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. Thissummary 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 Fiscal 2019 (The Fiscal Year Ended March 31, 2019 under Japanese GAAP)
Company Name: Grandy House Corporation
Stock Exchange Listing:
Securities Code:
8999
URL:
Representative:
Yasuro Hayashi, President
Inquiries:
Nobuyasu Takeuchi, Director & Administration Manager
Scheduled date of the Ordinary General Meeting of Shareholders: June 27, 2019
Scheduled date of securities report filing:
June 27, 2019
Scheduled date of dividend payment commencement:
June 28, 2019
Preparation of annual supplementary explanatory materials:
Yes
Annual results briefing held:
Yes (For analysts)

May 7, 2019
Tokyo Stock Exchange
http://www.grandy.co.jp
TEL: +81-28-650-7777(Figures are rounded down to the nearest million yen unless otherwise stated.)

1. Consolidated Financial Results for Fiscal 2019 (April 1, 2018 to March 31, 2019)(1) Consolidated Operating Results(Percentage figures show the year-on-year increase (decrease).)Net Income Attributable to
Owners of the Parent
Net Sales
Operating Income
Ordinary Income
Company(¥ million)%(¥ million)%(¥ million)%(¥ million)%
Fiscal 201944,452
(0.6)
3,131
16.2
3,288
17.6
2,065
13.0
Fiscal 2018
44,726
1.7
2,695
(0.7)
2,796
(0.3)
1,827
4.8
Note: Comprehensive income
Fiscal 2019: ¥2,021 million (11.4%)
Fiscal 2018: ¥1,815 million (1.6%)
Net Income per
Net Income per
Ordinary Income /Operating Income /Return on Equity
Share
Share (Diluted)
Total Assets
Net Sales
(¥)
(¥)
%
%
%
Fiscal 2019
71.62
70.67
10.3
7.0
7.0
Fiscal 2018
63.48
62.59
9.8
6.0
6.0
Reference: Equity in earnings of affiliates
Fiscal 2019: ¥― million
Fiscal 2018: ¥― million(2) Consolidated Financial Position

Total Assets
Net Assets(¥ million)(¥ million)
March 31, 201946,864
21,124
March 31, 2018
47,281
19,556
Reference: Shareholders' equity
Fiscal 2019: ¥20,932 million
Fiscal 2018: ¥19,362 million

Shareholders' Equity Ratio
%
44.7
41.0

Net Assets per Share

Cash Flows fromOperating Activities(¥ million)
3,042
2,155

Cash Flows from
Financing Activities(¥ million)(2,351)(691)

Cash and Cash Equivalents
at the End of the Period(¥ million)
10,001
9,813(¥)
725.35671.43(3) Consolidated Cash Flows

Fiscal 2019
Fiscal 2018

Cash Flows from
Investing Activities(¥ million)
(503)
(125)

2. Dividends
Annual Dividend per SharesFiscal 2018
Fiscal 2019
Fiscal 2020 (Forecast)

1Q-End2Q-End3Q-EndPeriodEnd

(¥)
―
―
―

(¥)
0.00
0.00
0.00

(¥)
―
―
―

(¥)
16.00
18.00
23.00

Total
(¥)
16.00
18.00
23.00

Total
Dividends(¥ million)
461
519

Payout Ratio(Consolidated)
%
25.2
25.1
30.2

Ratio of
Dividends to
Net Assets(Consolidated)
%
2.5
2.6

3. Consolidated Financial Forecasts for Fiscal 2020 (April 1, 2019 to March 31, 2020)

Net Sales

Full Fiscal Year(¥ million)
48,500Operating Income%
9.1(¥ million)
3,200

%
2.2

(Percentage figures show the year-on-year increase (decrease).)Net Income
Attributable to
Net Income per
Ordinary Income
Owners of the
Share
Parent Company(¥ million)%(¥ million)
%
(¥)
3,400
3.4
2,200
6.5
76.24

* 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) 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:(3) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding
March 31, 2019as of the period-end (including treasury shares)
March 31, 20192) Number of treasury shares
3) Average number of shares issued andFiscal 2019
outstanding for the period

None
None
None
None

30,823,200 shares

March 31, 201830,823,200 shares

1,965,245 shares

March 31, 2018

1,985,245 shares

28,839,493 sharesFiscal 2018

28,792,288 shares

Reference: Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for Fiscal 2019 (April 1, 2018 to March 31, 2019)(1) Non-Consolidated Operating Results

