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 2018 (The Fiscal Year Ended March 31, 2018 under Japanese GAAP)
Company Name:
Securities Code:
Representative:

Grandy House Corporation
Stock Exchange Listing:
8999
URL:
Yasuro Hayashi, President
Nobuyasu Takeuchi, Executive Officer Department Manager,
Inquiries:
Corporate Administrative Department
Scheduled date of the Ordinary General Meeting of Shareholders: June 28, 2018
Scheduled date of securities report filing:
June 28, 2018
Scheduled date of dividend payment commencement:
June 29, 2018
Preparation of annual supplementary explanatory materials:
Yes
Annual results briefing held:
Yes (For analysts)

May 7, 2018
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 2018 (April 1, 2017 to March 31, 2018)(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 2018
44,726
1.7
2,695
(0.7)
2,796
(0.3)
1,827
4.8
Fiscal 2017
43,962
5.4
2,715
(1.9)
2,805
(2.0)
1,744
0.7
Note: Comprehensive income
Fiscal 2018: ¥1,815 million (1.6%)
Fiscal 2017: ¥1,786 million (7.0%)
Net Income per
Net Income per
Ordinary Income /Operating Income /Return on Equity
Share
Share (Diluted)
Total Assets
Net Sales
(¥)
(¥)
%
%
%
Fiscal 2018
63.48
62.59
9.8
6.0
6.0
Fiscal 2017
60.61
60.59
10.1
6.6
6.2
Reference: Equity in earnings of affiliates
Fiscal 2018: ¥― million
Fiscal 2017: ¥― million(2) Consolidated Financial Position

Total Assets
Net Assets(¥ million)(¥ million)
March 31, 2018
47,281
19,556
March 31, 2017
45,682
18,121
Reference: Shareholders' equity
Fiscal 2018: ¥19,362 million
Fiscal 2017: ¥17,921 million

Shareholders' Equity Ratio
%
41.0
39.2

Net Assets per Share

Cash Flows fromOperating Activities(¥ million)
2,155(2,885)

Cash Flows from
Financing Activities(¥ million)
(691)
4,140

Cash and Cash Equivalents
at the End of the Period(¥ million)
9,813
8,475

(¥)
671.43622.78(3) Consolidated Cash Flows

Fiscal 2018
Fiscal 2017

Cash Flows from
Investing Activities(¥ million)
(125)
(562)

2. Dividends
Annual Dividend per SharesFiscal 2017
Fiscal 2018
Fiscal 2019 (Forecast)

1Q-End2Q-End3Q-EndPeriodEnd

(¥)
―
―
―

(¥)
0.00
0.00
0.00

(¥)
―
―
―

(¥)
14.00
16.00
16.00

Total
(¥)
14.00
16.00
16.00

Total
Dividends(¥ million)
402
461

Payout Ratio(Consolidated)
%
23.1
25.2
27.5

Ratio of
Dividends to
Net Assets(Consolidated)
%
2.3
2.5

3. Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2018 to March 31, 2019)

Net Sales

Full Fiscal Year(¥ million)
48,000%
7.3(Percentage figures show the year-on-year increase (decrease) for each corresponding period.)
Net Income
Attributable to
Net Income per
Operating Income
Ordinary Income
Owners of the
Share
Parent Company(¥ million)%(¥ million)%(¥ million)
%
(¥)
2,900
7.6
3,000
7.3
1,680 (8.1)
58.26

* 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, 2018as of the period-end (including treasury shares)
March 31, 2018
2) Number of treasury shares
3) Average number of shares issued andFiscal 2018
outstanding for the period

None
None
None
None

30,823,200 shares

March 31, 201730,823,200 shares

1,985,245 shares

March 31, 2017

2,046,245 shares

28,792,288 sharesFiscal 2017

28,776,955 shares

Reference: Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for Fiscal 2018 (April 1, 2017 to March 31, 2018)(1) Non-Consolidated Operating Results

Fiscal 2018
Fiscal 2017

Net Sales(¥ million)
21,175
19,462%8.8
4.6(Percentage figures show the year-on-year increase (decrease).)Ordinary Income
Net Income(¥ million)%(¥ million)
%
2,360
19.2
1,826
25.8
1,979
27.1
1,451
32.1

