purpose of granting restricted sharebased remuneration.
Issue price: 3,175 yen
Additional paid-in capital: 1,587.5 yen
7. The increase was due to the issuance of new shares for public offering (primary offering)
Issue price: 3,104 yen
Paid-in amount: 2,976 yen
Additional paid-in capital: 1,488 yen
8. The increase was due to a third-party allotment with compensation (capital increase through a third-party allotment
associated with a secondary offering of the Company’s shares by way of over-allotment)
Issue price: 2,976 yen
Additional paid-in capital: 1,488 yen
Allottee: SMBC Nikko Securities Inc.

- 29 -

IX.

Transactions with Directors, Officers or Major Shareholders

1. Related party transactions(1) Transactions between the reporting entity of the consolidated financial statements (hereinafter the “reporting
entity”) and its related parties
Fiscal year ended September 30, 2019
Not applicable

Fiscal year ended September 30, 2020
Not applicable(2) Transactions between consolidated subsidiaries of the reporting entity and its related parties(i) Officers and major shareholders (limited to individuals) of the reporting entity, etc.
Fiscal year ended September 30, 2019

Type

Name ofcompany orindividual

Officer Hitoshi Imamura

Location－

Capital or
Description of
investment
business or(Millions ofoccupation
yen)－

SeniorManaging
Director of theCompany

Ratio of voting
rights holding(held) (%)(Held)
Direct: 1.8

Relationshipwith therelated party

Summary oftransaction

Sale of realestateSale of realestate (Note)

Transaction
amount(Millions of
yen)

52

Items

Balance at
end ofperiod(Millions of
yen)

－

－

Note: The transaction was conducted on general terms equivalent to those prevailing in arm’s length transactions.

Fiscal year ended September 30, 2020

Type

Name ofcompany orindividual

Location

Capital or
Description of
investment
business or(Millions ofoccupationyen)

Officer Hitoshi Imamura－－

SeniorManaging
Director of theCompany

Officer Kotaro Wakatabi－－

Director of
the Company

Transaction
amountBalance at
end ofperiodRatio of voting
rights holding(held) (%)

Relationshipwith therelated party

Summary oftransaction(Held)
Direct: 1.6

Contracts fortheconstructionof homes

Contracts fortheconstructionof homes(Note)

16－－(Held)
Direct: 0.2

Sale of realestateSale of realestate (Note)

41

－

－

(Millions of
yen)

Items

(Millions ofyen)

Note: The transaction was conducted on general terms equivalent to those prevailing in arm’s length transactions.

(ii) Officers and major shareholders of significant subsidiaries of the reporting entity (limited to individuals), etc.
Fiscal year ended September 30, 2019

Type

Name ofcompany orindividual

Officer Keiji Takamasu

Location－

Capital or
Description of
investment
business or(Millions ofoccupation
yen)－

Ratio of voting
rights holding(held) (%)

President &Representative
Director of
the Company’s
subsidiary－

Relationshipwith therelated party

Summary oftransaction

Sale of realestateSale of realestate (Note)

Transaction
amount(Millions

Items(Millions ofyen)of yen)115－

Note: The transaction was conducted on general terms equivalent to those prevailing in arm’s length transactions.

- 30 -

Balance at
end ofperiod－Fiscal year ended September 30, 2020

Type

Name ofcompany orindividual

Officer Keiji Takamasu

Officer

HiroyukiHiratsuka

Capital orinvestment
Location(Millions of
yen)

－

－

Description ofbusiness or
occupation

Ratio of voting Relationshiprights holding with the related(held) (%)
party

Summary oftransaction

Transaction
amount(Millions

Items

of yen)Balance at
end ofperiod(Millionsof yen)－President &Representative
Director of
the Company’s
subsidiary－

Sale of realestateSale of realestate (Note)

40

－

－

－

Chairman &Representative
Director of
the Company’s
subsidiary(Held)
Direct: 0.9

Sale of realestateSale of realestate (Note)

124

－

－

Note: The transaction was conducted on general terms equivalent to those prevailing in arm’s length transactions.