Fiscal 2019
Fiscal 2018

Net Sales(¥ million)
21,321
21,175%0.7
8.8

Net Income per Share
(¥)
71.73
63.45

Fiscal 2019
Fiscal 2018

Operating Income(¥ million)
%
1,799
33.9
1,343
33.8

(Percentage figures show the year-on-year increase (decrease).)Ordinary Income
Net Income(¥ million)%(¥ million)
%
2,856
21.0
2,068
13.2
2,360
19.2
1,826
25.8

Net Income per Share(Diluted)

(¥)
70.78
62.56

(2) Non-Consolidated Financial Position
Total Assets
Net Assets(¥ million)(¥ million)
March 31, 2019
29,325
17,927
March 31, 2018
26,91016,356
Reference: Shareholders' equity March 31, 2019: ¥17,735 million
March 31, 2018: ¥16,162 million

Shareholders' Equity Ratio
%
60.5
60.1

Net Assets per Share(¥)
614.59560.47

2. Non-Consolidated Financial Forecasts for Fiscal 2020 (April 1, 2019 to March 31, 2020)(Percentage figures show the year-on-year increase (decrease).)Full Fiscal YearNet Sales(¥ million)
23,000%
7.9

Ordinary Income(¥ million)
%
2,880
0.8

Net Income(¥ million)
2,160

%
4.4

Net Income per Share

(¥)
74.85

*

This consolidated financial report is not subject to auditing by a certified public accountant or an auditing firm.

*

Explanation concerning the appropriate use of forecasts and other special instructions
Disclaimer:
Results forecasts and other forward-looking statements contained in this report are based on certain assumptions deemed to bereasonable by the Company 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 theaccuracy of forecasts and other forward-looking statements and its ability to achieve stated targets. Please refer to "1.
OVERVIEW OF OPERATING RESULTS (1) Overview of Operating Results for Fiscal 2019" on page 2 of the attachment
materials for information regarding the underlying assumptions for financial results forecasts and an explanation concerning
the appropriate use of forecasts and other notes.

Attachment Materials: Table of Contents
1. OVERVIEW OF OPERATING RESULTS ............................................................................................................. 2(1) Overview of Operating Results for Fiscal 2019 ...................................................................................................... 2(2) Overview of Financial Position for Fiscal 2019 ...................................................................................................... 4(3) Overview of Cash Flows for Fiscal 2019 ................................................................................................................ 4(4) Outlook for Fiscal 2020 ........................................................................................................................................... 5(5) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2019 and Fiscal 2020 ....................... 5
2. OVERVIEW OF THE CORPORATE GROUP ....................................................................................................... 6
3. BASIC APPROACH TO THE SELECTION OF ACCOUNTING STANDARDS ................................................ 7
4. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES ........................................................................... 8(1) Consolidated Balance Sheets ................................................................................................................................... 8(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ............................ 10(Consolidated Statements of Income) ....................................................................................................................10(Consolidated Statements of Comprehensive Income) .......................................................................................... 11(3) Consolidated Statements of Changes in Net Assets............................................................................................... 12(4) Consolidated Statements of Cash Flows................................................................................................................ 14(5) Notes to Consolidated Financial Statements ......................................................................................................... 15(Notes on Going Concern Assumptions) ...............................................................................................................15(Segment and Other Information)..........................................................................................................................16―1―

