English translation
February 10, 2022

Consolidated Financial Results for FY2022-3Q(Fiscal Year Ended December 31, 2021)
Company name:

Sun Frontier Fudousan Co., Ltd.

Stock listing:Tokyo Stock Exchange 1st Section

Code number:

8934

URL:

https://www.sunfrt.co.jp

Address:

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

Representative:

Seiichi Saito, President

Inquiries:

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

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

February 14, 2022
Yes
None
*Amounts are rounded down to million yen.

1. Consolidated Performance for FY2022 3Q (April 1, 2021 to December 31, 2021)(1) Consolidated Operating Results(Percentage figures indicate year-on-year changes.)

Net Sales

Operating Profit

Ordinary Profit

Million yen%

Million yen%

Million yen%

3Q FY2022¥61,61832.7¥12,15172.8¥11,983

82.6

3Q FY2021¥46,442(15.0)¥7,032(48.1)¥6,562(50.6)(Note) Comprehensive income: For the nine months ended December 31, 2021: ¥7,786 million (+100.2 %)For the nine months ended December 31, 2020: ¥3,890 million (-56.4 %)Profit Attributable to

Fully Diluted

Earnings per ShareOwners of Parent

Earnings per Share

Million yen

%

yen

yen

3Q FY2022¥7,51985.3¥154.40¥154.26

3Q FY2021¥4,059(54.8)¥83.35¥83.31-1

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

Total Assets

December 31, 2021
March 31, 2021
(Reference)Total Equity:

Net Assets

Equity Ratio

yen

yen

¥131,278¥74,500

54.3 %¥127,485¥69,77352.3 %

As of December 31, 2021: ¥ 71,334 million
As of March 31, 2021: ¥ 66,627 million

2. Cash Dividends
Cash Dividends per Share (Yen)
1st Quarter

2nd Quarter

3rd Quarter

Year-end

FY2021-0.00-

FY2022

-

21.00

-

FY2022 (Forecast)

Annual Total

42.00

42.00

21.00

42.00

(Note) Changes from the latest released dividend forecasts: None3.

Forecast for Consolidated Financial Results for FY2022(April 1, 2021 to March 31, 2022)(Percentage figures indicate year-on-year changes.)

Net Sales
FY2022

Operating Profit

Ordinary Profit

Profit Attributable toEarnings

Owners of Parent

per Share

Million yen%

Million yen%

Million yen%

Million yen%

yen¥76,000

27.4¥12,000

51.7¥11,500

52.8¥7,40073.1¥151.95(Note) Changes from the latest released performance: None

※ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes
in scope of consolidation): None
New companies: Excluded companies: (2) Adoption of special accounting practices in the preparation of quarterly consolidated financial statements:
None(3) Changes in accounting policies, estimates and restatement
1) Changes in accounting policies due to changes in accounting standard:
2) Changes in accounting policies other than 1) above:3) Changes in accounting estimates:
4) Retrospective restatement:

-2

Yes
None
None
None

(4) Number of outstanding shares (common stock)1) Number of outstanding shares at the end of the period (including treasury stock):
As of December 31, 2021:
48,755,500 shares
As of March 31, 2021:
48,755,500 shares
2) Number of s treasury stock at the end of the period:
As of December 31, 2021:
56,644 shares
As of March 31, 2021:
56,644 shares
3) Average number of shares for the period:
As of December 31, 2021:
48,698,856 shares
As of March 31, 2021:
48,698,856 shares*This Summary of Consolidated Financial Results is not subject to review processes under the Financial
Instruments and Exchange Act.
*Explanation for appropriate use of forecast and other special matters
Forward-looking statements, such as forecast of consolidated financial performance, stated in this document
are based on information currently possessed by the Company as well as certain assumptions deemed rational.
It does not mean that the Company assurances that the contents mentioned in these forward-looking statements
will ever materialize. Actual financial performance may be significantly different from such expectations due
to various factors. For the assumptions used and other notes, please refer to “1. (3) Explanation regarding
forward-looking statements such as consolidated earnings forecasts” on page 6.

