Consolidated Financial Results
For the Fiscal Year Ended March 31, 2015
(Based on Japanese GAAP)(Translation of Japanese Flash Report, Released on May 8, 2015)
Company name: Sun Frontier Fudousan Co., Ltd.
Stock listing: Tokyo Stock Exchange 1st Section
Code number: 8934
URL: http://www.sunfrt.co.jp
Address: 14F, Toho Hibiya Building, 2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006
Representative: Tomoaki Horiguchi, President, Representative Director
Inquiry: Yasushi Yamada, Executive Officer and Corporate HQ’s Group(Phone: +81-3-5521-1301)*Amounts under one million yen have been rounded down.

1. Consolidated Performance in the Fiscal Year Ended March 31, 2015
(1) Operating results*Percentage figures shown under net sales, operating income, ordinary income, and net income columns indicate year-on-year changes for
those items.
(Millions of yen, except for per share figures)

Net Sales

Operating Income

Ordinary Income

FY ended March 31, 2015

¥27,741 (56.1%)¥5,850 (29.1%)¥5,593 (28.8%)

FY ended March 31, 2014

¥17,772 (68.0%)¥4,531 (110.1%)¥4,341 (112.9%)Note) Comprehensive Income: FY Ended March, 2015: ¥5,147 million (28.0%) FY Ended March, 2014: ¥4,021 million (61.9%)

Net Income

Net Income per Share(Yen)

Fully Diluted
Net Income per Share(Yen)

FY ended March 31, 2015

¥5,053 (25.7%)¥118.18¥ －FY ended March 31, 2014

¥4,020 (61.9%)¥94.03¥ －Reference) Income on investments based on equity method: FY Ended March, 2015: ¥- million
FY Ended March,2014: ¥- million(Note) The Company conducted a 1:100 stock split of common stocks as of October 1, 2013. The “Net Income per Share” and “Fully Diluted
Net Income per Share” are calculated assuming that the aforementioned stock split was conducted at the beginning of the previous consolidated
FY.

(2) Financial Position (at end of the term)(Millions of yen, except for per share figures)

Total Assets

Net Assets

Equity Ratio(%)

FY ended March 31, 2015

¥40,424¥22,701

56.2%¥530.95

FY ended March 31, 2014

¥33,910¥18,46953.7%¥426.13

Reference) Equity at term-end: FY ended March 31, 2015: ¥22,701 million

Net Assets per Share(Yen)

FY ended March 31, 2014 : ¥18,219 million(3) Cash Flows(Millions of yen)

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

FY ended March, 2015

¥1,382¥(276)¥701

Cash and Cash
Equivalents at
Year-End¥11,212FY ended March, 2014¥(6,827)¥(1,338)¥7,573¥9,401

1

Cash Flows from
Financing Activities

2. Cash Dividends
Cash Dividends per Share

(Yen)

Total
Dividends

Net asset
Payout ratio
dividend rate
(Consolidated)(Consolidated)

1st quarter
period2nd quarter
period3rd quarter
periodYear end

Annualtotal

FY Ended March, 2014

-

¥0.00

-

13.50

13.50

577

14.4

3.5

FY Ended March, 2015

-

¥0.00

-

16.50

16.50

705

14.0

3.4

17.50

17.50

FY Ended March, 2016
¥0.00
(Projections)(Note) The Company conducted a 1:100 stock split on October 1, 2013.

(Millions of yen)

14.1

3. Projections for Consolidated Performance in the Fiscal Year Ending March 31, 2016
(From April 1, 2015 to March 31, 2016) *Percentage figures are indicated year-on year changes for those items.

FY Ending March, 2016

Net Sales

Operating Income¥33,000 (19.0%)¥6,300 (7.7%)(Millions of yen, except for per share figures)
Net Income per
Ordinary Income
Net Income
Share¥6,000 (7.3%)¥5,300 (4.9%)¥123.96

4. Others(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of
consolidation): None
Newly companies: —Excluded companies: —(2) Changes in accounting principles, procedures and presentation methods
1) Changes caused by revision of accounting standards: None
2) Changes other than those included in 1): None
3) Changes in accounting estimates: None
4) Restatement of corrections: None
(3) Number of shares issued and outstanding (common shares)
1) Number of shares issued and outstanding at the end of the period (including treasury stock):
FY ended March 31, 2015: 42,755,500 shares
FY ended March 31, 2014: 42,755,500 shares
2) Number of treasury stock at the end of period:
FY ended March 31, 2015: 143 shares
FY ended March 31, 2014: 100 shares3) Weighted average number of shares for the period:
FY ended March 31, 2015: 42,755,368 shares
FY ended March 31, 2014: 42,755,454 shares(Note) The Company conducted a 1:100 stock split of common stocks as of October 1, 2013. The number of shares issued and outstanding(common shares) is calculated assuming that the said stock split was conducted at the beginning of the previous consolidated FY.