1. OVERVIEW OF OPERATING RESULTS(1) Overview of Operating Results for Fiscal 2019
During the consolidated fiscal year under review, the Japanese economy showed signs of slowly recoveringon the whole, despite exports and production showing some signs of weakness during the quarter that registerednegative growth and toward the end of the fiscal year.
In the housing sector, new housing starts have grown steadily due to the interest rate on housing loans
continuing to remain at low levels, as well as the continuation of various support measures to promote homeacquisition 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 in its second medium-term business plan (from the fiscal year ending March 2019 to thefiscal year ending March 2021) 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 endeavored to boost sales of strategic large
housing lots, strengthen the sales structure of the northern area of Tochigi Prefecture, reinforce our product appeal,and improve profits through cost reduction and other measures while opening a new base and purchasing housing
lots for expanding into Saitama Prefecture among others. In existing home sales, we continued the effort from theprevious fiscal year to build up product inventory toward expanding home sales.
Through initiatives such as these, both orders received and sales for new homes exceeded the previous year's
levels, reaching all-time highs, and orders received and sales for existing homes also exceeded the previous year's
levels. However, consolidated net sales decreased slightly from the previous fiscal year in which sales of land inlots for single estates to business operators were recorded. Meanwhile, profit was improved significantly due tocost reduction and a year-on-year decrease in selling, general and administrative expenses among other expenses.
As a result of these initiatives, the Grandy House Group's results for the consolidated fiscal year ended March
31, 2019 were as follows. Net sales were ¥44,452 million, down 0.6% from the previous fiscal year; operating
income was ¥3,131 million, up 16.2% from the previous fiscal year; ordinary income was ¥3,288 million, up
17.6% from the previous fiscal year; and net income attributable to owners of the parent company totaled ¥2,065
million, up 13.0% from the previous fiscal year. Ordinary income and net income attributable to owners of theparent company recorded all-time highs.
Results by business segment are presented as follows.
a. Real Estate Sales
In the new home sales, we boosted sales activities by displaying model houses with various concepts andhosting a variety of experience events for strategic large housing lots, in addition to our efforts to boost customer
responses through a complete renewal of our website. With more than half of Yotsuba no Mori housing lots (211lots in Tsukuba in Ibaraki Prefecture) sold, sales accelerated as the actual townscape and the benefits of thelocation were once again recognized. Sales of GRAND BEAT PARK Kaminokawa (141 lots, Kaminokawamachi
in Tochigi Prefecture), which began at the end of the previous fiscal year, proceeded as planned. Moreover, inorder to further develop the northern area of Tochigi Prefecture, in December 2018 we opened a next-generation
experience-based showroom GRANDY PLAZA Nasushiobara (Nasushiobara in Tochigi Prefecture) and bolstered
our sales structure by relocating our Kenhoku branch to the site. In terms of products, we continued todifferentiate our products from those of our competitors by pursuing our "townscape creation" policy, which gavea theme to each housing lot and harmonized the distinctive appearance of homes and the uniform image of the
housing lot. In this situation, we started new initiatives such as proposals for houses equipped with IoT and startof sales of housing lots consisting of products planned by our female architects, or House Sommelière. As for
expanding our sales area to include Saitama Prefecture, we opened the Saitama branch (Urawa-ku, Saitama) andmade progress in purchasing housing lots with the branch as our purchasing base.
Through these initiatives, the number of new homes sold during the consolidated fiscal year ended March 31,
2019 was 1,355 homes (an increase of 14 homes year-on-year), reaching an all-time high. Meanwhile, profit was
improved because the cost-cutting initiative had borne fruit.
―2―

In existing home sales, we continued making efforts to expand existing home sales, etc. by enhancing productinventory as we did in the previous fiscal year. Amid competition intensifying on the purchasing side, orders
received for Fiscal 2019 were above the previous year's level as we were generally able to achieve our goal of
keeping 70 completed homes in inventory at any time as a result of our efforts to reinforce procurement andshorten the construction period for commercialization. As a result, the number of homes sold during theconsolidated fiscal year ended March 31, 2019 was 151 homes (an increase of 13 homes year-on-year).
As a result, sales in the real estate sales segment during the fiscal year under review decreased 0.7%
year-on-year to ¥41,212 million. Segment profit was ¥2,976 million, up 19.8% from the previous fiscal year.
b. Construction Material Sales
In construction material sales, new housing starts for wooden houses, including custom-made houses,
bottomed out on the whole, despite a noticeable decline in rental houses, and were around the previous year's
level. Meanwhile, in terms of wood material prices, the prices of North American logs have trended downward
since May due to the slowdown of housing investment arising from the interest rate increase in the United States,
and the prices of structural materials remained weak. Under such circumstances, the Grandy House Group
expanded sales of materials to wood material processing businesses while continuing to make efforts, such as
boosting sales of building materials/housing equipment other than pre-cut materials.
As a result of these initiatives, sales in the construction material sales segment during the fiscal year underreview increased 0.7% year-on-year to ¥2,992 million. Segment profit was ¥151 million, up 2.6% from theprevious fiscal year.
c. Real Estate Leasing
In the real estate leasing, while more stores were opened in or relocated to the city center in the officebuilding market in and around Utsunomiya, which is our main market, office vacancies increased due to theresumption of offering for lease in some offices where offering for lease had been suspended for a long period. In
the parking lot market, competition remained intense among parking lots in the vicinity. In this context, while theGrandy House Group made efforts to improve the operation rate of existing assets and reduce management costs,
the impact of the rise in vacancy rates in the second half of the previous year persisted, one pay-by-the-hourparking lot was sold, and repair expenses for rental properties were incurred. Consequently, sales in the realestate leasing segment during the fiscal year under review were ¥248 million, a decrease of 5.6% year-on-year,
and segment profit was ¥151 million, a decrease of 12.3% year-on-year.

