Consolidated Financial Results for Fiscal Year Ended March 31, 2024
May 10, 2024 released

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

Sun Frontier Fudousan Co., Ltd.
Tokyo Stock Exchange Prime Section
8934
https://www.sunfrt.co.jp/en/
Seiichi Saito, President
Takeshi Hirahara, Senior Executive Officer, General Manager of Corporate Planning Department(Phone: +81-3-5521-1301)
Scheduled date of general meetings of shareholder: June 25, 2024
Scheduled date of dividend payment commencement: June 26, 2024
Scheduled date of securities report submission: June 26, 2024
Supplemental materials for the financial results: Yes
Presentation to explain for the financial results: Yes (For institutional investors and analysts)*Amounts are rounded down to millions of yen.

1.Consolidated Performance in Fiscal Year Ended March 31, 2024
(1) Consolidated Operating Results (April 1, 2023 to March 31, 2024)(% indicate year-on-year changes)

Net Sales

Operating Profit

Ordinary Profit

Net Income¥ million%¥ million%¥ million%¥ million%

79,868-3.5

17,60018.1

17,37418.0

11,917

2.6

FY2023/3
82,777 16.2
14,905 22.9
14,722 20.5
(Note) Comprehensive income: FY2024/3: 12,375 millions of yen (3.3%)‘FY2023/3: 11,980 millions of yen (54.8%)
Net Income per
Fully Diluted
ROE
ROA
Share
Net income per Share¥¥%%FY2024/3
245.50230.74
13.9
10.2

11,61256.6

FY2024/3

Operating Income
Margin%22.0

FY2023/3
238.98238.76
15.3
10.2(Reference) Income on investments based on equity method FY2024/3: 12 millions of yen(Reference) Income on investments based on equity method FY2023/3: ‐71 millions of yen(2) Consolidated Financial Position
Total Assets¥ million

Net Assets

FY2024/3

188,661¥ million
94,416FY2023/3

152,519

83,965Equity Ratio

18.0

Net Assets per Share

%
48.0

¥
1,864.36

52.9

1,663.33

Cash Flows fromOperating Activities¥ million-4,254

Cash Flows fromOperating Activities¥ million
21,040Cash Flows fromOperating Activities¥ million
47,866‐6,681

2,039

41,914(Reference) Total Equity: FY2024/3: 90,519 millions of yen
FY2023/3: 80,702 millions of yen(3) Consolidated Cash Flows
Cash Flows fromOperating Activities¥ million
FY2024/3-11,003
FY2023/3

16,544-1

2.Cash Dividends
Cash Dividends per Share
1 quarter 2 quarter 3rd quarter
Year end
end
end
end
¥
¥
¥
¥

Total
Consolidated
Dividends Payout Ratio

Consolidated
Net Asset
dividend rate

%

%

20.1

3.1

FY2024/3
26.00
32.00
58.00
2,819
23.6
FY2025/3
33.00
33.00
66.00
22.9
(Forecast)
The breakdown of FY2024/3 year-end dividend (forecast): ordinary dividend ¥30.00,
commemorative dividend ¥2.00

3.3

st

FY2023/3

nd

-

23.00

-

25.00

AnnualTotal¥ ¥ million

48.00

2,335

3.Forecast for Consolidated Financial Results for FY2025/3 (April 1, 2024 to March 31, 2025)(% indicate year-on-year changes)

Net Sales
Full year

Operating income¥ million%¥ million%

100,000

25.2

20,870

18.6

Profit Attributable toOrdinary income
EPS (yen)
Owners of Parent¥ million%¥ million%¥
20,00015.1

14,00017.5

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

None
Yes
None
None

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

FY2024/3

48,755,500
shares

FY2023/3

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

FY2024/3

203,208
shares

FY2023/3

237,169
shares3) Average number of shares for the period:

FY2024/3

48,541,810
shares

FY2023/3

48,592,065
shares(Note) The number of treasury shares at the end of the third quarter of the fiscal year ending March 31, 2024
includes 1,934 treasury shares of restricted stock as renumeration held by the former employees
resigning during their terms in this period, 51 shares by purchase of fractional shares, and 35,946
treasury shares deducting disposed of as remuneration of restricted stock.

-2

(Reference) Overview of Non-consolidated Performance

1. Non-consolidated Performance in the Fiscal Year Ended March 31, 2024 (April 1, 2023 to March 31, 2024)(1) Non-Consolidated Operating Results(“¥ ” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales

Operating Profit

Ordinary Profit

Net Income¥ million%¥ million%¥ million%¥ million%

FY2024/3

52,929

1.6

11,944‐0.0

11,614

-1.2

7,953

1.0

FY2023/3

52,097‐12.5

11,949‐16.4

11,753

‐18.1

7,871

‐15.2

¥

Fully Diluted
Earnings per Share¥FY2024/3

163.85154.00

FY2023/3

161.98161.83

Earnings per Share(2) Non-Consolidated Financial Position

FY2024/3¥ million
168,972¥ million
85,382%
50.5

Net Assets per Share(yen)¥
1,757.95

FY2023/3

137,21279,85958.2

1,645.34

Total Assets

Net Assets

Equity Ratio (%)(Reference) Total Equity: FY2024/3: 85,352 millions of yen
FY2023/3: 79,829 millions of yen※This Summary of Consolidated Financial Results is exempt from audit process by Certified public
accountants or auditors.
※Explanation for appropriate use of forecast and other special matters
Earnings per share in the forecast of consolidated financial results for FY2025/3 is calculated based on the
average number of shares for the period, 48,541,810 shares.
Forward-looking statements, such as forecast of consolidated financial performance, stated in thisdocument are based on information currently possessed by the Company as well as certain assumptions
deemed rational. It does not mean that the Company assurances that the contents mentioned in these forwardlooking statements will ever materialize. Actual financial performance may be significantly different fromsuch expectations due to various factors.

