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 REPORTFOR FISCAL 2013
(The Fiscal Year Ended March 31, 2013 under Japanese GAAP)May 7, 2013
Company Name:Grandy House Corporation
Stock Exchange Listing:Tokyo Stock Exchange
Securities Code:8999
URL
http://grandy.co.jp
Representative:
Hiroyuki Murata, President
Inquiries:
Atsuo Saito, Senior Managing Director
TEL: +81-28-650-7777
Scheduled date of the Ordinary General Meeting of Shareholders:June 27, 2013
Scheduled date of Securities Report filing:
June 27, 2013
Scheduled date of dividend payment commencement:
June 28, 2013
No
Preparation of annual supplementary explanatory materials:
Yes (institutional investors)
Annual results briefing held:(Figures are rounded down to the nearest million yen unless otherwise stated)

1. Consolidated Financial Results for Fiscal 2013 (April 1, 2012 to March 31, 2013)(Percentage figures show the year-on-year increase (decrease))(1) Consolidated Operating Results
Fiscal 2013
Fiscal 2012

Net Sales(¥ million)
32,54029,355

Note: Comprehensive Income

Operating Income(¥ million)
%
2,317
38.2
1,676
11.4

%
10.9
7.8

Ordinary Income(¥ million)
%
2,392
39.8
1,711
13.3

Net Income(¥ million)
%
1,361
44.6
941
17.9

Fiscal 2013: ¥1,361 million (44.6%) Fiscal 2012: ¥941 million (17.9%)

Net Income per Share(Diluted)
(¥)
47.31
―
32.72
―

Net Income per Share

Return on Equity(¥)%

Fiscal 2013
Fiscal 2012

11.8
8.8

Ordinary Income /Total Assets
%
8.6
6.8

Operating Income /Net Sales
%
7.1
5.7

(Reference)Equity in earnings of affiliates
Fiscal 2013: ¥― million Fiscal 2012: ¥― million
Note: Effective April 1, 2012 and April 1, 2013, Grandy House conducted common stock splits of 1:100 and 1:3, respectively.
Net income per share data is calculated on the assumption that stock splits were conducted at the beginning of the previous fiscal year.

(2) Consolidated Financial Position
Total Assets(¥ million)
March 31, 2013
March 31, 2012

Net Assets(¥ million)
30,11825,387

Shareholders’ Equity Ratio%
12,11040.2
11,037
43.5

Net Assets per Share(¥)
420.84383.54(Reference) Shareholders’ equity March 31, 2013: ¥12,110 million March 31, 2012: ¥11,037 million
Note: Effective April 1, 2012 and April 1, 2013, Grandy House conducted common stock splits of 1:100 and 1:3, respectively.
Net assets per share data is calculated on the assumption that stock splits were conducted at the beginning of the previous fiscal year.

(3) Consolidated Cash Flows

Fiscal 2013
Fiscal 2012

Cash Flows from Operating Cash Flows from Investing Cash Flows from Financing Cash and Cash Equivalents at
Activities
Activities
Activities
the End of the Period(¥ million)(¥ million)(¥ million)(¥ million)(2,099)
(866)
2,754
5,207
2,662
(31)
(535)
5,418

2. Dividends
Annual Dividend per SharesFiscal 2012
Fiscal 2013
Fiscal 2014 (Forecast)

1Q-End2Q-End3Q-EndPeriod-End

Total

(¥)

(¥)

(¥)

(¥)
3,000.00
24.00
8.00

(¥)
3,000.00
24.00
8.00

―
―
―

0.00
0.00
0.00

―
―
―

Ratio of Dividends
to Net Assets(Consolidated)
%
30.6
2.6
16.9
1.9
―

Total Dividends

Payout Ratio(Consolidated)(¥ million)

%
287
230

Notes:
1.
Effective April 1, 2012, Grandy House conducted a 1:100 common stock split. The total dividends data for fiscal 2012 is the actual amount prior tothe common stock split.
2.
Effective April 1, 2013, Grandy House conducted a 1:3 common stock split. As a result, the forecast period-end per share dividend for the fiscal year
ending March 31, 2014 is calculated taking into consideration the common stock split.
3.
The fiscal 2012 period-end dividend of ¥3,000 per share includes a commemorative dividend amount of ¥1,000 per share following the listing of theCompany’s shares on the First Section of the Tokyo Stock Exchange.

3. Consolidated Financial Results Forecasts for Fiscal 2014 (April 1, 2013 to March 31, 2014)

Interim Period
Full Fiscal YearNet Sales(¥ million)%
17,5007.8
36,000
10.6(Percentage figures show the year-on-year increase (decrease) for each corresponding period)
Operating Income
Ordinary Income
Net Income
Net Income per Share(¥ million)%(¥ million)%(¥ million)
%
(¥)
1,230
5.1
1,260
5.3
710
5.6
24.67
2,640
13.9
2,700
12.9
1,500
10.2
52.12

Note: Effective April 1, 2013, Grandy House conducted a 1:3 common stock split.

* Explanatory Notes(1) Changes in the number 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 ：

Yes
None
Yes
None

Note: The aforementioned applies to Article 14, paragraph 7 “difficulties in distinguishing changes in accounting policies from changes in accounting
estimates” of the “Regulations Concerning Terminology, Forms, and Preparation Methods of Consolidated Financial Statements.”(3) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding as of the
March 31, 2013
period-end (including treasury stock)2) Number of treasury stock
March 31, 2013
3) Average number of shares issued and outstanding for
Fiscal 2013
the period

30,823,200 shares March 31, 2012

30,823,200 shares

2,046,198 shares March 31, 2012

2,046,000 shares

28,777,050 shares Fiscal 2012

28,777,200 shares

Note: Effective April 1, 2012 and April 1, 2013, Grandy House conducted common stock splits of 1:100 and 1:3, respectively. The number of shares issued
and outstanding as of the period-end (including treasury stock), number of treasury stock as of the period-end, and average number of shares issued andoutstanding for the period data is calculated on the assumption that stock splits were conducted at the beginning of the previous fiscal year.

(Reference) Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for Fiscal 2013 (April 1, 2012 to March 31, 2013)(1) Non-Consolidated Operating Results
Net Sales(¥ million)
Fiscal 2013
17,628
Fiscal 2012
15,729Fiscal 2013
Fiscal 2012

%
12.1
10.0

(Percentage figures show the year-on-year increase (decrease))
Operating Income
Ordinary Income
Net Income(¥ million)%(¥ million)%(¥ million)
%
1,190
35.6
1,522
35.6
989
42.2
877
13.7
1,122
26.1
695
32.8

Net Income per Share (Diluted)
Net Income per Share
(¥)
(¥)
34.39
―
24.18
―

Note: Effective April 1, 2012 and April 1, 2013, Grandy House conducted common stock splits of 1:100 and 1:3, respectively. Net income per share data is
calculated on the assumption that stock splits were conducted at the beginning of the previous fiscal year.