- 31 -

X. History
Month/Year

Events

September 1997

Founded under the name of Open House Co., Ltd. and commenced the trading and brokerage of newly-built
single-family homes.

September 1997

Opened the Head Office in Shibuya-ku, Tokyo

October 1997

Concluded a franchise agreement with “CENTURY 21 REAL ESTATE OF JAPAN LTD.”

February 2001

Commenced the sale of newly-built single-family homes built by the Company itself.

August 2001

Registered as First-class Architect Office [No. 46671 registered by Governor of Tokyo].

September 2001

Acquired all the stake in Souken Build Ltd. and converted it to a wholly-owned subsidiary. (Converted Souken
Build Ltd. to a stock company in July 2002 and changed the trading name to Tomari Build Co., Ltd. in August
2004.)

April 2002

Obtained the Special Construction License [No. (Special - 14) 117385 issued by Tokyo Metropolitan Governor].

October 2006

Obtained the Building Lots and Buildings Transaction Business License [No. (1) 7349 issued by the Minister ofLand, Infrastructure, Transport and Tourism].

October 2006

Changed the trading name of Tomari Build Co., Ltd. to Open House Development Co., Ltd.

March 2007
August 2007

Opened “Mizonokuchi Sales Center” in Takatsu-ku, Kawasaki-shi, Kanagawa Prefecture and commenced
operations in Kanagawa Prefecture.
Acquired all the shares in Ito-pia Business Net Co., Ltd. from Itochu Corporation and converted it to a whollyowned subsidiary (after the acquisition, held a 67% stake and acquired 100% stake in September 2010) andchanged the trading name to IB Net Co., Ltd.

October 2008

Commenced the sale of condominiums through Open House Development Co., Ltd.

January 2010

Opened “Marunouchi Office” in Marunouchi, Chiyoda-ku, Tokyo (relocated a part of the Head Office functions).

September 2010

Acquired all the stake in IB Net Co., Ltd. and converted it to a wholly-owned subsidiary.

September 2010

Launched Open House Realty & Investments, Inc. in California, the U.S.

September 2010

Launched Wangjia Architectural Design Consulting (Shanghai) Co., Ltd. in Shanghai, China.

October 2011

Launched OH Real Estate Management Co., Ltd. in Marunouchi, Chiyoda-ku, Tokyo.

September 2012

Terminated the franchise agreement with “CENTURY 21 REAL ESTATE OF JAPAN LTD.”

January 2013

Relocated the Head Office to Marunouchi, Chiyoda-ku, Tokyo.

September 2013

Listed on the First Section of The Tokyo Stock Exchange.

January 2015

Acquired shares of Asakawa Home Co., Ltd. and converted it to a wholly-owned subsidiary.

October 2016

Changed the trading name of Asakawa Home Co., Ltd. to Open House Architect Co., Ltd.

October 2016

Opened “Sakae Sales Center” in Naka-ku, Nagoya-shi, Aichi Prefecture and commenced operations in Aichi
Prefecture.

December 2016

Opened “Open House Group Shibuya Showroom” for single-family homes in Shibuya-ku, Tokyo.

September 2017

Opened “OPENHOUSE GINZA SALON” in Chuo-ku, Tokyo.

September 2017

Opened “Nagoya Mansion Gallery” in Naka-ku, Nagoya-shi, Aichi Prefecture.

- 32 -

Month/Year

Events

October 2017

Opened “Urawa Sales Center” in Urawa-ku, Saitama-shi, Saitama Prefecture and commenced operations in
Saitama Prefecture.

June 2018

Registered as Real Estate Specified Joint Enterprise [No. 106 registered by Governor of Tokyo].

July 2018

Acquired shares of Hawk One Corporation and converted it to a subsidiary (ratio of voting rights holding: 69.7%
including voting rights acquired in August 2018).

October 2018

Converted Hawk One Corporation to a wholly-owned subsidiary through a stock exchange.

January 2019

Opened “Tenjin Sales Center” in Chuo-ku, Fukuoka-shi, Fukuoka Prefecture and commenced operations inFukuoka Prefecture.

March 2019

Opened “NAGOYA SALON” in Nakamura-ku, Nagoya-shi, Aichi Prefecture.

