Annual Financial Summary 2023
(Securities Code: 3288)

Table of Contents
Introduction

3

Group Overview

7

Sustainability

13

Business Risks

19

Corporate Governance24

Consolidated Financial Statements

31

Significant Subsequent Events

40

Corporate Information

41©2023 Open House Group Co.,LTD. All Rights Reserved.

2

1

Introduction

Introduction

Corporate Profile
Open House Co., Ltd. changed its trading name to Open House Group Co., Ltd. (hereinafter the “Company”) on
January 1, 2022. At the same time, it completed an absorption-type company split by separating its business divisions
into another company to become a pure holding company.

Summary of Selected Financial Data
Fiscal year

23rd business 24th business 25th business 26th business 27th businessYear end

The Company and its 41 subsidiaries and associates (40 consolidated subsidiaries and 1 equity method affiliates;
hereinafter collectively with the Company, the “Group”) are engaged in the following businesses:
As the Company falls under the category of “specified Listed Company, etc.,” in the criteria for considering a material
fact to be of minor importance in the insider trading regulations, the numerical criteria provided in correlation to thesize of the listed company are determined based on calculations on a consolidated basis.

Single-family homes

Condominiums

Property resale

•

•
•

•
•
•
•

Established an integrated system from purchase of land and construction to brokerageand sales to ensure stable and efficient supply of affordable single-family homes inurban areas.
Engaged in the development and sale of newly built condominiums.
Develop and offer compact condominiums targeting single- or two-person households,
with high preference for convenient locations (urban areas in Tokyo metropolitan,
Nagoya and Fukuoka areas)
Engaged in purchase, management, and sales of investment real estate
Mainly purchase income-generating real estate properties (small office buildings andrental condos) in Tokyo metropolitan area
Increase the asset value through leasing and renovation
Resell to wealthy individuals and operating companies as real estate for investment.

OthersSelling U.S. real estate properties and offer related services including consulting,property management and financial services, to wealthy customers residing in Japan.

•••

Engaged in the planning, development, and sales of studio type condos (investment
rentals for single persons) and family sizes condominiums (family use).
Operates mainly in Kansai, Tokai, Kanto, and Okinawa areas.
PRESSANCE CORPORATION is listed on the Standard Market of the Tokyo Stock
Exchange.

term

term

term

Sept 2021

Sept 2022

Sept 20223(Millions of yen)

540,376575,951

810,540

952,686

1,148,484

Ordinary profit(Millions of yen)

54,92877,357

97,590121,166

136,927(Millions of yen)

39,40759,491

69,582

77,884

92,050Comprehensive income(Millions of yen)

38,54058,812

74,483

94,793

101,399

Net assets(Millions of yen)

138,067

233,695

347,143

395,702480,416

Total assets(Millions of yen)

445,904

569,038

879,913

1,031,174

1,198,668

Net assets per share(Yen)

1,246.15

1,855.66

2,329.72

2,802.19

3,448.66

Earnings per share (EPS)(Yen)

351.22525.36552.40626.24763.72(Yen)

349.11522.37550.41624.87762.40Equity ratio

(%)

30.9

41.0

33.4

32.7

34.7

Return on equity (ROE)

(%)

32.3

32.1

26.4

24.7

24.4

(Times)

7.33

7.23

11.98

7.82

6.64

(Millions of yen)

14,344

48,79350,123(16,353)

17,393(Millions of yen)

(4,800)(24,054)

23,541(4,367)(35,575)(Millions of yen)

7,186

59,43040,58824,694

49,103(Millions of yen)

135,345219,218

334,506

346,080

378,643

2,642

2,876

4,087

4,493

4,904

(240)

(242)

(286)

(351)

(466)

Profit attributable to ownersof parent

Diluted earnings per share(Diluted EPS)

Price earnings ratio
Net cash provided by (usedin) operating activities

in) investing activities
Net cash provided by (usedin) financing activities

PRESSANCECORPORATION

term
Sept 2020

Net sales

Net cash provided by (used•term
Sept 2019

Cash and cash equivalents at
end of period
Number of employees
Average number of(Persons)

temporary employees©2023 Open House Group Co.,LTD. All Rights Reserved.

4

Introduction

CEO MESSAGE
Record-high Net Sales and Profits for 11 Consecutive Years

Announcement of the Group's Three-year Basic Policy

The Group has achieved net sales of 1,148.4 billion yen in the fiscal year
ended September 2023, the 26th year since our founding. We made steadyefforts to realize the management targets set out in the Mid-termManagement Plan "Ikoze 1 cho! 2023" announced in November 2020. I
would like to take this opportunity to express my sincere appreciation forthe support we have received from our shareholders, which has been the
key to the growth of the Group thus far.
Regarding business results for the fiscal year ended September 2023, net
sales were 120.6% compared to the previous fiscal year. Operating profit
increased significantly by 119.2% to 142.3 billion yen, and profit
attributable to owners of parent increased significantly by 118.2% to 92
billion yen. Net sales exceeded the initial forecast of 1,100 billion yen,which was revised upward to 1,130 billion yen in May 2023.
By segment, sales in all segments increased by more than 110% year on
year, due to strong performance in the property resale business, and U.S.
investment real estate, as well as in the Company’s main business, singlefamily homes, and condominiums.
Since listing in the First Section of the Tokyo Stock Exchange in September
2013, the Company has posted record net sales and profits for 11
consecutive years. Furthermore, compared to the performance at the timeof listing, sales have continued to grow steadily, with net sales 11 times,
operating profit 14 times, and dividends per share 26 times.

In August 2023, we announced a tender offer for SANEI ARCHITECTURE
PLANNING CO. LTD. (hereinafter referred to as "Sanei Architectural
Planning"). Subsequent tender offers progressed as planned, and in
November of the same year, the Company made Sanei Architectural
Planning a wholly owned subsidiary. In order for Sanei Architectural
Planning to quickly restore its credibility and normalize its management,
we are working to strengthen their management structure, including byappointing executives from the Group as directors.
The Group has steadily achieved the medium-term management plans,"Hop Step 5000"(from September 2018 to September 2020" and "Ikoze 1
cho! 2023" (from September 2021 to September 2023) while continuing
our rapid growth. In the 10 years since joining the first section of theTokyo stock exchange, the monetary easing policy has continued toprovide a tail wind for the real estate industry. However, the outlook forthe future external environment is expected to be uncertain, with current
discussions on monetary policy changes such as the lifting of negativeinterest rates.
Under this business environment, in November 2023, the Groupannounced the three-year basic policy (from September 2024 to
September 2026). We have set a certain profit assumption for the next
three years, and have formulated the financial policy, growth investment
policy, and shareholder return policy based on that assumption.
©2024 Open House Group Co.,LTD. All Rights Reserved.

5

Introduction

CEO MESSAGE
Initiatives for the Fiscal Year Ending September 2024

Shareholder Returns

Target achievement of ¥1.3 trillion net sales
For the fiscal year ending September 2024, the Group will aim for net
sales of ¥1.3 trillion, a 113.2% increase over the previous fiscal year.
Mainly due to an increase in financial assets among the wealthy, we
anticipate a rise in demand for property resale business and U.S.
investment real estate handled by the Group.
In addition, as a Group, we will actively work on governance andcompliance reform, improving customer satisfaction, and strengthening
human resource recruitment as these are important issues for the fiscal
year ending September 2024.

Dividends and purchase of treasury shares
The Company recognizes that returning profit to shareholders is an
important management issue. Our basic policy is to continue paying
stable dividends while considering future business developments andstrengthening of our financial position. We intend to use retained
earnings for future business expansions.
Based on the above policy, the annual dividend per share for the fiscal
year ended September 2023 increased by 35 yen from the previous fiscal
year to 164 yen (interim dividend of 72 yen and year-end dividend of 92yen). The year-end dividend includes a special dividend of 10 yen tocommemorate the 10th anniversary of listing on the First Section of theTokyo Stock Exchange and the achievement of sales of 1 trillion yen. The
dividend payout ratio rose 0.9 of a percentage point to 21.5%.
The annual dividend per share for the fiscal year ending September 2024
is scheduled to be 166 yen, an increase of 2 yen from the previous fiscal
year (interim dividend: 83 yen, year-end dividend: 83 yen).
In addition, we announced the purchase of treasury shares. The total
amount of the share purchased is 10 billion yen (maximum), the total
number is 2.2 million shares (maximum, 1.82% of the total number ofissued shares (excluding treasury shares)), and the period is scheduled tobe from November 2023 to the end of April 2024.
We would like to ask all our shareholders for their continued support as
the Group continues to aim for further growth.

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

©2024 Open House Group Co.,LTD. All Rights Reserved.

6

2Group Overview

Group Overview

Corporate History and Trends in Net Sales(¥ Billion)

Growth Mainly in Urban Areas through Integrated
Manufacturing and Sales Operations.

1,148.4
Number of single family homes
supplied: 10,000 per fiscal year

Ｍ＆Ａ

The Company was founded in 1997.
It started as a real estate brokerage agent in the Jonan area ofTokyo and grew based on integrated manufacturing and sales
operations that encompass development functions including
procurement and construction

1,300
Acquired
MeldiaAcquired OpenHouse Architect

Acquired
PRESSANCECORPORATION
Acquired
Hawk One

Business
Expansion

Startedbrokeragebusiness

Started development of
single family homes(development & construction)

Meldia167

PRESSANCECORPORATION

952.6
111.5

Others

810.5
205

575.9

Started U.S. real
540.3
estate business

150

90

Property resale

Condominiums

390.7

StartedStartedcondominium property resale
businessbusiness

304.6
247.2
179.3

581

Single family
homes related

96.9 112.1

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (Fiscal year)
plan
Founded OpenHouse Co., Ltd.
in Shibuya

No. 1 in the worldin net sales among
Century 21 member
companies

Listed on the 1st
section of TSE

Shifted to a pure holding
company structure
in January 2022
©2024 Open House Group Co.,LTD. All Rights Reserved.

8

Group Overview

Management’s Analysis and Discussion of Financial Position, Operating Results and Cash Flows
Overview of operating results, etc.

(The Group’s financial position and operating results for the
fiscal year ended September 30, 2023)
Financial position

Assets• Total assets of 1,198,668 million yen, a year-on-year increase ofincrease of 167,493 million yen.
• Mainly due to a combined increase of 84,151 million yen in realestate for sale and real estate for sale in progress, as well as anincrease in cash and deposits of 52,574 million yen.
Liabilities• Total amounted to 718,251 million yen, a year-on-year increaseof 82,779 million yen.
• Mainly due to a total increase of 66,176 million yen in shortterm loans payable, long-term loans payable (including longterm loans payable due to be repaid within a year), andcorporate bonds (including corporate bonds due to beredeemed within a year), an increase in electronically recorded
debts by 3,756 million yen, as well as an increase of 3,708
million yen in operating accounts payable.
Net assets• Amounted to 480,416 million yen, a year-on-year increase of
84,714 million yen.
• Mainly due to an increase in retained earnings of 75,297 million
yen and an increase of non-controlling interest of 6,202 million
yen.
Operating results• The Group posted net sales of 1,148,484 million yen (up 20.6%
year on year), operating profit was 142,330 million yen (up19.2%), ordinary profit of 136,927 million yen (up 13.0%) andprofit attributable to owners of parent of 92,050 million yen (up18.2%).

