Note: This document has been translated from the Japanese original for reference only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail. Sun Frontier Fudousan Co., Ltd. assumes no responsibility
for this translation, and for the damages directly or indirectly arising from the translation.
(Stock Exchange Code 8934)
June 4, 2024
To Shareholders with Voting Rights:
Sun Frontier Fudousan Co., Ltd.
Seiichi Saito, President and Representative Director
2-2, Yurakucho 1-chome, Chiyoda-ku, TokyoNOTICE OF
THE 25th ANNUAL GENERAL MEETING OF SHAREHOLDERS

Dear Shareholders,
We would like to express our appreciation for your continued support and patronage.
Please be informed that the 25th Annual General Meeting of Shareholders of Sun Frontier Fudosan Co., Ltd. (the “Company”) will beheld for purposes as described below.
For the convocation of this General Meeting of Shareholders, electronic provision of information (materials subject to electronic
provision), which is the content of the Reference Documents, etc., has been implemented and posted on the following websites. Please
access them to see the related information.

The Company's website: https://www.sunfrt.co.jp/en/(Please access the above website and select “Investor Relations” and followed by “General Meeting of
Shareholders” from the menu.)
The materials subject to electronic provision are also posted on the following website.
TSE website (TSE Listed Company Search)https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show(Please access the above TSE website (TSE Listed Company Search), enter the name of the stock (Sun Frontier
Fudousan Co., Ltd.) or securities code (8934), select “Basic information”, “Documents for public inspection/PR
information”, then check “Notice of General Shareholders Meeting/Informational Materials for a General
Shareholders Meeting” section of “Filed information available for public inspection”.
In lieu of attending the meeting, you may exercise your voting rights in writing or via the Internet, etc. Please review the Reference
Documents listed in the “materials subject to electronic provision” and exercise your voting rights in accordance with the “Guide for
Exercising Voting Rights” on page 3 by 6:00 p.m. on Monday, June 24, 2024 (JST).

―1―

Information of the 25th Annual General Meeting of Shareholders
1.

Date

2:30 p.m. (JST) on Tuesday, June 25, 2024
(The hall is scheduled to open at 1:30 pm.)2.

Location

Pulp & Paper Building, 2nd Floor, Phoenix Hall, 3-9-11, Ginza, Chuo-ku, Tokyo

Materials to bereported

3.

Agenda

1. Business Report, Consolidated Financial Statements, and the Results of
Audits of the Consolidated Financial Statements by the Accounting Auditors
and the Audit & Supervisory Committee for the 25th Fiscal Year (April 1, 2023
to March 31, 2024)
2. Non-consolidated Financial Statements for the 25th Fiscal Year
(April 1, 2023 to March 31, 2024)
Proposal 1
Proposal 2

Materials to beresolved

Proposal 3
Proposal 4

Partial Amendments to the Articles of Incorporation
Election of Eight (8) Directors who are not Audit & Supervisory
Committee Members
Election of Three (3) Directors who are Audit & Supervisory
Committee Members
Election of One (1) Director who is an Substitute Audit andSupervisory Committee Member■ Other Decisions Regarding the General Meeting of Shareholders• After the General Meeting of Shareholders, the “Social gathering with Shareholders” will be held. We look forward to yourparticipation.
• In order to provide information promptly, the contents of this notice are disclosed on the Company's website prior to the shipmentof this notice.
• There are no souvenirs available for shareholders attending the General Meeting of Shareholders. Thank you for your understanding.
• When you attend the meeting, you will be kindly requested to present the enclosed Voting Rights Exercise Form at the reception.
• If the Shareholder is willing to exercise the voting rights by proxy, only 1 person per 1 shareholder who has voting rights may
attend the General Meeting of Shareholders as a proxy. In this case, please submit a document certifying the authority ofrepresentation such as a power of attorney to the Company. (Proxy who is not a shareholder and accompanying persons are notallowed to attend the General Meeting of Shareholders.)• If you exercise your voting rights both on the Voting Rights Exercise Form and via the Internet, the vote exercised via the Internet
will be deemed valid.
• If the voting rights are exercised for multiple times via the Internet, the last vote exercised will be treated as valid.
• If you do not indicate your approval or disapproval of the proposal on the Voting Rights Exercise Form, it will be treated as amanifestation of your approval.
• In accordance with laws and regulations as well as the provisions of the Company's Articles of Incorporation, among the materials
subject to electronic provision, the following matters are not stated in the documents to be delivered to shareholders who haverequested a delivery of documents. The Audit & Supervisory Committee and the Accounting Auditor have audited the documents
subject to audit, including the following items.

(1) “Matters related to the Company's share acquisition rights, etc.” and “System for Ensuring Proper Business Operations andOverview of Operation Status” in the Business Report(2) “Consolidated Statement of Changes in Equity” and “Notes to Consolidated Financial Statements” in the Consolidated Financial
Statements(3) “Non-consolidated Statement of Changes in Equity” and “Notes to Non-consolidated Financial Statements” in the Nonconsolidated Financial Statements―2―

■ Information for Website Posting• Any changes in the operation of the General Meeting of Shareholders will be posted on the Company's website at the following
URL. (https://www.sunfrt.co.jp/)• If there are any amendments made to the materials subject to electronic provision, such amendments will be posted on the respective
websites listed.

■ Information on Preliminary Questions

To Shareholders who have questions
If the Shareholders have any opinions or questions regarding the agenda of this Annual General Meeting of Shareholders, please feel
free to contact us. The Company plans to answer in advance the questions from the Shareholders which are regarding the agenda ofthis Annual General Meeting of Shareholders and are of high interest to shareholders and able to be answered. For the convenience of
preparation, we would appreciate your cooperation in sending the questions by the following methods to arrive by the date and time
below.
(Address) Corporate Planning Division of Sun Frontier Fudousan Co., Ltd.
1-2-2 Yurakucho, Chiyoda-ku, Tokyo 100-0006(Email) soukai2024@sunfrt.co.jp

Deadline

6:00 p.m. on Wednesday, June 19, 2024

• Please note that we do not promise to answer all questions we receive.
• Please note that we will not be able to answer the questions individually.
• Questions that were not answered at the General Meeting of Shareholders will be used for future reference.

―3―

Guide for Exercising Voting Rights
There are three ways to exercise the voting rights.
Please review the Reference Documents of the materials subject to electronic provision and exercise your voting rights.

* Shareholders who wish to exercise the voting
rights by proxy, may delegate the person who isalso a shareholder and with the voting rights inaccordance with the provisions of Article 18 of
the Company's Articles of Incorporation.
However, the Shareholders shall submit adocument certifying the authority ofrepresentation.

Please indicate your approval or disapproval of the proposals here.
Proposals No.1 and No.4

Approve
Disapprove•≫≫

Circle the "賛"

Circle the "否"Proposals No.2 and No.3≫≫
Disapprove• some candidates ≫For institutional investors

Approve everyone

Circle the "賛"

Disapprove everyone

Circle the "否"Circle the "賛".
And write down thenumber of the candidate
you disapprove.

You can exercise your voting rights by electromagnetic means from the "Electronic Voting Rights Exercise Platform" operated
by ICJ, Inc.

Guide to “Net de Shoshu”(online convocations)“Net de Shoshu” (online convocations) is a website that realizes a smooth page transition andcompiles information of this notice, and can be browsed from your PC, smartphone, or tablet.
Please feel free to use it.
https://s.srdb.jp/8934/―4―

Guide to Exercising Voting Rights via the Internet, etc.
How to read QR code by smartphone“Smart Exercise”
This is a method to log-in to the website of exercising
voting rights without entering the code and password.
Please read the QR code at the bottom right of the Voting
Rights Exercise Form.

How to enter the code and password to
exercise the voting rights
Website for exercising
voting rights

https://soukai.mizuho-tb.co.jp/

Please access the website for exercising the voting rights.

Please click “次へすすむ”

Please enter the code written on the Voting Rights
Exercise Form.
* "QR code" is a registered trademark of DENSO WAVE INCORPORATED.

Please follow the instructions on the screen to indicate
your approval or disapproval.

Please enter the “議決権行使コード”

Please click “次へ”Please enter the password written on the Voting Rights
Exercise Form.

Please enter the “初期パスワード”

Shareholders could exercise the voting rights by“Smart Exercise” only one time.
Shareholders who are willing to change the vote, please
access the website for PC, enter the code and password
written on the Voting Rights Exercise Form to log-in, andexercise the voting rights again.
* Reading the QR code again could bring you to
the website for PC.

If there is any questions regarding
the exercising of voting rights,
please contact the address on the right side.

Pleaseresetthepassword

Please click “登録”Please follow the instructions on the screen to
indicate your approval and disapproval.
Internet Help Dial of Mizuho Trust & Banking Co., Ltd.
(TEL) 0120-768-524(Connected from 9 a.m. to 9 p.m. except for New Year holidays)―5―

Proposal No. 1

Partial Amendments to the Articles of Incorporation

1. Reason for the proposal
The Company proposes to make necessary amendments to Article 2 (Purpose) of the current Articles ofIncorporation in order to respond to future development and diversification of the Company's businesses.
2. Description of the change
Details of the amendments are as follows.
(Changes are underlined.)
Current Articles of Incorporation

Proposed Amendments(Purpose)(Purpose)
Article 2 The purpose of the Company shall be to Article 2. (Unchanged)
engage in the following businesses:
1. - 7. (Omitted)(Newly established)
8. - 37. (Omitted)

1. - 7. (Unchanged)
8. Investment management business based on the
Financial Instruments and Exchange Act.
9. - 38. (Unchanged)―6―

Proposal No. 2

Election of eight (8) Directors who are not Audit & Supervisory Committee Members

The terms of office of all eight (8) Directors who are not Audit & Supervisory Committee Members will expire at the conclusion ofthis general meeting of shareholders. Accordingly, the election of eight (8) Directors who are not Audit & Supervisory Committee
Members is proposed. This proposal was discussed in the Audit & Supervisory Committee, but no particular opinions wereexpressed.
The candidates for Directors who are not Audit & Supervisory Board Members are as follows.
Candidate

No.

Name

Current Positions and Responsibilities

Candidate Attributes

Attendance Rate ofBoard of Directors
Meetings

1

Tomoaki Horiguchi

Chairman Representative Director

Reappointment

100%(18 of 18
meetings attended)2

Seiichi Saito

President Representative Director
President Executive Officer

Reappointment

100% (18 of 18
meetings attended)3

Izumi Nakamura

Vice President Director
Vice President Executive Officer
Division Director, Entrusted Asset Management Division

Reappointment

100% (18 of 18
meetings attended)4

Yasushi Yamada

Senior Managing Director
Senior Managing Executive Officer
Division Director, Business Development Division

Reappointment

100% (18 of 18
meetings attended)

5

Mitsuhiro Ninomiya

Managing Director / Managing Executive Officer
Division Director, Administration Division

Reappointment

100% (18 of 18
meetings attended)

6

Kenji Honda

Director / Senior Executive Officer
Division Director, Asset Management Division

Reappointment

100% (18 of 18
meetings attended)

Reappointment

7

Keiichi Asai

Outside Director

Outside100% (18 of 18
meetings attended)

Independent
New
Appointment

8

Koichi Ishimizu-

Outside-Independent(Notes) 1. There are no special interests between each candidate and the Company.
2. Mr. Keiichi Asai and Mr. Koichi Ishimizu are candidates for Outside Directors.
3. The term of office of Mr. Keiichi Asai as an Outside Director of the Company is 2 years at the conclusion of this general meeting ofshareholders.
4. The Company has entered into a Liability Limitation Agreement with Mr. Keiichi Asai pursuant to the provisions of Article 427
Paragraph 1 of the Companies Act and the provisions of the Company's Articles of Incorporation so that he may fully perform his
expected role as an Outside Director. The maximum amount of liability for damages under the agreement is the amount stipulated by laws
and regulations. If he is elected as a Director, the Company plans to continue the agreement.
5. The Company has designated Mr. Keiichi Asai as an independent officer under the provisions of the Tokyo Stock Exchange, Inc. and has
notified the Tokyo Stock Exchange of the designation. If he is elected as a Director, the Company plans for him to continue as anindependent officer.
6. The Company plans to enter into a Limited Liability Agreement with Mr. Koichi Ishizumi pursuant to the provisions of Article 427
Paragraph 1 of the Companies Act and the provisions of the Company's Articles of Incorporation if he is elected as an Outside Director sothat he may fully perform his expected role as an Outside Director. The maximum amount of liability for damages under the agreement
shall be the amount prescribed by laws and regulations.
7. If Mr. Koichi Ishizumi is elected as an Outside Director, the Company plans to designate him as an independent officer pursuant to theprovisions of the Tokyo Stock Exchange, Inc. and notify the Tokyo Stock Exchange to that effect.
8. The Company has entered into an Officers' Liability Insurance Agreement with an insurance company with all of the Director as insured
persons, and under this agreement, any damage that may arise from the fact that the Director as insured person is responsible for the
performance of his / her duties or from receiving a claim for pursuing such responsibility will be compensated. If each candidate isreappointed as a Director, he / she will become an insured person under the policy and will be renewed with the same content. The outlineof the agreement is as stated in the “Outline of the Officers’ Liability Limitation Agreement” of the Business Report.

―7―

No.

1

Tomoaki Horiguchi

Reappointment

Born on April 21, 1958
2,478,396 shares held

Biography, Positions and Responsibilities at the Company
March 1990

Sun Frontier Co., Ltd. (merged company) President and Representative
Director

April 1999

Established the Company, President and Representative Director

April 2020

Chairman and Representative Director of the Company (present)

Significant Concurrent Positions
Representative Director of Sun Frontier Hotel Management Inc.
Representative Director of Sun Frontier Sado Inc.

Reasons forselection as a
candidate for
Director

Mr. Tomoaki Horiguchi is the founder of the Company. He has strong centripetal force as
President and Representative Director, abundant experience in corporate management and has led
the growth of the Company for many years. Ever since he changed from the President of theCompany to the Chairman and Representative Director of the Company on April 1, 2020, he has
been making efforts to improve the long-term sustainable corporate value of the Group by
fostering human resources for the next generation and further strengthening the managementfoundation. The Company judges that his wealth of experience, achievements and high level of
insight are indispensable for the management of the Company and requests his continued election
as Director.

―8―

No.

2

Seiichi Saito

Reappointment

Born on June 9, 1960
81,829 shares held

Biography, Positions and Responsibilities at the Company
September 2005 Joined the Company
November 2005 Division Director of Administration Division of the Company
June 2006
June 2008
June 2012
June 2014

April 2015

April 2020

Director and Division Director of Administration Division of theCompany
Senior Managing Director and Division Director of Administration
Division of the Company
Executive Vice President, Vice President Executive Officer andDivision Director of Administration Division of the Company
Representative Executive Vice President, Vice President Executive
Officer and Division Director of Administration Division of theCompany
Representative Executive Vice President, Vice President Executive
Officer and Division Director of Asset Management Division of theCompany
President Representative Director and President Executive Officer(present)

Significant Concurrent Positions
CEO of Sun Frontier NY Co., Ltd.
Representative Director of SF Engineering Inc.

Reasons forselection as a
candidate for
Director

Mr. Seiichi Saito has a wealth of experience and achievements including the management of theCompany as a President Representative Director and President Executive Officer. As Chairman of
the Board of Directors, he has managed important management issues and enhanced the management
supervisory functions of the Board of Directors. Even after taking over the position of President from
Mr. Tomoaki Horiguchi, the founder, in 2020, he has made efforts to fulfill his role to further growand develop the Company and strengthen the management foundation for the growth of next
generation. The Company has judged that he is suitable for realizing the Corporate Philosophy of theCompany and increasing its corporate value and requests his continued election as a Director.

―9―

No.