―3―(2) Overview of Financial Position for Fiscal 2019
As of March 31, 2019, total consolidated assets fell to ¥46,864 million, a decrease of ¥416 million comparedto the end of the previous consolidated fiscal year. This was mainly due to a decrease in inventories following
sales of large housing lots for the current fiscal year, in terms of new home sales.
Liabilities decreased to ¥25,740 million, down ¥1,984 million compared to the end of the previous
consolidated fiscal year due mainly to a decrease in inventories, also ending up limiting new loans. Furthermore,
we are making efforts that are continued from the previous fiscal year to switch our fund procurement method tofinancing by bonds for part of our loans in order to reduce the burden of interest payments and to flexibly use
funds.
Total net assets increased by ¥1,567 million compared to the previous consolidated fiscal year to reach¥21,124 million. This is largely due to the acquisition of net income attributable to owners of the parent company
despite the payment of dividends.
(3) Overview of Cash Flows for Fiscal 2019
Cash and cash equivalents (hereinafter, "cash flows") as of March 31, 2019 increased by ¥187 million
compared to the previous consolidated fiscal year as a result of increased cash flows from operating activities anddecreased cash flows from investing and financial activities, to reach ¥10,001 million.
Factors contributing to movements in the Company's cash flows during the consolidated fiscal year underreview are presented as follows.
(Cash Flows from Operating Activities)
Net cash provided by operating activities amounted to ¥3,042 million (an increase of ¥2,155 million in theprevious fiscal year). This was mainly because of acquisition of net income before income taxes and a decrease
in inventories following sales of large housing lots for the current fiscal year, as noted above, despite payment ofincome taxes.
(Cash Flows from Investing Activities)
The decreased cash flow from investing activities was ¥503 million (a decrease of ¥125 million in theprevious fiscal year). This was mainly due to the purchase of property, plant and equipment such as land forbranches and employee parking lots as well as additional deposits made as a security deposit to warrant against
housing defects.
(Cash Flows from Financing Activities)
The decreased cash flow from financing activities was ¥2,351 million (a decrease of ¥691 million in theprevious fiscal year). This was due to payments of dividends and the progress made in the repayments of loans
following a decrease in inventories. Additionally, we switched our fund procurement method to financing bybonds for part of our loans, as noted above.
Trends in the Group's cash flow-related indices are presented as follows.
Fiscal 2017

Fiscal 2018

39.2
25.9

Shareholders' equity ratio (%)
Equity ratio on market value basis (%)
Interest-bearing liabilities to cash flow ratio (years)—

Interest coverage ratio (times)—

Fiscal 2019

41.0
27.5
10.3
7.0

Shareholders' equity ratio: Shareholders' equity/total assets
Equity ratio on a market value basis: Market capitalization/total assets
Interest-bearing liabilities to cash flow ratio: Interest-bearing liabilities/cash flows
Interest coverage ratio: Cash flows/interest payments
Notes: 1. Each index is calculated based on consolidated financial data.
2. Market capitalization is calculated based on the number of shares issued and outstanding as of theperiod-end (after deducting treasury shares).
―4―

44.7
27.5
6.7
12.3

3. Cash flows from operating activities are used as "cash flows" in the above calculation. As operating cash
flows for the fiscal year ended March 31, 2017 were negative, interest-bearing liabilities to cash flow ratio
and interest coverage ratio data have been omitted for the year.
4. Interest-bearing liabilities include all liabilities that bear interest under the liabilities section recorded on
consolidated balance sheets.
(4) Outlook for Fiscal 2020
The Japanese economy is forecast to remain on a moderate recovery trend, but there are concerns over effects
on the economy of the consumption tax increase scheduled in October 2019 as well as over unstable economic
factors such as the trade frictions between the United States and China, and developments in the United
Kingdom's exit from the European Union. In terms of home purchasing, we currently expect that the effects ofthe tax increase on home sales will be neutral throughout the fiscal year ending March 31, 2020, given that solid
government measures to stimulate home purchasing are scheduled and that the tax increase will be implemented
during the fiscal year. Nevertheless, competition among the business operators will likely intensify ahead of thetax increase.
Under these circumstances, based on the second medium-term business plan, we will strive to achieve themanagement targets, grow our business, and further improve our corporate value.
Our financial forecast for the period ending March 31, 2020 is now sales of ¥48,500 million (up 9.1%
compared to the same period of the previous year), operating income of ¥3,200 million (up 2.2% compared to thesame period of the previous year), ordinary income of ¥3,400 million (up 3.4% compared to the same period of
the previous year) and net income attributable to owners of the parent company of ¥2,200 million (up 6.5%
compared to the same period of the previous year).
(5) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2019 and Fiscal 2020
Grandy House focuses on increasing the corporate value and returning more profits to shareholders as one ofits priority management issues. For shareholders, we will follow a dividend policy that is based on businessperformance and work to enhance the policy while aiming for a consolidated dividend payout ratio of 25% (30%for the next fiscal year and onward). Purchase of treasury shares will be made in a timely manner and inaccordance with the Company's financial position in order to enhance shareholder returns and capital efficiency.
Based on the policy above, Grandy House has declared an annual dividend of ¥18 per share for the fiscal year
under review, up ¥2 from ¥16 per share in the initial forecast, reflecting the increase in profits. The annual
dividend forecast for the year ending March 31, 2020 is ¥23 per share.
Under its Articles of Incorporation, Grandy House has adopted a flexible and fluid approach toward thepayment of dividends from surplus based, which is subject to a resolution of the Company's Board of Directors.
In accordance with standard practice, however, Grandy House plans to continue paying a single annual dividend
to shareholders of record as of March 31 each year.

