Consolidated Financial Results for the Second Quarter of
Fiscal Year Ending March 31, 2024
November 9, 2023 released

Company name:
Stock listing:Code number:
URL:
Representative:
Inquiries:

Sun Frontier Fudousan Co., Ltd.
Tokyo Stock Exchange Prime Section
8934
https://www.sunfrt.co.jp/en/
Seiichi Saito, President
Takeshi Hirahara, Executive Officer, General Manager of Corporate Planning Department(Phone: +81-3-5521-1301)
Scheduled date of quarterly securities report submission: November 10, 2023
Scheduled date of dividend payment commencement: December 5, 2023
Supplemental materials for the financial results: Yes
Presentation to explain for the financial results: Yes (For institutional investors and analysts)*Amounts are rounded down to millions of yen.

1.Consolidated Performance in the Second Quarter of Fiscal Year Ending March 31, 2024
(1) Consolidated Operating Results(“¥ ” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales

Operating Profit

Ordinary Profit

Net Income

FY2024/3 2Q ¥ 48,998

38.7%¥ 12,02249.4%¥ 11,944

48.7%¥ 8,46357.7%

FY2023/3 2Q-22.0%¥ 8,044-14.4%¥ 8,035-13.5%¥ 5,368-8.4%¥35,333(Note) Comprehensive income: FY2024/3 2Q : 9,032 millions of yen (52.0%)(Note) Comprehensive income: FY2023/3 2Q :5,943 millions of yen (-2.3%)
Fully Diluted
Earnings per Shareearnings per Share
(yen)
(yen)
FY2024/3 2Q

174.39174.22

FY2023/3 2Q

110.44110.34(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

FY2024/3 2Q¥ 159,615¥ 91,833

55.4%

FY2023/3¥ 152,519¥ 83,965

52.9%(Reference) Equity: FY2024/3 2Q : 88,500 millions of yen(Reference) Equity: FY2023/3: 80,702 millions of yen
2.Cash Dividends
Cash Dividends per Share (yen)
2nd quarter3rd quarter
Year end
end
end
23.00
25.00

Annual Total

FY2024/3
26.00
FY2024/3
26.00(Forecast)(Note) Changes from the latest released dividend forecast: No.

52.00

FY2023/3

1st quarter
end
-

-1

48.00

3.Forecast for Consolidated Financial Results for FY2024/3 (April 1, 2023 to March 31, 2024)(“¥ ” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales
Full
year

¥83,000

0.3%

Operating Profit¥16,500

10.7%

Ordinary Profit¥16,000

8.7%

Profit Attributable to
Owners of Parent

EPS
(yen)

¥11,000

226.66‐5.3%(Note) Changes from the latest forecast: No.
※ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changing
scope of consolidation): None
New companies: Excluded companies: (2) Adaption of special accounting practices in the preparation of quarterly consolidated financial statements:
None(3) Changes in accounting policies, estimates and retrospective restatement
1) Changes in accounting policies due to changes in accounting standard:
2) Changes in accounting policies other than 1) above:3) Changes in accounting estimates:
4) Retrospective restatement:

None
Yes
None
None

(4) Number of outstanding shares (common stock)1) Number of outstanding shares at the endof the period (including treasury stock):

FY2024/3
2Q

48,755,500
shares

FY2023/3

48,755,500
shares2) Number of shares of treasury stock at theend of the period:

FY2024/3
2Q

202,052
shares

FY2023/3

237,169
shares3) Average number of shares for the period(April 1, 2023 to June 30, 2023):

