Information Disclosure on the Internet Regarding
The Notice of the 22nd Annual General Meeting of Shareholders

The 22nd Fiscal Year (from April 1, 2020 to March 31, 2021)
System for ensuring proper business operations andoverview of operation status

Page 2

Page 5

Consolidated Statement of Changes in Equity
Page 6

Notes to Consolidated Financial Statements
Page 15

Non-Consolidated Statement of Changes in Equity
Page 16

Notes to Non-consolidated Financial Statements

Sun Frontier Fudousan Co., Ltd.
This document is provided on the website (https://www.sunfrt.co.jp) of Sun Frontier Fudousan Co., Ltd. (the “Company”) on theinternet to shareholders in accordance with laws and regulations and Article 16 of the Articles of Incorporation.

1

■ System for Ensuring Proper Business Operations and Overview of Operation Status(1) Systems to ensure proper business operations
System to ensure that the execution of duties by directors complies with laws and regulations and the Articles of Incorporation.
The outline of the system to ensure the appropriateness of the business of other companies is as follows.
(i) Systems to ensure that the execution of duties by directors and employees complies with laws and regulations and the
Articles of Incorporation
All directors and employees shall strive to establish a management system that is trusted by society on an ongoing basis in
the future by strengthening internal management systems and raising awareness of compliance, based on the recognition
that it is our social responsibility as a company to always embody the spirit of legal compliance and execute business basedon a fair and high level of ethics.
In concrete terms, the Internal Audit Office, which is under direct control of the President and Representative Director, willbe established to conduct regular internal audits of all divisions and group companies without exception. In internal audits,
the Company shall ascertain the status of business operations and systems, and shall fairly investigate and verify whether
all business operations are conducted appropriately in compliance with laws and regulations, the Articles of Incorporation,and internal rules, and whether corporate systems, organizations, and rules are proper and appropriate. The results of audits
shall be reported to the President and Representative Director. In addition, the Company will establish a “Corporate Ethics
Help Line” and establish an internal reporting system with various contact methods that thoroughly protects reporters inorder to prevent and promptly detect violations of laws and regulations and misconduct to improve the mobility of the selfcleaning process, control reputational risks, and ensure public trust. Furthermore, in order to raise awareness of compliance,
the Legal Department will be established and various training and education will be conducted.
The Company and group companies shall have no relationship with anti-social forces and shall respond resolutely tounreasonable demands.
(ii) System for storage and management of information related to the execution of duties by directors
Information related to the execution of duties by directors, such as records related to decision-making at important meetings
including the Board of Directors meetings and documents approved by each director in accordance with the "Regulations
on Administrative Authority," shall be appropriately recorded, and shall be retained for a specified period of time inaccordance with laws and regulations and the "Regulations on the Handling of Documents," and shall be kept available forinspection by directors and Audit & Supervisory Board Members as necessary. The General Manager of the Administration
Department shall be responsible for supervising the storage and management of information.
(iii) Regulations concerning the management of risk of loss and other system
In order to respond to all risks that threaten the improvement of corporate value and the sustainable development of theCompany, the Company will strive to establish an organizational crisis management system by creating a risk management
manual and establishing a task force headed by the President and Representative Director (including a team of external
experts such as corporate lawyers) in the event of an unforeseen event.
(iv) Systems to ensure efficient execution of duties by directors
As an indicator for establishing and implementing the corporate vision of the entire corporation, the Company has
formulated a medium-term management policy and a single-year management plan. In order to realize the management
policy and the management plan, the Board of Directors has clarified the executive authority and responsibilities of directors
and has increased the efficiency of the execution of duties. In addition, with regard to matters for which decisions on
business execution have been delegated to the President and Representative Director and directors in charge of businessexecution of other matters, necessary decisions shall be made based on the "Organization Regulations" or the "Regulationsfor Management of Affiliated Companies" including group companies. These regulations shall also be appropriately
reviewed based on revisions and abolition of laws and regulations and for the purpose of improving the efficiency of theexecution of duties.
(v) Systems to ensure the appropriateness of operations within the corporate group consisting of the Company and groupcompanies
In order to ensure the appropriate execution of operations by group companies, the Corporate Planning Department shallbe responsible for the management of the group companies in accordance with the "Regulations for the Management ofAffiliated Companies." While respecting the autonomy of the group companies, the Corporate Planning Department shallreceive periodic reports on the status of the business of the group companies. In addition, the Corporate Planning
Department shall require prior consultation or prior approval with the Company for important management matters of the2