-3

Accompanying Materials
Contents
1. Qualitative information regarding consolidated performance for the first nine months ................................2(1) Explanation regarding operating results ....................................................................................................2(2) Explanation regarding financial position ...................................................................................................5(3) Explanation regarding forward-looking statements such as consolidated earnings forecasts ...................6
2．Quarterly Consolidated Financial Statements and Key Notes .....................................................................7(1) Consolidated Balance Sheet.......................................................................................................................7(2) Consolidated Statements of Income and Comprehensive Income .............................................................9(3) Notes to Consolidated Financial Statements............................................................................................ 11(Notes to Assumption of Going Concerns)) ................................................................................................ 11(Notes on Significant Changes in the Amount of Shareholders’ Equity) .................................................... 11(Change of Accounting Policies) ................................................................................................................ 11(Additional information) .............................................................................................................................12(Segment Information, etc.) ........................................................................................................................13(Significant Subsequent Events) .................................................................................................................14-1

1. Qualitative information regarding consolidated performance for the first nine months(1) Explanation regarding operating results
Although the Japanese economy has shown signs of recovery since the state of emergency declaration was
lifted, the number of infected people is rapidly increasing due to the impact of the COVID-19 variant. The
business environment in Japan continues to be severe, especially in the accommodation and tourism
industries. As for the world economy, while the impact of this new variant is spreading, various countries
consider to remove Easy Monetary Policy and start tapering against the background of soaring prices. It isnecessary to monitor interest rate trends in the future.
The deterioration in the average vacancy rate in the office building market in central Tokyo (5 districts of theCentral Tokyo: Chiyoda, Chuo, Minato, Shinjuku, and Shibuya), where the Company operates its officebuilding business, bottomed out in November 2021, and as of December 2021, the average vacancy rate was
6.33%, a slight improvement for the second consecutive month (approximately 0.12%) according to a survey
by a private research institution. However, the overall office market remained weak, with the average rent
falling for the 17th consecutive month (2,418 yen/ approximately 11%) to 20,596 yen (unit price per tsubo).
In the real estate investment market, although institutional investors remain eager to invest, the market isapproaching a phase of global monetary tightening, and the outlook for interest rates is unpredictable.
Based on this business environment, the Company is developing its business based on the medium-term
management plan announced in May 2021. During the fiscal year under review, even in the pandemic of
COVID-19, the Company's core business, Real Estate Revitalization Business, is resulting in steady sales ofreal estate due to the progression of commercialization with high-margin and high-quality. And Real Estate
Service Business is maintaining in strong performance.
On the other hand, because of the great effect by the pandemic of COVID-19, Hotel Operation Businessrecorded a loss in the fiscal year under review due to the impact of the state of emergency declaration andthe start-up expenses of new hotels.
As a result, net sales amounted to 61,618 million yen (up 32.7% YoY)t, operating profit amounted to 12,151
million yen (up 72.8% YoY), ordinary profit amounted to 11,983 million yen (up 82.6% YoY), and profit
attributable to owners of parent amounted to 7,519 million yen (up 85.3% YoY).
Due to partial change in the report segment from the beginning of FY2022 1Q, actual results for FY2022 3Q
and the same period of the previous fiscal year have been reclassified into the new segment classification.
The background and outline of the segment change are as follows. In November 2020, in order to utilizing
the know-how in Hotel Operation Business for the “Hotel Development Business” and enhance profitability
in an integrated manner, the Company changed the organizational structure by transferring Hotel
Development Business from Sun Frontier Fudousan Co., Ltd. into Sun Frontier Hotel Management Inc.
Accordingly, the business segment will reflect this change and is renamed the report segment "Hotel andTourism Business." Also, in order to strengthen further the coordination of each business segment in the realestate services field, the Company consolidated related business segments such as Conference Room Rental
Business and Rent Guarantee Business into “Real Estate Service Business”.

