Note: This document has been translated from the Japanese original for reference purpose only. In the event of any discrepancy between
this translated document and the Japanese original, the original shall prevail. Sun Frontier Fudosan Co., Ltd. assumes no responsibility
for this translation or for direct, indirect or any other forms of damages arising from the translation.
(Stock Exchange Code 8934)
May 31, 2021
To Shareholders with Voting Rights:
Seiichi Saito
President and Representative Director
Sun Frontier Fudousan Co., Ltd.
2-2, Yurakucho 1-chome,
Chiyoda-ku, TokyoNOTICE OF
THE 22ND ANNUAL GENERAL MEETING OF SHAREHOLDERS

Dear Shareholders,
We would like to express our appreciation for your continued support and patronage.
Please be informed that the 22nd Annual General Meeting of Shareholders of Sun Frontier Fudosan Co., Ltd. (the “Company”) will
be held for purposes as described below.
In order to avoid the risk of infection with COVID-19, please consider refraining from attending the General Meeting of
Shareholders and exercise your voting rights in writing in advance.
Please review the Reference Documents for the Annual General Meeting of Shareholders below, indicate your vote for or against the
proposal on the enclosed Voting Rights Exercise Form, and return it so that it is received by 6 p.m. on Monday, June 21, 2021 Japan
time.

1.

Date and Time

Tuesday, June 22, 2021 at 2:30 p.m. Japan time
(The hall is scheduled to open at 1:30 pm.)2.

Location"Phoenix Hall" 2nd Floor of Pulp & Paper Building, 9-11, Ginza 3-chome, Chuo-ku, Tokyo(Please refer to the guide map at the end.)3.

Matters to bereported

1. Business Report, Consolidated Financial Statements for the 22nd Fiscal Year
(April 1, 2020 to March 31, 2021) and results of audits of the Consolidated
Financial Statements by the Accounting Auditors and the Audit & Supervisory
Board
2. Non-consolidated Financial Statements for the Company’s 22nd Fiscal Year
(April 1, 2020 to March 31, 2021)

Matters to beresolved

Proposal 1

Dividends of Surplus

Proposal 2

Partial Amendments to the Articles of Incorporation

Proposal 3

Deciding compensation amount as well as content ofstock options for Directors

Meeting Agenda―1―■ Requests for Visitors● The Company has decided to cancel the souvenirs that were distributed at the Annual General Meeting of Shareholders. We
appreciate your understanding.
● When you attend the meeting, you are kindly requested to present the enclosed Voting Rights Exercise Form at the reception.
● If voting rights are exercised by proxy, only 1 person per 1 shareholder who has voting rights may attend the General Meeting of
Shareholders as a proxy.
In this case, please submit a document certifying the authority of representation such as a power of attorney to the Company. (Nonshareholders such as proxy and accompanying persons are not allowed to attend the General Meeting of Shareholders.)● After the General Meeting of Shareholders, the Company planned to hold a meeting with shareholders. However, due to the spreadof COVID-19, the meeting will be discontinued.
● Regarding Measures to Prevent COVID-19 Infection(1) Officers and operating staff attending the General Meeting of Shareholders will wear face masks.
(2) Attendees will be asked to disinfect their hands with alcohol-based sanitizer at the reception.
(3) Please make sure that all attendees wear a face mask to prevent infection.
(4) Please note that attendees must undergo the temperature check on the day of the event, and if they are found to be in poor
physical condition, such as having a fever, we will refuse admission.
(5) The General Meeting of Shareholders venue is scheduled to have more seats spaced to prevent infection, and the number ofseats will be less than usual.
Therefore, please note in advance that we may refuse admission if the seats are full.
(6) In particular, those who are elderly, have underlying diseases, or are pregnant, please consider refraining from your attendance.
(7) The proceedings of the General Meeting of Shareholders are scheduled to be conducted smoothly and efficiently in a shortertime than usual. We thank you in advance for your understanding and cooperation in this regard.
(8) If the venue facilities cannot be used on the day due to unavoidable circumstances, the General Meeting of Shareholders may
be held at a different venue. In that case, we will let you know on our website and at the entrance of the venue on the day.

―2―

■ Information Posted on the Website● Any changes in the management of the Annual General Meeting of Shareholders, or updates to the Reference Documents, theBusiness Report, the Consolidated Financial Statements and the Non-consolidated Financial Statements, etc. for the Annual General
Meeting of Shareholders will be posted on the Company's website at the following URL:https://www.sunfrt.co.jp.

● As the following information is posted on the Company’s website (https://www.sunfrt.co.jp) pursuant to the provisions of relevantlaws and regulations and Article 16 of the Articles of Incorporation of the Company, it is not included in this Notice of Convocation
or attached documents.

■ Business Report: "System for Ensuring Proper Business Operations and Overview of Operation Status"■ Consolidated Financial Statements: "Consolidated Statement of Changes in Equity" and "Notes toConsolidated Financial Statements"■ Non-Consolidated Financial Statements: "Non-Consolidated Statement of Changes in Equity" and"Notes to Non-Consolidated Financial Statements"

The Business Report, Consolidated Financial Statements and Non-consolidated Financial Statements audited by the Audit &Supervisory Board Members in preparing the Audit Report and the Consolidated Financial Statements and Non-consolidated
Financial Statements audited by the Accounting Auditor are posted on the Company's website.

―3―

Proposal 1

Dividends of Surplus

The Company proposes the year-end dividend for the 22nd fiscal year as follows, taking into consideration the businessperformance for the fiscal year under review and future business development.
1. Type of dividend property: Cash
2. Allotment of dividends to shareholders and total amount:
42 yen per share of the Company’s common share, for total amount of 2,047,724,952 yen
3. Effective date of dividends of surplus:
June 23, 2021

Reference
Basic policy concerning profit sharing
The Company’s basic policy is to contribute to the interestsof shareholders in a comprehensive manner, taking into
account (1) strive providing long-term and stable profit
returns to shareholders, (2) securing investment that
aggressively challenge Office Building Business andOverseas Business for future growth, and (3) strengthening
financial stability.

―4―

Proposal 2

Partial Amendments to the Articles of Incorporation

1. Reason for the Proposal
The Company will make necessary changes to Article 2 (Purpose) of the current Articles of Incorporation in order to clarify thecontents of the business in line with the current status of the business of the Company and its subsidiaries and to respond to futurebusiness development and diversification of the contents of the business including subsidiaries.
2. Details of the Change
The details of the change are as follows.
(Underlines indicate changes)
Proposed Change

Current Article of Incorporation(Purpose)(Purpose)

Article 2 The purpose of the Company shall be to engage

Article 2 (Unchanged)

in the following businesses.
1. (Omitted)

1. (Unchanged)

2.

2.

Planning, design, construction, supervision and contractingof civil engineering and building construction

Planning, design, construction, supervision, andcontracting for civil engineering works, construction
works, interior finishing works, waterproofing andpainting works, electrical works, telecommunications workand other construction works in general

(New)

3.

Building maintenance business

3. - 13. (Omitted)

4. - 14. (Unchanged)

14. Sales, leasing, brokerage and maintenance of office

15. Development, manufacturing, sales, leasing, brokerage andequipment, information and communications equipment,

maintenance of office equipment, information andfixtures and fittings, and interior decorations

communications equipment, furniture and fixtures, interior
decorations, lighting equipment, building materials, etc.

15. - 17. (Omitted)

16. - 18. (Unchanged)(New)

19. Environmental, sanitation and cleaning activities

18. - 19. (Omitted)

20. - 21. (Unchanged)

20. Ownership, leasing, operation, management and22. Ownership, leasing, operation, management,

administration of accommodations, commercial facilities,

administration and consulting of accommodation facilities,

sports facilities, educational facilities, medical facilities,

hot spring bath facilities, commercial facilities, rental

care facility for the elderly, day-care centers, beauty

conference room, rental offices, sports facilities,

salons, etc.

educational facilities, medical facilities, care facility forthe elderly, day-care centers, beauty salons, etc.

