Bridge Report:（8860）Fuji Fiscal Year ended March 2025

President Nobutsuna Miyawaki	Fuji Corporation Ltd. (8860)

Company Information

Stock Information

* The share price is the closing price on June 5, 2025. The number of shares issued at the end of the most recent quarter excludes its treasury shares.
* ROE and BPS are based on FY 3/25 earnings results. EPS and DPS are based on FY 3/26 earnings estimates.

Earnings Trends

*Units: million yen, EPS and dividend are yen.

This Bridge Report provides information about Fiscal Year ended March 2025 Earnings Results of Fuji Corporation Ltd.

Table of Contents

Key Points
1. Company Overview
2. New Medium-Term Management Plan (FY 3/26 to FY 3/28)
3. Fiscal Year ended March 2025 Earnings Results
4. Fiscal Year ending March 2026 Earnings Estimates
5. Conclusions
<Reference: Regarding Corporate Governance>

Key Points

• For the fiscal year ended March 2025, the company recorded a 2.9% year-on-year increase in sales and a 5.2% year-on-year increase in ordinary income. While the segment of residential properties for sale and effective land utilization experienced slight declines in sales, the housing distribution segment saw a 7.2% year-on-year increase due to the handover of more used houses. The property leasing and management segment also posted a 10.6% year-on-year increase in sales, contributing to overall revenue growth. On the profit side, although there was a slight decline in the housing distribution and effective land utilization segment, the segment of residential properties for sale recorded a significant increase in profit due to an improvement in gross profit per unit and strong contributions from land sales with high profit margins. In the property leasing and management segment, profit also increased in tandem with sales, resulting in an overall increase in profit from the previous year.

   

• For the fiscal year ending March 2026, the company forecasts a 1.7% year-on-year increase in sales and an 18.4% year-on-year decrease in ordinary income. On the sales side, growth is expected mainly due to the contribution of a large-scale condominium project that was handed over in April. On the profit side, the company anticipates an increase in personnel-related investments to support future growth, as well as higher interest expenses resulting from rising interest rates.The company plans to pay an annual dividend of 32 yen/share (an interim dividend of 16 yen/share and a year-end dividend of 16 yen/share), unchanged from the previous year, in which the annual dividend increased 5 yen/share year on year.

   

• The forecast for the fiscal year ending March 2026 calls for a 1.7% year-on-year increase in revenue and an 18.4% year-on-year decrease in ordinary income from the previous fiscal year. As of the end of the fiscal year ended March 2025, the company's order backlog stood at 60.1 billion yen, up 8.2% year on year, exceeding the previous year's level across all segments and marking a record high for the end of a fiscal year. Given this strong accumulation of orders, the company's forecast appears to be quite conservative. How much reserve the company can build for achieving its current-year targets amid a challenging industry environment, while maintaining its characteristic balanced management, will depend on how the results unfold in the upcoming first quarter.

   

   

1. Company Overview

Fuji Corporation Ltd. provides various real estate related services including sales of new and used condominiums and detached houses primarily in Osaka Prefecture (where the Company is based), between Osaka and Kobe, and within Wakayama City. Their main business is the sale of detached houses, albeit a built-for-sale type, that would maximize customer satisfaction by allowing for the “free-design house” regarding layout, specifications, etc. within the boundaries of Japan’s Building Standards Act. Fuji also boasts of strengths in the development of properties where 50 to 200 homes are constructed in coordination with the surrounding environment and each other to provide uniformity in neighborhoods. The other main pillars of the Company’s business include renovation and sale of used residential properties, collaboration with financial institutions for effective land utilization, sales of rental apartments for sale to individual investors, property leasing and management services.
Fuji boasts of unique knowhow developed in various businesses realms derived from its sales agency and detached house services. Furthermore, the complementary and synergistic effects that occur between its various business divisions allow the Company as a Complete Home Provider to respond with solutions that match the needs of home owners and residents in various geographic regions and times. Taking advantage of its strength in community-based management, the company aims to create homes that deliver high customer satisfaction by a special relationship with customers that doesn’t end just after sell or build them a home.
In addition, each of the company's businesses, consisting of residential properties for sale, housing distribution, effective land utilization, leasing and management, and construction-related businesses, has its own know-how and promotes balanced management that complements each other’s business segments. Starting with the sublease business of rental apartments for sale to individual investors and serviced housing for seniors for individual investors, the company has been diversifying the business, operating the asset business of existing residential properties and the business of owning serviced rental housing for seniors, and expanding its recurring-revenue business that will withstand any change in economic trends.

1-1 Management ethos

The company operates for the sake of:
・Employees,
・Employees’ families,
・Customers and business partners,
・Shareholders,
・Local communities, and
・Ultimately, the nation.
The company's management ethos begins with “for employees and their families” because it believes that if employees or their families are not happy, they cannot do work that would truly please customers. By treasuring employees and their families and providing them with a sense of gratitude, pride in their work, motivation, and a sense of purpose in life, the employees will be able to value customers truly, which the company believes will lead to the happiness of all stakeholders, including business partners, shareholders, local communities, and the nation.

1-2 Business Description

*The percentage represents the ratio of sales in each business segment to the total sales of the reporting segments (excluding internal sales).

Residential Properties for Sales (accounting for 28.0% of total sales in FY 3/25)
With its base of operations in Osaka Prefecture and the surrounding areas, the company sells freely designed new detached houses, built-for-sale houses, and condominiums, and also undertakes the construction of custom houses. It specializes in “development of a town” with 50 to 200 homes and offers “free-design house” in which customers themselves participate in building their homes, as well as its unique ventilation system “Sumi no Ie (a house with a system for purifying air with charcoal)/Pure Air,” which harnesses the self-purifying properties of charcoal. In the current fiscal year, the company plans to complete and deliver 11 condominium buildings (745 units), which will contribute to one-shot revenues.

(Taken from the website of the company)

Housing Distribution (accounting for 21.5% of total sales in FY 3/25)
The company is engaged in the “business of purchasing and reselling used residential properties,” in which it purchases used residential properties, renovates them, and sells them, and the “used housing asset business,” in which it acquires existing condominiums with tenants and earns rental income and profit on the sale of the condominiums through resale. The company aims to further stabilize its earnings base by focusing on the highly competitive and profitable used housing asset business, while continuing the inventory optimization and strict procurement policy emphasizing profit, which were started in the previous fiscal year.

(Taken from the website of the company)

Effective Land Utilization (accounting for 24.3% of total sales in FY 3/25)
The company is engaged in contract construction of rental apartment buildings and affordable apartments for seniors with nursing-care services, as well as selling rental apartments for sale to individual investors. Under a management policy of aiming to be “the most beloved effective land utilization business section in Japan,” the company has been able to exist solely in the closed market for many years, thanks to an extremely high repeat order rate and introduction of customers by its financing banks. The demand from investors is extremely strong, and the company expects the environment of strong demand to continue, leading to solid performance.

