English translation
May 12, 2021

Consolidated Financial Results for the fiscal year ended March 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, 2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006

Representative:

Seiichi Saito, President

Inquiries:

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

Scheduled date of Annual General Meeting of Shareholders:
Scheduled date of annual securities report:
June 23, 2021
Scheduled date of dividend payable:
June 23, 2021
Supplemental materials for annual results:
Yes
Presentation on annual results to be held:
Yes

June 22, 2021

*Amounts are rounded down to million yen.

1. Consolidated Performance for the fiscal year ended March 31, 2021
(1) Consolidated Operating Results*Percentage figures shown under net sales, operating profit, ordinary profit, and profit attributable to owners of parent columns
indicate year-on-year changes for those items.
(“¥” indicates millions of yen, except for per share figures.)

Net Sales

Operating Profit

Ordinary Profit

FY Ended March 31, 2021

¥59,632(18.6)%¥7,912(52.3)%¥7,524(53.3)%FY Ended March 31, 2020

¥73,218

37.4%¥16,571

24.6%¥16,127

25.9%(Note) Comprehensive income: For the year ended March 31, 2021: 4,006 million yen (down 62.3%)
For the year ended March 31, 2020: 10,632 million yen (up 24.1%)

Profit Attributable toEarnings per ShareOwners of Parent(yen)

Fully Diluted
Earnings per Share(yen)

FY Ended March 31, 2021

¥4,274(59.9)%

87.77

87.73

FY Ended March 31, 2020

¥10,666

21.4%

219.03218.97Return on Equity

Return on Asset

Return on Sales

FY Ended March 31, 2021

6.5%

5.8%

13.3%

FY Ended March 31, 2020

17.7%

13.4%

22.6%

1

(Reference) Loss on investments based on equity method: For the year ended March 31, 2021: 55 million yen
For the year ended March 31, 2020: 1 million yen(2) Consolidated Financial Position(“¥” indicates millions of yen)

Total Assets

Net Assets

Net Assets Per

Equity Ratio (%)

Share (yen)As of March 31, 2021

¥127,485¥69,77352.3%

1,368.14

As of March 31, 2020

¥130,293¥64,80949.6%

1,326.93(Reference)Total Equity:

As of March 31, 2021: 66,627 million yen
As of March 31, 2020: 64,620 million yen(3) Consolidated Cash Flows(“¥” indicates millions of yen)

Cash Flows from

Cash Flows from

Cash Flows from

Cash and CashOperating

Investing

FinancingEquivalents

Activities

Activities

Activities

at Year-End

FY Ended March 31, 2020

¥4,733¥451(¥1,150)¥21,319

FY Ended March 31, 2021(¥2,697)(¥4,441)¥5,535¥17,394

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

2nd Quarter

3rd Quarter

Year-end

Annual Total

FY Ended March 31, 2020

-

0.00

-

42.00

42.00

FY Ended March 31, 2021

-

0.00

-

42.00

42.00

FY Ending March 31, 2022 (Forecast)

-

0.00

-

42.00

42.00

(“¥” indicates millions of yen)

Total Dividends

Payout Ratio

Dividends to Net Assets(consolidated)(consolidated)

FY Ended March 31, 2020

¥2,047

19.2%

3.4%

FY Ended March 31, 2021

¥2,047

47.9%

3.1%

27.6%

FY Ending March 31, 2022 (Forecast)3.

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

Net Sales

Operating Profit

Ordinary Profit

Profit Attributable

Earnings

to Owners ofper Share

ParentFY EndingMarch 31, 2022

¥76,000

27.4%¥12,000

51.7%
2¥11,500

52.8%¥7,40073.1%

151.954.

Notes(1) Changes in significant subsidiaries during the current fiscal year (changes in specific subsidiaries resulting
in changes in the scope of consolidation): None
New companies: Excluded companies: (2) Changes in accounting principles, procedures and presentation methods
1) Changes caused by revision of accounting standards:
None2) Changes of accounting standards other than 1) above: None
3) Changes in accounting estimates:
None4) Restatement of corrections:
None(3) Number of outstanding shares (common shares)
1) Number of outstanding shares at the end of the period (including treasury shares):
As of March 31, 2021:
48,755,500 shares
As of March 31, 2020:
48,755,500 shares
2) Number of shares of treasury shares at the end of the period:
As of March 31, 2021:
56,644 shares
As of March 31, 2020:
56,644 shares
3) Average number of shares for the period:
For the fiscal year ended March 31, 2021:
48,698,856 shares
For the fiscal year ended March 31, 2020:
48,698,856 shares(Reference) Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 to March 31,2021)(“¥” indicates millions of yen, except for per share figures.)