(2) Non-Consolidated Financial Position
Total Assets
Net Assets
Shareholders’ Equity Ratio(¥ million)(¥ million)%
March 31, 2013
20,08910,54052.5
March 31, 2012
18,276
9,838
53.8(Reference) Shareholders’ equity March 31, 2013: ¥10,540 million March 31, 2012: ¥9,838 million

Net Assets per Share(¥)
366.27341.88

Note: Effective April 1, 2013, Grandy House conducted a 1:3 common stock split. Net assets per share data is calculated on the assumption that the stock
split was conducted at the beginning of the previous fiscal year.

2.

Non-Consolidated Financial Results Forecasts for Fiscal 2014 (April 1, 2013 to March 31, 2014)

Interim Period
Full Fiscal YearNet Sales(¥ million)
%
9,250
5.4
18,500
4.9(Percentage figures show the year-on-year increase (decrease) for each corresponding period)
Operating Income
Ordinary Income
Net Income
Net Income per Share(¥ million)%(¥ million)%(¥ million)
%
(¥)
620
2.8
1,030
14.1
725
14.9
25.19
1,260
5.9
1,700
11.6
1,060
7.1
36.83

Effective April 1, 2013, Grandy House conducted a 1:3 common stock split.

* Disclosure concerning the implementation status of audit proceduresThis financial report is exempt from the audit procedure provisions stipulated under the Financial Instruments and Exchange Act of Japan. As ofthe date of disclosure, audit procedures in connection with consolidated financial statements were in progress.
* 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 assumptions, beliefs, and uncertainties 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 notguarantee the accuracy of forecasts and other forward-looking statements and its ability to achieve stated targets. Please refer to “1. Analysis of Operating Results andFinancial Position (1) Analysis of Operating Results 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.
Please also note that effective April 1, 2013, Grandy House conducted a 1:3 common stock split.

Attachment Materials: Table of Contents
1. ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION ............................................................ 2(1) Analysis of Operating Results ................................................................................................................................. 2(2) Analysis of Financial Position................................................................................................................................. 3(3) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2013 and Fiscal 2014 ...................... 4(4) Business and Other Risks ........................................................................................................................................ 4
2. OVERVIEW OF THE CORPORATE GROUP ....................................................................................................... 8
3. MANAGEMENT POLICY ...................................................................................................................................... 9(1) Basic Management Policy ....................................................................................................................................... 9(2) Target Management Benchmarks ............................................................................................................................ 9(3) Medium- and Long-Term Management Strategies ................................................................................................. 9(4) Pending Issues ......................................................................................................................................................... 9(5) Other Matters Important to the Company’s Management ....................................................................................... 9
4. CONSOLIDATED FINANCIAL STATEMENTS ................................................................................................ 10(1) Consolidated Balance Sheets ................................................................................................................................ 10(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ............................ 12(Consolidated Statements of Income) ......................................................................................................................... 12(Consolidated Statements of Comprehensive Income) ............................................................................................... 13(3) Consolidated Statements of Changes in Net Assets .............................................................................................. 14(4) Consolidated Statements of Cash Flows ............................................................................................................... 15(5) Notes to Consolidated Financial Statements ......................................................................................................... 17(Notes Concerning Going Concern Assumptions) ...................................................................................................... 17(Segment and Other Information)…………………………………………………………………………………….18―1―

1. ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION(1) Analysis of Operating Results
In fiscal 2013, the fiscal year ended March 31, 2013, the Japanese economy witnessed mixed conditions. On the one
hand, the economy remained shrouded in uncertainty due mainly to the prolonged financial crisis in Europe and aslowdown in export activity to China reflecting the flow-on effects of territorial disputes. On the other hand, domestic
consumption was supported by a variety of factors including reconstruction demand following the Great East Japan
Earthquake. The business environment was also buoyed by growing expectations toward a recovery in economic
conditions including a positive turnaround in stock prices on the back of monetary easing and economic policies
announced by the new administration launched at the end of the previous year.
In the housing sector, new housing starts continued to rally. This was largely attributable to the favorable impactof the government’s housing purchase assistance and other measures against the backdrop of a low interest rateenvironment. In addition, interest in such variables as housing measures and the timing for acquisition heightened in
the lead up to the planned increase in the consumption tax rate.
Under these circumstances, the Grandy House Group worked in unison to address growing market concerns
regarding security and safety as well as the creation and conservation of energy in the aftermath of the Great East
Japan Earthquake. Turning to new home sales, orders received surpassed 1,000 in the fiscal year under review. This
was an historic high and allowed the Group to achieve its medium-term target one year in advance. Total cumulative
sales since the Company entered the housing sales business in 1996 reached 8,000 in December 2012.
As a result of these factors, consolidated net sales in fiscal 2013 were ¥32,540 million, up 10.9% compared withthe previous fiscal year. From a profit perspective, operating income climbed 38.2% year on year to ¥2,317 million.
Ordinary income grew 39.8% to ¥2,392 million and net income improved 44.6% to ¥1,361 million.
Results by business segment are presented as follows.
Real Estate Sales
As a core business, the Company took steps to further bolster its real estate sales structure and systems in an effort tosecure sustainable growth. Guided by this overarching policy, we worked diligently to increase our market share in
new home sales by implementing a variety of effective measures including the expansion of sales and marketing areas
and an increase in the number of sales staff. From a product perspective, we strengthened efforts to address growing
market concerns regarding security and safety as well as the creation and conservation of energy in the aftermath of
the Great East Japan Earthquake by shining a light on the appeal of the Group’s quality and technologies. Buoyed bythese activities, orders received surpassed 1,000 in the fiscal year under review. This was an historic high and allowed
the Group to achieve its medium-term target one year in advance. On a year-on-year basis, new home sales increasedby 102 amounting to 997 in the fiscal year under review.
In existing home sales, we undertook measures aimed at reinforcing our purchasing structure while upgrading
and increasing properties. Despite these endeavors, the number of existing homes sold decreased by one comparedwith the previous fiscal year to 170 in fiscal 2013. This reflected the increasingly fierce competition within the market.
Accounting for each of these factors, revenues in the real estate sales segment rose 11.5% year on year to ¥30,117
million. Segment profit surged 49.2% compared with the previous fiscal year to ¥2,078 million.
Construction Material Sales
In the construction material sales segment, sales including Group companies improved. These results reflect growth inproductivity on the back of a variety of measures, including efforts to improve production management, as well as thefocus on sales of items other than precut materials. Reflecting the robust demand of Group companies, on the other
hand, external sales edged up only slightly. In addition, trends in timber prices, which continued to hover at low levels,and the effects of increased production contributed to segment profits.
As a result, revenues in the construction material sales segment increased 4.3% compared with the previous fiscal
year to ¥2,095 million while segment profit jumped 88.9% year on year to ¥164 million.
Real Estate Leasing
In the real estate leasing business, the sale of one pay-by-the-hour parking facility in Utsunomiya City, Tochigi
Prefecture during the previous fiscal year resulted in a decline in rental income of non-Group companies. Revenues
for this segment accordingly decreased 2.0% year on year to ¥327 million. In addition, a factory site and building in
Kanuma City, Tochigi Prefecture leased to a subsidiary was sold to that subsidiary. As a result, segment profits fell
16.6% compared with the previous fiscal year to ¥193 million.