(Taken from the website of the company)

Property Leasing and Management (accounting for 25.0% of total sales in FY 3/25)
The company's wholly owned subsidiary Fuji Amenity Service Co., Ltd. provides management services such as the management of rental apartment buildings, tenant recruitment, and rent collection, as well as management of condominiums on consignment from their management associations. The company boasts the nation's largest number of affordable apartments for seniors with nursing-care services, which are operated only in the Kansai area. The company expects these operations to continue to be healthy in the current fiscal year and to become a key component of its long-term, stable earnings base, thanks to the strong synergetic effects of the construction contracts in the effective land utilization business, the sale and deliver of rental apartments for sale to individual investors and condominiums in the business of residential properties for sales.

(Taken from the website of the company)

Construction related (accounting for 1.0% of total sales in FY 3/25）
In January 2020, the company welcomed the Yuuken Construction Group, which has a proven track record in steel-framed and reinforced concrete construction work, as a partner, and is providing steel-framed housing for the “Fuji Palace Senior,” which is affordable apartments for seniors with nursing-care services, as well as carrying out public works projects, mainly architectural and civil engineering works. The company aims to expand its business lineup by carrying out steel-framed and reinforced concrete construction work all by itself and steadily expand its business performance.

(Taken from the website of the company)

Other business (accounting for 0.2% of total sales in FY 3/25)
This business segment is not included in segments to be reported, but includes the insurance agency business operated by the company.

1-3 Strengths of Fuji Corporation

◎ Creating customer-oriented homes that can take responsibility for meeting customer needs
The company’s name is derived from Mt. Fuji, with the aim of becoming "the most beloved company in Japan.” The company believes that a house is a once-or-twice-in-a-lifetime purchase, and that it must be a business that satisfies its customers to the very end. The company believes that providing safe and reliable products and services, and meeting the expectations and trust of its customers are of utmost importance, so that all its customers will be happy to say, "Fuji will take care of everything right through to the end, and I am glad I bought a house from Fuji." Since the company's founding, it has continued to build homes that are customer-focused and responsible. As a result, the company has been highly recognized by customers. This is evident through the many introductions of new customers by existing customers and cooperating companies and the repeat contracts from existing customers. Moreover, in the 2025 Oricon Customer Satisfaction ® Survey, the company has received high praise from customers, being ranked first in "Kinki" and "Osaka Prefecture" for five consecutive years.
In the division of residential properties for sale (new construction), 30.0% of orders received come from customers who have previously purchased a home from the company or through referrals from the company's affiliates. In the housing distribution division (used houses), 47.6% of orders for properties sold directly without intermediary agents also come from previous customers or referrals from company affiliates. Furthermore, in the effective land utilization business division, returning clients, owners who have already purchased a building and subsequently sign for a second or third one, account for approximately 40.0% of the total. In recent years, due to strong sales performance, properties have been sold by lottery, which has caused some fluctuations in the repeat purchase rate. However, the demand from repeat customers has remained stable, and overall sales conditions continue to be good.

*1 The number of contracts concluded through referrals for newly constructed homes for sale is calculated based on the number of lots when multiple lots are purchased at the same time (excluding sales of land).
*2 The number of used houses is for the homes sold directly by the company without an intermediary.
*3 The number of orders received is calculated based solely on contracts for construction and sale of rental apartment buildings, using the loan approval date from financial institutions as the reference point.
(Taken from the reference material of the company)

◎ Stable Business Structure with Balanced Management
Although the company's sales area is limited to Osaka and parts of Hyogo and Wakayama Prefectures, each of its divisions boasts a national level or the largest market share within its sales area. In the business of residential properties for sale, the company was ranked first in the number of housing starts in Osaka Prefecture in the builder category released in February 2023, for 17 consecutive years until fiscal 2021 (although it has not been certified since fiscal 2022 as the survey was terminated, the company believes that it still maintains the largest share of the market). In the housing distribution business, it is ranked 8th in Japan for the number of used housing purchases and resales, and in the property leasing and management department, it is ranked first in Japan by a long way with 256 affordable apartments for seniors with nursing-care services. “Source: Reform Industry Newspaper, Annual Ranking of Units Sold for Purchase and Resale 2024 (issued on July 29, 2024); the Elderly Housing Newspaper dated summer extra-large, 2024." The company was certified as No. 1 in the ranking of local builders in terms of housing starts in Osaka Prefecture, excluding Osaka City (Osaka City is out of scope for this survey.) (surveyed by Jutaku Sangyo Kenkyusho Co., Ltd. ; taken from “No. 1 Complete Collection of Builders in 2023”)
In addition, (1) the ability to conduct business that meets the needs of a wide range of customers, (2) the expansion of business opportunities by responding to a wide variety of commercialization, and (3) a high tolerance for changes in the economy and market conditions are strengths of balanced management.

[Sales composition by business segment in balance (FY 3/25)]

◎ Sumi no Ie（House of Charcoal） / Pure Air
Pollens, bacteria, and viruses are becoming grave problems in addition to air pollution due to such factors as exhaust gas. Fuji Corporation’s “Sumi no Ie / Pure Air” was born through its efforts of putting together the technologies that it has cultivated and focusing thoroughly on air and quality. The company has gained the right to use the patented system “Sumi no Ie” within the corporate group’s sales area, and offers safe housing as a product that differentiates it from other companies and possesses added value.
Sumi no Ie (a house with a system for purifying air with charcoal)/Pure Air is a carbon air clean system that forcibly draws in outdoor air with a fan, and blocks minute harmful substances with a microparticle filter. By putting charcoal under the floor and passing air through it, clean air is supplied to each room.
In some lots of land for sale, they hold an event for experiencing a stay at “Sumi no Ie (a house with a system for purifying air with charcoal).” This event has been held since 2019, and many people have experienced a stay at “Sumi no Ie.” In this event, those who are thinking of buying a detached house and interested in the effects of charcoal stay at a model house of “Sumi no Ie,” a detached house, for a day free of charge, to experience the effects of charcoal and the latest housing equipment.

(Taken from the reference material of the company)
*Examples of the effects felt by customers

◎ Provision of high-performance housing
The company considers that its mission is to provide high-quality housing where people can live while being filled with a sense of satisfaction throughout life. As one of the approaches to the mission, Fuji has obtained the housing performance assessment report for all its free design houses, and this means that the company has established a corporate system that enables it to earn the highest grades for all the housing performance indication items (having six kinds). Furthermore, the company has adopted “TRC Damper”, a vibration control system that dampens seismic vibrations, to achieve more effective prevention of walls from being damaged and furniture from falling down.

(Taken from the reference material of the company)

*The above contents are as of March 31, 2025.
*All housing units of the company got Grade 5 or higher grades for heat insulation performance, etc. according to the ZEH standards. The company also provides residential properties with Grade 6 to meet the needs of customers.
Considering the trends of the needs of customers and the market, the company plan to provide residential properties with Grade 7, too.

◎ Building a home that can be built because of their close ties to the local community
The company's founding spirit is to "keep taking care of a house after sold or built." The company is committed to continuing its dense business within the scope of its customers' face-to-face contact, and to ensuring a complete after-sales follow-up system, which is why it does not expand its business nationwide. In line with its founding spirit, the company aims to create high-quality housing that is community-based so that customers who have been with the company for decades can continue to live with peace of mind.