(New)

23. Management and operation of parking lots

21. - 26. (Omitted)

24. - 29. (Unchanged)(New)

30. Projects related to photography, image analysis, inspectionof buildings, research, cleaning, and research,development, manufacture, sale, rental, and flight training,etc., of unmanned flying object

27. - 33. (Omitted)

31. - 37. (Unchanged)―5―Proposal 3

Deciding compensation amount as well as content of stock options for Directors

At the 19th Annual General Meeting of Shareholders of the Company held on June 22, 2018, the Company designated shareacquisition rights as share-based compensation type stock options to be exercised upon retirement for Directors. Under the Board of
Directors resolution, the maximum number of share acquisition rights granted to Directors (excluding Outside Directors) is 7,000
units (1 unit is 10 shares), which is within the range of 36 million yen per year.
“The Act for Partial Revision of the Companies Act (Act No. 70 of 2019)”, which was implemented on March 1, 2021, clarified
the matters to be determined by resolution of the Annual General Meeting of Shareholders regarding the stock option compensation.
Accordingly, in order to continue the current stock option system, the Company requests approval to allocate the following shareacquisition rights within the range of 36 million yen per year as before to Directors (excluding Outside Directors), separately fromthe amount of remuneration for Directors, etc., of 360 million yen per year, which was approved at the 18th Annual General Meetingof Shareholders held on June 23, 2017.
The amount of compensation as stock options is equal to the fair value per share acquisition rights calculated as of the allotment
date of the share acquisition rights multiplied by the number of share acquisition rights to be allotted.
There are currently six Directors (excluding Outside Directors). The Company requests that the timing of the payment and the
distribution to each Director be left to the discretion of the Board of Directors.
The Company believes that the stock options are appropriate because they are in line with the Company's policy regarding thedetermination of individual compensation for Directors of the Company as determined by a resolution of the Board of Directors of
the Company (see page 16 of the Notice of Annual General Meeting of Shareholders). In addition, the Board of Directors aims toshare the benefits and risks of stock price fluctuations with shareholders, and to increase the incentive effect of Directors for
improving corporate performance and the management awareness of the importance of shareholders(1) Total number of shares in share acquisition rights, and type and number of shares to be granted(i) Total number of share acquisition rights
The total number of share acquisition rights units to be allotted to all Directors (excluding Outside Directors) shall be 7,000
units, which is the upper limit for one year.
(ii) Type and number of shares to be granted
The upper limit for one year will be 70,000 shares of common shares of the Company.
Number of shares to be delivered per share acquisition rights (hereinafter referred to as the “Number of Granted Shares”)
shall be 10 shares.
In the event that the Company conducts a common shares share split (including allocation of shares without contribution)
or a share consolidation, or conducts a merger or a corporate split, etc., and adjustment of the Number of Granted Shares isrequired in accordance with the above, the Number of Granted Shares and the upper limit of the Number of Shares shall be
adjusted within a reasonable range.
(2) Share acquisition rights paid-in amountThe amount to be paid in shall be the fair value calculated using the Black-Scholes Model on the share acquisition rights allotment
date. In addition, monetary compensation equivalent to the total amount to be paid in for share acquisition rights shall be paid tothe Directors who received the share acquisition rights, and compensation receivables shall be offset against the payment
obligations of such amount to be paid in.
(3) Value of assets to be contributed upon exercise of the share acquisition rights
The amount of assets to be contributed upon the exercise of the share acquisition rights shall be the amount of 1 yen per share to bedelivered upon the exercise of the share acquisition rights, multiplied by the number of shares granted.
(4) Period during which share acquisition rights may be exercised
It will be a period determined by the Board of Directors within 30 years from the day following the share acquisition rights
allocated date.
(5) Main conditions for the exercise of share acquisition rights
Share acquisition rights holders may exercise their share acquisition rights in a lump sum during the period from the day following
the day on which they lose their position as Director of the Company to the day on which ten days have elapsed within the period(4) above.
(6) Share acquisition rights transfer restrictions
Acquisition of share acquisition rights by transfer requires approval by resolution of the Company's Board of Directors.
(7) Matters concerning acquisition of share acquisition rights―6―

(i) If a share acquisition rights holder is unable to exercise his or her share acquisition rights prior to exercising his or her
right, the Company may acquire such share acquisition rights without compensation on a date separately determined by theCompany's Board of Directors.
(ii) In the event that a proposal for a merger agreement under which the Company will be dissolved, absorption-type company
split agreement or an incorporation-type company split plan under which the Company will be split, or a share exchange
agreement or share transfer plan under which the Company will become a wholly-owned subsidiary is approved by theCompany's General Meeting of Shareholders (or the Company's Board of Directors if a General Meeting of Shareholders is
not required), the Company may acquire the share acquisition rights whose rights have not been exercised as of the datespecified separately by the Company's Board of Directors without compensation.
(8) Other
The details of (1) through (7) above and other contents regarding share acquisition rights will be determined at the Board of
Directors, which will determine the subscription requirements for share acquisition rights.

―7―

1. Status of the corporate group(1) Progress and Results of Operations
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 for the future is unclear. Therefore, it is necessary to continue tomonitor developments closely. With regard to the global economy, large-scale financial support and monetary easing are continuingin each country, and vaccinations are widely spreading in some countries. Although recovery is expected in the future, the outlook
for the future remains uncertain due to the impact of the COVID-19.
In Japan's real estate market, as of March, the average rent in the central Tokyo Office Building Market (five central Tokyo
wards: Chiyoda, Chuo, Minato, Shinjuku, and Shibuya Ward) was 21,541 yen per tsubo, down for the eighth consecutive month(1,473 yen in total), and the average vacancy rate was 5.42%, down for the 13th consecutive month (3.93% point increase in total
according to a survey by a private research institution). As a result, the market conditions are becoming increasingly severe. Against
the backdrop of the COVID-19 outbreak, some companies are moving to downsize their offices due to the establishment of remote
work environments. However, in the small- and medium-sized offices in which the Company is strong, actual demand has remained
firm due to such factors as the increase in floor space by companies that have achieved growth and the spread of large offices tomultiple small - and medium-sized offices. Moreover, in the real estate investment market, institutional investors and J-REITs have astrong desire to invest due to the fact that the outlook for the office market in Tokyo is expected to bottom out to a certain extent andthe low interest rate environment continues.
Against this backdrop, the Company has continued its three management policies since last year of “thorough prevention of
infection outbreak and continuation of business,” “financial stability,” and “concentration of resources for the ‘revitalization andutilization of real estate’ our core business.” Based on these policies, the Company has quickly captured the opinions of local
communities, worked on its ability to resolve client’s problems, and developed its business.
As a result, net sales decreased 18.6% to 59,632 million yen from the previous fiscal year, operating profit decreased 52.3% to7,912 million yen from the previous fiscal year, ordinary profit decreased 53.3% to 7,524 million yen from the previous fiscal year,
and profit attributable to owners of parent decreased 59.9% to 4,274 million yen from the previous fiscal year.
Net sales by business segment for the fiscal year ended March 31,2021 (reference)
Business segment
Real Estate Revitalization Business
Real Estate Service Business
Operation Business
Other
Adjustment amountTotal

Net Sales for this fiscal year
(million yen)
48,398
3,656
3,069
5,294
(785)
59,632Year-on-year (%)(19.4)
5.2(43.2)(6.4)(18.6)

Note. "Adjustment amount" is an elimination of intersegment transactions.

(2) Capital Expenditures
The Company’s capital investment in the fiscal year ended March 31, 2021 was 528 million yen, mainly for the acquisition of
hotel facilities (198 million yen).
(3) Financing Activities
During the fiscal year ended March 31, 2021, the Company has not made any noteworthy fund procurement.

