English translation
August 10, 2021

Consolidated Financial Results for the Three Months Ended June 30, 2021
Company name:

Sun Frontier Fudousan Co., Ltd.

Stock listing:Tokyo Stock Exchange 1st Section

Code number:

8934

URL:

https://www.sunfrt.co.jp

Address:

14F, Toho Hibiya Building, 2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006

Representative:

Seiichi Saito, President

Inquiries:

Takeshi Hirahara, Executive Officer, General Manager, Corporate Planning Department(Phone: +81-3-5521-1301)

Scheduled date of quarterly securities report:
Scheduled date of dividend payable:
Supplemental materials for quarterly results:
Presentation on quarterly results to be held:

August 11, 2021
Yes
None
*Amounts are rounded down to million yen.

1. Consolidated Performance for the Three Months Ended June 30, 2021
(1) Consolidated Operating Results*Percentage figures shown under net sales, operating profit, ordinary profit, and profit attributable to owners of parent columns
indicate year-on-year changes for those items.
(“¥” indicates millions of yen, except for per share figures.)

Net Sales
For the three months ended
June 30, 2021
For the three months ended
June 30, 2020

Operating Profit

Ordinary Profit¥31,213128.3 %

¥7,340250.3 %

¥7,277272.8 %

¥13,672(58.1)%¥2,095(78.8)%¥1,952(80.0)%(Note) Comprehensive income: For the three months ended June 30, 2021: ¥4,906 million (up 364.6 %)For the three months ended June 30, 2010: ¥1,056 million (down 84.3%)

For the three months ended
June 30, 2021
For the three months ended
June 30, 2020

Profit Attributable toEarnings per ShareOwners of Parent(yen)

Fully Diluted
Earnings per Share(yen)¥4,802287.7 %

98.61

98.56

¥1,238(81.5)%

25.43

25.42

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(2) Consolidated Financial Position(“¥” indicates millions of yen)

Total Assets

Net Assets

Equity Ratio (%)

As of June 30, 2021

¥126,541¥72,62854.9 %

As of March 31, 2021

¥127,485¥69,77352.3 %(Reference)Total Equity:

As of June 30, 2021: ¥ 69,480 million
As of March 31, 2021¥ 66,627 million

2. Cash Dividends
Cash Dividends per Share (yen)
2nd
3rdYear-end
Quarter
Quarter
0.00
42.00

1st
Quarter
FY Ended March 31, 2021-

FY Ending March 31, 2022-

FY Ending March 31, 2022
(Forecast)

21.00

-

21.00

Annual
Total
42.00
42.00

(Note) Changes from the latest released dividend forecasts: Yes

3.

Forecast for Consolidated Financial Results for the Fiscal Year Ending March 31, 2022

(From April 1, 2021 to March 31, 2022)*Percentage figures indicate year-on year changes for those items.
(“¥” indicates millions of yen, except for per share figures.)

Net Sales
FY EndingMarch 31,2022

¥76,000

27.4 %

Operating Profit

Ordinary Profit

ProfitAttributable to
Owners of
Parent¥12,000¥11,500¥7,40051.7 %

52.8 %

73.1 %

Earnings
perShare
151.95(Note) Changes from the latest released performance: None

4.

Notes

(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes
in scope of consolidation): None
New companies: Excluded companies: (2) Adoption of special accounting practices in the preparation of quarterly consolidated financial statements:
None(3) Changes in accounting principles, procedures and presentation methods
1) Changes caused by revision of accounting standards:
Yes2) Changes of accounting standards other than 1) above: None
3) Changes in accounting estimates:
None4) Restatement of corrections:
None(4) Number of outstanding shares (common stock)1) Number of outstanding shares at the end of the period (including treasury stock):
As of June 30, 2021:
48,755,500 shares-2As of March 31, 2021:
48,755,500 shares
2) Number of shares of treasury stock at the end of the period:
As of June 30, 2021:
56,644 shares
As of March 31, 2021:
56,644 shares
3) Average number of shares for the period:
For the three months ended June 30, 2021:
48,698,856 shares
For the three months ended June 30, 2020:
48,698,856 shares*This Summary of Consolidated Financial Results is not subject to review processes under the Financial
Instruments and Exchange Act.
*Explanation for appropriate use of forecast and other notes
Forward-looking statements, such as forecast of consolidated financial performance, stated in this document
are based on information currently possessed by us or certain assumptions that we have deemed as rational.
We cannot make any assurances that the contents mentioned in these forward-looking statements will evermaterialize. Actual financial performance could be significantly different from our expectations as a result ofvarious factors. For the assumptions used and other notes, please refer to “1. (3) Explanation regarding
forward-looking statements such as consolidated earnings forecasts” on page 6.
In this document, the terms “we”, “us”, “our” and “Sun Frontier” refer to Sun Frontier Fudousan Co., Ltd. andconsolidated subsidiaries or, as the context may require, Sun Frontier Fudousan Co., Ltd. on a nonconsolidated basis.