2

Reference: Overview of Non-consolidated Performance
1. Non-consolidated Performance in FY ended March 31, 2015 (from April 1, 2014 to March 31, 2015)(1) Operating Results*Percentage figures shown in the net sales, operating income, ordinary income, and net income columns indicate year-on year changes for
those items.
(Millions of yen, except for per share figures)

Net Sales

Operating Income

Ordinary Income

Net Income

FY Ended March, 2015

¥25,012 (45.8%)¥5,594 (19.8%)¥5,359 (19.1%)¥4,940 (21.6%)

FY Ended March, 2014

¥17,152 (78.3%)¥4,668 (130.2%)¥4,501 (135.6%)¥4,063 (66.9%)

Net Income per Share (Yen)

Fully Diluted Net Income per Share (Yen)¥115.56-

FY Ended March, 2015

¥95.03
FY Ended March, 2014
(Note) The Company conducted a 1:100 stock split of common stocks as of October 1, 2013. The “Net Income per Share” and “Fully Diluted
Net Income per Share” are calculated assuming that the said stock split was conducted at the beginning of the previous consolidated FY.
(2) Financial Position(Millions of yen, except for per share figures)

Equity Ratio (%)

Net Assets per Share (Yen)

Total Assets

Net Assets

FY Ended March, 2015

¥39,801¥22,52856.6%¥526.91

FY Ended March, 2014

¥32,065¥18,16456.6%¥424.84

Reference: Equity at term-end: FY Ended March, 2015: ¥22,528 million
FY Ended March, 2014: ¥18,164 million※Indication of audit procedure implementation status
This financial results report is exempt from audit procedure based upon the Financial Instruments and Exchange Act. It is under
the audit procedure process at the time of disclosure of this report.

※Appropriate use of projections for performance, other notes
The projections for performance in this report contain forward-looking statements based on information available to theCompany at the date of publication, and on certain set assumptions that have been deemed reasonable. Actual earnings mayvary greatly in accordance with a wide range of factors. Refer to section 1. Analysis results of Operations and Financial
conditions (1) Analysis of the Results of Operations on page 5 for assumptions used for projections and the notes on the use of
the projections.

3

○Table of Contents of Appendix
1. Analysis Results of Operations and Financial Conditions................................................................................................... 5(1) Analysis of Results of Operations .................................................................................................................................. 5(2) Analysis of Financial Position ....................................................................................................................................... 7(3) Basic Policy for Profit Allocation and the Dividends for the Current and Next Terms ................................................ 8
2. Management Policy ............................................................................................................................................................. 8(1) The Company’s Fundamental Management Policy ....................................................................................................... 8(2) Target Managerial Indexes ............................................................................................................................................. 8(3) Corporate Management Strategy in the Mid to Long Terms ......................................................................................... 8(4) Challenges the Company Must Address ........................................................................................................................ 9
3. Our Fundamental Approach to Selecting Accounting Standards ........................................................................................ 9
4. Consolidated Financial Statements.................................................................................................................................... 10(1) Consolidated Balance Sheets ....................................................................................................................................... 10(2) Consolidated Statements of Income and Consolidated Statements of comprehensive income ................................... 12(3) Consolidated Statements of Changes in Net Assets ..................................................................................................... 14(4) Consolidated Statements of Cash Flows ...................................................................................................................... 16