-3

Accompanying Materials
1. Financial Highlights for the Fiscal Year Ended March 31, 2024 ...................................................................5(1) Business Performance ..................................................................................................................................5(2) Consolidated Financial Position ...................................................................................................................8(3) Consolidated Cash Flows .............................................................................................................................9(4) Outlook for the Fiscal Year Ending March 31, 2025 ..................................................................................10
2. Basic Views on the Selection of Accounting Standards ............................................................................... 11
3.Consolidated Financial Statements and Key Notes ......................................................................................12(1) Consolidated Balance Sheet .......................................................................................................................12(2) Consolidated Statements of Income and Comprehensive Income .............................................................14(3) Consolidated Statement of Changes in Equity ...........................................................................................16(4) Consolidated Statement of Cash Flows ......................................................................................................18(5) Notes to Consolidated Financial Statements ..............................................................................................20(Notes to Assumption of Going Concern) ................................................................................................20(Change of Accounting Policies)..............................................................................................................20(Segment Information, etc.) .....................................................................................................................20(Per Share Information) ............................................................................................................................23(Significant Subsequent Events) ..............................................................................................................23-4

1. Financial Highlights for the Fiscal Year Ended March 31, 2024
(1) Business Performance
Forward-looking statements in this document are based on the judgments of the Group as of the end of the
fiscal year ended March 31, 2024.
During the fiscal year under review, the Japanese economy continued to recover as the employment andincome 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 invarious countries, a slowdown in the Chinese economy, and high crude oil prices due to the impact ofgeopolitical risks, there is growing attention to the timing of policy interest rate cuts before the U.S.
presidential election and a 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, themarket has been generally weak due to the promotion of remote work in the pandemic of COVID-19 andthe increase in vacant floor space caused by the rush of completion of large-scale new office buildings.
However, after the transition of COVID-19 to Category 5 (May 2023), demand has recovered as thesignificance of offices has been reconfirmed, and expectations for further declines in vacancy rate andincreases in rents are increasing. In the real estate investment market, although the Bank of Japan's negativeinterest 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 numberof sales increased from the previous fiscal year. In addition, profit margin remained at a high level. As aresult, 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 tothe “Nationwide Travel Subsidy Program” and the transition of COVID-19 to a Category 5 disease, as wellas the impact of the depreciation 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).
The results of each segment are as follows.
(Real Estate Revitalization Business)
In the Real Estate Revitalization Business, we are engaged in (i) Replanning Business and (ii) Rental
Building Business.
(i) In Replanning Business, we provide a one stop, integrated real estate service that includes everythingfrom the purchase of buildings, renovation and utilization planning, construction work, leasing, rent
guarantee services, management, and building management. During the fiscal year under review,purchase operations progressed at a faster pace than planned, thanks to cooperation among various
departments of the Office Division and the strengthening of the procurement system. We will continue
to strengthen our purchase operations in preparation for commercialization and sales in the coming-5

fiscal year. In commercialization, we worked to reflect the real needs of clients in our products andincrease the value of our properties with a high added value. In property sales, we sold 25 properties(including two properties in New York and one small-lot property) during the fiscal year under review,
and maintained a high level of 30% in segment profit margin. We will continue to utilize ourcommunity-based leasing capabilities to sell properties with high occupancy rates and high added value
to investors in Japan and overseas. We also continued to focus on purchase and sales in our Replanning
Business of apartments in New York, with one purchase and two sales in the fiscal year under review.
Additionally, in specified joint real estate ventures, Compass Nerima, the Company's eighth small-lot
project, was sold out, and Compass Sakurashinmachi, the Company's ninth small-lot project, waslaunched. In the fiscal period under review, both net sales and profit posted year-on-year increases due
to steady property sales and the maintenance of a high level of gross profit margin.
(ii) In Rental Building Business, with the aim of building a stable revenue base as a stock business, we are
expanding the number of rental buildings properties in Replanning Business and utilizing theoperational capabilities we have accumulated in Real Estate Service division to increase rent income
over the medium to long term. As a result of an increase in the number of properties held as inventories,
both net sales and profit increased year on year.
As a result, net sales amounted to 51,027 million yen (up1.9% YoY) and segment profit amounted to 15,602
million yen (up1.7% YoY) in total for the Real Estate Revitalization Business.
(Real Estate Service Business)
In the Real Estate Service Business, we are engaged in (i) Property Management Business, (ii) Building
Maintenance Business, (iii) Sales Brokerage Business, (iv) Leasing Brokerage Business, (v) Rental
Conference Room Business, and (vi) Rent Guarantee Business.
(i) In Property Management Business, we aim to raise tenant satisfaction through property managementthat meets the needs of the clients. At the same time, we are working with the leasing brokerage division
to attract tenants and revise conditions to appropriate rents, thereby supporting the high-occupancy andhigh-profitability building management that meets building owners' requests. In the fiscal year underreview, both net sales and profit recorded year-on-year growth, with number of entrusted buildings
adding 36 buildings and occupancy rate improving 4.31% pt.
End of March 2022