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Accompanying Materials
Contents
1. Qualitative information regarding consolidated performance for the first three months ...............................2(1) Explanation regarding operating results ....................................................................................................2(2) Explanation regarding financial position ...................................................................................................5(3) Explanation regarding forward-looking statements such as consolidated earnings forecasts ...................6
2． Quarterly Consolidated Financial Statements and Key Notes....................................................................7(1) Consolidated Balance Sheet.......................................................................................................................7(2) Consolidated Statements of Income and Comprehensive Income .............................................................9(3) Notes to Consolidated Financial Statements............................................................................................ 11(Notes to Assumption of Going Concern) .....................................................................................................13(Notes on Significant Changes in Amount in Shareholders' Equity).............................................................13(Change of Accounting Policies) ...................................................................................................................13(Additional Information) ...............................................................................................................................13(Segment Information, etc.) ...........................................................................................................................13-1

1. Qualitative information regarding consolidated performance for the first three months(1) Explanation regarding operating results
Matters concerning the future in this document are those judged by Sun Frontier as of the of submission dateof this consolidated performance for the first three months.
During the three months ended June 30, 2021, the Japanese economy has been stagnant for a long time dueto the impact of COVID-19 infections. Although vaccination is progressing and economic normalization is
expected in the future, the number of new infections is rapidly increasing at present, and it is necessary tocontinue to monitor trends. In the global economy, the situation remains unpredictable due to the spread ofthe delta variant of COVID-19. As the Federal Reserve Bank seeks to normalize its monetary policy, market
uncertainty over future interest rate developments must be watched closely.
In the real estate market, the average rent in the office building market in central Tokyo (5 Wards of theCentral Tokyo: Chiyoda, Chuo, Minato, Shinjuku, and Shibuya Ward) was 21,160 yen (unit price per tsubo),
a decline for the eleventh consecutive month (1,854 yen / approximately 8%) and the average vacancy rate
was 6.19%, worsening for the sixteenth consecutive month (total 4.70% points according to a survey by a
private research institution). As a result, the office market remained weak overall. On the other hand, in thereal estate investment market, institutional investors have a strong desire to invest in Tokyo's office market
since the outlook for Tokyo office market has become clearer and the low interest rate environment continues.
Based on this business environment, we are developing its business based on the medium-term management
plan announced in May 2021. During the three months ended June 30, 2021, even during the COVID-19
pandemic, Real Estate Revitalization Business, our core business, saw steady progress in the sale of realestate for sale due to progress in high-profit and high-quality commercialization, while Real Estate Service
Business maintained stable results. On the other hand, in Hotel Operation Business, which is greatly affectedby the COVID-19 pandemic, was unable to recover during the first three months ended June 30, 2021 dueto the impact of the reissuance of the state of emergency and other factors, and recorded a loss.
As a result, net sales increased 128.3% to 31,213 million yen from the same period of the previous fiscal
year, operating profit increased 250.3% to 7,340 million yen from the same period of the previous fiscal year,
ordinary profit increased 272.8% to 7,277 million yen from the same period of the previous fiscal year, andprofit attributable to owners of parent increased 287.7% to 4,802 million yen from the same period of theprevious fiscal year.
Due to partial change in the report segment from the three months ended June 30, 2021, actual results for thecurrent fiscal year and the same period of the previous fiscal year have been reclassified into the new segmentclassification. The background and outline of the segment change are as follows. In November 2020, theCompany reorganized its Company operations and transferred Sun Frontier Fudousan Co., Ltd.'s Hotel