―8―

(4) Trends in Assets and Income(i) Consolidated Assets and Income of the Corporate GroupThe 22nd fiscal year
The 19th fiscal year The 20th fiscal year The 21st fiscal year
ended March 31,2021
ended March 31, 2018 ended March 31, 2019 ended March 31, 2020
(Current period)(million yen)
47,46353,291
73,21859,632(million yen)
10,755
12,813
16,127
7,524

Net Sales
Ordinary Profit
Ordinary Profit
(%)
Ratio
Profit Attributable to (million yen)
Owners of Parent
Earnings per Share (yen)Total Assets(million yen)
Equity Ratio(%)
Net Assets(million yen)
Net Assets per Share (yen)

22.7

24.0

22.0

12.6

7,420

8,783

10,666

4,274

167.62
91,761
53.2
48,8491,003.05

180.35
110,898
50.3
55,8601,145.34

219.03130,29349.6
64,8091,326.93

87.77
127,485
52.3
69,773
1,368.14

Note 1. Consumption tax and local consumption tax (hereinafter referred to as "consumption tax") are not included in net sales.
Note 2. The Company's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP) are included in weighted average number ofshares for the period in common shares and treasury shares deducted in the calculation of the total number of outstanding shares at the end of the
fiscal year under review. Moreover, the number of the Company's shares held by the trust account at the end of the fiscal year under review was
56,500 shares.

(ii) Non-consolidated Assets and Income of the Company
The 19th fiscal year The 20th fiscal year The 21st fiscal year The 22nd fiscal year
ended March 31,2021
ended March 31, 2018 ended March 31, 2019 ended March 31, 2020 (Current period)
Net Sales(million yen)
Ordinary Profit(million yen)
Profit(million yen)
Earnings per Share (yen)Total Assets(million yen)
Net Assets(million yen)
Net Assets per Share (yen)44,254
10,761
7,444
168.1689,46748,502995.97

48,722
12,8468,806
180.84
104,548
55,683
1,143.30

64,472
16,822
11,122228.39
121,708
64,934
1,333.15

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

Note 1. Consumption tax is not included in net sales.
Note 2. The Company's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP) are included in weighted average number ofshares for the period in common shares and treasury shares deducted in the calculation of the total number of outstanding shares at the end of the
fiscal year under review. Moreover, the number of the Company's shares held by the trust account at the end of the fiscal year under review was
56,500 shares.

―9―(5) Material Subsidiaries
Name
SF Building Support Inc.
SF Building Maintenance Inc.
Sun Frontier Space Management Inc.
SF Engineering Inc.
Sun Frontier Sado Co., Ltd.
Okesa Kanko Taxi Co., Ltd.

Share capital
Investment ratio
Major businesses
50 million yen
100 % Rent guarantee business
20 million yen
100 % Building maintenance business
Conference room rental business50 million yen
100 %Rental building business
Building construction and interior
20 million yen
100 %finishing business
Hotel planning and management
100 million yen
100 % business
Regional revitalization business
Passenger vehicle transportation
10 million yen
100 %business

Sun Frontier Community Arrangement
Co., Ltd.

100 million yen

100 %Sun Frontier Okinawa Co., Ltd.

230 million yen

100 %Sun Frontier Hotel Management Inc.

100 million yen

100 %Sky Heart Hotel Inc.

10 million yen

100 %Japan System Service Inc.

10 million yen

100 %Communication Development Inc.

45 million yen

100 %Sun Frontier Fudousan Taiwan Co., Ltd.
SUN FRONTIER VIETNAM CO., LTD.
SUN FRONTIER DANANG CO., LTD.
PT. SUN FRONTIER INDONESIA
PT. SUN FRONTIER PROPERTY ONE
Sun Frontier NY Co., Ltd.
340 West 48 SG LLC
439 West 46 SG LLC
RIVERSIDE STUDIOS LLC

10 million
Taiwan dollars
44,890 million
Vietnamese dong
160,466 million
Vietnamese dong
3,323 million
Indonesian rupia
120,000 million
Indonesian rupia
18,189 thousand
U.S. dollar
6,700 thousand
U.S. dollar
9,065 thousand
U.S. dollar
10,700 thousand
U.S. dollar

Hotel bed making and cleaning business
Hotel planning and managementbusiness
Hotel planning, development, andmanagement business
Hotel planning and managementbusiness
Building maintenance businessElectrical and telecommunications
construction business

100 %Real estate consulting business

100 %Real estate business in Vietnam

100 %Real estate business in Vietnam

85 %Real estate business in Indonesia

99.95 %

Real estate business in Indonesia

100 %
90 %
90 %
90 %

Real estate revitalization business in the
United States
Real estate revitalization business in the
United States
Real estate revitalization business in the
United States
Real estate revitalization business in the
United States

Note 1. There are 2 other equity-method affiliates.
Note 2. During the fiscal year under review, the Company's ownership in Sun Frontier Hotel Management Inc. increased from 98.0% to 100% as a result of theCompany's additional acquisition of shares.
The Company also succeeded to the hotel development business through an absorption-type company split (simplified absorption-type company split),
and the company issued Class-A Preferred Stock without voting rights and subsequently reduced its capital. As a result, the share capital of the company
became 100 million yen.
The Company's investment ratio in the said company and the investment ratios in Sky Heart Hotel Inc. and Sun Frontier Okinawa Co., Ltd. in which thecompany invests are calculated excluding Class A Preferred Stock issued by the company without voting rights.
Note 3. Communication Development Inc., which the Company acquired shares of, and Japan System Service Co., Ltd., which SF Building Maintenance Inc.,
the Company’s consolidated subsidiary, acquired shares of are included as significant subsidiaries in the fiscal year under review.
Note 4. As of March 31, 2021, Sun Frontier Fudousan Investment Advisory Co., Ltd. ceased to exist as a result of an absorption-type merger with our Company
as the surviving entity.

(6) Issues to be Addressed
The Company is promoting a five-year medium-term management plan from the fiscal year ended March 2019 to the fiscal year
ending March 2023. In the fiscal year ended March 31, 2019, the first year for medium-term management plan, and the fiscal year
ended March 31, 2020, the Company's business performance had been growing steadily with progress exceeding the plan. However,the business environment surrounding the Company changed significantly due to the impact of the spread of COVID-19 infections
from the beginning of 2020. Against this backdrop, our Company has developed its business based on the three management policies
of "thorough prevention of infection outbreak and continuation of business," "financial stability," and "concentration of resources forthe ‘revitalization and utilization of real estate’ our core business." Based on these policies, the Company has quickly captured theopinions of local communities, worked on its ability to resolve client’s problems, and developed its business.
Although the spread of COVID-19 is yet to be resolved, it is expected that the global economy will hit a bottom and return to arecovery path by next year, with the spread of vaccines and the continuation of large-scale fiscal measures and monetary easing in―10―each country. Taking into account these changes in the business environment and the new normal of "post COVID-19," we decided
that it was necessary to revise the timing of achievement in medium-term management plan in order to re-establish a sustainablegrowth trajectory starting from the fiscal year ended March 2021, which was affected by the COVID-19 pandemic.
The fiscal year ending in medium-term management plan will be extended for two years to the fiscal year ending in March 2025,
but the financial target in the medium-term management (net sales 100 billion yen, ordinary profit 20 billion yen, profit attributableto owners of parent 14 billion yen) will stay the same since we believe this target to be a passing point of the continuous growth ofthe company and aim to establish the “standing on both feet of flow and stock” profit structure.