4

1. Analysis Results of Operations and Financial Conditions(1) Analysis of Results of Operations

With regard to the Japanese economy during this consolidated fiscal year, although the recovery of consumption was
somewhat sluggish in the wake of the hike in consumption tax in April 2014, thanks to the Bank of Japan’s assertive monetaryeasing measures and mobile financial policy as well as under the influence of the weak yen and the drop in crude oil prices, etc,
the economy experienced moderate recovery with improvements being seen not only in corporate profits but also in capital
investment and in the employment situation.
In the real estate industry to which our company and our consolidated subsidiaries (hereinafter, “our corporate group”) belong,
there was a marked improvement in the vacancy rate in the city-center office building market, and the rent level is also showing
moderate improvement. In addition, on the back of factors such as favorable financing conditions and the weak yen, there wasan increase in the inflow of capital into the real estate market from both foreign and domestic investors. Investors’ drive to invest
remains as high as ever, with a marked decrease in returns being seen particularly on prime city-center real estate.
In such an environment, our corporate group focuses on the utilization and distribution of small to medium-sized officebuilding in the urban center of Tokyo, and has helped building owners solve various troubles regarding real estate. We create
multifaceted earning opportunities by providing each customer with one-stop services based on philosophy-based businessmodel, including proposal and order receipt for the rental, brokerage of sale, management, maintenance, remodeling, andrenovation of buildings; consultation regarding inheritance, tax affairs, etc. in collaboration with specialists; the insurance fordelinquency in rent payment, etc.
In addition, by capitalizing on the knowledge and know how that we have gained through delivering these various services,and by linking up some of their various functions, we have been proactively working to develop real estate revitalization projects
that generate substantial added value. We have accumulated the know-how and experience of restoration of mainly officebuildings in 5 cities in the center of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya), for example, optimal change in
use to vitalize the surrounding area and renovation placing importance on comfort to the occupants, with our capability offinding tenants based on our familiarity with local areas. On July 1, 2014, we established the new Kojimachi branch with theaim of further enriching our service that is deeply rooted in the localities it serves.
As for procurement of real estate, we obtain information on good real estate from leading real-estate companies and trustbanks, and also an increasing number of pieces of information from “Kyoeikai (Co-prosperity Association),” which is ouroriginal network of affiliates. In addition, we have worked to establish competitive procurement routes through activities, forexample, solving building owners’ worries, complaints, etc. will contribute to the direct procurement of real estate.
As a result, our operating results for the fiscal year ended March 2015 were as follows:
Sales of ¥27,741 million (up by 56.1% from the previous fiscal year), operating income of ¥5,850 million (up by 29.1%), andordinary income of ¥5,593 million (up by 28.8%). Net income was ¥5,053 million (up by 25.7%).
The performance of each segment is as follows.
Real Estate Revitalization
From the procurement stage, our corporate group starts a “production” process through which we aim to put the property to
the best use possible. By carefully researching real estate leasing market on a daily basis to collect knowledge and injecting andlinking each section’s experience, technologies, and knowledge of planning, building management, construction, etc., we will
gestate feasible plans. In addition, we emphasize the fact that the more satisfied the residents, the more satisfied the owner:
through frequent interactions with residents, we look for all possible ways to make the property more comfortable andconvenient for them to use, and address any challenges quickly and carefully, and thereby prevent residents from leaving midlease and achieve high rates of utilization.
In this way, we strive to maximize the profitability of real estate — renovating even real estate that has a low rate of utilizationor that needs renewal in a way that meets the needs of the owner and society, and reviving real estate with high utilization rates— before selling it on to asset holders, wealthy individuals and corporations.
By continuing to provide fast and responsive services even after the sale (including hardware and software management ofreal estate, pro-active response to faults, solving owner difficulties and responding to new demands), we deliver the property as
a composite package of added value that even extends to post-sale follow-up service.
As for the replanning business, we determined target buyers at the stages of procurement and commercialization, pursued not
only rate of return, but also “values” suited for target clients, including the locational characteristics and rarity of each property,
stability as assets, and merits regarding taxation. Through these efforts, we sold 29 buildings (19 buildings in the previous year)
and both sales and profits increased from the previous year. We also engaged in the commercialization of real estate to be soldin this term, and the procurement of real estate to be sold in the next term or later.
As for the rental building business, we purchased and retained properties according to our retention criteria, and, bycapitalizing on the real estate management skills that we developed working in rental brokerage, property management,
construction solutions and delinquent rent guarantee services, we have maintained a high rate of utilization and secured stablerental income. In the current fiscal year, as a result of higher rental income from renovated properties that are in the process ofcommercialization, we saw an increase in both sales and profits year-on-year.
In the real estate securitization business, etc., sales and profits increased from the previous year, because of the income fromthe sale of real estate for joint investment held by a special-purpose company, etc.
As a result of the above activities, sales were ¥24,279 million (up by 69.5% from the previous fiscal year) and segment income
was ¥6,270 million (up by 33.7%).
Real Estate Brokerage5In the sales brokerage business, we were not able to swiftly respond to the shift from the buyers’ market to the sellers’ market(that is, the steep drop in rate of return) as the market got thriving and competitions were getting fierce, and so the number oforders we received declined. As a result, sales and profits decreased.
In the rental brokerage business, while occupancy rates were improving in the market, we engaged in not only finding tenants,
but also solving various troubles about building managements for building owners. As a result, sales and profits remained flatfrom the previous year.
As a result of the above activities, sales were ¥1,239 million (down by 23.5% from the previous fiscal year) and segment
income was ¥1,047 million (down by 17.4%).
Both businesses contribute to the increase in income of the entire corporate group, by procuring and selling our own properties,
finding tenants for buildings that are being renovated, and undertaking building management.
Property Management
In the property management business, we strove to boost resident satisfaction by providing meticulous service, and managed
to maintain a high residency rate in the buildings we manage. After moving to leverage this high residency rate record to increase
the number of buildings under our management, at the end of the past fiscal year we were managing 49 more buildings comparedto the end of the previous year (a 21.6% increase), as can be seen in the table below. In addition, we worked to generate business
opportunities, such as brokerage and construction orders and switchovers to fair rent contracts, and pushed ahead with ourleasing business that boasts an intimate familiarity with the locality. These initiatives resulted in a steady increase in customer
numbers. Further, although the occupancy rate dropped temporarily at the end of this period after some vacancies arose becauseof the relocation of some major tenants at the beginning of this year, occupancy rate has since recovered thanks to the gradualinflux of contracts with new tenants. We have also offered continuous services linked with other businesses, as the clients whopurchased real estate through our replanning or sales brokerage business entrust us with the management of buildings after
purchase. As a result, sales and profits increased from the previous year.
End of Mar. 2013