FY2024/3
2Q

48,530,650
shares

FY2023/3
2Q

48,606,722
shares(Note) The number of treasury shares at the end of the second quarter of the fiscal year ending March 31,
2024 includes 824 treasury shares of restricted stock as renumeration held by the former employees
resigning during their terms in this period, 5 shares by purchase of fractional shares, and 35,946
treasury shares deducting disposed of as remuneration of restricted stock.
※This Summary of Consolidated Financial Results is exempt from audit process by Certified public
accountants or auditors.
※Explanation for appropriate use of forecast and other special matters
Earnings per share in the forecast of consolidated financial results for FY2024/3 is calculated based on the
average number of shares for the period, 48,530,650 shares.
Forward-looking statements, such as forecast of consolidated financial performance, stated in thisdocument are based on information currently possessed by the Company as well as certain assumptions
deemed rational. It does not mean that the Company assurances that the contents mentioned in these forwardlooking statements will ever materialize. Actual financial performance may be significantly different fromsuch expectations due to various factors. For further information on assumptions used in forecasts, please
see Page 7, 1. (3) Forward-Looking Statements such as Consolidated Earnings Forecasts.

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Accompanying Materials
Contents
1. Qualitative information regarding consolidated performance for the Second Quarter ................................. 4(1) Business Performance ............................................................................................................................... 4(2) Consolidated Financial Position ................................................................................................................ 7(3) Forward-Looking Statements such as Consolidated Earnings Forecasts .................................................. 7
2．Quarterly Consolidated Financial Statements and Key Notes ..................................................................... 8(1) Consolidated Balance Sheet ...................................................................................................................... 8(2) Consolidated Statements of Income and Comprehensive Income ........................................................... 10(3) Notes to Consolidated Financial Statements ............................................................................................ 12(Notes to Assumption of Going Concern) ................................................................................................ 12(Notes on Significant Changes in the Amount of Shareholders’ Equity) ................................................. 12(Change of Accounting Policies) .............................................................................................................. 13(Additional Information) .......................................................................................................................... 13(Segment Information) ............................................................................................................................. 14(Revenue Recognition) ............................................................................................................................ 15(Significant Subsequent Events) .............................................................................................................. 15-3