End of March 2023

End of March 2024

Number of
Entrusted Buildings

421 buildings

457 buildings

493 buildings

Occupancy Rate

91.49%

89.61%

93.92%(ii) Under the slogan of “making Tokyo the most beautiful city in the world,” Building MaintenanceBusiness is engaged in projects such as inspections, cleaning, renovation and surveys to maintain andmanage buildings. With strengths in glass cleaning and exterior wall cleaning and repair work, we arecollaborating with each department of the Office Division. Results for the fiscal year under review
decreased from the previous fiscal year in both net sales and profit due to a decrease in facility
disinfection work related to the COVID-19 pandemic and cancellations at unprofitable sites.
(iii) In Sales Brokerage Business, as part of our real estate consulting, we are working to quickly respondto inquiries from clients in other divisions, including Property Management Business and Leasing
Brokerage Business. The Office Divisions are working together to expand our customer base by
supporting building owners' building management, and based on the trust we have built up, we havebeen able to win brokerage contracts. Results for the year under review declined in both net sales and-6

profit due to the conclusion of large-scale projects in the previous fiscal year.
(iv) In Leasing Brokerage Business, we opened two sites in the fiscal year under review, the Shinbashi
office and the Ikebukuro office, creating a service network of 12 sites in the main central Tokyo area.
By utilizing tenant needs and changes that we have quickly learned from leasing sites in our researchand proposals for optimal use of office space, we are leading to the creation of a new sense of value
from our clients' perspective in Replanning Business product planning. Also, in our sub-lease
operations, where we are working to resolve building owners' concerns, we added two new entrustment
contracts during the fiscal year under review, bringing the total number of properties to 10. We willcontinue to stay close to clients and contribute to the local community by providing services as afamiliar information center. Results for the fiscal year under review increased year on year in both net
sales and profit due to strong performance in leasing.
(v) In Rental Conference Room Business, the number of companies that have resumed group training
programs has increased, and demand for rental conference room services has increased. Throughservices that respond to clients’ requests, both new and repeat customers have increased. During the
fiscal year under review, we opened new Vision Centers in the following five areas: Nihombashi,
Ichigaya, Yaesu, Shinjyuku, and Shimbashi. The scale of operations was 15 sites, 6,481 tsubo. We willcontinue to accelerate site expansion mainly in central Tokyo. In the fiscal year under review, orders
increased due to the new conference room opening and the floor space expansion in 10 facilities,
resulting in significant year-on-year growth in both net sales and profit.
(vi) In Rent Guarantee Business, through our brand “TRI-WINS”, we provide services tailored to building
owners for all processes from tenant screening at offices and stores, rent guarantee, building surrenderlawsuits, and eviction. Compared to general guarantee services, this brand expands the range ofservices. It is a win-win-win service that solves the risks and issues faced by both building owners andtenants and contributes to economic growth and social stability. As a result of continued stable progressin our core credit guarantee business, our performance in both net sales and profit remained strong.
As a result, net sales amounted to 10,497 million yen (up18.7% YoY) and segment profit amounted to 5,612
million yen (up14.8% YoY) in total for the Real Estate Service Business.
(Hotel and Tourism Business)
In the Hotel and Tourism Business, we are engaged in (i) Hotel Development Business, (ii) Hotel Operation
Business.
(i) In Hotel Development Business, net sales decreased year on year due to the sale of two hotels in theprevious fiscal year, but profit increased significantly due to the sale of one subdivision of acondominium hotel lot and one hotel. In addition to the capital return from the sale of those hotels, wewill utilize the funds raised through convertible bonds that were completed on October 6, 2023 toreinvest in development, including M&A, centered on the Tabino Hotel brand, and expand ouroperations. At present (May, 2024), there are 10 hotels with 1,347 rooms under planning in parts of thecountry, and together with hotels in in operation, there will be 39 hotels with 4,456 rooms.
(ii) In Hotel Operation Business, five hotels (612 rooms) have been added to the Group, including Seifutei(11 rooms) in Inawashiro-machi, Fukushima, and Joytel Hotel Namba Doutonbori in the Kansai area.
As a result, a total of 29 hotels (3,109 rooms) are currently (May, 2024) in operation. We will continue
to focus on creating enthusiastic fans through the heart-warming services of our staff under the themeof “a heartwarming and fun hotel.” During the fiscal year under review, due to the continued expansionof domestic tourism demand and the effects of recovery in inbound tourism, occupancy rate andaverage daily rate continued to rise based on the Group's high added value strategies. As a result, net
sales and profit increased significantly from the previous fiscal year.

