Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
May 12, 2023 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, Executive Officer, General Manager of Corporate Planning Department(Phone: +81-3-5521-1301)
Scheduled date of general meetings of shareholder: June 27, 2023
Scheduled date of dividend payment commencement: June 28, 2023
Scheduled date of securities report submission: June 28, 2023
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 the Fiscal Year Ended March 31, 2023 (April 1, 2022 to March 31, 2023)(1) Consolidated Operating Results(“¥ ” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales

Operating Profit

Ordinary Profit

Net Income

FY2023/3¥ 82,777

16.2%¥ 14,905

22.9%¥ 14,722

20.5%¥ 11,612

56.6%

FY2022/3¥ 71,25119.5%¥ 12,12753.3%¥ 12,215

62.3%¥ 7,415

73.5%(Note) Comprehensive income: FY2023/3: 11,980 millions of yen (54.8%)(Note) Comprehensive income: FY2022/3: 7,738 millions of yen (93.1%)
Fully Diluted
Earnings per ShareROE (%) ROA (%)
earnings per Share
(yen)
(yen)

Operating Income
Margin (%)

FY2023/3

238.98238.76

15.3％

10.2％

18.0％

FY2022/3

152.26152.12

10.8％

9.3％

17.0％

(Reference) Income on investments based on equity method FY2023/3: ‐71 millions of yen(Reference) Income on investments based on equity method FY2022/3: ‐23 millions of yen(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

Net Assets per Share(yen)

FY2023/3¥ 152,519¥ 83,965

52.9%

1,663.33

FY2022/3¥ 136,512¥ 74,452

52.2%

1,463.74

Cash Flows fromOperating Activities

Cash Flows fromOperating Activities

Cash Flows fromOperating Activities(Reference) Total Equity: FY2023/3: 80,702 millions of yen
FY2022/3: 71,282 millions of yen(3) Consolidated Cash Flows
Cash Flows fromOperating Activities
FY2023/3¥ 16,544¥ ‐6,681¥ 2,039¥ 41,914

FY2022/3¥ 17,443¥ ‐9,386¥ 449¥ 29,951-1

2.Cash Dividends(“¥ ” indicates millions of yen.)

Cash Dividends per Share (yen)
1st quarter 2nd quarter 3rd quarter
Year end
end
end
end
21.00
23.00

FY2022/3
FY2023/3
FY2024/3(Forecast)

Consolidated
Total
Consolidated
Annual Dividends Payout Ratio Net Assetdividend rate
Total
44.00
¥ 2,145
28.9%
3.1%

23.00

25.00

48.00

26.00

26.00

52.00

¥ 2,335

20.1%

3.1%

23.0%

3.Forecast for Consolidated Financial Results for FY2024/3 (April 1, 2023 to March 31, 2024)(“¥ ” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales
Full
year

¥83,000

0.3%

Operating income

Ordinary income

Profit Attributable to
Owners of Parent

EPS
(yen)

¥16,500¥16,000¥11,000

266.37

10.7%

8.7%

‐5.3%

※ 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) 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
None
None
None

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

FY2023/3

48,755,500
shares

FY2022/3

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

FY2023/3

237,169
shares

FY2022/3

56,644
shares3) Average number of shares for the period:

FY2023/3

48,592,065
shares

FY2022/3

48,698,856
shares(Note) The main increase/decrease in the number of shares of treasury stock at the end of the period is due toan increase of 143,800 shares by purchase of treasury shares pursuant to Article 156 of the Companies Act ofJapan, as applied pursuant to Paragraph 3, Article 165 of the Companies Act, an increase of 71,800 shares byadditional acquisition to the employee stock ownership plan (J-ESOP), and an increase of 49 shares by purchaseof fractional shares, despite a decrease of 35,124 shares disposed of as renumeration of restricted stock.