1. Qualitative information regarding consolidated performance for the first six months(1) Business Performance
Forward-looking statements in this document are based on the judgments of the Group as of the end of thesecond quarter of the fiscal year ending March 31, 2024.
During the six months ended September 30, 2023 (hereinafter referred to as the current period), the Japanese
economy continued its gradual recovery as the employment and income environment improved. There areconcerns that the global economy may slow down due to the tightening of monetary policy in various
countries and concerns about the economic outlook caused by the real estate slump in China.
In the real estate market, the average rent in the Tokyo Business District (5 wards of Central Tokyo: Chiyoda,
Chuo, Minato, Shinjuku and Shibuya) in September was 19,750 yen (unit price per tsubo), down for the 38th
consecutive month (total 3,264 yen/14.18%), and the average vacancy rate for the same month was almost
unchanged at 6.15% (according to a private research institution). Overall office market conditions remained
weak. The Japanese market is facing a large supply of new office buildings in 2025, and the outlook for thereal estate investment market is increasingly uncertain. Foreign institutional investors and other companies
have adopted a cautious investment stance on investment in offices, However, demand for investment inhotels is increasing due to a recovery in tourism demand.
In the current period, in Real Estate Revitalization Business, the core business of the Group, the number ofsales was the same as in the previous year. However, as our relatively large-scale, highly profitable properties
met our client’s expectations, we were able to sell ahead of schedule. As a result, both net sales and profits
increased from the same period of the previous year. Profit margin declined in reaction to the high level ofsales of properties with high profit margin in the same period of the previous fiscal year but remained at ahigh level and continued to drive overall results. In Real Estate Service Business, operations continued toperform well. In Hotel Development Business, the completion of the sale of one hotel resulted in a significant
year-on-year increase in both revenue and earnings. In Hotel Operation Business, demand for tourism further
increased due to the increase of domestic and foreign tourists in line with the Nationwide Travel Subsidy
Program and the transition of the status of COVID-19 to Category 5. As a result, net sales grew compared tothe same period of the previous fiscal year and profits returned to the black.
As a result, net sales amounted to 48,998 million yen (up 38.7% YoY), operating profit amounted to 12,022
million yen (up 49.4% YoY), ordinary profit amounted to 11,944 million yen (up 48.7% YoY) and profit
attributable to owners of parent amounted to 8,463 million yen (up 57.7% YoY).
The results of each segment are as follows.
(Real Estate Revitalization Business)
In the Real Estate Revitalization Business, we are engaged in (i) Replanning Business and (ii) Rental Building
Business.
(i) In Replanning Business, all processes from purchase of buildings to revitalization and usage planning anddevelopment, tenant placement, management, sales, and subsequent support with building management are
offered as a one stop service. In the current period, we made steady progress in purchasing and sales, andmade progress at a faster pace than planned. In commercialization, the Group reflected the real needs ofclients in its products while maintaining coordination with each department of the Office Division. In
addition, by leveraging close ties with local communities’ leasing capabilities, the Group increased the valueof real estate with high occupancy rates and high added value and sold products that meet the expectationsof clients in Japan and overseas. We also sold one property in New York. We are continuing purchase andsales of properties to meet clients’ asset portfolio diversification needs. In addition, the first stage ofCompass Nerima (a licensed nursery school), the eighth small-lot project, was completed, and the second
stage is scheduled for the fourth quarter. In the current period, the number of sales was 14, the same as the-4same period of the previous year, and net sales and profits increased from the same period of the previous
year.
(ii) In Rental Building Business, with the aim of building a stable revenue base as a stock business, we are
expanding the number of rental properties in Replanning Business and utilizing the operational capabilities
we have accumulated in Real Estate Service division to increase rent income over the medium to long term.
Net sales and profits increased year on year due to an increase in the number of properties held as inventories.
As a result, net sales amounted to 31,984 million yen (up 21.8% YoY) and segment profit amounted to 9,543
million yen (up 4.0% YoY) in total for the Real Estate Revitalization Business.
(Real Estate Service Business)
In the Real Estate Service Business, we are engaged in (i) Property Management Business, (ii) Building
Maintenance Business, (iii) Sales Brokerage Business, (iv) Leasing Brokerage Business, (v) Rental Conference
Room Business, and (vi) Rent Guarantee Business.
(i) In Property Management Business, we will enhance the satisfaction of tenants through property managementthat meets the needs of clients. At the same time, by working with the leasing brokerage division to attract
tenants and revising the conditions for appropriate rent, we are able to support the high-occupancy and highprofitability building management that owners want. In the current period, number of entrusted buildings
increased by 34 buildings compared to the end of the previous period, and occupancy rate improved by
1%pt. As a result, both net sales and profits increased from the same period of the previous year.

