Disclaimer: This is a Japanese-English translation of the summary of financial statements of the Company produced for your convenience.
Since no auditor audited this report, officially only the Japanese version is assumed to be the summary of financial statements of the Company.
This summary does not constitute any guarantee and will not compensate any losses and/or damage stemming from actions taken based on thesestatements. In the case that there is any discrepancy between the Japanese and English versions, the Japanese version is assumed to be correct.

Consolidated Financial Report
For the Second Quarter of Fiscal 2018 Ending March 31, 2018 (Japanese GAAP)
November 6, 2017
Grandy House Corporation
Stock Exchange Listing:Tokyo Stock Exchange
8999
URL:
http://www.grandy.co.jp
Hiroyuki Murata, President
Nobuyasu Takeuchi, Executive Officer Department Manager,
Inquiries:
TEL: +81-28-650-7777
Corporate Administrative Department
Scheduled date of quarterly securities report filing:
November 9, 2017
Scheduled date of dividend payment commencement:―
Preparation of quarterly supplementary explanatory materials:
Yes
Quarterly results briefing held:
Yes (For institutional investors and analysts)

Company Name:
Securities Code:
Representative:(Figures are rounded down to the nearest million yen unless otherwise stated.)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2018
(April 1, 2017 to September 30, 2017)(1) Consolidated Operating Results

Net Sales(Percentage figures show the year-on-year increase (decrease).)Net Income Attributable
Operating Income
Ordinary Income
to Owners of the Parent
Company(¥ million)%(¥ million)%(¥ million)%(¥ million)%

22,289

(1.4)

1,330

(12.1)

1,378(12.2)

928(9.5)

22,614

9.5

1,513

10.7

1,571

10.8

1,025

14.7

Six months ended
September 30, 2017
Six months ended
September 30, 2016
Note: Comprehensive income

Six months ended September 30, 2017: ¥924 million (-10.9%)
Six months ended September 30, 2016: ¥1,038 million (16.4%)
Net Income per ShareNet Income per Share(Diluted)(¥)(¥)

Six months ended
September 30, 2017
Six months ended
September 30, 2016

32.26

31.97

35.62

—

Total Assets(¥ million)
46,66945,682

Net Assets(¥ million)
18,643
18,121(2) Consolidated Financial Position

September 30, 2017
March 31, 2017
Reference: Shareholders' equity

Shareholders' Equity Ratio
%
39.5
39.2

Net Assets per Share(¥)
640.92622.78September 30, 2017: ¥18,443 million
March 31, 2017: ¥17,921 million

2. Dividends
1Q-End2Q-End(¥)——

Fiscal 2017
Fiscal 2018
Fiscal 2018 (Forecast)

Annual Dividend per Shares
3Q-End
(¥)
(¥)
0.00
—
0.00
—

Period-End

Total

(¥)
14.00

(¥)
14.00

16.00

16.00

Note: Revisions to the most recently announced forecast of cash dividends in the current quarter: None

3. Consolidated Financial Forecasts for Fiscal 2018 (April 1, 2017 to March 31, 2018)

Net Sales

Full Fiscal Year(¥ million)
48,000%
9.2(Percentage figures show the year-on-year increase (decrease) for each corresponding period.)
Net Income
Attributable toOperating Income
Ordinary Income
Net Income per ShareOwners of the Parent
Company(¥ million)%(¥ million)%(¥ million)
%
(¥)
3,200
17.9
3,300
17.6
2,100
20.4
72.98

Note: Revisions to the most recently announced financial forecasts in the current quarter: None* Explanatory Notes(1) Changes of important subsidiaries during the period(changes in specified subsidiaries resulting in a change in the scope of consolidation): None
Newly included: —Excluded: —(2) Adoption of specific methods for preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and restatements
1) Changes in accounting policies in connection with revision to accounting standards, etc.:
2) Changes in accounting policies other than 1):
3) Changes in accounting estimates:
4) Restatements:(4) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding
September 30,
as of the period-end (including treasury shares) 2017
September 30,
2) Number of treasury shares
3) Average number of shares issued andoutstanding for the period

2017
Six months ended
September 30,
2017

None
None
None
None

30,823,200 shares

March 31, 201730,823,200 shares

2,046,245 shares

March 31, 2017

2,046,245 shares

28,776,955 shares

Six months ended
September 30,
2016

28,776,955 shares*This consolidated quarterly financial report is not subject to quarterly review procedures in accordance with the
Financial Instruments and Exchange Act.