-7As a result, net sales amounted to 16,977 million yen (down26.1% YoY) and segment profit amounted to
4,369 million yen (up153.9% YoY) in total for the Hotel and Tourism Business.
(Other Business)
In Other Business, we are engaged in (i) Overseas Development Business, (ii) Construction Business.
(i) As for Overseas Development Business operations, the Group entered the Vietnamese market, where
growth is expected, and is developing condominiums and other businesses. In October 2023, we
acquired land for the development of a condominium in Danang, the largest city in central Vietnam,
and the construction is scheduled to begin in the first half of the next fiscal year. We will continue tocontribute to the development of local communities by providing high-quality housing using Japan's
advanced construction technology. Results for the fiscal year under review declined in both net sales
and profit due to a rebound from property sales in the previous fiscal year.
(ii) In Construction Business, we are engaged in renewal planning, repair and renovation of commercial
buildings, interior finishing work and telecommunications construction, etc. Both net sales and profit
increased year on year due to the booking of sales from large-scale construction projects by Group
companies.
As a result of the above, net sales amounted to 2,409 million yen (up34.8% YoY) and segment profit
amounted to 301 million yen (up6.4% YoY) in total for Other Business.
The main initiatives of the quarter are as follows.
“Sun Frontier Fudousan is committed to protecting all employees, achieving material and spiritual happiness,and initiatives to maintain and improve the health of its employees.” Based on this declaration, the Company
aims to maintain and improve the mental and physical health of its employees and increase their job
satisfaction which shall lead to increased productivity. We were recently certified as one of the “2024
Excellent Health and Productivity Management Corporations (Large-scale Corporations Category)” by the
Ministry of Economy, Trade and Industry and the Japan Health Council. Encouraged by this certification,
we will further strengthen our initiatives to maintain and improve the mental and physical health of ouremployees.
The Group sets a sustainability vision of “We will contribute to the realization of a sustainable society
through our business activities while respecting the heart of altruism, the Company policy. ” Based on thisvision, we have identified “Environmental protection,” “Regional revitalization” and “Human resource
development” as priority issues (materiality) and are working to resolve social issues through our businesses.
In February, 2024 we concluded an agreement for “Mizuho Positive Impact Finance*” with Mizuho Bank
Ltd. We will continue to contribute to the realization of a sustainable society by continuing to take on thechallenge of creating new value while controlling the waste of limited resources, and by advancing ourbusiness activities through the creation of customer delights.
*This contract is a comprehensive and quantitative evaluation of a company’s social impact (positive andnegative impacts) using an impact evaluation framework developed independently by Mizuho Research &Technologies Co., Ltd. If it confirms that the company has the intention of producing a positive impact, theloans will be provided to the company for the purpose of continuous support for initiatives.
(2) Consolidated Financial Position
Total assets at the end of the current consolidated fiscal year amounted to 188,661 million yen (up23.7%
compared with the end of the previous fiscal year), liability amounted to 94,244 million yen (up37.5%
compared with the end of the previous fiscal year), and net assets amounted to 94,416 million yen (up12.4%
compared with the end of the previous fiscal year).

-8

The increase in total assets was mainly due to an increase of 5,851 million yen in cash and deposits and anincrease of 34,826 million yen in real estate for sale in process and an increase of 912 million yen in land of
non-current assets, which were partially offset by a decrease of 8,149 million yen in real estate for sale and adecrease of 388 million yen in deferred tax assets.
The increase in liabilities was mainly due to an increase of 6,764 million yen in current portion of long-termborrowings, an increase of 9,999 million yen in bonds payable and an increase of 7,101 million yen in longterm borrowings, which were partially offset by a decrease in 789 million yen in advances received of otherin non-current liabilities,
The increase in net assets was mainly due to the recording of 11,917 million yen in profit attributable toowners of parent, which was partially offset by the year-end dividend payment of 1,216 million yen and theinterim dividend payment of 1,265 million yen. Equity ratio increased 4.9 percentage points to 48.0%.
(3) Consolidated Cash Flows
Cash and cash equivalents (hereinafter called, “funds”) at the end of the current period increased by 5,951
million yen from the beginning of the fiscal year to 47,866 million yen as a result of a decrease of 11,003
million yen of funds provided by operating activities, a decrease of 4,254 million yen of funds provided byinvesting activities, and an increase of 21,040 million yen of funds provided by financing activities.
Cash flows for the current consolidated fiscal year and their factors are as follows.
(Cash flows from operating activities)
Net cash outflow used in operating activities was 11,003 million yen compared with net cash provided byoperating activities of 16,544 million yen in the previous fiscal year. This was mainly due to outflow of anincrease in inventories of 26,770 million yen, corporate income taxes payments of 3,505 million yen and an
decrease for accounts receivable increasing of 1,187 million yen, despite profit before income taxes of
17,295 million yen, depreciation of 2,124 million yen.
(Cash flows from investing activities)
Net cash outflow used in investing activities was 4,254 million yen compared with net cash outflow used ininvesting activities of 6,681 million yen in the previous fiscal year. This was mainly due to outflow of 2,457
million yen in purchase of property, plant and equipment and 954 million yen in purchase of shares ofsubsidiaries and associates, despite 205 million yen in proceeds from collection of guaranteed deposits.
(Cash flows from financing activities)
Net cash provided by financing activities was 21,040 million yen compared with net cash provided byfinancing activities of 2,039 million yen in the previous fiscal year. This was mainly due to 32,558 million
yen in proceeds from long-term borrowings and 9,999 million yen in proceeds from bond issuance, despite
18,991 million yen in repayments of long-term borrowings and 2,481million 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 theReal Estate Revitalization Business. Purchase of 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 a lump-sum repayment of borrowings
is made at the time of sale of the inventory asset, while taking into account the monthly scheduled repayment
and this ensures sufficient liquidity of funds.