The results of each segment are as follows.
(Real Estate Revitalization Business)
In the Real Estate Revitalization Business, we are engaged in (1) Replanning Business and (2) Rental
Building Business.
-2(1) In the Replanning Business, all processes from purchase of buildings to planning and development, tenant
placement, sales, and subsequent support are offered in-house. During the nine months ended December 31,
2021, sales are making steady progress against the backdrop of strong investment appetite among investors.
On the other hand, the Company carefully selects and purchases properties while determining trends in theleasing market.
In commercialization, we aim to create an office that can be chosen among the new state while keeping aclose eye on changes in the city, office and work style. Among them, “set-up office,” which is equipped witha part of its interior in advance plays an important role in attracting tenants. In addition, through coordinatingwith the leasing brokerage division, which has expanded its branch network in central Tokyo and conducts
community-based sales activities, we promoted the attraction of tenants even during the COVID-19
pandemic and made our real estate products high-occupancy with high-added value which then we could sell
as products that meet the expectations of a wide range of clients in Japan and overseas. As a result, thenumber of units sold in Replanning Business increased steadily to 18, and both net sales and profit increased
significantly compared with the same period of the previous year.
(2) In Rental Building Business, with the aim of building a stable revenue base as a stock business, we areworking to increase rent income in the medium to long term by utilizing the operational capabilities
cultivated in the Real Estate Service division while maintaining the number of properties incommercialization in Replanning Business. However, compared with the same period of the previous fiscal
year, both net sales and income decreased due to the sale of mid-to-long term large buildings with highutilization rates.
As a result, net sales amounted to 49,677 million yen (up 66.1% YoY) and segment profit amounted to
14,725 million yen (up 89.1% YoY) for the total of Real Estate Revitalization Business.
(Real Estate Service Business)
In the Real Estate Service Business, we are engaged in (1) Property Management Business, (2) Building
Maintenance Business, (3) Sales Brokerage Business, (4) Leasing Brokerage Business, (5) Conference Room
Rental Business, and (6) Rent Guarantee Business.
By bringing together the expertise that each of these business divisions has cultivated in the field, they
coordinate and work with each other on the small and medium-sized office buildings areas of central Tokyo.
By also multiplying in a chain reaction, the expertise cultivated through creating on site, they create added
value and work as the basis for creating high profitability in the Replanning Business.
(1) In Property Management Business, the Company has achieved high-occupancy and high-profitability
building management by working with the leasing brokerage division to attract tenants and revise theconditions for appropriate rent. At the same time, we are working with the building maintenance divisionand the construction division to quickly support the recovery of building facilities in the event of earthquakes,
typhoons, and other disasters, thereby providing safe and secure building management for owners and tenants.
Although the number of buildings under management was maintained, revenue was sluggish due to a decline
in occupancy rate. As a result, both net sales and profits declined slightly compared with the same period of
the previous fiscal year.
End of December
2019

End of December
2020

End of December
2021

Number ofManaging Buildings

391 buildings

404 buildings

413 buildings

Occupancy Rate

98.4%

95.7%

90.8%

-3

(2) In the Building Maintenance Business, we are promoting business based on our strengths in cleaninghigh places using swings for exterior windows and exterior walls, waterproofing work, and exterior wall
repair work. In the previous fiscal year, we acquired 100% of shares in Japan System Service Inc., anothercompany in the same industry, in an effort to strengthen the foundation of its cleaning business in central
Tokyo. In the fiscal year under review, both net sales and profits increased significantly compared with thesame period of the previous fiscal year, as a result of a rebound from a decrease in orders from clients due tothe impact of COVID-19, as well as an increase in entrusted properties and the addition of sales and profits
from Japan System Service Inc.
(3) In the Sales Brokerage Business, as part of its real estate consulting, we are responding swiftly to inquiries
from other divisions, including Property Management Business and Leasing Brokerage Businesses. The
office building business division works together to support building owner’s building management, andbased on the trust we have built, we are able to close brokerage deals. As a result of the above, both net sales
and profit for the fiscal year under review increased significantly compared with the same period of theprevious fiscal year.
(4) In the Leasing Brokerage Business, we provide a service network based in 11 sites, mainly in the 5
districts of central Tokyo, and serve as a convenient consultation window that is close to local building
owners. We are also creating the clients' point of view's new values for Replanning Business in the productplanning by applying the needs and changes of tenants that we have obtained quickly in the field of tenantleasing. Both net sales and profit increased significantly in the fiscal year under review due to a reboundfrom the same period of the previous fiscal year when tenant relocation stagnated due to the impact of
COVID-19.
(5) In the Conference Room Rental Business, although the need for meeting rooms remains limited due tothe impact of COVID-19, we have provided services that capture the changing times and have responded
flexibly to clients' needs through close contact with local communities and implemented flexible proposalbased marketing, we were able to capture demand albeit on a limited scale. As a result, although both net
sales and profit increased compared with the same period of the previous fiscal year, profit slightly decreased
due to the impact of opening a new site.
(6) In Rent Guarantee Business, we provide services that are close to building owners, such as not only
providing rent guarantees when tenants fall behind in their rent payments, but also providing support for
tenants to vacate their property, thereby easing the burden on building management. During the pandemic of
COVID-19, the number of new guarantee and re-guarantee transactions remained steady as a result of anincrease in building owners’ consultations due to an increase in vacancies and concerns about credit fromtenants. As a result, both net sales and profit increased compared with the same period of the previous fiscal
year.
As a result, net sales for the total of Real Estate Service Business amounted to 5,477 million yen (up 22.9%
YoY) and segment profit amounted to 2,982 million yen (up 20.7% YoY).