*

Explanation concerning the appropriate use of forecasts and other special instructions
Results forecasts and other forward-looking statements contained in this report are based on assumptions, beliefs, anduncertainties in light of information available to the Company's management as of the publication date. Actual results may
differ materially from forecasts due to a variety of factors. Therefore, the Company does not guarantee the accuracy of
forecasts and other forward-looking statements and its ability to achieve stated targets.

Attachment Materials: Table of Contents
1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS.................................................................. 2(1) Explanation regarding Operating Results ................................................................................................................ 2(2) Explanation regarding Financial Position ................................................................................................................ 3(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts ............................................ 4
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS ........................................................................ 5(1) Quarterly Consolidated Balance Sheets................................................................................................................... 5(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .............. 7(Quarterly Consolidated Statements of Income)(Consolidated cumulative second quarter) ..........................................................................................................7(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative second quarter) ..........................................................................................................8(3) Quarterly Consolidated Statements of Cash Flows ................................................................................................. 9(4) Notes to Quarterly Consolidated Financial Statements ......................................................................................... 10(Notes on Going Concern Assumptions) ...............................................................................................................10(Notes on Significant Changes in the Amount of Shareholders' Equity) ...............................................................10(Adoption of Specific Methods for Preparation of the Quarterly Consolidated Financial Statements) .................10(Segment and Other Information)..........................................................................................................................10―1―

1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS(1) Explanation regarding Operating Results
During the six months ending September 30, 2017, the Japanese economy showed signs of slowly recovering
as positive growth was recorded for six consecutive quarters, including the second three months of this year.
In the housing sector, new housing starts grew steadily due to the interest rate on housing loans remaining at
low levels, as well as the continuation of various support measures to promote home acquisition and an
improvement in employment and income conditions, but competition between businesses has intensified.
Under these circumstances, the Grandy House Group continued to strive to expand and reinforce businessunder the basic policy (medium-term business plan) of "continuous growth through reinforcing the core operation(new homes)" and "expansion of business through enhancing the stock business."
With regard to new home sales, one of our core operations, we have made the Group's operations more
efficient by restructuring the Group's branches at the beginning of this fiscal year. Basically as planned, we havepromoted sales of Yotsuba no Mori (literally, Four-leaf Clover Hill) housing lots (211 lots, Tsukuba, Ibaraki
Prefecture), the largest housing lot development ever implemented by our group in our designated focus area
which stretches from southern Ibaraki Prefecture to Kashiwa in Chiba Prefecture, and also we have strove tofacilitate brand penetration for our products. Through initiatives such as these, received orders have steadily
recovered after hitting bottom in the fourth quarter of the previous fiscal year, and new home sales for the second
quarter under review reached the highest-ever level. However, both sales and profits for the first half of the fiscal
year fell below the figures in the same period of the previous fiscal year due partly to the impact of a decrease in
the backlog of orders at the beginning of the fiscal year.
In existing home sales, as a result of our efforts for building up our product inventory and expanding ourbusiness in metropolitan areas, the recovery of received orders continues and existing home sales for the first halfof the fiscal year recovered to the figures in the same period of the previous fiscal year.
As a result of these initiatives, the Grandy House Group's consolidated results for the second quarter(cumulative) of Fiscal 2018 were as follows. Net sales were ¥22,289 million, down 1.4% from the same period of
the previous fiscal year; operating income declined to ¥1,330 million, a decrease of 12.1% year-on-year; ordinary
income was ¥1,378 million, a decrease of 12.2% year-on-year; and net income attributable to owners of theparent company totaled ¥928 million, a decrease of 9.5% year-on-year.
Results by business segment are presented as follows.
Real Estate Sales
In the new home sales, we have made the Group's operations more efficient by restructuring the Group's two
branches in which Ibaraki Grandy House Koga branch was merged into our Kennan branch. In the area between
southern Ibaraki Prefecture and Kashiwa in Chiba Prefecture which is positioned as the key area for expanding
our sales area, we launched full-scale sales of Yotsuba no Mori housing lots (211 lots, Tsukuba in Ibaraki
Prefecture), the largest housing lot development ever built by our group, in the fiscal year. The sales have beenpromoted as approximately planned. In addition, we started to run TV commercials in across the Kanto area inJune this year in an effort to facilitate brand penetration for our products among customers in a wide area withincommuting distance of Tokyo. In terms of products, we continue to differentiate our products from those of ourcompetitors by creating distinctive housing lots with concepts such as a high level of creativity, energy
conservation, security, and crime prevention for each housing lot as well as creating added value with ourstrength in building comfortable urban environments. Through initiatives such as these, received orders havesteadily recovered after hitting bottom in the fourth quarter of the previous fiscal year and have been at a higher
level than the same month of the previous year since June this year.
As a result, new home sales for the second quarter under review resulted in 360, reaching the highest-everlevel at a quarterly basis. However, those for the first half of the fiscal year decreased to 666 (a decrease by 19
year-on-year) due partly to the impact of a decrease in the backlog of orders at the beginning of the fiscal year
and the orders for the first quarter being on the road to recovery.
In existing home sales, we made efforts to enhance product inventory and expand our business for the
Metropolitan area (Tokyo, Saitama, Chiba, and Kanagawa) to expand existing home sales. Home orders
continued to recover after hitting bottom in the third quarter of the previous year due partly to our efforts inreinforcing the procurement of homes with a new goal of 70 completed homes at any time and an increase insales of existing condominiums in the Metropolitan area. As a result, existing home sales for the first half of the
fiscal year recovered to 74 at the same level as the previous year (down 1 year on year) compared to the firstquarter when the sales greatly decreased year on year due partly to delayed deliveries of homes.
―2―