End of Mar. 2014

End of Mar. 2015

No. of entrusted buildings

183

227

276

Operation rate

94.9％

97.1％

92.9％

As for the building maintenance business, we made efforts to improve our earning system by refraining from receiving
unprofitable orders by bidding, further strengthening the height (such as building exterior wall) cleaning and repairing which
are our strong points, and increasing transactions in cooperation especially with the property management section for enhancing
the synergy with existing businesses. As a result, sales and profits increased from the previous year.
As a result of the above activities, sales were ¥1,325 million (up by 20.6% from the previous fiscal year) and segment income
was ¥595 million (up by 25.7%).
Other Businesses
As for the construction solution business, although the number of replanning transactions increased, the ratio of in-company
transactions also increased, and consequently sales increased and profits decreased from the previous year.
In the delinquent rent guarantee business, we concentrated on the popularization of new product plans in the market and thecooperation with affiliated companies, and so the number of transactions was healthy. Consequently, sales and profits increased
from the previous year.
As a result of the above activities, sales were ¥897 million (up by 22.8% from the previous fiscal year) and segment income
was ¥349 million (up by 11.7%).
Outlook for Next YearAs for the Japanese economy, the Bank of Japan’s continued monetary easing measures and the government’s steady
implementation of its growth strategy has continued to underpin economic growth, and with the rising wages that have come inresponse to increased corporate profits and a shortage of manpower anticipated to lead to a rise in consumption, overall the
economic situation is expected to remain robust.
As for the environment surrounding the real estate industry to which our corporate group belongs, occupancy rate are expected
to remain high, boosted by recovering corporate earnings. Furthermore, the increasing numbers of foreign tourists visiting Japan
has enlivened urban commercial facilities, and the influx of real estate investment not only from within Japan but also from Asiaand other foreign countries seems set to gain even greater momentum.
Against this backdrop, our corporate group will stay focused on working, as professionals in real estate utilization, to integrate
and effectively combine our diverse specialized services, strive to deliver even better quality by strengthening our internal
systems, work exhaustively to develop services and products that are sought after by building owners, asset holders and wealthy
individuals, emphasize profit and manage risk, and aim to achieve solid growth as a highly profitable forward-moving company.
Through these efforts, as for the consolidated earnings forecast for the term ending March 2016, we estimate sales of ¥33,000
million (19.0% increase), operating income of ¥6,300 million (7.7% increase), ordinary income of ¥6,000 million (7.3%
increase), and net income of ¥5,300 million (4.9% increase).
It should be noted that the above earnings forecast was drafted based on information that was available to us on the date of
publication. Actual earnings may for various reasons turn out to be different from those forecasted.