―2―

Outlook
Expectations of a recovery in corporate-sector earnings have begun to emerge throughout the Japanese economy
thanks largely to measures implemented following the change of government. While there are concerns regarding theimpact of an increase in the consumption tax rate and the weak yen on material prices, the housing industry is expected
to benefit from efforts by the government to maintain and expand initiatives aimed at stimulating housing demand andcontinued access to low interest-rate housing loans on the back of the Bank of Japan’s monetary easing measures.
Against this backdrop, Grandy House will allocate management resources to the core real estate sales businesssegment on a concentrated basis in order to secure sustainable growth. As a part of efforts to expand its business area,
the Company established Chiba Grandy House in Kashiwa City, Chiba Prefecture in February 2013 to oversee
business activities in Chiba Prefecture. The new company commenced operations in April 2013. Moreover, and as aplatform that underpins business expansion, we will take steps to significantly strengthen our housing landdevelopment capabilities.
Accounting for each of the aforementioned factors, Grandy House is forecasting consolidated net sales of¥36,000 million for the fiscal year ending March 31, 2014. This represents a 10.6% increase year on year. Operating
income is projected to climb 13.9% to ¥2,640 million. Ordinary income is anticipated to increase 12.9% to ¥2,700
million with net income improving 10.2% to ¥1,500 million.
(2) Analysis of Financial Positiona. Consolidated Balance Sheet
Total assets stood at ¥30,118 million as of March 31, 2013, up ¥4,730 million compared with the end of the previous
fiscal year. This upswing was mainly due to the increase of ¥4,163 million in total current assets reflecting the higher
balance of real estate for sale in process (principally land) against the backdrop of real estate sales business growth.
Total liabilities grew ¥3,656 million compared with the previous fiscal year-end to ¥18,007 million. In advancing
its real estate sales business activities, the Company increased its purchases of land. In order to fund each acquisition,
Grandy House undertook higher levels of short-term loans payable. As a result, total current liabilities climbed ¥3,592
million.
Total net assets stood at ¥12,110 million as of the end of the fiscal year under review. This was ¥1,073 million
higher than the balance recorded as of March 31, 2012 and mainly comprised the increase in retained earnings. Afteraccounting for the payment of dividends totaling ¥287 million, this increase was largely attributable to net income forthe period of ¥1,361 million.
b. Cash Flows
Cash flows from operating and investing activities resulted in decreases in cash and cash equivalents respectively, andcash flows from financing activities resulted in an increase in cash and cash equivalents in the fiscal year under review.
As a result, the balance of cash and cash equivalents at end of the period amounted to ¥5,207 million, down ¥210
million from March 31, 2012.
Factors contributing to movements in the Company’s cash flows during the fiscal year under review arepresented as follows.
(Cash Flows from Operating Activities)
Net cash used in operating activities came to ¥2,099 million in fiscal 2013 compared with net cash provided byoperating activities of ¥2,662 million in the previous fiscal year. Major cash inflows for the period were net income
before income taxes and an increase in notes and accounts payable-trade. These inflows were more than offset by thesubstantial increase in inventories representing the purchase of land.
(Cash Flows from Investing Activities)
Net cash used in investing activities amounted to ¥866 million, up ¥834 million compared with the previous fiscal year.
This outflow is largely attributable to the construction of a subsidiary headquarter office in Takasaki City, Gunma
Prefecture as a base for real estate sales as well as the increase in investment securities representing the purchase ofgovernment bonds as deposit assets in accordance with provisions stipulated under Japan’s Act on Assurance of
Performance of Specified Housing Defect Warranty.
(Cash Flows from Financing Activities)
Net cash provided by financing activities was ¥2,754 million in the fiscal year under review compared with net cashused in financing activities of ¥535 million in fiscal 2012. The principal factor was the net increase in short-term loans
payable to fund the purchase of land.

―3―

Trends in the Group’s cash flow-related indices are presented as follows.
Fiscal 2011

Fiscal 2012

Fiscal 2013

Shareholders’ equity ratio (%)

41.5

43.5

40.2

Equity ratio on market value basis (%)

16.9

24.3

34.7

Interest-bearing liabilities to cash flow ratio (years)

12.5

4.2

－

Interest coverage ratio (times)

4.2

12.9

－

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 the period-end(after deducting treasury stock).
3. Cash flows from operating activities are used in calculations that use cash flows. As operating cash flows for the
fiscal year ended March 31, 2013 were negative, interest-bearing liabilities to cash flow ratio and interest
coverage ratio data have been omitted for that year.
4. Interest-bearing liabilities include all liabilities that bear interest under the liabilities section recorded on
consolidated balance sheets.
(3) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2013 and Fiscal 2014
Grandy House maintains the fundamental profit allocation policy of ensuring the stable and continuous payment ofdividends while taking into consideration the need to retain sufficient internal reserves to engage in future businessdevelopment and strengthen its financial position. At the same time, the Company is conscious of proactively
returning profits to its shareholders through the payment of periodic extraordinary and commemorative dividends
depending on the timing and in light of performance growth.
Guided by this policy, Grandy House has declared an annual dividend of ¥24 per share for the fiscal year underreview. For fiscal 2014, the Company plans to pay a dividend of ¥8 per share, which takes into account the 1:3
common stock split conducted on April 1, 2013. Restating the forecast dividend in pre-stock split terms, the dividend
for fiscal 2014 translates to ¥24 per share.
Under its Articles of Incorporation, Grandy House has adopted a flexible and fluid approach toward the payment
of dividends from surplus based, which is subject to a resolution of the Company’s Board of Directors. In accordancewith standard practice, however, Grandy House plans to continue paying a single annual dividend to shareholders ofrecord as of March 31 each year. Complementing the payment of dividends, the Company will undertake the purchaseof treasury stock depending on its financial position as a part of comprehensive efforts to return profits to shareholders
through an increase in profits per share.
(4) Business and Other Risks
The Grandy House Group recognizes that a variety of factors has the potential to impact its operating results, financial
position, and share price. Details are presented briefly as follows. Readers are reminded that forward-looking
statements are based on judgments in light of information currently available to management as of the date of thispublication.
1) Risks relating to real estate salesi.
Housing demand
The Grandy House Group is mainly engaged in the sale of real estate and construction materials as well as
real estate leasing operations. In the fiscal year under review, sales from the real estate sales segment
accounted for 92.6% of total net sales on a consolidated basis. Real estate sales activities entail the sale ofdetached and custom-built houses, the development and sale of land for housing use, and related additional
exterior construction work. The sale of houses and land for housing use is affected by the willingness ofpurchasers to spend as well as demand trends. The willingness of purchasers to spend as well as demand
trends are in turn susceptible to such factors as movements in economic conditions, interest rates, and land
prices as well as forecasts of the future and tax systems applicable to the housing sector. Shifts in any ofthese factors have the potential to impact the Group’s performance and financial position.
ii.
Sales and marketing area
The Grandy House Group maintains its operating base largely in the North Kanto area. In fiscal 2013, theratio of sales generated from activities in Tochigi Prefecture was as high as 60.8%. In recent years, theGroup has worked diligently to expand its operating base and lift the ratios of revenue generated in
prefectures outside Tochigi. In the fiscal year under review, the share of Ibaraki Prefecture (Mito City,
―4―