(Hotel and Tourism Business)
In the Hotel and Tourism Business, we are engaged in (1) Hotel Development Business and (2) Hotel
Operation Business.
(1) In the Hotel Development Business, sales of the condominium hotel HIYORI OCEAN RESORTOKINAWA progressed, and the delivery of 40 plots were completed (cumulative sales: 199 plots / total
203 plots). In the fiscal year under review, both net sales and profit decreased significantly due to a-4reaction to the addition of sales and profit from 126 deliveries accompanying the completion of the
Okinawa Condominium Hotel in the same period of the previous fiscal year.
(2) The Hotel Operation Business operates a total of 20 hotels (2,859 rooms). During the fiscal year underreview, the Company recorded a loss despite an increase in net sales due to a significant decline inoccupancy rate and unit prices, mainly for hotels in urban areas caused by voluntary restraint on tourism
under the declaration of a state of emergency, and the recording of start-up expenses for newly-opened
hotels.
As a result, net sales for total of Hotel and Tourism Business amounted to 5,637 million yen (down 37.3%
YoY) and segment loss amounted to 1,227 million yen compared with the same period of the previous fiscal
year (segment profit was 508 million yen).
(Other Business)
In Other Business, we are engaged in (1) Overseas Development Business and (2) Construction Business.
(1) In Overseas Development Business, we have expanded into Southeast Asian countries where growth isexpected and has developed real estate mainly for condominiums and houses using Japanese advanced
construction technology. We are developing its business with a focus on providing Asian people withexperience of Japanese quality. In terms of business results, both net sales and profit decreased significantly
due to a reaction to the addition of sales of high-rise condominium projects in Da Nang, Viet Nam in thesame period of the previous year.
(2) In the Construction Business, renewal planning, repair and reform of commercial buildings, interior
finishing work, and telecommunications work were carried out. Results of Communication Development
Inc., which the Company acquired 100% of the shares in the previous fiscal year, contributed to the increasein both net sales and profit.
As a result, net sales for the total of Other Business amounted to 1,197 million yen (down 65.2% YoY) andsegment profit amounted to 106 million yen (down 83.3% YoY).
“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020 hereinafterreferred to as the "Revenue Recognition Accounting Standard"), etc. has been applied from the beginning of
the three months ended June 30, 2021.
Moreover, as a result of the application of Revenue Recognition Accounting Standard, net sales in theConstruction Business of the “Other Business” segment increased by 305 million yen during FY2022 3Q.
(2) Explanation regarding financial position
Total assets at the end of FY2022 3Q stood at 131,278 million yen, as increase of 3.0% compared to March
31, 2021. Liability at the end of FY2022 3Q stood at 56,777 million yen, as decrease of 1.6% compared toMarch 31, 2021 and net assets at the end of FY2022 3Q stood at 74,500 million yen, as increase of 6.8%
compared to March 31, 2021.
The main factors behind the increase in total assets was mainly due to increases of 11,028 million yen in
cash and time deposits, 1,244 million yen in real estate for sale, 1,523 million yen in buildings (netamount) of property, plant and equipment, 3,135 million yen in land of property, plant and equipment, and1,393 million yen in construction in progress included in other (net amount), despite a decrease of 16,229
million yen in real estate for sale in process.
The main reason for the decrease in liabilities was mainly due to 1,969 million yen decrease in long-termborrowings, 755 million yen decrease in long-term deposits received in other of non-current liabilities,
despite a 2,087 million yen increase in income taxes payable.