3

Izumi Nakamura

Reappointment

Born on March 16, 1952
60,781 shares held

Biography, Positions and Responsibilities at the Company
September 2006 Joined the Company
Head of Sales Administration Entrusted Asset Management Division
Director and Division Director of Entrusted Asset Management Division ofJune 2008
the Company
Managing Director, Managing Executive Officer and Division Director ofJune 2012
Entrusted Asset Management Division of the Company
Senior Managing Director, Senior Managing Executive Officer and Division
June 2016
Director of Entrusted Asset Management Division of the Company
Executive Vice President, Vice President Executive Officer and Division
April 2020
Director of Entrusted Asset Management Division of the Company (present)
Significant Concurrent Positions
Representative Director of SF Building Support Inc.
Representative Director of SF Building Maintenance Inc.

Reasons forselection as a
candidate for
Director

Mr. Izumi Nakamura has led the management of Real Estate Service Business such as leasing,property management and rent guarantee with strong leadership as the Executive Vice President,
Vice President Executive Officer and Division Director of Entrusted Asset Management Division. In
addition, he has assisted the President and strives to realize the Corporate Philosophy and increase
corporate value. The Company has determined that he is suitable for realizing the Company’sbusiness strategy for growth and supervising business divisions due to his wealth of businessexperience and knowledge regarding entrusted asset management and proposes his continued
election as a Director.

―10―

No.

4

Yasushi Yamada

Reappointment

Born on December 23, 1965
22,765 shares held

Biography, Positions and Responsibilities at the Company
August 2010

Joined the Company, General Manager of Corporate Planning Division

June 2012

Executive Officer and General Manager of Corporate Planning Division of
the Company
Executive Officer and Division Director of Administration Division of theCompany
Director, Executive Officer, Division Director of Administration Division of
the Company
Managing Director, Managing Executive Officer and Division Director of
Administration Division of the Company
Senior Managing Director, Senior Managing Executive Officer and Division
Director of Business Promotion Division of the Company (present)

April 2015
June 2015
June 2016
April 2020

Significant Concurrent Positions
Chairman of Board of Directors of SUN FRONTIER DANANG CO., LTD.

Reasons forselection as a
candidate for
DirectorMr. Yasushi Yamada has led new business areas in the Overseas Business and Environmental
Business as the Senior Managing Director, Senior Managing Executive Officer, and General
Manager of Business Promotion Division, and has promoted M&A. He is committed to the growth ofbusinesses with his diverse knowledge and leadership. The Company has judged that he is anappropriate person for the Company to respond appropriately to changes in the business environment
and implement corporate strategies aimed at sustainable improvement of corporate value and requests
his continued election as Director.

―11―

No.

5

Mitsuhiro Ninomiya

Reappointment

Born on March 1, 1969
36,133 shares held

Biography, Positions and Responsibilities at the Company
September 2003 Joined the Company in Leasing Business Division
General Manager of Property Management Business Division of the
March 2006
Company
General Manager of Human Resources General Affairs Division of theOctober 2010
Company
Executive Officer of the Company
June 2014

April 2020

Deputy Division Director of Administration Division and General Manager
of Corporate Planning Division of the Company
Deputy Division Director of Administration Division, General Manager ofCorporate Planning Division and General Manager of Information System
Division of the Company
Deputy Division Director r of Administration Division, General Manager ofGeneral Affairs Division and General Manager of Information System
Division of the Company
Division Director r of Administration Division of the Company

June 2020

Director of the Company

April 2024

Managing Director, Managing Executive Officer, Division Director of
Administration Division of the Company (present)

April 2018
April 2019

July 2019

Significant Concurrent Positions
None

Reasons forselection as a
candidate for
Director

Mr. Mitsuhiro Ninomiya has led the Administration Division as the Managing Director, Executive
Officer, and Division Director of Administration Division and worked to resolve management issues.
Mr. Ninomiya has also contributed to the development of human resources and creation of acorporate culture by leading the diffusion and retention of the Corporate Philosophy, which is thefoundation of the Company. Based on his wealth of knowledge and business experience, theCompany has judged that he is an appropriate person who can support the development and growthof the Company's business from the perspective of management and contribute to the realization ofsustainable enhancement of corporate value and proposes his continued election as a Director.

―12―

No.

6

Kenji Honda

Reappointment

Born on March 5, 1967
7,833 shares held

Biography, Positions and Responsibilities at the Company
April 2006
October 2010

Joined the Company in Entrusted Asset Management Division Corporate Sales
SectionGeneral Manager of Property Management Business Division of the Company

April 2020

Executive Officer and General Manager of Property Management Business
Department of the Company
Deputy Division Director of Entrusted Asset Management Division and General
Manager of Property Management Business 1st Division of the Company
Division Director of Asset Management Division of the Company

June 2020

Director of the Company

April 2024

Director, Senior Executive Officer, Division Director of Asset Management
Division of the Company (present)

June 2014
April 2018

Significant Concurrent Positions
Representative Director of SF Communication Inc.

Reasons forselection as a
candidate for
Director

Mr. Kenji Honda has led Real Estate Revitalization Business, the core business of the Company, andspecified joint real estate ventures and has contributed to the growth of the Company's businessdivision as Director, Executive Officer, and Division Director of Asset Management Division.
Accordingly, the Company has judged that he is an appropriate person who can contribute to thedevelopment and growth of the Company's business and the realization of sustainable enhancementof corporate value by utilizing his wealth of knowledge and business experience and requests his
continued election as a Director.

―13―

Reappointment

No.

7

Keiichi Asai

OutsideIndependent

Born on September 29, 1954
0 share held

Biography, Positions and Responsibilities at the Company
Joined Mitsubishi Corporation
Executive Officer, General Manager of the Energy Business Group CEO
Office of the same company
Vice President Director of Lithium Energy Japan Co., Ltd.
April 2013
September 2014 President Representative Director of KH Neochem Co., Ltd.
Retired from the same company
April 2019
Outside Director (Audit and Supervisory Committee Member) of Cosmo
June 2021
Energy Holdings Co., Ltd. (present)
Director of the Company (present)
June 2022
April 1978
April 2009

Significant Concurrent Positions
Outside Director (Audit and Supervisory Committee Member) of Cosmo Energy Holdings Co.,Ltd.
After joining Mitsubishi Corporation, Mr. Keiichi Asai has worked in various divisions of the oil
Reasons forbusiness, including oil sales, supply and demand, and refining. He has been involved in international
selecting him as
business in the energy sector for the most part, with assignments in the United States and India. He
a candidate for
was appointed Vice President Director of Lithium Energy Japan Co., Ltd. in 2013 and President
Outside Director
and an outline of Representative Director of KH Neochem Co., Ltd. in 2014, and engaged in corporate management in
his expected role general, and has abundant knowledge and experience. From his wealth of knowledge and experience,
the Company has determined that he can be expected to supervise the Company's management andappropriately perform his duties and proposes his reappointment as an Outside Director.

―14―

New appointment

No.

8

Koichi Ishimizu

OutsideIndependent

Born October 16, 1958
0 shares held

Biography, Positions and Responsibilities at the Company
April 1984

Joined Shimizu Corporation

February 1997

Director of Tokyo Branch Construction Department of the same company

July 2007

General Manager of Tokyo Building Construction Department No. 3, Building
Construction Division of the same company
General Manager of New Head Office Construction Division of the same
company
Executive Officer, Director of Hiroshima Branch of the same company

July 2008
April 2015

April 2023

Managing Officer in charge of the Tokyo Metropolitan Area, Director of Tokyo
Branch of the same company
Senior Managing Officer in charge of the Tokyo Metropolitan Area, Director ofTokyo Branch, Manager in charge of Nuclear Business of the same company
Senior Managing Officer in charge of the Kansai Region, Director of the
Yumeshima Project of the same company
Standing Advisor of the same company

March 2024

Resigned from the same company

April 2017
April 2020
April 2021

Significant Concurrent Positions
None
Since joining Shimizu Corporation, Mr. Koichi Ishimizu has consistently been involved in
Reasons forconstruction sites. He oversaw building construction management, placing orders for construction
selecting him as
work, and everything from the start of construction to completion. He also has experience in corporatea candidate formanagement, having served as Managing Officer and Senior Managing Officer. The Company has
Outside Director
judged that he can be expected to provide supervision and advice to the Group based on his abundant
and an outline ofknowledge and experience in the field and management and proposes that he be elected as an Outside
his expected role
Director.

―15―

Proposal No, 3Election of Three (3) Directors who are Audit & Supervisory
Committee Members

The terms of office of all three (3) Directors who are Audit & Supervisory Committee Members will expire at the conclusion of thisgeneral meeting of shareholders. Accordingly, the election of three (3) Directors who are Audit & Supervisory Committee Member is
proposed. This proposal has been approved by the Audit & Supervisory Committee.
The candidates for Directors who are Audit & Supervisory Board Members are as follows.
Attendance Rate
Attendance Rate
Current
positionsandof Audit &Candidateof Board ofNameresponsibilities at the Candidate Attributes
Supervisory
No.
Directors
Company
Committee
Meetings
Meetings
Director who is an Audit
100%
100%
1
Shinichi Tominaga& Supervisory
Reappointment(Attended 18 of (Attended 13 of 13
Committee Member
18 meetings)
meetings)

2

3

Kazutaka Okubo

Yukiko Edahiro

Director who is not an
Audit & Supervisory
Committee Member

New
Appointment
OutsideIndependent
New
Appointment
Outside-100%(Attended 18 of
18 meetings)

-

-

-

Independent
Notes: 1. There are no special interests between the Company and each candidate for Director who is an Audit & Supervisory Committee Member.
2. Mr. Kazutaka Okubo and Ms. Yukiko Edahiro are candidates for Outside Directors who are Audit & Supervisory Committee Members.
3. Mr. Kazutaka Okubo is currently an Outside Director who is not an Audit & Supervisory Committee Member of the Company, and his
term of office as an Outside Director will be five years at the conclusion of this general meeting of shareholders.
4. The Company has entered into a Liability Limitation Agreement with Mr. Kazutaka Okubo pursuant to the provisions of Article 427
Paragraph 1 of the Companies Act and the provisions of the Company's Articles of Incorporation so that he may fully perform his expectedrole as an Outside Director. The maximum amount of liability for damages under the agreement is the amount stipulated by laws andregulations. If he is elected as a Director, the Company plans to continue the agreement.
5. The Company has designated Mr. Kazutaka Okubo as an independent officer under the provisions of the Tokyo Stock Exchange, Inc. andhas notified the Tokyo Stock Exchange of the designation. If he is elected as a Director, the Company plans for him to continue as anindependent officer.
6. The Company plans to enter into a Limited Liability Agreement with Ms. Yukiko Edahiro pursuant to the provisions of Article 427
Paragraph 1 of the Companies Act and the Company's Articles of Incorporation if she is elected as an Outside Director so that she may
fully perform her expected role. The maximum amount of liability for damages under the agreement shall be the amount prescribed bylaws and regulations.
7. If Ms. Yukiko Edahiro is elected as an Outside Director, the Company plans to designate her as an independent officer pursuant to theprovisions of the Tokyo Stock Exchange, Inc. and notify the Tokyo Stock Exchange to that effect.
8. Ms. Yukiko Edahiro has never been involved in the management of a company (including foreign companies) other than by serving as an
Outside Audit & Supervisory Board Member. However, the Company proposes that she be elected as an Outside Director who is an Audit& Supervisory Committee Member as it has determined that she will be able to appropriately perform her duties based on the legal
knowledge that she has developed over many years as an attorney.
9. The Company has entered into an Officers' Liability Insurance Agreement with an insurance company under which all Directors are
insured. Under this agreement, Directors are compensated for any damage that may be caused by Directors who are insured being held
liable for the execution of their duties or receiving claims related to the pursuit of such liability. If each candidate is elected as a Director,
he / she will become an insured person under this insurance agreement, and the Company plans to renew the insurance agreement with thesame contents during his / her term of office. The summary of the content of the agreement is as stated in the “Outline of the Officers’
Liability Limitation Agreement” of the Business Report.

―16―

No.

1

Shinichi Tominaga

Reappointment

Born on June 13, 1957
700 shares held

Biography, Positions and Responsibilities at the Company
April 1981

Joined The Sumitomo Bank, Ltd. (currently Sumitomo Mitsui Banking
Corporation)

September 2007 Compliance Manager of Kenedix Advisors Inc.
March 2009Manager of Finance & Accounting Department of Kenedix, Inc.

September 2010 General Manager of Operations of Kenedix, Inc.
July 2017

Joined the Company as Deputy Division Director of Administration Division

April 2018

General Manager in charge of Corporate Governance, etc. of the Company

April 2019

General Manager in charge of Accounting Division of the Company

July 2020

General Manager of Corporate Planning Division of the Company
Director who is Full-time Audit and Supervisory Committee Member of theCompany (present)

June 2022

Significant Concurrent Positions
None

Reasons forselection as a
candidate for
Director

Mr. Shinichi Tominaga has knowledge in the financial industry and the real estate industry, as
well as abundant experience in compliance and risk management. In addition, he has served as
General Manager in charge of Corporate Governance and General Manager of Accounting
Department, etc. in the Administration Division of the Company, and is familiar with theCompany's business processes. Based on the above abundant knowledge and experience, theCompany expects that he will be able to strengthen the governance of the Company andappropriately execute his duties. Therefore, the Company proposes his continued election as
Director.

―17―

Newly appointed

No.

2

Kazutaka Okubo

OutsideIndependent

Born on March 22, 1973
3,500 shares held

Biography, Positions and Responsibilities at the Company
November 1995 Joined Century Audit Corporation (currently Ernst & Young ShinNihon LLC)
April 1999
Registered as a certified public accountant
February 2005

Managing Director, ShinNihon Integrity Assurance Co., Ltd., (currently Ernst& Young ShinNihon Sustainability Co., Ltd.)

June 2006
July 2012

Partner, Shin Nihon & Co. (currently Ernst & Young ShinNihon LLC)
Senior Partner, ShinNihon LLC (currently Ernst & Young ShinNihon LLC)

February 2016

Executive Managing Director, General Manager of ERM Division, ShinNihon
LLC

June 2019
June 2019

President and Representative Director, Okubo Associates Co., Ltd. (present)
Director of the Company (present)
December 2019 Outside Director, LIFULL Co., Ltd. (present)
February 2020 Outside Director, SARA CORPORATION (present)
June 2020
June 2020

Outside Director, The Shoko Chukin Bank, Ltd. (present)
Outside Director (Audit and Supervisory Committee Member), Musashi

Seimitsu Industry Co., Ltd. (present)
November 2020 President and Representative Director, SS Dnaform Co., Ltd. (present)
September 2021 Outside Director (Audit and Supervisory Committee Member) of Brainpad Co.,
Ltd. (present)
June 2022

Outside Director (Aduit and Supervisory Committee Member), SEGASAMMY HOLDINGS INC. (present)

Significant Concurrent Positions
President and Representative Director, Okubo Associates Co.
Outside Director (Audit and Supervisory Committee Member), SEGA SAMMY HOLDINGS
INC.
・Outside Director, LIFULL Co.
・Outside Director, SARA CORPORATION
・Outside Director, The Shoko Chukin Bank・Outside Director (Audit and Supervisory Committee Member), Musashi Seimitsu Industry
President and Representative Director, SS Dnaform Co.
Outside Director (Audit and Supervisory Committee Member), Brainpad Co
Reasons forselecting him asa candidate for
Outside Director
and an outline ofhis expected role

Mr. Kazutaka Okubo has extensive knowledge and experience in a wide range of fields, including
corporate compliance and corporate social responsibility, in addition to being familiar withcorporate governance and finance from his auditing experience at a large-sized audit firm. The
Company proposes that he be elected as an Outside Director who is an Audit and Supervisory
Committee Member with the expectation that he will strengthen corporate governance and audit
and supervise management toward the sustainable improvement of the Company's corporate
value based on his abundant knowledge and experience.

―18―

Newly appointed

No.