Number of
Entrusted Buildings
Occupancy Rate

End of

End of

End of

September 2021

September 2022

September 2023

403 buildings

444 buildings

478 buildings

91.6%

91.9%

92.9%

(ii) In Building Maintenance Business, under the slogan of “making Tokyo the most beautiful city in the world,”
we are engaged in inspections, cleaning, renovation, and surveys to maintain and manage buildings. With
strengths in glass cleaning and exterior wall cleaning and repair work, we are collaborating with eachdepartment of the Office Division. In the current period, net sales increased compared with the same periodof the previous fiscal year due to an increase in the number of entrusted buildings, despite a decrease infacility disinfection work related to COVID-19 and cancellations of contracts for unprofitable sites.
However, profits decreased due to an increase in personnel costs associated with an increase in the numberof new employees.
(iii) In Sales Brokerage Business, as part of our real estate consulting, we are working to quickly respond to
consultation requests from clients in other divisions such as Property Management Business and Leasing
Brokerage Business. Our Office Business is working to expand our customer base in building management
for building owners, and we are using the trust we have built up to win brokerage contracts. In the current
period, a number of large-scale deals were concluded, however a decrease in the number of deals concluded
resulted in a decline in both net sales and profits.
(iv) In Leasing Brokerage Business, we provide a service network based in 10 sites, mainly in central Tokyo,
and serve as a convenient consultation window that is close to local building owners. In addition, we utilize
tenant needs and changes that we have quickly learned at leasing sites in our research and proposals for the
optimal use of office space, leading to the creation of a new sense of value from our clients' perspective in
Replanning Business product planning. In the current period, both leasing and profits increased from thesame period of the previous year due to an increase in the number of tenant leasing brokerage transactions
at entrusted properties.
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(v) In Rental Conference Room Business, we provide services that respond to the changing times and succeededin attracting customers based on data. Through close ties with local communities and flexible and agile
proposal-based sales in response to clients’ requests, we have been able to capture demand from continuingusers and new customer segments. In the current period, both net sales and profits increased from the same
period of the previous fiscal year due to an increase in renting resulting from an increase in demand forevents such as corporate training and certification examinations, and the provision of a one stop service
including accommodation and catering, and the impact of the new conference room opening and the floor
space expansion in 7 facilities during the current period.
(vi) In Rent Guarantee Business, we provide services tailored to building owners for all processes from tenant
screening at offices and stores, rent guarantee, building surrender lawsuits, and eviction. The new brand,
TRI-WINS, is a win-win-win service that solves the risks and issues faced by both building owners andtenants and contributes to economic growth and social stability. Compared to general guarantee services, it
expands the range of services, including investigation and examination, rent guarantee, delinquency
handling, and removal. In the current period net sales remained almost flat compared with the same periodof the previous fiscal year, but net sales of the credit guarantee as main business grew by 7.4% comparedwith the same period of the previous fiscal year.
As a result, net sales amounted to 5,172 million yen (up 18.4% YoY) and segment profit amounted to 2,902
million yen (up 13.8% YoY) in total for the Real Estate Service Business.
(Hotel and Tourism Business)
In the Hotel and Tourism Business, we are engaged in (i) Hotel Development Business and (ii) Hotel
Operation Business.
(i) In Hotel Development Business, both net sales and profits increased significantly due to the sale of one
condominium hotel lot and one hotel. In addition to the capital return from the sale of hotels, funds raised
through the issuance of convertible bonds, for which payment was completed on October 6, 2023, will be
used to reinvest in hotel development, including M&A, with a focus on the Tabi no Hotel brand and hotel
condominiums for sale, and to expand operations.
(ii) In Hotel Operation Business we currently operate 21 hotels (2,477 rooms). In the current period, domestic
tourism continued to expand, and there was a recovery in inbound tourism, and both occupancy rate and theaverage daily rate continued to rise based on the Group's high added value strategies. As a result, both net
sales and profits increased significantly from the same period of the previous fiscal year.
As a result, net sales amounted to 11,329 million yen (up 148.8% YoY) and segment profit amounted to3,397 million yen compared with the previous fiscal year (segment loss was 334 million yen in the previous
fiscal year) in total for the Hotel and Tourism Business.
(Other Business)
In Other Business, we are engaged in (i) Overseas Development Business and (ii) Construction Business.
(i) In Overseas Development Business, the Company has entered the Southeast Asian market, where growth isexpected, and is developing real estate centering on condominiums and houses using Japanese advanced
construction technology, with a focus on providing Asian people with a taste of Japanese quality. In thecurrent period, both net sales and profits increased.
(ii) In Construction Business, the Company is engaged in renovation planning, repair and renovation ofcommercial buildings, interior finishing work and telecommunications construction, etc. In the current
period, both net sales and profits increased from the same period of the previous fiscal year due to thebooking of sales from large-scale construction projects at Group subsidiaries.