Net Income per Share(Diluted)

Net Income per Share
(¥)
63.45
50.46

Fiscal 2018
Fiscal 2017

Operating Income(¥ million)
%
1,343
33.8
1,004
13.0

(¥)
62.56
50.44

(2) Non-Consolidated Financial Position
Total Assets
Net Assets(¥ million)(¥ million)
March 31, 2018
26,91016,356
March 31, 201724,452
14,922
Reference: Shareholders' equity March 31, 2018: ¥16,162 million
March 31, 2017: ¥14,722 million

Shareholders' Equity Ratio
%
60.1
60.2

Net Assets per Share(¥)
560.47511.62

2. Non-Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2018 to March 31, 2019)

Full Fiscal YearNet Sales(¥ million)
21,200%0.1(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)
%
(¥)
1,380
2.7
2,380
0.8
1,550 (15.2)
53.75

*

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 assumptions, beliefs, anduncertainties in light of information available to the Company's management as of the publication date. Actual results may
differ materially from forecasts due to a variety of factors. Therefore, the Company does not guarantee the accuracy of
forecasts and other forward-looking statements and its ability to achieve stated targets. Please refer to "1. OVERVIEW OFOPERATING RESULTS (1) Overview of Operating Results for Fiscal 2018" 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 2018 ...................................................................................................... 2(2) Overview of Financial Position for Fiscal 2018 ...................................................................................................... 4(3) Overview of Cash Flows for Fiscal 2018 ................................................................................................................ 4(4) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2018 and Fiscal 2019 ....................... 5
2. BASIC APPROACH TO THE SELECTION OF ACCOUNTING STANDARDS ................................................ 6
3. CONSOLIDATED FINANCIAL STATEMENTS AND IMPORTANT NOTES .................................................... 7(1) Consolidated Balance Sheets ................................................................................................................................... 7(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .............................. 9(Consolidated Statements of Income) ......................................................................................................................9(Consolidated Statements of Comprehensive Income) ..........................................................................................10(3) Consolidated Statements of Changes in Net Assets............................................................................................... 11(4) Consolidated Statements of Cash Flows................................................................................................................ 13(5) Notes to Consolidated Financial Statements ......................................................................................................... 14(Notes on Going Concern Assumptions) ...............................................................................................................14(Segment and Other Information)..........................................................................................................................15―1―