group companies. Group companies' management plans are also formulated under the control of the Company, and theCompany provides timely and appropriate advice and guidance during the business period to improve the efficiency ofgroup companies' operations. In addition, the Company and its group companies have established a Risk Management
Committee chaired by the President and Representative Director and assign risk management officers to each division. In
the event that any risk is discovered in management or business, it shall be reported to the Risk Management Committee,
and the risk information shall be analyzed and countermeasures shall be considered to prevent damage or to minimize
damage to the Company and the group companies if such damage occurs. We will establish a system for reporting violationsof laws and regulations or illegal acts that have occurred or may occur at group companies to the internal reporting desk oroutside Audit & Supervisory Board Members specified in the "Regulations on the Corporate Ethics Help Line". We will
strive for early detection and resolution of these violations.
The Internal Audit Office shall conduct internal audits of all group companies in order to ensure the effectiveness andappropriateness of systems, organizations, and regulations covering the overall operations of group companies. The resultsof these audits shall be reported to the organization designated by the Company’s President and Representative Director.
President and Representative Director shall prepare and report its financial statements in accordance with fair andappropriate accounting standards in order to enhance the reliability of financial reporting and increase corporate value of
the Company and its group companies.
(vi) Matters relating to employees who are required to assist Audit & Supervisory Board Members in performing their duties
In the event that Audit & Supervisory Board Members request that an employee be assigned to assist them in performing
their duties, such employee shall be assigned as an Audit & Supervisory Board Members’ assistant. The auditor’s assistantshall be appointed from persons who have sufficient knowledge of accounting and law and shall perform their duties inaccordance with the instructions of the Audit & Supervisory Board Members. In addition, if an Audit & Supervisory Board
has been established, it shall also serve as the secretariat of the Audit & Supervisory Board.
(vii) Matters related to the independence of employees from directors in the preceding paragraph
In order to ensure the independence of the auditor’s assistant as set forth in the preceding paragraph, personnel changes andevaluations of such employees shall be reported to Audit & Supervisory Board Members in advance and their consent shallbe obtained.
(viii) Matters related to ensuring the effectiveness of instructions given by Audit & Supervisory Board Members to employees
in Paragraph (vi)
The auditor’s assistant in Paragraph 6 will have the opportunity to accompany the Audit & Supervisory Board Members to
Board of Directors meetings and other important meetings. They will also accompany the Audit & Supervisory Board
Members and regularly exchange opinions with the President and Representative Director and accounting auditors.
Directors and other employees will cooperate with the Audit & Supervisory Board Members to improve the auditing
environment so that the duties of the auditor’s assistant are carried out smoothly.
(ix) System for reporting to Audit & Supervisory Board Member and other Members by Directors and employees of theCompany and group companies
All directors and department heads shall report on the status of the execution of their duties from time to time at meetings
in the Board of Directors and other meetings attended by corporate auditors. Auditors shall be permitted to attend any
Company meetings they request to attend. All directors and employees of the Company and its group companies shallreport to the Audit & Supervisory Board Members as soon as they discover any matter that may or may not have a material
impact on the Company's credibility, business performance or any material violation of the Corporate Vision and/or
Corporate Code of Conduct.
Directors and employees of the Company and group companies may report to the internal reporting office of the Company
as set forth in the "Regulations on the Corporate Ethics Help Line" at any time. In addition, they may voluntarily report tooutside Audit & Supervisory Board Members. The Compliance Department of the Company provides education andtraining opportunities for directors and employees to raise awareness of the hotline and encourage active reporting.
The Company shall explicitly stipulate in the "Regulations on the Corporate Ethics Help Line" that directors and employeesof the Company and group companies shall not be subjected to unfavorable treatment in personnel evaluation and shall not
be subject to adverse dispositions such as disciplinary action by reporting to the internal reporting office, and shall make it
known that they shall not be subject to adverse dispositions due to reporting to Audit & Supervisory Board Members.
(x) Matters related to the policy regarding the handling of expenses and obligations arising from the execution of duties by
Audit & Supervisory Board Members
The Company shall promptly respond to requests from Audit & Supervisory Board Members for advance payment of3

expenses incurred in the execution of their duties, reimbursement of expenses incurred and repayment of obligations
incurred, except in cases where such expenses can be proved not to have arisen in the execution of their duties.
(xi) Systems to ensure effective audits by Audit & Supervisory Board Members
President and Representative Director will hold regular meetings with Audit & Supervisory Board Members in order tofacilitate mutual communication. In addition, in accordance with the " Regulations for Internal Audit " and the "Internal
Audit Implementation Guidelines," the Internal Audit Office shall maintain close contact and coordination and cooperate
to ensure that audits by Audit & Supervisory Board Members and audits by the accounting auditor are conducted efficiently
and effectively.
(2) Outline of the operating status of the system for ensuring the appropriateness of operations(i) Directors' execution of duties
We have established internal rules to ensure that directors act in compliance with laws and regulations and the Articles ofIncorporation. During the fiscal year under review, the Company held 19 Board of Directors meetings to discuss each
proposal, supervise the status of business execution, and actively exchange opinions.
(ii) Execution of duties by Audit & Supervisory Board
During the fiscal year under review, the Audit & Supervisory Board Members held 13 Audit & Supervisory Board Members
meetings and implemented audits based on the audit plan. In addition, the Audit & Supervisory Board Members attended
Board of Directors meetings and other important meetings and regularly exchanged information with the President andRepresentative Director, the accounting auditor, and the Internal Audit Office to audit the execution of duties by the
directors and to confirm the development and operational status of the internal control system.
(iii) Ensuring the appropriateness of operations at the Company's subsidiaries
The Company receives periodic reports on the status of its business from its subsidiaries in accordance with the"Regulations for Management of Affiliated Companies" and monitors their business activities.
(iv) Compliance and Risk Management
The Company has established the "Corporate Ethics Help Line" to ensure that employees who have reported complianceviolations or acts are not treated unfavorably for the reason of the report. The Company ensures that employees who reportcompliance violations or questionable acts are not treated unfavorably for the reason of the report.
In addition, we are preparing for unexpected situations such as training for countermeasures against large-scale disasters
and securing supplies for people with difficulty in returning home.

4Consolidated Statement of Changes in Equity(From April 1, 2020 to March 31, 2021)(Unit: million yen)
Shareholders' equity

Balance at beginning of the period

Share capital

Capital surplus

11,965

6,445

Retained earnings Treasury shares
46,347(67)

Total shareholders'equity64,690Changes during period
Dividends of surplus(2,047)(2,047)

Profit attributable to owners of parent

4,274

4,274

Change in ownership interest of parent
due to transactions with noncontrolling interests
Net changes in items other thanshareholders' equity

(0)

(0)

Total changes during period

-

(0)

2,226

-

2,226

Balance at end of the period

11,965

6,445

48,573(67)

66,916

Accumulated other comprehensive income
Valuation
Total accumulated Share acquisition Non-controlling
Foreign currency
difference on
otherrightsinterests
translation
available-for-salecomprehensive
adjustment
securities
incomeBalance at beginning of the period

3

(73)

(69)

11

177

Total net assets

64,809Changes during period
Dividends of surplus(2,047)

Profit attributable to owners of parent

4,274

Change in ownership interest of parent
due to transactions with noncontrolling interests
Net changes in items other thanshareholders' equity

(0)
(0)

(219)

(219)

4

2,952

2,737

Total changes during period

(0)

(219)

(219)