FY ending March 31, 2025
(Quantitative target)
Net Sales

100 billion yen

Ordinary Profit

20 billion yen

Profit14 billion yen

Ordinary Profit
Ratio

20％ or more

Equity Ratio
Return on Equity

50% level
10％ or more

Revision of Medium-term Management Plan (from the fiscal year ended March 2019 to the fiscal year ending March 2023)
The final year of the plan will be extended for two years to the fiscal year ending in March 2025, but the financial target in themedium-term management will stay the same
Net sales 100 billion yen, ordinary profit 20 billion yen, and profit attributable to owners of parent 14 billion yen for the fiscal
year ending March 31, 2025.
Basic policy
Providing "places where people gather and communicate with each other, and create social development and happiness forpeople"<Office Business>
・ Help to reduce the waste from non-renewable resources, and contribute to carbon neutrality through “Revitalization”
・ Focus on "Central Tokyo," "Small and Medium size," and "Office Building," and capture diversifying needs in a clients'
point of view that is on-site consistent・ Utilize new fields including digital technology to contribute to creating prosperous towns for the future<Hotel Business>
・ Provide safe and soothing time and space, creating the best smiles and making people's minds healthy and rich<Overseas Business>
・ Provide comfort to the people in Asia, together with our partners
・ Improve the quality of housing for local residents and contribute to the urban development by specializing in development,
sales, management and mediation of housing (condominiums)
In addition to the three business growth strategies, we will focus on the following three points.
(1) ESG(2) Digital(3) Cash flow
Based on the above growth strategy and key points, we aim to establish a business structure that balances flow and stock, and to
be a corporate group that will continue to grow continuously in and after the final fiscal year in medium-term management plan.
Now that we have been greatly affected by the COVID-19, we will strive to provide “places where people gather andcommunicate with each other, and create social development and happiness for people”, that we have established in our basic policy,
through our Office Business, Hotel Business, and Overseas Business. Also by focusing on ESG, digital, and cash flow, we will strive
to evolve each business and create a new high added value by taking on challenges and changes.
The strength of our Company is the values of “Altruism”, which is our corporate motto, and the strength of the unity of
employees, which is a bond of spirit based on the company philosophy. So far, each of us has solved problems in clients' point ofview by raising the level of added value generated by our high level of expertise through teamwork that transcends divisions. As
human resources and ways of working diversify under the new environment, we will continue our business policy based on the
Company’s philosophy to meet and exceed clients’ expectations.

―11―(7) Principal Business Segment of the Corporate Group (As of March31, 2021)
Business segment
Real Estate
Revitalization
Business

Replanning Business

Hotel Development Business

Real Estate
Service Business

Operation
Business
Other

Leasing of Rental Building
Business Properties
Property Management Business
Building maintenance business
Sales Brokerage Business
Rental Brokerage Business
Hotel Operation Business
Conference Room Rental
Business
Overseas Business
Rent Guarantee Business
Construction Business

Major businesses
Purchase of existing commercial buildings and rebuilding them asbuildings with a new concept, attract tenants and sell them with increased
real estate value
Development of new hotels, refurbishing existing hotels, and selling themas investment products
Leasing of own properties
Property management business for management of buildings and tenants
Building maintenance business such as building cleaning, facility
management, security, waterproofing, and exterior wall repair
Sales Brokerage of real estate for business
Rental Brokerage of real estate for business
Planning and management of accommodation facilities such as hotels
Plan and operate vacant office buildings in central Tokyo as rental
conference room, rental office, and co-working space
Real estate business in Vietnam, Indonesia, and other oversea countries
Provide a rent guarantee for the delinquency of rent of a tenant of realestate for building owners
Carry out interior finishing work, telecommunications work, and renewal
planning, repair, and reform for business buildings(8) Principal Business Office (As of March 31, 2021)
Name
Headquarters
Ginza Branch
Nihonbashi Branch
Kodendma-cho Branch
Kanda Branch
Kojimachi Branch
Akasaka Branch
Shinjuku Branch
Shibuya Branch
Gotanda Branch
Hamamatsucho Branch
Yokohama Branch
Property Management Business Department
SF Building Support Inc.
SF Building Maintenance Inc.
Sun Frontier Space Management Inc.
SF Engineering Inc.
Sun Frontier Sado Co., Ltd.
Okesa Kanko Taxi Co., Ltd.
Sun Frontier Community Arrangement Co., Ltd.
Sun Frontier Okinawa Co., Ltd.
Sun Frontier Hotel Management Inc.
Sky Heart Hotel Inc.
Japan System Service Co., Ltd.
Communication Development Inc.
Sun Frontier Fudousan Taiwan Co., Ltd.
SUN FRONTIER VIETNAM CO., LTD.
SUN FRONTIER DANANG CO., LTD.
PT. SUN FRONTIER INDONESIA
PT. SUN FRONTIER PROPERTY ONE
Sun Frontier NY Co., Ltd.
340 West 48 SG LLC
439 West 46 SG LLC
RIVERSIDE STUDIOS LLC

Place
Chiyoda-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Minato-ku, Tokyo
Shinjuku-ku, Tokyo
Shibuya-ku, Tokyo
Shinagawa-ku, Tokyo
Minato-ku, Tokyo
Yokohama-shi, Kanagawa
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Sumida-ku, Tokyo
Minato-ku, Tokyo
Sumida-ku, Tokyo
Sado-shi, Niigata
Sado-shi, Niigata
Chiyoda-ku, Tokyo
Naha-shi, Okinawa
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Minato-ku, Tokyo
Chuo-ku, Tokyo
TaiwanSocialist Republic of Vietnam
Socialist Republic of Vietnam
Republic of Indonesia
Republic of Indonesia
United States of America
United States of America
United States of America
United States of America―12―(9) Employees (As of March 31, 2021)(i) Employees of the Corporate Group
Number of Employees
641

Increase/Decrease Compared to end of previous FY
29 increase

Note. The above number of employees does not include 503 temporary employees (part-timers and temporary employees).

(ii) Employees of the Company
Number of Employees
319

Increase/Decrease Compared
to end of previous FY
6 increase

Average Age
35 years old

Average number of years ofContinuous Service
5.7 years

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

(10) Principal Lenders (As of March 31, 2021)
LenderSumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
MUFG Bank, Ltd.
Resona Bank, Limited
Shinsei Bank, Limited

Loan amount (million yen)
10,280
8,346
5,382
3,236
2,916
2,795

―13―

2. Status of Shares(1) Shares (As of March 31,2021)(i) Number of Authorized Shares

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

48,755,500(includes 144 of treasury shares)(iii) Number of Shareholders

10,649(iv) Principal Shareholders (top10)
Name
Houon Co., Ltd
Tomoaki Horiguchi
Quintet Private Bank（Europe）S.A.107704
S Kawagoe Co., Ltd
SMBC Nikko Securities Inc.
The Master Trust Bank of Japan Co., Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
State Street London Care of State Street Bank and Trust,
Boston SSBTC A/C UK London Branch Clients - United
KingdomState Street Bank and Trust Company 505103
State Street Bank and Trust Company 505227

Number of shares held
17,957,500
3,013,800
2,340,900
1,566,400
1,442,800
1,250,400
729,800

Percentage of shares held (%)
36.83
6.18
4.80
3.21
2.96
2.56
1.50

594,300

1.22

504,063486,978

1.03
1.00

Note 1. The percentage of shares held is calculated after exclusion of treasury shares (144 shares).
Note 2. The percentage of shares held is calculated including 56,500 shares of the Company held by Mizuho Trust & Banking Co., Ltd as the trust account of
the Employee Stock Ownership Plan (J-ESOP.)(2) Other Significant Matters concerning the Shares
Not applicable.