1. OVERVIEW OF OPERATING RESULTS(1) Overview of Operating Results for Fiscal 2018
During the consolidated fiscal year under review, the Japanese economy showed signs of slowly recovering as
positive growth was recorded for eight consecutive quarters, including the fourth quarter (Oct.– Dec.) of this year.
In the housing sector, new housing starts grew steadily due to the interest rate on housing loans continuing toremain at low levels regardless of showing an upward trend in the fall of 2017, as well as the continuation ofvarious support measures to promote home acquisition and an improvement in employment and income
conditions, but competition between businesses has intensified.
Under these circumstances, the Grandy House Group continued making efforts toward expanding andreinforcing business under the basic policy (medium-term business plan) of "continuous growth throughreinforcing 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 made our operations more efficient throughrestructuring our branches; promoting sales of Yotsuba no Mori (literally, Four-leaf Clover Hill) housing lots ofstrategic value (211 lots, Tsukuba City in Ibaraki Prefecture); and bolstering our sales in Mito City and in the area
north of Mito City in Ibaraki Prefecture. Through initiatives such as these, since June 2017 orders received
continued to exceed the level in the same month in the previous fiscal year for the most part, and orders received
for new homes for the full fiscal year reached an all-time high, even though it fell short of our initial target. On
the other hand, up to the third quarter, new home sales were significantly affected by the decrease in the backlogof orders at the beginning of the fiscal year. However, for the full fiscal year, there was only a small decline to alevel basically the same as the previous year's level.
In existing home sales, we supplemented our product inventory and expanded our business in metropolitan
areas. Due to initiatives such as these, orders received continued to rise from the beginning of the fiscal year,
except for in the third quarter, and existing home sales for the full fiscal year slightly exceeded the previous year's
level.
As a result of these initiatives, the Grandy House Group's consolidated results for Fiscal 2018 were as follows.
Net sales were ¥44,726 million, up 1.7% from the previous fiscal year; operating income was ¥2,695 million,
down 0.7% from the previous fiscal year; ordinary income was ¥2,796 million, down 0.3% from the previous
fiscal year; and net income attributable to owners of the parent company totaled ¥1,827 million, up 4.8% from theprevious fiscal year.
Results by business segment are presented as follows.
Real Estate Sales
In the new home sales, we have made the Group's operations more efficient by restructuring the Group's two
branches, in which Ibaraki Grandy House Koga branch was merged into our Kennan branch at the beginning of
the fiscal year. In southern Ibaraki Prefecture, which is one of the key areas for expanding our sales area, welaunched full-scale sales of Yotsuba no Mori housing lots of strategic value (211 lots, Tsukuba City in Ibaraki
Prefecture). The sales have proceeded as nearly as planned. In Tochigi Prefecture, from March 2018 we begansales of GRAND BEAT PARK Kaminokawa housing lots (141 lots, Kaminokawa Town in Tochigi Prefecture), a
large-sized development project, as well as residential land sales to business operators. Meanwhile, we opened
the Ibaraki Grandy House Hitachinaka branch as our new sales base last November to strengthen our operationsin Mito City and in the area north of Mito City in Ibaraki Prefecture. In terms of products, we continue todifferentiate our products from those of our competitors by creating distinctive housing lots with concepts such asa high level of creativity, energy conservation, security and crime prevention for each housing lot as well as
creating added value with our strength in building comfortable urban environments.
Through initiatives such as these, orders received for new homes has exceeded the previous year's level sincelast June and reached a record high, even though it was below our initial target. As a result, new homes sales forthe current fiscal year totaled 1,341, down by 5 on the previous fiscal year, after recovering from a significant
drop that continued until the third quarter due to a decrease in the backlog of orders at the beginning of the fiscal
year.
In existing home sales, we made efforts to enhance product inventory and expand our business for themetropolitan area to expand existing home sales. In terms of product inventories, we worked to reinforce theprocurement of homes with a new goal of 70 completed homes at any time and to increase sales of existing―2―

condominiums in the metropolitan area. In addition, we partially introduced brokered sales in order to promote
both procurement and sales through reinforcing relationships with major brokers. Through initiatives such asthese, orders received continued to rise from the beginning of the fiscal year, except for in the third quarter, andexisting home sales for the consolidated cumulative period under review totaled 138, up 2 on the previous fiscal
year.
As a result of these initiatives, sales in the real estate sales segment increased 2.0% year-on-year to ¥41,492
million. Segment profit was ¥2,485 million, down 0.5% from the previous fiscal year.
Construction Material Sales
In the construction material sales, new housing starts for wooden houses including custom-made houses
began to fall below those of the same month of the previous year from last July. Meanwhile, material wood pricesrose and remained high due to the intensified competition with other companies.
Under such circumstances, the Grandy House Group made efforts such as boosting sales of building
materials/housing equipment other than pre-cut materials, switching sales to our best customers in terms ofearnings, and increasing orders for non-residential buildings. Although there was an increase in orders received
for non-residential buildings, we struggled to increase orders for residential buildings due to the intensifiedcompetition in sales to small and medium sized construction firms, which resulted in giving negative influenceson sales of housing equipment. Additionally, material prices rising and remaining at a high level have had anegative impact on our profits.
As a result of these initiatives, sales in the construction material sales segment decreased 2.0% year-on-yearto ¥2,970 million. Segment profit was ¥147 million, down 0.3% from the previous fiscal year.
Real Estate Leasing
In the real estate leasing, the vacancy rate of office buildings continued to decline in and around Utsunomiya
City, Tochigi Prefecture which is our main market. In the parking lot market, competition remained intense
between parking lots in the vicinity.
In this context, we made efforts to improve the operation rate of existing assets and reduce management
costs. The renting out of the three apartments acquired in connection with our purchase of land for housingdevelopment for the moment contributed to our revenues. Furthermore, our management costs significantly
decreased from the previous fiscal year when a cost of large-scale renovation was recorded, which contributed to
an increase in our revenues.
As a result of these initiatives, sales in the real estate leasing segment increased 1.8% year-on-year to ¥262
million. Segment profit was ¥172 million, up 11.0% from the previous fiscal year.
Outlook
The Japanese economy is forecast to remain on a moderate recovery trend, as it achieved positive growth foreight consecutive quarters.
There has been a favorable environment for home purchasing due to the interest rate on housing loans
remaining at low levels and continued government measures to stimulate home purchasing. As a result, newhousing starts have remained solid and competition between businesses is likely to intensify even more.
Under these circumstances, based on the second medium-term business plan, which was announced today andis effective until the year ending March 31, 2021, we will strive not only to achieve the management targets
included in our previous plan at an early stage at the same time as overcoming the challenges that we faced
during the previous medium-term business plan period, but also to accelerate the growth of our business tofurther improve our corporate value.
Our financial forecast for the period ending March 31, 2019 is now sales of ¥48,000 million (up 7.3%
compared to the same period of the previous year), operating income of ¥2,900 million (up 7.6% compared to thesame period of the previous year), ordinary income of ¥3,000 million (up 7.3% compared to the same period of
the previous year) and net income attributable to owners of the parent company of ¥1,680 million (down 8.1%
compared to the same period of the previous year).