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(Reference) Overview of Non-consolidated Performance

1. Non-consolidated Performance in the Fiscal Year Ended March 31, 2023 (April 1, 2022 to March 31, 2023)(1) Non-Consolidated Operating Results(“¥ ” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales

Operating Profit

Ordinary Profit

Net Income

FY2023/3¥ 52,097‐12.5%¥ 11,949‐16.4%¥ 11,753‐18.1%¥ 7,871‐15.2%FY2022/3¥ 59,563

41.8%¥ 14,300

78.4%¥ 14,356

79.6%¥ 9,284

74.7%

Earnings per Share(yen)

Fully Diluted
earnings per Share(yen)

FY2023/3

161.98161.83

FY2022/3

190.65190.47(2) Non-Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

Net Assets per Share(yen)

FY2023/3¥ 137,212¥ 79,859

58.2%

1,645.34

FY2022/3¥ 124,800¥ 74,432

59.6%

1,527.80(Reference) Total Equity: FY2023/3: 79,829 millions of yen
FY2022/3: 74,402 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 for Consolidated Financial Results for FY2024/3 is calculated based on
48,592,065 shares, the average number of shares for the period at the end of fiscal year ended March 31,2023.
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.

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Accompanying Materials
Contents
1.

Financial Highlits for the Fiscal Year Ended March 31, 2023 ..................................................................5(1) Business Performance ................................................................................................................................5(2) Consolidated Financial Position ................................................................................................................9(3) Consolidated Cash Flows...........................................................................................................................9(4) Outlook for the Fiscal Year Ending March 31, 2024 ...............................................................................10
2.

Basic Views on the Selection of Accounting Standards .......................................................................... 113.

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 of Consolidated Financial Statements ...........................................................................................19(Notes of Assumption of Going Concern) ..................................................................................................19(Segment Information, etc.) ........................................................................................................................19(Per Share Information) ..............................................................................................................................21(Significant Subsequent Events) .................................................................................................................22-4

1. Financial Highlights for the Fiscal Year Ended March 31, 2023
(1) Business Performance
Forward-looking statements in this document are based on the judgments of the Group as of the end of thecurrent fiscal year.
During the current consolidated fiscal year (hereinafter referred to as the current period), the Japanese
economy continued to recover mainly in personal consumption and capital investment as restrictions onsocio-economic activities further eased under coexisting with COVID-19. With regard to the global economy,
there were concerns that the Ukraine problem was prolonged, inflation in various countries remained high,and interest rate hikes will lead to economic slowdown.
In the real estate market, the average rent in the Tokyo business district (5 Wards of the Central Tokyo:
Chiyoda, Chuo, Minato, Shinjuku and Shibuya) in March was 19,991 yen (unit price per tsubo), down forthe 32nd consecutive month (total 3,023 yen / 13. 1%), and the average vacancy rate for the same month was
almost unchanged at 6.41% (according to a private research institution). Overall office market conditions
remained weak. At the same time, in the real estate investment market, although the willingness to invest in
institutional investors was generally strong, the outlook remained unpredictable due to the global monetary
tightening phase.
In the Real Estate Revitalization Business, the Group’s core business, sales of high-profit and high-quality
properties was steady in the current period. Profit margin continued to be higher than the previous year, andcontinued to be a strong driver of overall performance, despite a year-on-year decline in net sales and profits
due to a concentration of sales of relatively large-scale properties in the previous fiscal year. The Real Estate
Service Business continued to perform well. In the Hotel Development Business, sales and profit increased
significantly year on year due to the completion of the sale of two hotels. In the Hotel Operation Business,
which has been greatly affected by the pandemic of COVID-19, demand continued to increase due to theeasing of restrictions on socioeconomic activities. In addition, sales recovered sharply due to the Nationwide
Travel Subsidy Program, which was launched in October to promote domestic tourism, and the lifting of theban on personal travel from abroad.
As a result, net sales amounted to 82,777 million yen (up 16.2% YoY), operating profit amounted to 14,905
million yen (up 22.9% YoY), ordinary profit amounted to 14,722 million yen (up 20.5% YoY), and profit
attributable to owners of parent amounted to 11,612 million yen (up 56.6% YoY).
Moreover, as a result of the rapid recovery in Hotel and Tourism Business, the business’ tax loss
carryforwards reduced taxable income and deferred tax assets were recorded resulting in significant growth
in profit attributable to owners of parent.