March 2019

Opened “Iidabashi Mansion Gallery” in Shinjuku-ku, Tokyo.

July 2019
May 2020

Opened “Motoyawata Sales Center” in Ichikawa-shi, Chiba Prefecture and commenced operations in Chiba
Prefecture.
Acquired shares of Pressance Corporation Co., Ltd. and converted it to an equity-method affiliate (ratio of voting
rights holding: 31.9%)- 33 -

XI. Corporate Data
Basic Information (as of September 30, 2020)
Trade name:Business inauguration:
Listed market:

Open House Co., Ltd.
September 1997
The First Section of Tokyo Stock Exchange(Securities Code: 3288)
September 2013
From October 1 to September 30
19,741 million yen
2,876 persons (Consolidated)
2-4-1 Marunouchi, Chiyoda-ku, Tokyo
+81-3-6213-0776
Open House Development Co., Ltd.
OH Real Estate Management Co., Ltd.
Open House Realty & Investments, Inc.
Open House Texas Realty & Investments LLC
IB Net Co., Ltd.
Open House Architect Co., Ltd.
HAWK ONE CORPORATIONOther 11 companies

Listed:Business year:
Capital stock:
Number of employees:
Head office:Telephone:
Consolidated subsidiaries:

Directors and Audit & Supervisory Board Members (as of September 30, 2020)
President & CEO
Executive Vice President
Senior Managing Director
Director, Senior Executive Officer
Managing Director, Senior Executive Officer and
CFO
Director*
Director*
Director*
Audit & Supervisory Board Member (Full-time) **Audit & Supervisory Board Member**
Audit & Supervisory Board Member**

Masaaki Arai
Kazuhiko Kamata
Hitoshi Imamura
Ryosuke Fukuoka
Kotaro Wakatabi
Hitoshi Ishimura
Yuko Omae
Maoko Kotani
Koichi Matsumoto
Yuzo Toyama
Mieko Hosaka* Outside Director ** Outside Audit & Supervisory Board Member- 34 -

Stock Status (as of September 30, 2020)
Total number of authorized shares:
Total number of issued shares:
Number of shareholders:

325,200,000 shares
125,819,100 shares
7,429

Major shareholders (Top 10)
Name

48,000,000

Shareholding ratio(excluding treasury
shares) (%)
38.15

9,011,100

7.16

6,861,400

5.45

5,455,300
2,366,891

4.33
1.88

2,038,500

1.62

2,004,000

1.59

1,993,714

1.58

1,294,100

1.02

1,237,306

0.98

Number of shares held

Masaaki Arai
Ichigo Trust PTE Limited(Standing proxy: The Hongkong and Shanghai
Banking Corporation Limited Tokyo branch)
The Master Trust Bank of Japan, Ltd. (Trust
Account)
Custody Bank of Japan, Ltd. (Trust Account)
Morgan Stanley MUFG Securities Co., Ltd.
TAIYO FUND, L.P.
(Standing proxy: MUFG Bank, Ltd.)
Hitoshi Imamura(Standing proxy: Mizuho Securities Co., Ltd.)SSBTC CLIENT OMNIBUS ACCOUNT(Standing proxy: The Hongkong and Shanghai
Banking Corporation Limited Tokyo branch)
Custody Bank of Japan, Ltd. (Trust Account 5)
STATE STREET BANK AND TRUSTCOMPANY 505223(Standing proxy: Mizuho Bank, Ltd.)* In addition to shares described above, the Company holds 41 shares as treasury shares.

* Annual Select is an English-language disclosure format developed by ZAIHON, INC. to increase the level of convenience of investors outside Japan based on Japanese-language
statutory disclosure material, timely disclosure material prescribed by securities exchanges and voluntarily disclosed IR material. Annual Select is a registered trademark of
ZAIHON, INC. Reproduction or copying without prior permission is prohibited.
* While every best effort has been made to provide a translation meeting the quality standards required of professionals, the Company does not guarantee it is 100% accurate.
Therefore, please verify the original Japanese text for any final judgments made based on this information.

- 35 -