iii.

iv.

v.

vi.

Ushiku City, other), Gunma Prefecture (Takasaki City, Ota City, other), and Chiba Prefecture (Kashiwa
City, other) sales as a ratio to total sales were 27.2%, 10.5%, and 1.5%, respectively. Despite theseendeavors, and for a variety of reasons including competitive relationships, the Group’s performance andfinancial position may be affected if the Company is unable to advance its strategies with respect to areasof particular emphasis according to plans.
Competition
In relative terms, the Grandy House Group maintains competitive advantage in Tochigi Prefecture. In theevent, however, that a new entity with the capacity to significantly impact the Group’s land supply
structure enters the market, substantial potential exists for the Group’s performance and financial position
to be affected.
In major metropolitan areas, competition is heating up between the Group’s industry peers. Thankslargely to the Group’s insistence on providing high value-added products including houses built for salethat offer such outstanding qualities as excellent room layout, external appearance, and townscaping,Grandy House is essentially holding the line against home builders who are promoting a low-price strategy.
Should competition continue to intensify resulting in a marked drop in prices, the potential exists for theGroup’s performance and financial position to be affected.
The procurement of sites and inventory for saleIn its real estate sales business, the Grandy House Group engages in a full range of activities. These
activities include negotiations for the purchase of land (sites), discussions with government agencies, site
development, the acquisition of permits and approvals, construction work, and maintenance. The period
from the purchase of land to construction completion generally takes about eight months. In the event ofsuch wide-ranging circumstances as the inability to purchase land or sites according to plans in advance ofsales due to difficulties in securing land that offers a favorable location and conditions, and a sharp rise inland prices, or any other unforeseen matter including a natural disaster that delays the period of
construction resulting in the failure to produce inventory for sale, the potential exists for the Group’s
performance and financial position to be affected.
Employees
The real estate industry is distinguished by the substantial mobility of its human resources and high rate ofpersonnel turnover. The Grandy House Group is no exception and continuously confronts a high attrition
rate particularly with respect to its sales staff. The principal reason is the extremely high product unit priceand the significant amount of time and experience required for employees to achieve stable results.
Accordingly, it is not uncommon for employees to change jobs before reaching this point of stability.
Under these circumstances, the Company takes great pains to fully explain the nature of its work at the timeof recruiting and hiring. Moreover, and in order to improve its retention rate, Grandy House provides new
employees with substantial education and on-the-job training. Every effort is made to ensure that all
employees are conversant with the Company’s sales and marketing activities that are deeply rooted in thelocal community. In the event, however, that Grandy House is unable to secure sales staff on a stable basis
and according to plans, is unable to sufficiently foster the necessary human resources required to carry out
the important role of driving the Company’s business forward, and fails to improve its retention rate, thepotential exists for the Group’s performance and financial position to be affected.
Natural and other disasters
Large-scale natural and other disasters may give rise to substantial repair expenditure due to the damage tobusiness assets including operating bases as well as other damage to such merchandise as detached houses.
At the same time, any of the aforementioned disasters may force a suspension or delay of operations atbusiness bases and work sites owing to physical injuries, property damage, and interruptions to essential
lifelines and social infrastructure. Furthermore, disasters may result in delays in construction and delivery
reflecting such factors as the time required to complete repairs and delays in the delivery of construction
materials. In each case, the potential exists for the Group’s performance and financial position to beaffected.

2) Risks relating to financial position and operating resultsi.
Dependence on debt
In the conduct of its real estate sales activities, the Grandy House Group procures all or a portion of the funds
required to purchase land earmarked for development and to meet development as well as building
construction expenses from financial and other institutions on an individual project basis. The subject land isgenerally lodged as collateral for each loan. In addition, debt finance is primarily the source of funds used topurchase and/or construct properties that underpin the Group’s real estate leasing activities as well as

―5―

ii.

iii.

iv.

purchase and/or construct properties that are used to establish business bases. As of March 31, 2013, thebalance of interest-bearing liabilities stood at ¥14,152 million.
In this context, a rise in interest rates or a prolonged period during which interest rates hover at a highlevel due to such factors as changes in economic conditions and restrictions on the access to debt and otherfunding owing to a deterioration in the Group’s credit standing can lead to difficulties in the conduct ofbusiness such as an increase in the interest expense burden, or a change in business plans. As a result, thepotential exists for the Group’s performance and financial position to be affected.
Decline in the values of noncurrent assets and real estate for saleWith its operating base in the North Kanto area, the Grandy House Group engages in such wide-ranging
activities as the acquisition, development, sale, and leasing of real estate. In the event of a deterioration in realestate market conditions, the Group may incur an impairment of its noncurrent assets or a major write-downof its real estate for sale and other assets. This then has the potential to affect the Group’s performance andfinancial position.
Change in performance due to delays in delivery
Revenues from the sale of detached housing are recorded for accounting purposes at the time of delivery.
While certain large-scale projects require a considerable amount of time through to delivery, the periodrequired from the purchase of land to building completion is generally around eight months. Naturally, strict
management is undertaken to monitor progress. In the event, however, of a delay in construction due to suchfactors as natural disasters or other unforeseen circumstance, or a substantial delay in delivery owing to
unexpected contingencies that result in the carryover of sales into the next period, the potential exists for theGroup’s performance to be affected. In addition, in the event that a hit product that contributes to theshortening of sales periods emerges, or orders received exceed the forecast number of properties sold due toa variety of factors including economic trends, and a drop-off in the supply of products for sale arises
thereafter, the potential exists for the Group’s performance and financial position to be affected.
Sharp rise in material prices
The detached housing products handled by the Group employ timber- and petroleum-related materials. On
this basis, and in the event of difficulties in reducing costs or passing on to consumers any increase in theprices of materials procured owing to fluctuations in market conditions and foreign currency exchange rates,
the potential exists for the Group’s performance and financial position to be affected.