Overview of operating results by segment is asfollows:

Single-family homes related business• Net sales amounted to 590,342 million yen (up 14.3% year onyear) and operating profit increased to 63,178 million yen (up0.3%).
• Although there was an impact from increases in land andmaterial prices compared to the previous fiscal year, sales
increased by double digits due to strong demand for singlefamily homes in the city center.
Condominiums business(the Group offers new condos in Tokyo’s 23 wards, Nagoya andFukuoka area)• Amid steady sales, the delivery of properties, which had been
concentrated in the fourth quarter of the fiscal year, wascompleted as planned, and business performance was strong.
• Net sales stood at 124,689 million yen (up 99.9% year on year)
and operating profit amounted to 25,139 million yen (up136.0%).
Property resale business• Sales were strong even as financial institutions proceeded withthe filtering of investors and properties, owing to high demandfor properties such as rental condominiums and office buildings,
etc., to be purchased for investment purposes by operatingcompanies and wealthy individuals, who are the Group's target
customers for this business.
• Net sales stood at 184,710 million yen (up 19.9% year on year)
and operating profit amounted to 20,222 million yen (up 14.4%).
Others• High investment demand for U.S. real estate for asset
diversification purposes of wealthy individuals contributed tostrong sales.
• Net sales stood at 87,459 million yen (up 17.7% year on year)
and operating profit amounted to 8,667 million yen (up 5.6%).

PRESSANCE CORPORATION• Focused on selling condominiums for investment purposes andfor actual use by families in prime locations in Kinki area (mainsales area), Tokai, Chukyo areas, the Tokyo metropolitan area, as
well as in the downtown city hub of Okinawa.
• Net sales stood at 161,265 million yen (up 11.0% year on year)
and operating profit amounted to 25,791 million yen (up 24.4%).

Cash flows• Cash and cash equivalents (hereinafter referred to as "net cash")increased by 32,562 million yen year on year to 378,643 million
yen.
Cash flows from operating activities• Net cash used in operating activities amounted to 17,393 million
yen (16,353 million yen was used in the previous fiscal year).
• Mainly due to an increase in inventories of 85,219 million yen
and income taxes paid of 40,239 million yen, while net profit
before income taxes of 136,901 million yen and an increase inaccounts payables of 7,857 million yen.
Cash flows from investing activities• Net cash used in investment activities amounted to 35,575
million yen (4,367 million yen was used in the previous fiscal
year).
• Mainly due to time deposit expenses of 18,527 million yen,investments in capital of subsidiaries and associates of 10,537
million yen, and purchase of property, plant, and equipment of
6,381 million yen.
Cash flows from financing activities• Net cash provided by financing activities amounted to 49,103
million yen (compared to net cash provided of 24,694 million
yen in the previous fiscal year).
• Mainly due to net cash provided of 66,415 million yen from thesum of proceeds from borrowings and repayments ofborrowings, which was more than offset by dividends paid of
16,753 million yen.
©2024 Open House Group Co.,LTD. All Rights Reserved.

9Group Overview

Management’s Analysis and Discussion of Financial Position, Operating Results and Cash Flows
Results of production, orders received and sales

The Group’s results of production are approximately the same as theresults of sales. For details, see "Overview of operating results,
etc.“ on the previous page.
Results of orders received
The status of orders received for built-to order houses during the fiscal
year ended September 30, 2023, is as follows:
Segment
Single-family homes
related business
PRESSANCECORPORATION

Orders received(Millions of yen)

YoY change(%)

Order backlog(Millions ofyen)

YoY change(%)

69,748(11.2)

52,225(10.8)

138,282(2.7)

75,049(17.1)

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 judgment of management as of September 30, 2023.
Recognition, analysis and discussion of operating results, etc.
In the current consolidated fiscal year, the Japanese economy saw arecovery in personal consumption and capital investment as social andeconomic activities, which had been stagnant for a long time, became
more active due to the relaxation of movement restrictions associatedwith Covid-19. Corporate profits and business conditions have generally
shown an uptrend, and the economy has been recovering moderately, as
evidenced by the improvement in the employment situation and the risein consumer prices.
In the real estate industry to which the Group belongs, land prices arealso rising, mainly in the three major metropolitan areas, reflecting themoderate economic recovery.
In residential areas, demand for housing in central urban areas and inareas with excellent lifestyle convenience was firm, and land prices
continued to rise. In commercial districts, demand for stores is on an
uptrend, reflecting a recovery in the flow of people, mainly in urban
areas , and land prices are on a recovery trend, with steady demand for
offices.

In this business environment, the Group has been working to achieve themanagement targets set out in the Mid-term Management Plan "Ikouze
1 cho! 2023" (from the fiscal year ended September 2021 to the fiscal
year ended September 2023), where net sales and operating profit
increased in all segments.
Analysis of operating results
Net sales•
Increased by 195,798 million yen year on year to 1,148,484 million
yen (up 20.6% year on year).
•
Mainly due to an increase of 73,840 million yen to 590,394 million
yen (up 14.3% ) in the single-family homes related business, inaddition to an increase of 62,622 million yen to 124,984 million yen(up 100.4%) in net sales from the condominiums related business.
Cost of sales, gross profit•
Increased by 162,009 million yen year on year to 930,127 million yen(up 21.1% year on year), while gross profit increased by 33,787
million yen to 218,356 million yen (up 18.3%). Gross profit margindecreased by 0.4 percentage points to 19.0% (compared to 19.4% in
the previous fiscal year).
•
Mainly due to the decrease in gross profit margin by 1.5 percentage
points to 16.7% (18.2% for the previous fiscal year), driven by anincrease in land purchasing costs in the single-family homes related
business.
•
Selling, general and administrative expenses, operating profit•
Increased by 10,815 million yen year on year to 76,026 million yen(up 16.6% year on year) while selling, general and administrative
expense ratio decreased by 0.2 percentage points to 6.6% (compared
to 6.8% in the previous fiscal year).
•
Mainly due to an increase of 2,616 million yen in labor costs to
23,774 million yen (compared to 21,157 million yen in the previous
fiscal year) as a result of an increase in personnel for businessexpansion. the selling, general and administrative expense ratio
decreased due to improvements in productivity compared to theprevious fiscal year.
Operating profit increased by 22,972 million yen year on year to142,330 million yen (up 19.2%).
Operating profit margin decreased by 0.1 point to 12.4% (12.5% in theprevious fiscal year).

Non-operating income and expenses, ordinary profit•
Decreased by 5,849 million yen year on year to 2,441 million yen(down 70.6% year on year), while non-operating expenses increased
by 1,361 million yen year on year to 7,884 million yen. (up 21.0%).
•
Mainly due to the depreciation of the yen slowing down and foreignexchange gains decreased by 4,598 million yen to 471 million yen.
•
As a result, ordinary profit increased by 15,760 million yen year on
year to 136,927 million yen (up 13.0% year on year). In addition,
ordinary income margin decreased by 0.8 percentage points to
11.9% (compared to 12.7% in the previous fiscal year).
Extraordinary income or loss, profit attributable to owners of parent•
Increased by 14,165 million yen year on year to 92,050 million yen(up 18.2%). In addition, ratio of profit to net sales decreased by 0.2
percentage points to 8.0% (compared to 8.2% in the previous fiscal
year).
Objective indicators to assess the achievement of management
policies, strategies and targets
The Group formulated the Mid-term Business Plan “Ikouze 1 cho, 2023!”(from October 2020 to September 2023). In formulating the Plan, the net
sales target was initially set at 800.0 billion yen for the fiscal year ended
September 30, 2023, the final year, however the target was revised andraised by 330 billion yen to 1,130 billion yen through four upwardrevisions, reflecting the strong business progress. In terms of capital
policy, expect to maintain the initial targets of ROE of 20.0%, equity ratioof 30.0%, and dividend payout ratio of 20.0% or more. The financial
results and the progress status against the targets for the fiscal year
ended September 30, 2023, the final year of the Mid-term Business Plan,
are as follows:
Net sales were 1,148,484 million yen (initial target of 1,000,000 million
yen, achievement rate 114.8%); operating profit was 142,330 million
yen (88,000 million yen, 161.7%); ROE was 24.4% (exceeding the target
by 4.4 percentage points); equity ratio was 34.7% (exceeding the target
by 4.7 percentage points); and dividend payout ratio was 21.5%(exceeding the target by 1.5 percentage points), exceeding the targets in
all indicators.
©2024 Open House Group Co.,LTD. All Rights Reserved.

10Group Overview

Management’s Analysis and Discussion of Financial Position, Operating Results and Cash Flows
Capital resources and funding liquidity
The Group’s capital requirements are primarily to fund theacquisition of commercial land and properties, construction
work, investments to expand the business and working
capital in each segment.
The resources of these funds include shareholders’ equity,interest-bearing debt through borrowings from financial
institutions and the issuance of corporate bonds as well as
cash flows from operating activities. The Group strives tosecure a wide range of funding means suitable for various
uses of funds.
Significant accounting policies and estimates
The Group’s consolidated financial statements are preparedin accordance with accounting standards generally accepted
as fair and appropriate in Japan. In preparing these
consolidated financial statements, the Group makes
estimates and assumptions that affect reported amounts ofassets and liabilities at the balance sheet date and those ofincome and expenses during the reporting period. With
respect to these estimates, the Group makes estimates bymaking assumptions and gathering information based on
past experience and other reasonable factors under thecircumstances. However, actual results may differ from theseestimates due to the uncertainty inherent in these estimates.

©2024 Open House Group Co.,LTD. All Rights Reserved.

11

Group Overview

Mid-term Management Policies and Issues to be Addressed
Three-year basic policy

In November 2023, the Group announced a three-year basic policy(from the fiscal year ending September 30, 2024, to the fiscal year
ending September 30, 2026). Given the expectations thatcircumstances will remain unclear for the foreseeable future, theGroup set certain profit assumptions for the three years, based on
which it has formulated financial, investment, and shareholder
return policies.
Regarding the profit assumptions, the Group has set an assumptionof cumulative net income for the three years of 250.0 billion yen. In
the business performance forecasts for the fiscal year ending
September 30, 2024, net income is forecast at 92.5 billion yen. The
Group set cumulative net income at 250.0 billion yen on theassumption that the net income of 80.0 billion yen resulting frombusiness, excluding the temporary negative goodwill generated by
the acquisition of SANEI ARCHITECTURE PLANNING CO. LTD.
(hereinafter “SANEI ARCHITECTURE PLANNING”) will continue until
2026, for details, see (Conversion of SANEI ARCHITECTURE
PLANNING to Consolidated Subsidiary) under X. (Significant
Subsequent Events). For this reason, the Group has not included
increases in net income resulting from M&As conducted in future
after the acquisition of SANEI ARCHITECTURE PLANNING.
Firstly, regarding the financial policy, as a key indicator, the Groupwill raise its equity ratio from the current 30% or more to 35% ormore. Net D/E ratio will be kept at 1.0 or less. ROE is assumed at
20% or more for the fiscal year ending September 30, 2024, and 15%
or more for the fiscal year ending September 30, 2025, and beyond.
In each case, in addition to maintaining a safer financial positionin an uncertain economic environment, the Group will aim to
maintain fund procurement capacity that will enable it torespond flexibly to M&As and other growth investments, while
continuing to place importance on capital efficiency.
Next, regarding growth investment policy, the Company has
assumed growth investments of 500.0 billion yen over the next
three years.