3

Yukiko Edahiro

OutsideIndependent

Born on June 14, 1980
0 shares held

Biography, Positions and Responsibilities at the Company
December 2009 Registered as an attorney at law (Tokyo Bar Association)
December 2009 Joined Makinouchi & Kamiishi Law Office (currently Makinouchi Law Office)
July 2016
January 2020

Joined Ginza Broad Law Office
Established Toranomon Daiichi Law Office (present)

Significant Concurrent Positions
Partner, Toranomon Daiichi Law OfficeOutside Member, Ethics Committee, Toho University School of Medicine
Judicial Commissioner, Tokyo Summary Court
Outside Audit & Supervisory Board Member of Yutori no Kukan Corporation
Reasons forselecting her as a
candidate for
Outside Director
and an outline ofher expected role

Ms. Yukiko Edahiro has specialized knowledge and extensive experience in corporate legal affairs as
an attorney, mainly in the fields of real estate and inheritance-related matters. The Company proposesthat she be elected as an Outside Director who is an Audit and Supervisory Committee Member as it
believes that she will be able to utilize her expertise in strengthening the governance of the Groupand auditing and supervising the execution of business. In addition, we expect objective and expert
advice in promoting the activities of diverse human resources, including women and foreign
nationals.

―19―

(Reference)Management system after proposals are approved (planned)
Main expertise and experience we expect from Directors who are not an Audit & Supervisory Committee Member are as follows.
Expected expertise and experience* Listing up 4 main items
Name
Sex
Legal/Complian HR/Labor/
Corporate
management

Real estate

Accounting/
FinanceTomoaki Horiguchi

Male

●

●

Seiichi Saito

Male

●

●

●

Izumi Nakamura

Male

●

●

●

Yasushi Yamada

Male

●

●

Mitsuhiro Ninomiya

MaleKenji Honda

Male

Keiichi Asai

Male

●

Koichi Ishimizu

Male

●

ce/RiskManagement

HR
Development

CSR/ ESG/
Sustainability●

M&A

Overseas

●
●
●

●
●

●

●

●

●

●

●

●

●

Main expertise and experience we expect from Directors who are an Audit & Supervisory Committee Member are as follows.
Expected expertise and experience* Up to 4 main items are listed.
Name
Sex
Legal/Complian HR/Labor/
Corporate
management

Shinichi Tominaga

Male

Kazutaka Okubo

Male

Yukiko Edahiro

FemaleReal estate

Accounting/
Finance

●

●

●

●

●

ce/RiskManagement●

HR
Development●●

The above does not represent all the knowledge and experience possessed by each director.

―20―

CSR/ ESG/
Sustainability

M&A

OverseasElection of One (1) Director who is a Substitute Audit & Supervisory
Committee Member

Proposal No. 4

In preparation for the case where the number of Directors who are Audit and Supervisory Committee Members
falls below the number prescribed by laws and regulations, the Company proposes the election of one (1) Director
who is a Substitute Audit & Supervisory Committee Member in advance.
The candidate for the Director who is a Substitute Audit & Supervisory Committee Member is as follows, andthe consent of the Audit & Supervisory Committee has been obtained for this proposal.
Born on July 26, 1952
0 shares held

Fumio Tsuchiya
Biography, Positions and Responsibilities at the Company
April 1985

Registered as an attorney at law (The Second Tokyo Bar Association)

April 1989

Established Tsuchiya Law Office as the Representative (present)

Significant Concurrent Positions
Representative of Tsuchiya Law Office
Reasons for
Mr. Fumio Tsuchiya is a qualified attorney at law and has abundant experience and deep insight as an
selecting him as expert in corporate legal affairs. The Company proposes that he be elected as a Substitute Outside
a candidate for
Director as it has determined that he will contribute to enhancing the transparency and fairness of
Outside Director management by auditing and supervising the Company's management from an objective standpoint,
and an outline of utilizing the insight he has cultivated through his experience.
his expected role
(Notes) 1. Although the Company has entered into a corporate lawyer agreement with Mr. Fumio Tsuchiya, he satisfies the Company's IndependenceStandards for Outside Officers. In addition, if he is appointed as an Outside Director, the Company plans to terminate the legal counsel
agreement with him.
2. Mr. Fumio Tsuchiya is the candidate for the Director who is a Substitute Audit & Supervisory Committee Member.
3. If Mr. Tsuchiya is appointed as an Outside Director, the Company plans to enter into a limited liability agreement pursuant to the provisionsof Article 427, Paragraph 1 of the Companies Act and the Company's Articles of Incorporation in order to enable Outside Directors to fully
perform the roles expected of them. The maximum amount of liability for damages under the agreement will be the amount stipulated bylaws and regulations.
4. If he is appointed as an Outside Director, the Company plans to designate him as an Independent Officer pursuant to the provisions of theTokyo Stock Exchange, Inc. and notify the exchange to that effect.
5. The Company proposes that he be elected as an Outside Director who is a Substitute Audit and Supervisory Committee Member as it hasdetermined that he will be able to appropriately perform his duties based on the legal knowledge that he has developed over many years as
an attorney at law, although he has never been involved in the management of a company (including foreign companies).
6. The Company has concluded an Officers' Liability Insurance Agreement with an insurance company, under which Directors are compensatedfor any damage that may be caused by the Directors, who are insured persons, assuming liability for the execution of their duties or receiving
claims related to the pursuit of such liability. When Mr. Fumio Tsuchiya assumes the position of an Outside Director who is an Audit andSupervisory Committee Member, he will be included as an insured person under the insurance contract. The summary of the said agreement
is as stated in the “Outline of the Officers’ Liability Limitation Agreement” of the Business Report.

―21―

1. Status of the Corporate Group(1) Progress and Results of Operations
The Japanese economy continued to recover as the employment and income environments persisted to improve amid rising
expectations for higher interest rates. In the global economy, while there are concerns about the outlook, such as persistently
high policy interest rates in various countries, a slowdown in the Chinese economy, and high crude oil prices due to the impactof geopolitical risks, there is growing attention to the timing of policy interest rate cuts before the U.S. presidential election anda soft landing of the U.S. economy.
In the real estate market, average rents in the Tokyo Business District (5 wards of Central Tokyo: Chiyoda, Chuo, Minato,
Shinjuku and Shibuya) bottomed out in November 2023 (unit price per tsubo: 19,726 yen) after 40 consecutive months of decline,
and are currently on a slight upward trend at 19,820 yen (March 2024). After peaking at 6.48% in June 2023, the average vacancy
rate has generally continued to improve, reaching 5.47% in March 2024 (according to a survey by a private survey organization).
Until now, the market has been generally weak due to the promotion of remote work in the pandemic of COVID-19 and theincrease in vacant floor space caused by the rush of completion of large-scale new office buildings. However, after the transitionof COVID-19 to Category 5 (May 2023), demand has recovered as the significance of offices has been reconfirmed, andexpectations for further declines in vacancy rate and increases in rents are increasing. In the real estate investment market,
although the Bank of Japan's negative interest rate policy has been lifted, the accommodative financial environment is expected
to be maintained, and low interest rates and the depreciation of the yen are expected to continue. Against this backdrop, overseas
investors are expected to return to investing in office buildings. At the same time, strong investment demand for hotels continues
due to a recovery in tourism demand.
In this environment, in the Real Estate Revitalization Business, our core business in the Group, the number of sales increased
from the previous fiscal year. In addition, profit margin remained at a high level. As a result, both net sales and profit increased,
continuing to drive the overall performance of the Company. Moreover, the Real Estate Service Business operations continued
to perform well. In Hotel Development Business, net sales decreased in reaction to the sale of two hotels in the previous fiscal
year, while profit increased due to the sale of one hotel in the fiscal year under review. In Hotel Operation Business, due to the“Nationwide Travel Subsidy Program” and the transition of COVID-19 to a Category 5 disease, as well as the impact of thedepreciation of the yen, tourism demands further increased due to the recovery of both domestic and foreign tourists, and both
net sales and profit saw significant year-on-year increases.
As a result, net sales amounted to 79,868 million yen (down3.5% YoY), operating profit amounted to 17,600 million yen(up18.1% YoY), ordinary profit amounted to 17,374 million yen (up18.0% YoY) and profit attributable to owners of parent
amounted to 11,917 million yen (up2.6% YoY)

―22―

Net sales by business segment for the current fiscal year (reference)
Other

Net sales 2,409 million yen

Hotel andTourism BusinessNet salesbybusinesssegment

Net sales 16,977 million yen

Real Estate
Revitalization Business

Real Estate
Service Businessmillion yen

Net sales 10,497 million yen

Net sales 51,027 million yen

Real Estate Service Business

Real Estate Revitalization BusinessNet sales

23rd

Segment profit

24th(million yen)

Net sales

25th

23rd

Hotel and Tourism BusinessNet sales

23rd

Segment profit

24thSegment profit(million yen)

24th

25th

Other

(million yen)

Net sales

25th

23rd

Segment profit

24th(million yen)

25th(2) Capital Expenditures
The Group’s capital expenditure in the fiscal year ended March 31, 2024 was 3,029 million yen, mainly for the acquisition ofrental office buildings (614 million yen) and hotel facilities (1,716 million yen).
(3) Financing Activities
During the current fiscal year, the Company raised funds of 9,999 million yen through the issuance of convertible bonds withshare acquisition rights.

―23―

(4) Trends in Assets and Income(i) Consolidated Assets and Income of the Corporate GroupFY2022/3
Net Sales(million yen)
Ordinary Profit(million yen)
Ordinary Profit
(%)
Ratio
Profit Attributable to(million yen)
Owners of Parent
Earnings per Share (yen)Total Assets(million yen)
Equity Ratio(%)
Net Assets(million yen)
Net Assets per Share (yen)FY2023/3

FY2024/3

59,632
7,524

71,251
12,21582,777
14,722

FY2025/3(current period)
79,86817,374

12.6

17.1

17.8

21.8

4,274

7,415

11,612

11,917

87.77
127,485
52.3
69,773
1,368.14

152.26
136,51252.2
74,452
1,463.74

238.98
152,51952.9
83,965
1,663.33

245.50188,661
48.0
94,416
1,864.36

Note 1. 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 for the 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 under review. Moreover, the number of the Company's shares held by the trust account at the end of
the fiscal year under review was 128,300 shares.
Note 2. “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020), etc. has been applied from the 23rd fiscal
year. The figures for the assets and profit and loss of 23rd fiscal year and onwards are after the application of the above accounting
standards.

22nd

23rd

Profit attributable to owners of parent (million yen)
Earnings per share (yen)Ordinary profit (million yen)
Ordinary profit margin (%)

Net sales (million yen)

24th

25th

22nd

23rd

24th

Total assets (million yen)
Equity ratio (%)

22nd

23rd

24th

25th

22nd

23rd

24th

25th

Net assets (million yen)
Net assets per share (yen)

25th

22nd

23rd

24th

25th

(ii) Non-consolidated Assets and Income of the Company
FY2022/3
Net Sales(million yen)
Ordinary Profit(million yen)
Profit(million yen)
Earnings per Share (yen)Total Assets(million yen)
Net Assets(million yen)
Net Assets per Share (yen)FY2023/3

42,002
7,994
5,314
109.12
114,729
68,2041,400.21

59,563
14,356
9,284
190.65
124,800
74,432
1,527.80

FY2024/3
52,097
11,753
7,871
161.98137,21279,8591,645.34

FY2025/3(current period)
52,92911,614
7,953
163.85
168,972
85,382
1,757.95

Note 1. 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 for the 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 under review. Moreover, the number of the Company's shares held by the trust account at the end of
the fiscal year under review was 128,300 shares.

―24―

(5) Material Subsidiaries
Name
SF Building Support Inc.
SF Building Maintenance Inc.
Sun Frontier Space Management Inc.
SF Engineering Inc.
SF Communication Inc.
Sun Frontier Hotel Management Inc.
Sky Heart Hotel Inc.
Sun Frontier Sado Inc.
Nihon Toshi Hotel Kaihatsu Co. ltd.
SUN FRONTIER DANANG CO.,LTD.
Sun Frontier NY Co., Ltd.

Share capital
Investment ratio
Major businesses
50 million yen
100.0% Rent guarantee business
20 million yen
100.0% Building maintenance business
Conference room rental business, rental
50 million yen
100.0%
office business
Construction and interior finishing
20 million yen
100.0%
business
45 million yen
100.0% Electrical and telecommunications work
Hotel planning, development, and100 million yen
100.0%
management
10 million yen
100.0% Hotel Planning and Operation Business
Hotel Planning and Operation, Regional
100 million yen
100.0%
Revitalization Business25 million yen
100.0% Hotel Planning and Operation Business
160,466 million VND
100.0% Real estate business in Vietnam
3 million
Real estate revitalization business in the
100.0%
U.S. dollar
United States(Note) 1. The Company acquired the shares of Nippon Toshi Hotel Kaihatsu Co., Ltd. on January 23, 2024, making it a subsidiary.
(6) Issues to be Addressed

The Group celebrated its 25th anniversary in April this year. Moreover, it is the final year of the current Medium-termManagement Plan (revised on May 12, 2021, hereinafter the “Current Plan”). In the Current Plan, based on the Management
policy of “altruism” advocated since its foundation, we have been making efforts to realize the Management Philosophy of“Our mission is to look after every employee and pursue the happiness of both mind and matter. At the same time, tocontribute to the prosperity of mankind and society with a spirit of coexistence.” During this period, we encountered theunprecedented headwind of the pandemic of COVID-19. However, we overcame it and achieved our highest performance inthe financial results for FY2024/3. In addition, we are now in sight of achieving the targets of the Current Plan. In order toachieve sustainable growth while realizing the Management Philosophy over the long term from this fiscal year, we havedecided to quickly clarify our long-term strategies and measures. Accordingly, we have formulated the Long-Term Vision2035 as the ideal image to achieve in 10 years, and the next Medium-term Management Plan as an action plan toward therealization of this vision.
< Overview of the Long-Term Vision 2035 >Based on the Company policy “altruism”, the Company set its Management Philosophy of “Our mission is to lookafter every employee and pursue the happiness of both mind and matter. At the same time, to co-create a rich andsustainable society by contributing to the evolution and the development of the human society.” The Group aims toachieve the Long-Term Vision 2035 and its quantitative targets through realizing this Management Philosophy.
・ Long-Term Vision 2035
Utilize limited resources to fill the world with smiles and excitement!
Becoming a corporate group that continues to challenge the creation of future value.
・ Quantitative target
Net Sales of 300 billion yen and Ordinary Profit of 60 billion yen in FY2035.
< Outline of the next Medium-term Management Plan>
Looking backward from the “Long-Term Vision 2035”, our ideal image in 10 years, the overview of the next Mediumterm Management Plan, which will cover the three years (from FY2026/3 to FY2028/3) following the achievement of
the Current Plan, is as follows.
・ Basic policy
Work to resolve social issues by promoting cooperation and diversification within the core business, providing
manufacturing through clients' point of view and heart-warming services.
・ Quantitative target

Net sales

100 billion yen

Ordinary profit
Ordinary profit
marginROE

20 billion yen

FY2028/3(Target)135 billion
yen
27 billion yen

20%

20%

-

10% or more

10% or more-

Equity ratio

Around 50%

Around 45%-

FY2025/3 (Forecast)Profit plan

Management indicator―25―

Growth rate
35.0%
35.0%

<Sustainability Initiatives>
The Group has put into practice a philosophy management based on the spirit of altruism since our founding. Also, the Company
has been promoting business activities that contribute to the sustainability of society by defining the Company Philosophy as “wereduce the waste of non-renewable resource on earth and contribute to the prosperity of the people, plants and animals.” The spiritof altruism is the idea that we value others as much as we value ourselves. Our desire to make many people smile and to contributeto the prosperity of people, plants and animals on the earth is the foundation of our business philosophy. We also place great
importance on being close to clients while sharing the value that “the pleasure of others is one’s own”, with “rightness” and“consideration” based on right and wrong rather than gain and loss. This concept of the Group was redefined as our Sustainability
Vision. We have identified three important issues (materiality), namely environmental protection, regional revitalization and humanresource development, and are promoting sustainable management that integrates with the spirit of altruism. We will continue toincrease our corporate value over the medium to long term by realizing this vision and implementing specific measures on important
issues to contribute to the realization of a sustainable society through our operational activities.