―14―3. Matters Concerning Share Acquisition Rights(1) Share Acquisition Right Granted as part of the Compensation held by the Company Officers
The Company issues share-based compensation type stock options to Directors (excluding Outside Directors) for the purpose ofenhancing the incentive effect for Directors to improve corporate performance and enhancing management awareness of shareholder
value (as of March 31, 2021.)(1)

Name of Share
Acquisition Rights(2)

Date of issuance

(3)
(4)

(5)

(6)

(7)

(8)

Number of Share
Acquisition Rights
Status of Share
Acquisition Rights
ownership
Class and numberof shares to beissued upon
Amount to be paidin ShareAcquisition Rights
Value of property
to be contributed
upon exercise of
Share Acquisition
RightsDate of allotmentof ShareAcquisition Rights
and deadline forexercise(9)

Conditions for
Exercise of Rights(10)

Restrictions on
Transfer of Share
Acquisition Rights

Share-based Compensation
type Stock Option for FY2018(Share acquisition rights)
June 22, 2018(the Board of Directors
Resolution)

Share-based Compensation
type Stock Option for FY2019(Share acquisition rights)
June 21, 2019(the Board of Directors
Resolution)

Share-based Compensation
type Stock Option for FY2020(Share acquisition rights)
June 30, 2020
(the Board of Directors
Resolution)

524

740

1,112

4 Directors (excluding Outside
Directors) 524

4 Directors (excluding
Outside Directors) 740

4 Directors (excluding
Outside Directors) 1,112

5,240 shares in common shares(10 stocks per 1 shareacquisition right)

7,400 shares in commonshares(10 stocks per 1 shareacquisition right)

11,120 shares in commonshares(10 stocks per 1 shareacquisition right)

1,019 yen per 1 share

789 yen per 1 share

438 yen per 1 share

1 yen per 1 share to be delivered upon exercise of share acquisition rights
Date of allotment: July 31,
Date of allotment: July 31,
2019
2020
Exercise period:
Exercise period:
From August 1, 2019
From August 1, 2020
until July 31, 2049
until July 31, 2050
A holder of share acquisition rights may exercise their share acquisition rights in a lump sum only
when they lose their position as a Director of the Company and only on the day following day fromlosing their position until 10 days after.
Date of allotment: July 31, 2018
Exercise period:
From August 1, 2018
until July 31, 2048

Any acquisition of share acquisition rights by transfer shall require approval by resolution of theCompany's Board of Directors.

Note 1. At the 19th Annual General Meeting of Shareholders held on June 22, 2018, a resolution was passed to allocate share acquisition rights to Directors(excluding Outside Directors) as share-based compensation type stock options to be exercised upon retirement, within the range of 36 million yen per
year.
Note 2. Conditions for the exercise of other rights other than those described in (9) shall be in accordance with the "Share Acquisition Rights Application Form
(Application Guidelines)" submitted to the Company.

(2) Share Acquisition Rights Delivered to Employees as Consideration for Execution of Duties during the Fiscal Year under review
Not applicable.
(3) Other Significant Matters concerning the Share Acquisition Rights
Not applicable.

―15―4. Company Officers(1) Directors and Audit & Supervisory Board Members (As of March 31, 2021)
Position

Name

Chairman and
Representative Director

Tomoaki Horiguchi

President andRepresentative Director
President Executive Officer

Seiichi Saito

Vice President and Director
Vice President Executive
Officer

Izumi Nakamura

Senior Managing Director
Senior Managing Executive
Officer

Yasushi Yamada

Director
Executive Officer
Director
Executive Officer
Director
Director

Director

Areas of Responsibility and Important Concurrent Positions
Representative Director of Sun Frontier Hotel Management Inc.
Representative Director of Sun Frontier Sado Co., Ltd.
Representative Director of Sun Frontier Okinawa Co., Ltd.
Representative Director of Okesa Kanko Taxi Co., Ltd.
Representative Director of SF Engineering Inc.
Chairman of Sun Frontier Fudousan Taiwan Co., Ltd.
General Manager of Entrusted Asset Management Division
Representative Director of SF Building Support Inc.
Representative Director of SF Building Maintenance Inc.
Representative Director of Sun Frontier Space Management Inc.
General Manager of Business Development Division
Representative Director of Sun Frontier Community Arrangement Co., Ltd.
Representative Director of PT.SUN FRONTIER PROPERTY ONE
Representative Director of PT.SUN FRONTIER INDONESIA
Chairman of the Board of SUN FRONTIER VIETNAM CO.LTD.
Chairman of the Board of SUN FRONTIER DANANG CO.LTD.

Mitsuhiro Ninomiya General Manager of Administration Division
Kenji Honda
Toshio Takahara
Yukitoshi Kubo

Kazutaka Okubo

Position

Name

Audit & Supervisory Board
Member (full-time)

Kouichi Shinada

Audit & Supervisory Board
MemberKoichi Moriya

Audit & Supervisory Board
Member

Hidetaka Tanaka

General Manager of Asset Management Division
Representative Director of Communication Development Inc.
Professor in Accounting Course of Ohara Graduate School of Accounting
President and Representative Director of Okubo Associates Co., Ltd.
Outside Audit & Supervisory Board Member of SEGA SAMMYHOLDINGS INC.
Outside Audit & Supervisory Board Member of BrainPad Inc.
Outside Director of LIFULL Co., Ltd.
Outside Director of SALA Corporation
Outside Director of The Shoko Chukin Bank, Ltd.
Areas of Responsibility and Important Concurrent Positions

Director of Moriya Law OfficeOutside Audit & Supervisory Board Member of TAMURACORPORATION
Outside Director of Samantha Thavasa Japan Limited
Representative Director of Rating Research Center (general incorporated
association)

Note 1. Directors Toshio Takahara, Yukitoshi Kubo and Kazutaka Okubo are Outside Directors as stipulated in Article 2, Item 15 of the Companies Act.
Note 2. Audit & Supervisory Board Members Koichi Moriya and Mr. Hidetaka Tanaka are Outside Audit & Supervisory Board Members as stipulated in
Article 2, Item 16 of the Companies Act.
Note 3. Directors Yukitoshi Kubo and Kazutaka Okubo have qualifications as certified public accountants and have expertise and abundant experience infinance and accounting.
Note 4. Audit & Supervisory Board Member Mr. Koichi Moriya is qualified as an attorney-at-law and has a wealth of experience in various fields including
legal expertise and real estate.
Note 5. The Company has designated Director Toshio Takahara, Director Yukitoshi Kubo, Director Kazutaka Okubo, Audit & Supervisory Board Member
Koichi Moriya and Audit & Supervisory Board Member Tanaka Hidetaka as Independent Officers as stipulated by the Tokyo Stock Exchange and has
notified the Exchange thereof.

―16―

(2) Expertise and experience (skill matrix) of Director as well as Audit & Supervisory Board Members.
Main expertise and experience of Director as well as Audit & Supervisory Board Members are as follows.
Expertise and experience (skill matrix)* Up to 5 main items are listed.
Position
Name
Legal/Compli HR/Labor/
Corporate
management

Real estate

Tomoaki Horiguchi●●

Seiichi Saito

●

●

●

Izumi Nakamura

●

●

●

●

Yasushi Yamada

●

●

●

●

Director

Mitsuhiro Ninomiya●●

Director

Kenji Honda●●

OutsideDirector

Toshio Takahara●●

OutsideDirector

Yukitoshi Kubo●●

OutsideDirector

Kazutaka Okubo

●

●

●

●

●

●

●

●

●

Chairman and
Representative
Director
President andRepresentative
Director
Vice President
and Director
SeniorManaging
Director

Audit &
Supervisory
Kouichi Shinada
Board Member(full-time)
Audit &
Supervisory
Koichi Moriya
Board Member
Audit &
Supervisory
Hidetaka Tanaka
Board Member

●

●

●

Accounting/
Financeance/Risk
HRManagement Development

IT/Digital

CSR/ ESG/
Sustainability

●

M&A

●

●

●

●

●
●

●

●

●
●

●

Overseas

●

●
●

●
●

●

●

●

●

●

(3) Outline of the Liability Limitation Agreement
The Company has concluded a liability limitation agreement pursuant to the provisions of Article 427, Paragraph 1 of theCompanies Act and Article 29, Paragraph 2 and Article 38, Paragraph 2 of our Company’s Articles of Incorporation with the Outside
Directors and Audit & Supervisory Board Members.
The maximum amount of liability for damages under the agreement is the amount stipulated by laws and regulations.
(4) Outline of Officers' Liability Insurance Contract
The Company has entered into liability insurance contracts for officers, etc. as stipulated in Article 430 (3), Item 1 of theCompanies Act with the Company's and its subsidiaries' Directors, Audit & Supervisory Board Member, executive officers and other
employees as insured persons.
Claims for damages arising from an act performed by an insured person in relation with the business of the Company (including
inaction) are covered by compensation for damages and court costs incurred by the insured.
The Company pays all insurance premiums for all insured persons, but damage caused by criminal acts or intentional illegal acts is
excluded so as not to impair the appropriateness of the execution of duties.
(5) Remuneration for Directors and Audit & Supervisory Board Members for the Fiscal Year under review(i) Matters concerning the policy for determining the contents of individual compensation, etc. for Directors(a) Determination method
At the meeting held in the Board of Directors on February 16, 2021, the Company resolved a policy for determining thedetails of individual compensation for Directors, etc. An outline of the policy is as described in (b) to (g) below.