Important issues (materiality)

This will comprise 350.0 billion yen in M&As in Japan and overseas(this includes an approximately 100.0-billion-yen investment
resulting from the consolidation of SANEI ARCHITECTURE
PLANNING in November 2023) and 150.0 billion yen in existing
businesses, including increases in inventory, U.S. real estatedevelopment business, DX, and sustainability.
Finally, regarding shareholder return policy, the Group has assumed
shareholder returns of 100.0 billion yen over the next three years.
This will comprise 60.0 billion yen in dividends and 40.0 billion yen
in acquisition of treasury stock (including the acquisition of treasury
stock announced on November 14, 2023 [total number of acquirable
shares: 2,200,000 shares; total amount acquired: 10.0 billion yen;acquisition period: November 15, 2023, to April 30, 2024].) The
Group will continue to conduct stable dividends with a payout ratioof 20% or more and the flexible acquisition of treasury stock.
As described above, the Group will conduct corporate managementwith an emphasis on the appropriate allocation of management
resources in the three areas of maintaining financial soundness,growth investments, and shareholder returns.

The group has established new materiality when formulating thethree-year basic policy.

Issues for the fiscal year ending September 30, 2024••

Normalization of management of SANEI ARCHITECTURE
PLANNING
By making SANEI ARCHITECTURE PLANNING a wholly owned
subsidiary of the Company, the Group will work to streamline its
management systems such as management structure and promote
the restoration of SANEI ARCHITECTURE PLANNING’s
creditworthiness and, by extension, the normalization of its
management. In addition, through the general improvement of thesingle-family homes related business, leveraging housing supply
capabilities of SANEI ARCHITECTURE PLANNING and sales expertiseof the Group, and by other means, we will achieve synergies
between the Group and SANEI ARCHITECTURE PLANNING in ourefforts to increase the corporate value of both parties.

•
•
•
•
•

Important issues (materiality)
Governance and compliance reform
Enhance customer satisfaction
Strengthening hiring of key talent
Promotion of sustainability (sustainable society and corporate
growth)-Maximize the value of human capital-Realize healthy and safe living-Contribute to decarbonization

Other issues to be addressed regarding business promotion are
as follows.

Continuous growth focused on single-family homes
related business••

Growth of existing businesses centered around single-family
homesExpansion of single-family homes related business into the
Kansai region
Steady growth in condominium business
Sustainable growth of property resale business

Pursuing group synergies with PRESSANCECORPORATION CO., Ltd.
Promotion of M&A
Development of private REIT business mainly in theresidential sector
Acquire new business opportunities along with thechanges from “zero corona” to a “with corona”
environment©2024 Open House Group Co.,LTD. All Rights Reserved.

12

3

Sustainability

Sustainability

Approach to Sustainability and Initiatives
The Group contributes to the realization of a sustainable society through its businessactivities and promotes "sustainability" with the aim of achieving sustainablecorporate growth. The Group has continued to pursue our corporate philosophy of

Risk management“Committed to pursuing ‘Houses that customers want’ honestly and constantly” andRisk management is carried out by the Sustainability
Committee, centered around governance. Among theimportant sustainability-related issues in materiality, thenewly established three-year basic policy includes
initiatives including risk management regarding“Governance and compliance reform” and “Contributeto decarbonization"

have also worked on our business with the mission of “Providing affordable housing
in metropolitan areas''. By continuing to realize the Group's mission in the changing
times, we are putting into practice the creation of shared value that aims to balancesocial value with business value. We are also keenly aware of the social responsibilities
associated with our business activities and of contributing to the achievement of ourSDGs, and we are promoting initiatives through our business activities to address
issues related to the environment/society/governance (ESG).

Board of Directors

Sustainability
Committee[Secretariat]
Corporate
Planning
Dept.

Governance (promotion system)

Maximize the value of human capital

The Group has established a Sustainability Committee
consisting of directors, executive officers, and others. This
committee, which operates under the supervision of theBoard of Directors, identifies, and evaluates risks andopportunities related to sustainability, and collects andmanages information regarding responses in each businessdivisions and group companies. Progress and results will bereported to and discussed by the Sustainability Committee.
Important matters discussed at the committee are thenreported to the Board of Directors.

The Group believes that to attain sustainable company growth, we need toplace importance on strengthening of quality recruitment to “Maximize thevalue of human capital”, providing continuous training to further educate anddevelop the abilities of our employees. To realize the corporate philosophy of“Attract a wide range of motivated people and create an organization thatrewards results”, we promote human resources regardless of background, etc.,
and strive for human resources development in hopes that they will be thedriving force behind business growth and future management.

©2024 Open House Group Co.,LTD. All Rights Reserved.

14

Sustainability

Sustainability and Initiatives
Strategy
Demonstration of ability and wage increases

Promoting diversity

The Group conducts promotion assessments four times a year in order to promote
appropriate personnel. By designing a system that reflects results quickly, we are striving
to provide opportunities for prompt promotion and allowing each employee to maximize
their abilities.

The Group respects the human rights of every employee and strives to create anorganization with a comfortable working environment that takes advantage of diversity,
regardless of attributes such as gender, age, nationality, or disability. The Group is
implementing the following initiatives to promote diversity.

Health management

Promoting employment and active participation of persons
with disabilities

The Group believes that maintaining and improving the health of our employees
contributes to revitalizing the organization and improving productivity. We haveestablished a health management promotion system with the representative director as
the health management officer, have set health goals and are implementing measures for
improvement. In addition to hygiene management as required by law, we are working to
expand welfare benefits that contribute to health management and are working to
improve the health of our employees by planning and implementing work style reform
measures such as correcting long working hours and are striving to create an environment
where employees can continue to demonstrate high performance.

Promoting women’s participation in the workplace
Under the commitment of the representative director, “Promoting Women's
Empowerment Group” has been established to promote long-term career development
for women employees through welfare programs and training. The Group believes that tobuild sustainable careers, it is necessary to focus on supporting employees (women
employees with children) who have undergone changes in their life stages due tochildbirth, childcare, etc. We focus on both aspects of the situation, and design support
systems to provide support tailored to each stage, from before and after maternity leave.

The Group aims to create a workplace where persons with and without disabilities canwork together and has established a department called the "Operation Center" thatspecializes in supporting the success of people with disabilities. The employment rate is2.9%, which is 0.6 points higher than the statuary employment rate of 2.3%. As a major
initiative to attract human resources and enable active engagement, we have opened
three offices with barrier-free design, introduced four full-time supporters, as well as one
paid work exemption day system for hospital visits. We are also actively working todevelop our environment and systems so that our diverse human resources candemonstrate stable performance.

Childcare support
The Group believes that children, who will lead the next generation, are the mostimportant treasure in realizing a sustainable society. Additionally, since the majority of theGroup's employees are of the child-rearing generation, we are placing particular emphasison childcare support. We have implemented multiple economic support measures, suchas childbirth gifts of up to 1 million yen, but this year we will enhance further by providing“single parent allowance”, for single-parent households, and “shared use of company-led
childcare facilities”. Going forward, we will continue to support the improvement of thework and lifestyles of our employees, to encourage the demonstration of their abilities,
and aim to sustainably increase corporate value.
©2024 Open House Group Co.,LTD. All Rights Reserved.

15

Sustainability

Sustainability and Initiatives
Goals and indicators
Regarding targets and indicators related to human capital in
the Group, the "Open House Group Declaration on Promoting
Women's Empowerment" states that we will increase the ratioof women in management positions at three major companies(*1) to 10% by the fiscal year ending September 2025. As ofthe end of September 2023, the percentage is at 7.14%.
(*1) Open House Group Co., Ltd., Open House Co., Ltd., andOpen House Development Co., Ltd.

Governance and compliance reform
The Group is experiencing rapid growth, with sales exceeding
1 trillion yen in the fiscal year ended September 2023, 26
years since our founding. To strengthen the governance andcompliance system in line with the expansion of thecompany's scale, it is important to seek advice and verification
fromoutsideexperts,

identify

potential

issues,andcontinuously work to strengthen the system. Recognizing that
this is an even more important management issue than everbefore, we have begun efforts to reform governance andcompliance from September 2023. Please note that thisinitiative targets OH, OHD, OHA, and Hawk One.

Governance
The Group Transformation Promotion Headquarters has been
established as an organization under the direct control of the
President and CEO, who serves as the Head of the
Headquarters, and operates from a cross-organizational
perspective without being bound by company restrictions.
Risk management
The Group conducts compliance risk assessments to identify
governance and compliance issues. This assessment isconducted by the Risk Assessment Group in cooperation withan outside expert law firm.
Strategy
The Risk Assessment Group, with the support ofoutside experts, identifies organizational governanceissues and legal issues within the Group, who thenreports and submits these issues to the Group
Transformation Promotion Headquarters. Based on
given instructions, the Transformation Promotion
Group will then formulate reformation policies, review
systems and processes, present improvement
measures, and work to ensure that they arethoroughly disseminated throughout the Group. The
Main Contact for Customer Service Inquires serves as
the point of contact for inquiries and complaints forthe entire Group and takes the lead in resolving issues
identified by customers. The knowledge gained
through this process is then transferred to businessdepartments to implement improvement measures forcustomer satisfaction.

Goals
The Group will implement the following measures tostrengthen our governance and compliance systems, including
measures that we have already begun.
•
•

•
•
•
•

Pursuit of long-term customer satisfaction
Strengthening the quality control system in theconstruction of single-family homes
Reformation of organizational culture
Harassment prevention training
Expansion of internal reporting system
Establishment of a system to strengthen subsidiary
governanceGroup Transformation Promotion Headquarters:

Group Transformations Promotion HQHead of Division: President & CEO Masaaki Arai

Risk Assessment
Group
Outside Expert
Law Firm

Transformation
Promotion
Headquarters

Main Contact for
Customer Service
Inquires©2024 Open House Group Co.,LTD. All Rights Reserved.

16

Sustainability

Sustainability and Initiatives
Contribute to decarbonization(disclosure in line with TCFD reduction)

The company announced its support for the ``TCFD'' (*2)
recommendations in January 2021, and since joining the ``TCFD
Consortium'' (*3), recognizing the urgency needed to respond toclimate change, we conducted a scenario analysis regarding theimpact of climate change on the Group's mainstay single-family
home related business (*4).
(*2) “TCFD (Task Force on Climate-related Financial Disclosures)”
An initiative established by the Financial Stability Board (FSB) in responseto the wishes of G20 Finance Ministers and Central Bank Governors.
Recommending the assessment and disclosure of the financial impact ofclimate change risks and opportunities.
(*3) “TCFD Consortium”
An organization established to discuss the efforts of companies, financial
institutions, etc. that express their support for TCFD recommendations topromote their efforts in unison and to effectively disclose corporate
information and to link disclosed information to appropriate investment
decisions by financial institutions, etc.
(*4) Single-family homes related business:
We conducted a scenario analysis of the single-family homes related
business operated by Open House Co., Ltd. and Open House
Development Co., Ltd.