Sustainability Vision and Important Issues (Materiality)
1. Sustainability Vision
We will contribute to the realization of a sustainable society through business activities while respecting the heart of altruism,
the Company policy.
2. Important sustainability issues
We have identified three important issues that must be addressed to realize our Sustainability Vision. We will implement specificmeasures in the three areas of environmental protection, regional revitalization, and human resource development. Specificmeasures will be reviewed as appropriate in response to future environmental and social trends and changes in the businessenvironment.
ImportantissuesVisionIncrease environmental
sustainability by significantly
Environmental reducing waste and greenhouseprotection
gas emissions, as a frontier of Real
Estate Revitalization Business

Regional
revitalization

Create sustainable growth ofregional economies throughoffices, hotels, and tourism, as afrontier for sustainable regional
revitalization

Human
resource
development

Spread the concept of “altruism”
that is indispensable for realizing asustainable society, as a frontier ofphilosophy management

Policy◼ Extend the life and health of real estate◼ Energy conservation and reduction ofenvironmental impact by Real Estate
Revitalization Business◼ Expanded use of renewable energy◼ Create buildings, offices, and spaces with“job satisfaction” and “creativity” that
contribute to economic growth◼ Prevent and mitigate disaster throughregional cooperation◼ Solve regional issues through community
activation and creation◼ Create workplaces with job satisfaction,
creativity and growth opportunities◼ Respect and utilize diversity◼ Disseminate information on philosophy
management to foster next-generation
managers―26―

Relevant SDGs

(7) Principal Business Segment of the Corporate Group (As of March 31, 2024)
Business segment
Real Estate
Revitalization
Business

Real Estate
Service Business

Replanning Business
Rental Building BusinessLeasing of own properties

Property Management Business

Property management business for management of buildings and tenants

Building Maintenance Business

Building maintenance business such as building cleaning, facility
management, security, waterproofing, and exterior wall repair

Sales Brokerage Business

Brokerage of real estate for businessLeasing Brokerage BusinessLeasing of offices and stores

Conference Room Rental
Business

Provide a rent guarantee for the delinquency of rent of a tenant of realestate for building owners
Plan and operate vacant office buildings in central Tokyo as rental
conference room, rental office, and coreworking space

Hotel Operation Business

Planning and management of accommodation facilities such as hotels

Hotel Development Business

Development of new hotels, refurbishing existing hotels, and selling themas investment products

Overseas Development Business

Real estate development business in Vietnam, etc.

Construction Business

Carry out interior finishing work, telecommunications work, and renewal
planning, repair, and reform for business buildings

Rent Guarantee Business

Hotel and Tourism
Business

Other

Major businesses
Purchase of existing commercial buildings and rebuilding them as buildings
with a new concept, attract tenants and sell them with increased real estatevalue(8) Principal Business Office (As of March 31, 2024)
Name
Headquarters
Ginza Branch
Nihonbashi Branch
Kodendma-cho Branch
Kanda Branch
Kojimachi Branch
Shinjuku Branch
Shibuya Branch
Gotanda Branch
Hamamatsucho Branch
Shinbashi Branch
Ikebukuro Branch
Yokohama Branch
Property Management Business Department
SF Building Support Inc.
SF Building Maintenance Inc.
Sun Frontier Space Management Inc.
SF Engineering Inc.
SF Communication Inc.
Navd Inc.
Sun Frontier Hotel Management Inc.
Sky Heart Hotel Inc.
Nihon Toshi Hotel Kaihatsu Co. ltd.
Sun Frontier Sado Co., Ltd.
Hotel Oosado Inc.
Okesa Kanko Taxi Co., Ltd.
Sun Frontier Okinawa Co., Ltd.
Sun Frontier Fudousan Taiwan Co., Ltd.
SUN FRONTIER DANANG CO., LTD.
Sun Frontier NY Co., Ltd.

Place
Chiyoda-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Shinjuku-ku, Tokyo
Shibuya-ku, Tokyo
Shinagawa-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Toshima-ku, Tokyo
Yokohama-shi, Kanagawa
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Sumida-ku, Tokyo
Minato-ku, Tokyo
Sumida-ku, Tokyo
Chuo-ku, Tokyo
Shibuya-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Osaka-shi, Osaka
Sado-shi, Niigata
Sado-shi, Niigata
Sado-shi, Niigata
Naha-shi, Okinawa
TaiwanSocialist Republic of Vietnam
United States of America―27―

(9) Employees (As of March 31, 2024)(i) Employees of the Corporate Group
Number of Employees
763

Increase/Decrease Compared to end of previous FY
61 increase

Note. The above number of employees does not include 654 temporary employees (part-timers and temporary employees).

(ii) Employees of the Company
Increase/Decrease Compared
to end of previous FY
19 increase

Number of Employees
348

Average Age
36.4 years old

Average number of years ofContinuous Service
6.8 years

Note. The above number of employees does not include employees transferred from the Company to other companies.

(10) Principal Lenders (As of March 31, 2024)
LenderSumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Resona Bank, Limited
SBI Shinsei Bank
Aozora Bank, Ltd.

Loan amount (million yen)
15,375
12,374
6,000
5,772
4,949
3,299

Financial Instruments
Business Operators

2. Status of Shares(1) Shares (As of March 31, 2024)(i) Number of Authorized Shares

91,200,000(ii) Number of Outstanding Shares

48,755,500

Financial
Institutions(includes 74,908 of treasury shares)(iii) Number of Shareholders

Other
Corporations

Foreign
Corporations, etc.

14,403Distribution ofsharesby owner

Individuals
and Other(iv) Principal Shareholders (top 10)
Name
Houon Co., Ltd
The Master Trust Bank of Japan Co., Ltd. (Trust
Account)
Tomoaki Horiguchi
Custody Bank of Japan, Ltd. (Trust Account)
THE BANK OF NEW YORK MELLON 140044
DFA INTL SMALL CAP VALUE PORTFOLIO
Keiko Horiguchi
Sun Frontier Employee Stock Ownership Plan
JP Morgan Securities Co., Ltd.
SSBTC CLIENT OMNIBUS ACCOUNT

Number of shares held
18,507,500

Percentage of shares held (%)
38.02

3,524,500

7.24

2,478,396
2,037,100
892,400
477,700
416,500
416,000
374,851
354,057

5.09
4.18
1.83
0.98
0.86
0.86
0.77
0.73

Note 1. The percentage of shares held is calculated after exclusion of treasury shares (74,908 shares).
Note 2. The percentage of shares held is calculated including 128,300 shares of the Company held by Mizuho Trust & Banking Co., Ltd as thetrust account of the Employee Stock Ownership Plan (J-ESOP.)(2) Shares Delivered to Directors as Consideration for Execution of Duties During the Fiscal Year
Director category
Number of shares
Number of recipients (persons)
Directors who are not Audit &Supervisory Committee Members
18,911(excluding Outside Directors)(3) Other Significant Matters concerning the Shares
Not applicable.

―28―

6

3. Matters Concerning Share Acquisition Rights(1) Share acquisition rights granted as part of the compensation held by the Company’s officers(1)

Name of shareacquisition rights(2)

Date of issuance(3)

Number of shareacquisition rights

Share-based
Share-based
Share-based
Share-based
compensation type stock compensation type stock compensation type stock compensation type stock
option for FY2018/3
option for FY2019/3
option for FY2020/3
option for FY2021/3(Share acquisition(Share acquisition(Share acquisition(Share acquisitionrights)rights)rights)rights)June 22, 2018
June 21, 2019
June 30, 2020
June 22, 2021
(the Board of Directors (the Board of Directors (the Board of Directors (the Board of Directors
Resolution)
Resolution)
Resolution)
Resolution)
524

740

1,112

2,155

4 Directors
4 Directors
4 Directors
6 Directors(excluding Audit &(excluding Audit &(excluding Audit &(excluding Audit &Status of share
Supervisory Committee Supervisory Committee Supervisory Committee Supervisory Committee(4) acquisition rights
Members and Outside
Members and Outside
Members and Outside
Members and Outside
ownership
Directors)
Directors)
Directors)
Directors)
524
740
1,112
2,155
5,240 shares in common 7,400 shares in common
11,120 shares in
21,550 shares inClass and number
sharessharescommon sharescommon shares(5) of shares to be(10 stocks per 1 share(10 stocks per 1 share(10 stocks per 1 share(10 stocks per 1 shareissued uponacquisition right)
acquisition right)
acquisition right)
acquisition right)
Amount to be(6) paid in share
1,019 yen per 1 share
789 yen per 1 share
438 yen per 1 share
657 yen per 1 shareacquisition rights
Value of property
to be contributed(7) upon exercise of 1 yen per 1 share to be delivered upon exercise of share acquisition rights
share acquisitionrightsDate of allotment
Date of allotment:
Date of allotment:
Date of allotment:
Date of allotment:of shareJuly 31, 2018
July 31, 2019
July 31, 2020
July 30, 2021
(8) acquisition rights
Exercise period:
Exercise period:
Exercise period:
Exercise period:and period forFrom August 1, 2018
From August 1, 2019
From August 1, 2020
From July 31, 2021
exerciseuntil July 31, 2048
until July 31, 2049
until July 31, 2050
until July 30, 2051
A holder of share acquisition rights may exercise their share acquisition rights in a lump sum only when
Conditions for(9)they lose their position as a Director of the Company and only on the following day from losing their
exercise of rights
position until 10 days after.
Restrictions on
Any acquisition of share acquisition rights by transfer shall require approval by resolution of the(10) transfer of share
Company's Board of Directors.
acquisition rights
Note 1. At the 19th Annual General Meeting of Shareholders held on June 22, 2018, a resolution was passed to allocate share acquisition rights to
Directors (excluding Audit & Supervisory Committee Members and Outside Directors) as share-based compensation type stock options to be
exercised upon retirement, within the range of 36 million yen per year.
Note 2. Conditions for the exercise of other rights other than those described in (9) shall be in accordance with the “Share Acquisition Rights
Application Form (Application Guidelines)” submitted to the Company.

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(2) Share acquisition rights delivered to employees as consideration for execution of duties during the fiscal year
under review
Not applicable.
(3) Other significant matters concerning share acquisition rights
The Company has issued unsecured convertible bonds with share acquisition rights through third party
allotment based on a resolution of the Board of Directors.
Outline of the First Series Unsecured Convertible Bonds with Share Acquisition Rights
Date of issuance

September 20, 2023

Date of payment

October 6, 2023

Total number of shareacquisition rights

49

Issued price of bonds andshare acquisition rights
Number of dilutive sharesby such issuance
Amount of funds to be
procured
Exercise price orconversion price
Method of offering or
allotment
Assignee
Other

The issued price of each bond is 204,488,160 yen (100.2 yen per 100 yen face value. The
face value of each bond is 204,080,000 yen.)
Provided, however, that no monetary payment is required in exchange for the Share Options.

6,434,900 shares
The conversion price of the bonds with share acquisition rights will not be amended, andtherefore there is no upper limit conversion price or lower limit conversion price.
10,019,919,840 yen (estimated net proceeds: 9,999,318,200 yen)
1,554 yen per share
By way of third party allotment.
AAGS S5, L.P
The Company entered into an underwriting agreement for the Bonds with Share Acquisition
Rights with AAGS S5, L. P., the assignee, on September 20, 2023.

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4. Company Officers(1) Directors (As of March 31, 2024)
Position
Chairman and
Representative Director
President andRepresentative Director
President and Executive
Officer
Vice President and Director
Vice President andExecutive Officer
Senior Managing Director
Senior Managing Executive
Officer
Director
Executive Officer
Director
Executive Officer

Name

Areas of Responsibility and Important Concurrent Positions
Representative Director of Sun Frontier Hotel Management Inc.
Tomoaki Horiguchi
Representative Director of Sun Frontier Sado Inc.
Seiichi Saito

Izumi Nakamura

Yasushi Yamada

Kazutaka Okubo

Director

Keiichi Asai

Director(Audit & Supervisory
Committee Member)

Representative Director of SF Engineering Inc.
Division Director of Entrusted Asset Management Division
Representative Director of SF Building Support Inc.
Representative Director of SF Building Maintenance Inc.
Division Director of Business Development Division
Chairman of the Board of SUN FRONTIER DANANG CO.LTD.

Mitsuhiro Ninomiya Division Director of Administration Division and General Affairs Manager

Director

Director(Full-time Audit &Supervisory Committee
Member)Director(Audit & Supervisory
Committee Member)

CEO of Sun Frontier NY Co., Ltd.

Division Director of Asset Management Division
Representative Director of SF Communication Inc.
President and Representative Director of Okubo Associates Co., Ltd.
Outside Director (Audit & Supervisory Committee Member) of SEGASAMMY HOLDINGS INC.
Outside Director (Audit & Supervisory Committee Member) of BrainPad
Inc.
Outside Director of LIFULL Co., Ltd.
Outside Director of SALA Corporation
Outside Director of The Shoko Chukin Bank, Ltd.
Outside Director (Audit & Supervisory Committee Member) of Musashi
Seimitsu Industry Co., Ltd.
President and Representative Director of SS Dnaform Co., Ltd.
Outside Director (Audit & Supervisory Committee Member) of Cosmo
Energy Holdings Co., Ltd.

Shinichi Tominaga

Hidetaka Tanaka

Auditor of NPO JAPAN PLATFORM
Executive Director of Japan Credit Rating Association

Tsuneko Murata

Outside Director of Milbon Co., Ltd.
Outside Director of Kakuyasu Group Co., Ltd.
Outside Director (Audit & Supervisory Committee Member), Tokyo
Seimitsu Co., Ltd.

Note 1. Directors Kazutaka Okubo, Keiichi Asai, Hidetaka Tanaka and Tsuneko Murata are Outside Directors as stipulated in Article 2, Item 15 of
the Companies Act. The Company has designated the four (4) individuals as independent officers under the provisions of the Tokyo Stock
Exchange and has notified the Tokyo Stock Exchange of the designation.
Note 2. The Company appoints full-time Audit and Supervisory Committee Members since full-time persons who have thorough knowledge of theCompany conduct effective audits through attendance at important meetings and close cooperation with the Internal Audit Department.
Note 3. Director Kazutaka Okubo has qualifications as a certified public accountant and has expertise and abundant experience in finance andaccounting.

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(2) Outline of the Liability Limitation Agreement
The Company has concluded a liability limitation agreement pursuant to the provisions of Article 427, Paragraph 1 of theCompanies Act and Article 30, Paragraph 2 of our Company’s Articles of Incorporation with all Outside Directors.
The maximum amount of liability for damages under the agreement is the amount stipulated by laws and regulations.
(3) Outline of Officers’ Liability Insurance Contract
The Company has entered into liability insurance contracts for officers, etc. as stipulated in Article 430 (3), Item 1 of theCompanies Act with the Company's and its subsidiaries' Directors, Audit & Supervisory Board Member, executive officers andother employees as insured persons.
Claims for damages arising from an act performed by an insured person in relation with the business of the Company (including
inaction) are covered by compensation for damages and court costs incurred by the insured.
The Company pays all insurance premiums for all insured persons, but damage caused by criminal acts or intentional illegal acts
is excluded so as not to impair the appropriateness of the execution of duties.
(4) Remuneration for Directors for the Fiscal Year under review(i) Matters concerning the policy for determining the contents of individual compensation, etc. for Directors(a) Determination method
At the meeting held in the Board of Directors on May 12, 2023, the Company resolved a policy for determining thedetails of individual compensation for Directors who are not Audit & Supervisory Committee Members. An outline ofthe policy is as described in (b) to (g) below.
(b) Fixed remuneration (monetary remuneration) shall be an amount considered to be at an appropriate level in comparison
with the performance of other companies in the real estate industry in Japan, etc., in consideration of the content of duties
of Directors and the Company's situation, etc.
(c) Performance-linked remuneration (monetary remuneration) shall be determined from the perspective of reflecting theresults of the improvement in performance by taking into consideration the status of achievement against the target basedon the consolidated performance (ordinary profit) of the relevant fiscal year.
(d) Directors (excluding outside directors) shall be granted restricted shares remuneration through resolution by the Boardof Directors to provide an incentive to Directors to continuously improve corporate value and to further share value withshareholders.
(e) As a guideline for the ratio of individual remuneration, etc. for Directors, excluding Outside Directors, if the target forthe performance-linked remuneration indicator is 100%, fixed remuneration will be 60%, performance-linked
remuneration will be 30%, and restricted shares remuneration will be 10%. With regard to Outside Directors, only fixed
remuneration will be provided.
(f) The timing of payment of remuneration, etc. shall be as follows.
a．Fixed compensation
b．Performance-linked remunerationc．Restricted shares remuneration

It is provided every month.
Payment shall be made once a year after the end of the Annual General
Meeting of Shareholders pertaining to the relevant fiscal year.
The amount shall be determined and granted by the resolution of the Board of
Directors held once a year after the end of the Annual General Meeting of
Shareholders and the transfer restriction shall be lifted at the time ofresignation or retirement of each Director.