The results of each segment are as follows.
(Real Estate Revitalization Business)
In the Real Estate Revitalization Business, we are engaged in (1) Replanning Business and (2) Rental
Building Business.
(1) In the Replanning Business, all processes from purchase of buildings to revitalization and usage planningand development, tenant placement, management, sales, and subsequent support with building management
are offered as a one stop service. Sales continued to grow steadily in the current period as well due to strong
investor enthusiasm about purchasing. At the same time, we actively purchased properties while carefully
selecting properties and assessing the real estate market conditions in macroeconomic fluctuations and theimpact of monetary policies. In commercialization, we aim to create offices that can be chosen even in the
new normal by catering to a hybrid working style while keeping a close eye on changes in the city, office-5and work style. During the fiscal year under review, we continued our commercialization, focusing on setup offices, which interior construction was carried out in advance, and it was possible to significantly reduce
expenses for tenants when moving in and out. In addition, through coordinating with the leasing brokeragedivision we promoted the attraction of tenants and made our real estate products high-occupancy and highadded value so that we could sell them with the expectations of a wide range of clients in Japan and overseas.
For example, in December, working in close coordination with the leasing brokerage division we were able
to sell five office buildings in Tokyo to an investor with almost full occupancy. These five properties, which
we are entrusted to manage, acquired the Building-Housing Energy-efficiency Labeling System BELS
certification in January 2023. The Group will promote initiatives toward further conversion to energy
conservation and decarbonization. In the Real Estate Revitalization Business in New York City, U.S.A., theCompany sold two properties that had been commercialized in order to meet the diversification needs ofclients’ asset portfolio. In addition, as small-lot owned products in specified joint real estate ventures, theCompany sold out medical and educational malls (new construction) (third and fourth composition) and alicensed nursery school (new construction) (first and second composition). Although the number of sales in
the Replanning Business was 24 cases, 2 cases more than the previous period, the customer base expanded,
including sales in New York. Although net sales and profits decreased year on year due to a decrease in salesof relatively large properties compared to the previous fiscal year, net sales and profits in this segment were
47,995 million yen and 14,943 million yen respectively, the third highest level after the previous fiscal year.
(2) In the Rental Building Business, with the aim of building a stable revenue base as a stock business, theCompany is working to increase rent income over the medium to long term while expanding the number ofrental buildings properties in the Replanning Business and utilizing the operational capabilities accumulated
in the Real Estate Service division. Compared with the previous year, the current period’s net sales and profits
decreased due to a decrease in rent income from properties held as inventories.
As a result, net sales amounted to 50,066 million yen (down 10.5% YoY) and segment profit amounted to
15,343 million yen (down 5.7% YoY) in total for the Real Estate Revitalization Business.
The Group is promoting initiatives to support start-ups with the idea of “making Tokyo the most friendly
city for start-up in the world.” As one such initiatives, in January 2023, we opened “A Shibuya,” an officethat supports the growth of startups in Jinnan, Shibuya-ku, Tokyo (on the 3rd floor of the Tokyu Shibuya
Station Building). In the same facility, we opened “Hive Shibuya,” a share office for startups, jointly operated
by Z Venture Capital, a corporate venture capital of Z Holdings Corporation, and East Ventures (hereinafter“EV”), one of the largest seed-stage venture capital firms in Southeast Asia. Also, in April 2023, weconcluded a business alliance with StartPass Co., Ltd., which provides “StartPass,” a cloud service toaccelerate startup management. In order to realize our mission of “accelerating the management of start-up
companies”, we will provide various services that combine online and offline, which are our mutual strengths
through this business alliance.
(Real Estate Service Business)
In the Real Estate Service Business, we are engaged in (1) Property Management Business, (2) Building
Maintenance Business, (3) Sales Brokerage Business, (4) Leasing Brokerage Business, (5) Rental
Conference Room Business, and (6) Rent Guarantee Business.
Each of these divisions is developing its business in the medium-sized office sector in central Tokyo bybringing together the expertise that has cultivated in the field and coordinating and working with each other.
Also added value is created through a chain-reaction of expertise cultivated through originality and ingenuity
in the field and this is the foundation for creating high profitability in the Replanning Business.
(1) In the Property Management Business, we are increasing the satisfaction of tenants through attentive
property management and supporting owners also by realizing high-occupancy and high-profitability-6building management by working with the leasing brokerage division to attract tenants and revising theconditions for appropriate rent. Despite weak market conditions, the number of entrusted buildings increasedby more than 8% from the previous fiscal year. As a result, both net sales and profits increased.