―5―2. OVERVIEW OF THE CORPORATE GROUP
The Grandy House Group (Grandy House Corporation and its affiliates) consists of Grandy House Corporationand six subsidiaries. The Group is mainly engaged in real estate sales, construction material sales, and real estateleasing.
The business operations of the Group and the positions of the Grandy House Corporation and its subsidiaries inthose operations are as follows.
(1) Real Estate Sales
The Grandy House Group purchases housing lots, obtains permits and approvals for development, manages
residential construction works, designs and builds houses, and handles sales and after-sales maintenance.
Sales, design, and construction of detached houses, which are our main business, are in general supervised byGrandy House Corporation and its subsidiaries by trading area, from the perspective of promoting region-based
sales. General sales areas of each company are as follows:
Grandy House Corporation: Tochigi Prefecture, western part of Ibaraki Prefecture, etc.
Ibaraki Grandy House Co., Ltd.: Ibaraki Prefecture (excluding the western part)
Gunma Grandy House Co., Ltd.: Gunma Prefecture
Chiba Grandy House Co., Ltd.: Chiba Prefecture
Furthermore, Chuko Jutaku Joho Kan Co., Ltd. is engaged in sales of existing homes and Grandy ReformCo., Ltd. is engaged in the after-sales maintenance and renovation business.
(2) Construction Material Sales
General Livetech Co., Ltd. is engaged in sales of construction materials and components, mainly pre-cut
materials.
(3) Real Estate Leasing
Grandy House Corporation is engaged in the leasing business of tenant buildings and apartments owned by
the Company and the parking lot business.
[Business Group Organization Chart] (As of March 31, 2019)
The matters described above are shown in the following Business Group Organization Chart.
Grandy House Corporation
Supply of pre-cut materials, etc.
Leasing of houses, stores, and buildings and the parking lot business

Sales of pre-cut
materials, etc.

Renovation

Sales of existinghomes, etc.

After-sales maintenance

General Livetech, Co., Ltd.

Grandy Reform Co., Ltd.

Chuko Jutaku Joho Kan Co., Ltd.

Entrustment of after-sales maintenance

Sales of detached houses, etc. (Ibaraki, Gunma,
and Chiba Prefectures)

Sales of detached houses, etc. (Tochigi Prefecture, etc.)

Ibaraki Grandy House Co., Ltd.
Gunma Grandy House Co., Ltd.
Chiba Grandy House Co., Ltd.

Customers
Construction
material sales

Real estate sales―6―

Real estateleasing

3. BASIC APPROACH TO THE SELECTION OF ACCOUNTING STANDARDSAt present, the Grandy House Group operates its business only in Japan and most of its stakeholders areshareholders, lenders, and business partners in Japan. There is no plan to raise funds from overseas markets. Against
this background, the Group will prepare its consolidated financial statements based on Japanese GAAP for the time
being.
For the application of International Financial Reporting Standards (IFRS), we will take adequate actions while
paying attention to various situations inside and outside Japan.