◎ Used asset business in collaboration with the leasing management division
The used asset business acquires used condominiums that are already rented. This business model profits by collecting rents until tenants move out, and then the company renovates and resells the properties by collaborating with the leasing management business division. The company is one of the leading companies in Japan in the property purchase and resale business that renovates and resells vacant, used houses. The company owns 989 properties in Osaka Prefecture and the Hanshinkan area. Namely, it holds a significant number of properties in Kansai, being comparable to the largest companies in the same industry. In addition, the company has diversified exit strategies, such as re-leasing properties with existing tenants as investment properties or selling them with the tenants living in them. Using the corporate group's leasing management division enables the company to manage the properties flexibly according to their attributes. The average area of ​​properties owned as of the end of March 2025 is 58.68m2, and the average building age is about 26 years. Regarding the location of the properties, 61% of them are in Osaka prefecture, and 34% are in Hyogo prefecture, making them the regions with the largest number of properties.

*Properties owned at the end of March 2025

◎ No sales consignment. The company’s employees handle all sales.
The company sells about 1,000 new condominium units annually, and the company's employees conduct sales activities at all sales sites. The company's employees handle land purchase, sales, plan design, construction site management, and after-sales follow-up. The company conducts face-to-face sales activities in an intensive and responsible manner aiming for the best customer satisfaction in Japan and pursuing customer happiness. In the sales department, there are no sales performance graphs for individual employees, but customer reviews and report graphs. The company places great importance on the positive reviews it receives from its customers and is promoting its sales activities by upholding the principles of "a special relationship with customers that doesn’t end just after sell or build them a home."

◎ Leasing management that has maintained a high occupancy rate of approx. 97% for the past five consecutive years
As of the end of March 2025, the number of rental housing units managed by the company is 38,030 (the number of rental residential buildings managed by the company is 2,642), the number of rental housing units managed by the company after renting whole buildings is 33,388 (the number of rental residential buildings managed by the company is 2,467), and occupancy rate is 96.8%. In the past 5 years, occupancy rate has been as high as approx. 97%. This is thanks to the company carefully selecting the location of each property so that its buyer can manage the property with peace of mind over the long term, as well as (1) the company's ability to attract customers through strong cooperation with brokerage companies, (2) its high level of property management, and (3) the rapid and flexible management system due to division of labor.

◎ Stable supply of high-quality housing based on deep trusting relationships with cooperative firms
In order to provide high-quality housing, the company holds a meeting of the council for safety and health every month and a conference of the association for on-site cooperation once a year, to share the management philosophy of the company and carry out the thoroughgoing management of safety and quality. At the conference of the association for on-site cooperation in fiscal year 2024, approx. 900 people of cooperative firms got together, and held a ceremony for commending companies and artisans who aim to “bring happiness to customers” together with Fuji Corporation. In addition, they hold a ceremony for offering letters of appreciation to cooperative firms that make daily efforts to satisfy customers three times a year to express their thanks. Fuji Corporation and cooperative firms join hands to provide high-quality housing in a stable manner.

1-4 Efforts for ESG and SDGs

Fuji Corporation aims to become a corporate group that continues growing sustainably together with the society and builds up trust by contributing to the society while being conscious of the relationship of its community-based property management activities with Environmental, Social, and Corporate Governance (ESG) and the Sustainable Development Goals (SDGs).

1-5 DX (Digital Transformation) Initiatives

To promote next-generation system construction projects to dramatically accelerate the improvement of duplicated operations through overall optimization and the improvement of operational efficiency through information sharing, with the aim of building a system infrastructure that is resistant to change.

(Taken from the reference material of the company)

In November 2023, the company adopted the "ITANDI Service" operated by Itandi, Inc. Ltd. This allows the entire process, from property search to application and contract conclusion, to be completed online, reducing the burden on customers to visit in person, enabling faster customer services, and significantly improving operational efficiency for both the company and partner real estate agencies. Additionally, the company adopted the electronic contract and document management service "Release" for various business operations in sales contracts in the business of residential properties for sale in February 2023, and in lease agreements for rental apartments for seniors with nurse care services in June 2024.
Moreover, in December 2023, the company adopted the "egaku" cloud-based housing specification confirmation service, and it has achieved seamless management in the business of purchasing and reselling used residential properties, by digitalizing operations in collaboration with partner companies.

2. New Medium-Term Management Plan (FY 3/26 to FY 3/28)

In the real estate industry, land prices continue to rise, and the cost of supplying new housing has further increased due to surging construction material prices and labor costs. Additionally, the Bank of Japan's measures for normalizing policy interest rates have made the business environment even more challenging for real estate companies. On the other hand, economic recovery and wage growth are supporting consumers' willingness to purchase homes, and the real estate market as a whole remains relatively firm. In particular, the steep rise in new housing prices has invigorated the used house resale market, and the market of properties for investment, including rental housing, is also performing well. In response to these market changes, the corporate group has formulated a medium-term management plan (FY 3/26 to FY 3/28) centered on expanding recurring-revenue businesses, to optimize its business portfolio and strengthen its stable revenue base. This plan seeks to secure the company's growth path by maximizing synergies across five business areas, further enhancing its proposal and product development capabilities, driving operational innovation through DX and generative AI, and optimizing financial management. The plan also aims to contribute to the realization of a sustainable society by developing human resources.

◎ Review of the Previous Medium-Term Management Plan (FY 3/23 to FY 3/25)
During the period of the previous medium-term management plan (FY 3/23 to FY 3/25), both sales and all kinds of profits exceeded the targets in every fiscal year. As initially projected, the fiscal year ended March 2025 marked a record high in both sales and profit. ROE also remained stable, and over the three years, the company was able to strengthen its earnings structure further.

*Units: million yen

◎ Vision for the New Medium-Term Management Plan (FY 3/26 to FY 3/28)

The company believes that having as many employees as possible understand and embody its management philosophy is the foundation for enhancing all aspects of corporate value, productivity, profitability, credibility, and sustainability.

◎ Profit Plan
Under this medium-term plan, sales are projected to reach record highs for three consecutive fiscal years, with profit also expected to grow steadily. Through investment in human capital and cost absorption, key financial indicators such as ROE and equity ratio are expected to remain at stable levels, striking a balance between growth and financial soundness.

[Consolidated performance plan]

*Units: million yen

<Consolidated Net Sales>
Sales are projected to reach record highs for three consecutive fiscal years, maintaining a stable growth trend.
◆Recurring revenue from property leasing and management is expected to grow steadily by approximately 7% annually, forming a stable revenue base.
◆One-shot revenue from the selling of residential properties, housing distribution, and effective land utilization is also expected to be healthy.
◆Condominium developments: Plans call for the completion and handover of 9 buildings totaling approximately 850 to just under 900 units over the period of three fiscal years
◆With steady performance across all segments, net sales are expected to exceed 130 billion yen in the third fiscal year of the plan, marking a strong growth path.