3) Risks relating to statutory and regulatory requirements
The Grandy House Group engages in business activities that are regulated by such wide-ranging legislation as
Building Lots and Buildings Transaction Business Act, Construction Business Act, and Act on Architects andBuilding Engineers. In addition, the Group is subject to a variety of statutory and regulatory requirements including
those stipulated under Japan’s City Planning Act, National Land Use Planning Act, Act on Regulation of Residential
Land Development, Building Standards Act, Housing Quality Assurance Act, and the Act on Assurance of
Performance of Specified Housing Defect Warranty. In the event that a revision or abolition of any of theaforementioned or other applicable statutory and regulatory requirements, or the establishment of any new statute or
regulation leads to an increase in expenditure or delays in assessment periods by governing agencies, the potential
exists for the Group’s performance to be affected.
Legislation related to such key issues as permits and approvals including Building Lots and Buildings
Transaction Business Act, Construction Business Act, and Act on Architects and Building Engineers stipulate theduration of validity and causes for cancellation. The Grandy House Group adheres strictly to all statutory andregulatory requirements and as of the date of this report has not incurred any cancellation or refusal to renew permits
and approvals. However, if for whatever reason a permit or approval is cancelled, or renewal is refused, and the Group
incurs difficulties in carrying out its mainstay business activities, the potential exists for the Group’s performance tobe seriously affected.
Details of the Grandy House Group’s principal permits and approvals as well as durations of validity and causesof cancellation are presented in the following table.

―6―

Name of Permit,
Approval, etc.

Company NameGrandy House CorporationRealestatelicenseoperator IBARAKI Grandy House
Corporation
GUNMA Grandy House
Corporation
CHIBA Grandy House
Corporation (Note)
Chukojutaku Johokan
Corporation

Construction license

Chukojutaku Johokan
Corporation
IBARAKI Grandy House
Corporation

Grandy House Corporation

Architect officeregistration

IBARAKI Grandy House
Corporation

GUNMA Grandy House
Corporation

CHIBA Grandy House
Corporation (Note)

Chukojutaku Johokan
Corporation

General Livetech Corporation

Permits / Approval Number
・Period of Validity

Regulation /StatuteCauses ofPermit,Approval, etc.
Cancellation,
Other

Minister of Land, Infrastructure and Transportation(3) No. 5942
October 21, 2009 – October 20, 2014
Article 65,
The Governor of Ibaraki Prefecture (2) No. 6548
Article 66,
December 1, 2012 – November 30, 2017
Building Lots
Article 67
and Buildings
The Governor of Gunma Prefecture (2) No. 6860
Transaction
December 12, 2012 – December 11, 2017
Business Act
The Governor of Chiba Prefecture (1) No. 16460
April 4, 2013 – April 3, 2018
Minister of Land, Infrastructure and Transportation(1) No. 8039
September 1, 2010 – August 31, 2015
The Governor of Tochigi Prefecture
Authorization (Special-24) No. 22719
Article 28,
February 1, 2013 – January 31, 2018
Construction Article 29,
Business Act Article 29-2
The Governor of Ibaraki Prefecture
Authorization (General-24) No. 32248
March 6, 2013 – March 5, 2018
First class architect office registration
The Governor of Tochigi Prefecture
Registration A(c) No. 2430
November 28, 2011 – November 27, 2016
First class architect office registration
The Governor of Tochigi Prefecture
Registration A(b) No. 2694
January 4, 2011 – January 3, 2016
First class architect office registration
The Governor of Ibaraki Prefecture
Registration No. A3316
Act onMarch 6, 2013 – March 5, 2018
Architects andSecond class architect office registration
Article 26
Building
The Governor of Ibaraki Prefecture
Engineers
Registration No. B5348
March 29, 2013 – March 28, 2018
First class architect office registration
The Governor of Gunma Prefecture
Registration No.4164
November 30, 2012 – November 29, 2017
First class architect office registration
The Governor of Chiba Prefecture
Registration No. 1-1304-7782
April 19, 2013 – April 18, 2018
Second class architect office registration
The Governor of Tochigi Prefecture
Registration No. B(a) 4320
April 25, 2012 – April 24, 2017
Second class architect office registration
The Governor of Tochigi Prefecture
Registration No. B4467
March 1, 2011 – February 29, 2016

Note: Permits, approvals, etc. received after the last day of the fiscal year under review (April 1, 2012 to March 31, 2013)

4) Personal information protection
The Grandy House Group handles individual, customer, and related personal information in the normal course of its
order activities. The Group takes great care to put in place a sound information management structure and systems
which are complemented by the continuous update of internal rules and regulations. In the event, however, of theleakage of personal information to external parties that leads to a loss of credibility or the payment of compensation
for damages, the potential exists for the Group’s performance and financial position to be affected.

―7―

2. OVERVIEW OF THE CORPORATE GROUP
The Grandy House Group (Grandy House and the Company’s affiliated companies) is comprised of Grandy Houseand six subsidiary companies. The Group’s principal business activities include the sales of real estate, the sale ofconstruction materials, and the leasing of real estate.
Details of the business activities of the Group and the activities undertaken by the Company and each subsidiarycompany are presented as follows.
(1) Real Estate Sales
The Grandy House Group engages in a wide range of real estate-related activities from the procurement of land forsale in lots through the acquisition of related permits and approvals to the management of housing land development
work, housing design and construction, sales, and after-sales maintenance and service.
In its mainstay detached housing sale, design, and construction activities, the Group has adopted an oversight
structure by individual operating area. This takes into account the Group’s focus on operations that remain deeply
rooted in the local community. Each company is active within its own basic area of operations. Grandy House operates
mainly in Tochigi Prefecture and a portion of Ibaraki Prefecture. IBARAKI Grandy House and GUNMA GrandyHouse operate mainly in Ibaraki Prefecture and Gunma Prefecture, respectively. CHIBA Grandy House, which
commenced business on April 12, 2013) operates mainly in Chiba Prefecture.
Chukojutaku Johokan is primarily engaged in the sale of existing homes. Grandy Reform Co., Ltd. is active in
housing maintenance and after-sales service as well as housing renovations.
(2) Construction Material Sales
General Livetech is involved mainly in the sale of construction materials and items focusing primarily on precut
materials.
(3) Real Estate Leasing
Grandy House is engaged in such activities as the leasing of its own buildings for rent as well as condominiums andother properties. The Company is also active in the parking business.
The following schematic provides an overview of the structure and businesses of the Grandy House Group (as ofMarch 31, 2013).