Development Business to Sun Frontier Hotel Management Inc., with the aim of utilizing its operational
know-how in Hotel Operation Business for the “Hotel Development Business” and promoting the businessin an integrated manner to enhance profitability. Accordingly, the business segment will reflect this change
and is renamed the report segment "Hotel and Tourism Business." At the same time, with a view to further
strengthening the coordination of each business segment in the real estate services field, we have made achange to consolidate related business segments such as Conference Room Rental Business and Rent
Guarantee Business into “Real Estate Service Business”.
The results of each segment are as follows.
(Real Estate Revitalization Business)
In the Real Estate Revitalization Business, we are engaged in (1) Replanning Business and (2) Rental
Building Business.
-2(1) In the Replanning Business, all processes from purchase of buildings to planning and development, tenant
occupancy, sales, and subsequent support are manufactured in-house. During the three months ended June30, 2021, although the number of projects on the market is slightly smaller than before the COVID-19
pandemic, we are always listening to the voices of the front lines on the site and making efforts to ascertain
the outlook of the office market and the potential of real estate, and are proceeding with careful and boldproperty purchases. In commercialization, we aim to create an office that can be chosen among the new statebased on new values while keeping a close eye on changes in the city, office and work style. Among them,“set-up office,” which is equipped with a part of its interior in advance, such as setting up reception andreception rooms, and carrying out highly design-oriented construction work in the office area, plays animportant role in attracting tenants. In addition, through coordinating with the leasing brokerage division,
which has expanded its branch network in central Tokyo and conducts community-based sales activities, we
promoted the attraction of tenants even during the COVID-19 pandemic and made our real estate products
high-occupancy, high-added value and then we could sell as products that meet the expectations of a wide
range of clients in Japan and overseas. As a result, the number of units sold in Replanning Business increased
steadily to eight, and both net sales and profit increased significantly compared with the same period of theprevious year, when COVID-19 pandemic occurred.
(2) In Rental Building Business, with the aim of building a stable revenue base as a stock business, we areworking to increase rent income in the medium to long term by expanding the number of rental buildings
properties in Replanning Business while utilizing the operational capabilities cultivated in the Real Estate
Service division. Both net sales and income decreased compared with the same period of the previous fiscal
year due to the sale of large buildings with high occupancy rates.
As a result, net sales increased 170.6% to 27,450 million yen from the same period of the previous fiscal
year and segment profit increased 182.9% to 8,235 million yen from the same period of the previous fiscal
year for the Real Estate Revitalization Business as a whole.
(Real Estate Service Business)
In the Real Estate Service Business, we are engaged in (1) Property Management Business, (2) Building
Maintenance Business, (3) Sales Brokerage Business, (4) Leasing Brokerage Business, (5) Conference Room
Rental Business, and (6) Rent Guarantee Business.
By bringing together the expertise that each of these business divisions has cultivated in the field, they
coordinate and work with each other on the small and medium-sized office buildings areas of central Tokyo.
By also multiplying in a chain reaction the expertise cultivated through creating on site, they create added
value and work as the basis for creating high profitability in the Replanning Business.
(1) In Property Management Business, the Company has achieved high-occupancy and high-profitability
building management by increasing tenant satisfaction through meticulous property management and byworking with the leasing brokerage division to attract tenants and revise the conditions for appropriate rent.
We are solving various requests and problems arising from the impact of COVID-19 by utilizing theknowledge and organizational power we have accumulated over the years. In the COVID-19 pandemic,
although the number of administrative buildings grew steadily, revenue was sluggish due to a decline inoccupancy rate. As a result, both net sales and profits declined slightly compared with the same period of theprevious fiscal year.
End of June 2019