<All Kinds of Profits >
Ordinary income is expected to be impacted by an increased interest burden in the second fiscal year, but is expected to recover and return to a growth trend.
◆Human capital investment: integrating recruitment, development, and retention processes to strengthen organizational capabilities and on-site business execution
◆Advertising expenses will be strategically optimized, while DX investments will be carried out in a planned manner.
◆The impact of policy interest rate hikes is expected to peak in the second year, with expansion in net sales offsetting the effect in the third year.

<ROE & Equity Ratio>
Equity ratio is expected to be 30% or higher, ensuring financial soundness.
◆ROE is projected to temporarily decline to around 6% in the second fiscal year, when rising borrowing costs and personnel expenses are taken into account.
◆However, steady accumulation of equity capital, combined with increased sales and improved profitability, is expected to support a recovery trend from the third fiscal year onward.
◆Net D/E ratio is expected to gradually decline through appropriate management of inventory levels and interest-bearing debt, along with steady capital accumulation.
◆Equity ratio is expected to remain stable, maintaining a healthy financial standing.

[Performance Trends]
Since its listing on the stock market, the company has maintained steady sales growth by flexibly responding to changes in the external environment. Despite ongoing external pressures such as persistently high construction and land costs and rising interest rates, the company is committed to appropriate inventory management and disciplined investment decisions through selection and focus. During the current medium-term plan period, the company aims to achieve record-high sales for three consecutive fiscal years.

[Pursuit of the Recurring-revenue Business]
During the current plan period, the company aims to hand over approximately 600 rental apartment buildings over a three-year period. This is expected to result in an increase in the number of properties under management and an expansion of leasing and management revenue. The occupancy rate is projected to remain at a high level of around 97%, and the company will continue to ensure revenue stability through a high-quality property management system.

[Trends and Projections for Key Financial Indicators (Equity Ratio, ROE, and Net D/E Ratio)]
During the current plan period, as all kinds of profits recover, equity capital is expected to accumulate, resulting in stable trends of key financial indicators.

(Taken from the reference material of the company)

[Sustainable Shareholder Return Through a Progressive Dividend Policy]
The company has consistently maintained stable dividends, with no dividend reductions, for 15 consecutive fiscal years, while expanding its earnings base and strengthening its financial foundation. In the fiscal year ended March 2024, it adopted a progressive dividend policy and plans to implement dividend increases for two consecutive years. The company will continue to provide flexible shareholder returns in line with business performance, aiming for stable dividends and the sustainable enhancement of corporate value.

(Taken from the reference material of the company)

◎ Business strategies in each segment
[Residential Properties for Sales Business]

* Units: million yen

During the current plan period, supply will expand for both detached houses and condominiums, with steady performance expected throughout the three fiscal years. Although the fiscal year ending March 2027 is projected to see a temporary decline in revenue and profit due to a reactionary drop in the number of units delivered for a large-scale condominium project, supply is expected to recover in the fiscal year ending March 2028, leading to a rebound in both net sales and segment profit.

In the residential properties for sales business, the company offers three brands: the custom-built "Sumi no Ie/Pure Air" (a house with a system for purifying air with charcoal) which emphasizes air quality and health, the price-conscious "S.O.U" series; and "HIRANAGI," a single-story home line focused on design and livability. Through this diverse product lineup, the company aims to respond precisely to the evolving lifestyles and values of its customers, while also balancing operational efficiency with profitability and maximizing its proposal capabilities. In the southern area (including Sakai City, southern Osaka, Minami-kawachi, and northern Wakayama), the focus is on maximizing proposal provision capabilities and sales efficiency by leveraging all three brands. In the northern area (Osaka City, the Hanshin region, Hokusetsu, Keihan area, and Higashi-Osaka), the strategy is to maximize added value and profitability through offerings tailored to urban living.
In addition, the company provides homes that earn customer trust and satisfaction through three pillars: custom design, air quality, and earthquake resistance. With recent changes in work styles and rising land and construction costs, consumer preferences regarding housing have diversified, and consumers are becoming increasingly more likely to base their purchasing decisions on price. In response to these evolving needs, the company launched two new product lines, "S.O.U" and "HIRANAGI," in November 2022. These are new types of standardized housing that expand customer options while maintaining quality.

<Condominium Development>
Under this plan, the company aims to complete and hand over 9 condominium projects totaling approximately 850 to just under 900 units over three years, forming a key pillar of the company's overall earnings base. The handover schedule includes 3 buildings in the fiscal year ending March 2026, 4 buildings in the fiscal year ending March 2027, and 2 buildings in the fiscal year ending March 2028.

(Taken from the reference material of the company)

<Detached Housing>
Examples of ongoing sales projects linked to the sales plan from the fiscal year ending March 2026 onward (excerpted from currently available properties)

(Taken from the reference material of the company)

[Housing Distribution Business]

* Units: million yen

During the current plan period, the company will focus on used condominiums as the core of its business, while improving its product lineup based on profitability and market potential. For used detached houses, the strategy will involve a selective approach, focusing on highly profitable properties. Furthermore, in the used property housing business, the company will leverage its competitive edge in property acquisition and implement flexible sales strategies, accompanied by careful inventory management. This is expected to lead to both net sales and segment profit growing steadily.

Amid expectations for continued steady growth in the used residential property market within the Kinki region, the company aims to secure stable earnings through diverse exit strategies that carefully manage inventory levels. In the housing distribution business, the company is also developing a “used housing asset model,” a recurring-revenue approach that leverages collaboration with the rental division. This model involves acquiring and holding used residential properties with existing tenants, generating revenue from both rental income and resale profits. Compared to the highly competitive buy-and-resell market, this model features higher barriers to entry, offers greater flexibility in exit strategies, and enables risk diversification. As such, it is positioned as a strategic business domain that contributes to enhancing earnings stability.

[Effective Land Utilization Business]

* Units: million yen
* The amount of internal transactions between segments is included.

During the current plan period, both net sales and segment profit are expected to remain generally flat, indicating that overall business operations will continue steadily and stably. In the construction contracting segment, a strong order intake from the previous fiscal year is expected to contribute to performance in the first year. However, for the second year onward, the company is adopting a conservative outlook, assuming stable order intake while taking into account potential changes in the external environment and the risk of rising construction costs.

As of now, order trends remain steady, with no significant fluctuations in the business's growth potential or earnings base. Stable revenue generation is expected to continue. With growing interest in inheritance and asset succession, the company has been steadily building its track record by supplying rental apartment buildings that emphasize "security and stability" as a means of asset formation capable of generating stable returns. Even as the investment environment shifts following the end of prolonged monetary easing, the company will continue to meet the needs of owners who prioritize long-term stable income and effective asset utilization, supported by its strong supply capabilities. During the current plan period, the company plans to hand over approximately 420 rental apartment buildings and around 180 buildings through construction contracts. Amid rising construction material costs, wooden rental apartments, which offer an excellent balance between cost and profitability, are once again drawing attention. The company's Fuji Palace series leverages design expertise cultivated through its detached housing business to minimize initial investment while achieving both profitability and asset value. These properties are also well regarded from tax and financing perspectives, contributing to stable rental business operations.