Net Sales

Operating Profit

Ordinary Profit

FY Ended March 31, 2021

¥42,002(34.9)%¥8,017(54.9)%¥7,994(52.5)%FY Ended March 31, 2020

¥64,472

32.3%¥17,757

34.7%¥16,822

31.0%

Profit Attributable toEarnings per ShareOwners of Parent(yen)

Fully Diluted
Earnings per Share(yen)

FY Ended March 31, 2021

¥5,314(52.2)%

109.12109.07FY Ended March 31, 2020

¥11,12226.3%

228.39228.33(2) Non-consolidated Financial Position

Total Assets

Net Assets

Equity Ratio (%)

Net Assets per
Share (yen)As of March 31, 2021

¥114,729¥68,20459.4%

1,400.21

As of March 31, 2020

¥121,708¥64,93453.3%

1,333.15

3

(Reference)Total Equity:

As of March 31, 2021: 68,188 million yen
As of March 31, 2020: 64,923 million yen*This Summary of Consolidated Financial Results is not subject to audit processes under the Financial
Instruments and Exchange Act.
*Explanation for appropriate use of forecast and other notes
Forward-looking statements, such as forecast of consolidated financial performance, stated in this document
are based on information currently possessed by us or certain assumptions that we have deemed as rational. We
cannot make any assurances that the contents mentioned in these forward-looking statements will evermaterialize. Actual financial performance could be significantly different from our expectations as a result ofvarious factors. For the assumptions used and other notes, please refer to “1. (4) Explanation regarding forwardlooking statements such as consolidated earnings forecasts” on page 6.
(About changing the presentation unit of the amount)
The number of accounts and the others listed in the attached quarterly consolidated financial statements andkey notes was previously stated in thousand yen unit but it is listed in million yen unit from the first quarter
consolidated accounting period and the first quarter consolidated the cumulative period. Further, in the previous
consolidated fiscal year and the previous third quarter consolidated cumulative period it is also changed tomillion-yen unit and stated.
In this document, the terms “we”, “us”, “our”, the “Company” and “Sun Frontier” refer to Sun Frontier
Fudousan Co., Ltd. and consolidated subsidiaries or, as the context may require, Sun Frontier Fudousan Co.,
Ltd. on a non-consolidated basis.