(ii)Risk management (system)
The Sustainability Committee of the Company formulates a basic policyon environmental issues and manages risks created by climate change.
The Sustainability Committee identifies the issues facing the Group by
following trends in Japan and the world in response to climate change,
including exchanging information with external experts.

(iii)Strategy
The Group has identified risks and opportunities presented byclimate change envisioned for 2030 for its mainstay singlefamily homes related business. It also analyzed the financial
effects based on two scenarios envisioned by theIntergovernmental Panel on Climate Change (“IPCC”) andconsidered future response policies as follows.
Transition risk Physical risk(i)Governance
The Sustainability Committee regularly evaluates the Company’s
response to various issues related to climate change. Furthermore,
the Board of Directors monitors the Sustainability Committee, andreports and deliberates on important policies and matters.

It also discusses the necessary policies with Group companies
and operating divisions, and regularly monitors the progress of
those policies. The Sustainability Committee also manages the
progress of the established GHG emission reduction targets, andcontinuously considers raising the targets further. The
Sustainability Committee reports to the Board of Directors on
the climate change issues and the progress of initiatives toaddress the issues. Through these efforts, the Company has
developed a system to respond appropriately to the risks andopportunities presented by climate change, which is expected tofurther diversify, expand and intensify in the future.

Risks and opportunities associatedwith changes in policies, rules,
technologies, the market, customer
preferences, etc. during thetransition period to a low-carbon
society.
The acute risk such as natural
disasters becoming more severe
and frequent due to climate change,
and the chronic risk such as rising
average temperatures andabnormal weather.

Results of scenario analysis
1.5°C scenario
In the 1.5°C scenario, the transition risk of introducing acarbon tax and mandating solar panels is seen as the main
factor pressuring earnings. However, winning new customers byproviding homes with a low environmental impact is anearnings opportunity. In terms of the physical risk, the risk fromnatural disasters, etc. is negligible. Overall, we have concluded
that the financial effects in this scenario are limited.
4°C scenario
In the 4°C scenario, we concluded that there is no significant
transition risk. In terms of physical risk, the single-family homes
related business operated by the Group is a short-flow business.
Because of this, by increasing our sensitivity to changes in theexternal environment such as intensifying natural disasters, we
can reduce risks, and have concluded that there are no
significant financial effects in this scenario.

(i) 1.5 °C scenario(ii) 4 °C scenario

Strict global climate change policies
are thoroughly implemented,
succeeding in limiting global
warming.
As a result, the average temperaturein 2050 will only rise by 1.5°C
compared to before the Industrial
Revolution in the 18th century.

Despite various calls for attention to
global warming, the world’s nations
are unable to cooperate, and strict
policies are not introduced.
As a result, global warming
progresses further, the averagetemperature will rise by 4 °C, andnatural disasters become more
severe and frequent.

©2024 Open House Group Co.,LTD. All Rights Reserved.

17

Sustainability

Sustainability and Initiatives
List of risks, opportunities, and financial effectRisks andopportunities/Items

Transition risk
・Effects

Financial effects

Opportunity
Physical risk

1.5°C

4°C

Rising procurement costs of materials, etc.
from the introduction of the carbon tax(Rising construction contracting costs)↓－

Rising fuel costs for company vehicles fromthe introduction of the carbon tax↓－

Rising electricity usage costs from theintroduction of the carbon tax↓－[Risk]
Mandated installation ofsolar panels

Rising costs (0% pass-through rate to saleprice) from the mandated installation of solar
panels↓[Opportunity]
Rising demand for homes
with a low environmental
impactIncreased earnings with the provision ofhomes with a low environmental impact (ZEH
Oriented)[Risk]
Effects of intensifying
typhoons and floods

Increased costs due to reduced productivity of
construction workers from severe heat

[Risk]
Carbon tax introduction[Risk]
Increased negative healtheffects from severe heat
(heatstroke, etc.)

Decreased earnings from reduced sales
efficiency of sales staff from severe heat

Metrics and targets
Based on the results of the scenario analysis, to reduce the risks from climatechange, the Company set medium- to long-term GHG emission reduction targets
for the first time in November 2021, and added Scope 3 to our targets in October
2022. In the future, we plan to promote the "Open House Group Decarbonization
Project" to achieve our goals.

46%

reduction－

100%
reduction

↑

－

↓

↓

↓

↓

2018

2030

2050
Net zero(*) Scopes 1, 2, and 3
Scope 1: emissions from the business activities of covered companies (direct emissions)
Scope 2: emissions produced from the use of energy provided by other companies (indirect emissions)
Scope 3: emissions from other business activities (indirect emissions mainly from materials procurement
and the use of homes after sale)↑/↓: absolute value of ¥1 billion or more and less than ¥5 billion
Not applicable: absolute value of ¥100 million or more and less than ¥1 billion↑ / ↓: absolute value of ¥10 million or more and less than ¥100 million－: no financial effect, or an absolute value of less than ¥10 million©2024 Open House Group Co.,LTD. All Rights Reserved.

18

4

Business Risks

RisksBusiness Risks etc.
The main matters considered to be potential risks regarding business development and otheraspects of the Group are described below. In addition, from the perspective of active
information disclosure to investors, the Group also discloses matters that, while they do notnecessarily constitute those kinds of risk factors, are considered important for investors inmaking investment decisions. Forward-looking statements in this document are based on the
judgment of the Group as of the end of the fiscal year ended September 30, 2023.

1. Management environment surrounding the businessi. Impact of economic trends and interest rate trends, etc.
◼ Corporate results in the real estate industry to which the Group belongs are closely related
to changes in macro economic factors such as trends in economic conditions, interest ratelevels, land value levels, and foreign exchange markets.
◼ Economic and political circumstances such as real estate market conditions, trends inhome loan interest rates and increase of consumption tax, population trends, and real
property tax system reforms, as well as psychological trends in prospective home buyers,
have the potential to impact on the Group’s business performance and the developmentof its business.
ii. Concentration of business areas in the Tokyo metropolitan area and the impact ofcompetition, disasters, etc.
◼ High demand for homes and property resale in Tokyo metropolitan areas, which mean
competition can intensify in the future.
◼ Exposed to competition from other companies with our recent expansion to Nagoya,Fukuoka, and Kansai areas◼ If we lose our ability to procure land and selling power, or a sharp drop in demand due
to price fluctuations◼ Susceptible to population trends, geographical changes, changes in average income,regional economic conditions, and real estate market conditions in Tokyo metropolitan
area and other cities.
◼ if an earthquake, typhoon, or other disaster were to occur in the Group operating area, in
addition to damage to people and property, there are risks of delays in works and theinability to conduct development or sales, the risk of a fall in the value of real estate, therisk of costs required for repairs, etc., and other adverse impacts on the business,business performance, and financial position of the Group.

iii. Impact of COVID-19◼ Appropriate implementation of infection prevention measures has allowed the Group to
conduct its business activities while suppressing the spread of the disease amongst
customers and employees.
◼ However, if prevention measures had not been established, there would be potential forthis to have serious adverse impact on the business, business performance, liquidity andfinancial position of the Group.
◼ Potential hindrance of sales activities, turmoil in supply chain (as a result of restrictions
places on the activities of the Group, its customers, subcontractors, suppliers and partners)
due to measures to prevent the spread of the infection.
◼ There are no guarantees such prevention measures would be effective, and if unsuccessful,there are risks to the Group’s business activities and its business plans.
◼ New opportunities can be sought out if another infectious disease were to spread(although that is not guaranteed).
◼ the degree of the final, total impact on the Group of such infectious diseases is extremely
unclear, given that it would depend on future progression of events, including the timing
at which such an epidemic ended, and it is extremely difficult to make predictions.
Depending on the degree of such impact, there is potential for adverse impacts on thebusiness, business performance, liquidity, and financial position of the Group.

2. Land procurement, purchasing of timber and building materials,
etc., and personal expenses◼ Land is procured primarily in Tokyo metropolitan area and other urban locations, which
accounts for most of the development cost.
◼ Due to external factors beyond our control, such as shortage of supply for properties insuch areas, could cause sharp increase in procurement costs.
◼ the newly built single-family homes by the Company’s consolidated subsidiaries, OHD,
OHA, and Hawk One, use timber, building materials, and other raw materials. There is thepotential for the prices of such materials to rise sharply due to various factors, including
exchange rate fluctuations and country risks in the countries of origin.
◼ there is potential for sharp rises in the personnel expenses for construction work due tofactors such as labor shortages in the construction industry.
©2024 Open House Group Co.,LTD. All Rights Reserved.

20

RisksBusiness Risks etc.
4. M&A◼ Going forward, there is no guarantee that suitable prospective target companies matching
the Group’s business strategy will be found or that the Group will be able to conduct
M&As on appropriate terms and conditions with such prospective target companies.
SANEI ARCHITECTURE PLANNING was made a wholly owned subsidiary in November
2023, but there are various risks involved even when such M&As are conducted. Risks asfollows:• business integration with the target does not proceed as planned• synergies do not eventuate• resources expended on the work required for the M&A hinder the Group’s regularbusiness activities• an exodus of the target company’s talented personnel• target is unable to operate at the same level of compliance as the that of the Group• misjudgments in the assessment of the target company’s value• large amounts of goodwill will be recorded that may become the target of future
impairment• the Group’s liabilities related to the M&A will increase◼ if the Group acquires only a non-controlling interest in the target company, there is a riskthat it will not be able to supervise or control the management of the target company
effectively and that the target company will not implement management policies andbusiness strategies that the Group considers appropriate for realizing the effectiveness ofthe strategic investment. Which can have adverse impact on the business, businessperformance, and financial position of the Company.
◼ There are risks that the existence of a partnership with a certain partner will restrict the
freedom of the Group to collaborate with other prospective partners in the future.
PRESSANCE CORPORATION Co., Ltd. (consolidated subsidiary as of January 2021), and
MELDIA Development & Construction CO., LTD. (consolidated sub-subsidiary as of
October 2023), continue to be listed, and as such, the Company believes that theindependence of their management should be respected.
◼ While aiming to realize synergies, as the parent company, we need to encourage theimprovement and enhancement of their corporate governance and internal control
systems, and there is a risk that such initiatives may not proceed as planned.

5. Dependence on interest-bearing debt

implementation of The Acquisition funds of land and properties for the Group’s business andits working capital are primarily covered by loans from financial institutions.

As of
Sept 30, 2023

Balance of consolidated
interest-bearing debt

Increase (decrease)
From previous FY

Interest bearing debt
of total assets

575,137 million yen

66,176 million yen

48.0%◼ Changes in current interest rate levels have the potential to impact business performance◼ if the Group were unable to procure sufficient funds for some reason, such as suddenchanges in monetary conditions, this has the potential to impact on the businessperformance, financial position, and business development of the Group.