[Property Leasing and Management Business]

* Units: million yen

During the current plan period, the company anticipates stable growth driven by the expansion of recurring revenue, primarily through its rental apartment brand, Fuji Palace, and Fuji Palace Senior, which offers rental apartments for seniors with nurse care services. Sales are projected to increase from 31.5 billion yen in the fiscal year ending March 2026 to 36 billion yen in the fiscal year ending March 2028, with segment profit expected to rise steadily each year, exceeding 5 billion yen in the final year of the plan.

The company's property leasing and management business, which serves as its foundation for recurring revenue, is steadily expanding through the continuous increase in the number of units under management, due to construction contracting and handover of rental apartments for sale to individual investors and condominiums. The profit from this business continues to account for an increasing share of the company's total profit, solidifying its position as a core business that supports mid- to long-term earnings stability. In addition to community-based rental apartments for seniors with nurse care services, the property leasing and management business centered on company-owned properties, subleased units, and condominium management is contributing to the steady expansion of its recurring revenue base. The company is expected to maintain a high occupancy rate of around 97%, supported by strong partnerships with brokerage firms, rigorous quality control, and on-site operation capabilities built through close collaboration between employees and subcontractors.

[Construction-related Businesses]

* Units: million yen
* The amount of internal transactions between segments is included.

In the first year of the plan, several in-house projects are scheduled, including the renovation of Fuji Palace Senior, new construction and demolition of Fuji Palace rental apartments, and other initiatives. These are expected to contribute to stable performance. In the second year, revenue and profit are projected to decline temporarily due to project scheduling delays. However, in the third year, profitability is expected to improve through the end of goodwill amortization and a recovery in order volume.

During the previous plan, the company was involved in a variety of in-house projects, including new condominium developments and renovations of affordable apartments for seniors with nursing-care services, thereby expanding its track record of construction through interdepartmental collaboration. Through the collaboration from the planning and design stages, the company has advanced cost, quality, and schedule optimization, generating synergies across one-shot revenue and recurring-revenue businesses.

3. Fiscal Year ended March 2025 Earnings Results

3-1 Consolidated Results

* Data in this table and other parts of this report include figures which have been calculated by Investment Bridge, and may differ from those of the Company (same as below)
* Units: million yen

*Created by Investment Bridge based on disclosed material of the company.
*▲ of expense account indicates that the expense has increased.

Sales increased 2.9% year on year, and ordinary income grew 5.2% year on year
In the fiscal year ended March 2025, sales increased 2.9% year on year to 123,927 million yen. In terms of sales, the sales in the segment of residential properties for sale and effective land utilization segment fell slightly, but the sales in the housing distribution segment increased 7.2% year on year due to an increase in the handover of used houses, and sales in the property leasing and management segment increased 10.6% year on year, resulting in an overall increase in sales.
In the fiscal year ended March 2025, ordinary income rose 5.2% year on year to 6,987 million yen. In terms of profit, there was a slight decline in the housing distribution segment and the effective land utilization segment, but there was a significant increase in the segment of residential properties for sale due to an improvement in gross profit margin per unit and the handover of high-margin land. In addition, the property leasing and management segment as a whole improved from the previous fiscal year due to an increase in profit in line with the increase in sales. Gross profit margin increased 0.3 points from the previous fiscal year to 15.8%. Despite a 3.2% year on year increase in SG&A expenses due to higher sales commissions, salaries/bonuses, and consumption taxes, operating income increased 8.7% year on year to 7,894 million yen. The ratio of operating income to sales was 6.4%, up 0.41 points year on year. In addition, despite an increase in subsidy revenue in non-operating income, the rate of increase in ordinary income was slightly slower than that of the increase in operating income due to an increase in interest expenses in non-operating expenses. There were no other major extraordinary income gains/losses recorded, and net income attributable to shareholders of the parent company increased 4.5% year on year.
Furthermore, as of the end of March 2025, the backlog of orders received was 60,138 million yen, up 8.2% from the previous fiscal year, setting a new record for the end of the fiscal year.
In addition, net sales and all kinds of profits exceeded both the initial forecast and the medium-term management plan.

3-2 Segment Earnings (FY3/25)

Results by Segment and Topics

* Units: million yen
*Sales mean sales to external clients, while segment profit means operating income.
*The composition ratio of segment profit means the ratio to operating income before adjustments.
*The revenue from the insurance agency business had been posted in “non-operating revenue,” but they adopted the method for posting it in “sales” in the first quarter of FY3/24 , and is shown in the Other segment.

*A: Residential Properties for Sale, B: Housing Distribution, C: Effective Land Utilization, D: Property Leasing and Management, E: Construction Related, F: Other
*Created by Investment Bridge based on disclosed material of the company.

In the segment of residential properties for sale, sales decreased 2.1％% year on year to 34,718 million yen and profit rose 21.3% year on year to 2,251 million yen.
In the segment of residential properties for sale, sales decreased slightly from the previous fiscal year, but segment profit increased significantly.
Although the number of units delivered for freely designed houses and residential properties for sale decreased, the average sales price per unit for freely designed houses increased, and the completion and handover of four residential condominiums, as well as the sale of highly profitable undeveloped land, contributed. As a result, there was only a slight decrease in overall sales.
Segment profit increased significantly by 21.3% year on year due to an increase in profit per unit as a result of sales at appropriate prices and the sale of highly profitable undeveloped land.

* Units: million yen

(Taken from the reference material of the company)

In the housing distribution segment, sales increased 7.2% year on year to 26,661 million yen and profit decreased 3.6% year on year to 876 million yen.
In the housing distribution segment, sales increased from the previous fiscal year due to an increase in the number of units sold; however, segment profit decreased slightly.
Sales increased 7.2% year on year as a result of progress in securing inventory through stronger procurement from the start of the fiscal year, a sales strategy focused on inventory turnover, and initiatives to boost sales in the used asset business. On the other hand, segment income decreased 3.6% year on year as a result of temporarily prioritizing the securing of sales and actively promoting inventory replacement.
In the used asset business, as a result of strengthening purchases with the aim of increasing the number of owned units, the number of owned units as of the end of March 2025 was 989 (up 141 year on year), and rental income also increased steadily. The company will continue to maintain the number of owned units and secure stable rental income while focusing on sales to investors with strong demand.

*Units: million yen

According to Japan Journal of Remodeling’s Annual Ranking of Resale Units Sold 2024 (issued on July 29, 2024), the company ranked eighth in Japan in the annual ranking of resale units sold. The company's housing distribution business takes place mainly in Osaka and the Hanshin region, and although its sales activities are limited to this area, it boasts one of the largest purchase and resale volumes in Japan.
Fuji Home Bank operates the used assets business with a significant competitive advantage, buying and reselling used condominiums and acquiring used condominiums occupied by tenants as real estate for investment and renovating and reselling them after occupants move out. As of the end of March 2025, the company holds 989 units.

[Variation in the used housing asset business]

In addition, each “Ouchi Kan” store is a general housing exhibition hall that always displays information on more than 1,000 properties and is arranged by area, new construction, and used house to make it easier to search for properties.