4

Accompanying Materials
Contents
1. Qualitative information regarding consolidated performance for the fiscal year ..........................................1(1) Explanation regarding operating results ....................................................................................................1(2) Explanation regarding financial position ...................................................................................................4(3) Explanation regarding cash flows ..............................................................................................................5(4) Explanation regarding forward-looking statements such as consolidated earnings forecasts ...................6
2. Basic Views on the Selection of Accounting Standards .................................................................................6
3. Consolidated Financial Statements and Key Notes .......................................................................................7(1) Consolidated Balance Sheet.......................................................................................................................7(2) Consolidated Statements of Income and Comprehensive Income .............................................................9(3) Consolidated Statement of Changes in Equity......................................................................................... 11(4) Consolidated Statement of Cash Flows ...................................................................................................13(5) Notes to Consolidated Financial Statements............................................................................................14(Notes to Assumption of Going Concerns) ...................................................................................................14(Additional Information) ...............................................................................................................................14(Segment Information, etc.) ...........................................................................................................................15(Per Share Information) .................................................................................................................................17(Significant Subsequent Events)....................................................................................................................1701. Qualitative information regarding consolidated performance for the fiscal year
(1) Explanation regarding operating results
Matters concerning the future in this document are those judged by Sun Frontier as of the of submission dateof this consolidated performance for the fiscal year.
During the consolidated fiscal year under review, the Japanese economy remained stagnant for a long time
due to the impact of the COVID-19. Although the spread of vaccines is expected to bring the economy
back to normal in the future, the state of emergency was declared again in April 2021, and the outlook forthe future is unclear. Therefore, it is necessary to continue to monitor developments closely. With regard to
the global economy, although recovery is expected in the future due to the large-scale financial support andmonetary easing continuing in each country, and vaccinations are widely spreading in some countries,
outlook for the future remains uncertain due to the impact of COVID-19 and such.
In the real estate market in Japan, the average rent in the office building market in central Tokyo (5 Wardsof the Central Tokyo: Chiyoda, Chuo, Minato, Shinjuku, and Shibuya Ward) as of March was 21,541 yen(unit price per tsubo), a decline for the eighth consecutive month (1,473 yen.) The average vacancy rate
was 5.42%, worsening for the thirteenth consecutive month (increased 3.93% points according to a survey
by a private research institution) and market conditions are becoming increasingly severe. Although against
the backdrop of the recent damage caused by the outbreak of COVID-19, some companies are reducing
their offices by promoting remote work, demand for small and medium-sized offices has been steady, as
seen in the expansion of floor space at high-performing companies and the movement to disperse offices
where employees are concentrated in one location. On the other hand, in the real estate investment market,
institutional investors and J-REITs have a strong desire to invest due to the fact that the outlook for theoffice market in Tokyo is expected to bottom out to a certain extent and since the low interest rateenvironment continues.
Against this backdrop, we have continued its three management policies since last year to "thoroughly
prevent the spread of the COVID-19 infection and continue business," "maintain financial stability," and"concentrate resources on our core business the ‘revitalization and utilization of real estate’". We are alsoable to quickly grasp on-site trends and customer feedback, improve our ability to solve problems from theclients' point of view, and develop our business by flexibly changing ourselves.
As a result, net sales decreased 18.6% to 59,632 million yen from the same period of the previous fiscal
year, operating profit decreased 52.3% to 7,912 million yen from the same period of the previous fiscal
year, ordinary profit decreased 53.3% to 7,524 million yen from the same period of the previous fiscal year,
and profit attributable to owners of parent decreased 59.9% to 4,274 million yen from the same period of
the previous fiscal year.
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, (2) Rental Building
Business, and (3) Hotel Development Business.
(1) In the Replanning Business, all processes from purchase of buildings to planning and development, tenant
occupancy, sales, and subsequent support are manufactured in-house. In purchasing, even in the outbreak of
the COVID-19, we carefully select properties while looking at the direction of the market. In
commercialization, we aim to create an office that can be chosen in this “new normal”, based on new values,by enhancing sensitivity to market movements such as the voices of tenants that are heard every day and byfirmly grasping changes in offices, towns and working styles. During the fiscal year under review, we
proposed to society the ideal form of office in line with the changing times. For example, “WEEK” whichallows clients to lease our set-up office on a certain day of the week, “A Yotsuya” a Creative Art Office withmural wall paintings, “Designing the Air” an anti-virus office designed for social distance equipped with the1newest anti-virus machines, and “Work style close to life” offices and such. We are responding to the needsof a wide range of clients in Japan and overseas by creating highly profitable and highly added value productswith our strengths in revitalization planning and tenant occupancy promotion. Furthermore, in the area ofsales, in the fiscal year under review, with investment product in sub-divided real estate we sold out thesecond project (1,150 million yen), and in April, we began offering the third project operating newly built
nursery schools. This product has also contributed to the expansion of the client base of the entire Company
and has led to sales of office buildings and condominiums. As a result, despite the outbreak of COVID-19,
the number of buildings sold in Replanning Business was 23 which secured a certain level, but both the net
sales and profits declined significantly compared to the 43 buildings sold from the same period of theprevious fiscal 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 expanding the number of rental buildings
properties in Replanning Business while utilizing the operational capabilities cultivated in the real estateservice division. Both net sales and income decreased compared with the same period of the previous fiscal
year due to decrease in rent income from Hotel Business caused by reduction and exemption of rent.
(3) In the Hotel Development Business, the development of HIYORI OCEAN RESORT OKINAWA (203
lots) a condominium development project in Onna Village, Okinawa Prefecture, which was completed in
December 2020, made steady progress, completing the delivery of a total of 159 lots. In March, we completed
the sale of Hiyori Hotel Maihama, which opened in 2017 as the first hotel under our own brand. As a resultof our efforts to improve cash flow, both net sales and profit increased significantly from the same period of
the previous year.
As a result, net sales decreased 19.4% to 48,398 million yen from the same period of the previous fiscal year
and segment profit decreased 40.3% to 11,261 million yen from the same period of the previous fiscal year
for the Real Estate Revitalization Business as a whole.
(Real Estate Service Business)
In the Real Estate Service Business, we are engaged in (1) Property Management Business, (2) Building
Maintenance Business, (3) Brokerage Business, and (4) Leasing Business. By bringing together theexpertise that each of these business divisions has cultivated in the field, they cooperate with each other,and by applying their originality and ingenuity, they create a chain of added value which also serves as thebasis for creating high profitability in the Replanning Business.
(1) In Property Management Business, we have improved the satisfaction of tenants through meticulous
property management and maintenance. At the same time, we have implemented highly profitable andhighly operational building management through efforts such as attracting tenants by taking advantage ofits community-based strengths and improving profits by revising conditions for appropriate rent andreviewing power supply and demand contracts. We provide accurate and prompt information to tenants
who are affected by the COVID-19 outbreak and building owners who are concerned and utilizes its
accumulated experience and organizational power to resolve any new requests or problems arising from the
spread of COVID-19 infections. As a result, the number of managing buildings have grown steadily evenduring the outbreak of COVID-19. Both net sales and profits increased compared with the same period of
the previous year.
End of March 2019