-6

As a result of the above, net sales amounted to 996 million yen (up 60.7% YoY) and segment profit amounted
to 131 million yen (up 51.6% YoY) in total for Other Business.
Initiatives in the current period are as follows.
Based on the concept of “making Tokyo the most friendly city for start-up in the world,” the Group is
promoting initiatives to support startups. As one such initiatives, we launched the “START-UP FRONTIERTOKYO” project and held its kick-off event, the “FRONTIER PITCH TOKYO for Startups 2023,” on
September 15. We will support the further growth of the startup.
The Group is also engaged in sustainability management under the vision of “contributing to the realizationof a sustainable society through our corporate activities while taking care of the Company policy (Credo).” To
realize this vision, we have identified three key issues, environmental protection, regional revitalization, andhuman resource development, and have set specific measures and KPIs. As an initiative of regional revitalization,
we supported the following two events together with local residents. In August we sponsored the “Island Dream
Jazz in Sado 2023,” In September, we sponsored the 2023 Sado International Triathlon Competition. As an
initiative of human resource development, on October 6, 2023, we established “SF Human Support Co., Ltd.,”
which supports the employment of specified skilled workers, etc., to contribute to solving the labor shortage inJapan. The newly established company will support the education, employment, and livelihood of excellent andmotivated foreign nationals with the specified skills in Vietnam and other Asian countries and contribute to theresolution of social issues through the development of human resources who will be responsible for the growthof domestic industries. In addition, on September 29, we issued the Group Sustainability Report 2023 to further
deepen understanding of the Group. This report summarizes the philosophy that the Group has held dear since
its founding, the history of the company, and recent sustainability activities.
(2) Consolidated Financial Position
Total assets at the end of the current consolidated fiscal year amounted to 159,615 million yen (up 4.7%
compared with the end of the previous fiscal year), liability amounted to 67,781 million yen (down 1.1%
compared with the end of the previous fiscal year), and net assets amounted to 91,833 million yen (up 9.4%
compared with the end of the previous fiscal year).
The increase in total assets was mainly due to an increase of 5,094 million yen in cash and time deposits andan increase of 8,655 million yen in real estate for sale in process, offset by a decrease of 6,533 million yen
in real estate for sale.
The decrease in liabilities was mainly due to an increase of 4,226 million yen in current portion of long-termborrowings and an increase of 1,361 million yen in income taxes payable, offset by a decrease of 5,522
million yen in long-term borrowing and a decrease of 910 million yen in advance payment included in Otherof current liabilities.
The increase in net assets was mainly due to the recording of 8,463 million yen in profit attributable toowners of parent, which offset the year-end dividend payment of 1,216 million yen.
Equity ratio increased 2.5%pt from the same period of the previous fiscal year to 55.4%(3) Forward-Looking Statements such as Consolidated Earnings Forecasts
There are no changes to the forecasts for the fiscal year ending March 31, 2024, announced on May 12, 2023.
Our group executed a business alliance agreement with Advantage Advisors Co., Ltd. (“Advantage
Advisors”) , and the payment of 1st Series Unsecured Convertible Bonds was completed on October 6.
Our group raise the philosophy of “Protect all employees, pursue the material and intellectual happiness,with the heart of coexistence we contribute to the prosperity of society and humankind.” To realize thephilosophy, we aim to expand the existing businesses by the synergy between “Real Estate Revitalization
Business” which has high social significance from both an environmental and economic perspective and“Real Estate Service Business” which serves as a platform. In “Hotel and Tourism Business” which is a
growth business, we aim to expand the scale actively by furthering refinement the business models
established and improving the brand as “heartwarming and fun hotel”. At the same time, we will deepen the-7possibility of growth opportunities through M&A. In order to steadily advance each of the abovementioned
measures, the corporate group believes that procuring investment funds and M&A funds for the hotel
development business and others will be necessary, and also that acquiring a high level of external
professional support will be effective. Just at the same time, we received a proposal for increasing corporate
value from Advantage Advisors and decided to execute it. We will receive support from Advantage Advisersfor (i) the provision of know-how for various efforts and the steady implementation of measures therefor, (ii)the search for M&A partner candidates, and the enhancement of the examination process and PMI, (iii) the
expansion of sales networks by utilizing the diversified networks of Advantage Advisors, (iv) theestablishment of business models and enhanced marketing, and (v) the improvement of productivity andefficiency, etc. by acquiring a high level of external professional support. To realize the management
philosophy and increasing corporate value, we will receive a lot of support from Advantage Advisors andkeep growing.