4

2,952

4,963

Balance at end of the period

2

(292)

(289)

16

3,129

69,7735

Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes Regarding Significant Accounting Policies for the Preparation of Consolidated Financial Statements)
1. Scope of Consolidation(1) Number of consolidated subsidiaries and names of principal subsidiaries
Number of consolidated subsidiaries
21 companies
Names of consolidated subsidiaries
SF Building Support Inc.
SF Building Maintenance Inc.
Sun Frontier Space Management Inc.
SF Engineering Inc.
Sun Frontier Sado Co., Ltd.
Okesa Kanko Taxi Co., Ltd.
Sun Frontier Community Arrangement Co., Ltd.
Sun Frontier Okinawa Co., Ltd.
Sun Frontier Hotel Management Inc.
Sky Heart Hotel Inc.
Japan System Service Inc.
Communication Development Inc.
Sun Frontier Fudousan Taiwan Co., Ltd.
SUN FRONTIER VIETNAM CO., LTD.
SUN FRONTIER DANANG CO., LTD.
PT. SUN FRONTIER INDONESIA
PT. SUN FRONTIER PROPERTY ONE
Sun Frontier NY Co.,Ltd.
340 West 48 SG LLC
439 West 46 SG LLC
RIVERSIDE STUDIOS LLC
In the consolidated fiscal year under review, the newly acquired Japan System Service Inc. and Communication Development
Inc. are included in the scope of consolidation.
Kouwa Corporation changed its company name to SF Engineering Inc. on April 1, 2020.
Inlite Co., Ltd., a subsidiary of the said company, ceased to exist as a result of an absorption-type merger with SF Engineering
Inc. as the surviving company.
Sun Frontier Fudousan Investment Advisory Co., Ltd., was excluded from the scope of consolidation because it was dissolved
as a result of an absorption-type merger with the Company as the surviving company.
(2) Name of the company that did not hold the majority voting rights on its own account as a subsidiary
Not applicable.
(3) Assets, profit or loss of subsidiaries excluded from the scope of consolidation since control is deemed to be temporary
Not applicable.
(4) Special purpose company subject to disclosure
An outline of the special purpose company subject to disclosure, an outline of transactions using the special purpose company
subject to disclosure, and the transaction amount with the special purpose company subject to disclosure are described in “Notes
on special purpose company subject to disclosure.”
2. Application of Equity Method(1) Number of affiliated companies accounted for by the equity method and names of major companies
Number of equity-method affiliates
2 companies
Names of equity-method affiliates
Power Consulting Networks Co., Ltd.
SKY ESTATE Inc.
(2) Name of the company which holds not less than 20% and not more than 50% of the voting rights on its own account and6which has not been an affiliated company
Not applicable.
(3) Special note regarding application of the equity method
Not applicable.
3. Matters concerning Accounting Policies(1) Valuation standards and methods for significant assets(i) Other securities (available-for-sale securities)
Securities with market quotations
Stated at market based on the market price, etc., on the balance sheet
date (Valuation difference is reported as a component of net assets. The
cost of sale is calculated using the moving-average method.)
Securities without market quotations
Stated at cost using the moving-average method.
(ii) Inventories
1. Real estate for sale and Real estate for sale inprocess

2. Costs of uncompleted construction contracts

3. Supplies

Stated at cost determined by the specific identification method(The figures shown in the balance sheet have been calculated by writing
them down based on decline in profitability.)
Leased assets are amortized in accordance with property, plant andequipment standards.
Stated at cost determined by the specific identification method(The figures shown in the balance sheet have been calculated by writing
them down based on decline in profitability.)
The most recent purchase cost method(The figures shown in the balance sheet have been calculated by writing
them down based on decline in profitability.)(2) Depreciation or amortization method for significant depreciable assets(i) Property, plant and equipment
The declining-balance method is applied.
However, buildings (excluding facilities attached to buildings) andfacilities attached to buildings acquired on or after April 1, 2016 aredepreciated using the straight-line method.
The estimated useful lives are as follows:
Buildings
3 to 29 years
Other
2 to 15 years
Small-amount depreciable assets with an acquisition cost of 100,000
yen or more but less than 200,000 yen are amortized over three years
on a straight-line basis.
(ii) Intangible assets
The straight-line method is used.
Software for internal use is amortized on a straight-line basis over theestimated internal useful life (5 years).
(3) Significant provisions(i) Allowance for doubtful accounts(ii) Provision for bonuses(iii) Provision for bonuses for directors (andother officers)(iv) Provision for fulfillment of guarantees(v) Provision for share-based remuneration

The allowance for doubtful accounts is provided based on the historical
write-off rate for ordinary receivables, the estimated amount of
irrecoverable debt based on recoverability of individual cases for
specified receivables such as doubtful accounts.
To prepare for the payment of bonuses to employees, the Company
records the portion of the estimated bonuses to be paid during thecurrent consolidated fiscal year.
Provision for directors' bonuses is provided based on the estimatedamount to be paid during the current consolidated fiscal year.
In order to prepare for losses related to Rent Guarantee Business
operations, costs for which the amount incurred can be estimatedindividually are recorded in the amount of such costs, and for others,
the estimated losses are recorded in the estimated losses by taking intorate.
In order to prepare for the provision of the Company's shares to
employees based on the Share Benefit Regulations, the provision for
the Company's shares is recorded based on the estimated amount of theshare benefit obligation at the end of the current consolidated fiscal
year.