―7―

4. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES(1) Consolidated Balance Sheets(Thousands of Yen)FY2018(As of March 31, 2018)

FY2019(As of March 31, 2019)

AssetsCurrent assets
Cash and deposits

9,813,941

10,001,725

672,527

547,282

16,588,298

17,322,784

2,414

7,244

Real estate for sale in process

8,936,229

7,062,704

Merchandise and finished goods

211,897

244,048

Raw materials and supplies

166,467

128,188

Other

413,250

816,802

Allowance for doubtful accounts(4,348)(3,305)36,800,680

36,127,474

Notes and accounts receivable – trade
Real estate for sale
Costs on uncompleted construction contracts

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

5,135,282

5,232,271

Accumulated depreciation(1,878,573)(2,030,651)

Buildings and structures, net

3,256,709

3,201,619

Machinery, equipment and vehicles

53,16753,496(46,992)(49,325)

Accumulated depreciation
Machinery, equipment and vehicles, net

6,175

4,171

Tools, furniture and fixtures

342,790351,017

Accumulated depreciation(280,227)(282,493)

Tools, furniture and fixtures, net
Land
Leased assets

62,563

68,523

5,319,659

5,576,884

136,776

143,586

Accumulated depreciation(67,773)(63,129)

Lease assets, net

69,00280,456–

1,011

8,714,109

8,932,666

66,86280,077428,336

363,031

Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable

14,85913,701

Deferred tax assets

381,203413,834

Other

846,788897,508

Allowance for doubtful accounts(4,901)(1,030)Total investments and other assets

1,666,286

1,687,045

10,447,258

10,699,789

Bond issuance costs

33,38837,512

Total deferred assets

33,38837,51247,281,326

46,864,776

Total non-current assets
Deferred assets

Total assets―8―

(Thousands of Yen)FY2018(As of March 31, 2018)

FY2019(As of March 31, 2019)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,408,906

3,132,890

Short-term loans payable

19,177,700

17,324,800

Current portion of long-term loans payable

494,513503,345

Current portion of bonds

21,00021,000

Lease obligations

24,40328,366

Income taxes payable

495,419544,514

Provision for warranties for completed construction

58,68685,853

Other755,677

758,230

24,436,306

22,398,999

Bonds payable

1,066,000

1,545,000

Long-term loans payable

1,384,806

881,461

Lease obligations

50,09958,582

Provision for directors' retirement benefits

166,279

168,654

Net defined benefit liability

571,584

629,972

Total current liabilities
Non-current liabilities

Asset retirement obligations

4,296

12,227

Other

45,48345,7303,288,549

3,341,627

27,724,855

25,740,627

Capital stock

2,077,500

2,077,500

Capital surplus

2,223,038

2,228,898

Retained earnings

15,407,196

17,011,385

Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

Treasury shares
Total shareholders' equity(341,339)(337,899)

19,366,395

20,979,883(3,824)(47,634)

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―9―(3,824)(47,634)

193,900

191,900

19,556,471

21,124,148

47,281,326

46,864,776

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of Yen)
Fiscal 2018
(From April 1, 2017
to March 31, 2018)

Fiscal 2019
(From April 1, 2018
to March 31, 2019)

Net sales

44,726,118

44,452,833

Cost of sales

37,082,208

36,415,450

Gross profit

7,643,910

8,037,383

Selling, general and administrative expenses

4,948,754

4,906,276

Operating income

2,695,156

3,131,106Interest income

1,257

869

Dividends income

Non-operating income
6,203

5,703

Operations consignment fee

233,712

224,634

Office work fee

156,426

161,523

Other

46,47631,010Total non-operating income

444,076

423,741

Non-operating expenses
Interest expenses

328,820

248,648

Commission for syndicate loan

7,738

6,666

Other

6,630

11,334

343,189

266,649

2,796,043

3,288,197

Total non-operating expenses
Ordinary income
Extraordinary loss
Loss on sales of non-current assets–

75

Loss on retirement of non-current assets

15,88816,373

Impairment loss

70,253–

Loss on cancellation of lease contracts

–

2,528

Directors' retirement benefits–

300,000

Total extraordinary loss

86,141

318,978

Net income before income taxes

2,709,901

2,969,219

Income taxes – current

899,993917,064

Income taxes – deferred(17,903)(13,440)

Total income taxes

882,089

903,623

Net income

1,827,811

2,065,595

Net income attributable to owners of the parent company

1,827,811

2,065,595― 10 ―

(Consolidated Statements of Comprehensive Income)(Thousands of Yen)
Fiscal 2018
(From April 1, 2017
to March 31, 2018)
Net income

Fiscal 2019
(From April 1, 2018
to March 31, 2019)

1,827,811

2,065,595

Valuation difference on available-for-sale securities(12,517)(43,810)

Total other comprehensive income(12,517)(43,810)

1,815,294

2,021,785

1,815,294

2,021,785––

Other comprehensive income

Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to non-controllinginterests― 11 ―

(3) Consolidated Statements of Changes in Net Assets
Fiscal 2018 (From April 1, 2017 to March 31, 2018)
Shareholders' equity