-9

(Reference) Cash Flows-Related Indicators
FY Ended FY Ended FY Ended FY Ended FY Ended
March 31, March 31, March 31, March 31, March 31,
2020
2021
2022
2023
2024
Equity ratio
49.6
52.3
52.2
52.9
48.0
Equity ratio at market value
30.7
36.9
37.5
40.8
50.5
Interest-bearing debt to cash flow ratio
10.0
2.9
3.4
-6.3
Interest coverage ratio
9.4
39.1
34.7
-20.4
Equity Ratio: Equity/Total assets
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) Outlook for the Fiscal Year Ending March 31, 2025
Since the transition of COVID-19 to a Category 5 disease in May 2023, the Japanese economy has entereda full-scale recovery trend. Although the Bank of Japan decided to end its negative interest rate policy at theMonetary Policy Meeting in March 2024, the accommodative financial environment is expected to be
maintained for the time being. The global economy is expected to avoid downside risks due to the softlanding of the U.S. economy and solid growth in emerging economies, despite the continued low growthrate due to the slowdown in the Chinese economy.
In the office building market in central Tokyo, average vacancy rate is gradually improving despite thecompletion of many large-scale new office buildings. As more and more people return to the office and the
hybrid work styles have taken root, the ways in which people use the office have become more diverse.
Under these circumstances, the Company will continue to utilize the know-how it has accumulated on thefront lines of its Office Division, promote commercialization that reflects the latest needs of tenants, andenhance the value of its buildings to be highly profitable and highly operational through close cooperation
among each department. At the same time, we aim to curb waste of resources through the environmentfriendly revitalization for existing office buildings and minimizing necessity of future reconstruction for
new office buildings. In the Group, after we sell a property to building owners, we will continue to manage
the property, together with other buildings of the owner, and provide various real estate services to maintainand improve the value of the property.
In the hotel and tourism market, in addition to the expansion of tourism demands, the number of foreign
visitors to Japan has exceeded the number before the novel coronavirus outbreak due to continued low
interest rates and the depreciation of the yen due to the maintenance of the easy monetary policy, andinbound demands are expanding. Under these circumstances, the Hotel and Tourism Business in the Groupwill aim to be “the one and only hotel in the world for clients” through heart-warming services by our staff
under the theme of “a heartwarming and fun hotel” this year as well. Moreover, as SDGs partners certified
by each local government, all our hotels will keep contributing to solving environmental and social issues.
At the same time, we will actively promote hotel development in various parts of Japan while contributing
to regional revitalization, focusing on the Tabino Hotel brand that responds to the needs of both businessand tourism, and small luxury where you can enjoy the characteristics unique to the area.
In this business environment, the fiscal year ending March 31, 2025 is the final year of medium-term
management plan, which was extended by two years in May 2021. The consolidated earnings forecasts forthe fiscal year are as planned: net sales 100,000 million yen (up 25.2% year on year), operating profit 20,870
million yen (up 18.6% year on year), ordinary profit 20,000 million yen (up 15.1% year on year), and profit
attributable to owners of parent 14,000 million yen (up 17.5% year on year).
We have set forth a new long-term vision for 2035, which is ten years from now, and have formulated thenext medium-term management plan, with the fiscal year ending March 31, 2028 as the final year, to achieve
this vision. By formulating the next medium-term management plan before the completion of the medium-10

term management plan, the final year of which is the fiscal year ending March 2025, we intend to quickly
clarify our policies for the future, unify the intentions of the entire Group, and work toward sustainablegrowth toward the realization of our Company Philosophy. The details are as follows.
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 2035
The company aims for 300 billion yen in net sales and 60 billion yen in ordinary profit for FY2035/3.
The Next Medium-term Management Plan (From FY2026/3 to FY2028/3)⚫
Basic policy
Work to resolve social issues by promoting cooperation and diversification within our core businessthrough product making and heartwarming services from clients’ point of view.
⚫

Key Points(1) Strengthening human resource base(2) Product making and heartwarming services from clients’ point of view(3) Promoting cooperation and diversifying core businesses⚫

Quantitative target
After achieving the goals of the current medium-term management plan, the Company will continue
to achieve high profitability and growth potential, while at the same time developing businesses withhigh capital efficiency through more active investment in businesses while paying attention tofinancial discipline.