(4) Other significant matters for preparation of consolidated financial statements(i) Fiscal year of consolidated subsidiaries
Consolidated domestic subsidiaries and Sun Frontier Fudousan Taiwan Co., Ltd. close their books on March 31, and SUN
FRONTIER VIETNAM CO., LTD., PT. SUN FRONTIER INDONESIA, PT. SUN FRONTIER PROPERTY ONE, SUN

7

FRONTIER DANANG CO., LTD., Sun Frontier NY Co., Ltd., 340 West 48 SG LLC, 439 West 46 SG LLC and
RIVERSIDE STUDIOS LLC close their books on December 31.
In preparing the consolidated financial statements, the financial statements as of December 31 are used for the consolidated
subsidiaries whose closing date is December 31, and necessary adjustments are made for significant transactions occurring
between the consolidated closing date and December 31.
(ii) Standards for recording significant revenues and expenses
Standards for recording completed construction
・Construction work for which the outcome of the construction
and completed construction costs
activity is deemed certain at the end of the current consolidated
fiscal year
The percentage of completion method is applied (the percentage ofcompletion of construction activity is estimated by the incurredcost).
・Other construction
Construction completion method is applied.
(iii) Accounting treatment for retirement benefits
In calculating the retirement benefit liability and retirement benefit expenses, certain of the Company’s consolidated
subsidiaries apply the simplified method where the amount of retirement benefits payable at the end of the fiscal year forvoluntary resignations is the retirement benefit obligation.
(iv) Standards for translation of foreign currency-denominated assets and liabilities into Japanese currency
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the spot exchange
rates on the consolidated balance sheet date, and translation differences are charged or credited to income. Assets, liabilities
and income and expenses of foreign subsidiaries are translated into Japanese yen at the exchange rates prevailing at therespective balance sheet dates of the foreign subsidiaries. Translation differences are included in foreign currency translation
adjustment and non-controlling interests in net assets.
(v)Accounting for consumption taxes

The tax exclusion method is applied.
Non-deductible consumption taxes are included in expenses for thecurrent fiscal year.

(vi) Amortization methods and periods for
Goodwill(vii) Application of consolidated tax payment
system(viii) Application of Tax Effect Accounting fortransition from consolidated taxation system toconsolidated group system

Goodwill is amortized on a straight-line basis over mainly 10 years.
Consolidated taxation system is applied.
The Company and certain domestic consolidated subsidiaries haveadopted the “Application of Accounting Standard for Tax EffectAccounting” (ASBJ Guidance No. 28, February 16, 2018), without
applying provisions of section 44, in accordance with paragraph 3 of
the “Treatment of Application of Tax Effect Accounting for Transition
from Consolidated Tax Payment System to Consolidated Tax Payment
System for Group” (ASBJ PITF No. 39, March 31, 2020), with respect
to the items for which the Company’s consolidated tax payment systemand the non-consolidated tax payment system have been revised in linewith the transition to the “Act for Partial Revision of the Income Tax
Act, etc.” (Act No. 8 of 2020). Moreover, deferred tax assets anddeferred tax liabilities are based on the provisions of the preamendment tax laws.

(Change of Presentation Method)
Consolidated Balance Sheet“Construction warrantee reserve” (0 million yen in the fiscal year under review) which was included in “Current liabilities” in theprevious fiscal year has been included in “Other" in the current fiscal year due to their decreasing materiality.
Consolidated Statement of Income“Borrowing related expenses” (56 million yen in the fiscal year under review) which was included in “Non-operating expenses” inthe previous fiscal year has been included in “Other" in the current fiscal year due to their decreasing materiality.
Changes accompanying the application of “Accounting Standard for Disclosure of Accounting Estimates”

8

“Accounting Standard for Disclosure of Accounting Estimates” (Accounting Standards Board of Japan (ASBJ) Statement No. 31,
March 31, 2020) has been applied from the current fiscal year. Accordingly, the “Notes to Accounting Estimates” are stated in theNotes to Consolidated Financial Statements.
(Notes on Accounting Estimates)
1. Assessment of the real estate for sale(1) Amount recorded in the consolidated financial statements for the current fiscal year
Real estate for sale
13,601 million yen
Real estate for sale in process
72,282 million yen(2) Other information
For real estate for sale, etc., if the net selling price falls below the acquisition cost, the net selling price is stated as the balance
sheet amount. The net selling price is calculated by deducting the estimated future cost of construction work and the estimatedselling expenses from the return value estimated based on the business plan.
The business plan that forms the basis for the value of the return to profits includes the expected tenant rent and the occupancy
rate of hotel rooms, and is based on important assumptions such as the assumed market conditions in the future and theforecast of the convergence time of the COVID-19.
In the following fiscal year, the net selling price may change due to changes in assumptions used in formulating businessplans in the event of events that were not anticipated at the time of formulating business plans. This may have a significant
impact on the amount of real estate for sale, etc., recognized in the consolidated financial statements for the following fiscal
year and thereafter.
2. Non-current assets impairment(1) Amount recorded in the consolidated financial statements for the current fiscal year
Non-current assets related to hotel development business and Hotel Operation Business 8,541 million yen(2) Other information
Due to the impact of the spread of COVID-19, the occupancy rate of hotel rooms has decreased and profitability has declined.
As a result, signs of impairment have emerged as a significant deterioration in the business environment. Impairment losses
are losses based on a comparison of the estimated undiscounted future cash flows over the remaining economic useful livesof the hotel's major assets with the carrying amounts of the hotel's asset groups.
The business plan of the hotel, which is the basis of future cash flows, has been formulated under the policy of conducting
long-term management, based on important assumptions including the forecast of the occupancy rate of hotel rooms, etc., aswell as the assumption of future market conditions and the forecast of the convergence time of the COVID-19.
In the following fiscal year, the assumptions used in formulating business plans may change in the event of a situation thatwas not anticipated when the business plan was formulated. This may have a material impact on the non-current asset amounts
recognized in the consolidated financial statements for the following fiscal year and thereafter.
(Additional Information)
Transactions of delivering the company’s own shares to employees etc. through trusts
The Company conducts transactions to deliver its own shares through trust for the purpose of employee welfare.
(i) Overview of transaction
The Plan provides the Company's shares to employees of the Company who meet certain requirements based on the sharebenefit regulations established by the Company in advance.
The Company will grant points to employees who satisfy certain conditions at the end of the consolidated fiscal year, andwhen they acquire the right to receive benefits, the Company shares corresponding to the granted points will be delivered.
The shares to be granted to employees are acquired in the future with the money set in trust in advance and managed separately
as trust assets.
The total amount method is applied to the Employee Stock Ownership Plan (J-ESOP) in accordance with the “Practical
Solution on Transactions of Delivering the Company’s Own Shares to Employees etc. through Trusts” (ASBJ PITF No. 30,
March 26, 2015).
(ii) Own shares remaining in the trust
The book value of the Company's shares remaining in the trust (excluding the amount of incidental expenses) is included in
net assets. The book value and number of shares of the treasury shares were 67 million yen and 56,500 shares.