―17―(b) Fixed remuneration shall be an amount considered to be at an appropriate level in comparison with the performance ofother companies in the real estate industry in Japan, etc., in consideration of the content of duties of Directors and theCompany's situation, etc.
(c) Performance-linked remuneration shall be determined from the perspective of reflecting the results of the improvementin performance by taking into consideration the status of achievement against the consolidated performance ordinary
profit (loss) based on the consolidated performance forecast during the relevant fiscal year.
(d) Directors (excluding outside directors) shall be granted share acquisition rights as share-based compensation stock
options upon a resolution of the Board of Directors to share the benefits and risks of stock price fluctuations withshareholders and to enhance the incentive effect of Directors to improve corporate performance and the managementawareness of shareholders.
(e) With regard to the ratio of individual remuneration, etc. for Directors, excluding Outside Directors, if the target for the
performance-linked remuneration indicator is 100%, fixed remuneration will be 65%, performance-linked remuneration
will be 30%, and stock options will be 5%. With regard to Outside Directors, only fixed remuneration andperformance-linked remuneration will be provided, but the above target will be referred to.
(f) The timing of payment of remuneration, etc. shall be as follows.
a．Fixed compensation

It is provided every month.

b．Performance-linked
compensationc．Stock option

Payment shall be made once a year after the end of the Annual General Meeting of
Shareholders pertaining to the relevant fiscal year.
The amount shall be determined and granted by the resolution of the Board of
Directors held once a year after the end of the Annual General Meeting of
Shareholders and shall be exercised at the time of retirement of each Director.

(g) Matters concerning delegation pertaining to determination of contents of remuneration, etc. for individual Directors
The amount of fixed remuneration and performance-linked remuneration for each individual or the determination of themethods for calculating such amounts shall be determined by resolution at the Board of Directors and delegated to the
Chairman and Representative Director.
In order to improve the objectivity and transparency of the procedures for determining renumeration of Directors, theCompany has established a Nomination and Compensation Committee consisting of the Chairman and Representative
Director and President and Representative Director as well as 2 or more Outside Directors as a voluntary advisory
body. The Nomination and Compensation Committee considers and deliberates on the amount of remuneration for
Directors, the calculation method, the composition of remuneration, the ratio, and the setting of indicators, and the
Chairman and Representative Director makes decisions with maximum respect for the deliberation contents.
(h) Status of the above decision policy for the fiscal year under review
The target for performance (consolidated ordinary profit (loss)), which is an indicator of performance-linked
compensation for the fiscal year under review, was 6,500 million yen, while the actual performance was 7,524 million
yen. The Board of Directors received a report from the Nomination and Compensation Committee, and determined thatthe content of individual compensation for Directors for the fiscal year under review, including the procedure andcontent of the decision by Mr. Tomoaki Horiguchi, Chairman and Representative Director, is consistent with the above
decision policy.
(ii) Matters concerning resolutions of the Annual General Meeting of Shareholders regarding remuneration, etc. for Directors
and Audit & Supervisory Board Members(a) At the 18th Annual General Meeting of Shareholders held on June 23, 2017, it was resolved that the total amount ofmonetary remuneration (fixed remuneration and performance-linked remuneration) for Directors to be 360 million yen
per year (including no more than 36 million yen for Outside Directors, but excluding employee salaries for Directors
who concurrently serve as employees). The number of Directors at the conclusion of the said Annual General Meetingof Shareholders was six (including two Outside Directors). In addition, separately from the monetary remuneration, at
the 19th Annual General Meeting of Shareholders held on June 22, 2018, it was resolved that share acquisition rights
will be allotted to Directors (excluding Outside Directors) within the scope of 36 million yen per year as share-based
compensation type stock options to be exercised upon retirement. The number of Directors (excluding Outside
Directors) at the conclusion of the said Annual General Meeting of Shareholders was four.
(b) At the 7th Annual General Meeting of Shareholders held on June 22, 2006, it was resolved that the limit of the total
amount of monetary remuneration (fixed remuneration only) for Audit & Supervisory Board Members should be no
more than 36 million yen per year. The number of Audit & Supervisory Board Members (including one Outside Audit& Supervisory Board Member) at the conclusion of the said Annual General Meeting of Shareholders was three.

―18―

(iii) Total Amount of Remuneration of Directors and Audit & Supervisory Board Members
Amount paid by type (million yen)
PerformanceBasic
linkedStock optioncompensation compensation,
etc.
163
50
4
(17)
( 3)
(-)

Amount paid
(million yen)
Directors(of which, Outside Directors)
Audit & Supervisory Board Members(of which, Outside Audit &Supervisory Board Members)

218
(20)
21
(12)

21
(12)

(-)

(-)

Number ofqualified officers
9
(3)
3
(2)

Note 1. Bonuses are paid to Directors as performance-linked remuneration.
Note 2. Performance-linked remuneration, etc. indicates the provision for the current period in provision for bonuses for Directors (and other officers) for the
fiscal year under review.
Note 3. The amount of stock options indicates the amount of remuneration paid during the fiscal year under review to four Directors (excluding Outside
Directors) for share-based compensation type stock option for FY2020 (share acquisition rights).
Note 4. 76 million yen (including 7 million yen for three Outside Directors) was paid to seven Directors in the current fiscal year as bonuses to Directors forthe 21st fiscal year. This compensation for Directors is included in the 76 million yen of provision for bonuses for Directors (and other officers) for the
21st fiscal year and is not included in the performance-linked compensation.

(6) Matters regarding Outside Officers(i) Relationship between the Company and corporations which are significant concurrent positions⚫ Director Yukitoshi Kubo concurrently serves as a Professor Accounting Course of Ohara Graduate School of
Accounting. There is no important relationship to be disclosed between the Company and the said organization.
⚫ Director Kazutaka Okubo concurrently serves as the President and Representative Director of Okubo Associates Co.,
Ltd., Outside Audit & Supervisory Board Member of SEGA SAMMY HOLDINGS Inc., Outside Audit & Supervisory
Board Member of BrainPad Inc., Outside Director of LIFULL Co., Ltd., Outside Director of SALA Corporation, andOutside Director of The Shoko Chukin Bank, Ltd. There is no important relationship to be disclosed between the
Company and the said corporations.
⚫ Audit & Supervisory Board Member Koichi Moriya is the General Manager of Moriya Law Office, and concurrently
serves as Outside Audit & Supervisory Board Member of TAMURA CORPORATION and Outside Director of
Samantha Thavasa Japan Limited. There is no important relationship to be disclosed between the Company and the said
corporations.
⚫ Audit & Supervisory Board Member Hidetaka Tanaka concurrently serves as Representative Director of the Rating
Research Center (general incorporated association), but there is no important relationship to be disclosed between the
Company and the said corporation.
(ii) Major Activities during the Fiscal Year ended March 31,2021(a) Attendance at the Board of Directors and the Audit & Supervisory Board meetings

Director
Director
Director
Audit & Supervisory
Board Member
Audit & Supervisory
Board Member

Toshio Takahara
Yukitoshi Kubo
Kazutaka Okubo
Koichi Moriya
Hidetaka Tanaka

Board of Directors (held 19 times)
Audit & Supervisory Board (held 13 times)
Attendance (times) Attendance Rate (%) Attendance (times) Attendance Rate (%))
19/ 19100
19/ 19100
19/ 19100
18/ 1994.7
12/ 13
92.3
19/ 19100

13/ 13100Note. In addition to the above-mentioned Board of Directors, there were 8 written resolutions deemed to have been adopted by the Board of Directors Resolution
pursuant to Article 370 of the Companies Act and Article 26, Paragraph 2 of the Articles of Incorporation of the Company.