6

(2) Analysis of Financial Positioni) Assets, Liabilities, and Net Assets
The current assets at the end of this consolidated fiscal year were ¥37,452 million, increasing ¥6,006 million from the end of
the previous consolidated fiscal year, as inventory assets increased.
Cash and deposits were ¥12,686 million, increasing ¥1,506 million from the end of the previous consolidated fiscal year, as
there were income of ¥1,382 million in the cash flow from operating activities, expenditures of ¥276 million from the cash flowfrom investing activities, and income of ¥701 million from the cash flow from financial activities, and the fixed deposit, whose
deposit term is over 3 months, and derivative deposit decreased ¥304 million.
Inventory assets were ¥23,480 million, increasing ¥4,750 million from the end of the previous consolidated fiscal year, as
they are mainly real estate for sale and sale in process in the replanning business and by focusing on promoting acquiringproperties.
Noncurrent assets were ¥2,971 million, increasing ¥507 million from the end of the previous consolidated fiscal year, due toincrease in property, plant and equipment and increases in long term guarantee deposits that are included as “others” under“investments and other assets”.
Total liabilities at the end of this consolidated fiscal year were ¥17,723 million, increasing ¥2,282 million from the end of theprevious consolidated fiscal year, as long-term loans payable increased, although bonds decreased. Total net assets were ¥22,701
million, increasing ¥4,231 million from the end of the previous consolidated fiscal year, as retained earnings increased because
net income were posted, although minority interest decreased.
Consequently, net assets per share were ¥530.95.
Total assets as of the end of this consolidated fiscal year were ¥40,424 million, increasing ¥6,514 million from the end of theprevious consolidated fiscal year.
ii) Cash Flow
Cash and cash equivalents (hereinafter called “cash”) as of the end of this consolidated fiscal year were ¥11,212 million,
increasing ¥1,810 million from the beginning of this consolidated fiscal year. This is mainly the result of inventory assets
increasing in value by ¥5,200 million and expenditures of ¥8,385 million to repayment of long-term loans payable, although
there were ¥11,155 million of proceeds from long-term loans payable, ¥5,574 million of income before income taxes andminority interests.
Each cash flow for this consolidated fiscal year and related factors are as follows:
Cash flow from operating activity
Cash obtained for operating activity were ¥1,382 million (previous term: expenditures of ¥6,827 million). This was mainly
because inventory assets increased in value by ¥5,200 million, although there were an income before income taxes and minority
interests of ¥5,574 million, depreciation and amortization of ¥509 million, and increase in notes and accounts payable-trade of¥308 million.
Cash flow from investing activity
The cash used for investing activities was ¥276 million (previous term: expenditures of ¥1,338 million). This was mainly due
to ¥3,482 million of payments into time deposits and ¥375 million in purchase of property, plant and equipment, although therewas ¥3,546 million of proceeds from refunds of fixed deposits.
Cash flow from financing activity
Cash obtained from financing activity was ¥701 million (previous term: income of ¥7,573 million). This was mainly due to¥11,155 million of proceeds from long-term loans, although there was ¥8,385 million of repayment of long-term loans payableand ¥1,195 million of redemption of bonds.
(Reference) Changes in Cash Flow Related Indices
FY Ended March FY Ended March FY Ended March
31, 2011
31, 2012
31, 2013
Equity ratio (%)
43.3
57.5
68.5
Equity ratio on market
25.8
57.8
246.9
price basis (%)
Debt repayment period
4.4(years)Interest coverage ratio
7.9(times)Equity ratio:
equity capital/total assets
Market value basis equity ratio:
total market value of stock/total assets
Debt repayment period:
interest-bearing debt/operating cash flow
Interest coverage ratio:
operating cash flow/interest payments

FY Ended March
31, 2014
53.7

FY Ended March
31, 2015
56.2

179.5

117.0

-

1,012.0-

5.9(Note 1) Stock Market Capitalization is calculated as Term End Stock Closing Price x Number of Issued Shares at Term End.
(Note 2) Operating Cash Flow uses the cash flow from operating activity of the Consolidated Cash Flow Statement of Accounts.
(Note 3) Interest Bearing Liabilities include all liabilities on which interest is being paid of the liabilities included on theConsolidated Balance Sheet. Further, regarding interest payments, the payment amount of interest from the Consolidated Cash
Flow Statement of Accounts is used.

7

(Note 4) For the Cash Flow to Interest Bearing Liabilities Ratio and Interest Coverage Ratio for Fiscal Years ended March 31,
2011, March 31, 2013 and March 31, 2014, they are not recorded because the operating cash flow is negative.

(3) Basic Policy for Profit Allocation and the Dividends for the Current and Next Terms
Our company has the basic policy of returning profits to shareholders in a long-term, stable basis and enriching retained
earnings to respond to the changes in the business environment flexibly.
The term-end dividend for the term ended March 2015 is ¥16.5 per share under the above mentioned policy.
This matter is to be discussed at the annual meeting of shareholders scheduled in June 2015.
The dividend for the next term ending March 2016 is planned to be ¥17.5 per share.

2. Management Policy(1) The Company’s Fundamental Management Policy
Our corporate group conducts business guided by a fundamental management policy that is comprised of the following mission
statement and corporate philosophy.
Management Principal“While protecting all our employees, and pursuing their physical and psychological wellbeing, we work in a spirit of harmony tocontribute to the prosperity of society and the human race.”
Corporate Philosophy“Through our work, we employees shall put abundant enthusiasm into developing our knowledge, skills and characters, and weshall dedicate ourselves to utilizing and distributing real estate stock so as to prevent the wasting of non-reproducible resources
and contribute to the lasting prosperity of the human race and all living things.”(2) Target Managerial Indexes
Our corporate group aims to produce enduring growth in the long term, and we emphasize capital adequacy ratio from the pointof view of financial stability, ordinary profit margin, etc., from the point of view of profitability and productivity.