9

(Notes to Consolidated Balance Sheet)(1) Assets pledged as collateral and obligations secured by collateral(i) Assets pledged as collateral are as follows:
Real estate for sale
Real estate for sale in process
Buildings
Land
Other
Total
(ii) Secured obligations are as follows:
Current portion of Long-term borrowings
Long-term borrowings

9,180 million yen
69,524 million yen
849 million yen
6,533 million yen
1,568 million yen
87,656 million yen

5,010 million yen
39,496 million yen

Total

44,507 million yen(2) Accumulated depreciation of Property, plant and equipment

1,160 million yen

Note. The above amounts include accumulated impairment losses.

(3) Contingent liabilities
Debt guarantee
Liability guarantee by rent guarantee
Customers pertaining to Rent Guarantee Business(amount equivalent to the guarantee limit)
Provision for fulfillment of guarantees
Total

40,048 million yen-53 million yen
39,994 million yen

10(Notes to Consolidated Statement of Income)Not applicable.
(Notes to Consolidated Statement of Changes in Equity)(1) Total number of issued shares
Beginning of theType of shares
current consolidated
fiscal year
Common shares
48,755,500 shares(2) Matters concerning Treasury shares
Beginning of theType of shares
current consolidated
fiscal year
Common shares
56,644 shares

Increase

End of the current
consolidated fiscal year

Decrease- shares- shares

Increase

End of the current
consolidated fiscal year

Decrease- shares48,755,500 shares- shares

56,644 sharesNote. The number of Treasury shares in common shares, includes the Company's share of 56,500 held by the trust account of the Employee Stock Ownership
Plan (J-ESOP).
(Summary of Reasons for Change)
Not applicable.

(3) Matters concerning dividends of surplus(i) Cash dividends paid
Resolution

Type of shares

Total dividends(million yen)

Dividends per share(yen)June 23, 2020
Annual general
meeting ofshareholders

Common shares

2,047

42.00

Base date
March 31, 2020

Effective dateJune 24, 2020

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 theCompany's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP).

(ii) Dividends whose record date falls in the current consolidated fiscal year and whose effective date falls in the following
consolidated fiscal year
The following resolution is scheduled.
Source ofTotal dividends
Dividends per
Resolution
Type of shares
Base date
Effective datedividends(million yen)share (yen)June 22, 2021
Annual general
Common shares Retained earnings
2,047
42.00 March 31, 2021
June 23, 2021
meeting ofshareholders
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 theCompany's shares held by the Employee Stock Ownership Plan (J-ESOP).

(4) Share acquisition rights as of the end of the current consolidated fiscal year
Number of shares to be issued (shares)
Breakdown

2018 Share acquisitionrights as Stock Option
2019 Share acquisitionrights as Stock Option
2020 Share acquisitionrights as Stock Option
Total

Balance atthe end of
the current
consolidated
fiscal year
(million yen)

Beginning of
the current
consolidated
fiscal year

Increase

Decrease

End of thecurrent
consolidated
fiscal year

-

-

-

-

-

5

-

-

-

-

-

5

-

-

-

-

-

4

-

-

-

-

16

Type of shares
to be issued

11

(Notes on Financial Instruments)(1) Items relating to financial instruments(i) Policy on financial instruments
The group limits its fund management to short-term deposits, etc. With regard to fund procurement, the Company's policy is
to procure funds through indirect financing through bank loans and direct financing through issuance of bonds and shares, etc.,
taking into comprehensive consideration the characteristics of necessary fund demand, financial market environment, long andshort-term redemption periods. Derivative transactions are used to avoid interest rate fluctuation risks borrowings or to limit
them to a certain range, and the Company's policy is not to engage in speculative transactions.
(ii) Content as well as risks of financial instruments
Trade receivables are exposed to customers' credit risk.
Borrowings raised funds mainly for investment in business purposes and business strategies. Variable borrowings are exposed
to interest rate fluctuation risk. Borrowings, which procures funds mainly from financial institutions, is exposed to liquidity
risks that restrict fund procurement due to changes in the stance of transactions with the group.
(iii) Risk management system for the financial instruments
A. Management of credit risks (risks pertaining to non-performance of contracts by counterparties)
Based on the Management Regulations for Trade Receivables and other rules, the Company regularly monitors the businessconditions of major business partners with regard to trade receivables, strives to identify and mitigate early concerns aboutcollection of trade receivables due to deterioration in financial conditions and other factors.
B. Management of market risks (risks related to market price fluctuations)
Derivative transactions are not conducted for speculative purposes not stipulated in the investment regulations.
C. Management of liquidity risk related to fund procurement (risk of inability to pay on the due date)
The Company aims to diversify its funding sources by accurately assessing the group's funding needs and financial position,and by strengthening relationships with financial institutions.
(iv) Supplementary explanation of fair value of financial instruments
The fair values of financial instruments include values based on market prices and reasonably calculated values if there is nomarket price. Since variable factors are incorporated in the calculation of the value, the value may fluctuate by adopting
different assumptions, etc.
(2) Fair value of financial instruments
At March 31, 2021, the book values of the Consolidated Balance Sheet, fair values and differences between them are as follows.
(Unit: million yen)

Cash and deposits
Total assets
Long-term borrowings (including
current portion)
Total liabilities
Derivative transaction

Consolidated Balance
Sheet amount
21,50821,508Market value

Difference
21,50821,508-47,52147,027(494)

47,521-47,027-(494)-

Note. Methods for calculating the market values of financial instruments and derivative transactions
AssetsCash and deposits
Since the settlement periods for the foregoing are short, the market values thereof are essentially equal to the book values. Therefore, the corresponding
book value is used as the market value.
Liabilities
Long-term borrowings
The market value of long-term borrowings is calculated by discounting the total amount (*) of the long-term borrowings divided by a certain period by
the interest rate assumed for similar new loans.
(*) For long-term borrowings that were subject to interest rate caps in accordance with the special treatment of interest rate swaps, the total amount ofprincipal and interest accounted for as an integral part of the interest rate caps
Derivative transaction(i) Items for which hedge accounting is not applied
Not applicable.
(ii) Hedge accounting is applied
Since interest rate caps, which are subject to the special treatment of interest rate swaps, are treated as an integral part of the hedged long-term borrowings,
their fair values are included in the fair values of the long-term borrowings.