-82． Quarterly Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2023
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-9

As of September 30, 2023

42,016

47,110

1,625

1,947

19,78160,254

13,24868,910

57

84

87
2,080
-18
125,886

86
1,556
-19
132,923

9,528
10,117764
20,4109,396
10,3081,000
20,705

343
472
815

311
576
887

3,210
2,033
173
-11
5,406
26,633
152,519

3,110
1,533
466
-12
5,097
26,691
159,615

(Unit: million yen)
As of March 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
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-10

As of September 30, 2023

2,106
50
5,442
1,699
237

2,328
－
9,668
3,060
259

73

40

22
6,731
16,36326
5,801
21,18650,1705
83
1,930
52,19068,55344,6483
91
1,851
46,59467,781

11,965
6,445
62,289-270
80,43011,965
6,460
69,537-233
87,728

2

2

269

769

271

771

30
3,233
83,965
152,51930
3,303
91,833
159,615

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Unit: million yen)
For the six months ended
September 30, 2022

For the six months ended
September 30, 2023

35,33323,534
11,7983,753
8,044

48,99832,641
16,357
4,334
12,022

23
179
68
271

43
112
37
193

241
39
281
8,035

256
15
271
11,944

101

-

101

-

22
22
8,114
2,478
172
2,650
5,464

25
25
11,919
2,914
496
3,410
8,508

95

45

5,368

8,463

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of shares of subsidiaries andaffiliates
Total extraordinary income
Extraordinary loss
Loss on retirement of non-current assets
Impairment loss
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit/loss attributable to non-controllinginterests
Profit attributable to owners of parent-11

Consolidated Statement of Comprehensive Income(Unit: million yen)
For the six months ended
September 30, 2022

For the six months ended
September 30, 2023

5,464

8,508

-0

0

480
479
5,943

523
524
9,032

5,816
127

8,963
69

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-12(3) Notes of Consolidated Financial Statements(Notes of Assumption of Going Concern)
Not applicable.
(Notes of Significant Changes in the Amount of Shareholders’ Equity)
I For FY2023/3 2Q (April 1, 2022 to September 30, 2022)
1. Dividend paid
Resolution

Type of shares

Annual General
Meeting of
Shareholders,June 21, 2022

Common shares

Total dividends(million yen)

Dividends per share
(yen)

1,121

23.00

Record date

Effective date

Source ofdividends

March 31, 2022

June 22, 2022

Retained earnings

Note: The total amount of dividends decided at the Annual General Meeting of Shareholders on June 21, 2022 includes dividendsof 1 million yen for the Company’s shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP).

2. Dividends for which the record date is during FY2023/3 2Q and the effective date is after the last day of
FY2023/3 2Q
Resolution

Type of shares

Board of Directors,
November 10, 2022

Common shares

Total dividends(million yen)

Dividends per share
(yen)

1,118

23.00

Record date

Effective date

Source ofdividends

September 30,
December 6, 2022 Retained earnings
2022

3. Significant changes in shareholders' equity Based on the resolution of Board of Directors meeting held on
May 13, 2022, the Company purchased 143,800 treasury shares. The Company also disposed of 35,464
treasury shares with a due date of July 21, 2022 as a remuneration of restricted shares. As a result, treasury
shares increased by 112 million yen during the 6 months ended September 30, 2022, and stands at 180
million yen as of the end of the period.
II For FY2024/3 2Q (April 1, 2023 to September 30, 2023)
1. Dividend paid
Resolution

Type of shares

Board of Directors,
May 16, 2023

Common shares

Total dividends(million yen)

Dividends per share
(yen)

1,216

25.00

Record date

Effective date

Source ofdividends

March 31, 2023

June 28, 2023

Retained earnings

Note: The total amount of dividends decided at the Board of Directors on May 16, 2023 includes dividends of 3 million yen for
the Company’s shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP).