Grandy House Corporation
Supply of pre-cut and other materials
Leasing of residential properties, shops,
and buildings; parking facility business

Sale of pre-cut andother materials

Customers

Sale of existing
homes

Maintenance andafter-sales service

General Livetech

Grandy Reform

Chukojutaku Johokan

Maintenance andafter-sales service consignment

Sale of detached housing and related
activities (Gunma Prefecture)

Sale of detached housing and related
activities (Ibaraki Prefecture)

Sale of detached housing and related）
activities (Tochigi Prefecture and others)

GUNMA Grandy
House

IBARAKI Grandy House

Construction
RealMaterial
EstateSales
Leasing

Real Estate Sales―8―

3. MANAGEMENT POLICY(1) Basic Management Policy
The Grandy House Group’s basic management policy entails providing homes that deliver comfort and peace of mind
to help realize a rich and abundant society. Guided by this policy, we have continued to nurture our housing landdevelopment capabilities since foundation. With this as our core competence, we have taken consistently positive
steps to add significant value to both land and buildings and provide attractive and appealing homes through aproprietary integrated system that extends from the purchase of land through housing design to construction, sales,
maintenance, and after-sales service. Looking ahead, we will continue to make every effort toward delivering better
homes by developing new technologies, enhancing quality, and upgrading and expanding our menu of services. At thesame time, we will do our utmost to meet the expectations of society as a good corporate citizen.
(2) Target Management Benchmarks
The Grandy House Group targets stable and sustainable growth. In this context, we place considerable importance onvarious benchmarks that measure the growth potential and earning capacity of net sales and ordinary income. In
specific terms, we are targeting net sales and ordinary income growth of 10% or more.
(3) Medium- and Long-Term Management Strategies
The housing industry continues to confront a wide range of issues in connection with the environment, energy and ashrinking population attributable to the declining birth rate. Grandy House is aiming for sustainable growth by
expanding its development activities to areas adjacent to and surrounding its mainstay north Kanto area of business. In
specific terms, the Company is advancing the following growth strategies.
1) Strengthen core businesses
We are concentrating the allocation of management resources into the real estate sales business in an effort to securesustainable growth. Under this policy, we are working to increase our market share in the detached housing business inthe mainstay north Kanto (Tochigi Prefecture, Ibaraki Prefecture, and Gunma Prefecture) area. At the same time, wehave established a company to oversee business in Chiba Prefecture with the aim of expanding our area of operations
and increasing sales. We have positioned the sale of existing homes as a second mainstay business pillar and areeyeing the expansion of operations from the principal Tochigi Prefecture into areas around north Kanto (Ibaraki
Prefecture and Gunma Prefecture). In this manner, we will increase our business activities in this field.
2) Enhance development capabilities and establish a robust operating platform
In our dominant detached housing sales business, we have continued to distinguish ourselves from competitors byadopting a comprehensive in-house system. By engaging directly in the full range of activities from the purchase ofland through housing land development work to housing design and construction, we have consistently added value inthe sale of detached housing while enhancing quality. This defining feature has in fact served as our wellspring for
growth. In this context, our housing land development capabilities form the core of our business model while
underpinning growth. Accordingly, we are increasing the number of development personnel and placing considerable
weight on education and training to ensure that development staff are given every opportunity to excel. Through thesemeans, we are building a robust operating platform.
(4) Pending Issues
The Grandy House Group is aiming for sustainable growth by further strengthening its core real estate sales business.
Building a stable procurement and sales structure is therefore critical to this task. In an effort to achieve its establishedgoals, the Group is undertaking a variety of initiatives. Moving forward, we will increase the number of employees
focusing mainly on housing land development while securing sales staff, who are capable of engaging in marketing
activities that are deeply rooted in the local community. At the same time, we will provide staff with the necessary
tools to make an immediate impact. Drawing on these initiatives, we will increase our market share in existing areas
and expand activities into the Chiba area where we have established a new operating base.
From a financial perspective, we will continue to stringently manage finished stock in order to improve ourearning capacity and the efficiency of our assets. These efforts are a part of comprehensive measures aimed at further
strengthening our financial position.
(5) Other Matters Important to the Company’s Management
The products and services handled by the Grandy House Group are essentially geared toward the individual customer.
In this regard, there are instances where members of the Board of Directors pursue dealings with the Company. This
includes the purchase and/or construction of homes. In each case, transactions are conducted at the same price andprofit level as those that apply to the Group’s general customer base. Again, this includes the price for houses built forsale and ensures that transactions are conducted at an appropriate level of profit. For other products such as
custom-built homes, the terms and conditions of transactions are based on calculations regarding fair and appropriate
prices as well as formal appraisals. Moreover, transactions are subject to prior approval by the Company’s Board of
Directors.

―9―

4. CONSOLIDATED FINANCIAL STATEMENTS(1) Consolidated Balance Sheets(Thousands of Yen)FY2012(As of March 31, 2012)

FY2013(As of March 31, 2013)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

5,429,022
413,072

5,218,245
394,082

Real estate for sale
Costs on uncompleted construction contracts

5,821,893
7,944

6,171,787
10,159Real estate for sale in process
Merchandise and finished goods

3,483,184
196,056

7,404,313
252,665

Raw materials and supplies
Deferred tax assets

81,906109,368

113,328
124,336

Other
Allowance for doubtful accounts

239,215(3,258)256,258(2,788)15,778,406

19,942,389

4,432,171(1,226,027)

4,663,682(1,324,144)

Buildings and structures, net

3,206,144

3,339,538

Machinery, equipment and vehicles
Accumulated depreciation

16,171(9,580)16,171(11,627)

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

Machinery, equipment and vehicles, net

6,590

4,543

271,469(219,394)

276,085(231,095)

52,07444,9895,938,230
224,892

5,915,880
253,914

Accumulated depreciation(59,448)(99,175)

Lease assets, net

165,443

154,738

Construction in progress

6,431

－

9,374,914

9,459,690

67,05064,062

Investment securities
Long-term loans receivable

15,00041,451

514,882
29,987

Deferred tax assets
Other90,82764,91786,29557,245

Allowance for doubtful accounts(44,812)(36,283)

Total investments and other assets

167,385

652,127

9,609,350

10,175,880

25,387,757

30,118,269

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets

Total property, plant and equipment
Intangible assets
Investments and other assets

Total noncurrent assets
Total assets―10―

(Thousands of Yen)FY2012(As of March 31, 2012)

FY2013(As of March 31, 2013)

Liabilities
Current liabilities
Accounts payable for construction contracts
Short-term loans payable