12

(Notes on Lease and Real Estate)
The Company operates rental office buildings (including land) as well as hotel facilities (including land) in Tokyo and other areas.
For the fiscal year ended March 31, 2021, net rental income from such rental properties was 171 million yen (rent revenue isrecorded in net sales and rental expenses are recorded in cost of sales).
In addition, the amount recorded in the Consolidated Balance Sheet, increase/decrease for the current consolidated fiscal year andmarket value at the end of the current consolidated fiscal year for the said lease and real estate are as follows.
(Unit: million yen)
Consolidated Balance Sheet amountMarket value at the end of the
Balance at the beginning of the
Fiscal year under review
Balance at the end of the current current consolidated fiscal year
current consolidated fiscal year
Increase/Decrease
consolidated fiscal year
2,174
9
2,183
4,447
Note 1. The amount recorded in the Consolidated Balance Sheet is the acquisition cost excluding the accumulated depreciation.
Note 2. The major increase in increase/decrease during the fiscal year under review was due to renewal of facility (65 million yen) and decrease was due todepreciation (56 million yen)
Note 3. The fair value at the end of the current consolidated fiscal year is the amount based on the real estate appraisal report by an external real estate appraiser.

(Notes on Per Share Information)(1) Net assets per share(2) Earnings per share(3) Fully diluted earnings per share

1,368.14 yen
87.77 yen
87.73 yenNote. The Company's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP) are included in weighted average number of shares forthe period in common shares and treasury shares deducted in the calculation of the total number of outstanding shares at the end of the fiscal year underreview. The weighted average number of the Company’s shares for the period and year-end held by the trust account is 56,500 shares.

13

(Notes on Special Purpose Companies subject to Disclosure)(1) Overview of the special purpose company subject to disclosure and overview of transactions using the special purpose company
subject to disclosure
The Company operates an investment product in sub-divided real estate sales business in Real Estate Revitalization Businessbased on Act on Specified Joint Real Estate Ventures (voluntary partnership type) and uses voluntary partnership as part of thebusiness structure.
In this business, sub-divided real estate investment product purchasers (hereinafter referred to as investors) will enter into anagreement with voluntary partnership to participate in the real estate specified business and make contributions in kind.
Voluntary partnership is structured to receive distributions of profits and losses arising from real estate investments in kind byinvestors. Profits and losses on leasing and sales of the real estate are attributable to investors.
As a Managing Partner (Chairman), the Company receives chairman compensation in accordance with the VoluntaryPartnership Agreement, and also receives compensation from voluntary partnership for entrusting building management in alump sum.
The latest financial position for the current consolidated fiscal year is as follows.
Fiscal year under review(March 31, 2021)
2 union2,048 million yen
85 million yen

Number of Special Purpose Companies
Total assets as of the latest balance sheet date (simple sum)
Total liabilities (simple sum)(2) Transaction amount with the special purpose company subject to disclosure for the current consolidated fiscal year (from April
1, 2020 to March 31, 2021)(Unit: million yen)Transaction amount
Chairman’s Compensation (Note 1)
Management Commission Income (Note 1)

Item
4
2

Net sales
Net sales

Amount42Note. The amount of chairman's compensation and management commission income is calculated from the relevant real estate at a fixed rate. Chairman'scompensation and management commission income are recorded in net sales in Consolidated Statement of Income.

(Note on Significant Subsequent Events)
Not applicable.
(Other Note)
Not applicable.

14Non-consolidated Statement of Changes in Equity(From April 1, 2020 to March 31, 2021)(Unit: million yen)
Capital surplus
Share capital

Balance at
beginning of theperiodChanges during
periodDividends ofsurplusProfitNet changes in
items other thanshareholders'equityTotal changes
during period
Balance at end of
the period

Balance at
beginning of theperiodChanges during
periodDividends ofsurplusProfitNet changes in
items other thanshareholders'equityTotal changes
during period
Balance at end of
the period

Capitalreserve

11,965

Total capitalsurplus

6,449

6,449

Shareholder’s equity
Retained earnings
Other retained
earnings
Legalreserve
Retained earnings
brought forward
13
46,559Total
retainedearnings
46,572

Total
shareholders'equityTreasuryshares(67)

64,919(2,047)(2,047)(2,047)

5,314

5,314

5,314

-

-

-

-

3,266

3,266

-

3,266

11,965

6,449

6,449

13

49,82549,838(67)

68,186

Valuation and translation difference
Valuation
Total valuation Share acquisitiondifference onrightsand translation
available-for-saledifference
securities3
3
11

Net assets
total
64,934(2,047)

(0)

(0)

4

5,314
4

(0)

(0)

4

3,270

2

2

16

68,20415

Notes to Non-consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Matters concerning Accounting Policies)
1. Valuation standards and methods for assets(1) Valuation standards and methods for securities(i) Shares of subsidiaries and affiliates(ii) Other securities (available-for-sale securities)
Securities with market quotations

Securities without market quotations

Stated at cost using the moving-average method.
Stated at market based on the market price, etc., on the balance sheet
date (Valuation difference is reported as a component of net assets.
The cost of sale is calculated using the moving-average method.)Stated at cost using the moving-average method.