-5The main factor behind the increase in net assets was the recording of 7,519 million yen in profit attributableto owners of parent, despite the payment of year-end dividends of 2,047 million yen and 1,023 million yen
in interim dividends.
Moreover, the equity ratio increased 2.1 percentage points to 54.3% as of December 31,2021 compared toMarch 31, 2021.
(3) Explanation regarding forward-looking statements such as consolidated earnings forecasts
As for the results for the fiscal year ending March 31, 2022, there are no changes to the forecast figuresannounced on May 12, 2021.

-6

2．Quarterly Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2021

As of December 31, 2021

21,50832,536

1,532

1,637
14,84556,052

AssetsCurrent assets
Cash and time deposits
Notes, accounts receivable, and contract
assetsReal estate for sale
Real estate for sale in process
Costs of uncompleted construction
contracts
Supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings (net amount)
Land
Other (net amount)
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

13,601
72,282
157

-7

46
1,693
(36)
110,785

178
73
1,928
(13)
107,238

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

3,513
9,956
3,849
17,318

552
149
701

493
152
645

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

4,731
913
439
(9)
6,075
24,039131,278

(Unit: million yen)
As of March 31, 2021

As of December 31, 2021

1,634
5,530
901
197

1,766
30
5,420
2,988
96

52
53
4,988
13,35855
53
4,733
15,144

41,991
11
56
2,295
44,35457,71240,0216
65
1,539
41,632
56,777

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

11,965
6,445
53,021(67)
71,364

2

3

(292)

(33)

(289)

(30)

16
3,129
69,773
127,48530
3,136
74,500131,278

Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (andother officers)
Provision for fulfillment of guarantees
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Provision for share-based remuneration
Other
Total non-current liabilities
Total liabilities
Net Assets
Shareholders' equity
Share capital
Capital surplus
Retained Earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-8(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Unit: million yen)
For the nine months
For the nine months
ended December 31, 2020 ended December 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Subsidy income
Other
Total non-operating income
Non-operating Expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on bargain purchaseTotal extraordinary income
Extraordinary loss
Settlement money
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent-946,442
34,021
12,421
5,389
7,032

61,61844,09817,5195,368
12,151

34
0
70
20
126

24
0
148
80
253

371
224
596
6,562

329
92
421
11,983

0
0

0
115
116

9
9
6,553
2,570
(44)
2,526
4,027
(31)
4,059

254
14
268
11,831
4,280
36
4,317
7,514
(5)
7,519

Consolidated Statement of Comprehensive Income(Unit: million yen)
For the nine months
For the nine months
ended December 31, 2020 ended December 31, 2021
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

-10

4,027

7,514

(1)

(0)

(136)
(137)
3,890

272
272
7,786

3,929
(38)

7,778
8

(3) Notes to Consolidated Financial Statements(Notes to Assumption of Going Concerns)
Not applicable.
(Notes on Significant Changes in the Amount of Shareholders’ Equity)
For FY2021 3Q (April 1, 2020 to December 31, 2020)
1. Dividend paid
Resolution

Type of shares

Total dividends(million yen)

Dividends per
share (yen)Base date

Effective date

Source ofdividends

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

2. Dividends for which the base date is during FY2021 3Q and the effective date is after the last day of
FY2021 3Q.
Not applicable.
For FY2022 3Q (April 1, 2021 to December 31, 2021)
1. Dividend paid
Resolution

Type ofsharesTotal dividends(million yen)

Dividends per
share (yen)Base date

Effective date

Source ofdividends

Annual General
Meeting of
Shareholders, June22, 2021

Commonshares

2,047

42.00

March 31, 2021

June 23, 2021

Retainedearnings

Board of Directors,
November 9, 2021

Commonshares

1,023

21.00 September 30, 2021 December 7, 2021

Retainedearnings

Note: 1. The total amount of dividends decided at the Annual General Meeting of Shareholders held on June 22, 2021,
includes dividends of 2 million yen for the Company's shares held by the trust account of the Employee Stock
Ownership Plan (J-ESOP).
2. The total amount of dividends decided at the Board of Directors held on November 9, 2021, includes dividends of
1 million yen for the Company's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP).