As a result of these initiatives, sales in the real estate sales segment decreased 1.1% year-on-year to ¥20,738
million. Segment profit declined to ¥1,215 million, down 14.4% from the same period of the previous fiscal year.
Construction Material Sales
In the construction material sales, new housing starts for wooden houses continued to increase year-on-year
for an extended period, but there have been changes in the situations. Material wood prices remained high due tothe intensified competition with other companies. Under such circumstances, the Grandy House Group madeefforts such as boosting sales of construction materials/housing equipment other than pre-cut materials, switchingsales to our best customers in terms of earnings, and increasing orders for non-residential buildings. Although we
struggled to increase orders due to the intensified competition in sales for small and medium sized construction
firms, there was an increase in sales of non-residential buildings. On the other hand, there was a decrease in salesof housing equipment. Furthermore, material prices remaining at a high level have had a negative impact on our
profits.
As a result of these factors, sales in the construction materials sales segment decreased 6.1% year-on-year to¥1,418 million. Segment profit declined to ¥74 million, down 5.0% from a year earlier.
Real Estate Leasing
In the real estate leasing, the vacancy rate of office buildings continued to decline in and around Utsunomiya,Tochigi Prefecture which is our main market. In the parking lot market, competition remained intense between
parking lots in the vicinity.
In this context, we made efforts to improve the operation rate of existing assets and reduce management
costs. In addition to an improvement in the occupancy rate of leasing buildings, the renting out of the three
apartments acquired in connection with our purchase of land for housing development for the moment
contributed to our revenues. In addition, our management costs significantly decreased from the same period of
the previous year when we recorded a cost of large-scale renovation, which contributed to an increase in ourrevenues.
As a result of these factors, sales in the real estate leasing segment increased by 2.5% year-on-year to ¥132
million. Segment profit rose to ¥90 million, up 26.1% year-on-year.
(2) Explanation regarding Financial Position
a. Balance Sheet
Total consolidated assets as of the end of the second consolidated quarter were ¥46,669 million, up ¥986
million from the previous consolidated fiscal year due to an increase in current assets including cash and deposits.
Total liabilities grew ¥465 million compared with the previous consolidated fiscal year to ¥28,026 million.
This is mainly due to an increase in current liabilities including the acquisition of properties for sale throughfunding via short-term loans and an increase in accounts payable for construction of land/buildings.
Total net assets stood at ¥18,643 million as of September 30, 2017. This represents an increase of ¥521
million from the balance recorded as of March 31, 2017. This is largely due to the acquisition of net income
attributable to owners of the parent company despite the payment of dividends.
b. Cash Flows
Cash and cash equivalents (hereinafter, "cash flows") as of the end of the second consolidated quarter
increased by ¥1,171 million compared to the end of the previous consolidated fiscal year to ¥9,646 million as aresult of increased cash flows from operating activities and decreased cash flows from investing activities andfinancial activities.
Factors contributing to movements in the Company's cash flows during the six months ended September 30,
2017, are as follows.
(Cash Flows from Operating Activities)
Net cash provided by operating activities amounted to ¥1,378 million (decrease of ¥1,293 million for the six
months ended September 30, 2016). This was largely due to an increase in net income before income taxes despite
the payment of income taxes.