End of March 2021

End of March 2022

End of March 2023

Number of
Entrusted Buildings

397 buildings

421 buildings

457 buildings

Occupancy Rate

94.4%

91.5%

89.6%

(2) In the Building Maintenance Business, under the slogan “making Tokyo the most beautiful city in theworld,” we are conducting total maintenance of buildings, including inspections to maintain and manage thebuilding, cleaning to maintain beautiful and comfortable spaces, and renovation construction. We arepromoting cooperation with the Property Management division, taking advantage of high-rise cleaning of
exterior windows and walls using swings, as well as waterproofing construction and exterior wall renovation
construction. Both net sales and profits increased compared to the previous fiscal year due to synergies
resulting from M&A and an increase in the number of entrusted buildings.
(3) In the Sales Brokerage Business, as a part of real estate consulting, we are responding swiftly to inquiries
from Property Management Business and the Leasing Brokerage Business and other divisions. Officedivision works together to support owners managing buildings and expand the customer base. Based on thetrust we have built, we are able to close brokerage deals. In the fiscal year under review, both net sales andprofits increased compared with the previous fiscal year due to the strong brokerage with investors in Japanand overseas.
(4) In the Leasing Brokerage Business, we provide a service network based in 10 sites, mainly in central
Tokyo, and serve as a convenient consultation window that is close to local building owners. In addition, by
utilizing the needs and changes of tenants quickly acquired at leasing sites in research and proposals for
optimal use of office space, we are creating new value from the customer's point of view in product planningfor the Replanning Business. Both net sales and profits increased from the previous fiscal year due to anincrease in the number of contracts concluded.
(5) In the Rental Conference Room Business, we have provided services that capture the changing times andhave responded flexibly to clients’ needs through close contact with local communities and implemented
flexible proposal-based marketing. Consequently, we were able to capture demand from new clients. During
the current period, demand for corporate training, seminars and certification tests continued to recover amid
further easing of restrictions on social and economic activities. Moreover, orders for large-scale projects inthe two newly opened sites resulted in an increase in net sales compared to the previous fiscal year. Profits
also increased despite a temporary increase in expenses associated with the opening of new sites and the
expansion of existing site floors. In addition to the two sites newly established in September and November
2022, we expanded the floor space of several existing site and opened two new sites in February and April
2023 in order to meet increasing demand for rental conference rooms.
(6) In the Rent Guarantee Business, we provide services that are close to building owners, such as not only
providing rent guarantees when tenants fall behind in their rent payments, but also providing support for
tenants to vacate their property, thereby easing the burden on building management. “TRI-WINS,” a new
brand launched in February, is a “win-win-win” service that resolves the risks and issues faced by bothbuilding owners and tenants and contributes to economic growth and social stability. Compared with generalguarantee services, TRI-WINS has expanded the scope of its services to include investigation and screening,-7