6. Protraction of timing of recognition of revenue in real estatedevelopments procured primarily in Tokyo metropolitan area and other urban◼ In the real estate sales business in which the Group is engaged, a considerable length oftime is required from the procurement of land until the sale to general consumers, andlarge investments are required on multiple occasions during that period.
◼ Potential for unexpected time and cost requirements during the period until sale togeneral consumers due to external factors beyond the Group’s control, such as sharp rises
in raw material prices, labor shortages, and changes in customer demand.
◼ if, due to delays in development, the Group is forced to hold onto inventory for longer
than initially planned, and if market conditions deteriorate in that time, as well as thepossibility that this could lead to the recording of losses on valuation of inventory assets,
there is potential for delays in revenue recognition, which could have a serious adverse
impact on the business performance and financial position of the Group.
◼ if development cannot be completed according to initial plans, there is a risk that theGroup’s credibility could be damaged and that liability toward customers could incur.
©2024 Open House Group Co.,LTD. All Rights Reserved.

21

RisksBusiness Risks etc.
7. Inventory. Impact of economic trends and, etc.
Our group is engaged in the real estate sales business and records real estate for sale andreal estate for sale in progress as inventory assets. The situation as of the end of September
2023 is as follows.
Breakdown of real estate for sale and real estate for sale in progress
Real estate for sale
Real estate for sale in
Items(million yen)progress (million yen)
Single-family homes related

73,879218,199

Condominiums

1,258

83,092

Property resale

48,244

40,111Others

16,30327,494

PRESSANCE CORPORATION
CO., Ltd

8,171

124,501

Total

147,857

493,398◼ There is a risk that the real estate value of the inventory assets owned by the Group
could fall due to various factors.
◼ if it is difficult to sell at the prices envisaged by the Group, the Group may take measures
to promote sales by lowering selling prices for the purpose of mitigating inventory risk.
◼ If the decrease in profits and losses on valuation of inventory assets becomes significant
as a result of such measures, this has the potential to impact the business performanceand financial position of the Group.

8. Subcontracting management

In the construction of new single-family homes, in principle, the Group divides up and places
orders with subcontractors for operations, excluding construction supervision work
(management of quality, safety, processes, and costs). Also, in the condominium construction
business, the majority of work, including construction supervision work, is outsourced toconstruction companies.
◼ Because the Group depends on subcontracting for the majority of its construction
operations, if it is unable to secure sufficient subcontractors, if there are problems with thequality of the construction work of a subcontractor, or if financial difficulties andconstruction delays occur at a subcontractor, this has the potential to impact the businessperformance and financial position of the Group.

9. Securing human resources

The Group intends to continue to develop its business with a focus on the single-family
home-related business. To provide products and services of good quality that meet customer
needs, a key management challenge will be to provide education and training of humanresources, who have high potential and who are able to make product proposals that will
satisfy customers, and to put those human resources on the front lines. With the future
expansion of its business, the Group intends to actively recruit large numbers of talented
human resources.
◼ If the Group is unable to secure enough human resources, if there is an exodus of humanresources currently at the Group, or if the costs of securing human resources rise, this has
the potential to impact business development and business performance.

10. Warranty against defects and contract non-conformity warranty

Pursuant to the Housing Quality Assurance Act, the Group bears a ten-year warranty against
defects or a contract non-conformity warranty for the main parts of the structure of newlybuilt homes and for the prevention of penetration of rainwater. In the unlikely event that there
is a serious defect in a property sold by the Group, even if the direct cause of the defect is thefault of a party other than the Group, the Group may bear the responsibility for that defect as
the vendor. In such an event, increases in the costs of guarantee work and the decline in theGroup’s credibility have the potential to impact the business performance, financial position,and business development of the Group.
©2024 Open House Group Co.,LTD. All Rights Reserved.

22

RisksBusiness Risks etc.
11. Statutory regulations. Impact of economic trends and, etc.

The Group is subject to a variety of statutory regulations in the management of its business.
These include the Real Estate Brokerage Act, the Building Standards Act, the City Planning Act,
the Construction Business Act, the National Land Use Planning Act, the Money Lending
Business Act, and environmental regulations.
The Group strives to comply with the various criteria for obtaining permits and licenses underlaws and ordinances and with the provisions of the relevant laws and regulations, and there
are no circumstances at present that would lead to the cancellation of any of these permits
and licenses. Going forward, if the relevant laws are revised or abolished or new statutory
regulations are established, or if the Group has been unable to comply with these regulations,
including laws and ordinances, this has the potential to impact the business performance andbusiness development of the Group.

12. Management of personal information

In each of its businesses, the Group holds information about potential customers, information
about customers with whom the Group has transacted, and other personal information
obtained through the Group’s businesses, and is subject to regulations governing suchinformation, including the Act on the Protection of Personal Information.
Individual Group companies that hold such personal information manage it with meticulous
care. However, in the unlikely event of an incident such as an external leak, compensation fordamages, the loss of social credibility and other consequences have the potential to impact
the business performance and business development of the Group.

©2024 Open House Group Co.,LTD. All Rights Reserved.

23

5

Corporate GovernanceCorporate Governance

Information on Corporate Governance, etc.
Basic approach to corporate governance

The Company’s corporate governance structure is as follows:

Under the Group’s corporate philosophy of “Committed to pursuing ‘Houses that customers
General Meeting of Shareholders

want’ honestly and constantly,” the Group aims to be a real estate company needed bysociety. To this end, we believe that it is important to make efforts to establish and improve

Election and removal Election and removalElection and removal

our organizational structure to ensure the appropriateness of organizational management
and thereby establish an organizational foundation to achieve the Group’s sustainablegrowth and maximization of corporate value in the medium- to long-term. Based on such

Nomation andCompensation Committee

recognition, the Company discloses the “Basic Policy on Corporate Governance,” which wasformulated to set forth its basic approach to, and policy on, corporate governance.

the Group and will practice management based on this Basic Policy while fully considering
the purpose and background of the Corporate Governance Code.
Overview of corporate governance structure and reasons for adoption of this structure◼ Overview of corporate governance structure

Audit

Reporting/Direction

Board ofDirectors

Sustainability Committee
Risk Management
Committee

Cooperation

Audit & Supervisory
Board
Audit

Reporting
Cooperation

Reporting[business execution]

Appointment
and dismissal

President & CEO

Direction/
ReportingDirection/
ReportingExecutive officers

Direction/
ReportingDirection/
Reporting

Audit

Internal
Audit
OfficeAccounting Auditor

The Company positions this Basic Policy as the highest standard for corporate governance ofConsultation/
recomm.

Cooperation
Audit

Business departments
and subsidiaries©2024 Open House Group Co.,LTD. All Rights Reserved.

25

Corporate Governance

Information on Corporate Governance, etc.
Board of Directors and Executive Officer•

With Masaaki Arai, President & CEO, as the Chairman, the Board of Directors of theCompany consists of a total of nine Directors, of which six are internal Directors(Masaaki Arai, Kazuhiko Kamata, Kotaro Wakatabi, Hitoshi Imamura, Ryosuke Fukuoka
and Hiroshi Munemasa) and three are Outside Directors (Hitoshi Ishimura, Yuko Omae
and Maoko Kotani).

•

As a management decision-making body, the Board of Directors deliberates andmakes decisions on management policies and other important management mattersbased on the Board of Directors Rules and supervises the execution of duties byDirectors.

•

In addition to regular meetings held once a month, the Board of Directors holds
meetings as needed and has lively discussions over various matters related to theCompany’s business activities.
The Company’s Articles of Incorporation limit the number of Directors to theminimum necessary from the perspective of pursuing swift decision-making and fullmanagement function of the Board of Directors simultaneously.

••

The Board of Directors help management make quick and drastic decisions based onsuch a structure.

•

The Company also adopts the Executive Officer system to increase flexibility andefficiency in both management decision-making and business execution anddelegates business execution to Executive Officers.

•

Executive Officers are responsible for practical execution of business in accordancewith 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, Mieko Hosaka, and Shoko Sasaki)••

In addition to a regular monthly meeting, meetings are held on a needed basis.
Full-time Audit & Supervisory Board Members Koichi Matsumoto is an Outside Audit& Supervisory Board Member with extensive knowledge and insight into finance andaccounting as well as a wealth of experience as an auditor, ensuring an objective andneutral 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 conduct audits of the executionof duties by Directors from a standpoint independent from Directors, through theirattendance at the Board of Directors’ meetings and interviews with Directors andother officers on the status of business operations.

•Through information exchange, shared recognition and cooperation with the Internal
Audit Division and Accounting Auditor, the Audit & Supervisory Board also strives tostrengthen its auditing function by supplementing operational audits and accounting
audits.

•Assesses the appropriateness of the Accounting Auditor in accordance with 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.

©2024 Open House Group Co.,LTD. All Rights Reserved.

26

Corporate Governance

Information on Corporate Governance, etc.
Nomination and Remuneration Committee•••

The Nomination and Remuneration Committee is composed of three members,
chaired by Outside Director Hitoshi Ishimura, Outside Director Yuko Omae andSenior Managing Director Kotaro Wakatabi.
The purpose of the Committee, which the Company established voluntarily, is tocontribute to the enhancement of corporate governance in the Group as a whole.
In addition to deliberating on the nomination of key executives and employees of
the Group, the Nomination and Remuneration Committee is authorized to decideon the amounts of compensation, etc. for individual Directors of the Company, andit supplements the decision-making by the Board of Directors from an objective
stance that is somewhat removed from the execution of the Company’s business.

Internal Audit Division
•
•

•
•

•

The Internal Audit Division (four staff members), which is placed directly under the
President
Conducts internal audits on the legality and appropriateness of the operation ofinternal 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.
In principle, the Internal Audit Division conducts internal audits of all departments of
the Group and reports the results 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 and monitors their improvement in an ongoing basis.
Furthermore, the Internal Audit Division strives to strengthen its internal audit
function by supplementing internal audits through information exchange, sharedrecognition and 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 firm conduct audits in afair 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 theCompany’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.

Reasons for adoption of this structure••

The Company believes that swift decision-making is especially important inappropriately adapting to the business environment surrounding the Group andconsistently enhancing its corporate value.
The Company adopts the current corporate governance structure from theperspective of ensuring the transparency and fairness of management by
establishing an objective and neutral management monitoring function while
enabling flexible decision-making by taking into account the Group’s business sizeand business plans.

©2024 Open House Group Co.,LTD. All Rights Reserved.

27

Corporate Governance

Information on Corporate Governance, etc.
Renumeration for Officers
Matters related to the determination of remuneration amount for officers and/or
the calculation method.
Details of the policy on the determination of remuneration amount for officers and/or
the calculation method and the determination method*

Renumeration of Directors-Consists of fixed remuneration, performance-based remuneration, and share-based
remuneration.
-From the perspective of the role and independence of outside directors, performance is
not evaluated when determining the amount of monetary remuneration paid.
*share-based remuneration is not paid to outside directors and corporate auditors.
Fixed Renumeration
According to the position, duties, skills, responsibilities, etc. of each director for thecurrent fiscal year is used to determine and formulate the renumeration table.
Performance-based Remuneration
to improve the motivation of directors, by immediately reflecting the results of thecurrent period in the remuneration for the next period, consolidated ordinary income forthe current business year is used as a performance indicator, and remuneration is
calculated based on performance, taking into consideration the achievement status offinancial indicators of the medium-term management plan, scope of control, position,
job responsibilities, etc., without being biased towards short-term performance. We haveadopted a policy that the total value of all directors is no more than 1% of consolidated
ordinary income.
Note * The Company revised its policy on decisions regarding individual directors' remuneration, etc., at the Board of
Directors meeting held on January 19, 2023.