End of March 2020

End of March 2021

Number ofManaging Buildings

373 buildings

392 buildings

397 buildings

Occupancy Rate

97.6%

98.6%

94.4%

2

(2) In the Building Maintenance Business, we are promoting cooperation with the property management
division, taking advantage of our strengths in cleaning high places, waterproofing work, and exterior wall
repair work using swings for exterior windows and exterior walls. In addition, during the fiscal year underreview, we acquired 100% of the shares of Japan System Service Inc., which is in the same industry as the
Building Maintenance Business and strengthened its services in the western area of central Tokyo (Minato,
Shibuya, and Shinjuku Ward), which we have been comparatively less entrusted with, in an effort to raise
the foundation of its cleaning business in central Tokyo. Although demand for COVID-19 decontaminationand disinfection work was newly captured, there was decrease in revenue associated with the Replanning
Business. As a result, both net sales and profits increased compared to the same period of the previous year.
(3) In the Brokerage Business, as part of its real estate consulting, we are responding swiftly to inquiries
from other divisions, including Property Management Business and Leasing Businesses. In addition, while
it is difficult for Clients, wealthy individuals, to visit Japan due to the impact of COVID-19, we have strived
to increase the value of our Japanese investment properties and with the trust we have built up over the years
Clients have purchased several replanning properties in the fiscal year under review, making a significant
contribution to our performance. As a result, both net sales and profits increased compared with the same
period of the previous fiscal year.
(4) In the Leasing Business, we provide a service network based in 12 sites, mainly in the 5 wards of central
Tokyo. It functions as a window for consultation close to the local building owners. We don’t consult only
one aspect of problems like vacancy for building owners, but also a variety of fundamental problems related
to real estate, such as management, inheritance, and deterioration of buildings that are difficult to deal with
due to the aging of the population through communicating with clients at the site. By working to solve these
problems from a multi-faceted and long-term perspective, our business as a whole has been strengthened andexpanded by creating opportunities for Replanning Business purchase, sales, construction orders, andbrokerage. In addition, we understand the needs of tenants in detail at the site of tenant leasing by thinking
together, researching, and making proposals to them. In this way, we anticipate changes quickly and find out
new values and needs from the client’s perspective. As a result of the damage caused by the outbreak of
COVID-19, both net sales and profits decreased compared with the same period of the previous fiscal year.
As a result, net sales in Real Estate Service Business as a whole increased 5.2% to 3,656 million yen fromthe same period of the previous fiscal year and segment profit increased 4.0% to 2,345 million yen from thesame period of the previous fiscal year.
(Operation Business)
In the Operation Business, we are engaged in (1) Hotel Operation Business and (2) Conference Room Rental
Business.
(1) In the Hotel Operation Business, we opened HIYORI Ocean Resort Okinawa (203 rooms) in February
and have 16 (2,295 rooms) operating hotels. Due to the outbreak of COVID-19 there was a sharp decline in
the number of inbound tourists, closure of tourist facilities and events, the government’s request to refrain
not only from traveling on vacation, but also from business trips resulted in a significant decrease inoccupancy rate especially in city hotels. As a result, despite efforts to reduce expenses, we recorded a loss
due to a large decrease in net sales compared with the same period of the previous fiscal year.
(2) In the Conference Room Rental Business, the need for training, seminars, and various events has
decreased due to the outbreak of COVID-19, making it difficult for us to offer existing business services.
However, we have quickly responded to clients' requests by developing new services that take into accountthe changing times such as custom-made spaces. At the same time, despite thorough cost reductions, both
net sales and profits declined compared with the same period of the previous fiscal year.

3As a result, net sales in Operation Business as a whole decreased 43.2% to 3,069 million yen from the same
period of the previous fiscal year and segment loss was 1,266 million yen compared with 192 million yen insegment loss from the same period of the previous fiscal year.
(Other Business)
In Other Business, we are engaged in (1) Rent Guarantee Business, (2) Overseas Business, and (3)Construction Business.
(1) In Rent Guarantee Business, when contract of guarantee is implemented, we conduct fact-finding surveys
thoroughly and rigorously in tenant guarantee examinations. When rent arrears occur, we provide services
tailored to building owners not only with rent guarantee, but also sincere support until the lease is surrendered.
Consultations from building owners increased due to the increase of vacant rooms and tenant credit concerns,
caused by the outbreak of COVID-19, and the switching from personal guarantee to institutional guarantee
due to the revision of the Civil Code. As a result, the number of new and renewed guarantees handled
remained steady and both net sales and profits increased compared with the same period of the previous
fiscal year.
(2) In Overseas Business, we have expanded into Southeast Asian countries where growth is expected andhas developed real estate mainly for condominiums and houses using Japanese advanced construction
technology. We are developing its business with a focus on providing Asian people with experience ofJapanese quality. The HIYORI Garden Tower (306 units), a high-rise condominium in Da Nang, Vietnam,
was completed in December 2019 and delivered until September 2020. As a result, net sales decreased andprofits increased compared with the same period of the previous fiscal year because the portion deliveredfrom January to September 2020 was recorded during this fiscal year.
(3) In the Construction Business, renewal planning, repair and reform, interior finishing work, andtelecommunications work for commercial buildings are carried out. Both net sales and profits declined due
to a reactionary decline following the delivery of large-scale construction work from the same period of theprevious fiscal year.
As a result, net sales of Other Business as a whole decreased 6.4% to 5,294 million yen from the same periodof the previous fiscal year and segment profit increased 4.9% to 1,489 million yen from the same period of
the previous fiscal year.
(2) Explanation regarding financial position
Total assets decreased 2.2% to 127,485 million yen as of March 31,2021 compared to March 31, 2020.
Liabilities decreased 11.9% to 57,712 million yen as of March 31,2021 compared to March 31, 2020 and net
assets increased to 7.7% to 69,773 million yen as of March 31,2021 compared to March 31, 2020.
The main factors behind the decrease in total assets were a decrease of 8,647 million yen in real estate forsale in process, a decrease of 658 million yen in accrued consumption taxes and advance payments included
in other current assets, and a decrease of 444 million yen in costs of uncompleted construction contracts,
while there was an increase of 3,400 million yen in real estate for sale of current assets, an increase of 2,880
million yen in cash and time deposits, and an increase of 641 million yen in notes and accounts receivable.
The main factors behind the decrease in liabilities was a decrease of 2,915 million yen in long-termborrowings in non-current liabilities, a decrease of 2,665 million yen in income taxes payable of current
liabilities, a decrease of 1,864 million yen in advances received included in other, and a decrease of 1,498
million yen in accounts payable, while there was an increase of 1,545 million yen in long-term borrowings
scheduled to be repaid within one year.
The main factors behind the increase in net assets was the increase of recording of 4,274 million yen in profit
attributable to owners of parent, while there was payment of year-end dividends of 2,047 million yen and an4increase of 3,000 million yen in non-controlling interests. The increase in non-controlling interests was dueto the issuance of preferred shares by subsidiaries.
As a result, sales in equity ratio increased 2.7 percentage points to 52.3% as of March 31,2021 compared toMarch 31, 2020.
(3) Explanation regarding cash flows
Cash and cash equivalents at the end of the fiscal year increased by 3,924 million yen from the beginning of
the fiscal year to 21,319 million yen as a result of an increase of 4,733 million yen in cash provided byoperating activities, an increase of 451 million yen in cash provided by investing activities, and a decreaseof 1,150 million yen in cash provided by financing activities.
Cash flows for the fiscal year under review and their factors are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities was 4,733 million yen compared with a net cash outflow of 2,697
million yen in the previous fiscal year. This was mainly due to payment of 5,964 million yen for corporate
income taxes, an increase of 2,688 million yen in notes and accounts receivable-trade, and a decrease of
1,509 million yen in accounts payable, while there was cash inflow of 7,462 million yen from profit before
income taxes, depreciation of 1,326 million yen, and a decrease of 4,396 million yen in inventories.
(Cash flows from investing activities)
Net cash provided by investing activities was 451 million yen compared with net cash outflow of 4,441
million yen in the previous fiscal year. This was mainly due to cash outflow of 530 million yen for thepayments into time deposits, outflow of 319 million yen in purchase of property, plant and equipment, andoutflow of 221 million yen in payments of guarantee deposits, while there was provision of 1,574 million
yen in proceeds from withdrawal of time deposits.
(Cash flows from financing activities)
Net cash used in financing activities was 1,150 million yen compared with net cash provided of 5,535 million
yen in the previous fiscal year. This was mainly due to increases such as 19,990 million yen in proceeds fromlong-term borrowings and 3,000 million yen in non-controlling interests, while there was cash outflow of
21,461 million yen in proceeds from issuance of bonds and 2,046 million yen in dividends paid.
(Sources of Capital and Liquidity of Funds)
The main demand for funds in our business activities is purchase in inventory assets, which is related to Real
Estate Revitalization Business. Purchase in inventory assets is provided by long-term borrowings fromfinancial institutions secured by individual inventory assets and funds acquired through operating activities.
As a basic policy, the inventory asset is to be sold within one year, and borrowings is to make a lump sum
repayment at the time of sale of the inventory assets, while taking into account the monthly scheduled
repayment and liquidity of funds is sufficiently secured.
(Reference) Cash Flows-Related Indicators