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(g) Matters concerning delegation pertaining to determination of contents of remuneration, etc. for individual Directors

The amount of fixed remuneration and performance-linked remuneration for each individual or the determinationof the methods for calculating such amounts shall be determined by resolution at the Board of Directors anddelegated to the President and Representative Director (revised on May 10, 2024; the Chairman and Representative
Director before revision).
In order to improve the objectivity and transparency of the procedures for determining renumeration of Directors, theCompany has established a Nomination and Compensation Committee consisting of the Chairman and Representative
Director and President and Representative Director as well as 2 or more Outside Directors as a voluntary advisory body.
The Nomination and Compensation Committee considers and deliberates on the amount of remuneration for Directors,
the calculation method, the composition of remuneration, the ratio, and the setting of indicators, and the President andRepresentative Director (Revised on May 10, 2024: Decisions prior to revision are delegated to Tomoaki Horiguchi,
Chairman and Representative Director) makes decisions with maximum respect for the deliberation contents.
(h) Status of the above decision policy for the fiscal year under review
The target for performance (consolidated ordinary profit), which is an indicator of performance-linked remuneration for
the fiscal year under review, was 16,000 million yen, while the actual performance was 17,374 million yen. The
determination of the amount of fixed remuneration and performance-linked remuneration for each individual or the
calculation method thereof has been delegated to the President and Representative Director, who can evaluate the projects
which each Director oversees, with the involvement of the Nomination and Remuneration Committee. The Board of
Directors, upon receiving reports from the Nomination and Remuneration Committee, has determined that the details of
individual compensation for Directors who are not Audit and Supervisory Committee Members for the fiscal year underreview, including the procedures and details of decisions made by Tomoaki Horiguchi, Chairman and Representative
Director , are in line with the above decision policies.
(ii) Matters concerning resolutions of the Annual General Meeting of Shareholders regarding remuneration, etc. for Directors
and Audit & Supervisory Board Members(a) At the 23rd Annual General Meeting of Shareholders held on June 21, 2022, it was resolved that the amount of monetary
remuneration (fixed remuneration and performance-linked remuneration) for Directors who are not Audit & Supervisory
Committee Members to be no more than 360 million yen per year (including no more than 36 million yen for Outside
Directors, but excluding employee salaries for Directors who concurrently serve as employees). The number of Directors
at the conclusion of the said Annual General Meeting of Shareholders was eight (including two Outside Directors).
Separately from this monetary remuneration, at the 23rd Annual General Meeting of Shareholders held on June 21, 2022,
it was resolved that the annual amount of restricted shares remuneration for Directors who are not Audit and Supervisory
Committee Members (excluding Outside Directors) should not exceed 36 million yen. The number of Directors(excluding Outside Directors) at the conclusion of the said Annual General Meeting of Shareholders was six.
(b) At the 23rdh Annual General Meeting of Shareholders held on June 21, 2022, it was resolved that the amount of monetary
remuneration (fixed remuneration only) for Directors who are Audit & Supervisory Committee Members should be no
more than 36 million yen per year including those for Outside Directors. The number of Directors who are Audit &Supervisory Committee Members at the conclusion of the said Annual General Meeting of Shareholders was three(including two Outside Directors).

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(iii) Total Amount of Remuneration of Directors
Amount paid
Director category(million yen)Amount paid by type (million yen)
PerformanceBasic
Restricted shareslinkedcompensation
remuneration
remuneration, etc.

Directors who are not
Audit & Supervisory
Committee Members

270.7

173.7

70.0

27.0

(of which, Outside
Directors)(13.5)(13.5)--

Number ofqualified
officers
8(2)

Directors who are Audit& Supervisory
24.5
24.5
3
Committee Members(of which, Outside(12.5)(12.5)
(- )
(- )
(2)
Directors)
Notes:
1. Executive bonuses are paid to Directors as performance-linked remuneration.
2. Performance-linked remuneration indicates the provision for the current period in provision for bonuses for
Directors (and other officers) for the fiscal year under review.
3. As non-monetary remuneration, restricted shares remuneration is provided to Directors, excluding Outside
Directors and Audit & Supervisory Committee Members. “Restricted shares remuneration” above indicates theamount recorded as expenses in the fiscal year under review.
4. 65 million yen was paid to six Directors who are not Audit and Supervisory Committee Members, excluding
Outside Directors, in the current fiscal year as bonuses for the 24th fiscal year. This compensation for Directors is
included in the 65 million yen of provision for bonuses for Directors (and other officers) for the 24th fiscal year
and is not included in the performance-linked remuneration.
(5) Matters regarding Outside Officers(i) Relationship between the Company and corporations which are significant concurrent positions• Director Kazutaka Okubo concurrently serves as the President and Representative Director of Okubo Associates Co.,
Ltd., President and Representative Director of SS Dnaform Co., Ltd., Outside Audit & Supervisory Board Member of
SEGA SAMMY HOLDINGS Inc., Outside Director of LIFULL Co., Ltd., Outside Director of SALA Corporation,
Outside Director of The Shoko Chukin Bank, Ltd., Outside Director of Musashi Seimitsu Industry Co., Ltd., and Outside
Audit & Supervisory Board Member of BrainPad Inc. There is no important relationship to be disclosed between the
Company and the said corporations.
• Director Keiichi Asai also serves as an Outside Director of Cosmo Energy Holdings Co., Ltd. However, there is nomaterial relationship that should be disclosed between the Company and the said other corporation. Audit & Supervisory
Board Member Hidetaka Tanaka concurrently serves as Auditor of Authorized NPO Japan Platform, and Executive
director of Japan Credit Rating Agency, Ltd., but there is no important relationship to be disclosed between the
Company and the said corporation.

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(ii) Major Activities during the Fiscal Year ended March 31,2024(a) Attendance at the Board of Directors and the Audit & Supervisory Board meetings
Board of Directors(held 18 times)
Attendance (times) Attendance Rate (%)

Audit & Supervisory Committee(held 13 times)
Attendance (times) Attendance Rate (%))

Director Kazutaka Okubo

18 / 18

100.0

-

-

Director Keiichi Asai

18 / 18

100.0

-

-

18 / 18100.0

18 / 18

100.0

Director (Audit & Supervisory
Committee Member)
Hidetaka Tanaka
Director (Audit & Supervisory
Committee Member)
Tsuneko Murata

13 / 13
13 / 13

100.0
100.0

Note. In addition to the above-mentioned Board of Directors, there were 3 written resolutions deemed to have been adopted by the Board of Directors Resolution
pursuant to Article 370 of the Companies Act and Article 27, Paragraph 2 of the Articles of Incorporation of the Company.

(b) Activities of Outside Directors and outline of duties performed in relation to expected roles Director Kazutaka Okubo attended all Board of Directors meetings and, as a Certified Public Accountant, provided
advice to ensure the appropriateness and reasonableness of decision-making based on his extensive knowledge in theareas of governance, compliance and CSR, as well as a wide range of recommendations for improving future corporate
value.
 Director Keiichi Asai has attended all Board of Directors meetings and provided valuable advice through his experience
in international business. In particular, he provided effective advice based on his insight into overall corporate
management and a wealth of knowledge about the energy industry. He is responsible for improving the corporate valueof the Company, deliberating important management matters in the Board of Directors, and supervising management.
 Director (Audit & Supervisory Committee Member) Hidetaka Tanaka attended all Board of Directors meetings andappropriately expressed opinions based on his expertise in international finance, wealth of business experience as acorporate manager, and extensive knowledge in the field of sustainability. He is responsible for enhancing the corporate
value of the Company, as well as deliberating important management matters in the Board of Directors and supervising
the management.
 Director (Audit & Supervisory Committee Member) Tsuneko Murata attended all Board of Directors meetings andappropriately expressed opinions based on her experience and wealth of knowledge of governance, legal affairs,
compliance and CSR in corporate management. She is responsible for enhancing corporate governance and thecorporate value of the Company, as well as deliberating important management matters in the Board of Directors andsupervising the management.

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5. Accounting Auditor(1) Name of the Accounting Auditor:

BDO Sanyu(2) Remuneration to be Paid to the Accounting Auditor
Amount paid (million yen)Amount of remuneration, etc. as an accounting auditor for the fiscal year
under review

41

Total amount of cash and other proprietary benefits that the Company
and its subsidiaries should pay to the accounting auditor

41

Note 1. In the audit agreement between the Company and the accounting auditor, the amount of audit fees for audits based on the Companies Act
and audits based on the Financial Instruments and Exchange Act is not clearly distinguished and cannot be substantially distinguished.
Therefore, the amount of remuneration, etc. for the fiscal year under review is the sum of these amounts.
Note 2. Reasons for the Audit & Supervisory Board's agreement on remuneration, etc. for the accounting auditor
Based on the “Practical Guidelines for Cooperation with Accounting Auditors” published by the Japan Audit & Supervisory Board
Members Association, the Audit & Supervisory Board has confirmed the results of the audit time and the amount of remuneration for each
audit item and hierarchy in the audit plan for the past fiscal year, as well as the status of the accounting auditor's performance of duties,
and examined the appropriateness of the audit plan and the amount of remuneration for the fiscal year under review. As a result, the Audit& Supervisory Board has given its consent to the remuneration, etc. of the accounting auditor under Article 399, Paragraph 1 of theCompanies Act.

(3) Policy on Decision of Dismissal and Refusal of Reappointment of the Accounting Auditor
When it is considered that the accounting auditor falls under any of the items stipulated in Article 340, Paragraph 1 of theCompanies Act and if deemed necessary, the Company will dismiss the accounting auditor subject to the unanimous consent ofAudit & Supervisory Board Members. In this case, the Audit & Supervisory Board Member selected by the Audit & Supervisory
Board will report the dismissal of the accounting auditor and the reason thereof at the first General Meeting of Shareholders
Meeting convened after the dismissal. In addition, the Audit & Supervisory Board will determine the content of a shareholder
resolution to be proposed at the General Meeting of Shareholders to dismiss or refuse the reappointment of the accounting
auditor when the Audit & Supervisory Board judges that there are problems with the qualifications, independency, and reliabilityof the accounting auditor.

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6. System for Ensuring Proper Business Operations and Overview of Operation Status(1) Systems 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 based on afair 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, andinternal rules, and whether corporate systems, organizations, and rules are proper and appropriate. The results of audits shallbe reported to the President and Representative Director. In addition, the Company will establish a “Corporate Ethics HelpLine” and establish an internal reporting system with various contact methods that thoroughly protects reporters to preventand promptly detect violations of laws and regulations and misconduct to improve the mobility of the self-cleaning 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 as necessary. The General Manager of the Administration Department shall be responsible forsupervising the storage and management of information.
(iii) Regulations concerning the management of risk of loss and other systems.
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 businessexecution have been delegated to the President and Representative Director and directors in charge of business execution ofother matters, necessary decisions shall be made based on the “Organization Regulations” or the “Regulations forManagement of Affiliated Companies” including group companies. These regulations shall also be timely and appropriately
reviewed based on revisions and abolition of laws and regulations and for the purpose of improving the efficiency of theexecution of duties.

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(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 shall be
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 the groupcompanies. Group companies' management plans are also formulated under the control of the Company, and the Company
provides timely and appropriate advice and guidance during the business period to improve the efficiency of groupcompanies' 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 thatany 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 theCompany and the group companies if such damage occurs. We will establish a system for reporting violations of laws andregulations or illegal acts that have occurred or may occur at group companies to the internal reporting desk or outside Audit& Supervisory Committee Members specified in the “Regulations on the Corporate Ethics Help Line”. We will strive forearly detection and resolution of these violations.
The Internal Audit Office shall conduct internal audits of all group companies to ensure the effectiveness and appropriatenessof systems, organizations, and regulations covering the overall operations of group companies. The results of 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 and appropriate
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 Committee in performing their duties.
In the event that Audit & Supervisory Committee requests that an employee be assigned to assist them in performing theirduties, such employee shall be assigned as an Audit & Supervisory Committee’s assistant. The assistant shall be appointed
from persons who have sufficient knowledge of accounting and law and shall perform their duties in accordance with the
instructions of the Audit & Supervisory Committee Members. In addition, the assistant shall also serve as the secretariat of
the Audit & Supervisory Committee.
(vii) Matters related to the independence of employees from directors in the preceding paragraph.
In order to ensure the independence of the assistant as set forth in the preceding paragraph, personnel changes and evaluationsof such employees shall be reported to Audit & Supervisory Committee in advance and their consent shall be obtained.
(viii) Matters related to ensuring the effectiveness of instructions given by Audit & Supervisory Committee to employees inParagraph (vi).
The assistant in Paragraph 6 will have the opportunity to accompany the Audit & Supervisory Committee Members to Boardof Directors meetings and other important meetings. They will also accompany the Audit & Supervisory Committee
Members and regularly exchange opinions with the President and Representative Director and accounting auditors. Directors
and other employees will cooperate with the Audit & Supervisory Committee Members to improve the auditing environment
so that the duties of the assistant are carried out smoothly.

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(ix) System for reporting to Audit & Supervisory Committee and other Members by Directors and employees of the Company
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 ofthe Board of Directors and other meetings attended by Audit & Supervisory Committee Members. Audit & Supervisory
Committee Members shall be permitted to attend any Company meetings they request to attend. All directors and employeesof the Company and its group companies shall report to the Audit & Supervisory Committee 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 Committee 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 actions 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 Committee Members.
(x)

Matters related to the policy regarding the handling of expenses and obligations arising from the execution of duties by Audit& Supervisory Committee Members.
The Company shall promptly respond to requests from Audit & Supervisory Committee Members for advance payment ofexpenses 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 Committee
The President and Representative Director will hold regular meetings with Audit & Supervisory Committee Members inorder to facilitate 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 andcooperate to ensure that audits by Audit & Supervisory Committee and audits by the accounting auditor are conductedefficiently 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 18 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 Committee Members
During the fiscal year under review, the Audit & Supervisory Committee Members held 13 Audit & Supervisory Committee
meetings and implemented audits based on the audit plan stipulated by the Audit & Supervisory Committee. In addition, theAudit & Supervisory Committee Members attended Board of Directors meetings and other important meetings and regularly
exchanged information with the President and Representative 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 the business from its subsidiaries in accordance with the “Regulationsfor 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 andsecuring supplies for people with difficulty in returning home.

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7. Policy on the Determination of Dividends of Surplus, etc.
The Group’s basic policy is to contribute to the interests of shareholders in a comprehensive manner while (i) striving to provide
long-term and stable profit returns to shareholders, (ii) securing investment funds to aggressively challenge businesses for future
growth, and (iii) strengthening financial stability.
In the case of dividends of surplus, principally the Company pays dividends twice a year through interim dividends and yearend dividends, which is stipulated in the Company’s Articles of Incorporation. The Company also provides in its Articles ofIncorporation that dividends of surplus may be determined by the Board of Directors pursuant to the provisions of Article 459,
Paragraph 1 of the Companies Act of Japan.
The year-end dividend for the fiscal year under review was 32 yen per share, 6 yen (including a commemorative dividend of 2
yen per share) higher than the dividend forecast announced on May 12, 2023. As the interim dividend for the fiscal year underreview was 26 yen, cash dividends per share for the year increased by 10 yen from 48 yen in the previous fiscal year to 58 yen.
The Company plans to pay an interim dividend of 33 yen per share and a year-end dividend of 33 yen per share for the next fiscal
year.