1,844,310
8,484,630

2,299,933
11,639,900

Current portion of long-term loans payable
Lease obligations

578,262
43,956482,61249,630

Income taxes payable
Provision for warranties for completed construction

460,705
51,215579,31355,433

Other695,275

644,494

12,158,355

15,751,317

1,798,255
146,013

1,828,171
123,134

Provision for retirement benefits
Provision for directors’ retirement benefits

179,679－

221,276
17,241

Other

68,34366,493

Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations

Total noncurrent liabilities
Total liabilities

2,192,290

2,256,316

14,350,646

18,007,633

Net assets
Shareholders’ equity
Capital stock

2,077,500

2,077,500

Capital surplus
Retained earnings

2,205,165
7,106,226

2,205,165
8,179,785

Treasury stock(351,780)(351,814)

Total shareholders’ equity

11,037,110

12,110,636

Total net assets
Total liabilities and net assets―11―

11,037,110

12,110,636

25,387,757

30,118,269

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of Yen)

Net sales
Cost of sales

Fiscal 2012

Fiscal 2013

(From April 1, 2011
to March 31, 2012)(From April 1, 2012
to March 31, 2013)

29,355,644
24,112,298

32,540,755
26,484,807

Gross profit

5,243,345

6,055,947

Selling, general and administrative expenses

3,567,228

3,738,810

Operating income

1,676,117

2,317,137

626
63

900
139

Operations consignment fee
Office work fee

126,317
119,083

161,020
135,062

Other

29,16831,747

Total non-operating income

275,260

328,869

212,275
22,812

214,420
32,198Non-operating income
Interest income
Dividends income

Non-operating expenses
Interest expenses
Commission for syndicate loan
Other

5,007

6,909

240,094

253,527

1,711,283

2,392,479

Gain on sales of noncurrent assets
Gain on reversal of provision for loss on disaster

27,864
9,211－－

Total extraordinary income

37,075－

Total non-operating expenses
Ordinary income
Extraordinary income

Extraordinary loss
Loss on retirement of noncurrent assets

18,92020,251

Impairment loss
Loss on cancellation of lease contracts

52,766－

46,26041

Loss on disaster
Environmental expenses

7,768
－

－
27,399Total extraordinary loss

79,455

93,953

Net income before income taxes

1,668,903

2,298,525

Income taxes-current

758,336

947,629

Income taxes-deferred(30,965)(10,435)

Total income taxes

727,370

937,194

Income before minority interests

941,533

1,361,331

Net income

941,533

1,361,331―12―

(Consolidated Statements of Comprehensive Income)(Thousands of Yen)
Fiscal 2012

Fiscal 2013

(From April 1, 2011
to March 31, 2012)(From April 1, 2012
to March 31, 2013)

Income before minority interests

941,533

1,361,331

Comprehensive income

941,533

1,361,331

941,533－

1,361,331－

Comprehensive income attributable to:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests―13―(3) Consolidated Statements of Changes in Net Assets(Thousands of Yen)
Fiscal 2012

Fiscal 2013

(From April 1, 2011
to March 31, 2012)(From April 1, 2012
to March 31, 2013)

Shareholders’ equity
Capital stock
Balance as of the beginning of the period
Changes of items during the period
Total changes of items during the period
Balance as of the end of the period

2,077,500

2,077,500－－

2,077,500

2,077,500

2,205,165

2,205,165

Capital surplus
Balance as of the beginning of the period
Changes of items during the period
Total changes of items during the period
Balance as of the end of the period－－

2,205,165

2,205,165

6,356,541

7,106,226(191,848)
941,533(287,772)
1,361,331

Retained earnings
Balance as of the beginning of the period
Changes of items during the period
Dividends from surplus
Net income

749,685

1,073,559

Balance as of the end of the period

Total changes of items during the period

7,106,226

8,179,785

Treasury stock
Balance as of the beginning of the period(351,780)(351,780)－(33)

Changes of items during the period
Purchase of treasury stock
Total changes of items during the period
Balance as of the end of the period

－

(33)

(351,780)(351,814)

10,287,425

11,037,110(191,848)
941,533(287,772)
1,361,331

Total shareholders’ equity
Balance as of the beginning of the period
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Total changes of items during the period
Balance as of the end of the period

－

(33)

749,685

1,073,525

11,037,110

12,110,636

10,287,425

11,037,110(191,848)
941,533(287,772)
1,361,331－(33)

Total net assets
Balance as of the beginning of the period
Changes of items during the period
Dividends from surplus
Net income
Purchase of treasury stock
Total changes of items during the period
Balance as of the end of the period―14―749,685

1,073,525

11,037,110

12,110,636

(4) Consolidated Statements of Cash Flows(Thousands of Yen)
Fiscal 2013
(From April 1, 2012
to March 31, 2013)

Fiscal 2012
(From April 1, 2011
to March 31, 2012)
Net cash provided by (used in) operating activities
Net income before income taxes
Depreciation and amortization
Increase (decrease) in provision for retirement
benefits
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 provision for loss on disaster
Interest and dividends income
Interest expenses
Impairment loss
Loss on retirement of noncurrent assets
Loss (gain) on sales of noncurrent 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
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Payments of loans receivableCollection of loans receivable
Other payments
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
Purchase of treasury stock
Cash dividends paid
Repayments of lease obligations
Net cash provided by (used in) financing activities―15―

1,668,903
227,335

2,298,525
220,766

41,43841,597－

17,241

2,348

4,218

(1,054)(8,998)(74,498)(690)
212,275
52,76618,920(27,864)－(1,039)214,420
46,26020,251－(54,234)

19,355

1,336,504
318,038(119,020)
3,601,166
690(205,940)(733,731)
2,662,185(4,331,279)
455,622(52,645)(1,055,703)
1,039(214,353)(830,434)(2,099,451)(185,067)
156,691(8,717)－(3,600)7,304(16,690)
18,753(31,325)(353,103)－(19,192)(499,880)－
5,517(21,641)
22,063(866,236)

43,090988,000(1,334,980)－(191,192)(40,242)(535,324)

3,155,270
943,000(1,008,734)(33)(286,913)(47,678)
2,754,910

Fiscal 2012
(From April 1, 2011
to March 31, 2012)
2,095,534
3,322,987
5,418,522

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―16―(Thousands of Yen)
Fiscal 2013
(From April 1, 2012
to March 31, 2013)(210,776)
5,418,522
5,207,745