―3―(2) Overview of Financial Position for Fiscal 2018
As of March 31, 2018, total consolidated assets were ¥47,281 million, up ¥1,598 million compared to theprevious consolidated fiscal year. This was due to a slight increase in inventories resulting from our selective andrestrictive approach to purchasing, as we had already secured a certain amount of land stock for the current fiscal
year before its beginning by purchasing large areas of land for lots. In addition, an increase in cash and deposits
because of the progress made in sales and collections also contributed to the result.
Total liabilities grew ¥163 million to ¥27,724 million compared to the previous consolidated fiscal year, as
inventories increased only slightly. Additionally, we switched our fund procurement method to financing bybonds for a part of our loans in order to reduce the burden of interest rate payments and to make the use of funds
more flexible.
Total net assets increased by ¥1,434 million compared to the previous consolidated fiscal year to reach¥19,556 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 2018
Cash and cash equivalents (hereinafter, "cash flows") as of March 31, 2018 increased by ¥1,338 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 ¥9,813 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 ¥2,155 million (a decrease of ¥2,885 million in theprevious fiscal year). This was mainly because net income before income taxes was obtained, while there wasonly a small increase in inventories as described above.
(Cash Flows from Investing Activities)
The decreased cash flow from investing activities was ¥125 million (a decrease of ¥562 million in theprevious fiscal year). This was because government bonds that were deposited as a security deposit to warrant
against housing defects reached redemption and they were switched to a cash deposit and additional deposits
were made for the current fiscal year, and because there were no large investments or returns.
(Cash Flows from Financing Activities)
The decreased cash flow from financing activities was ¥691 million (an increase of ¥4,140 million in theprevious fiscal year). This was due to payments of dividends and the progress made in the repayments of loans.
Additionally, we switched our fund procurement method to financing by bonds for a part of our loans.
Trends in the Group's cash flow-related indices are presented as follows.
Fiscal 2016

Fiscal 2017

41.6
26.4
177.3
0.3

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

Fiscal 2018

39.2
25.9
—
—

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 theperiod-end (after deducting treasury shares).

―4―

41.0
27.5
10.3
7.0

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) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2018 and Fiscal 2019
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 20% (25%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.
Grandy House has declared an annual dividend of ¥16 per share for the fiscal year under review, despite thefact that we were unable to secure the net income forecast for this period based on the above policy. The annual
divided forecast for the year ending March 31, 2019 is ¥16 per share, which will be the same as the dividend forthe current fiscal year.
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. 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.