―40―

Consolidated Balance Sheet(As of March 31, 2024)(Unit: million yen)
Item

AmountItem

AssetsCurrent assets

AmountLiabilities
159,518

Current liabilities

24,767

Cash and time deposits

47,867

Accounts payable - trade2,810

Notes and accounts receivableand contract assets

2,138

Short-term borrowings

62

Real estate for sale

11,632Current portion of long-termborrowings

12,207

Real estate for sale in process

95,081

Income taxes payable

2,967

Costs of uncompleted
construction contracts

50

Provision for bonuses

279

Supplies

104

Other

2,680

Allowance for doubtful accounts

Provision for bonuses for
directors (and other officers)
Provision for fulfillment ofguarantees

-38

Other

44
6,314

Non-current assets

29,143

Property, plant and equipment

22,323

Bond

9,999

Buildings

10,038Long-term borrowings

57,272Land

11,029Retirement benefit liability

1

Other

1,254

Provision for share-based
remuneration

97

Intangible assets

1,193

Other

2,105

Goodwill

579

Total liabilities

94,244

Other

614

Investments and other assets

Non-current liabilities

80

69,477

Net assets

5,626

Shareholders' equity

89,889

3,523

Share capital

11,965

1,644

Capital surplus

6,433

Other

470

Retained earnings

71,725

Allowance for doubtful accounts-13

Treasury shares-233

Guarantee deposits
Deferred tax assets

Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Foreign currency translation
adjustment

Total assets

188,661

―41―

629
2
626

Share acquisition rights

30

Non-controlling interests

3,867

Total net assets

94,416

Total liabilities and net assets

188,661

Consolidated Statement of Income(From April 1, 2023 to March 31, 2024)(Unit: million yen)
Item

AmountNet sales

79,868

Cost of sales

53,462Gross profit
Selling, general and administrative
expenses
Operating profit

26,4058,804
17,600Non-operating income
Interest and dividend income

71

Collection and withdrawal fee

97

Subsidy income

40

Foreign exchange gains

125

Investment gain on equity method

12

Other

52

399

Non-operating expenses
Interest expenses

539

Loss from liquidation of affiliated companies

68

Other

17

Ordinary profit

625
17,374Extraordinary income
Government subsidy

41

41

Extraordinary loss
Loss on reduction of fixed assets

48

Loss on devaluation of investment securities

41

Impairment loss

30

Profit before income taxes

120
17,295

Income taxes - current

4,808

Income taxes - deferred

464

Profit5,272
12,023

Profit attributable to non-controlling interests

106

Profit attributable to owners of parent

11,917―42―

Consolidated Statement of Changes in Equity(From April 1, 2023 to March 31, 2024)(Unit: million yen)
Shareholders’ equity
Capitalsurplus

Share capital
Balance at beginning of
the period
Changes during period
Dividends of surplus
Profit attributable toowners of parent
Acquisition of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items
other than shareholders’equityTotal changes during
periodBalance at end of theperiod11,965Retainedearnings

6,445

TreasurysharesTotalshareholders’equity-270

80,43062,289-2,481-2,481

11,917

11,917

14

-0

-0

37

51

-27

0

-27

-

-12

9,435

37

9,459

11,965

6,433

71,725-233

89,889

Accumulated other comprehensive income
Total
Share
NonValuation
Foreignaccumulated acquisition controlling
difference on
currency
otherrightsinterests
available-fortranslation
comprehensive
sale securities
adjustment
incomeBalance at beginning of
the period
Changes during period
Dividends of surplus
Profit attributable toowners of parent
Acquisition of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent due totransactions with noncontrolling interests
Net changes in items
other than shareholders’equityTotal changes during
periodBalance at end of theperiod

2

269

271

60

3233

Total net
assets

83,965-2,481
11,917
-0
51

-27

0

357

357

-

633

991

0

357

357

-

633

10,450

2

626

629

30

3,867

94,416―43―

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
All subsidiaries are consolidated.
(1) Number of consolidated subsidiaries and names of principal subsidiaries
Number of consolidated subsidiaries
26 companies
Names of major consolidated subsidiaries
SF Building Support Inc.
SF Building Maintenance Inc.
Sun Frontier Space Management Inc.
SF Engineering Inc.
Sun Frontier Hotel Management Inc.
Sky Heart Hotel, Inc.
Sun Frontier Sado Inc.
Nihon Toshi Hotel Kaihatsu Co., Ltd.
Sun Frontier NY Co., Ltd.
Three companies acquired in the current consolidated fiscal year and two newly established companies are included in thescope of consolidation. One of these companies has been excluded from the scope of consolidation because it was dissolved
as a result of the merger. In addition, one company was excluded from the scope of consolidation due to liquidation.
Moreover, Nihon Toshi Hotel Kaihatsu Co., Ltd., shares of which were acquired in the current consolidated fiscal year, isconsolidated only in the non-consolidated balance sheet of the current consolidated fiscal year because the deemed date ofacquisition is the end of the current consolidated fiscal year.
(2) Name of companies the Company did not make into its subsidiaries since the company held the majority voting rights on its
own account.
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
1 company
Names of equity-method affiliates
Power Consulting Networks Co., Ltd.
(2) Name of the company which holds not less than 20% and not more than 50% of the voting rights on its own account and which
has not been an affiliated company
Not applicable.
(3) Special note regarding application of the equity method
Not applicable.

―44―3. Matters concerning Accounting Policies(1) Valuation standards and methods for significant assets(i) Valuation standards and methods for securities
Other securities (available-for-sale securities)
Shares other than those with no market price Stated at market (Valuation difference is reported as a component of
net assets. The cost of sale is calculated using the moving-averagemethod.)Shares with no market priceStated at cost using the moving-average method.
(ii) Inventories
1. Real estate for sale and Real estate for sale in Stated at cost determined by the specific identification method
process(The figures shown in the balance sheet have been calculated bywriting them down based on decline in profitability.)
Leased assets are amortized in accordance with property, plant andequipment standards.
2. Costs of uncompleted construction contracts Stated at cost determined by the specific identification method(The figures shown in the balance sheet have been calculated bywriting them down based on decline in profitability.)
3. Supplies
The most recent purchase cost method(The figures shown in the balance sheet have been calculated bywriting 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
are depreciated 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
The allowance for doubtful accounts is provided based on thehistorical write-off rate for ordinary receivables, the estimatedamount of irrecoverable debt based on recoverability of individual
cases for specified receivables such as doubtful accounts.
(ii) Provision for bonuses
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.
(iii) Provision for bonuses for directors (and other Provision for directors’ bonuses is provided based on the estimatedofficers)
amount to be paid during the current consolidated fiscal year.
(iv) Provision for fulfillment of guarantees
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 by taking into account the pastguarantee fulfillment rate.
(v) Provision for share-based remuneration
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
the share benefit obligation at the end of the current consolidated
fiscal year.

―45―

(4) Other significant matters for preparation of consolidated financial statements(i) Fiscal year of consolidated subsidiaries
Consolidated domestic subsidiaries and one overseas consolidated subsidiary close their books on March 31, and Sun
Frontier NY Co., Ltd., and nine other companies 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
The major performance obligations of the Company and its consolidated subsidiaries in their principal businesses withrespect to revenue arising from contracts with clients and the normal time at which such performance obligations are met(normal time at which revenue is recognized) are as follows.
(a) Real Estate Revitalization Business
Replanning Business
Replanning Business purchases existing office buildings and refurbishes buildings and facilities and attracts excellent
tenants to sell buildings with added value to clients in Japan and overseas. The business is obligated to deliver theseproperties based on real estate sales agreements with clients.
The performance obligation is fulfilled at the time the property is delivered and revenue is recorded at the time ofdelivery of the property.
(b) Real Estate Service Business(1) Property Management Business
Property Management Business enters into property management agreements with clients and is obligated toperform various operations related to real estate properties on behalf of clients, including maintenance andmanagement of properties and collection of rent for tenants.
The performance obligation is fulfilled at the time service provision based on the property management agreement,
and revenue is recorded over the contract period.
(2) Building Maintenance Business
Building Maintenance Business mainly is obligated to inspect building facilities by entering into various
agreements with clients or by entering into purchase orders and order contracts.
The performance obligation is fulfilled upon completion of the work under the agreement, and revenue is recordedat the time of issuance of the completion report for the work and construction.
(3) Sales Brokerage Business
Sales Brokerage Business stands between the buyer and the seller at the time of purchase and sale of real estateand is responsible for executing the sales agreement. Based on the intermediary agreement with the client, theCompany is responsible for a series of operations including negotiation and adjustment of transaction terms andconditions, delivery and explanation of important matters, preparation and delivery of the agreement, andinvolvement in procedure for performance of agreements.
The performance obligation is fulfilled at the time when the property related to the real estate sales contract
established by the intermediary agreement is delivered, and revenue is recorded at the time of delivery.
(4) Leasing Brokerage BusinessLeasing Brokerage Business stands between the lessee and the lessor when leasing real estate and is responsible
for concluding lease agreements. Based on intermediary agreements with clients, the business has obligations
related to a series of operations including negotiations and adjustments of transaction terms and conditions, delivery
and explanation of important matters, preparation and delivery of agreements, and involvement in procedures for
performance of agreements.
The performance obligation is fulfilled at the time when the real estate lease agreement for the property brokeredby the intermediary agreement is concluded, and revenue is recorded at the time of conclusion of the agreement.
(c) Hotel and Tourism Business(1) Hotel Operation Business
Hotel Operation Business is primarily responsible for the operation of hotels owned or leased by the Company andis obligated to provide hotel services for clients to stay or provide meals at restaurants located within the hotel.

―46―

These performance obligations are fulfilled at the time service is provided to clients, and revenue is recorded whenclients check in.
(2) Hotel Development Business
Hotel Development Business is a business engaging in the purchase of land and the construction of hotel buildings,
which are then sold to clients, and is obligated to deliver the property based on the real estate sales agreement withthe clients.
The performance obligation is fulfilled at the time the property is delivered and revenue is recorded at the time ofdelivery.
(d) Others(1) Overseas Development Business
Overseas Business is engaged in real estate development mainly for condominiums and houses in Southeast Asiaand sells these properties to clients in Japan and overseas. The business is obligated to deliver these properties
based on real estate sales agreements with clients.
The performance obligation is fulfilled at the time the property is delivered, and revenue is recorded at the time ofdelivery.
(2) Construction Business
Construction Business is engaged in renovation planning, repair and renovation related to renewal planning, repair
and renovation work for commercial buildings, telecommunications work, contracted interior construction for large,
medium, and small facilities, etc.
When control over goods or services is transferred to clients over a certain period, revenue is recorded over acertain period as the performance obligation to transfer goods or services to clients is fulfilled.
Contracts with a very short period between the transaction start date and the time when the performance obligation
is expected to be fulfilled, or contracts with a small order amount received per unit of construction are subject toalternative treatment. Revenue is not recognized over a certain period but is recognized when the performanceobligation is fulfilled.
(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
for voluntary 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 the respective balance sheet dates of the foreign subsidiaries and sales income and expenses are translated
into Japanese yen at the average exchange rate during the year. Translation differences are included in foreign currencytranslation adjustment and non-controlling interests in net assets.
(v)

Non-deductible consumption tax accounting
Non-deductible consumption tax and local consumption tax on assets are charged to income in the year in which they
are incurred.

(vi) Amortization methods and periods for goodwill
Goodwill is amortized on a straight-line basis over mainly 10 years.
(vii) Application of group tax sharing system
The Company and certain consolidated domestic subsidiaries apply the group tax sharing system.

―47―

(Change of Accounting Policies)
Change in the method of translating sales profits and expenses of overseas subsidiaries
Sales income and expense accounts of foreign subsidiaries were previously translated into Japanese yen at the foreign exchange
rates prevailing at the respective balance sheet dates of the foreign subsidiaries, but since the beginning of the current consolidated
fiscal year have been translated at the average rates of exchange for the period. This change was made in order to mitigate theimpact of temporary fluctuations in foreign exchange rates on the profits and losses of the Group’s subsidiaries and more
appropriately reflect the performance of overseas subsidiaries in the Consolidated Financial Statements, as the impact on the
profits and losses of subsidiaries is expected to become more important due to the expansion of overseas operations amid theincreasing range of exchange rate fluctuations resulting from the recent increasingly complex international situation.
As the effect of this change is insignificant, it has not been applied retroactively.
(Change of Presentation Method)
Consolidated Statement of Income“Loss on retirement of non-current assets,” which was included in “Other” of “Extraordinary loss” in the previous fiscal year, ispresented separately from extraordinary loss because it exceeded 10/100 of the total amount in the current consolidated fiscal year.
(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
11,632 million yen
Real estate for sale in process
95,081 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 expected future revenue of the business plan, that forms the basis for the value of the return to profit, includes future tenantrent, expected average unit price, occupancy rate, etc. of hotel rooms, and is formulated based on important assumptions suchas forecasts of future market conditions.
In the following fiscal years, 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:

12,354 million yen(2) Other information
If a hotel shows signs of impairment, the determination of impairment loss recognition is based on the hotel’s business plan
and a comparison of the estimated undiscounted future cash flows over the remaining economic useful lives of the hotel’smajor 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 average unit price and the occupancy
rate of hotel rooms, etc., as well as the assumption of future market conditions.
In the following fiscal year and thereafter, the net selling price may change due to changes in assumptions used in formulating
business plans in the 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.
(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―48―

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 157 million yen and 128,300 shares.
(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
Total

9,109 million yen
87,692 million yen
7,777 million yen
10,236 million yen
114,815 million yen(ii) Secured obligations are as follows:
Long-term borrowings

66,349 million yen(2) Accumulated depreciation of property, plant and equipment

5,780 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

50,535million yen-44 million yen

Total

50,490 million yen(4) Reduction entry amountThe reduced entry amount deducted from the acquisition cost of property, plant and equipment due to government subsidies, etc.
is as follows.
Buildings
241 million yen
Land
32 million yen(Notes to Consolidated Statement of Changes in Equity)(1) Total number of issued shares
Type of shares
Common shares

Beginning of thecurrent consolidated
fiscal year

Increase

48,755,500 shares

Decrease- shares- shares

End of the current
consolidated fiscal year
48,755,500 shares(2) Matters concerning treasury shares
Type of shares
Common shares

Beginning of thecurrent consolidated
fiscal year
237,169 shares

Increase
1,985 shares

Decrease
35,946 shares

End of the current
consolidated fiscal year
203,208 sharesNote. The number of treasury shares in common shares, includes the Company's share of 128,300 held by the trust account of the Employee Stock Ownership
Plan (J-ESOP).
(Summary of Reasons for Change)
The increase/increase in the number of treasury shares of common shares was mainly due to an increase of 1,934 shares due to the purchase of treasury sharesas a result of the loss of rights of the target who was granted shares as remuneration of restricted stock and an increase of 51 shares due to the purchase of
fractional shares, while there was a decrease of 35,946 shares due to the disposition of treasury shares for the purpose of granting as remuneration of restricted
stock.

―49―

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

Type of shares

Total dividends(million yen)

Dividends per share(yen)

May 16, 2023
Board of Directors

Common shares

1,216

November 9, 2023
Board of Directors

Common shares

1,265

Base date

Effective date

25.00

March 31, 2023

June 28, 2023

26.00

September 30,
2023

December 5,
2023

Note. The total amount of dividends decided at the Board of Directors Resolution 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).
The total amount of dividends decided at the Board of Directors Resolution on November 9, 2023 includes dividends of 3 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.
Resolution
May 21, 2024
Board ofDirectors

Source ofdividends

Type of shares

Total dividends(million yen)

Dividends per
share (yen)

1,553

32.00

Common shares Retained earnings

Base date

Effective date

March 31, 2024

June 26, 2024

Note 1. The total amount of dividends decided at the Board of Directors Resolution on May 21, 2024, includes dividends of 4 million yen for the Company's
shares held by the Employee Stock Ownership Plan (J-ESOP).
2. The amount of cash dividend per 2.1 shares includes 2.00 yen of commemorative dividend for the 25th anniversary of the Company's founding.