End of June 2020

End of June 2021

Number ofManaging Buildings

374 buildings

397 buildings

403 buildings

Occupancy Rate

97.6%

97.9%

93.5%

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(2) In the Building Maintenance Business, we are promoting cooperation with the property management
division, taking advantage of our strengths in cleaning high places using swings for exterior windows andexterior walls, waterproofing work, and exterior wall repair work. In addition, in the previous fiscal year, we
acquired 100% of shares in Japan System Service Inc., another company in the same industry, in an effort tostrengthen the foundation of its cleaning business in central Tokyo. In the fiscal year under review, both net
sales and profits increased significantly compared with the same period of the previous fiscal year, as a resultof a rebound from a decrease in orders from clients, which was forced to close due to a state of emergency
in the same period of the previous year, as well as an increase in entrusted properties and the addition ofsales and profits from Japan System Service Inc.
(3) In the Sales Brokerage Business, as part of its real estate consulting, we are responding swiftly to inquiries
from other divisions, including Property Management Business and Leasing Brokerage Businesses. The
office division works together to support building owner’s building management, and based on the trust we
have built, we are able to close brokerage deals. As a result of the above, both net sales and profit for the
fiscal year under review increased significantly compared with the same period of the previous fiscal year.
(4) In the Leasing Brokerage Business, we provide a service network based in 12 sites, mainly in the 5 wardsof central Tokyo, and serve as a convenient consultation window that is close to local building owners. We
are also creating the clients' point of view's new values for Replanning Business in the product planning byapplying the needs and changes of tenants that we have obtained quickly in the field of tenant leasing toresearch and proposals for optimal use of office space. Both net sales and profit increased significantly inthe fiscal year under review due to a rebound from the same period of the previous fiscal year when tenant
relocation stagnated due to the impact of COVID-19 pandemic.
(5) In the Conference Room Rental Business, although the need for meeting rooms remains limited due tothe impact of COVID-19 pandemic, we have provided services that capture the changing times and have
responded flexibly and quickly to clients' needs through close contact with local communities. By
implementing flexible proposal-based marketing, we were able to capture new demand, albeit on a limited
scale. As a result, both net sales and profit increased compared with the same period of the previous fiscal
year.
(6) In Rent Guarantee Business, we provide services that are close to building owners, such as not only
providing rent guarantees when tenants fall behind in their rent payments, but also providing support for
tenants to vacate their property, thereby easing the burden on building management. In terms of COVID-19
pandemic, the number of new guarantee and re-guarantee transactions remained steady as a result of anincrease in building owners’ consultations due to an increase in vacancies and concerns about credit fromtenants. As a result, both net sales and profit increased compared with the same period of the previous fiscal
year.
As a result, net sales in Real Estate Service Business as a whole increased 42.9% to 2,060 million yen
compared with the same period of the previous fiscal year and segment profit increased 56.7% to 1,252
million yen compared with the same period of the previous fiscal year.
(Hotel and Tourism Business)
In the Hotel and Tourism Business, we are engaged in (1) Hotel Development Business and (2) Hotel
Operation Business.
(1) In the Hotel Development Business, sales of the condominium hotel HIYORI OCEAN RESORTOKINAWA progressed, and the delivery of 11 plots were completed (cumulative sales: 170 plots / total 203-4

plots). As a result, both net sales and profit increased compared with the same period of the previous fiscal
year when there were no results.
(2) In the Hotel Operation Business, we opened HIYORI Chapter Kyoto Tribute Portfolio Hotel and Tabino
Hotel lit Miyakojima in June of the current fiscal year, operating 19 hotels (2,683 rooms) in total. During the
fiscal year under review, the Company recorded a loss despite an increase in net sales as a result of asignificant decline in occupancy rate and room rates, particularly for urban hotels, due to a rapid decline in
inbound visitors due to COVID-19 pandemic and the voluntary restraint of sightseeing due to the issuanceof a state of emergency. In addition, we recorded expenses for preparation for the opening of new hotels.
As a result, net sales in Hotel and Tourism Business as a whole increased 363.4% to 1,346 million yen
compared with the same period of the previous fiscal year and segment loss was 584 million yen comparedwith segment loss of 512 million yen the same period of the previous fiscal year.
(Other Business)
In Other Business, we are engaged in (1) Overseas Business and (2) Construction Business.
(1) In Overseas Business, we have expanded into Southeast Asian countries where growth is expected andhas developed real estate mainly for condominiums and houses using Japanese advanced construction
technology. We are developing its business with a focus on providing Asian people with experience ofJapanese quality. In terms of business results, both net sales and profit decreased significantly due to areaction to the addition of sales of high-rise condominium projects in Da Nang, Viet Nam in the same periodof the previous year.
(2) In the Construction Business, renewal planning, repair and reform of commercial buildings, interior
finishing work, and telecommunications work were carried out. Results of Communication Development
Inc., which we acquired 100% of the shares in the previous fiscal year, contributed to the increase in both
net sales and profit.
As a result, net sales of Other Business as a whole decreased 76.2% to 469 million yen compared with thesame period of the previous fiscal year and segment profit decreased 96.6% to 15 million yen compared withthe same period of the previous fiscal year.
Moreover, “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020
hereinafter referred to as the "Revenue Recognition Accounting Standard"), etc. has been applied from the
beginning of the three months ended June 30, 2021.
As a result of the application of Revenue Recognition Accounting Standard, net sales in the Construction
Business of the “Other Business” segment increased by 232 million yen during the three months ended June30, 2021.
(2) Explanation regarding financial position
Total assets decreased 0.7% to 126,541 million yen as of June 30, 2021 compared to March 31, 2021.
Liability decreased 6.6% to 53,913 million yen as of June 30, 2021 compared to March 31, 2021 and net
assets increased to 4.1% to 72,628 million yen as of June 30, 2021 compared to March 31, 2021.
The main factors behind the decrease in total assets were a decrease of 11,962 million yen in real estate forsale in process, while there were an increase of 8,952 million yen in cash and deposits and an increase of
2,021 million yen in construction in progress, tools, furniture and fixtures included in other, property, plantand equipment.