2. Dividends for which the base date is during FY2022 3Q and the effective date is after the last day of
FY2022 3Q.
Not applicable.
(Change of Accounting Policies)(Application of Accounting Standards for Revenue Recognition)“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020. Hereinafterreferred to as the "Revenue Recognition Accounting Standard") was applied at the beginning of the threemonths ended June 30, 2021 and so revenue is recognized in the amount expected to be received in exchange
for the promised goods or services at the time when control of the goods or services is transferred to thecustomer. As a result, in connection with construction contracts, in the past, when there was a certain degreeof certainty about the outcome of the progress of the construction work, the percentage of construction
completion method had to recognize revenue over a certain period. However, in the case where control overgoods or services is transferred to the customer over a certain period of time, the Company has changed themethod to recognize revenue over a certain period of time as it fulfills its performance obligation to transfer
goods or services to the customer. Progress in meeting performance obligations is measured based on theratio of construction costs incurred by the end of each report period to the total construction costs to beforecast. In addition, if it is not possible to reasonably estimate the degree of progress in fulfilling theperformance obligations at the initial stage of the contract, but it is expected the costs incurred, revenue is-11

recognized based on the cost recovery standard. For construction contracts for which the period from thetransaction start date to the time when the performance obligation is expected to be fully satisfied is very
short, alternative treatment is applied. Revenue is not recognized over a certain period of time and revenue
is recognized when the performance obligation is fully satisfied.
The application of the Revenue Recognition Accounting Standard is in accordance with the transitional
treatment provided in the proviso to Paragraph 84 of the Revenue Recognition Accounting Standard, butthere is no impact on the balance at beginning of the period of retained earnings.
As a result of the application of the Revenue Recognition Accounting “notes and accounts receivable – trade”
that was included in “current assets” in the previous fiscal year, has been included in "Notes, Accountreceivable and contract assets" from the three months ended June 30, 2021. In accordance with thetransitional treatment set forth in Paragraph 28-15 of the "Accounting Standard for the Non-Consolidated
Financial Statements" (ASBJ Statement No. 12, March 31, 2020), information on revenue arising fromcontracts with customers for the previous third quarter consolidated cumulative period is not stated.
(Application of Accounting Standards for Calculation of Market Value)"Accounting Standard for Calculation of Fair Value" (ASBJ Statement No. 30, July 4, 2019. Hereinafterreferred to as "accounting standard for fair value calculation") was applied at the beginning of the threemonths ended June 30, 2021 and so in accordance with the transitional treatment set forth in Paragraph 19of the accounting standard for fair value calculation, and Paragraph 44-2 of the "Accounting Standard for
Financial Instruments" (ASBJ Statement No. 10, July 4, 2019), the new accounting policies set forth in theaccounting standard for fair value calculation will be applied in the future.
Moreover, there is no impact on the Consolidated Financial Statements.
(Additional information)
1. Accounting estimates for the impact of the spread of COVID-19 infections
There have been no material changes to assumptions regarding the impact of the spread of COVID-19
infections described in the "Significant Accounting Estimates" in the Annual Securities Report for theprevious fiscal year.
2. Treatment of application of tax effect accounting for transition from consolidated tax payment system to
new tax group relief system
Sun Frontier Fudousan Co., Ltd. and certain domestic consolidated subsidiaries have adopted the "Guidanceon Application of Accounting Standards for Tax Effect Accounting" (ASBJ Guidance No. 28, February 16,2018) in accordance with Paragraph 3 of the "Treatment of Application of Tax Effect Accounting for theTransition from the Consolidated Tax Payment System to the Group Accumulation System" (ASBJ Guidance
No. 39, March 31, 2020) for items for which the non-consolidated tax payment system was reviewed inaccordance with the transition to the Tax Group Relief System established under the "Act for Partial Revisionof the Income Tax Act, etc. (Act No. 8, 2020). The provisions of Paragraph 44 do not apply, and the amountof deferred tax assets and deferred tax liabilities is based on the provisions of the tax laws prior to the revision.