(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
2021 share acquisitionrights as stock option
Total

Type of shares
to be issued

Beginning of
the current
consolidated
fiscal year

Increase

End of thecurrent
consolidated
fiscal year

Decrease

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

-

-

-

-

-

5

-

-

-

-

-

5

-

-

-

-

-

4

-

-

-

-

-

14

-

-

-

-

30

(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 and short-term redemption periods. Derivative transactions are used to avoid interest rate fluctuation risks in 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, are exposed
to liquidity risks that restrict fund procurement due to changes in the stance of transactions with the group.
Corporate bonds are procured mainly for capital investment and do not bear interest.

―50―

(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 thebusiness conditions of major business partners with regard to trade receivables, strives to identify and mitigate early
concerns about collection of trade receivables due to deterioration in financial conditions and other factors.
B. Management of market risks (risks related to market price fluctuations)
The Company will not conduct derivative transactions for speculative purposes not stipulated in the derivative transaction
management 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
Since variable factors are incorporated in the calculation of the fair values of financial instruments, the value may fluctuate
by adopting different assumptions, etc.

(2) Fair value of financial instruments
On March 31, 2024, the book values of the consolidated balance sheet, fair values and differences between them are as follows.
Consolidated balance sheet
amount(million yen)

Market value(million yen)

Difference(million yen)

Corporate bonds

9,999

9,156

-843

Long-term borrowings (including
current portion)

69,47967,2882,191

Total liabilities

79,47976,444

3,035

Note 1. “Cash and time deposits” is omitted because the market value approximates the book value since cash and deposits are settled in a short period oftime.
Note 2. Shares with no market priceCategory

Consolidated balance
sheet value(million yen)

Shares of subsidiaries andaffiliates
Unlisted shares

43
155

Note 3. Scheduled repayment amount of short-term borrowings, corporate bonds, and long-term borrowings after the consolidated balance sheet dateCategory
Short-term borrowings
Corporate bonds
Long-term borrowings

Over 1 year Over 2 years Over 3 years Over 4 years
and within 2 and within 3 and within 4 and within 5 Over 5 years
years
years
years
years
(million yen)(million yen) (million yen) (million yen) (million yen)
62-

Within 1 year
(million yen)

-

-

-

-

9,999

-

12,207

12,762

18,100

5,149

9,465

11,794(3) Breakdown of market value of financial instruments by appropriate category, etc.
The market values of financial instruments are classified into the following three levels according to the inputs, observability
and materiality related to the calculation of market values.
Level 1 Market Value: Market value calculated based on quoted prices of the same asset or liability in an active market(unadjusted)
Level 2 Market Value: Market value calculated using direct or indirect observable inputs other than Level 1 inputs
Level 3 Market Value: Market value calculated using significant unobservable inputs
When multiple inputs that have a significant impact on the calculation of market value are used, market value is classified to thelowest level to which each of these inputs belongs that has the lowest priority for calculating market value.

―51―

Financial assets and liabilities not recognized in consolidated balance sheet at market valueMarket value (million yen)
Category
Level 1

Level 2

Level 3

Total

Corporate bonds

-

9,156

-

9,156

Long-term borrowings-

67,288-67,288Note. Explanation of valuation techniques used for market value calculation and input related to market value calculation
Long-term borrowings
These market values are calculated by the discounted present value method based on the total amount of principal and interest and the interest ratetaking into account the remaining period of the debt and credit risk and are classified as Level 2 market values.
Corporate bonds
The fair value of corporate bonds issued by the Company is calculated using the discounted present value method based on the total amount ofprincipal and interest and the interest rate that takes into account the remaining term of the bonds and credit risk and is classified as Level 2 fairvalue.

(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, 2024, net rental income from such rental properties was 157 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.
Consolidated balance sheet amount (million yen)
Market 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
(million yen)current consolidated fiscal year
Increase/Decrease
consolidated fiscal year
8,225

435

8,660

11,528Note 1. The amount recorded in the Consolidated balance sheet is the acquisition cost excluding the accumulated depreciation.
Note 2. Among increases/decreases during the fiscal year under review, the major increase was due to new acquisitions (665 million yen) and the major
decreases were due to retirement (31 million yen) and depreciation (199 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 Revenue Recognition)
1. Breakdown of information regarding revenue generated from contracts with clients(Unit: million yen)
Reportable segments
Real Estate
Revitalization
Business
Real Estate
Revitalization
Business net sales
Hotel Development
Business net sales
Hotel Operation
Business net sales
Other Business net
sales
Revenue fromcontracts with clients
Other income(Note 2)
Net sales to externalclients

Real Estate
ServiceBusiness

Hotel andTourism
Business

Total

Other
(Note 1)

Total

46,631--

46,631-

46,631

-

-

5,270

5,270

-

5,270

-

-

11,38011,380-11,380

30

8,171

163

8,365

2,363

10,72846,662

8,171

16,814

71,6472,363

74,010

4,358

1,377

121

5,857

-

5,857

51,020

9,548

16,93677,504

2,363

79,868Note 1. The “Other” segment is a business segment that is not included in the reportable segment and includes Overseas Development Business andConstruction Business.
Note 2. Other income includes rental income, etc. under Accounting Standard for Lease Transactions (ASBJ Statement No. 13).

―52―

2. Basic information to understand the revenue generated from contracts with clients
Basic information for understanding revenue is as described in “Notes Regarding Significant Accounting Policies for the
Preparation of Consolidated Financial Statements 3. Matters concerning Accounting Policies (4) Other significant matters for
preparation of consolidated financial statements (ii) Standards for recording significant revenues and expenses.”
3. Information to understand the amount of revenue for the current period and subsequent periods(1) Balance of contract assets and contract liabilities, etc.
The Company’s contract balance is as follows.
(Million yen)
Current consolidated fiscal
year(March 31, 2024)
Receivables arising from contracts with clients
1,560(at beginning of the period)
Receivables arising from contracts with clients
1,938(at end of the period)
Contract assets (at beginning of the period)

35

Contract assets (at end of the period)

134
1,649

Contract liabilities (at beginning of the period)

674

Contract liabilities (at end of the period)

Note 1. Receivables arising from contracts with clients
Receivables arising from contracts with clients are mainly uncollected proceeds for room charges, etc. and rights to clients
arising from the performance of contracts in Real Estate Service Business. The collection period for these receivables ismainly within one to three months.
Note 2. Contract assets
Contract assets relates to the rights to clients arising from the receipt of payments from clients in the course of
performance recognized in connection with contract work agreements in Construction Business. Contract assets forcompleted work are recognized in advance and are transferred to trade receivables upon acceptance by clients andinvoicing.
Contract assets are included in notes receivable, accounts receivable, and contract assets in Consolidated Balance Sheet.
Note 3. Contract liabilities
Contract liabilities mainly consist of earnest money received at the time of execution of sales contracts in Replanning
Business, consideration received prior to performance under construction contracts in Construction Business, and room
charges received in advance, etc. in Hotel Operation Business. These are transferred to income when the Company
performs under contracts.
Contract liabilities are included in Other current liabilities in Consolidated Balance Sheet.
Of the contract liabilities at the beginning of current consolidated fiscal year, the amount recognized in revenue in current
consolidated fiscal year was 1,612 million yen.
The increase in contract assets in current consolidated fiscal year was mainly due to an increase in construction orders.
The decrease in contract liabilities in current consolidated fiscal year was mainly due to a decrease in deposit balance in
Replanning Business.
(Notes on Per Share Information)(1) Net assets per share(2) Earnings per share(3) Fully diluted earnings per share

1,864.36 yen
245.50 yen
230.74 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 128,300 shares and number ofshares at end of year is 128,300 shares.

―53―

(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 specified joint real estate ventures 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 Voluntary Partnership
Agreement, and also receives compensation from voluntary partnership for entrusting building management in a lump sum.
The latest financial position for the current consolidated fiscal year is as follows.
Fiscal year under review(March 31, 2024)
13 unions

Number of Special Purpose Companies
Total assets as of the latest balance sheet date (simple sum)

7,725 million yen

Total liabilities (simple sum)203 million yen

For the fiscal year under review, the total amount of assets and liabilities of one of the above units is not includedin the total amount because the closing date has not arrived yet.
(2) Transaction amount with the special purpose company subject to disclosure
Major transaction amountTransfer amount of real estate(Note 1)

1,758 million yen

Main profit and loss
Item
Net sales

Amount
1,758 million yen

Note 1. Transfer amount of real estate is stated at the transfer price at the time of transfer. The transfer amount of real estate isshown in net sales in the Consolidated Statement of Income.
Note 2. Transactions other than above have been omitted due to lack of importance.
(Note on Significant Subsequent Events)
Not applicable.
(Other Note)
Not applicable.

―54―

Non-consolidated Balance Sheet(As of March 31, 2024)(Unit: million yen)
Item

AmountItem

AssetsCurrent assets
Cash and time deposits

AmountLiabilities
131,782

Current liabilities

Account receivable

448

Real estate for sale

11,612

Accounts payable - trade
Current portion of long-termborrowings
Income taxes payable

Real estate for sale in process
Short-term advance to affiliatedcompany
Current portion of long-term loans toaffiliates
Other

83,087

Deposits payable

1,003

Provision for bonuses

151

Provision for bonuses for directors(and other officers)
Other

70

Allowance for doubtful accounts

32,97919,083

908
1,797
-54

1,526
11,377

2,169

2,104

1,683

Non-current liabilities

64,505

Non-current assets

37,189Corporate bonds

9,999

Property, plant and equipment

17,981Long-term borrowings

52,599Buildings

7,659

Long-term deposits received

1,755

Land

10,175

Provision for share-based remuneration

90

Other

146

Other

60

Intangible assets

541

Other

541

Investments and other assets
Subsidiaries’ and affiliates’ stocks

18,666

Total liabilities

83,589Net assets

15,278

Shareholders' equity

85,350380

Share capital

11,965

Deferred tax assets

1,203

Capital surplus

6,464

Other

1,897

Long-term loans to affiliates

Allowance for doubtful accounts-93

Capital reserve
Other capital surplus
Retained earnings
Legal reserve
Other retained earnings
Retained earnings brought
forwardTreasury shares
Valuation and translation adjustments
Valuation difference on available-forsale securities
Share acquisition rights

Total assets

168,972

―55―

6,449
14
67,154
13
67,141
67,141-233
2
2
30

Total net assets

85,382

Total liabilities and net assets

168,972

Non-consolidated Statement of Income(From April 1, 2023 to March 31, 2024)(Unit: million yen)
Item

AmountNet sales

52,929

Cost of sales

34,076Gross profit

18,853

Selling, general and administrative expenses

6,909

Operating profit

11,944Non-operating income
Interest and dividend income

54

Foreign exchange gains

131

Reversal of allowance for doubtful account

9

Other

10

206

Non-operating expenses
Interest expenses

481

Provision of allowance for doubtful accounts

46

Other

8

Ordinary profit

536
11,614Extraordinary loss
Loss on retirement of non-current assets

25

Investments in subsidiaries unrealized loss

23

Profit before income taxes

48
11,565

Income taxes - current

3,783

Income taxes - deferred-171

Profit

3,611
7,953

―56―

Non-consolidated Statement of Changes in Equity(From April 1, 2023 to March 31, 2024)(Unit: million yen)
Shareholder’s equity
Capital surplus
Share capital
Balance at
beginning of theperiodChanges during
periodDividends ofsurplusProfitPurchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders’equityTotal changes
during period
Balance at end of
the period

Other
capitalsurplusCapitalreserve

11,965

6,449

-

14

13

61,66961,682-2,481-2,481

7,953

7,953

-

-

14

14

-

5,471

5,471

11,965

6,449

14

6,464

13

67,141

67,154

ShareacquisitionrightsNet assets
total

Treasury shares-270

Valuation and translation difference

Valuation
Total valuation
Total shareholders’difference ontranslation
equityavailable-for-sale anddifference
securities
79,8271

1

30

79,859-2,481-2,481

7,953

7,953

-0

-0

-0

37

51

51

ProfitPurchase oftreasury shares
Disposal oftreasury shares
Net changes in
items other thanshareholders’equityTotal changes
during period
Balance at endof the period

6,449

14

Shareholders’ equity

Balance at
beginning of theperiodChanges during
periodDividends ofsurplusTotal
capitalsurplusRetained earnings
Other retained
earnings
Total retained
Legal reserveearnings
Retained earnings
brought forward

0

0

-

0

37

5,522

0

0

-

5,523

-233

85,3502230

85,382―57―

Notes to Non-consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Matters Concerning Significant Accounting Policies)
1. Valuation standards and methods for assets(1) Valuation standards and methods for securities(i) Shares of subsidiaries and affiliates
Stated at cost using the moving-average method.
(ii) Other securities (available-for-sale securities)
Shares other than those with no market
price, etc.
Shares with no market price, etc.

Stated at market (Valuation difference is reported as a component of
net assets. The cost of sale is calculated using the moving-averagemethod.)Stated at cost using the moving-average method.

(2) Assessment criteria and assessment methods of Inventories
Real estate for sale and Real estate for saleStated at cost determined by the specific identification method
in process(The figures shown in the balance sheet have been calculated bywriting them 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
are depreciated 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 overthree years on a straight-line basis.
The straight-line method is used.
Software for internal use is amortized on a straight-line basis overthe estimated internal useful life (5 years).

―58―

3. Standards for provisions(1) Allowance for doubtful accounts(2) Provision for bonuses(3) Provision for bonuses for directors(and other officers)(4) 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 the current fiscal
year.
Provision for directors’ bonuses is provided based on the estimated amountto be paid during the current fiscal year.
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 the share benefit
obligation at the end of the current fiscal year.

4. Method of recording revenue and expenses
The major performance obligations in principal businesses related to revenue arising from contracts with the Company’s clients andthe normal time at which such performance obligations are satisfied (normal time at which revenue is recognized) are as follows.
(a) Real Estate Revitalization Business
Replanning Business
Replanning Business purchases existing office buildings, refurbishes buildings and facilities, and attracts excellent tenants to sell
added value to clients in Japan and overseas. The Company is obligated to deliver these properties based on real estate sales
agreements with clients.
The performance obligation is fulfilled at the time the property is delivered and revenue is recorded at the time of delivery of theproperty.
(b) Real Estate Service Business(1) Property Management Business
Property Management Business enters into property management agreements with clients and is obligated to perform various
operations related to real estate properties on behalf of clients, including maintenance and management of properties andcollection of rent from tenants.
The performance obligation is fulfilled at the time service is provided based on the property management agreement, andrevenue is recorded over the contract period.
(2) Sales Brokerage Business
Sales Brokerage Business stands between the buyer and the seller at the time of purchase and sale of real estate and is
responsible for executing the sales agreement. Based on the intermediary agreement with the client, the Company is
responsible for a series of operations including negotiation and adjustment of transaction terms and conditions, delivery andexplanation of important matters, preparation and delivery of the agreement, and involvement in the execution of theagreement.
The performance obligation is fulfilled at the time when the property related to the real estate sales agreement established by
the intermediary contract is delivered, and revenue is recorded at the time of delivery.
(3) Leasing Brokerage BusinessLeasing Brokerage Business is a business that stands between the lessee and the lessor when leasing real estate and is
responsible for concluding lease agreements. Based on intermediary agreements with clients, the business is responsible fora series of operations including negotiations and adjustments of transaction terms and conditions to conclude agreements,
delivery and explanation of important matters, preparation and delivery of agreements, and involvement in procedures for
performance of agreements.
The performance obligation is fulfilled at the time when the real estate lease agreement for the property brokered by theintermediary agreement is concluded, and revenue is recorded at the time of conclusion of the agreement.
(c) Hotel and Tourism Business
Hotel Development Business
Hotel Development Business is a business engaging in the purchase of land and the construction of hotel buildings, which arethen sold to clients, and is obligated to deliver the property based on the real estate sales agreement with the clients.
The performance obligation is fulfilled at the time the property is delivered and revenue is recorded at the time of delivery.