Equity ratio
Equity ratio at market value
Interest-bearing debt to cash flow ratio
Interest coverage ratio
Equity Ratio: Equity/Total assets

FY Ended
March 31,
2017
56.0
65.2
506.8
19.9

FY Ended
March 31,
2018
53.2
62.2
5

FY Ended
March 31,
2019
50.3
52.0
-

FY Ended
March 31,
2020
49.6
30.7
-

FY Ended
March 31,
2021
52.3
36.9
10.0
9.4

Equity Ratio at Market Value: Market Capitalization/Total assets
Interest-Bearing Debt to Cash Flow Ratio: Interest-bearing debt/Cash flows from operating activities
Interest Coverage Ratio: Cash flows from operating activities/Interest expenses(4) Explanation regarding forward-looking statements such as consolidated earnings forecasts
In response to the spread of COVID-19 infections, countries around the world are going through full-scalevaccination and is working toward the end of the spread of COVID-19. In Japan, although vaccination has
begun, the vaccination rate remains low compared with OECD member countries. In addition, the state of
emergency, which was reissued in April 2021, was extended until May 31. As a result, the environment
remains unpredictable for the end of the spread of COVID-19. According to the IMF's forecast for global
economic growth in fiscal year 2021 (released in April), the global economy is expected to grow by 6.0%.
In Japan, however, the growth rate is expected to remain at 3.3% due to the slow pace of the spread ofvaccines, although recovery can be observed compared to fiscal year 2020.
Against this backdrop, in the Japanese real estate market, while the average rent of office building market incentral Tokyo continues to decline and the average vacancy rate index continues to rise, there were signs ofa recovery in sales and purchases due to a certain level of bottoming out in the Tokyo office market and thecontinued low interest rate environment.
As a result of these initiatives, we expect forecast consolidated financial results for the fiscal year ending
March 31, 2022 to be 27.4% increase in net sales to 76,000 million yen from the same period of the previous
fiscal year, 51.7% increase in operating profit to 12,000 million yen from the same period of the previous
fiscal year, 52.8% increase in ordinary profit to 11,500 million yen from the same period of the previous
fiscal year, and 73.1% increase in profit attributable to owners of parent to 7,400 million yen from the same
period of the previous fiscal year.
In addition, in consideration of the recent changes in business environment and the new state of post COVID19, it has been decided that it is necessary to revise the timing for achieving medium-term management plan.
The numerical targets for medium-term management plan (100 billion yen for net sales, 20 billion yen forordinary profit, and 14 billion yen for profit attributable to owners of parent) will remain unchanged as amilestone in our sustainable growth, but the final fiscal year of the medium-term management plan will be
extended by two years to the fiscal year ending March 31, 2025. Based on our new growth strategy and focus
points, we aim to establish a business structure that balances flow and stock, and to be a corporate group thatwill continue to grow sustainably in and after the final fiscal year in the medium-term management plan.
2. Basic Views on the Selection of Accounting Standards
Our policy is to prepare consolidated financial statements for Japanese GAAP for the time being, taking into
account comparability of consolidated financial statements over time and comparability among companies.
With regard to the application of IFRS, we intend to take appropriate measures in consideration of various
situations in Japan and overseas.