[Profit plan]
Net sales
Ordinary profit[Management
indicator]
Ordinary profit
marginROE
Equity ratio

Current Medium-Term
Management Plan
Earnings forecast for
FY2025/3

Next Medium-Term
Management Plan
Plan forFY2028/3

100 billion yen
20 billion yen

135 billion yen
27 billion yen

20%

20%

10% or more
50% level

10% or more
45% level

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-113.Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2023

As of March 31, 2024

42,01647,867

1,625

2,138

19,78160,254

11,632
95,081

57

50

87
2,080
-18
125,886

104
2,680
-38
159,518

13,416-3,878-8
9,528
10,117
1,767
-995
-6
764
20,41014,486-4,438-8
10,03811,0292,587-1,325-7
1,254
22,323

343
472
815

579
614
1,193

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

3,523
1,644
470
-13
5,626
29,143
188,661

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
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-12

(Unit: million yen)
As of March 31, 2023

As of March 31, 2024

2,106
50
5,442
1,699
237

2,810
62
12,207
2,967
279

73

80

22
6,731
16,36344
6,314
24,76750,1705
83
1,930
52,19068,553

9,999
57,272
1
97
2,105
69,477
94,244

11,965
6,445
62,289-270
80,43011,965
6,433
71,725-233
89,889

2

2

269

626

271

629

30
3,233
83,965
152,51930
3,867
94,416
188,661

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
Corporate bonds
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-13

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Unit: million yen)
For the year ended
March 31,2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Eviction fee received
Subsidy income
Foreign exchange gains
Income on investments based on equity
methodPenalty income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on liquidation of subsidiaries andassociates
Loss on investments based on equity method
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Government subsidy
Gain on liquidation of subsidiaries andassociates
Gain on sale of shares of subsidiaries andassociates
Other
Total extraordinary income
Extraordinary loss
Impairment loss
Loss on reduction of non-current assets
Loss on retirement of non-current assets
Loss on devaluation of investment securities
Other
Total extraordinary loss
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent-14

For the year ended
March 31,2024

82,77759,97122,8057,900
14,90579,86853,462
26,4058,804
17,600

55
62
83

71
97
40
125

133
72
406

12
52
399

477
-

539
68

71
41
589
14,72217625
17,374

232
64

41
-

101

-

1
400

41

27
232
12
104
0
377
14,745
3,876
-852
3,024
11,721
108
11,612

48
41
30
120
17,295
4,808
464
5,272
12,023
106
11,917

Consolidated Statement of Comprehensive Income(Unit: million yen)
For the year ended
March 31,2023
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-15

For the year ended
March 31,2024

11,721

12,023

-1

0

259
258
11,980351
351
12,375

11,861
118

12,27995

(3) Consolidated Statement of Changes in Equity
For the fiscal year ended March 31, 2023
(Unit: million yen)
Shareholders’ equity

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 non-controlling interests
Net changes in items
other than shareholders’equityTotal changes during
periodBalance at end of theperiodShare capital

Capital surplus

11,965

6,445

Retainedearnings

52,917

Treasury shares

Total
shareholders’equity-67

71,260-2,240-2,24011,612

11,612

-0

-239

-239

36

36

0

0

-

0

9,372

-202

9,169

11,965

6,445

62,289-270

80,430

Accumulated other comprehensive income
Total
Valuation
Foreign currency accumulated Share acquisition Non-controlling Total net assets
difference onrightsinterests
translation
otheravailable-foradjustment
comprehensive
sale securities
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 non-controlling interests
Net changes in items
other than shareholders’equityTotal changes during
periodBalance at end of theperiod

3

19

22

30

3,139

74,452-2,24011,612
-239
36
0

-1

250

249

-

94

343

-1

250

249

-

94

9,513

2

269

271

30

3,233

83,965-16

For the fiscal year ended March 31, 2024
(Unit: million yen)
Shareholders’ equity

Balance at beginning of
the period
Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesChange in ownershipinterest of parent due totransactions with non-controlling interests
Net changes in items
other than shareholders’equityTotal changes during
periodBalance at end of theperiodShare capital

Capital surplus

11,965

6,445

Retainedearnings

62,289Treasury shares

Total
shareholders’equity-270

80,430-2,481-2,481

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
Valuation
Foreign currency accumulated Share acquisition Non-controlling Total net assets
difference onrightsinterests
translation
otheravailable-foradjustment
comprehensive
sale securities
incomeBalance at beginning of
the period
Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesChange 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

269

271

30

3,233

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

94,416-17

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

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Loss (gain) on liquidation of subsidiaries and associates
Loss on reduction of non-current assets
Government subsidy
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 fulfillment ofguarantees
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 on retirement of non-current assets
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
Proceeds from Government subsidy
Proceeds from settlement
Other
Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from sales of shares of subsidiaries andassociates
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
Proceeds from collection of lease and guarantee deposits
Purchase of shares of subsidiaries resulting in change inscope of consolidation
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-18