(b) Statements made at the Board of Directors and the Audit & Supervisory Board⚫ Director Toshio Takahara attended all of the Board of Directors meetings and based on his wealth of operational
experience and broad knowledge as a corporate manager, he made appropriate statements at an independent standpointfrom the management team that executes business.
⚫ Director Yukitoshi Kubo attended all of the Board of Directors meetings, and from a professional perspective based on
his wealth of experience and knowledge in corporate governance management for listed companies during his tenure at
the Tokyo Stock Exchange and as a university professor who specializes in accounting made appropriate remarks at an
independent standpoint from the management team that executes business.
⚫ Director Kazutaka Okubo attended all of the Board of Directors meetings held after assuming office and based on his
experience not only in accounting and taxation as a certified public accountant, but also as a member of the advisorycommittee of various public offices and as an executive officer of business organizations, he has made appropriate
remarks in an independent standpoint from the management team that executes business from a professional viewpointin the fields of crisis management, compliance, and CSR.
⚫ Audit & Supervisory Board Member Koichi Moriya attended 18 out of 19 of the Board of Directors meetings andprovided advice and proposals to ensure the legality and appropriateness of the Board of Directors' decision-making,mainly by stating opinions from his professional viewpoint as an attorney.

―19―

In addition, he attended 12 out of 13 Audit & Supervisory Board meetings, made remarks on the establishment andmaintenance of the Company's compliance system, and gave a lot of advice.
⚫ Audit & Supervisory Board Member Hidetaka Tanaka attended all the Board of Directors meetings held after assuming
office and provided advice and proposals to ensure the legality and appropriateness of the Board of Directors' decisionmaking based on his expertise in international finance as a U.S. Certified Public Accountant and his wealth ofoperational experience as a corporate manager. In addition, he attended all meetings of the Audit & Supervisory Board
held and gave many advice including expressing opinions from a global perspective.
(c) Expected Duties Performed by Outside Directors
As stated above, the three Outside Directors attended the Board of Directors meetings and made statements, and also
attended the Management Committee for reporting and discussing important management matters of the Company,
budget performance management for all businesses, business execution plans, and other matters. In addition, they are
members of the Nomination and Compensation Committee, which was established as a voluntary advisory body in the
Board of Directors to improve the fairness, objectivity, and transparency of procedures related to the appointment anddismissal of officers and their remuneration. By attending these meetings and the Committee meetings and making
statements utilizing their respective wealth of experience and expertise, the three Outside Directors have demonstrated
their functions and roles to contribute to the sustainable growth of the Company and the enhancement of medium- tolong-term corporate value.

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

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

35

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

35

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

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

―21―

Consolidated Balance Sheet(As of March 31, 2021)(Unit: million yen)
Item

AmountItem

AssetsCurrent assets

Liabilities
110,785

Cash and time deposits

21,508Notes and accounts receivable - trade

1,532

Real estate for sale

13,601

Real estate for sale in process
Costs of uncompleted construction
contracts
Supplies

72,282

Other

1,693

Allowance for doubtful accounts

AmountCurrent liabilities
Accounts payable - trade
Current portion of long-termborrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors(and other officers)
Provision for fulfillment of guarantees

157
46

(36)

Other
Non-current liabilities

Non-current assets

16,700Long-term borrowings

Property, plant and equipment

10,528Retirement benefit liability
Provision for share-based
remuneration
Other

Buildings

1,989

Land

6,821

Other

1,717

Total liabilities

13,358
1,634
5,530
901
197
52
53
4,988
44,354
41,991
11
56
2,295
57,712Intangible assets

701

Net assets

Goodwill

552

Shareholders' equity

66,916

Other

149

Share capital

11,965

5,470

Capital surplus

6,445

Guarantee deposits

3,997

Retained earnings

48,573

Deferred tax assets

973

Other

500

Allowance for doubtful accounts(1)

Investments and other assets

Total assets

127,485

Treasury shares
Accumulated other comprehensive
incomeValuation difference on available-forsale securities
Foreign currency translation
adjustment
Share acquisition rights

(67)
(289)
2
(292)
16

Non-controlling interests

3,129

Total net assets

69,773

Total liabilities and net assets

127,485―22―

Consolidated Statement of Income(From April 1, 2020 to March 31, 2021)(Unit: million yen)
Item

AmountNet sales

59,632

Cost of sales

44,549Gross profit
Selling, general and administrative expenses

15,083
7,170

Operating profit
Non-operating income

7,912Interest income
Dividend income

430Foreign exchange gains
Subsidy income

33
154

Other

38

270

Non-operating Expenses
Interest expenses
Loss on investments based on equity method

502
55

Other

99

Ordinary profit
Extraordinary income
Gain on sales of non-current assets

1

Extraordinary loss
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss

0
5
51

658
7,524

Other

6

Profit before income taxes

1

63
7,462

Income taxes - current
Income taxes - deferred

3,295
(70)

3,224

ProfitLoss attributable to non-controlling interests

4,238
36

Profit attributable to owners of parent

4,274

―23―

Non-consolidated Balance Sheet(As of March 31, 2021)(Unit: million yen)
Item

AmountItem

AssetsCurrent assets
Cash and time deposits

Liabilities
87,167

Current liabilities

14,943

Accounts payable - trade

Account receivable

282

Real estate for sale

11,534Current portion of long-termborrowings
Income taxes payable

Real estate for sale in process

58,646

Deposits payable

Short-term advance to affiliatedcompany390

Other
Allowance for doubtful accounts

Provision for bonuses
Provision for bonuses for directors(and other officers)
Other

1,371
(0)

Non-current assets

27,561

Property, plant and equipment

8,748

Buildings

AmountNon-current liabilities

661

7,827
966
3,258
194
1,654
125
50
1,576
38,696Long-term borrowings

36,629Long-term guarantee deposited

1,963

Land

6,472

Provision for share-based remuneration

48

Other

1,614

Other

56

Intangible assets

111

Total liabilities

Other

111

Net assets

46,524

Investments and other assets

18,701

Shareholders' equity

68,186

Subsidiaries’ and affiliates’ stocks

15,283

Share capital

11,965Long-term advance to affiliatedcompany

1,243

Capital surplus

6,449

Deferred tax assets

964

Capital reserve

6,449

Other

1,427

Retained earnings

49,838

Allowance for doubtful accounts(218)

Legal reserve

13

Other retained earnings
Retained earnings brought
forwardTreasury shares
Valuation and translation adjustments
Valuation difference on availablefor-sale securities
Share acquisition rights

Total assets

114,729

49,82549,825(67)
2
2
16

Total net assets

68,204

Total liabilities and net assets

114,729―24―

Non-consolidated Statement of Income(From April 1, 2020 to March 31, 2021)(Unit: million yen)
Item

AmountNet sales

42,002

Cost of sales

28,973Gross profit

13,029Selling, general and administrative expenses

5,011

Operating profit

8,017

Non-operating income
Interest income

69

Dividend income0

Reversal of allowance for doubtful accounts

312

Other

55

438

Non-operating Expenses
Interest expenses

432

Other

28

Ordinary profit

461
7,994

Extraordinary income
Gain on extinguishment of tie-in shares

26

Extraordinary loss
Loss on devaluation of subsidiaries’ and affiliates’
stocksLoss on valuation of investments in capital ofsubsidiaries and associates
Other

26

99
190
6

Profit before income taxes

296
7,724

Income taxes - current

2,452

Income taxes - deferred(42)

Profit

2,409
5,314

―25―

Audit Report on Consolidated Financial Statements
Independent Auditor's Report
May 18, 2021
To the Board of Directors of Sun Frontier Fudousan Co., Ltd.:BDO Sanyu
Tokyo Office, Japan
Hiroshi Saito
Designated Partner
Engagement Partner
Certified Public Accountant
Satoshi Morita
Designated Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statement ofincome, the consolidated statement of changes in equity and the notes to consolidated financial statements of Sun Frontier FudosanCo., Ltd. (the “Company”) and its consolidated subsidiaries (collectively referred to as the “Group”) for the fiscal year from April 1,2020 to March 31, 2021 in accordance with Article 444, Paragraph 4 of the Companies Act.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position and the results of operations of the Group for the period, for which the consolidated financial statements were prepared, in
accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We
are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management, the Audit & Supervisory Board Members and the Audit & Supervisory Board for theConsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance withaccounting principles generally accepted in Japan, including the design, implementation and maintenance of such internal control as
management determines is necessary to enable the preparation and fair presentation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare theconsolidated financial statements with the assumption of the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern in accordance with accounting principles generally accepted in Japan.
The Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Directors’
performance of their duties including the design, implementation and maintenance of the Group’s financial reporting process.