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The main reason for the decrease in liabilities was a decrease of 5,713 million yen in long-term borrowings,
despite an increase of 1,696 million yen in income taxes payable and an increase of 961 million yen in longterm borrowings scheduled to be repaid within one year.
The main factor behind the increase in net assets was the recording of 4,802 million yen in profit attributableto owners of parent, despite the payment of year-end dividends of 2,047 million yen.
Moreover, the equity ratio increased 2.6 percentage points to 54.9% as of June 30, 2021 compared to March
31, 2021.
(3) Explanation regarding forward-looking statements such as consolidated earnings forecasts
For the fiscal year ended March 31, 2022, there is no change to the forecast figures announced on May 12,
2021.

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2． Quarterly Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2021
AssetsCurrent assets
Cash and time deposits
Notes, accounts receivable, and contract
assetsReal estate for sale
Real estate for sale in process
Costs of uncompleted construction
contracts
Supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings (net amount)
Land
Other (net amount)
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-7

As of June 30, 2021

21,50830,461

1,532

1,051

13,601
72,282

14,15260,320

157

37

46
1,693
(36)
110,785

58
1,203
(25)
107,258

1,989
6,821
1,717
10,528

2,084
6,880
3,738
12,702

552
149
701

532
139
672

3,997
973
500
(1)
5,470
16,700127,485

4,590
897
421
(1)
5,908
19,283
126,541

(Unit: million yen)
As of March 31, 2021
Liabilities
Current liabilities
Accounts payable - trade
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (andother officers)
Provision for fulfillment of guarantees
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Provision for share-based remuneration
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-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-8

As of June 30, 2021

1,634
5,530
901
197

2,318
6,492
2,597
113

52

18

53
4,988
13,35845
4,135
15,72041,991
11
56
2,295
44,35457,712

36,2778
58
1,847
38,19253,913

11,965
6,445
48,573(67)
66,916

11,965
6,445
51,328(67)
69,671

2

3

(292)

(194)

(289)

(191)

16
3,129
69,773
127,485

16
3,132
72,628
126,541

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Unit: million yen)
For the three months
ended June 30, 2020
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Subsidy income
Other
Total non-operating income
Non-operating Expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Negative goodwill gain
Total extraordinary income
Extraordinary loss
Loss on devaluation of memberships
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent-9

For the three months
ended June 30, 2021

13,672
9,797
3,875
1,779
2,095

31,213
21,906
9,306
1,965
7,340

9
0
8
6
9
33

7
0
45
11
64

128
47
176
1,952

104
23
127
7,277

-

78
78

6
6
1,946
547
164
711
1,234
(3)
1,238

0
0
7,356
2,473
82
2,556
4,800
(1)
4,802

Consolidated Statement of Comprehensive Income(Unit: million yen)
For the three months
ended June 30, 2020
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests-10

For the three months
ended June 30, 2021

1,234

4,800

(0)

(0)

(177)
(178)
1,056

106
106
4,906

1,061
(5)

4,899
6

(3) Notes to Consolidated Financial Statements(Notes to Assumption of Going Concerns))
Not applicable.
(Notes on Significant Changes in the Amount of Shareholders’ Equity)
I For the three months ended June 30, 2020
1. Dividend paid
Resolution

Type of shares

Total dividends(million yen)

Dividends per share(yen)

Base date

Effective date

Source ofdividends

June 23, 2020
Annual General
Common shares
2,047
42.00 March 31, 2020 June 24, 2020 Retained earnings
Meeting of
Shareholders
Note: The total amount of dividends decided at the Annual General Meeting of Shareholders on June 23, 2020 includes
dividends of 2 million yen for the Company's shares held by the trust account of the Employee Stock Ownership Plan (JESOP).