6

3. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2020

As of March 31, 2021

18,627891
9,426
81,70321,5081,532
13,601
72,282

602

157

33
2,575
(18)
113,842

46
1,693
(36)
110,785

2,627
(721)
(6)
1,900
6,821
2,010
(299)
(19)
1,692
10,413

2,851
(855)
(6)
1,989
6,821
2,016
(291)
(7)
1,717
10,528

524
188
712

552
149
701

3,856
1,041
426
(1)
5,324
16,450130,293

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

AssetsCurrent assets
Cash and time deposits
Notes and accounts receivable - trade
Real 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
Accumulated depreciation
Accumulated impairment
Buildings (net amount)
Land
Other
Accumulated depreciation
Accumulated impairment
Other (net amount)
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

7

(Unit: million yen)
As of March 31, 2020

As of March 31, 2021

3,132
478
3,985
3,566
215

1,634
5,530
901
197

80

52

50
6,543
18,052

53
4,988
13,35844,90611
40
2,473
47,431
65,483

41,991
11
56
2,295
44,35457,712

11,965
6,445
46,347(67)
64,69011,965
6,445
48,573(67)
66,916

3

2

(73)

(292)

(69)

(289)

11
177
64,809130,293

16
3,129
69,773
127,485

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 assets8(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Unit: million yen)
For the year ended
March 31,2020
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Penalty income
Foreign exchange gains
Subsidy income
Other
Total non-operating income
Non-operating Expenses
Interest expenses
Foreign exchange losses
Loss on investments based on equity method
Provision of allowance for doubtful accounts
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary loss
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

9

For the year ended
March 31,2021

73,21849,18924,028
7,456
16,571

59,63244,54915,083
7,170
7,912

45
0
159
1
53
260

43
0
33
154
38
270

455
78
1
0
168
704
16,127

502
55
99
658
7,524

3
3

1
1

23
21
44
16,086
5,552
(49)
5,503
10,583
83
10,666

0
5
51
6
63
7,462
3,295
(70)
3,224
4,238
36
4,274

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

10

For the year ended
March 31,2021

10,583

4,238

(0)

(0)

49
48
10,632

(230)
(231)
4,006

10,720
(88)

4,054
(47)

(3) Consolidated Statement of Changes in Equity
For the fiscal year ended March 31, 2020
(Unit: million yen)
Shareholders' equity
Share capital
Balance at beginning of
the period

11,965

Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity6,445

37,557(67)

55,900Changes during period
Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with non-controlling interests
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of theperiod(1,877)(1,877)

10,666

10,666

-

-

-

8,789

-

8,789

11,965

6,445

46,347(67)

64,690Total accumulated
othercomprehensive
incomeShare acquisitionrightsNon-controllinginterests

Total net assets

(123)

5

77

55,860

Accumulated other comprehensive income
Valuation difference Foreign currency
on available-for-saletranslation
securities
adjustment
Balance at beginning of
the period

3

(126)

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with non-controlling interests
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of theperiod(1,877)
10,666

-

(0)

53

53

5

100

159

(0)

53

53

5

100

8,949

3

(73)

(69)

11

177

64,80911

For the fiscal year ended March 31, 2021
(Unit: million yen)
Shareholders' equity
Share capital
Balance at beginning of
the period

11,965

Capital surplus

Retained earnings

Treasury shares

Total shareholders'equity6,445

46,347(67)

64,690Changes during period
Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with non-controlling interests
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of theperiod(2,047)(2,047)

4,274

4,274

(0)

(0)

-

(0)

2,226

-

2,226

11,965

6,445

48,573(67)

66,916

Total accumulated
othercomprehensive
incomeShare acquisitionrightsNon-controllinginterests

Total net assets

(69)

11

177

64,809

Accumulated other comprehensive income
Valuation difference Foreign currency
on available-for-saletranslation
securities
adjustment
Balance at beginning of
the period

3

(73)

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Change in ownershipinterest of parent due totransactions with non-controlling interests
Net changes in items
other than shareholders'equityTotal changes during
periodBalance at end of theperiod(2,047)
4,274

(0)

(0)

(219)

(219)

4

2,952

2,737

(0)

(219)

(219)

4

2,952

4,963

2

(292)

(289)

16

3,129

69,77312

(4) Consolidated Statement of Cash Flows(Unit: million yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for directors(and other officers)
Increase (decrease) in provision for provision for
fulfillment of guarantees
Increase (decrease) in provision for share-based
remuneration
Interest and dividend income
Subsidy income
Interest expenses
Loss (gain) on investments based on equity method
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other
SubtotalInterest and dividends received
Interest paid
Income taxes (paid) refund
Proceeds from subsidy income
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments of guarantee deposits
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Dividends paid
Proceeds from share issuance to non-controllingshareholders
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Increase in cash and cash equivalents resulting from
inclusion of subsidiaries in consolidation
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
13