―59―

(d) Others
Construction Business
Construction Business is engaged in renovation planning, repair and renovation work for commercial buildings,
telecommunications work and contracted interior construction for large, medium, and small facilities, etc.
When control over goods or services is transferred to clients over a certain period, revenue is recorded over a certain period
as the performance obligation to transfer goods or services to clients is fulfilled.
Contracts with a very short period between the transaction start date and the time when the performance obligation is expected
to be fulfilled, or construction work for which the order amount per construction work is insignificant are subject to alternative
treatment in which revenue is not recognized over a certain period but is recognized when the performance obligation is
fulfilled.
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) Non-deductible consumption tax accounting
Non-deductible consumption tax on assets is charged to income in the year in which it is incurred.
(3) Application of group tax sharing system
Group tax sharing system is applied.
(Notes on Changes in Presentation Methods)
Non-consolidated Statement of Income“Loss on retirement of non-current assets,” which was included in “Other” of “Extraordinary loss” in the previous fiscal year, ispresented separately from extraordinary loss because it exceeded 10/100 of the total amount in the current consolidated fiscal year.
(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
11,612 million yen
Real estate for sale in process
83,087 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 expected future revenue of the business plan, that forms the basis for the value of the return to profit, includes futuretenant rent, and is formulated based on important assumptions such as forecasts of future market conditions.
In the following fiscal years, 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 financial statements for the current business year
Non-current assets related to Hotel Development Business 9,332 million yen(2) Other information
The non-current assets related to Hotel Development Business are leased to consolidated subsidiaries. The rent is determinedbased on assumptions such as the average unit price and occupancy rate of hotel rooms based on future market forecasts under
the long-term management policy. If signs of impairment are shown, the determination of impairment loss recognition is basedon the rental contracts and a comparison of the estimated undiscounted future cash flows over the contract period with thecarrying amounts of the hotels.
In the following fiscal year and thereafter, the assumptions used in calculating rents may change in the events that were notanticipated when the rental contracts were formulated. This may have a significant impact on the non-current assets amounts
recognized in the financial statements for the following fiscal year and thereafter.

―60―

(Additional Information)
Change in holding purpose of assets
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 157 million yen and 128,300 shares.
(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
Total
(ii) Secured liabilities are as follows:
Long-term borrowings

9,109 million yen
82,229 million yen
7,298 million yen
10,100 million yen
108,737 million yen
63,362 million yen(2) Accumulated depreciation of property, plant and equipment

1,407 million yen(3) Monetary claims and monetary obligations to subsidiaries and affiliates (excluding those classified)
Short-term monetary receivables
208 million yen
Short-term monetary debt
238 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.
Sun Frontier Sado Inc.
SF Communication Inc.
Hotel Osado Co., Ltd(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
Non-operating transactions
Non-operating income―61―

3,250 million yen
342 million yen
26 million yen
316 million yen

514 million yen
1,003 million yen
55million yen

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

Beginning of thecurrent fiscal year
237,169 shares

Increase
1,985 shares

Decrease
35,946 shares

End of the current
fiscal year
203,208 sharesNote. The number of treasury shares in common shares, includes the Company’s share of 128,300 held by the trust account of the Employee Stock Ownership
Plan (J-ESOP).
(Summary of Reasons for Change)
The increase/decrease in the number of treasury shares of common shares was mainly due to an increase of 1,934 shares due to the purchase of treasury sharesas a result of the loss of rights of the target who was granted shares as remuneration of restricted stock and an increase of 51 shares due to the purchase of
fractional shares, while there was a decrease of 35,946 shares due to the disposition of treasury shares for the purpose of granting as remuneration of restricted
stock.

(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
636
Disallowed unrealized loss on shares of affiliates
735
Accrued enterprise tax
114
Allowance for doubtful accounts
33
Taxes and duties
65
Accounts payable
75
Accrued expenses
38
Provision for bonuses
46
Long-term accounts payable
17
Excess depreciation
55
Disallowed unrealized loss on land
8
Other
101
Subtotal
1,928
Valuation allowance-716
Deferred tax assets total
Deferred tax liabilities
Valuation difference on available-for-sale securities
Other
Deferred tax liabilities total

1,211

Deferred tax assets net

1,203

1
6
7

―62―

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

Company
name

Percentage ofvoting rights
held

Relationshipwith relatedpartiesLeasetransaction

Subsidiary

Sun Frontier
Possession
Hotel
Direct 100%
Management
Indirect Inc.

Contents of thetransaction

Transaction
amountReceipt of interest(Note 1 (i))

9Management
Concurrent
appointment
posts

Debt guarantee(Note 1 (ii))

3,250

Capital recovery

2,000

Loan offunds
Debt
guarantee

Subject
Current
liabilities
Other(Advancesreceived)
Current assets
Other(Advance)
Long-termloans toaffiliates

Year-end balance

39

0

-

Note 1. Transaction terms and policy for determining transaction terms(i) Interest rates for loans are determined by taking market interest rates into consideration.
(ii) 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

1,757.95 million yen(2) Earnings per share

163.85 million yen(3) Fully diluted earnings per share

154.00 million 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 shares for the period and year-end held by the trust account is 128,300 shares and number of shares at end ofyear is 128,300 shares.

(Notes on Significant Subsequent Events)
Not applicable.

―63―

Audit Report on Consolidated Financial Statements
Independent Auditor's Report
May 14, 2024
To the Board of Directors of Sun Frontier Fudousan Co., Ltd.:BDO Sanyu
Tokyo Office, Japan
Hitoshi Torii
Designated Partner
Engagement Partner
Certified Public Accountant
Tomoharu Takashima
Designated Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statement ofincome, the consolidated statement of changes in equity and the notes to consolidated financial statements of Sun Frontier FudousanCo., Ltd. (the “Company”) and its consolidated subsidiaries (collectively referred to as the “Group”) for the fiscal year from April 1,
2023 to March 31, 2024 in accordance with Article 444, Paragraph 4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position and the results of operations of the Group for the period, for which the consolidated financial statements were prepared, in
accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We
are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
Other information consists of the business report and supplementary schedules. Management is responsible for the preparation anddisclosure of the other information. The Audit & Supervisory Committee Members and the Audit & Supervisory Committee areresponsible for overseeing the Directors’ performance of duties within the maintenance and operation of the reporting process for theother information.
The scope of our opinion on the financial statements does not include the other information, and we do not provide our opinion on theother information.
Our responsibility for the audit of the financial statements is to read the other information, and, in doing so, consider whether there isa material inconsistency between the other information and the financial statements or our knowledge obtained during audit, and giveattention to whether there are any other indications of material errors in the other information aside from such material inconsistency.

―64―

If, based on the audit work performed, we determine that there is a material misstatement in the other information, we are required toreport such facts.
We have no matters to report with respect to the other information.
Responsibilities of Management, the Audit & Supervisory Committee Members and the Audit & Supervisory Committee for
the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance withaccounting principles generally accepted in Japan, including the design, implementation and maintenance of such internal control as
management determines is necessary to enable the preparation and fair presentation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare theconsolidated financial statements with the assumption of the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern in accordance with accounting principles generally accepted in Japan.
The Audit & Supervisory Committee Members and the Audit & Supervisory Committee are responsible for overseeing the Directors’
performance of their duties including the design, implementation and maintenance of the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion on the consolidated financial
statements based on our audit from an independent point of view. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, anddesign and perform audit procedures responsive to those risks. The procedures selected to be applied depend on the auditor’s
judgment. In addition, obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

•

Obtain, in making those risk assessments, an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, while the objective of the audit of the consolidated financial statements is
not to express an opinion on the effectiveness of the Group’s internal control.

•

Evaluate the appropriateness of accounting policies used by management and their method of application, as well as thereasonableness of accounting estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’s use of the going concern basis for preparing the consolidated financial
statements and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if
such disclosures are inadequate, to express a qualified opinion with exceptions on the consolidated financial statements. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.

•

Evaluate whether the presentation and disclosures in the consolidated financial statements are in accordance with accounting
standards generally accepted in Japan, the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within theGroup to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision andperformance of the group audit. We remain solely responsible for our audit opinion.

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We communicate with the Audit & Supervisory Committee Members and the Audit & Supervisory Committee regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit & Supervisory Committee Members and the Audit & Supervisory Committee with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence, and where applicable, if measures have been taken to eliminate
disincentives or applied safeguards to reduce them to an acceptable level, the details of those measures.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and the designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to
the provisions of the Certified Public Accountants Act of Japan.

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Audit Report on the Non-consolidated Financial Statements
Independent Auditor's Report
May 14, 2024
To the Board of Directors of Sun Frontier Fudousan Co., Ltd.:BDO Sanyu
Tokyo Office, Japan
Hitoshi Torii
Designated Partner
Engagement Partner
Certified Public Accountant
Tomoharu Takashima
Designated Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the non-consolidated financial statements, which comprise the non-consolidated balance sheet, the non-consolidated
statement of income, the non-consolidated statement of changes in equity and the notes to non-consolidated financial statements, andthe supplementary schedules (the “financial statements and others”) of Sun Frontier Fudousan Co., Ltd. (the “Company”) as at March
31, 2024 and for the fiscal year from April 1, 2023 to March 31, 2024 in accordance with Article 436, Paragraph 2, Item 1 of theCompanies Act.
In our opinion, the financial statements and others referred to above present fairly, in all material respects, the financial position andthe results of operations of the Company for the period, for which the financial statements and others were prepared, in accordancewith accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements and Others section of our report. We
are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the non-consolidated
financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Other Information
Other information consists of the business report and supplementary schedules. Management is responsible for the preparation anddisclosure of the other information. The Audit & Supervisory Committee Members and the Audit & Supervisory Committee areresponsible for overseeing the Directors’ performance of duties within the maintenance and operation of the reporting process for theother information.
The scope of our opinion on the financial statements does not include the other information, and we do not provide our opinion on theother information.

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Our responsibility for the audit of the financial statements is to read the other information, and, in doing so, consider whether there isa material inconsistency between the other information and the financial statements or our knowledge obtained during audit, and giveattention to whether there are any other indications of material errors in the other information aside from such material inconsistency.
If, based on the audit work performed, we determine that there is a material misstatement in the other information, we are required toreport such facts.
We have no matters to report with respect to the other information.
Responsibilities of Management, the Audit & Supervisory Committee Members and the Audit & Supervisory Committee for
the Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and others in accordance withaccounting principles generally accepted in Japan, including the design, implementation and maintenance of and for such internal
control as management determines is necessary to enable the preparation and fair presentation of financial statements and others thatare free from material misstatement, whether due to fraud or error.
In preparing the financial statements and others, management is responsible for assessing whether it is appropriate to prepare thefinancial statements and others with the assumption of the Company’s ability to continue as a going concern, disclosing matters related
to going concern, as applicable in accordance with accounting principles generally accepted in Japan.
The Audit & Supervisory Committee are responsible for overseeing the Directors’ performance of their duties including the design,
implementation and maintenance of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements and Others
Our objectives are to obtain reasonable assurance about whether the financial statements and others as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion on the financial statements andothers based on our audit from an independent point of view. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basisof these financial statements and others.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:•

Identify and assess the risks of material misstatement of the financial statements and others, whether due to fraud or error, anddesign and perform audit procedures responsive to those risks. The procedures selected to be applied depend on the auditor’s
judgment. In addition, obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

•

Consider, in making those risk assessments, internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, while the objective of the audit of the financial statements and others is not to express an opinion
on the effectiveness of the Company’s internal control.

•

Evaluate the appropriateness of accounting policies used by management and their method of application, as well as thereasonableness of accounting estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’s use of the going concern basis for preparing the financial statements andothers and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in the financial statements and others or, if suchdisclosures are inadequate, to express a qualified opinion with exceptions on the financial statements and others. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.

•

Evaluate whether the presentation and disclosures in the financial statements and others are in accordance with accounting
standards generally accepted in Japan, the overall presentation, structure and content of the financial statements and others,
including the disclosures, and whether the financial statements and others represent the underlying transactions and events in amanner that achieves fair presentation.

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We communicate with the Audit & Supervisory Committee Members and the Audit & Supervisory Committee regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit & Supervisory Committee Members and the Audit & Supervisory Committee with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence, and where applicable, if measures have been taken to eliminate
disincentives or applied safeguards to reduce them to an acceptable level, the details of those measures.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and the designated engagement partners do not have any interest in the Company which is required to be disclosed pursuant
to the provisions of the Certified Public Accountants Act of Japan.

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Audit Report of the Audit & Supervisory Committee
Audit Report
The Audit & Supervisory Committee, having received a report from each Audit & Supervisory Committee Member on the method andresults of his or her audit on the performance of duties of directors during the 25th fiscal year from April 1, 2023 to March 31, 2024,
and, as a result of discussion, does hereby report the results of audit as follows:

1. Auditing method and its contents
The Audit and Supervisory Committee regularly received reports on the details of the resolutions of the Board of Directors
concerning the matters listed in Article 399-13, Paragraph 1, Item 1 (b) and (c) of the Companies Act of Japan and the status of theconstruction and operation of the system established based on such resolutions (internal control system) from Directors and employees,
etc., requested explanations as necessary, expressed opinions, and conducted audits by the method described below.
(i) Audit & Supervisory Committee Members attended important meetings, received reports from Directors and employees onmatters related to the execution of their duties, requested explanations as necessary, inspected important approval
documents, etc., and investigated the status of business and assets at the head office and major business offices inaccordance with the standards for Audit & Supervisory Committee Audits established by the Audit & Supervisory
Committee and in accordance with auditing policies and the division of duties, in cooperation with the internal audit
department of the Company. With regard to subsidiaries, the Audit & Supervisory Committee worked to communicate andexchange information with the Directors and Audit & Supervisory Committee Members, etc. of the subsidiaries, andreceived reports on the business from the subsidiaries as necessary.
(ii) We monitored and verified whether or not the accounting auditor has properly carried out audits while maintaining its
independence. We also received reports from the accounting auditor on the performance of its duties and have asked it toprovide explanations when necessary. In addition, we sought explanations as necessary, upon having received notice fromthe accounting auditor that the “systems for ensuring that the performance of the duties is being carried out properly”(matters stipulated in each item of Article 131 of the Regulation on Corporate Accounting) have been developed inaccordance with the “Quality Control Standard for Audit” (Business Accounting Council), etc. With regard to key audit
matters (KAMs), the Audit & Supervisory Committee consulted with BDO Sanyu and received reports on theimplementation status of the audit and requested explanations as necessary.
Based on the methods described above, we reviewed the business report and supplementary schedules, the Non-consolidated Financial
Statements (Non-consolidated balance sheet, Non-consolidated statement of income, Non-consolidated statement of changes in equity,
and Notes to non-consolidated financial statements), supplementary schedules attached thereto, and the Consolidated Financial
Statements (Consolidated balance sheet, Consolidated statement of income, Consolidated statement of changes in equity, and Notes toconsolidated financial statements).

2.

Audit Results(1) Audit results of the Business Report, etc.
(i) We deem that the Business Report and supplementary schedules attached thereto fairly represent the situation of theCompany in accordance with relevant laws and regulations, and the Articles of Incorporation.
(ii) We deem there to be no misconduct or material fact constituting a violation of relevant laws and regulations, or the Articles
of Incorporation, regarding the Directors in performing their duties.
(iii) We deem that resolutions of the content of the Business Report and Board of Directors regarding the internal control
systems are appropriate in content. We also deem there to be no issues to be pointed out with respect to the Directors in
performing their duties regarding the internal control systems.
(2) Audit results of the Non-consolidated Financial Statements and supplementary schedules attached thereto
We deem that the methods and results of audits performed by the accounting auditor, BDO Sanyu are appropriate.

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(3) Audit results of the Consolidated Financial Statements
We deem that the methods and results of audits performed by the accounting auditor, BDO Sanyu are appropriate.
May 15, 2024
Sun Frontier Fudousan Co., Ltd. Audit & Supervisory Committee
Audit & Supervisory Committee Member (full-time) Shinichi Tominaga

Note.

Outside Audit & Supervisory Committee Member

Hidetaka Tanaka

Outside Audit & Supervisory Committee Member

Tsuneko Murata

Audit and Supervisory Committee Members Hidetaka Tanaka and Tsuneko Murata are Outside Directors as stipulated in
Article 2, Item 15 and Article 331, Paragraph 6 of the Companies Act.

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