2. Dividends for which the base date is during the three months ended June 30, 2020 and the effective date isafter the last day of the three months ended June 30, 2020
Not applicable.
II For the three months ended June 30, 2021
1. Dividend paid
Resolution

Type of shares

Total dividends(million yen)

Dividends per share(yen)

Base date

Effective date

Source ofdividends

Annual General
Meeting ofCommon shares
2,047
42.00 March 31, 2021 June 23, 2021 Retained earnings
Shareholders,June 22, 2021
Note: The total amount of dividends decided at the Annual General Meeting of Shareholders held on June 22, 2021, includes
dividends of 2 million yen for the Company's shares held by the trust account of the Employee Stock Ownership Plan (JESOP).

2. Dividends for which the base date is during the three months ended June 30, 2021 and the effective date isafter the last day of the three months ended June 30, 2021
Not applicable.
(Change of Accounting Policies)(Application of Accounting Standards for Revenue Recognition)“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020. Hereinafterreferred to as the "Revenue Recognition Accounting Standard") was applied at the beginning of the threemonths ended June 30, 2021 and so revenue is recognized in the amount expected to be received in exchange
for the promised goods or services at the time when control of the goods or services is transferred to thecustomer. As a result, in connection with construction contracts, in the past, when there was a certain degreeof certainty about the outcome of the progress of the construction work, the percentage of construction
completion method had to recognize revenue over a certain period. However, in the case where control overgoods or services is transferred to the customer over a certain period of time, the Company has changed themethod to recognize revenue over a certain period of time as it fulfills its performance obligation to transfer
goods or services to the customer. Progress in meeting performance obligations is measured based on theratio of construction costs incurred by the end of each report period to the total construction costs to beforecast. In addition, if it is not possible to reasonably estimate the degree of progress in fulfilling theperformance obligations at the initial stage of the contract, but it is expected the costs incurred, revenue isrecognized based on the cost recovery standard. For construction contracts for which the period from thetransaction start date to the time when the performance obligation is expected to be fully satisfied is very
short, alternative treatment is applied. Revenue is not recognized over a certain period of time and revenue
is recognized when the performance obligation is fully satisfied.
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The application of the Revenue Recognition Accounting Standard is in accordance with the transitional
treatment provided in the proviso to Paragraph 84 of the Revenue Recognition Accounting Standard, butthere is no impact on the balance at beginning of the period of retained earnings.
As a result of the application of the Revenue Recognition Accounting “notes and accounts receivable – trade”
that was included in “current assets” in the previous fiscal year, has been included in "Notes, Accountreceivable and contract assets" from the three months ended June 30, 2021. In accordance with thetransitional treatment set forth in Paragraph 28-15 of the "Accounting Standard for the Non-Consolidated
Financial Statements" (ASBJ Statement No. 12, March 31, 2020), information on revenue arising fromcontracts with customers for the previous first quarter consolidated cumulative period is not stated.
(Application of Accounting Standards for Calculation of Market Value)"Accounting Standard for Calculation of Fair Value" (ASBJ Statement No. 30, July 4, 2019. Hereinafterreferred to as "accounting standard for fair value calculation") was applied at the beginning of the threemonths ended June 30, 2021 and so in accordance with the transitional treatment set forth in Paragraph 19of the accounting standard for fair value calculation, and Paragraph 44-2 of the "Accounting Standard for
Financial Instruments" (ASBJ Statement No. 10, July 4, 2019), the new accounting policies set forth in theaccounting standard for fair value calculation will be applied in the future.
Moreover, there is no impact on the Consolidated Financial Statements.
(Additional information)
Treatment of application of tax effect accounting for transition from consolidated tax payment system to newtax group relief system
Sun Frontier and certain domestic consolidated subsidiaries have adopted the "Guidance on Application of
Accounting Standards for Tax Effect Accounting" (ASBJ Guidance No. 28, February 16, 2018) in accordancewith Paragraph 3 of the "Treatment of Application of Tax Effect Accounting for the Transition from theConsolidated Tax Payment System to the Group Accumulation System" (ASBJ Guidance No. 39, March 31,2020) for items for which the non-consolidated tax payment system was reviewed in accordance with thetransition to the Tax Group Relief System established under the "Act for Partial Revision of the Income Tax
Act, etc. (Act No. 8, 2020). The provisions of Paragraph 44 do not apply, and the amount of deferred tax
assets and deferred tax liabilities is based on the provisions of the tax laws prior to the revision.
Accounting estimates for the impact of the spread of COVID-19 infections
There have been no material changes to assumptions regarding the impact of the spread of COVID-19
infections described in the Annual Securities Report (Significant Accounting Estimates) for the previous
fiscal year.