rent guarantee, handling of arrears and removal, etc. During the fiscal year under review, both net sales andprofits grew compared with the previous fiscal year, due to an increase in the number of new guarantee
contracts as a result of an rise in consultations with building owners caused by a higher number of vacantrooms and concerns over the creditworthiness of tenants.
As a result, net sales amounted to 8,843 million yen (up 23.6% YoY) and segment profit amounted to 4,890
million yen (up 28.6% YoY) in total for the Real Estate Service Business.
(Hotel and Tourism Business)
In the Hotel and Tourism Business, we are engaged in (1) Hotel Development Business and (2) Hotel
Operation Business.
(1) In the Hotel Development Business, both net sales and profits increased compared to the previous fiscal
year, as two of the three hotels announced to be sold in August 2022 were handed over in October. One
hotel that was announced to be sold at the same time as these two hotels was delivered in April 2023. Net
sales and profits from this transaction are expected to be recorded in the 1st quarter for the fiscal year
ending March 2024. The funds recovered from the sale of the hotel will be reinvested in hotel
development, including M&A, centering on the "Tabi-no-Hotel" brand and commercial hotel
condominiums, to expand the business.
(2) In the Hotel Operation Business, we opened “Shijo Kawaramachi Onsen Sora Niwa Terrace Kyoto” and“Shijo Kawaramachi Onsen Bettei Kamogawa” in June 2022. As of May 12, we operated a total of 21 hotels(2,477 rooms). During the current period, amid further recovery in domestic tourism demand due to theeasing of restrictions on socio-economic activities, against the backdrop of the Nationwide Travel Subsidy
Program, which was launched in October to promote domestic tourism, and the lifting of the ban on personal
travel from abroad occupancy rates and room unit prices continued to rise based on the Group's high-valueadded strategy. As a result, net sales increased, and profits were in the black compared with the previous
fiscal year.
As a result, net sales amounted to 22,967 million yen (up 232.3% YoY) and segment profit amounted to
1,720 million yen compared with the previous fiscal year (segment loss was 1,950 million yen in the previous
fiscal year) in total for the Hotel and Tourism Business.
(Other Business)
In Other Business, we are engaged in (1) Overseas Development Business and (2) Construction Business.
(1) In the Overseas Development Business, we have expanded into Southeast Asian countries where growthis expected and have developed real estate mainly for condominiums and houses using Japanese advanced
construction technology. We are developing its business with a focus on providing an experience of Japanesequality to Asian people. Although net sales decreased compared with the previous fiscal year due to adecrease in revenue from property sales, revenue from the management of condominiums in Vietnam, which
we are promoting as a stock business, increased. Profit for the fiscal year under review increased due to anincrease in profit from the sale of properties in Vietnam, despite a write-down of inventories in Indonesia.
As for our business in Indonesia, we started the withdrawal process with the sale of all our properties in
November.
(2) In the Construction Business, renovation planning, repair and reform of commercial buildings, interior
finishing work, and telecommunications work were carried out. Both net sales and profits increased
compared to the previous fiscal year due to sales from large-scale construction projects at group subsidiaries.

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As a result of the above, net sales amounted to 1,788 million yen (up 5.5% YoY) and segment profit
amounted to 283 million yen (up 177.8% YoY) in total for Other Business.
The Group’s mission is “We will protect all employees, pursue both material and spiritual well-being, andrealize a sustainable and affluent society with a spirit of co-creation.” To promote this philosophy, we madeinitiatives in various projects during the fiscal year under review. In November, we agreed to a core businessand capital alliance with CONNEXX SYSTEMS Corporation, which develops storage battery technology
essential for the spread of renewable energy. In March, we signed an agreement with NOTUS SOLAR
JAPAN CO., LTD. which has next-generation agricultural photovoltaic power generation technology, to forma financial and core business partnership. In the Group, we will continue to contribute to the realization of asustainable society through our operations.
(2) Consolidated Financial Position
Total assets at the end of the current consolidated fiscal year amounted to 152,519 million yen (up 11.7%
YoY), liability amounted to 68,553 million yen (up 10.5% YoY), and net assets amounted to 83,965 million
yen (up 12.8% YoY.)
The increase in total assets was mainly due to an increase of 11,962 million yen in cash and time deposits,
an increase of 5,558 million yen in real estate for sale and an increase of 1,651 million yen in property
plant and equipment buildings (net amount), despite a decrease of 2,679 million yen in real estate for salein process and a decrease of 1,515 million yen in guarantee deposits.
The main factors for the increase in liabilities were an increase of 760 million yen in accounts payable –trade, an increase of 1,104 million yen in advances received included in other in current liabilities, and anincrease of 6,000 million yen in long-term borrowings, despite a decrease of 1,431 million yen in current
portion of long-term borrowings and a decrease of 1,829 million yen in income taxes payable.
The increase in net assets was mainly due to the recording of 11,612 million yen in profit attributable toowners of parent, despite the payment of 1,121 million in year-end dividends and 1,118 million yen ininterim dividends.
Equity ratio increased 0.7 percentage points to 52.9%.
(3) Consolidated Cash Flows
Cash and cash equivalents (hereinafter called, “funds”) at the end of the current period increased by 11,962
million yen from the beginning of the fiscal year to 41,914 million yen as a result of an increase of 16,544
million yen of funds provided by operating activities, a decrease of 6,681 million yen of funds provided byinvesting activities, and an increase of 2,039 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 provided by operating activities was 16,544 million yen compared with net cash provided byoperating activities of 17,443 million yen in the previous fiscal year. This was mainly due to profit before
income taxes of 14,745 million yen, depreciation of 1,968 million yen, income from a decrease in inventories
of 1,854 million yen, and income from an increase in notes and accounts payable - trade of 1,155 million
yen, despite corporate income taxes payments of 5,729 million yen and interest pain of 490 million.
(Cash flows from investing activities)
Net cash outflow used in investing activities was 6,681 million yen compared with net cash outflow used ininvesting activities of 9,386 million yen in the previous fiscal year. This was mainly due to outflow of 7,531-9