(3) Corporate Management Strategy in the Mid to Long Terms
Our corporate group has defined its client base as being made up of building owners, asset holders and wealthy individuals, andby staying by their side and resolving any real estate-related difficulties that they might have, we aim, as professionals in real estateutilization, to be a real estate company that will be loved and chosen by customers. Working mainly with small to medium sizedbuildings in the Tokyo metropolitan area, we make it our policy not only to work on the property itself, but also to bring happinessto property owners and to focus on resolving any difficulties that they may have. As a foundation for this work, by training our
employees based on a philosophy that is summed up in the word “altruism”, we train human resources who are able to put thehappiness of others first and do work that is beneficial to society, and we thereby strive to earn our customers’ trust (we believethat our people are our fortune, and so we write “human resources” with the character meaning “fortune”).
As for the environment in which our corporate group operates, given the marked improvement in vacancy rates in downtown
office buildings and the gradual and sustained rise in rental standards, and against the backdrop of favorable financing conditions
and the weak yen, etc., the drive to purchase Japanese real estate, primarily among foreign investors, remains high. Furthermore,
as described below, we have developed a three-pronged strategy for future growth in response to three factors: the shift from a
deflationary mindset to an inflationary mindset; the greater strengthening of international ties, particularly with Asian countries,
as evidenced by the increasing numbers of foreign tourists visiting Japan; and mid-term changes in business conditions including
the progress of urban re-modeling in preparation for the Tokyo Olympics. The strategy involves “1. Expanding Operations,” “2.
M&A,” and “3. Overseas Expansion.”
1. Expanding Current BusinessWe will strive to further extend our market penetration, with the office market in the center of Tokyo, the world’s largest
metropolitan area, as our main battlefield.
In addition to expanding our network of branches and continuing to work on improving the quality of our various services, wewill also ascertain our customers’ needs, both obvious and subtle, and work to expand our service lineup. Furthermore, in order tofurther improve customer satisfaction, we will train our personnel to build close relationships with each individual client and todevise proposals that are optimally tailored to them, and we shall also work on structural improvements including improvements
to the customer system.
Moreover, we will work on projects to utilize and operate urban spaces in order to make effective use of our clients’ assets, andin order to invigorate cities by responding to changes in urban structure and making effective use of social infrastructure stock.
Already, in September 2014, we started a small 33-room office project in Okachimachi (fully occupied at the time of publication),and in April 2015 we opened a time rental event space and rental meeting rooms in front of Tokyo Station as a rental space project.
As seen in these examples, we see our buildings as more than just rental spaces; we put a lot of thought into their potential andgenerate, combine and link different sources of added value to develop proposals for new building projects.
2. M&AWe see the utilization of M&A as an effective choice in helping us make further progress in providing better client-oriented
services.
As the scope of our projects expands, underdeveloped related sectors, including building construction, facilities, and housing
management, are importantly positioned to develop alongside us. We will rapidly acquire the platforms, personnel and technology

8for our projects, and strive for growth and development by moving ahead with capital tie-ups and business alliances in order toprovide our clients with optimal services that are responsive to changes in the environment.
3. Overseas Business Expansion
It has been two years since we started our overseas businesses, and our corporate group counts an increasing number of foreign
asset holders and affluent individuals among its clients. We will pursue the following two policies with the aim of making further
progress overseas, with a particular focus on Asia.
1. Further promote inbound investment by providing Asia’s burgeoning affluent classes with real estate investment opportunities
in Tokyo, the city with the largest economy in the world.
2. Pursue outbound investment by aiming, first, to provide Japan’s affluent classes with real estate investment opportunities infast-growing Asian metropolises, and second, to develop projects, targeted at high-earners, that help support regional cities andeconomies and contribute to the wellbeing of the people living in those regions.
Strongly encouraging our employees in their evolution and development, we aim to become an organization where each andevery employee can experience the satisfaction that comes through taking on challenges. We will clearly delineate our policy,
unlock the potential of our personnel, connect with more external collaborators, improve our capacity to deal with asset holders’difficulties, and work toward Asian growth in our capacity as a port of call for affluent Asian investors.
We aim to maintain our ordinary profit margin at 20% or higher, develop ourselves while managing risk, pro-actively enter nichemarkets, and continue to move forward with greater emphasis on profit than on sales.
By staying close to our clients and working to solve any real estate-related problems that may arise, we aim to become a company
of “real estate utilization professionals” that is relied on more than any in the world. Also, by uniting as a team, researching ourclients’ needs, providing maximal added value, and creating greater client satisfaction, we will strive to deliver greater sustainablecorporate value.
(4) Challenges the Company Must Address
Thanks to the still-favorable financing conditions surrounding the real estate market, developers and companies have a strong
drive for acquisitions, and there also seems to be increasing demand from foreign investors on the back of the weak yen.
Additionally, it seems that there will be greater demand for effective real estate utilization in central Tokyo, where urban
regeneration work is underway in preparation for the Tokyo Olympics that will be held in five years time.
In this context, we are aware of the importance of clearly defining our business policy and strategy, and setting ourselves apartfrom other companies in the industry, in order to become a company that customers love and happily choose.
Our corporate group has defined its client base as being made up of building owners, asset holders and wealthy individuals, andour focus is to always provide them with individualized, tailor-made service and to solve their problems. We will use theinformation we gain through repeated interactions with clients to identify their needs and challenges, which we will then solve byworking collaboratively across divisions, thereby providing each individual client with the ideal service and products. We believethat the superiority of our corporate group lies in the fact that we always satisfy our clients, provide them with added value, andgain their confidence.
Further, with competition to acquire properties expected to intensify going forward, we will further expand our procurement
routes based not only on indexes such as expected rate of return, but also on close and multi-faceted communication with ourcustomers.