―26―

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion on the consolidated financial
statements based on our audit from an independent point of view. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:•

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

•

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

•

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

•

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

•

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

•

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

We communicate with the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that we have compliedwith relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards in order to eliminate or reduce obstruction
factors.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and the designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to
the provisions of the Certified Public Accountants Act of Japan.

―27―

Audit Report on the Non-consolidated Financial Statements
Independent Auditor's Report
May 18, 2021
To the Board of Directors of Sun Frontier Fudousan Co., Ltd.:BDO Sanyu
Tokyo Office, Japan
Hiroshi Saito
Designated Partner
Engagement Partner
Certified Public Accountant
Satoshi Morita
Designated Partner
Engagement Partner
Certified Public Accountant
OpinionWe have audited the non-consolidated financial statements, which comprise the non-consolidated balance sheet, the non-consolidated
statement of income, the non-consolidated statement of changes in equity and the notes to non-consolidated financial statements, andthe supplementary schedules (the “financial statements and others”) of Sun Frontier Fudousan Co., Ltd. (the “Company”) as at March
31, 2021 and for the fiscal year from April 1, 2020 to March 31, 2021 in accordance with Article 436, Paragraph 2, Item 1 of theCompanies Act.
In our opinion, the financial statements and others referred to above present fairly, in all material respects, the financial position andthe results of operations of the Company for the period, for which the financial statements and others were prepared, in accordancewith accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements and Others section of our report. We
are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the non-consolidated
financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of Management, the Audit & Supervisory Board Members and the Audit & Supervisory Board for the
Financial Statements and Others
Management is responsible for the preparation and fair presentation of the financial statements and others in accordance withaccounting principles generally accepted in Japan, including the design, implementation and maintenance of and for such internal
control as management determines is necessary to enable the preparation and fair presentation of financial statements and others thatare free from material misstatement, whether due to fraud or error.
In preparing the financial statements and others, management is responsible for assessing whether it is appropriate to prepare thefinancial statements and others with the assumption of the Company’s ability to continue as a going concern, disclosing matters related
to going concern, as applicable in accordance with accounting principles generally accepted in Japan.

―28―

The Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Directors’
performance of their duties including the design, implementation and maintenance of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements and Others
Our objectives are to obtain reasonable assurance about whether the financial statements and others as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion on the financial statements andothers based on our audit from an independent point of view. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basisof these financial statements and others.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:•

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

•

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

•

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

•

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

•

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

We communicate with the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide The Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that we have compliedwith relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards in order to eliminate or reduce obstruction
factors.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and the designated engagement partners do not have any interest in the Company which is required to be disclosed pursuant
to the provisions of the Certified Public Accountants Act of Japan.

―29―

Audit Report of the Audit & Supervisory Board
Audit Report
The Audit & Supervisory Board, having received a report from each Audit & Supervisory Board Member on the method and resultsof his or her audit on the performance of duties of directors during the 22nd fiscal year from April 1, 2020 to March 31, 2021, and, asa result of discussion, does hereby report the results of audit as follows:

1. Auditing method and its contents(1) In addition to formulating audit policy and annual audit plans and receiving reports concerning the status and results of audits
conducted by each Audit & Supervisory Board Member, we received reports from directors and the accounting auditors
regarding the performance of their duties and sought explanations when deemed necessary.
(2) Each Audit & Supervisory Board Member, in accordance with audit standards, policy and plans formulated by the Audit &Supervisory Board, sought to facilitate mutual understanding with directors, the internal auditing section and other employees,
gathered information and worked to improve the environment for conducting audits. Accordingly, the Audit & Supervisory
Board Members conducted the following audit:(i) In addition to attending meetings of the Board of Directors and other important meetings, the Audit & Supervisory Board
Members received reports from directors and other employees regarding the performance of their duties, and when
deemed necessary, sought explanations, perused important documents including matters subject to executive approval,
and conducted examinations of conditions of business and assets at the head office and other major business offices. In
addition, opinions were exchanged regularly with the representative directors.
(ii) The Audit & Supervisory Board Members also periodically received reports from directors and other employees, inaccordance with the auditing standards for internal control systems established by the Audit & Supervisory Board, sought
explanations as necessary, and expressed their opinions regarding the contents of resolutions by the Board of Directors
concerning the development of systems stipulated in Article 100, Paragraphs 1 and 3 of the Enforcement Regulations of
the Companies Act, which are necessary to ensure that directors’ performance of their duties is in conformity with laws
and regulations and the Articles of Incorporation of the Company and to ensure the appropriateness of operations of theCompany and its subsidiaries, as described in the business report, as well as the status of the building and managementof the system developed pursuant to such resolutions (internal control system).
(iii) With regard to subsidiaries, the Audit & Supervisory Board Members worked to communicate and exchange information
with the Directors and Audit & Supervisory Board Members, etc. of the subsidiaries, attended the Board of Directors
meetings of the subsidiaries as necessary, received reports on the business and financial condition of the subsidiaries, andexpressed their opinions.
Based on the above methods, we have reviewed the business report and supplementary schedules attached thereto for the
relevant fiscal year.
(iv) We monitored and verified whether or not the accounting auditor has properly carried out audits while maintaining its
independence. We also received reports from the accounting auditor on the performance of its duties and have asked it
to provide explanations when necessary. In addition, we sought explanations as necessary, upon having received noticefrom the accounting auditor that the “systems for ensuring that the performance of the duties is being carried out properly”(matters stipulated in each item of Article 131 of the Regulation on Corporate Accounting) have been developed inaccordance with the “Quality Control Standard for Audit” (Business Accounting Council, October 28, 2005), etc.
Based on the methods described above, we reviewed the Non-consolidated Financial Statements (Non-consolidatedbalance sheet, Non-consolidated statement of income, Non-consolidated statement of changes in equity, and Notes tonon-consolidated financial statements), supplementary schedules attached thereto, and the Consolidated Financial
Statements (Consolidated balance sheet, Consolidated statement of income, Consolidated statement of changes in equity,
and Notes to consolidated financial statements).

―30―

2.

Audit Results(1) Audit results of the Business Report, etc.
(i)

We deem that the Business Report and supplementary schedules attached thereto fairly represent the situation of theCompany in accordance with relevant laws and regulations, and the Articles of Incorporation.

(ii)

We deem there to be no misconduct or material fact constituting a violation of relevant laws and regulations, or the Articles
of Incorporation, regarding the Directors in performing their duties.

(iii) We deem that resolutions of the content of the Business Report and Board of Directors regarding the internal control
systems are appropriate in content. We also deem there to be no issues to be pointed out with respect to the Directors in
performing their duties regarding the internal control systems.
(2) Audit results of the Non-consolidated Financial Statements and supplementary schedules attached thereto
We deem that the methods and results of audits performed by the accounting auditor, BDO Sanyu are appropriate.
(3) Audit results of the Consolidated Financial Statements
We deem that the methods and results of audits performed by the accounting auditor, BDO Sanyu are appropriate.

May 18, 2021

Sun Frontier Fudousan Co., Ltd. Audit & Supervisory Board
Audit & Supervisory Board Member (full-time)

Kouichi Shinada

Outside Audit & Supervisory Board Member

Koichi Moriya

Outside Audit & Supervisory Board Member

Hidetaka Tanaka―31―