For the year ended
March 31,2023

For the year ended
March 31,2024

14,745
1,968
27
64
-64
232
-232
6
-87

17,295
2,124
48
75
68
41
-41
20
27

-0

6

-17

21

15

13

-55
-62
477
71
12
409
1,854
1,155
1,751
22,27455-490-5,729
62
232
150
-10
16,544

-71
-40
539
-12
30
-1,187-26,770114
580-7,11571-536-3,50540
41-11,003

125

-

-100
100
-7,531
27
-312
-692
2,337

-0
100
-2,457
0
-275
-581
205

-478

-954

-155
-6,681-291-4,25420
23,261-18,691

8
32,558-18,991

Dividends paid
Proceeds from issuance of bonds
Purchase of treasury shares
Proceeds from share issuance to non-controllingshareholders
Payments for refunds to non-controlling shareholders
Proceeds from sales of shares in subsidiaries not
resulting in in change in scope of consolidation
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
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period-19

For the year ended
March 31,2023

For the year ended
March 31,2024-2,239-239-2,481
9,999
-0

1

46

-69

-94

4

-

-5
2,039

-5
21,04059

169

11,962
29,951
41,914

5,951
41,91447,866

(5) Notes to Consolidated Financial Statements(Notes to Assumption of Going Concern)
Not applicable.
(Change of Accounting Policies)(Change in Translation Method for Revenues and Expenses of Overseas Subsidiaries)
Revenues and expenses of foreign subsidiaries were previously translated into Japanese yen at the spot
exchange rates of the dates foreign subsidiaries close their books, but from the beginning of the firstquarter consolidated accounting period, they have been translated into Japanese yen at the averageexchange rate during the period. This change was made in order to mitigate the effect of temporary
fluctuations in foreign exchange rates on the profits and losses of the Group subsidiaries and more
appropriately reflect the performance of overseas subsidiaries in the quarterly consolidated financial
statements, as the impact on the profits and losses of overseas subsidiaries in the Group is expected to
become more important due to the expansion of overseas business development in the future, while therange of exchange rate fluctuations is increasing due to the recent complicated international situation.
As the effect of this change is insignificant, it has not been applied retroactively.

(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 “Hotel and Tourism Business”, which are defined by the product andservice segments established by the head office.
“Real Estate Revitalization Business” is engaged in Replanning Business and Rental Building Business.
“Real Estate Service Business” is engaged in Property Management Business, Building MaintenanceBusiness, Sales Brokerage Business, Leasing Brokerage Business, Conference Room Rental Business, andRent Guarantee Business. “Hotel and Tourism Business” is engaged in Hotel Development Business andHotel Operation Business.
2. Method for calculating the amount of sales, profit or loss, assets, liabilities and other items for eachreportable segment
The method of accounting for the reportable segments is the same as that described in “Significant basis
for preparation of consolidated financial statements”. Profit for the reportable segment is based on ordinary
profit.

3. Information on net sales, profit or loss, assets, liabilities, and other items for each reportable segment-20For the year ended March 31, 2023
(Unit: million yen)

Reportable segments
Real Estate Real Estate Hotel and
Revitalization Service
Tourism
Business
Business
Business

Other(Note 1)

Total

Amount on
consolidated
Adjustment
financial(Note 2)statement(Note 3)Total

Net sales
Revenue fromcontracts withcustomers

45,687

6,714

22,80875,211

1,774

76,985-76,985

Other income

4,362

1,299

129

5,792

-

5,792

-

5,792

Net sales to externalcustomers

50,0508,014

22,93881,003

1,774

82,777-

82,777

Internal sales ortransfers

16

828

28

874

13

887

-887

-

Subtotal

50,066

8,843

22,967

81,877

1,788

83,665-887

82,777

Segment profit (loss)

15,343

4,890

1,720

21,954283

22,237-7,514

14,722

Segment assets

78,4402,950

24,442

105,832676

106,50946,010152,519

Segment liabilities

46,5603,709

11,467

61,737

194

61,932

6,621

68,553

Depreciation

872

45

889

1,807

4

1,811

151

1,963

Amortization of
goodwill

-

4

-

4

47

51

12

64

Interest expenses

332

3

113

450

-

450

26

477

OthersIncome(loss) on
investments based on-71-71
equity method
Increase in property,
plant and equipment
6,216
163
1,031
7,411
1
7,412
431
7,844
and intangible assets
Note 1. The “Other” segment is a business segment that is not included in the reportable segment and includes Overseas
Development Business and Construction Business.
Note 2. Details of the “Adjustment” are as follows:(1) Adjustment in segment profit of negative 7,514 million yen includes elimination of intersegment transactions of 3 million
yen and company-wide expenses of negative 7,517 million yen not allocated to each reportable segment. Company-wide
expenses are mainly selling, general and administrative expenses that are not attributable to reportable segments.
(2) Adjustment in segment assets of 46,010 million yen include eliminations of intersegment transactions of negative 17,749
million yen and company-wide assets of 63,759 million yen that are not allocated to each reportable segment. Companywide assets consist mainly of surplus operating funds (cash and time deposits and available-for-sale securities) andadministration department’s assets that do not belong to any reportable segment.
(3) Adjustment in segment liabilities of 6,621 million yen include elimination of intersegment transactions of negative 264
million yen and company-wide liabilities of 6,885 million yen that are not allocated to each reportable segment.
(4) Adjustment of depreciation under “Other” of 151 million yen includes depreciation of company-wide assets not allocatedto each reportable segment of 151 million yen.
(5) Adjustment of income(loss) on investments based on equity method under “Other” of negative 71 million yen includes
income(loss) on investments based on equity method of negative 71 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 “Other” of 431 million yen includes
the 431 million yen increase in property, plant and equipment and intangible assets related to company-wide assets notallocated to each reportable segment.
Note 3. Segment profit is reconciled to ordinary profit in the consolidated statement income.