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(Segment Information, etc.)[Segment Information]
I For the three months ended June 30, 2020
1． Information on net sales and profit for each reportable segment(Unit: million yen)

Reportable segment
Real Estate Real Estate
Revitalizatio Servicen BusinessBusiness

Hotel andTourism
Business

Other (Note)

Subtotal

Total

Net Sales
Net sales toexternal customers
Internal sales ortransfers

10,1391,273

290

11,703

1,969

13,672

6

168

-

174

-

174

Subtotal

10,145

1,441

290

11,878

1,969

13,847

Segment Income (loss)

2,911

799

(512)

3,198

456

3,654

Note: The "Other" segment is a business segment that is not included in the reportable segment and includes Overseas Business andConstruction Business, etc.

2． The difference between the total amount of the report segment's profit or loss and the amount recordedin the Consolidated Statement of Income and the main content of the difference (matters related to thedifference adjustment)(Unit: million yen)
ProfitAmountReportable Segment Total

3,198

Profit in the “Other” category

456

Elimination of intersegment transactions(2)

Corporate expenses (Note)(1,699)Ordinary Profit in the consolidated statement of income

1,952

Note: Corporate expenses are mainly general and administrative expenses not attributable to the reportable segment.

3．Information on impairment loss or goodwill of fixed assets for each reportable segment
Not applicable.
II For the three months ended June 30, 2021
1 ． Information on net sales and profit(loss) for each reportable segment and revenue decomposition
information(Unit: million yen)
Reportable segment
Real Estate Real Estate
Revitalizatio Servicen BusinessBusiness
Net Sales
Revenue fromcontracts withcustomers

26,588

Hotel andTourism
Business

1,820

1,318
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Subtotal

29,727

Other(Note 1)

469

Total

30,196Other revenue (Note2)
Net sales toexternal customers
Internal net sales ortransfers between
segments

858

129

28

1,016

-

1,016

27,447

1,949

1,346

30,743469

31,213

3

110

-

114

-

114

Total

27,450

2,060

1,346

30,857469

31,327

Segment income (loss)

8,235

1,252

(584)

8,903

15

8,918

Note 1. The "Other" segment is a business segment that is not included in the reportable segment and includes Overseas Business
and Construction Business, etc.
Note 2. Other's revenues include rental income under Accounting Standards for Lease Transactions (ASBJ Statement No. 13).

2．The difference between the total amount of the report segment's profit or loss and the amount recorded in
the Consolidated Statement of Income and the main content of the difference (matters related to the difference
adjustment)(Unit: million yen)
ProfitAmountReportable Segment Total

8,903

Profit in the “Other” category

15

Elimination of intersegment transactions

0

Corporate expenses (Note)(1,641)

Ordinary Profit in the consolidated statement of income

7,277

Note: Corporate expenses are mainly general and administrative expenses not attributable to the reportable segment.

3．Information on non-current asset's impairment loss or goodwill by report segment
Not applicable.
4．Changes in report segments(1) Changes in report segments
Effective from the first quarter consolidated accounting period, the report segment classification has beenrevised in line with the business reorganization implemented in November 2020. The major changes are
as follows:(i) The "Hotel Development Business" previously disclosed as "Real Estate Revitalization Business"and the "Hotel Operation Business" previously disclosed as "Operation Business" have been merged
into the "Hotel and Tourism Business" under the new reportable segment.
(ii) The “Real Estate Revitalization Business" previously disclosed as "Sub-lease Business" and"Operation Business" previously disclosed as "Conference Room Rental Business" and "Other
Business" previously disclosed as "Rent Guarantee Business" are now disclosed as "Real Estate
Service Business".
Segment information for the three months ended June 30, 2020 includes information on sales andprofits by report segment prepared based on the above changes.
(2) Change of Accounting Policies
As described in "Change of Accounting Policies", the accounting method for revenue recognition waschanged by applying the Revenue Recognition Accounting Standard from the beginning of the threemonths ended June 30, 2021. Therefore, the method for calculating profit or loss of business segments-14was also changed.
As a result of this change, the net sales for "Other Business" in the three months ended June 30, 2021
increased by 232 million yen compared with the previous method.

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