For the year ended
March 31,2020

For the year ended
March 31,2021

16,086
1,301
109
10
27

7,462
1,326
110
18
(19)

10

(27)

18

2

15

16

(45)
455
1
(3)
44
481
(16,962)
1,644
(735)
2,460
42
(464)
(4,735)(2,697)

(44)
(154)
502
55
(1)
5
51
(2,688)4,396(1,509)1,488
10,99348(497)(5,964)154
4,733(2,075)2,165(2,859)12(46)(1,614)(22)(4,441)

(530)
1,574
(319)
3
(25)
(221)
(30)
451

478
27,800(20,895)(1,875)(564)
19,990(21,461)(2,046)

188

3,000

(158)
5,535
63

(67)
(1,150)(110)(1,539)3,924

18,933
17,394

17,394
21,319(5) Notes to Consolidated Financial Statements(Notes to Assumption of Going Concerns)
Not applicable.
(Additional Information)
The Company conducts transactions to deliver its own shares through trust for the purpose of employee
welfare.
(1) Overview of transaction
The Plan provides the Company's shares to employees of the Company who meet certain requirements
based on the share benefit regulations established by the Company in advance.
The Company will grant points to employees who satisfy certain conditions at the end of the consolidated
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 themoney 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 withthe “Practical Solution on Transactions of Delivering the Company’s Own Shares to Employees etc.
through Trusts” (ASBJ PITF No. 30, March 26, 2015).
(2) 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 at the endof the previous fiscal year were 67 million yen and 56,500 shares, and at the end of the current fiscal year
were 67 million yen and 56,500 shares.

14

(Segment Information, etc.)[Segment Information]
1. Overview of Reportable Segments
The reportable segments of the Company are the constituent units of the company group for which separate
financial information is available and which are subject to periodic review by the Board of Directors inorder to determine the allocation of management resources and evaluate performance.
The head office formulates comprehensive strategies for each type of product and service and conducts
business activities.
Accordingly, the Company consists of three reportable segments: “Real Estate Revitalization Business”,“Real Estate Service Business”, and “Operation Business”, which are defined by the product and service
segments established by the head office.
“Real Estate Revitalization Business” is engaged in Replanning Business, Hotel Development Business andRental Building Business. Real Estate Service Business is engaged in Property Management Business,
Building Maintenance Business, Brokerage Business, and Leasing Business. “Operation Business” is engagedin Hotel Operation Business and Conference Room Rental Business.
2. Method of Calculating the Net Sales, Profit (loss), Assets and Liabilities for Each Reportable Segment
The methods of accounting for the reportable business segments are the same as those described in“Significant matters that form the basis of preparation of consolidated financial statements” Reportablesegment profit is based on ordinary profit (loss).
3. Information on Net Sales, Profit (loss), Assets and Liabilities for Each Reportable Segment
For the fiscal year ended March 31,2020(Unit: million yen)Amount on
consolidated
Adjustment
statement of(Note 2)income(Note 3)

Reportable segments

Net sales
Net sales to externalcustomers
Internal sales ortransfers
Subtotal
Segment profit
Segment assets
Segment liabilities
OthersDepreciation
Amortization of goodwill
Interest expenses
Income(loss) on
investments based onequity method
Increase in Property,
plant and equipment andintangible assets

Other(Note 1)

Real Estate
Revitalization
Business

Real Estate
ServiceBusiness

Operation
Business

59,103

3,079

5,405

67,588

5,629

73,218-73,218

958

396

-

1,354

29

1,384

(1,384)-60,061
18,855
101,581
54,912

3,476
2,253
621
1,286

5,405
(192)
2,375
347

68,943
20,917
104,578
56,547

5,659
1,419
4,360
4,038

74,602
22,337
108,939
60,585(1,384)(6,209)21,353
4,898

73,21816,127130,293
65,483

1,057
453

0
-

97
83
0

1,155
83
454

16
47
26

1,172
130
480

129
(25)

1,301
130
455

-

-

-

-

-

-

(1)

(1)

1,612

8

176

1,797

9

1,807

143

1,951

Total

Total

Note 1. The “Other” segment is a business segment that is not included in the reportable segment and includes the rent guarantee
business, overseas business, construction solutions business, etc.
Note 2. Details of the “Adjustment” are as follows:(1) Adjustment in segment profit of negative 6,209 million yen includes elimination of intersegment transactions of negative
157 million yen and company-wide expenses of negative 6,052 million yen is not allocated to each reportable segment.
Company-wide expenses are mainly selling, general and administrative expenses that are not attributable to reportablesegments.
(2) Adjustment in segment assets of 21,353 million yen include eliminations of intersegment transactions of 676 million yen
and company-wide assets of 22,030 million yen that are not allocated to each reportable segment. Company-wide assets
consist mainly of surplus operating funds (cash and time deposits and marketable securities) and administration
department’s assets that do not belong to any reportable segment.