―3―

(Cash Flows from Investment Activities)
Net cash used in investment activities amounted to ¥65 million (a decrease of ¥225 million for the six months
ended September 30, 2016) mainly due to payments for the purchase of property, plant, and equipment, etc.
(Cash Flows from Financing Activities)
Net cash used in financing activities amounted to ¥142 million (increase of ¥2,146 million for the six months
ended September 30, 2016). This was mainly due to the payment of dividends, etc. despite an increase in shortterm loans payable to support the acquisition of inventory.
(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts
There is no change to financial forecasts announced on May 8, 2017.

―4―

2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS(1) Quarterly Consolidated Balance Sheets(Thousands of Yen)FY2017(As of March 31, 2017)

Second Quarter of FY2018(As of September 30, 2017)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Securities

8,475,518

9,646,718

589,066

669,721499,982499,994

14,054,910

14,836,958

2,368

5,249

Real estate for sale in process

11,021,975

9,932,407

Merchandise and finished goods

220,154

205,770

Real estate for sale
Costs on uncompleted construction contracts

Raw materials and supplies

147,599

175,575

Deferred tax assets

117,152

127,210

Other

456,190555,832

Allowance for doubtful accounts
Total current assets(4,316)(4,495)35,580,603

36,650,941

3,434,934

3,353,975

Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net

13,602

14,209Tools, furniture and fixtures, net

66,32476,536

5,376,457

5,376,457

Land
Lease assets, net
Total property, plant and equipment
Intangible assets

102,661

78,2998,993,981

8,899,480

64,14057,710448,642

442,489

Investments and other assets
Investment securities
Long-term loans receivable

16,614

16,054

Deferred tax assets

240,664

254,561

Other

357,141

354,046

Allowance for doubtful accounts(18,843)(5,397)

Total investments and other assets

1,044,218

1,061,754

10,102,340

10,018,944

45,682,944

46,669,886

Total non-current assets
Total assets―5―

(Thousands of Yen)FY2017(As of March 31, 2017)

Second Quarter of FY2018(As of September 30, 2017)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,231,631

3,331,828

Short-term loans payable

20,225,700

20,458,500

Current portion of long-term loans payable

495,152

521,472

Current portion of bonds

21,00021,000

Lease obligations

38,632

27,304

Income taxes payable

410,406

361,985

Provision for warranties for completed construction

57,22357,195

Other635,983

737,793

25,115,729

25,517,080

87,00076,500Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable

1,587,719

1,622,815

Lease obligations

70,305

57,158Provision for directors' retirement benefits

132,954

149,579

Net defined benefit liability

508,917545,621

Asset retirement obligations

4,249

4,273

Other
Total non-current liabilities
Total liabilities

54,28053,181

2,445,425

2,509,128

27,561,155

28,026,209

2,077,500

2,077,500

Net assets
Shareholders' equity
Capital stock
Capital surplus

2,205,165

2,205,165

Retained earnings

13,982,262

14,507,627

Treasury shares(351,831)(351,831)

17,913,096

18,438,461

8,692

5,215

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets

―6―

8,692

5,215

200,000

200,000

18,121,788

18,643,676

45,682,944

46,669,886

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated cumulative second quarter)(Thousands of Yen)
Six months ended
September 30, 2016
(From April 1, 2016 to
September 30, 2016)

Six months ended
September 30, 2017
(From April 1, 2017 to
September 30, 2017)

Net sales

22,614,869

22,289,476

Cost of sales

18,670,041

18,440,325

Gross profit

3,944,828

3,849,151

Selling, general and administrative expenses

2,430,860

2,518,951

Operating income

1,513,967

1,330,199

Interest income

734

711

Dividends income

2,454

3,453

Operations consignment fee

117,124

117,300

Office work fee

80,27576,719Other

14,924

31,823

Total non-operating income

215,512230,007

156,168

172,383

2,250

4,405

–

4,531

Non-operating income

Non-operating expenses
Interest expenses
Commission for syndicate loan
Other
Total non-operating expenses

158,418

181,319

1,571,061

1,378,887

Loss on retirement of non-current assets

8,145

8,644

Loss on cancellation of lease contracts

45

–

8,191

8,644

Ordinary income
Extraordinary loss

Total extraordinary loss
Net income before income taxes

1,562,870

1,370,242

Income taxes – current

552,838

464,432

Income taxes – deferred(15,109)(22,431)

Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company―7―537,729442,000

1,025,140

928,242––

1,025,140

928,242(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative second quarter)(Thousands of Yen)
Six months ended
September 30, 2016
(From April 1, 2016
to September 30, 2016)
Net income

Six months ended
September 30, 2017
(From April 1, 2017
to September 30, 2017)

1,025,140

928,242

Valuation difference on available-for-sale securities

13,212(3,477)

Total other comprehensive income

13,212(3,477)

1,038,353

924,765

1,038,353

924,765––

Other comprehensive income

Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of the parent
company
Comprehensive income attributable to non-controllinginterests―8―

(3) Quarterly Consolidated Statements of Cash Flows(Thousands of Yen)
Six months ended September
30, 2016 (From April 1, 2016
to September 30, 2016)

Six months ended September
30, 2017 (From April 1, 2017
to September 30, 2017)

Cash flows from operating activities
Net income before income taxes

1,562,870

1,370,242

Depreciation and amortization

131,359

142,126

Stock compensation expense
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in provision for warranties forcompleted construction
Increase (decrease) in allowance for doubtful accounts

24,999–15,675

16,625

2,848

(27)

5,309

(13,268)

Increase (decrease) in net defined benefit liability

38,41236,704

Interest and dividends income(3,188)(4,164)

Interest expenses

156,168

172,383

Loss on retirement of non-current assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories

8,145

8,644

(72,404)(67,184)(2,596,816)

291,048

Increase (decrease) in notes and accounts payable-trade(32,963)

100,197

Other

314,421(34,008)

Subtotal(445,162)

2,019,318

4,322

5,297

(157,994)(151,606)

Interest and dividends income received
Interest expenses paid
Income taxes paid

(694,395)(494,208)(1,293,230)

1,378,799

Purchase of property, plant and equipment(186,887)(43,336)

Purchase of intangible assets(14,514)(3,418)Net cash provided by (used in) operating activities

Cash flows from investment activities

Collection of loans receivable

546

560

Payments for guarantee deposits(29,300)(18,000)

Other payments(7,819)(1,395)

Other proceeds
Net cash provided by (used in) investing activities

12,000540(225,974)(65,050)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

2,111,500

232,800

Proceeds from long-term loans payable

630,000

418,300

Repayment of long-term loans payable(217,749)(356,884)

Redemption of bonds(10,500)(10,500)

Cash dividends paid

(344,580)(401,790)

Repayments of lease obligations(22,147)(24,475)

2,146,522(142,550)

627,317

1,171,199

Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period

7,782,687

8,475,518

Cash and cash equivalents at end of the period

8,410,005

9,646,718―9―

(4) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Notes on Significant Changes in the Amount of Shareholders' Equity)
Not applicable.
(Adoption of Specific Methods for Preparation of the Quarterly Consolidated Financial Statements)
Not applicable.
(Segment and Other Information)
Segment Information
I. The six months ended September 30, 2016 (April 1, 2016 to September 30, 2016)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

Net sales
Sales to outside
customers
Intersegment sales
and transfers
Total
Segment profit

Adjustments(Note 1)(Thousands of Yen)
AmountRecorded on
Quarterly
Consolidated
Statements ofIncome (Note 2)

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

20,975,266

1,510,578

129,024

22,614,869—

22,614,869—

1,666,316

41,2501,707,566(1,707,566)—

20,975,266
1,419,551

3,176,894
78,803

170,274
71,62424,322,435
1,569,979(1,707,566)
1,081

22,614,869
1,571,061

Total

Notes: 1 Adjustments of segment profit ¥1,081 thousand are eliminations of intersegment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

2. Information concerning the impairment loss of non-current assets and goodwill by reportable segment
Not applicable.
II. The six months ended September 30, 2017 (April 1, 2017 to September 30, 2017)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

Net sales
Sales to outside
customers
Intersegment sales
and transfers
Total
Segment profit

Adjustments(Note 1)(Thousands of Yen)
AmountRecorded on
Quarterly
Consolidated
Statements ofIncome (Note 2)

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

20,738,592

1,418,574

132,30922,289,476—

22,289,476—

1,643,079

39,7201,682,799(1,682,799)—

20,738,592
1,215,505

3,061,653
74,843172,02990,292

23,972,276
1,380,641(1,682,799)(1,754)

22,289,476
1,378,887

Total

Notes: 1 Adjustments of segment profit (−¥1,754 thousand) are eliminations of intersegment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

2. Information concerning the impairment loss of non-current assets and goodwill by reportable segment
Not applicable.

― 10 ―