million yen in purchase of property, plant and equipment, and outflow of 692 million yen in payments ofguarantee deposits, despite 2,337 million yen in proceeds from collection of guarantee deposits.
(Cash flows from financing activities)
Net cash provided by financing activities was 2,039 million yen compared with net cash provided byfinancing activities of 449 million yen in the previous fiscal year. This was mainly due to 23,261 million yen
in proceeds from long-term borrowings despite 18,691 million yen in repayments of long-term borrowingsand 2,239 million yen in dividends paid.
(Sources of capital and liquidity of funds)
The main demand for funds in our business activities is purchase in inventory assets, which is related to 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.
(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,
2019
2020
2021
2022
2023
Equity ratio
50.3
49.6
52.3
52.2
52.9
Equity ratio at market value
52.0
30.7
36.9
37.5
40.8
Interest-bearing debt to cash flow ratio
10.0
2.9
3.4
Interest coverage ratio
9.4
39.1
34.5
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, 2024
Amid the rapid normalization of socio-economic activities in Japan and overseas under the coexisting with
COVID-19, it is expected that the Japanese economy will continue to recover mainly in domestic demandsuch as personal consumption and capital investment. Although the Chinese economy is showing signs ofrecovery, downside risks to the global economy are increasing due to factors such as the prolonged Ukraine
crisis, high inflation, and credit instability in some financial institutions caused by interest rate hikes by
central banks in the United States and Europe.
Under such circumstances, in the office building market in central Tokyo, both the average vacancy rate andaverage rents cannot be said to be improving, and the market is expected to remain weak due to a significant
increase in the supply of new large-scale office buildings. However, there is a strong need to move into midsized offices in central Tokyo, where the Group is increasing its value, and the Company will continue toactively sell highly profitable and highly utilized properties to investors in Japan and overseas. Also, in orderto solve the problems of the owners of buildings managed by the Group, we will provide various real estateservices this fiscal year as well.
In the Hotel Tourism Business, inbound demand is expected to expand further due to the end of borderenforcement measures in early May. In such a business environment, clients using our Group’s hotels are
expected to increase further. This year too, we will aim for our hotels to become “the only hotel in the world
for clients”, and we will continue to enhance our heartfelt service.

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As a result, the Company forecasts consolidated financial results for the fiscal year ending March 31, 2024
to be 83,000 million yen in net sales (up 0.3% YoY), 16,500 million yen in operating profit (up 10.7% YoY),
16,000 million yen in ordinary profit (up 8.7% YoY) and 11,000 million yen in profit attributable to ownersof parent (down 5.3% YoY).
The business environment surrounding the Group has changed significantly due to the impact of the spreadof COVID-19 since the beginning of 2020.
Against the backdrop of these changes in the business environment and the shift to the new normal, theGroup reviewed medium-term management plan in May 2021 in order to reestablish a sustainable growthpath.
The final year of the plan was extended for two years to the year ending March 2025 without changing thequantitative target (100 billion yen in net sales, 20,000 million yen in ordinary profit and 14,000 in profit
attributable to owners of parent).
Under the basic policy of “a place where people gather and communicate with each other to create social
development and people's happiness,” we will focus on the three fields of offices, hotels, and abroad. We
will also actively utilize M&As and other initiatives to promote businesses that contribute to achieving our
medium-term management plan's goals and realizing a sustainable society.
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.