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(Segment Information, etc.)[Segment Information]
I For FY2021 3Q (April 1, 2020 to December 31, 2020)
1． Information on net sales and profit for each reportable segment
Reportable segment
Real Estate Real Estate Operation
Revitalization Service
Business
Business
Business(Unit: million yen)
Subtotal

Other (Note)

Total

Net Sales
Net sales toexternalcustomers
Internal sales ortransfers

29,906

4,102

8,994

43,002

3,440

46,442

8

354

-

363

-

363

Subtotal

29,914

4,456

8,994

43,3653,440

46,805

Segment profit

7,786

2,470

508

10,765638

11,403Note.

The "Other" segment is a business segment that is not included in the reportable segment and includes
overseas business, construction solutions business, etc.

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

10,765

Profit in the “Other” category

638

Elimination of intersegment transactions(17)

Corporate expenses (Note)
Ordinary Profit in the consolidated statement ofincome(4,823)
6,562

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

3． Information on impairment loss or goodwill of fixed assets for each reportable segment
Not applicable.
II For FY2022 3Q (April 1, 2021 to December 31, 2021)
1． Information on net sales and profit(loss) for each reportable segment
Reportable segment
Real Estate Real Estate Operation
Revitalization Service
Business
Business
Business
Net Sales
Revenue fromcontracts withcustomers
Other revenue(Note 2)
Net sales toexternal customers
Internal net sales ortransfers between
segments(Unit: million yen)

Subtotal

Other(Note 1)

Total

46,165

4,726

5,552

56,445

1,192

57,637

3,502

394

84

3,980

-

3,980

49,667

5,120

5,637

60,425

1,192

61,618

9

356

-

366

4

371

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TotalSegment profit (loss)

49,677
14,725

5,477

5,637

60,792

1,197

61,9892,982(1,227)

16,480106

16,586Note 1. The "Other" segment is a business segment that is not included in the reportable segment and includes Overseas Development
Business and Construction Business, etc.
Note 2. Other's revenues include rental income under Accounting Standards for Lease Transactions (ASBJ Statement No. 13).

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

16,480

Profit in the “Other” category

106

Elimination of intersegment transactions(0)

Corporate expenses (Note)
Ordinary Profit in the consolidated statement ofincome(4,602)
11,983

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

3． Information on impairment loss or goodwill of fixed assets for each reportable segment
Not applicable.
4． Items regarding changes in report segments(1) Changes in report segments
Effective from the first quarter consolidated accounting period, the report segment classification has beenrevised in line with the business reorganization implemented in November 2020. The major changes are
as follows:(i) The "Hotel Development Business" previously disclosed as "Real Estate Revitalization Business"and the "Hotel Operation Business" previously disclosed as "Operation Business" have been merged
into the "Hotel and Tourism Business" under the new reportable segment.
(ii) The “Sub-lease Business" previously disclosed as "Real Estate Revitalization Business" and"Conference Room Rental Business " previously disclosed as "Operation Business" and "Rent
Guarantee Business" previously disclosed as "Other Business" are now disclosed as "Real Estate
Service Business".
Segment information for FY2021 3Q (April 1, 2020 to December 31, 2020) includes information onsales and profits by report segment prepared based on the above changes.
(2) Change of Accounting Policies
As described in "Change of Accounting Policies", the accounting method for revenue recognition waschanged by applying the Revenue Recognition Accounting Standard from the beginning of FY2022 1Q.
Therefore, the method for calculating profit or loss of business segments was also changed.
As a result of this change, the net sales for "Other Business" in FY2022 3Q increased by 305 million yen
compared with the previous method.
(Significant Subsequent Events)
Not applicable.

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