(2) Assessment criteria and assessment methods of Inventories
Stated at cost determined by the specific identification method
Real estate for sale and Real estate for sale in(The figures shown in the balance sheet have been calculated by writing
processthem down based on decline in profitability.)
Leased assets are amortized in accordance with property, plant andequipment standards.
2. Depreciation of non-current assets(1) Property, plant and equipment(2) Intangible assets

The declining-balance method is applied.
However, buildings (excluding facilities attached to buildings) andfacilities attached to buildings acquired on or after April 1, 2016 aredepreciated using the straight-line method.
The estimated useful lives are as follows:
Buildings
3 to 29 years
Other
2 to 15 years
Small-amount depreciable assets with an acquisition cost of 100,000
yen or more but less than 200,000 yen are amortized over three years
on a straight-line basis.
The straight-line method is used.
Software for internal use is amortized on a straight-line basis over theestimated internal useful life (5 years).

16

3. Standards for provisions(1) Allowance for doubtful accounts(2)

Provision for bonuses

(3)
(4)

Provision for bonuses for directors (and otherofficers)
Provision for fulfillment of guarantees(5)

Provision for share-based remuneration

4. Method of recording revenue and expenses
Standards for recording completed construction andcompleted construction costs

The allowance for doubtful accounts is provided based on the historical
write-off rate for ordinary receivables, the estimated amount of
irrecoverable debt based on recoverability of individual cases for
specified receivables such as doubtful accounts.
To prepare for the payment of bonuses to employees, the Company
records the portion of the estimated bonuses to be paid during thecurrent fiscal year.
Provision for directors' bonuses is provided based on the estimatedamount to be paid during the current fiscal year.
In order to prepare for losses related to Rent Guarantee Business
operations, costs for which the amount incurred can be estimatedindividually are recorded in the amount of such costs, and for others,
the estimated losses are recorded in the estimated losses by taking intorate.
In order to prepare for the provision of the Company's shares to
employees based on the Share Benefit Regulations, the provision for
the Company's shares is recorded based on the estimated amount of theshare benefit obligation at the end of the current fiscal year.

・Construction work for which the outcome of the construction activity
is deemed certain at the end of the current consolidated fiscal year
The percentage of completion method is applied (the percentage ofcompletion of construction activity is estimated by the incurred cost).
・Other construction
Construction completion method is applied.

5. Basis for preparation of other financial statements(1) Standards for translation of significant assets or liabilities denominated in foreign currencies into Japanese currency
Monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the spot exchange
rates prevailing at the respective balance sheet dates, and translation differences are charged or credited to income.
(2) Accounting for consumption taxes

Consumption tax and local consumption tax are accounted for by the tax exclusion
method, and non-deductible consumption tax and local consumption tax are
accounted for as expenses for the current fiscal year.
Consolidated taxation system is applied.

(3) Application of consolidated tax
payment system(4) Application of Tax Effect Accounting The Company has adopted the “Application of Accounting Standard for Tax Effectfor transition from consolidated taxation Accounting” (ASBJ Guidance No. 28, February 16, 2018), without applying
system to consolidated group systemprovisions of section 44, in accordance with paragraph 3 of the “Treatment ofApplication of Tax Effect Accounting for Transition from Consolidated Tax Payment
System to Consolidated Tax Payment System for Group” (ASBJ PITF No. 39,
March 31, 2020), with respect to the items for which the Company’s consolidated tax
payment system and the non-consolidated tax payment system have been revised inline with the transition to the “Act for Partial Revision of the Income Tax Act, etc.”(Act No. 8 of 2020). Moreover, deferred tax assets and deferred tax liabilities are
based on the provisions of the pre-amendment tax laws.
(Change of Presentation Method)
Consolidated Balance Sheet“Construction warrantee reserve” (0 million yen in the fiscal year under review) which was included in “Current liabilities” in theprevious fiscal year has been included in “Other" in the current fiscal year due to their decreasing materiality.
Consolidated Income Statement“Borrowing related expenses” (8 million yen in the fiscal year under review) which was included in “Non-operating expenses” in theprevious fiscal year has been included in “Other" in the current fiscal year due to their decreasing materiality.
Changes accompanying the application of “Accounting Standard for Disclosure of Accounting Estimates”
Accounting Standard for Disclosure of Accounting Estimates” (Accounting Standards Board of Japan (ASBJ) Statement No. 31, March
31, 2020) has been applied from the current fiscal year. Accordingly, the “Notes to Accounting Estimates” are stated in the Notes to
Non-consolidated Financial Statements.

17

(Notes on Accounting Estimates)
１． Assessment of the real estate for sale(1) Amount recorded in the financial statements for the current business year
Real estate for sale
11,534 million yen
Real estate for sale in process
58,646 million yen(2)

Other information
For real estate for sale, etc., if the net selling price falls below the acquisition cost, the net selling price is stated as thebalance sheet value. The net selling price is calculated by deducting the estimated future cost of construction work andthe estimated selling expenses from the return value estimated based on the business plan.
The business plan that forms the basis for the value of the return to profits includes the expected tenant rent and theoccupancy rate of hotel rooms, and is based on important assumptions such as the assumed market conditions in the
future and the forecast of the of the convergence time of the COVID-19.
In the following fiscal year, the net selling price may change due to changes in assumptions used in formulating businessplans in the event of events that were not anticipated at the time of formulating business plans. This may have a significant
impact on the amount of real estate for sale, etc., recognized in the financial statements for the following fiscal year andthereafter.