2. Dividends for which the record date is during FY2024/3 2Q and the effective date is after the last day of
FY2024/3 2Q
Resolution

Type of shares

Total dividends(million yen)

Dividends per share(yen)

Record date

Effective date

Source ofdividends

September 30,
December 5, 2023 Retained earnings
2023
Note: The total amount of dividends decided at the Board of Directors on November 9, 2023 includes dividends of 3 million yen
for the Company’s shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP).

Board of Directors,
November 9, 2023

Common shares

1,265

26.00

3. Significant changes in shareholders’ equity
Not applicable.

-13

(Change of Accounting Policies)(Change in Translation Method for Revenue and Expenses of Foreign Subsidiaries)
Revenue and expenses of foreign subsidiaries were previously translated into Japanese yen at the spot
exchange rate as of the date the foreign subsidiary closes their books. However, from the beginning of
the first three months ended June 30, 2023, the Company has changed to a method of translating revenue
and expenses into Japanese yen at the average exchange rate during the period. This change was madein order to mitigate the effect of temporary fluctuations in foreign exchange rates on the profits andlosses of the Group’s subsidiaries and more appropriately reflect the performance of foreign subsidiaries
on the quarterly consolidated financial statements. The impact on the profits and losses of foreignsubsidiaries is expected to become more important due to the expansion of overseas operations amid
the increasing range of exchange rate fluctuations caused by the increasingly complex internationalsituation in recent years.
As the effect of this change is insignificant, it has not been applied retroactively.
(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 share benefit 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 theright 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 andmanaged 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 treasury shares were 157 million yen
and 128,300 shares as of the end of the previous fiscal year, and 157 million yen and 128,300 shares asof September 30, 2023.

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(Segment Information, etc.)
Segment Information
I For FY 2023/3 2Q (April 1, 2022 to September 30, 2022)
1. Information on net sales and profit and disaggregation of revenue for each reportable segment(Unit: million yen)
Reportable segment
Real Estate Real Estate
Revitalization
ServiceBusiness
Business
Net sales
Revenue fromcontracts withcustomers
Other revenue(Note 2)
Net sales to externalcustomers
Internal sales ortransfers between
segments

Hotel andTourism
Business

Subtotal

Other(Note 1)

Total

24,925

3,285

4,472

32,682618

33,301

1,319

647

64

2,032

-

2,032

26,245

3,933

4,536

34,714618

35,333

10

433

17

461

1

463

Total

26,255

4,367

4,553

35,176620

35,797

Segment profit (loss)

9,181

2,551

-334

11,39786

11,484

Notes:1. The “Other” segment is a business segment that is not included in the reportable segment and includes the Overseas
Development Business, Construction Business, etc.
2. Other income is rental income, etc., based on ASBJ No. 13 “Accounting Standard for Lease Transactions”.

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 thedifference adjustment)(Unit: million yen)
ProfitAmountReportable segment total

11,397

Profit in the “Other” category

86

Elimination of intersegment transactions-12

Corporate expenses (Note)-3,437

Ordinary profit in the consolidated statement of income

8,035

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.

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II For FY2024/3 2Q (April 1, 2023 to September 30, 2023)
1. Information on net sales and profit and disaggregation of revenue for each reportable segment(Unit: million yen)
Reportable segment
Real Estate Real Estate
Revitalization
ServiceBusiness
Business
Net sales
Revenue fromcontracts withcustomers
Other revenue(Note 2)
Net sales toexternal customers
Internal sales ortransfers between
segments

Hotel andTourism
Business

Subtotal

Other(Note 1)

Total

29,883

4,065

11,24445,193989

46,182

2,095

654

65

2,816

-

2,816

31,9784,720

11,30948,009989

48,998

5

451

19

476

7

484

Total

31,984

5,172

11,32948,486996

49,483

Segment profit

9,543

2,902

3,397

15,844131

15,976

Notes: 1. The “Other” segment is a business segment that is not included in the reportable segment and includes the Overseas
Development Business, Construction Business, etc.
2. Other income is rental income, etc., based on ASBJ No. 13 “Accounting Standard for Lease Transactions”.