3. Our Fundamental Approach to Selecting Accounting Standards
Taking into account the capacity to compare consolidated financial statements from different periods and to compare different
corporations, for the time being, our corporate group has established the policy of using Japanese standards for drafting
consolidated financial statements.
Further, with regard to the application of IFRS, considering conditions both in Japan and overseas, our policy is to handle themin an appropriate manner.

94. Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)
FY ended March 31, 2014
(As of March 31,2014)

FY ended March 31, 2015
(As of March 31,2015)

ASSETS
Current assets
Cash and deposits
Accounts receivable-trade※1,※2 11,180,325

Real estate for sale
Real estate for sale in process
Supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets

285,231

12,686,800
233,535※1 3,213,910※1 1,599,420※1,※2 15,515,223※1 21,880,382

791
748,356

730
774,725※1,※2 515,005

297,082△12,425△19,882

31,446,419

37,452,794

1,047,527△128,223

1,399,882△173,745※1 919,303※1 1,226,136※1 1,232,679※1 1,232,143

Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill

83,717

95,603△70,918△70,433

12,79925,1692,164,782

2,483,449

9,375

1,875

Other

2,331

74,388

Total intangible assets

11,70676,263

Investments and other assets
Deferred tax assets

9,575

2,083

Other
Allowance for doubtful accounts

283,351△5,402

414,572△4,587

Total investments and other assets

287,524

412,069

Total noncurrent assets
Total assets

102,464,013

2,971,783

33,910,433

40,424,577

(Thousands of yen)
FY ended March 31, 2014
(As of March 31,2014)

FY ended March 31, 2015
(As of March 31,2015)

LIABILITIESCurrent liabilities
Accounts payable-trade
Short-term loans payable

411,085

Current portion of bonds
Current portion of long-term loans payable※1 347,500

606,061-※1,※2 17,014※1 40,000※1 642,360※1 964,484

Income taxes payable
Provision for bonuses

266,448
87,499221,154
109,208

Provision for directors' bonuses
Construction warranty reserve

20,00034,80030,00022,100

Provision for loss on guarantees for rent
Other

6,561
1,190,179

22,361
1,535,214

Total current liabilities

3,023,449

3,550,585※1,※2 1,157,986※1 340,000※1 10,201,660※1 12,648,786

306-

Provision for loss on litigation
Other

1,057,505

31,0001,152,905

Total noncurrent liabilities

12,417,457

14,172,691

15,440,906

17,723,276

Shareholders' equity
Capital stock

8,387,211

8,387,211

Capital surplus
Retained earnings

2,871,767
6,958,425

2,871,767
11,434,300

△121

△174

18,217,283

22,693,105

1,749

2,253

493

5,941

Noncurrent liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities

Total liabilities
NET ASSETSTreasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

2,242

8,195

Minority interest

Total accumulated other comprehensive income

250,000-

Total net assets

18,469,526

22,701,300

33,910,433

40,424,577

Total liabilities and net assets

11(2) Consolidated Statements of Income and Consolidated Statements of comprehensive income
Consolidated Statements of Income(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)

FY ended March 31, 2015
(April 1,2014- March 31, 2015)

Net sales
Cost of sales

17,772,333
10,542,797

27,741,197
18,757,583

Gross profit

7,229,536

8,983,613※1 2,698,160※1 3,133,004

4,531,375

5,850,609

Non-operating income
Interest income

3,893

8,219

Dividends income
Interest on refund

470
1,977

477
508

Subsidy income
Other

2,800
3,510

5,040
1,105

Total non-operating income

12,652

15,350Non-operating expenses
Interest expenses

144,117

235,614

Finance costs
Stock issuance cost

36,9101,434

20,989-Other

20,012

16,013

Selling, general and administrative expenses
Operating income

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Total extraordinary income

202,474

272,618

4,341,553

5,593,341※2 79※2 14,017

79

14,017※3 286※3 647Extraordinary loss
Loss on retirement of noncurrent assets
Provision for loss on litigation-

31,000

Amortization of goodwill
Other※4 337,061

1,796

1,220

Total extraordinary losses

339,144

32,867

4,002,488

5,574,492

Income before income taxes and minority interests
Income taxes-current

288,281452,566

Income taxes-deferred△306,075△19,292

Total income taxes△17,793433,274

4,020,281

5,141,217△100

88,1454,020,381

5,053,072

Income before minority interests
Minority interests in income (loss)
Net income

12Consolidated Statements of comprehensive income(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)

FY ended March 31, 2015
(April 1,2014- March 31, 2015)