In the effective land utilization segment, sales decreased 0.7% year on year to 30,120 million yen and profit decreased 6.4% year on year to 2,763 million yen.
In the effective land utilization segment, sales were almost unchanged from the previous fiscal year, and segment profit decreased slightly.
In terms of sales, the sales of contracted construction of rental housing and affordable apartments for seniors with nursing-care services were lower than the previous year, but internal sales increased due to the rental apartments for sale to individual investors and contracted construction of company-owned affordable apartments for seniors with nursing-care services, resulting in sales that were unchanged from the previous year. Although segment profit decreased slightly due to the impact of recording the amount of consumption tax on units as SG&A expenses in line with the increase in the number of completed rental apartment units for sale for the purpose of holding for a certain period of time, gross profit margin remained unchanged, and the company maintained stable profitability.

* Units: million yen

Regarding rental apartments for sale to individual investors, the company rigorously selects and procures rare profitable buildings based on abundant information accumulated as a general real estate industry, and keeps occupancy rate as high as 96.8% as of the end of March 2025, based on the advanced management and tenant attracting capabilities of group companies. Owners highly evaluate their capabilities of developing products, managing properties in good faith, and attracting tenants as well as the contents of contracts beneficial for owners.

(Taken from the reference material of the company)

Sales in the property leasing and management segment increased 10.6% year on year to 30,989 million yen, and profit increased 15.4% year on year to 3,924 million yen.
Both sales and segment profit increased year on year as initially forecast, because the number of managed properties increased through the delivery of rental residential properties in the effective land utilization business and the operation of their own affordable apartments for seniors with nursing-care services progressed.

*Units: million yen

While the number of leased and managed units has been increasing at an average annual pace of over 2,000 units since 2020, occupancy rate has remained stable at around 97%. In addition, as of the end of March 2025, the company boasts operating 270 affordable rental apartment buildings for seniors with nursing-care services and managing 8,966 units. In addition, according to the Summer 2024 Special Edition of the Senior Citizens Housing Weekly Newspaper, the company has Japan's top ranking in the number of affordable rental apartment buildings for seniors with nursing-care services in operation, with 256 buildings in operation.

*Number of buildings in operated and managed as of March 2025 (Made by Investment Bridge Co., Ltd. based on the reference material of the company.)
*Ranking in the number of affordable rental apartment buildings for seniors with nursing-care services in operation (produced by Investment Bridge Inc. with reference to the August 21, 2024 issue of The Senior Citizens Housing Weekly Newspaper).

In the construction-related segment, sales decreased 16.1% year on year to 1,259 million yen and profit improved 114 million yen year on year to 94 million yen.
In the construction-related segment, both sales (internal sales or transfers between segments) and segment profit were significantly higher than in the same period of the previous year.
External sales (construction-related) declined 16.1% year on year. Still, internal sales rose sharply, reflecting steady progress in renovation work on affordable apartments for seniors with nursing-care services and other projects, resulting in a 12.8% year-on-year increase in overall sales. Profit turned positive due to the significant increase in sales.

* Units: million yen
* Table sales are before deducting intersegment sales or transfers.

In January 2020, the company welcomed the renowned Yuuken Kensetsu Group as a partner in constructing steel-framed and reinforced concrete structures. After that, the company worked on the construction of a new large-sized RC apartment for seniors with nursing-care services and renovated an old company-owned condominium building into an affordable apartment for seniors with nursing-care services. At present, they engage in the construction of condominiums that will be sold by the corporate group and large-scale repairs of the company’s building, indicating a steady expansion of the scope of cooperation. In the current fiscal year, the company is involved in the construction of condominiums and the renovation of affordable apartments for seniors with nursing-care services.

(Case of in-group construction)
Renovation of affordable apartments for seniors with nursing-care services

(Taken from the reference material of the company)

Sales in the other segment increased 2.1% year on year to 178 million yen, and profit increased 2.6% yen year on year to 132 million yen.
The other segment is a business segment not included in segments to be reported but includes the insurance agency business operated by Fuji Corporation.
The revenue from the insurance agency business had been posted in “non-operating revenue,” but they adopted the method for posting it in “sales” in the first quarter of fiscal year ended March 2023.

3-3 Quarterly Earnings Trends

Consolidated sales and ordinary income for the fourth quarter (January - March)

*Created by Investment Bridge based on disclosed material of the company.

In the fourth quarter (January-March), sales declined slightly from the previous fiscal year, resulting in a decrease in profit. In the fourth quarter of the previous fiscal year, the completion and delivery of two condominium buildings were reflected in sales. However, in the fourth quarter of the current fiscal year, this was not the case. Instead, sales remained at the same level as the fourth quarter of the previous fiscal year as a result of a significant increase in the handover of new detached houses and used houses. On the other hand, operating income in the fourth quarter of the current fiscal year decreased from the fourth quarter of the previous fiscal year due to a recoil from the delivery of profitable condominiums in the previous fiscal year.

3-4 Status of order backlog

* Units: million yen
(Taken from the reference material of the company)

As of the end of the fiscal year ending March 2025, order backlog stood at 60.1 billion yen, grew 8.2% from the same period of the previous year.
In the segment of residential properties for sale, order backlog grew 11.0% year on year as they received a healthy number of orders for freely designed houses. In the housing distribution segment, order backlog increased 23.7% year on year as they received a favorable number of orders for used detached houses and used condominiums. In the effective land utilization segment, the order backlog for commissioned construction of rental housing, etc. increased 18.3% year on year due to the continuous strong needs for the effective utilization of real estate owned by wealthy people. The number of orders for rental apartments for sale to individual investors remained strong, being unchanged from the previous fiscal year, with an overall increase of 2.8% year on year. In the construction-related segment, order backlog increased significantly by 70.6% year on year due to large-scale construction contracts outside the group. The backlog of orders exceeded those at the end of the previous fiscal year in all segments and reached a record high for the end of the current fiscal year.

3-5 Financial Conditions and Cash Flow (CF)

Financial Conditions

* Units: million yen
* Inventories = Real estate for sale + Real estate for sale in progress + Real estate for development + Payments for uncompleted construction + Inventories

* Interest bearing liabilities = Loans + Lease liabilities + Debenture

*Created by Investment Bridge Co., Ltd. based on disclosed material of the company.

Total assets at the end of March 2025 were 183,210 million yen, up 14,997 million yen from the end of the previous fiscal year. On the asset side, there was an increase in fixed assets mainly due to an increase in the number of owned real estate for sale, real estate for development, buildings/structures, land, and used condominiums divided into units with rental tenants (used assets). On the liabilities and net assets side, there were increases in short-term borrowings, long-term borrowings, and retained earnings due to the recording of net income attributable to shareholders of the parent company. The breakdown and amount of inventory assets are as follows: real estate for sale amounting to 28.26 billion yen (23.31 billion yen at the end of the previous fiscal year), real estate for sale in process amounting to 29.09 billion yen (29.64 billion yen at the end of the previous fiscal year), real estate for development amounting to 36.475 billion yen (32.52 billion yen at the end of the previous fiscal year), and used assets amounting to 22.054 billion yen (14.54 billion yen at the end of the previous fiscal year).
Real estate inventories increased 8.3 billion yen from the end of the previous fiscal year. Although the number of condominiums for sale decreased 1.8 billion yen due to the handover of four units during the fiscal year, the acquisition of sites and properties for detached houses for sale, used houses, and effective land utilization progressed smoothly. As a result, the number of detached houses and condominiums for sale in inventory has reached 2,602 (out of which 650 units have already been ordered), which is equivalent to the number of orders received in approximately three years. In addition, the number of units in stock for effective land utilization is 271, out of which 70 units (9.3 billion yen) are for the purpose of holding them for a certain period of time. The company has 201 units in inventory for sale (95 of which have already been ordered), which is the same as the number of units at the end of the previous fiscal year and equivalent to the number of orders received in approximately 1.5 years. The company has secured necessary and sufficient inventory for detached houses for sale, condominiums for sale, and effective land utilization, and all of them are at appropriate levels.