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 thedifference adjustment)(Unit: million yen)
ProfitAmountReportable segment total

15,844

Profit in the “Other” category

131

Elimination of intersegment transactions

11

Corporate expenses (Note)-4,043

Ordinary profit in the consolidated statement of income

11,944

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.
(Revenue Recognition)
Breakdown of revenue from contracts with customers is as stated in the “Notes to Consolidated Financial
Statements (Segment Information, etc.)”.

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(Significant Subsequent Events)
The Company made a resolution on the offering of its 1st series unsecured convertible bonds with shareacquisition rights at Board of Directors Meeting on September 20, 2023, and the payment was completed
on October 6, 2023.
The overview is as follows.
(1)

Total amount issued

10,019,919,840 yen(2)Issue price of bonds andshare acquisition rights

The issue price of each bond is 204,488,160 yen(100.2 yen per 100 yen of the face value; the face value of each bondis 204,080,000 yen)

(3)

Interest rate

Non-interest-bearing(4)

Redemption amount

100 yen per par value of 100 yen(5)

Maturity
related to share(6) Matters
acquisition rights(i) Type under shareacquisition rights
number of share(ii) Total
acquisition rights(iii) Conversion price

October 6, 2028(iv) Exercise period

From October 10, 2023 to October 4, 2028
In principle, the allottee may not exercise the share acquisition rights
within one year from the closing date. In principle, the allottee may
make a request for the exercise of the share acquisition rights only if
the closing price of regular trading on common shares of theCompany for the business day immediately preceding the day on
which the request for the exercise of the share acquisition rights
becomes effective is not less than the amount obtained bymultiplying the conversion price which is effective on the day on
which the allotee intends to make a request for the exercise of theshare acquisition rights by 1.20.
October 6, 2023(v) Other

Common shares of the Company
49 acquisition rights
1,554 yen per share(8)

Due date of payment(issue date)
Security(9)

Use of funds

Acquisition of land in conjunction with new hotel development andconstruction work investment and M&A funds primarily for the hotel
development business and construction business.

of offering or(10) Method
allotment

The entire amount is allocated to AAGS S5, L.P. by way of thirdparty allotment.

(7)

None

The reasons for selecting AAGS S5, L.P. as the allottee are as follows.
The Company had been considering that in order to steadily promote measures to accelerate its growthstrategies for the future while envisioning the next medium-term management plan, it would be necessary
to raise funds for investment such as hotel development and for M&A, and that highly specialized external
support would be effective. Around April 2023, the Company received a proposal from Advantage Advisors
Co., Ltd. (hereinafter “Advantage Advisors”) regarding a business alliance with the Group in which
Advantage Advisors would provide information, introduce clients, and provide business support.
In addition, Advantage Advisors introduced a fund provided by Advantage Advisors, which has a trackrecord of investing in multiple listed companies and is reliable, as a prospective allottee as a financing
method that can satisfy the Company’s need to raise necessary funds with due consideration to the shareprice and the interests of existing shareholders. In order to maximize the investment return of the funds,
Advantage Advisors provides management and financial advice to the listed companies in which the fundinvests and provides information using its own network.
After careful consideration of Advantage Advisors’ extensive track record in dealing with listed companies-17and specifics of their proposal, the Group has determined that the proposal from Advantage Advisors is themost appropriate in order to improve the corporate value of the Group because it can receive from Advantage
Advisors growth support consistent with the Group’s mission and needs when tackling the management
issues of which the Group is aware, and because the Group considers the issuance of Bonds with Share
Acquisition Rights by way of third-party allotment to be the most appropriate fundraising method.
Accordingly, the Group has determined that the proposal is most suitable for increasing the corporate valueof the Group and decided to implement the third-party allotment and selected AAGS S5, L.P., a fundserviced by Advantage Advisors, who has a track record of investment and reliability as described above,as the allottee for the third-party allotment.

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