２． Non-current assets impairment(1) Amount recorded in the financial statements for the current business year
Non-current assets related to hotel development business 6,874 million yen(2)

Other information
Due to the impact of the spread of COVID-19, the occupancy rate of hotel rooms has decreased and profitability has
declined. As a result, signs of impairment have emerged as a significant deterioration in the business environment.
Impairment losses are losses based on a comparison of the estimated undiscounted future cash flows over the remaining
economic useful lives of the hotel's major assets with the carrying amounts of the hotel's asset groups.
The business plan of the hotel, which is the basis of future cash flows, has been formulated under the policy of conducting
long-term management, based on important assumptions including the forecast of the occupancy rate of hotel rooms, etc.,
as well as the assumption of future market conditions and the forecast of the convergence time of the COVID-19.
In the following fiscal year, the assumptions used in formulating business plans may change in the event of a situationthat was not anticipated when the business plan was formulated. This may have a material impact on the non-current
asset amounts recognized in the financial statements for the following fiscal year and thereafter.

(Additional Information)
Transactions of delivering the company’s own shares to employees etc. through trusts
The Company conducts transactions to deliver its own shares through trust for the purpose of employee welfare.
(i) Overview of transaction
The plan provides the Company's shares to employees of the Company who meet certain requirements based on the sharebenefit regulations established by the Company in advance.
The Company will grant points to employees who satisfy certain conditions at the end of the fiscal year, and when they acquire
the right to receive benefits, the Company shares corresponding to the granted points will be delivered. The shares to be granted
to employees are acquired in the future with the money set in trust in advance and managed separately as trust assets.
The total amount method is applied to the Employee Stock Ownership Plan (J-ESOP) in accordance with the “Practical Solution
on Transactions of Delivering the Company’s Own Shares to Employees etc. through Trusts” (ASBJ PITF No. 30, March 26,2015).
(ii) Own shares remaining in the trust
The book value of the Company's shares remaining in the trust (excluding the amount of incidental expenses) is included in net
assets. The book value and number of shares of the treasury shares were 67 million yen and 56,500 shares.

18

(Notes to Balance Sheet)(1) Assets pledged as collateral and obligations secured by collateral(i) Assets pledged as collateral are as follows:
Real estate for sale
Real estate for sale in process
Buildings
Land
Other
Total
(ii) Secured liabilities are as follows:
Current portion of Long-term borrowings
Long-term borrowings
Total

9,180 million yen
58,203 million yen
412 million yen
6,398 million yen
1,568 million yen
75,763 million yen
2,862 million yen
35,223 million yen
38,086 million yen(2) Accumulated depreciation of Property, plant and equipment

530 million yen(3) Monetary claims and monetary obligations to subsidiaries and affiliates (excluding those classified)
Short-term monetary receivables
302 million yen
Short-term monetary debt
165 million yen
Long-term monetary receivables
7 million yen(4) Monetary obligations to directors

56 million yen(5) Guarantee obligations
Guarantees for borrowings loans by financial institutions ofaffiliated companies
Sun Frontier Hotel Management Inc.
(Notes to Statement of Income)Transactions with affiliated companies
Transaction volume from operating transactions
Net sales
Cost of sales and Selling, general and administrative
expenses

6,721 million yen

382 million yen
372 million yen

Non-operating transactions

69 million yen

19

(Notes to Statement of Changes in Equity)
Matters concerning the Treasury shares
Type of shares
Common shares

Beginning of thecurrent fiscal year
56,644 shares

Increase

Decrease- shares- shares

End of the current
fiscal year
56,644 sharesNote. The number of Treasury shares in common shares, includes the Company's share of 56,500 held by the trust account of the Employee Stock Ownership
Plan (J-ESOP).
(Summary of Reasons for Change)
Not applicable.

(Notes on Tax Effect Accounting)Breakdown of Deferred tax assets and deferred tax liabilities by major cause(Unit: million yen)
Deferred tax assets
Inventory Assets
594
Unrealized loss repudiation of shares of affiliates
469
Accrued enterprise tax
39
Allowance for doubtful accounts
67
Taxes and duties
62
Accounts payable
13
Accrued expenses
41
Provision for bonuses73
Long-term accounts payable
17
Unrealized loss Non-current assets denied
8
Excess depreciation
2
Other
83
Subtotal
1,474
Valuation allowance(509)
Deferred tax assets total
965
Deferred tax liabilities
Valuation difference on available-for-sale securities(1)
Deferred tax liabilities total(1)
Deferred tax assets net
964

20

(Notes on Transactions with Related Parties)
1. Subsidiaries and affiliates(Unit: million yen)Type

Company
name

Percentage ofvoting rights
held

Relationshipwith relatedpartiesLeasetransaction

Contents of thetransaction
Receipt of building
rent (Note 2 (i))

Transaction
amountSubject

296

Advances
received
Deposits
received

Management
Subsidiary

Sun Frontier
Possession
Hotel
Direct 100%
Management
Indirect Inc.

Concurrent
appointment
posts
Loan offunds
Debt
guarantee

Receipt ofadministrative
service expenses(Note 2 (ii))
Receipt of interest(Note 2 (iii))
Debt Guarantee(Note 2 (iv))

Year-end balance
10
31

10

Advancepayment

0

17

-

-

6,721

-

-

Note 1. Of the above amounts, the transaction amount does not include consumption taxes, etc. and the balance at the end of the period includes consumption
taxes, etc.
Note 2. Transaction Terms and Policy for Determining Transaction Terms(i) The Company receives building rent under general terms and conditions similar to those for independent third party transactions.
(ii) With regard to administrative service costs, the price is reasonably determined in consideration of costs for providing services, etc.
(iii) The interest rate for loans is determined by taking the market interest rate into account.
(iv) The Company provides guarantees for loans from banks. No debt guarantee fee has been received for this.

2. Officers and individual major shareholders, etc.
There are no significant transactions that should be noted.
(Notes on Per Share Information)(1) Net assets per share

1,400.21 yen(2) Earnings per share

109.12 yen(3) Fully diluted earnings per share

109.07 yen

Note. The Company's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP) are included in weighted average number of shares forthe period in common shares and treasury shares deducted in the calculation of the total number of outstanding shares at the end of the fiscal year underreview. The weighted average number of the Company’s shares for the period and year-end held by the trust account is 56,500 shares.

(Notes on Significant Subsequent Events)
Not applicable.

21