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

―17―

(Segment and Other Information)a. Segment 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 theallocation of management resources and assessing performance.
The Grandy House Group is engaged in real estate- and housing-related business activities. The Group’s
principal real estate, product, and service activities include the manufacture of general wood frame housing, whichmainly comprise houses built for sale, and pre-cut materials, sale of construction materials, and the provision of office,parking facility, and other leasing services. The Group puts forward comprehensive plans on an individual real estate,product, and service basis as a part of its business development activities. Taking each of the aforementioned into
consideration, the Grandy House Group’s business is classified into the three Real Estate Sales, Construction Material
Sales, and Real Estate Leasing segments based on real estate, products, and services.
In the Real Estate Sales business, activities include the sale of such properties as new detached housing andexisting homes. In the Construction Material Sales business, the Group engages in the manufacture and sale of precut
materials as well as the sale of construction materials for housing use. In the Real Estate Leasing business, activities
comprise the leasing of office, homes, related properties, and parking facilities.
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 andloss are based on ordinary income. Inter-segment sales or transfers are calculated based on market prices.
3. Information relating to the amounts of net sales, profit and loss, assets, liabilities, and other items by reportablesegment
The fiscal year ended March 31, 2012 (April 1, 2011 to March 31, 2012)(Thousands of Yen)
Reportable Segment
Adjustments(Note 1)

AmountRecorded on
Consolidated
Financial
Statements(Note 2)

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

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

27,012,575－

2,008,389
1,810,962

334,679
112,217

29,355,644
1,923,179－(1,923,179)

29,355,644
－

Total

27,012,575

3,819,351

446,896

31,278,824(1,923,179)

29,355,644

Segment profit

1,393,033

87,204

231,516

1,711,754(471)

1,711,283

Segment assets

15,509,357

1,795,965

4,833,341

22,138,665

3,249,092

25,387,757

Segment liabilities

13,529,574

941,127

142,205

14,612,908

14,350,646

140,598
673
202,900

31,952
29
5,789

54,784－
3,661

227,335
703
212,351(262,261)

－
(76)
(76)

227,335
626
212,275

211,637

590,912－802,549(586,192)

216,357

Other items
Depreciation and amortization
Interest income
Interest expenses
Increase in property, plant andequipment and intangible assets

―18―

Total

The fiscal year ended March 31, 2013 (April 1, 2012 to March 31, 2013)(Thousands of Yen)

Adjustments(Note 1)

Reportable Segment

AmountRecorded on
Consolidated
Financial
Statements(Note 2)

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

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

30,117,269－

2,095,652
2,204,599

327,833
59,31432,540,755
2,263,913－(2,263,913)

32,540,755
－

Total

30,117,269

4,300,252

387,147

34,804,669(2,263,913)

32,540,755

Segment profit

2,078,680

164,725

193,157

2,436,563(44,084)

2,392,479

Segment assets

20,337,501

1,936,179

4,717,452

26,991,132

3,127,137

30,118,269

Segment liabilities

16,533,145

1,623,026

100,194

18,256,367(248,733)

18,007,633

128,704
869
202,590

39,311
31
11,14552,750－684

220,766
900
214,420－－－

220,766
900
214,420384,339

21,203285

405,827－

405,827

Other items
Depreciation and amortization
Interest income
Interest expenses
Increase in property, plant andequipment and intangible assets

Total

Note 1: Details of adjustments are presented as follows.

Segment profit(Thousands of Yen)
Fiscal 2012
Eliminations of inter-segment translation
Total

Fiscal 2013
(471)

(44,084)(471)(44,084)

Segment assets(Thousands of Yen)
Fiscal 2012

Fiscal 2013

Eliminations of inter-segment receivables(261,730)(247,517)

Eliminations of inter-segment unrealized
profit(14,834)(30,952)

Corporate assets

3,525,658

3,405,607

Total

3,249,092

3,127,137

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 2012

Fiscal 2013

Eliminations of inter-segment payables(262,261)(248,733)

Total(262,261)(248,733)―19―

Interest income(Thousands of Yen)
Fiscal 2012

Fiscal 2013

Eliminations of inter-segment transactions

(76)

－

Total

(76)

－

Interest expenses(Thousands of Yen)
Fiscal 2012

Fiscal 2013

Eliminations of inter-segment transactions

(76)

－

Total

(76)

－

Increase in property, plant and equipment and intangible assets(Thousands of Yen)
Fiscal 2012

Fiscal 2013

Eliminations of inter-segment transactions(586,192)

－

Total

(586,192)－

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

b. Related Information
The fiscal year ended March 31, 2012 (April 1, 2011 to March 31, 2012)
1.

Information by product and service(Thousands of Yen)
Real Estate Sales

Sales to outside customers

Construction Material
Sales

Real Estate Leasing

2,008,389

334,679

27,012,575

Total
29,355,644

2. Information by geographic segment(1) Net sales
There are no sales to outside customer other than in Japan. Accordingly, there is no applicable information toreport.
(2) Property, plant and equipment
There are no property, plant and equipment located outside of Japan. Accordingly, there is no applicable
information to report.
3.

Information by principal customer
There is no single outside customer who accounts for 10% or more of the total net sales recorded in the
consolidated statements of income. Accordingly, there is no applicable information to report.

The fiscal year ended March 31, 2013 (April 1, 2012 to March 31, 2013)
1.

Information by product and service(Thousands of Yen)
Real Estate Sales

Sales to outside customers

Construction Material
Sales

Real Estate Leasing

2,095,652

327,833

30,117,269

―20―

Total
32,540,755

2. Information by geographic segment(1) Net sales
There are no sales to outside customer other than in Japan. Accordingly, there is no applicable information toreport.
(2) Property, plant and equipment
There are no property, plant and equipment located outside of Japan. Accordingly, there is no applicable
information to report.
3.

Information by principal customer
There is no single outside customer who accounts for 10% or more of the total net sales recorded in the
consolidated statements of income. Accordingly, there is no applicable information to report.

c. Information concerning Impairment Loss on Noncurrent Assets by Reportable Segment
The fiscal year ended March 31, 2012 (April 1, 2011 to March 31, 2012)(Thousands of Yen)

Impairment loss

Real Estate Sales

Construction
Material Sales

48,586－

Real Estate
Leasing

Total

4,180

Adjustment
AmountTotal－

52,76652,766

The fiscal year ended March 31, 2013 (April 1, 2012 to March 31, 2013)(Thousands of Yen)

Impairment loss

Real Estate Sales

Construction
Material Sales

25,571－

Real Estate
Leasing

Total

20,68946,260Adjustment
AmountTotal－

46,260d. Information concerning the Amount of Goodwill Amortization and the Balance of Unamortized Goodwill by
Reportable Segment
The fiscal year ended March 31, 2012 (April 1, 2011 to March 31, 2012)
Not applicable.
The fiscal year ended March 31, 2013 (April 1, 2012 to March 31, 2013)
Not applicable.
e. Information concerning Gain on Negative Goodwill by Reportable Segment
The fiscal year ended March 31, 2012 (April 1, 2011 to March 31, 2012)
Not applicable.
The fiscal year ended March 31, 2013 (April 1, 2012 to March 31, 2013)
Not applicable.

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