Balance as of the beginning of the period
Changes of items during the period
Dividends from surplus
Net income attributable to owners of parent
company
Exercise of subscription rights to shares
Net changes to items other than shareholder equity
Total changes of items during the period
Balance as of the end of the period

Capital stock

CapitalsurplusRetainedearnings

2,077,500

2,205,165

13,982,262

Total
shareholders'equity(351,831) 17,913,096(402,877)(402,877)

1,827,811

1,827,811

17,873–
2,077,500

17,8732,223,038

1,424,934
15,407,196

Treasuryshares

10,49228,365

10,492(341,339)

1,453,299
19,366,395(Thousands of Yen)
Accumulated othercomprehensive income
Subscription
Valuation
Total
rights todifference on accumulatedsharesavailableotherfor-salecomprehensive
securities
incomeBalance as of the beginning of the period
Changes of items during the period
Dividends from surplus
Net income attributable to owners of parent
company
Exercise of subscription rights to shares
Net changes to items other than shareholder equity
Total changes of items during the period
Balance as of the end of the period

8,692

8,692

200,000

Total net
assets18,121,788(402,877)
1,827,811(6,100)(12,517)(12,517)(3,824)(12,517)(12,517)(3,824)― 12 ―(6,100)193,900

22,265(12,517)
1,434,682
19,556,471

Fiscal 2019 (From April 1, 2018 to March 31, 2019)
Shareholders' equity
Capital stock Capital surplus
Balance as of the beginning of the period
Changes of items during the period
Dividends from surplus
Net income attributable to owners of parent
company
Exercise of subscription rights to shares
Net changes to items other than shareholder equity
Total changes of items during the period
Balance as of the end of the period

2,077,500

2,223,038

15,407,196

Total
shareholders'equity(341,339) 19,366,395(461,407)(461,407)

2,065,595

2,065,595

Retainedearnings

5,860–
2,077,500

5,860
2,228,898

1,604,188
17,011,385

Treasuryshares

3,440

9,300

3,440
(337,899)

1,613,488
20,979,883(Thousands of Yen)
Accumulated othercomprehensive income

Balance as of the beginning of the period
Changes of items during the period
Dividends from surplus
Net income attributable to owners of parent
company
Exercise of subscription rights to shares
Net changes to items other than shareholder equity
Total changes of items during the period
Balance as of the end of the period

Valuation
Total
difference on accumulated
availableotherfor-salecomprehensive
securities
income(3,824)(3,824)

Subscription
rights toshares

193,900

Total net
assets

19,556,471(461,407)
2,065,595(2,000)(43,810)(43,810)(47,634)(43,810)(43,810)(47,634)― 13 ―(2,000)191,900

7,300(43,810)
1,567,677
21,124,148

(4) Consolidated Statements of Cash Flows(Thousands of Yen)
Fiscal 2018
(From April 1, 2017
to March 31, 2018)
Net cash provided by (used in) operating activities
Net income before income taxes
Depreciation and amortization
Impairment loss
Increase (decrease) in provision for directors'
retirement benefits
Increase (decrease) in provision for warranties forcompleted construction
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Loss (gain) on sales of property, plant and equipment
Loss on retirement of non-current assets
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts
payable-trade
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Collection of loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other proceeds
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from disposal of treasury shares due toexercise of subscription rights to shares
Cash dividends paid
Repayments of lease obligations
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
Cash and cash equivalents at end of the period― 14 ―

Fiscal 2019
(From April 1, 2018
to March 31, 2019)

2,709,901
280,971
70,253

2,969,219
248,990–

33,325

2,374

1,462

27,166(13,910)62,667(7,460)328,820–
15,888(4,913)58,388(6,572)
248,648
75
16,373(69,990)

125,602(458,298)

1,140,337

177,274(276,016)

83,7183,214,622
9,887(306,693)(761,817)
2,155,999(399,835)
4,149,839
8,878(247,794)(868,012)
3,042,911

500,000(94,544)–(23,234)
1,127(514,807)
1,271
4,267
(125,919)–(491,188)
90,034(37,040)
1,157(68,827)2,145–(503,719)(1,048,000)
418,300(621,852)
1,000,000(21,000)(1,852,900)–(494,513)
500,000(21,000)

22,2657,300(402,281)(39,088)(691,657)
1,338,423
8,475,518
9,813,941(460,176)(30,119)(2,351,408)
187,783
9,813,941
10,001,725

(5) Notes to Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.