-21

For the year ended March 31, 2024
(Unit: million yen)

Reportable segments
Real Estate Real Estate Hotel and
Revitalization Service
Tourism
Business
Business
Business

Other(Note 1)

Total

Amount on
consolidated
Adjustment
financial(Note 2)statement(Note 3)Total

Net sales
Revenue fromcontracts withcustomers

46,662

8,171

16,814

71,6472,363

74,010-74,010

Other income

4,358

1,377

121

5,857

-

5,857

-

5,857

Net sales to externalcustomers

51,020

9,548

16,93677,504

2,363

79,868-79,868Internal sales ortransfers

6

948

41

997

46

1,043

-1,043-

Subtotal

51,027

10,497

16,97778,502

2,409

80,912-1,04379,868Segment profit (loss)

15,602

5,612

4,369

25,583301

25,885-8,51017,374

Segment assets

105,206

3,688

26,259135,153

1,845

136,999

51,662

188,661

Segment liabilities

62,499

4,391

9,776

76,667299

76,967

17,277

94,244

1,327

80

508

1,916

4

1,920

204

2,124

Amortization of
goodwill

-

17

6

23

51

75

-

75

Interest expenses

426

7

60

493

-

493

45

539

OthersDepreciation

Income(loss) on
investments based on1212equity method
Increase in property,
plant and equipment
614
302
1,716
2,633
1
2,635
394
3,029
and intangible assets
Note 1. The “Other” segment is a business segment that is not included in the reportable segment and includes Overseas
Development Business and Construction Business.
Note 2. Details of the “Adjustment” are as follows:(1) Adjustment in segment profit of negative 8,510 million yen includes elimination of intersegment transactions of negative
25 million yen and company-wide expenses of negative 8,485 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 51,662 million yen include eliminations of intersegment transactions of negative 19,913
million yen and company-wide assets of 71,575 million yen that are not allocated to each reportable segment. Companywide assets consist mainly of surplus operating funds (cash and time deposits and available-for-sale securities) andadministration department’s assets that do not belong to any reportable segment.
(3) Adjustment in segment liabilities of 17,277 million yen include elimination of intersegment transactions of negative 561
million yen and company-wide liabilities of 17,839 million yen that are not allocated to each reportable segment.
(4) Adjustment of depreciation under “Other” of 204 million yen includes depreciation of company-wide assets not allocatedto each reportable segment of 204 million yen.
(5) Adjustment of income(loss) on investments based on equity method under “Other” of 12 million yen includes
income(loss) on investments based on equity method of 12 million yen related to company-wide assets not allocated toeach reportable segment.
(6) Adjustment of increase in property, plant and equipment and intangible assets under “Other” of 394 million yen includes
the 394 million yen increase in property, plant and equipment and intangible assets related to company-wide assets notallocated to each reportable segment.
Note 3. Segment profit is reconciled to ordinary profit in the consolidated statement income.

-22

(Per Share Information)
For the year ended
March 31, 2023
1,663.33
238.98238.76

Net assets per share (yen)Earnings per share (yen)Fully diluted earnings per share (yen)For the year ended
March 31, 2024
1,864.36
245.50230.74Note. Basis for calculation of earnings per share and fully diluted earnings per share is as follows.
(“¥” indicates millions of yen, except for per share figures.)
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Earnings per share
Profit attributable to owners of parent¥11,612¥11,917
Amount not attributable to common shareholders
Profit attributable to owners of parent related to common shares¥11,612¥11,917
Average number of common shares
48,592,065
48,541,810
Fully diluted earnings per share
Adjustment of profit attributable to owners of parent
Common shares increase
45,2703,104,495(including share acquisition rights)
¥-30
¥-30
Outline of dilutive shares not included in the calculation of fully diluted
earnings per share because they have no dilutive effectNote. Basis for calculation of net assets per share is as follows.
(“¥” indicates millions of yen, except for per share figures.)
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Total net assets¥83,965¥94,416
Amount of deduction from total net assets¥3,263¥3,897(including share acquisition rights)
¥-30
¥-30
(including non-controlling interests)¥-3,233¥-3,867
Net assets at year end available to common shares¥80,702¥90,519
Number of common shares at year end used for the calculation of net
48,518,331
48,552,292
assets per shareNote. 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 ofoutstanding 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 62,921 shares for the previous fiscal year and 128,300 shares for the current fiscal
year. The number of shares at the end of the fiscal year is 128,300 shares for the previous fiscal year and 128,300 shares for thecurrent fiscal year.

(Significant Subsequent Events)
Not applicable.

-23