* Units: million yen

In terms of cash flows, the cash inflow from operating activities shrank due to the decrease in accounts payable, the increase in payment of income taxes, etc. In addition, the cash outflow from investment activities grew and the deficit of free cash flow augmented due to the increase of tangible fixed assets through the acquisition of previously owned condominiums, affordable apartments for seniors with nursing-care services, etc. for enhancing the used housing asset business. On the other hand, the cash inflow from financial activities grew thanks to the increase in inventory assets, the augmentation of short-term debt through the fund procurement for acquiring tangible fixed assets, etc. Accordingly, the balance of cash and cash equivalents as of the end of the period was down 9.2% year on year.

3-6 Trends in Tangible Noncurrent Assets

* Tangible fixed assets are the total value of buildings & structures, machinery, equipment & vehicles, tools, furniture & fixtures, and land, excluding leased assets and construction work-in-progress assets.

The company has actively acquired its own affordable apartments for seniors with nursing-care services (serviced residences for the elderly) and used assets (used condominiums with sectional ownership by rental tenants). The company is strengthening its efforts in the recurring-revenue business to build a foundation for stable earnings.

3-7 Trends in Management Indicators

[Equity Ratio / ROE]

[Interest-Bearing Debts, Equity, and Net D/E Ratio]

*Net D/E rati (Interest-bearing debt - Cash and cash equivalents at end of period) / Equity

From the fiscal year ended March 2016 to the fiscal year ended March 2020, the company actively purchased land for large-scale sites (detached houses and condominiums) to secure inventory while actively purchasing land for its own properties (apartment for seniors with nursing care services). The period from the fiscal year ended March 2021 onward has been a period in which the company carefully has selected its land purchases due to the surge in land prices, and it also has reviewed inventory levels (improved inventory turnover rate) by responding flexibly to sales prices.

4. Fiscal Year ending March 2026 Earnings Estimates

4-1 Consolidated Earnings

*Units: million yen

Sales are expected to grow 1.7% year on year, while ordinary income is projected to decline 18.4%.
For the fiscal year ending March 2026, the company forecasts sales of 126 billion yen, up 1.7% year on year, and an ordinary income of 5.7 billion yen, down 18.4% year on year.
Although land and construction costs remain high across the real estate industry, where the company group operates, in the fiscal year ending March 2026, the company's new condominium business is expected to offset a slight decline in the number of detached houses sold. This will be achieved through the handover of three newly completed condominium buildings and the promotion of unsold inventory from previously completed projects. The company will secure sales volume more than the number of units sold in the fiscal year ended March 2025 to make up for the decline in sales of detached houses. By maintaining a deliberate and careful sales strategy rather than rushing to sell, the company expects to increase per-unit profitability and achieve overall profit growth in the new condominium division. In the effective land utilization business, demand for income-generating properties and construction from affluent individuals and investors remains strong, and results are projected to exceed those of the fiscal year ended March 2025. The property leasing and management business is also expected to maintain stable performance, driven by an increase in managed properties and sustained high occupancy rates. By leveraging its strength in balanced management, the company anticipates steady progress in both revenue and all kinds of profits, particularly driven by growth in its effective land utilization business and property leasing and management business.
On the revenue side, sales will also be supported by the handover of a large-scale condominium complex completed in April. On the profit side, the company expects increased human capital investment for future growth, as well as higher interest payments due to rising interest rates.
Regarding dividends, the company plans to maintain the same level as the previous year, in which they increase the dividend amount by 5 yen/share, at 32 yen/share annually (an interim dividend of 16 yen/share and a year-end dividend of 16 yen/share), with a projected dividend payout ratio of 31.1%.

4-2 The company’s policy about capital costs and share price

The purpose of the company’s business administration is to continue its business stably and repay all stakeholders for their support on a permanent basis in accordance with the management philosophy.
The real estate business is easily influenced by changes in market conditions, so business operation using financial leverage is indispensable. Accordingly, financial strategies are extremely important, so the company has a policy of enriching IR activities for improving expected values while aiming to improve the financial soundness by improving the efficiency of asset use and increase profitability by investing in growing fields while paying more attention to capital costs and share price.

*1: Capital cost means the cost of shareholder’s equity (Risk-free rate + β value × Market risk premium), *2: PBR (price-book value ratio), *3: BPS (book value per share), *4: EPS (earnings per share)

4-3 Dividends and shareholder benefits

◎ Dividend

◎ Benefits for shareholders
Benefits are offered to shareholders holding 500 or more shares written or recorded in the shareholder registry as of March 31 every year.

5. Conclusions

In the fiscal year ended March 2025, which marked the final year of the previous medium-term management plan, the company recorded net sales of 123.927 billion yen and an ordinary income of 6.987 billion yen. These results exceeded the medium-term management plan's numerical targets of 121.8 billion yen in sales and 6.6 billion yen in ordinary income, successfully achieving both revenue and profit goals at all stages. During this period, the Japanese economy faced persistent uncertainty due to inflation, rising interest rates, and surging energy prices. In the real estate market, while demand for newly built houses declined, demand for used houses and investment rental properties remained steady. The company accurately responded to these market changes and achieved its medium-term management plan targets by leveraging a balanced management approach, an achievement that deserves high praise. The forecast for the fiscal year ending March 2026 is conservative, with a 1.7% year-on-year increase in revenue and an 18.4% decrease in ordinary income. In terms of sales, the forecast is supported primarily by the handover of a large-scale condominium project in April. In terms of profit, the company anticipates increases in human capital investment and DX spending to support future growth, as well as a rise in interest payments due to rising interest rates. As of the end of the fiscal year ended March 2025, the company's order backlog across all segments reached 60.1 billion yen, a record high for the end of a fiscal year, marking an 8.2% increase from the previous fiscal year. Considering this significant accumulation of orders, the company's forecast appears quite conservative. Whether the company can get off to a strong start for achieving this fiscal year's business plan will depend on the performance trends in the upcoming first quarter. Additionally, attention is focused on whether the company can further expand its order backlog, which serves as a leading indicator of its performance.
A new medium-term management plan has also begun, with the fiscal year ending March 2028 as its final year. Despite ongoing external pressures such as persistently high construction and land costs and rising interest rates, the company aims to achieve record-high sales for three consecutive years by rigorously managing inventory and making selective, focused investment decisions. On the profit side, the plan remains conservative due to expected increases in human capital and DX investments, as well as higher interest payments. Recovery is targeted for the final year of the plan (the fiscal year ending March 2028), when the burden of these upfront investments and the impact of rising interest rates are expected to ease. The new medium-term plan outlines five key goals for the company's future:

1.Enhance service quality to deliver products that meet evolving societal needs and provide tailored proposals to each customer.
2.Build a stable, long-term profit base by optimally combining transaction-type (sales) and subscription-type (rent and property management) businesses.
3.Enhance productivity and create a rewarding workplace through operational improvements, DX, and generative AI.
4.Achieve both financial soundness and efficiency through the optimization of capital structure, profit distribution, and inventory strategy.
5.Contribute to solving social issues through the company's core businesses and deepen ties with local communities.