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3. Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2022

As of March 31, 2023

30,05342,016945

1,625

14,22262,934

19,78160,254

100

57

83
2,603
(21)
110,920

87
2,080
(18)
125,886

11,489(3,609)(3)
7,876
10,046
1,800
(921)
(6)
872
18,796

13,416(3,878)(8)
9,528
10,117
1,767
(995)
(6)
764
20,410

408
164
572

343
472
815

4,726
1,036
460
(0)
6,222
25,591
136,512

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

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, 2022

As of March 31, 2023

1,345
30
6,874
3,528
191

2,106
50
5,442
1,699
237

73

73

39
4,126
16,21022
6,731
16,36344,1696
68
1,605
45,84962,06050,1705
83
1,930
52,19068,553

11,965
6,445
52,917(67)
71,26011,965
6,445
62,289(270)
80,430

3

2

19

269

22

271

30
3,139
74,452
136,51230
3,233
83,965
152,519

Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (andother officers)
Provision for fulfillment of guarantees
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Provision for share-based remuneration
Other
Total non-current liabilities
Total liabilities
Net Assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-13

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Unit: million yen)
For the year ended
March 31,2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Penalty income
Foreign exchange gains
Subsidy income
Other
Total non-operating income
Non-operating Expenses
Interest expenses
Loss on investments based on equity method
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Government subsidy
Gain on sale of shares of subsidiaries andassociates
Gain on liquidation of subsidiaries andassociates
Settlement money
Gain on bargain purchase
Other
Total extraordinary income
Extraordinary loss
Loss on reduction of fixed assets
Loss on devaluation of investment securities
Impairment loss
Loss on sales of non-current assets
Settlement money
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable to non-controllinginterests
Profit attributable to owners of parent-14

For the year ended
March 31,2023

71,251
51,907
19,344
7,216
12,127

82,77759,97122,8057,900
14,905

35
200
86
215
77
614

55
133
83
62
72
406

446
23
56
526
12,215

477
71
41
589
14,722

-

232

-

101

-

64

144
115
0
260

1
400

65
0
254
20
340
12,135
4,812
(85)
4,726
7,408

232
104
27
12
377
14,745
3,876
(852)
3,024
11,721

(6)

108

7,415

11,612

Consolidated Statement of Comprehensive Income(Unit: million yen)
For the year ended
March 31,2022
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toowners of parent
Non-controlling interests-15

For the year ended
March 31,2023

7,408

11,721

0

(1)

329
330
7,738

259
258
11,9807,727
1111,861
118

(3) Consolidated Statement of Changes in Equity
For the fiscal year ended March 31, 2022
(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

48,573

Treasury shares

Total
shareholders’equity(67)

66,916(3,071)(3,071)

7,415

7,415
-

-

-

4,343

-

4,343

11,965

6,445

52,917(67)

71,260

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

2

(292)

(289)

16

3,129

69,773(3,071)
7,415
-

0

311

312

14

9

335

0

311

312

14

9

4,679

3

19

22

30

3,139

74,452-16

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)(2,240)11,612

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(2,240)11,612
(239)
36
0

(1)

250

249

-

94

343

(1)

250

249

-

94

9,513

2

269

271

30

3,233

83,965-17

(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 fixed 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
Gain on bargain purchase
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
Settlement money paid
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
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-18

For the year ended
March 31,2022

For the year ended
March 31,2023

12,135
1,632
65
78
(14)
(8)

14,745
1,968
27
64
(64)
232
(232)
6
(87)

21

(0)

(13)

(17)

11

15

(35)
(215)
446
23
20
(115)
496
7,874
(776)
(1,271)
20,35435(447)(2,460)215(254)
17,443

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

-

125

(183)
271
(8,484)
5
(48)
(822)
44
(168)
(9,386)(100)
100(7,531)
27
(312)
(692)
2,337
(634)
(6,681)30
24,18320
23,261

Repayments of long-term borrowings
Dividends paid
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

For the year ended
March 31,2022

For the year ended
March 31,2023(20,661)(3,070)-(18,691)(2,239)
(239)

6

1

-

(69)

-

4

(39)
449

(5)
2,039

125

59

8,632
21,31929,951

11,962
29,951
41,914(5) Notes to Consolidated Financial Statements(Notes to Assumption of Going Concern)
Not applicable.
(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” in the Annual Securities Report. Reportable segment
profits are based on ordinary profit.