Stock Renumeration-Stock compensation-type stock options annually are granted annually with the amountequivalent to 10% of their monetary remuneration.
-This allows our directors to share the benefits and risks of stock price fluctuations withshareholders and to increase their medium to long term motivation in contributing to
improve corporate value.
The Nomination and Remuneration Committee determines the amount of
individual remuneration-The Committee members are mainly outside directors, upon delegation from the Boardof Directors, in accordance with the remuneration determination policy determined by
the Board of Directors after deliberation by the Nomination and Remuneration
Committee.
Remuneration for Audit & Supervisory Board Members-Consists of monetary remuneration.
-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.
Policy on determining the remuneration amount for officers or the calculation
method by position-For officers, the Company classifies directors into two categories: executive directors
and non-executive directors, we formulate and determine a fixed remuneration table foreach category.
-Executive directors receive fixed-remuneration, performance-based remuneration andstock-based remunerations, while non-executive directors receive fixed-remuneration
only.
-Corporate auditors are classified into two categories: full-time corporate auditors andpart-time corporate auditors, and specific amounts of remuneration, etc., are determinedwithin predetermined upper limits for each category.
©2024 Open House Group Co.,LTD. All Rights Reserved.

28

Corporate Governance

Information on Corporate Governance, etc.
Details of resolutions on remuneration for officers at the general
meeting of shareholders

The following details were resolved, regarding remuneration for directors, at
the general meeting of shareholders. The number of directors is stipulated in
the articles of incorporation to be 12 or less.
i.
The total remuneration for directors per fiscal year shall not exceed
2,000 million yen per year (of which, the amount for outside directors
shall not exceed 200 million yen per year. However, this excludes thesalary of directors who concurrently serve as employees). (26th Ordinary
General Meeting of Shareholders to held on December 21, 2022)
ii.
Separately from i, directors (excluding outside directors) are to receive
remuneration related to stock acquisition rights as stock options within
300 million yen per fiscal year, and the number of stock acquisitionrights is 1,200 (The number of shares for each stock acquisition rightshall be limited to 100 shares). (26th Ordinary General Meeting of
Shareholders held on December 21, 2022)
The remuneration for Audit & Supervisory Board Members was resolved at the
7th Ordinary General Meeting of Shareholders held on December 25, 2003, thatthe remuneration would be no more than 100 million yen per year. The numberof corporate auditors is stipulated in the articles of incorporation to be no morethan four.

Total amount of consolidated remuneration by officer and type of remuneration
Total
amount of
remuneration(Millions of yen)

Name

Amount of consolidated remuneration by type of
remuneration (Millions of yen)
Officercategory

Company
category

Fixed
remuneration

Performancebased
remuneration

Stockremuneration

Masaaki Arai

573

Director

Reporting entity

180

336

57

Kazuhiko Kamata

269

Director

Reporting entity

81

147

41

Kotaro Wakatabi

217

Director

Reporting entity

61

123

31

Notes:
1. The above table only includes those who received consolidated remuneration of 100 million yen or more.
2. Fixed remuneration and performance-based remuneration consist of monetary remuneration, while stock remuneration consists of restricted stock remuneration and stock
remuneration-type stock options
3. In addition to the above, the Company covers the rent for company housing of one Director. The amount covered in the fiscal year ended September 30, 2023, was 6 million yen.

Remuneration amounts for officers

Total amount of remuneration by officer category, total amount of remuneration by type of remuneration andthe number of eligible officers

Officer category

Totalamount of
remuneration(Millions of yen)Amount of consolidated remuneration by type of remuneration(Millions of yen)Fixed
remuneration

Performancebased
remuneration

Share-based
remuneration

Number of
eligible officers(Persons)

Director(excl. Outside
Directors)

1,302

441

700

161

6

Outside officer

91

91

―

―

6

Notes:
1. The Board of Directors resolved to leave the decisions on Director remuneration for the fiscal year ended September 30, 2023, to theNomination and Remuneration Committee, in accordance with the remuneration determination policy determined by the Board of Directors
after deliberation by the Nomination and Remuneration Committee.
The reason for the delegation of authority is that the directors are made up of three members: outside director Toshiko Ishimura as thechairperson, outside director Yuko Ohmae, and senior managing director CFO and corporate planning head Kotaro Wakatabi. The Nomination
and Compensation Committee accounts for the majority of the members from outside, to enhance fairness and objectivity.
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 remuneration paid in the fiscal year ended September 30, 2023, were projectedconsolidated financial results for the same fiscal year, including ordinary profit of 120,000 million yen and the consolidated financial results forthe same fiscal year were ordinary profit of 136,927 million yen.
3. Fixed remuneration and performance-based remuneration consist of monetary remuneration, and stock remuneration consists of restricted
stock remuneration and stock remuneration-type stock options.
4. In addition to the above, the Company covers the rent for company housing of one Directors. The amount covered in the fiscal year ended
September 30, 2023, was 6 million yen.

©2024 Open House Group Co.,LTD. All Rights Reserved.

29

Corporate Governance

Stock Holding Status
The concept and standard for the classification of investment stocks

3. Stocks for which the holding purpose is pure investment

The Group considers investment stocks for purposes other than pureinvestment (hereinafter non-pure investment), to be either directly or
indirectly related to business strategy, and other stocks are for pureinvestment purposes.

Current fiscal year

Category

Total of balance
sheet amount(million yen)

Number ofstocksTotal of balance
sheet amount(million yen)

Number ofstocksUnlisted stocks

3

1,700

2

0

Stocks other thanunlisted stocks

1

36

11

1,937

Investment stocks held for non-pure investment purposes
Holding policy, method of verifying the rationality of holding, and detailsof verification by the board of directors, etc. regarding the appropriatenessof holding individual stocks.
The Company determines the suitability of holding investment shares
after fully verifying medium to long-term economic rationality and future
prospects, taking into consideration the income obtained fromstrengthening business relationships and the investment amount, etc.
Please note that the Company does not hold investment stocks for nonpure investment purposes.

Previous fiscal year

Current fiscal year
Category

Total dividends
received(million yen)

Total gains (losses) on
sale(million yen)

Net unrealized gains(losses)(million yen)

Unlisted stocks――(note)

Stocks other thanunlisted stocks

43

101

21

(Note) As there is no market price for unlisted stocks, the "net unrealized gains (losses) " is not stated.

©2024 Open House Group Co.,LTD. All Rights Reserved.

30

6

Consolidated Financial
Statements

Consolidated Financial Statements(Millions of yen)

As of September 30, 2022 As of September 30, 2023

Consolidated Balance Sheets(Millions of yen)

AssetsCurrent assets
Cash and deposits
Trade accounts receivable and Contract assets

As of September 30, 2022

As of September 30, 2023

349,305

401,879

2,198

4,776

Real estate for sale
Real estate for sale in process
Operating loans
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Real estate for rent
Accumulated depreciation
Real estate for rent, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts

95,717461,388
43,26230,128(344)
981,656

147,857
493,398
49,301
34,105(549)
1,130,769

6,357(2,417)
3,939
15,149(1,035)
14,1132,277
2,217(1,424)792
21,1232,925

7,012(2,426)
4,585
21,975(1,444)
20,5302,278
2,521(1,459)1,061
28,456
2,690

13,271
5,150
7,066
(18)

20,955
8,345
7,468
(18)

Total investments and other assets
Total non-current assets
Total assets

25,47049,5181,031,174

36,751
67,898
1,198,668

Liabilities
Current liabilities
Notes payable - trade
Trade accounts payable
Electronically recorded obligations - operating
Short-term borrowings
Current portion of bonds payable
Current portion of long-term borrowings
Income taxes payable
Contract liabilities
Guarantee deposits received
Provision for bonuses

1,238
31,2208,104
144,309242
39,262
20,29235,854
2,789
4,669

1,631
34,92911,860182,734
10,24238,45722,51832,681
3,709
4,604

Provision for warranties for completed construction

1,139

1,395

Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

20,373
309,495

28,760373,526

10,363314,784318
211
298
325,976
635,472

121
343,582326
230
464
344,725
718,251

20,07019,882286,286(18)
326,221

20,11019,767
361,583(18)
401,443(34)
11,434
11,399474
57,606
395,702
1,031,174

42
14,36814,411752
63,808480,416
1,198,668©2024 Open House Group Co.,LTD. All Rights Reserved.

32

Consolidated Financial Statements

Consolidated Balance Sheets(Millions of yen)
Fiscal year ended
September 30, 2023

Fiscal year ended
September 30, 2022

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Gain on sale of securities
Rental income from buildings
Foreign exchange gains
Share of profit of entities accounted forusing equity method
Other
Total non-operating income
Non-operating expenses
Loss on valuation of investment securities
Loss on investments in securities interest
expenses
Interest expenses
Commission expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary loss
Loss on sale of shares of subsidiaries andassociates
Impairment losses
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

952,686
768,117
184,568
65,210
119,358

1,148,484
930,127
218,356
76,026142,330

170
1,853
―
174
5,069

625
137
101
225
471

383

69

638
8,291

809
2,441

1,942

―

―

2,038

3,531
601
407
6,482
121,166

3,965
687
1,152
7,844
136,927

119

―

58
178
120,988
35,9391,110
37,05083,937
6,053
77,88425
25
136,901
41,743(3,216)38,526
98,375
6,324
92,050

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests

Fiscal year ended
September 30, 2022
83,937(Millions of yen)
Fiscal year ended
September 30, 2023
98,375(45)85

10,888

2,931

12

6

10,855
94,793

3,024
101,399

88,74995,062

6,043

6,336

©2024 Open House Group Co.,LTD. All Rights Reserved.