― 15 ―

(Segment and Other Information)
1. Overview of reportable segments
The reportable segments of the Group are components for which separate financial information is available
and whose operating results are regularly reviewed by the Company's Board of Directors when making decisions
about the allocation of management resources and assessing performance.
The Grandy House Group is engaged in the following businesses: new home sales, existing home sales, homerenovation, construction material sales and real estate leasing (all of which are operated in Japan). A portion or
all of operations for new home sales, existing home sales and home renovation are conducted by subsidiaries.
From the perspective of similarity, relationships, and sharing of common management resources, these threebusinesses are regarded as one business segment, Real Estate Sales. The Company devises overall strategies forthis real estate sales segment and conducts business activities.
Accordingly, the Group's three reportable segments are classified as Real Estate Sales, Construction Material
Sales, and Real Estate Leasing.
The Real Estate Sales business includes sales of new homes (including building contract and sale of land,etc.) and existing homes and home renovation. The Construction Material Sales business comprises of production
and sale of pre-cut materials for housing and sale of construction materials and home facilities and equipment. In
the Real Estate Leasing business, activities comprise the leasing of office, homes, related properties, and parking
facilities, etc.
2. Calculation method of net sales, profit and loss, assets, liabilities, and other items by reportable segment
The accounting method for reportable segments is the same as that outlined under "Important Items
Fundamental to the Preparation of Consolidated Financial Statements (This part is omitted on this translation)."Segment profit and loss are based on ordinary income. Inter-segment sales or transfers are calculated based onmarket prices.
3. Information relating to the amounts of net sales, profit and loss, assets, liabilities, and other items byreportable segment
The fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)(Thousands of Yen)
Reportable Segment
Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

41,492,209

2,970,910

262,999–

3,205,503

79,469Adjustments(Note 1)

AmountRecorded on
Consolidated
Financial
Statements(Note 2)

44,726,118–

44,726,118

3,284,972(3,284,972)

–

Total

Net sales
Sales to outside customers
Inter-segment sales and transfers

41,492,209

6,176,413

342,468

48,011,091(3,284,972)

44,726,118

Segment profit

Total

2,485,266

147,685

172,5792,805,531(9,487)2,796,043

Segment assets

34,246,141

2,112,857

3,725,023

40,084,022

7,197,304

47,281,326

Segment liabilities

26,416,289

1,604,276

66,322

28,086,888(362,033)

27,724,855
280,971

Other items
Depreciation and amortization

189,881

43,622

47,467

280,971–

Interest income

1,248

8

–

1,257

–

1,257

Interest expenses

319,997

8,822–

328,820–

328,820

Increase in property, plant and equipment
and intangible assets

106,777

8,342

3,204

118,323–

118,323― 16 ―

The fiscal year ended March 31, 2019 (April 1, 2018 to March 31, 2019)(Thousands of Yen)
Reportable Segment
Adjustments(Note 1)

AmountRecorded on
Consolidated
Financial
Statements(Note 2)44,452,833–

44,452,833

83,876

3,207,349(3,207,349)–

332,139

47,660,183(3,207,349)

44,452,833

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

41,212,359

2,992,211

248,262–

3,123,472

41,212,359

6,115,684

Total

Net sales
Sales to outside customers
Inter-segment sales and transfers
Total
Segment profit

2,976,984

151,461

151,315

3,279,761

8,435

3,288,197

Segment assets

33,466,252

2,109,797

3,578,817

39,154,867

7,709,909

46,864,776

Segment liabilities

24,406,096

1,603,723

69,756

26,079,576(338,948)

25,740,627

176,180

26,106

46,704

248,990–248,990

Other items
Depreciation and amortization
Interest income

863

6

–

869

–

869

Interest expenses

241,3257,322–

248,648–

248,648

10,9375,424

576,249–

576,249

Increase in property, plant and equipment
559,887
and intangible assets
Note 1: Details of adjustments are presented as follows.

Segment profit(Thousands of Yen)
Fiscal 2018

Fiscal 2019

Eliminations of inter-segment transactions
Total(9,487)8,435(9,487)

8,435

Segment assets(Thousands of Yen)
Fiscal 2018

Fiscal 2019

Eliminations of inter-segment receivables(360,148)(337,184)

Eliminations of inter-segment unrealized profit(52,371)(46,021)

7,609,824

8,093,115

7,197,304

7,709,909

Corporate assets
Total
Note:

Corporate assets mainly comprise cash and deposits as well as investment securities which are not attributable to reportable segments.

Segment liabilities(Thousands of Yen)
Fiscal 2018
Eliminations of inter-segment payables
Total

Fiscal 2019
(362,033)(338,948)(362,033)(338,948)

Note 2: Segment profit is adjusted with the ordinary income recorded in consolidated financial statements.

― 17 ―