-19

3. Information on net sales and profit and disaggregation of revenue for each reportable segment
For the year ended March 31, 2022
(Unit: million yen)

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

Total

Other
(Note 1)

Total

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

Net sales
Revenue fromcontracts with
51,644
5,447
6,797
63,8891,690
65,58065,580
customers
Other income
4,301
1,255
114
5,671
5,671
5,671
Net sales to external
55,946
6,703
6,911
69,561
1,690
71,251
71,251
customers
Internal sales or
12
450
462
5
467
(467)
transfers
Subtotal
55,958
7,154
6,911
70,023
1,695
71,719(467)
71,251
Segment profit (loss)
16,262
3,803(1,950)18,115
101
18,217(6,001)
12,215
Segment assets
70,812
1,941
29,809102,563
1,029
103,592
32,919136,512Segment liabilities
37,3883,049
13,78954,226
192
54,4197,640
62,060
OthersDepreciation
829
40
657
1,527
11
1,539
93
1,632
Amortization of
17
17
61
78
78
goodwillInterest expenses
283
1
119
404
404
41
446
Income(loss) on
investments based on
(23)
(23)
equity method
Increase in Property,
plant and equipment
4,568
107
3,842
8,517
1
8,518
14
8,533
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 6,001 million yen includes elimination of intersegment transactions of negative
2 million yen and company-wide expenses of negative 5,999 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 32,919 million yen include eliminations of intersegment transactions of negative 19,189
million yen and company-wide assets of 52,109 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 7,640 million yen include elimination of intersegment transactions of negative 97
million yen and company-wide liabilities of 7,737 million yen that are not allocated to each reportable segment.
(4) Adjustment of depreciation under “Other” of 93 million yen includes depreciation of company-wide assets not allocatedto each reportable segment of 93 million yen.
(5) Adjustment of income(loss) on investments based on equity method under “Other” of negative 23 million yen includes
income(loss) on investments based on equity method of negative 23 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 14 million yen includes
the 14 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.

-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

Total

Other
(Note 1)

Total

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

Net sales
Revenue fromcontracts with
45,687
6,714
22,80875,211
1,774
76,98576,985
customers
Other income
4,362
1,299
129
5,792
5,792
5,792
Net sales to external
50,0508,014
22,93881,003
1,774
82,777
82,777
customers
Internal sales or
16
828
28
874
13
887
(887)
transfers
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
OthersDepreciation
872
45
889
1,807
4
1,811
151
1,963
Amortization of
4
4
47
51
12
64
goodwillInterest expenses
332
3
113
450
450
26
477
Income(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.

(Per Share Information)
For the year ended
March 31,2022
1,463.74
152.26152.12

Net assets per share (yen)Earnings per share (yen)Fully diluted earnings per share (yen)Note 1. Basis for calculation of earnings per share and fully diluted earnings per share is as follows.

-21

For the year ended
March 31,2023
1,663.33
238.98238.76

(“¥” indicates millions of yen, except for per share figures.)
For the year ended
March 31,2022
Earnings per share
Profit attributable to owners of parent
Amount not attributable to common shareholders
Profit attributable to owners of parent related to common shares
Average number of common shares
Fully diluted earnings per share
Adjustment of profit attributable to owners of parent
Common shares increase(including share acquisition rights)
Outline of dilutive shares not included in the calculation of fully
diluted earnings per share because they have no dilutive effectNote 2. Basis for calculation of net assets per share is as follows.

For the year ended
March 31,2023¥7,415¥7,415
48,698,856¥11,612¥11,61248,592,065

45,267(¥30)

45,270(¥)(“¥” indicates millions of yen, except for per share figures.)
For the year ended
March 31,2022¥74,452¥3,169(¥30)(¥3,139)¥71,282

For the year ended
March 31,2023¥83,965¥3,263(¥30)(¥3,233)¥80,702

Total net assets
Amount of deduction from total net assets(Share acquisition rights)(Non-controlling interests)
Net assets at year end available to common shares
Number of common shares used for the calculation of net assets per
48,698,856
48,518,331
share
Note 3. The Company’s shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP) are included in weighted
average number of shares for the period in common shares and treasury shares deducted in the calculation of the total numberof outstanding shares at the end of the fiscal year under review. The weighted average number of shares for the period of theCompany’s shares held by the trust account is 56,500 shares for the previous fiscal year and 62,921 shares for the current fiscal
year. The number of shares at the end of the fiscal year is 56,500 shares for the previous fiscal year and 128,300 shares for thecurrent fiscal year.

(Significant Subsequent Events)
Not applicable.

-22