33

Consolidated Financial Statements

Consolidated Statement of Changes in Equity
FY 2022 (From October 1, 2021 to September 30, 2022)

FY 2022 (From October 1, 2021 to September 30, 2022)
Accumulated other comprehensive income

Shareholders’ equity

Balance at beginning of
periodChanges in items during
periodShare capital

Capital surplus

19,93929,068Retainedearnings

244,248

Treasury shares

Total
shareholders’equity(0)293,256

Issuance of new shares(Exercise of shareacquisition rights)

75

75

151

Issuance of new shares(Issuance of restricted
shares)

54

54

109

Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury shares(9,467)

Change in scope of
consolidation

Balance at end of period(15,648)

77,88477,884(20,514)

Total
accumulated
othercomprehensive
incomeShare
acquisitionrights

12

540

552

551

Noncontrollinginterest
52,782

Changes in items during
periodIssuance of new shares(Exercise of shareacquisition rights)
Issuance of new shares(Issuance of restricted
shares)Dividends of surplus
Profit attributable toowners of parent

Total net
assets347,143

151

109(15,648)
77,884(30,000)－

Disposal of treasury shares－

316

Change in scope of
consolidation

316

151

Capital increase of
consolidated subsidiaries

151(30,000)

29,982151

Foreign currencytranslation
adjustment

Purchase of treasury shares(30,000)

316

Capital increase of
consolidated subsidiaries
Net changes of items
other than shareholders’equityTotal changes in items during
period(15,648)

Balance at beginning of period

Valuationdifference on
available-forsale securities

Net changes of items otherthan shareholders’ equity(47)

10,893

10,846

(77)

4,824

15,593130(9,185)42,037(17)32,964

Total changes in items during
period(47)

10,893

10,846

(77)

4,824

48,55820,07019,882286,286(18)

326,221

Balance at end of period(34)

11,434

11,399474

57,606

395,702©2024 Open House Group Co.,LTD. All Rights Reserved.

34

Consolidated Financial Statements

Consolidated Statement of Changes in Equity
FY 2023 (From October 1, 2022 to September 30, 2023)

FY 2023 (From October 1, 2022 to September 30, 2023)

Shareholders’ equity

Share capital Capital surplus

Balance at beginning of
period20,07019,882Retainedearnings

286,286

Accumulated other comprehensive income

Total
Treasury shares shareholders’equity(18)

326,221

Changes in items during
periodIssuance of new shares(Exercise of shareacquisition rights)

40

40

80

(16,753)(16,753)

Profit attributable toowners of parent

92,02592,025Purchase of treasury
shares(0)

Capital increase of
consolidated
subsidiaries

(155)

(0)

(155)

Net changes of items
other thanshareholders’ equity

Balance at end of period

Foreign currencytranslation
adjustment

Total
accumulated
othercomprehensive
incomeSubscription
rights toshares(34)

11,434

11,399474

Noncontrollinginterest

57,606

Total net
assets395,702

Changes in items during period

Dividends of surplus

Total changes in items
during period

Balance at beginning of period

Valuationdifference on
available-for-salesecurities

Issuance of new shares(Exercise of share acquisitionrights)80

Dividends of surplus(16,753)

Profit attributable to ownersof parent

92,025

Disposal of treasury shares(0)

Capital increase of
consolidated subsidiaries(155)

Net changes of items otherthan shareholders’ equity

77

2,934

3,011

277

6,202

9,491

40

(114)

75,297(0)75,222

Total changes in items during
period

77

2,934

3,011

277

6,202

84,714

20,11019,767

361,583(18)

401,443

Balance at end of period

42

14,36814,411752

63,808480,416©2024 Open House Group Co.,LTD. All Rights Reserved.

35

Consolidated Financial Statements

Consolidated Statement of Changes in Equity(Millions of yen)
Fiscal year ended
September 30, 2023

Fiscal year ended
September 30, 2022
Cash flows from operating activities
Profit before income taxes
Depreciation
Share-based payment expenses
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for share awards
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for warranties forcompleted
Increase (decrease) in retirement benefit liability
Loss (gain) on sale of shares of subsidiaries andassociates
Loss (gain) on valuation of investment securities
Loss (gain) on valuation of Investment securities
Share of loss (profit) of entities accounted for using
equity method
Interest and dividend income
Foreign exchange losses (gains)
Interest expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in operating loans receivable
Increase (decrease) in contract liabilities
Increase (decrease) in guarantee deposits received
Increase (decrease) in deposits received
Decrease (increase) in advance payments to
suppliers

Fiscal year ended
September 30, 2022

120,988
1,375
205
1,014
(257)

136,901
1,487
498
(67)
―

(17)

205

99

256

7

7

119

―

1,942
―

―
2,038

(383)

(69)

(2,024)(4,346)3,531
92(116,798)
13,833(6,384)
7,307
802
4,224

(763)
(455)
3,965
(2,873)(85,219)
7,857(6,038)(3,475)864
2,401(1,136)(446)

Other, net(2,303)

3,708

Subtotal

21,89260,783

Interest and dividends received
Dividends received from entities accounted for using equity
methodInterest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Loan advances
Proceeds from collection of loans receivable
Purchase of investment securities
Proceeds from sale and redemption of investment securities
Purchase of shares of subsidiaries and associates
Proceeds from sale of shares of subsidiaries and associates
Payments for investments in capital of subsidiaries andassociates
Repayment from investment in capital of subsidiaries andaffiliates
Payments of leasehold and guarantee deposits
Proceeds from refund of leasehold and guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Redemption of bonds
Proceeds from exercise of employee share options
Purchase of treasury shares
Repayments to non-controlling shareholders
Proceeds from share issuance to non-controlling shareholders
Dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting fromchange in scope of consolidation
Cash and cash equivalents at end of period(Millions of yen)
Fiscal year ended
September 30, 2023

2,024

763

207

19

(3,508)(36,969)(16,353)(3,932)(40,239)
17,393(0)(3,139)28(487)(1,171)
5,166(3,203)――
17(18,527)(6,381)8(340)(2,953)2,181(2,403)
2,317
(332)
40

(3,174)(10,537)

3,107

1,544

(1,934)268
156(4,367)(5,782)5,602(12)(35,575)

262,358(212,514)
197,430(175,277)(242)
98(30,000)(1,182)668(15,648)(997)
24,694
6,858
10,832
334,506

275,724(237,298)
207,404(179,414)
(242)
56
(0)
(0)
565
(16,753)(938)
49,103
1,641
32,562
346,080741―

346,080

378,643©2024 Open House Group Co.,LTD. All Rights Reserved.

36

Consolidated Financial Statements

Issuance, Redemption or Acquisition of Shares
Changes in the total number of shares issued, share capital, etc.
Date
October 1, 2018 toNovember 30, 2018 (Note 1)

Change in the total numberof shares issued(Shares)

Balance of the total numberof shares issued(Shares)

Change in share capital(Millions of yen)

Balance of share capital(Millions of yen)

Change in legal capitalsurplus(Millions of yen)

Balance of legal capitalsurplus(Millions of yen)

40,00057,552,500

63

4,158

63

3,941

February 14, 2019 (Note 2)

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 3)

8,100

57,602,900

16

4,221

16

4,004

April 6, 2019 to
September 30, 2019 (Note 1)

15,60057,618,500

13

4,234

13

4,017

57,618,500

115,237,000

―

4,234

―

4,017

October 1, 2019 to December 31, 2019
(Note 1)

21,200115,258,200

8

4,242

8

4,026

February 5, 2020 (Note 5)

25,500115,283,700

40

4,283

40

4,066

February 6, 2020 toMarch 31, 2020 (Note 1)

72,800115,356,500

32

4,315

32

4,098

July 28, 2020 (Note 6)

9,617,200

124,973,700

14,31018,625

14,31018,408August 25, 2020 (Note 7)

684,600

125,658,300

1,019

19,644

1,019

19,427

August 26, 2020 to
September 30, 2020 (Note 1)

160,800

125,819,100

97

19,741

97

19,524

October 1, 2020 to
December 31, 2020 (Note 1)

21,600125,840,700

819,7508

19,533February 10, 2022 (Note 8)

22,700125,863,400

46

19,79646

19,579February 11, 2021 to September 30, 2021
(Note 1)

253,600

126,117,000

142

19,939142

19,722February 10, 2022 (Note 9)18,700126,135,700

54

19,99454

19,777

February 11, 2022 to
May 22, 2021 (Note 1)

149,000

126,284,700

75

20,07075

19,853

August 31,2022 (Note 10)△5,796,800

120,487,900―

20,070―19,853September 1, 2022 toMarch 17, 2022 (Note 1)

80,000120,567,900

31

20,10131

19,884

March 18, 2023 to
September 13, 2023 (Note 1)

20,200120,588,100

8

20,1108

19,893October 1, 2019 (Note 5)

Notes:
1. The increase was due to the exercise of share acquisitionrights.
2. The increase was due to the issuance of new shares withcompensation for the purpose of granting restricted sharebased remuneration.
Issue price: 4,265 yen
Additional paid-in capital: 2,132.5 yen
3. The increase was due to the issuance of new shares withcompensation for the purpose of granting restricted sharebased remuneration.
Issue price: 3,990 yen
Additional paid-in capital: 1,995 yen
4. The increase was due to a 2-for-1 stock split.
5. The increase was due to the issuance of new shares withcompensation for the purpose of granting restricted sharebased remuneration.
Issue price: 3,175 yen
Additional paid-in capital: 1,587.5 yen
6. 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
7. The increase was due to the issuance of new shares forthird-party allotment (third-party allotment capital increase
related to the secondary offering of our shares through overallotment)
Issue price: 2,976 yen
Additional paid-in capital: 1,488 yen
8. The increase was due to the issuance of new shares withcompensation for the purpose of granting restricted sharebased remuneration.
Issue price: 4,100 yen
Additional paid-in capital: 2,050 yen
9. The increase was due to the issuance of new shares withcompensation for the purpose of granting restricted sharebased remuneration.
Issue price: 5,860 yen
Additional paid-in capital: 2,930 yen
10. The decrease was due to the cancellation of treasury shares.

©2024 Open House Group Co.,LTD. All Rights Reserved.

37

Consolidated Financial Statements

Issuance, Redemption or Acquisition of Shares(Information on Officers)
Transactions with individuals (1) Transactions between the reporting entity of the consolidated financial statements (hereinafter the “reporting entity”) and its related parties
Fiscal year ended September 30, 2022
Type

Name of company orindividual

Location

Capital orinvestment(Millions of yen)

Officer

Masaaki Arai－－

Yasuhito Hidaka－－

Rakuto Kuroyanagi－－

Officer of a
subsidiary
Officer of a
subsidiary

Description ofbusiness or
occupation
President &Representative
Director of
the Company
President &Representative
Director of
the Company’s
subsidiary
Director of
the Company’s
subsidiary

Ratio of voting rights
holding (held) (%)

Relationship withthe related party

Summary oftransaction

Transaction
amount(Millions of yen)

Items

Balance at endof period(Millions of yen)

(Held)
Direct: 36.3

Purchase oftreasury shares

Purchase oftreasury shares(Note.1)

8,699

－

－

(Held)
Direct: 0.0

Exercise of stock
option rights

Exercise of stock
option rights(Note.2)

48－－(Held)
Direct: 0.0

Exercise of stock
option rights

Exercise of stock
option rights(Note.2)

11－－

Transaction
amount(Millions of yen)

Items

Balance at endof period(Millions of yen)Note:
1. The purchase of treasury shares was
conducted on May 19, 2022 on ToSTNeT-3,
the system for transactions for the purchaseby listed companies of their own shares,
based on a resolution of the Board of
Directors on May 13, 2022.
The value of the transaction is based on theclosing price on May 18, 2022.
2. The table presents the exercise of stock
option rights granted based on resolutionsof the Board of Directors on October 3, 2014
and May 15, 2015. The “Transaction amount”
column presents the amount obtained bymultiplying the number of shares grantedwith the exercise of stock option rights by
the paid-in amount.