4,020,281

5,141,217△857

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income

2,140

503
5,448

※ 1,282※ 5,952

4,021,564

5,147,170

4,021,664△100

5,059,025
88,145Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests13(3) Consolidated Statements of Changes in Net Assets
Previous Fiscal Year (From April 1, 2013 to March 31, 2014)(Thousands of yen)
Shareholders' equity
Capital stock
Balance at the beginningof current period
Changes of items during
the period

Capital surplus

8,387,211

Retained earnings

2,871,767

3,301,465

Total shareholders'equityTreasury shares―

14,560,445

Dividends from surplus△363,421△363,421

Net income

4,020,381

4,020,381

Purchase of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

△121

△121

―

―

3,656,959△121

3,656,838

8,387,211

2,871,767

6,958,425△121

18,217,283

Accumulated other comprehensive income
Valuation difference on
Foreign currency
Total accumulated otheravailable-for-saletranslation adjustment comprehensive income
securities
Balance at the beginningof current period
Changes of items during
the period

2,606

959

△1,647

Minority interests―

Total net assets

14,561,404

Dividends from surplus△363,421

Net income

4,020,381

Purchase of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

△121
△857

2,140

1,282

250,000

251,282

△857

2,140

1,282

250,000

3,908,121

1,749

493

2,242

250,000

18,469,526

14

Current Fiscal Year (From April 1, 2014 to March 31, 2015)(Thousands of yen)
Shareholders' equity
Capital stock
Balance at the beginningof current period
Changes of items during
the period

Capital surplus

8,387,211

Retained earnings

2,871,767

6,958,425

Total shareholders'equityTreasury shares△121

18,217,283

Dividends from surplus△577,197△577,197

Net income

5,053,072

5,053,072

Purchase of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

△52

△52

―

―

4,475,875△52

4,475,822

8,387,211

2,871,767

11,434,300△174

22,693,105

Accumulated other comprehensive income
Valuation difference on
Foreign currency
Total accumulated otheravailable-for-saletranslation adjustment comprehensive income
securities
Balance at the beginningof current period
Changes of items during
the period

1,749

493

2,242

Minority interests

250,000

Total net assets

18,469,526

Dividends from surplus△577,197

Net income

5,053,072

Purchase of treasury
sharesNet changes of items
other than shareholders'equityTotal changes of items
during the period
Balance at the end ofcurrent period

△52
503

5,448

5,952

△250,000△244,047

503

5,448

5,952

△250,000

4,231,774

2,253

5,941

8,195

―

22,701,300

15

(4) Consolidated Statements of Cash Flows(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses

4,002,488

5,574,492※2 273,261※2 509,235

386,693

7,500

5,063

6,641
21,708△3,055
5,000
7,845

Increase (decrease) in provision for directors' bonuses
Increase (decrease) in construction warranty reserve
Increase (decrease) in provision for loss on guarantees for rent
Increase (decrease) in provision for office transfer

3,861△2,381-

Increase (decrease) in provision for loss on litigation
Interest and dividends income
Interest expenses
Stock issuance cost
Loss (gain) on sales of noncurrent assets
Loss on retirement of noncurrent assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in guarantee deposits received
Increase (decrease) in deposits received
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities

16

FY ended March 31, 2015
(April 1,2014- March 31, 2015)

10,000△12,700
15,80031,000△4,364
144,117
1,434△8,696
235,614-△79
286△14,017647

185,874

191,578△12,543,734
327,359
477,814△5,200,257
308,373
95,400218,845△47,169

181,048
160,064△6,560,839

2,113,435

4,365

5,671

△144,438△126,668△234,472△501,965△6,827,582

1,382,668

(Thousands of yen)
FY ended March 31, 2014
(April 1,2013- March 31, 2014)

FY ended March 31, 2015
(April 1,2014- March 31, 2015)△2,583,886
2,062,492△3,482,882
3,546,825△571,112
142△375,036
17,198Net cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets△159△71,231△16,747△240,235
11,360△147,449
240,235△1,338,145△276,372

Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

217,500
10,970,000△347,500
11,155,000

Repayment of long-term loans payable
Proceeds from issuance of bonds△4,647,160
1,159,174△8,385,750
389,767

248,666△1,195,000--△250,000△88,145

Cash dividends paid
Other, net△361,475△13,071△576,358△52

Net cash provided by (used in) financing activities

7,573,633

701,961

Payments for guarantee deposits
Net decrease (increase) in derivative deposit
Other, net
Net cash provided by (used in) investing activities△4,031

Net cash provided by (used in) financing activities

Redemption of bonds
Proceeds from stock issuance to minority shareholders
Repayments to minority shareholders
Cash dividends paid to minority shareholders

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

17

2,261

2,254

△589,832

1,810,511

9,991,433

9,401,600※1 9,401,600※1 11,212,112