We will focus on the progress of this newly launched medium-term management plan.

<Reference: Regarding Corporate Governance>

◎ Organization type, and the composition of directors and auditors

◎ Corporate Governance Report
The company submitted its latest corporate governance report on June 5, 2025

Basic Policy
Our basic policy on corporate governance is to maximize corporate value from the standpoint of our shareholders while improving management efficiency and transparency and achieving steady business results. We regard this as one of the most important management issues.

(1) To Maximize Shareholder Value
This corporate group was founded with the business objectives of “building homes that bring happiness” and “making our customers happy after they buy homes,” and with the desire to become “the most loved company in Japan, like Mt. Fuji.” The company’s main areas of operation are the entire Osaka Prefecture, southern Hyogo Prefecture and northern Wakayama Prefecture, and its business is based on the management principle of building trustworthy houses with a customer-facing approach that does not ignore them after the completion and sale of houses. Therefore, instead of seeking temporary profits and business expansion, the company believes it is important to establish a company that will survive based on long-term stable management. For long-term stable management, human capital is essential, and it is important to develop respectable leaders with excellent knowledge, boldness, and insight, and thus, the corporate group has adopted the following management ethos and corporate philosophy, by using the expression “human capital” rather than “human resources,” based on the belief that people are assets.
“Management Ethos”
The company operates for the sake of:
・Employees,
・Employees’ families,
・Customers and business partners,
・Shareholders,
・Local communities, and
・Ultimately, the nation.
“Corporate Philosophy”
・We are employees of Fuji Corporation Limited.
・We shall engage in our work with enthusiasm and good faith.
・We shall recognize the responsibilities and importance of our own work.
・We shall work in a spirit of gratitude and service.
・We shall do a job that will be appreciated by our customers and business partners.
The company’s management ethos starts with “For the benefit of employees” and “employees’ families.” This is because the company believes that they cannot do a job that truly pleases their customers if their employees or their families are not happy. When the company values its employees and their families and all employees have a sense of appreciation, pride in their work, a sense of achievement, and a sense of purpose in life, the employees get more motivated and can care about their customers from the bottom of their hearts. The company believes that this will lead to the happiness of all stakeholders, including customers, business partners, shareholders, local communities, and consequently, the nation.
While utilizing the above management ethos and policy and expanding business in line with the growth of human capital, the company aims to become a corporation that is always trusted by its customers, business partners, and shareholders, and that can serve society through its business, by further cultivating the business areas it has been operating from the past, actively expanding into Osaka City, the largest market in the Osaka Prefecture, as well as the northern Osaka Prefecture and southern Hyogo Prefecture, and by promoting the improvement of profitability and strengthening the financial structure.

(2) Meetings of the Board of Directors
In order to formulate highly competitive strategies according to changes in the business environment and carry out quick decision-making, the Board of Directors meets once a month in principle. The Board meets based on a resolution in writing if there are urgent matters. The Board of Directors is currently composed of seven Directors (including two Outside Directors), and strives to ensure that there is a lively debate at meetings of the Board of Directors and that decisions are made quickly through a collegial system.

(3) Corporate Auditors and the Board of Corporate Auditors
The company has adopted a corporate auditor system. The Board of Corporate Auditors consists of one full-time Corporate Auditor (Mr. Hitoshi Kawade) and two Outside Corporate Auditors (Mr. Shinsuke Takatani and Mr. Inao Harato). In principle, the Board of Corporate Auditors holds regular meetings three times a year with the Representative Director and President to exchange views and opinions, and each Corporate Auditor attends the Board of Directors’ meetings and meetings of department managers and expresses his or her opinions. In addition, they conduct a wide range of audits, including assessing the appropriateness and efficiency of the Directors’ execution of duties and the status of the development and operation of internal control systems, through attending audits and exchanging information with the Internal Audit Office and auditing firms.

(4) To Strengthen the Internal Information Disclosure System
In order to ensure the timeliness, accuracy and fairness of information disclosure, the corporate group has established “Information Disclosure Rules” to restructure and standardize the group-wide information disclosure system, and has been working to raise awareness within the company in relation to timely disclosure.
The “Information Disclosure Rules” designate the head of the IR Office as the person responsible for handling information, and clarifies the roles and responsibilities of each department in relation to timely disclosure. In addition, when disclosing information, each relevant department within the company examines and scrutinizes the information to be disclosed and mutually checks the disclosure documents prepared by each department, thereby establishing a system to ensure the appropriateness of the disclosure process starting from information gathering to disclosure.

(5) To Improve the Quality of IR Activities
The company is committed to IR activities based on its basic policy of disseminating information to shareholders and investors in a timely, appropriate, prompt, and easy-to-understand manner
Specifically, the company strives to actively disclose information on corporate details through the publication of financial statements and supplementary materials as well as other materials disclosed by the stock exchange on the company’s website, the posting of electronic public notices, the active holding of company briefings for analysts and institutional investors and for general investors, also through its participation in IR events.
Further, in order to fairly disclose the medium/long term direction of the company to shareholders and investors, the company publishes management indicators, which are published in the IR section of its website. Moreover, shareholder newsletters are prepared in an easy-to-understand manner to provide individual shareholders with a better understanding of the company’s management philosophy and policies, as well as its management situation and direction.
In principle, the company’s financial results are announced before the end of the following month after the closing date, to accelerate and decentralize the announcement of financial results.

(6) To Strengthen Internal Control
The company believes that internal control is one of the most important mechanisms supporting corporate governance for a company to adequately fulfill its social responsibilities, and that the efforts to strengthen this internal control are the most significant initiatives for a company to adequately fulfill its social responsibilities, recognizing that such efforts are the responsibility of the management itself. As a specific effort to strengthen internal control, the company established the Internal Control Promotion Committee in February 2007, and has been actively exchanging opinions at its meetings held on a regular basis. To achieve 4 objectives of internal control: [1] effectiveness and efficiency of operations, [2] reliability of financial reporting, [3] compliance with laws and regulations related to business activities, and [4] preservation of assets, the company established an organization and corporate culture with a focus on the control environment in internal control.
In addition, in order to further enhance monitoring activities, the Internal Audit Office is assigned as a complementary organization to maintain and strengthen compliance and risk management, which continuously perform internal checks on business execution in accordance with laws and internal regulations.

<Reason for Non-compliance with the principles of the Corporate Governance Code (excerpts)>

<Disclosure Based on the Principles of the Corporate Governance Code (excerpts)>