(2) Transactions between consolidated subsidiaries of the reporting entity and its related parties
Officers and major shareholders (limited to individuals) of the reporting entity, etc.
Fiscal year ended September 30, 2022
Type

Name of company orindividual

Location

Capital orinvestment(Millions of yen)

Officer

Kazuhiko Kamata－－

Officer

Kotaro Wakatabi－－

Officer

Hitoshi Munemasa－

Fiscal year ended September 30, 2022

－

Type

Name of company orindividual

Location

Capital orinvestment(Millions of yen)

Officer

Kazuhiko Kamata－－

Officer

Hitoshi Imamura－－

Description ofbusiness or
occupation
Executive Vice
President of theCompany
Senior Managing
Director and CFO of
the Company
Director of theCompany

Description ofbusiness or
occupation
Executive Vice
President of theCompany
Director of theCompany

Ratio of voting rights
holding (held) (%)

Relationship withthe related party

Summary oftransaction(Held)
Direct: 0.1

Sale of real estate

Sale of real estate(Note)

114(Held)
Direct: 0.2

Sale of real estate

Sale of real estate(Note)

41－－(Held)
Direct: 0.0

Sale of real estate

Sale of real estate(Note)

45－－

Ratio of voting rights
holding (held) (%)

Relationship withthe related party

Summary oftransaction(Held)
Direct: 0.1

Sale of real estate

Sale of realestate (Note)

178 Contract liability

27(Held)
Direct: 1.7

Sale of real estate

Sale of realestate (Note)

114 Contract liability

38

Transaction
amount(Millions of yen)

Advanced
payment

Items

15

Balance at endof period(Millions of yen)Note:
The transaction was conducted on generalterms equivalent to those prevailing in arm’s
length transactions.

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

©2024 Open House Group Co.,LTD. All Rights Reserved.

38

Consolidated Financial Statements

Issuance, Redemption or Acquisition of Shares
Officers and major shareholders of significant subsidiaries of the reporting entity (limited to individuals), etc.
Fiscal year ended September 30, 2022

Type

Officer of a
subsidiary

Name of company orindividual

Kenta Kikuchi

Location－

Capital orinvestment(Millions ofyen)

Description ofbusiness or
occupation

Ratio of voting rights
holding (held) (%)

Relationship withthe related party

Summary oftransaction－

President &Representative
Director of
the Company’s
subsidiary(Held)
Direct: 0.2

Sale of real estate

Sale of real estate(Note)－

Director of
the Company’s
subsidiary

Sale of real estate
Officer of a
subsidiary

Hajime Yazu－

(Held)
Direct: 0.0

Lending of funds

Sale of real estate
Officer of a
subsidiary

Officer of a
subsidiary

Officer of a
subsidiary

RakutoKuroyanagi

Kenichiro Kimura

Katsuhiko Tamura

－

－

－

－

－

－

Director of
the Company’s
subsidiary(Held)
Direct: 0.0

Director of
the Company’s
subsidiary(Held)
Direct: 0.0

Auditor of
the Company’s
subsidiary(Held)
Direct: 0.0

Lending of funds

Lending of funds

Lending of funds

Sale of real estate(Note)
Lending of funds(Note)
Receipt of interest(Note)
Sale of real estate(Note)
Lending of funds(Note)
Receipt of interest(Note)
Lending of funds(Note)
Receipt of interest(Note)
Lending of funds(Note)
Receipt of interest(Note)

Transaction
amount(Millions of
yen)

Items

Balance at endof period(Millions of
yen)

80

－

－

45

－

－

29

Operating
loans

99

2

－

－

44

－

－

－

Operating
loans

25

0

－

－

－

Operating
loans

27

0

－

－

－

Operating
loans

21

0

－

－

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

©2024 Open House Group Co.,LTD. All Rights Reserved.

39

Significant Subsequent Events

Conversion of SANEI ARCHITECTURE PLANNING to Consolidated Subsidiary
On October 5, 2023, the Company acquired 19,735,327 commonshares of SANEI ARCHITECTURE PLANNING CO. LTD. through astock tender offer. As a result, our voting rights in SANEIARCHITECTURE PLANNING reached 93.01%, and converted thecompany into a consolidated subsidiary on the same day.
Furthermore, as the Group has become a special controllingshareholder of the company, as part of the transaction for making
SANEI ARCHITECTURE PLANNING a wholly owned subsidiary, theGroup notified the company on October 13, 2023, that it would
request all non-controlling shareholders, excluding the company, tosell all of their shares, pursuant to Article 179, Paragraph (1) of theCompanies Act, and received approval from the board of directorsof SANEI ARCHITECTURE PLANNING. As a result, on November 6,
2023, the Company acquired an additional 1,481,534 shares ofcommon stock, and SANEI ARCHITECTURE PLANNING became awholly owned subsidiary of the Company.

Business combination overview

Name of the acquired company and details of its business
Name of acquired company: SANEI ARCHITECTURE PLANNING CO. LTD.
Business details: sale of single-family homes, custom-built housing,
contracting business, etc.

Main reasons for the business combination
To expand the Group’s product lineup by adding the company's welldesigned single-family homes, improve cost competitiveness bystrengthening various purchasing power by taking advantage of
economies of scale, and facilitate and stabilize the company's
transactions with financial institutions. In order to realize synergies, wethought it would be desirable to make the company a wholly owned
subsidiary.
Business combination date
October 5, 2023
Legal form of business combination
Acquisition of shares for cash consideration
Name of the combined company
No changes.
Percentage of voting rights acquired
・Ratio of voting rights acquired through tender offer: 93.01%
・ Ratio of voting rights additionally acquired after the businesscombination date due to demand for stock sale: 6.98%
・Voting rights ratio after additional acquisition: 100%
Main basis for company acquisition
The Company was designated as the acquiring company, due to thefact that the Company acquired 93.01% of the voting rights throughstock acquisition for cash consideration.

Matters related to calculation of acquisition cost, etc.

Breakdown by type of acquisition cost and compensation of
acquired company
Total amount of stock acquisition price due to tender offer and demand
for stock sale (cash and deposits) 42,964 million yen.
Procurement of payment funds
The entire amount is self-funded.
Details and amounts of major acquisition-related costs
Currently unconfirmed.
(Acquisition of treasury stock)
At the board of directors meeting held on November 14, 2023, theCompany resolved on matters related to the acquisition of treasury
stock based on the provisions of Article 156 of the Companies Act, asapplied by replacing the terms with the provisions of Article 165,
Paragraph 3 of the same Act.
Reasons for acquiring treasury stock
Aims to implement flexible capital policy and to improve shareholder
value.
Contents of matters related to acquisition
Type of stock to be acquired:
Common stock
Method of acquisition:
Market purchaseTotal number of shares to be acquired: 2,200,000 shares (upper limit)
Total acquisition price of shares:
10,000 million yen (upper limit)
Acquisition period:
Nov. 15, 2023~April 30, 2024
(planned)©2024 Open House Group Co.,LTD. All Rights Reserved.

40

7

Corporate Information

Corporate Information

Company nameOpen House Group Co., Ltd. (Note) In Jan. 2022, Shifted to a pure holding company structure and changed the company name

Founded

September 1997

Listed market

The Prime Market of Tokyo Stock Exchange (Securities Code: 3288)

ListedSeptember 2013

Business year

From October 1 to September 30

Capital stock¥ 20,110 million (as of the end of December 2023)

Number of employees

4,904 persons (as of the end of December 2023)

Head Office

JP Tower , 2-7-2 Marunouchi, Chiyoda-Ku, Tokyo 100-7020, Japan

Telephone+81-3-6213-0776

Consolidated
subsidiaries

Open House Co., Ltd
Open House Development Co., Ltd.
IB Net Co., Ltd
Open House Real Estate Co., Ltd.
Open House Architect Co., Ltd
Open House Texas Realty & Investments LLC
Open House Texas Property Management LLC
Open House Ohio Realty & Investments LLC
HAWK ONE CORPORATIONOpen House Atlanta Realty & Investments LLC
Open House Investments LLC
PRESSANCE CORPORATION Co., Ltd.
Open House Realty & Investments, Inc.
And 25 other subsidiaries

Websitehttps://openhouse-group.co.jp/ir/en

All information are as of September 30, 2023, unless specified otherwise©2024 Open House Group Co.,LTD. All Rights Reserved.

42

Corporate Information

Supervisory Board Members（as of December 30, 2023）

President & CEO

Masaaki Arai

Executive Vice President

Kazuhiko Kamata

Senior Managing Director, CFO

Kotaro Wakatabi

Senior Managing Director

Hitoshi Imamura

Director, Senior Managing Executive Officer

Ryosuke Fukuoka

Director

Hiroshi Munemasa

Outside Director

Hitoshi Ishimura

Outside Director

Yuko Omae

Outside Director

Maoko Kotani

Outside Audit & Supervisory Board Member (Full-time)

Koichi Matsumoto

Outside Audit & Supervisory Board Member

Mieko Hosaka

Outside Audit & Supervisory Board Member

Shoko Sasaki©2024 Open House Group Co.,LTD. All Rights Reserved.

43

Corporate Information

Shareholder Composition (as of September 30, 2023)
Major Shareholders (Top 10)
Name
Masaaki Arai

Composition by Number of Shareholdings
Number ofshares held
（in thousands）

Shareholding
ratio (％)

38,237

31.70

The Master Trust Bank of Japan Ltd.
(Trust Account)

11,773

9.76

Ichigo Trust Pte., Ltd.

10,6198.80

Number ofsharesoutstanding(in thousands)%of total
issued shares

Financial Institutions

20,762

17.22

Securities firms

3,298

2.74

Other Corporation

157

0.13

Foreign investors

43,485

36.06

Individuals and others

52,884

43.86

SMBC Trust Bank Ltd.
(Trustee of Regulated / Designated
Securities in Trust)

4,520

3.74

Custody Bank of Japan Ltd.
(Trust Account)

3,426

2.84

STATE STREET BANK AND TRUSTCOMPANY 510312

2,243

1.86

Hitoshi Imamura

2,004

1.66

STATE STREET BANK AND TRUSTCOMPANY 510311

1,821

1.51

Number of shares of common stock

MNYM TREATY DTT 15

1,686

1.39

Total number of authorizedshares

325,200,000

Total number of issued shares

120,588,100

Morgan Stanley MUFG Securities Co., Ltd.

1,671

1.38

Financial
institutions
17.22%
Individuals
and others
43.86%

Number of shareholders

Securities firms
2.74%
Other corporation
0.13%

Foreigncorporation
36.06%

9,455©2024 Open House Group Co.,LTD. All Rights Reserved.

44https://openhouse-group.co.jp/ir/en/――Disclaimer ――This document contains forward-looking statements concerning future business performance. These statements include company forecasts based on information
available at the time of publication and involve potential risks and uncertainties. They do not constitute a guarantee of future results. The information provided herein issubject to change without notice; no guarantees are provided with regard to the accuracy or reliability of such information.
This document is provided for informational purposes only. It does not constitute a solicitation to invest.
This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and theJapanese original, the original shall prevail.