15

(3) Adjustment in segment liabilities of 4,898 million yen include elimination of intersegment transactions of 369 million yen
and company-wide liabilities of 5,268 million yen that are not allocated to each reportable segment.
(4) Adjustment of depreciation under the “Others” of 129 million yen includes depreciation of company-wide assets notallocated to each reportable segment of 129 million yen.
(5) Adjustment of income(loss) on investments based on equity method under the “Others” of 1 million includes 1 million
yen of income(loss) on investments based on equity method relating to company-wide assets not allocated to eachreportable segment.
(6) Adjustment of increase in property, plant and equipment and intangible assets under the “Others” of 143 million yen
includes the 143 million yen increase in property, plant and equipment and intangible assets related to company-wide
assets not allocated to each reportable segment.
Note 3. Segment profit is reconciled to ordinary profit (loss) in the consolidated statement of income.

For the fiscal year ended March 31, 2021
(Unit: million yen)Amount on
consolidated
Adjustment
statement of(Note 2)income(Note 3)

Reportable segments

Net sales
Net sales to externalcustomers
Internal sales ortransfers
Subtotal
Segment profit
Segment assets
Segment liabilities
OthersDepreciation
Amortization of goodwill
Interest expenses
Income(loss) on
investments based onequity method
Increase in Property,
plant and equipment andintangible assets

Other(Note 1)

Real Estate
Revitalization
Business

Real Estate
ServiceBusiness

Operation
Business

48,077

3,239

3,069

54,386

5,246

59,632-

59,632

321

416

-

737

48

785

(785)

-

48,398
11,261
96,56650,544

3,656
2,345
817
1,625

3,069
(1,266)
5,127
905

55,123
12,339102,51153,075

5,294
1,489
1,605
1,275

60,41813,828104,11754,350(785)(6,304)23,3683,361

59,632
7,524
127,485
57,712

1,054
463
-

8
2
-

157
59
-

1,219
62
463
-

19
48
4
-

1,239
110
467
-

87
35
(55)

1,326
110
502
(55)

173

122

135

431

81

513

15

528

Total

Total

Note 1. The “Other” segment is a business segment that is not included in the reportable segment and includes the rent guarantee
business, overseas business, construction solutions business, etc.
Note 2. Details of the “Adjustment” are as follows:(1) Adjustment in segment profit of negative 6,304 million yen includes elimination of intersegment transactions of negative
229 million yen and company-wide expenses of negative 6,074 million yen not allocated to each reportable segment.
Company-wide expenses are mainly selling, general and administrative expenses that are not attributable to reportablesegments.
(2) Adjustment in segment assets of 23,368 million yen include eliminations of intersegment transactions of 208 million yen
and company-wide assets of 23,577 million yen that are not allocated to each reportable segment. Company-wide assets
consist mainly of surplus operating funds (cash and time deposits and marketable securities) and administration
department’s assets that do not belong to any reportable segment.
(3) Adjustment in segment liabilities of 3,361 million yen include elimination of intersegment transactions of 34 million yen
and company-wide liabilities of 3,396 million yen that are not allocated to each reportable segment.
(4) Adjustment of depreciation under the “Others” of 87 million yen includes depreciation of company-wide assets notallocated to each reportable segment of 87 million yen.
(5) Adjustment of income(loss) on investments based on equity method in the “Others” of negative 55 million yen includes
income(loss) on investments based on equity method of negative 55 million yen related to company-wide assets notallocated to each reportable segment.
(6) Adjustment of increase in property, plant and equipment and intangible assets under the “Others” of 15 million yen
includes the 15 million yen increase in property, plant and equipment and intangible assets related to company-wide assets
not allocated to each reportable segment.
Note 3. Segment profit is reconciled to ordinary profit (loss) in the consolidated statement income.

16(Per Share Information)
For the year ended March
31,2020
Net assets per share (yen)1,326.93
Earnings per share (yen)219.03
Fully diluted earnings per share (yen)218.97Note 1. Basis for calculation of earnings per share and fully diluted earnings per share is as follows.

For the year ended March
31,2021
1,368.14
87.77
87.73

(“¥” indicates millions of yen, except for per share figures.)

Earnings per share
Profit attributable to owners of parent
Amount not attributable to common shareholders
Profit attributable to owners of parent related to common shares
Average number of shares
Fully diluted earnings per share
Adjustment of profit attributable to owners of parent
Common shares increase(including Share acquisition rights)
Outline of dilutive shares not included in the calculation of fully
diluted earnings per share because they have no dilutive effect

For the year ended March
31,2020

For the year ended March
31,2021¥10,666¥10,666
48,698,856¥4,274¥4,274
48,698,856

12,630¥12

20,021¥16-

Note 2. Basis for calculation of net assets per share is as follows.
(“¥” indicates millions of yen, except for per share figures.)
For the year ended March
31,2020
Total net assets¥64,809
Amount of deduction from total net assets¥188
Share acquisition rights¥11
Non-controlling interests¥177
Net assets at year end available to common shares¥64,620
Number of common shares used for the calculation of net assets per share
48,698,856

For the year ended March
31,2021¥69,773¥3,145¥16¥3,129¥66,627
48,698,856

Note 3. 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 numberof outstanding shares at the end of the fiscal year under review. The weighted average number of shares for the period of theCompany's shares held by the trust account is 56,500 shares for the previous fiscal year and 56,500 shares for the current fiscal
year. The number of shares at the end of the fiscal year is 56,500 shares for the previous fiscal year and 56,500 shares for thecurrent fiscal year.

(Significant Subsequent Events)
Not applicable.

17