―6―3. CONSOLIDATED FINANCIAL STATEMENTS AND IMPORTANT NOTES(1) Consolidated Balance Sheets(Thousands of Yen)FY2017(As of March 31, 2017)

FY2018(As of March 31, 2018)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Securities
Real estate for sale
Costs on uncompleted construction contracts

8,475,518

9,813,941

589,066

672,527

499,982–

14,054,910

16,588,298

2,368

2,414

Real estate for sale in process

11,021,975

8,936,229

Merchandise and finished goods

220,154

211,897

Raw materials and supplies

147,599

166,467

Deferred tax assets

117,152

141,601

Other456,190413,250

Allowance for doubtful accounts(4,316)(4,348)35,580,603

36,942,281

5,215,916

5,135,282

Accumulated depreciation(1,780,981)(1,878,573)

Buildings and structures, net

3,434,934

3,256,709

Machinery, equipment and vehicles

47,06753,167

Accumulated depreciation(33,465)(46,992)

Machinery, equipment and vehicles, net

13,602

6,175

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

Tools, furniture and fixtures

316,050

342,790

Accumulated depreciation(249,726)(280,227)

66,32462,563

5,376,457

5,319,659

286,290

136,776(183,628)(67,773)

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

102,661

69,002

8,993,981

8,714,109

64,14066,862

Investment securities

448,642428,336

Long-term loans receivable

16,614

14,859Deferred tax assets

240,664

239,602

Other

357,141

846,788

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

Allowance for doubtful accounts(18,843)(4,901)

Total investments and other assets

1,044,218

1,524,685

10,102,340

10,305,657

Bond issuance costs–

33,388

Total deferred assets–

33,38845,682,944

47,281,326

Total non-current assets
Deferred assets

Total assets―7―

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

FY2018(As of March 31, 2018)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,231,631

3,408,906

Short-term loans payable

20,225,700

19,177,700

495,152

494,513

Current portion of long-term loans payable
Current portion of bonds

21,00021,000

Lease obligations

38,632

24,403

Income taxes payable

410,406

495,419

Provision for warranties for completed construction

57,22358,686

Other635,983

755,677

25,115,729

24,436,306

87,0001,066,000

Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable

1,587,719

1,384,806

Lease obligations

70,30550,099Provision for directors' retirement benefits

132,954

166,279

Net defined benefit liability

508,917571,584

Asset retirement obligations

4,249

4,296

Other

54,28045,483

Total non-current liabilities
Total liabilities

2,445,425

3,288,549

27,561,155

27,724,855

2,077,500

2,077,500

Net assets
Shareholders' equity
Capital stock
Capital surplus

2,205,165

2,223,038

Retained earnings

13,982,262

15,407,196

Treasury shares(351,831)(341,339)

17,913,096

19,366,395

Valuation difference on available-for-sale securities

8,692(3,824)

Total accumulated other comprehensive income

8,692(3,824)

Total shareholders' equity
Accumulated other comprehensive income

Subscription rights to shares
Total net assets
Total liabilities and net assets―8―200,000

193,900

18,121,788

19,556,471

45,682,944

47,281,326

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of Yen)
Fiscal 2017
(From April 1, 2016
to March 31, 2017)

Fiscal 2018
(From April 1, 2017
to March 31, 2018)

Net sales

43,962,733

44,726,118

Cost of sales

36,420,793

37,082,208

Gross profit

7,541,939

7,643,910

Selling, general and administrative expenses

4,826,889

4,948,754

Operating income

2,715,050

2,695,156

Interest income

1,424

1,257

Dividends income

Non-operating income
5,204

6,203

Operations consignment fee

237,660

233,712

Office work fee

158,479

156,426

Other

25,834

46,476

Total non-operating income

428,603444,076

Non-operating expenses
Interest expenses

328,937

328,820

Commission for syndicate loan

5,609

7,738

Other

3,800

6,630

338,346

343,189

2,805,306

2,796,043

Gain on sales of non-current assets

5,829

–

Total extraordinary income

5,829

–

Loss on retirement of non-current assets

30,396

15,888

Impairment loss

232,659

70,25345–

Total extraordinary loss

263,101

86,141

Net income before income taxes

Total non-operating expenses
Ordinary income
Extraordinary income

Extraordinary loss

Loss on cancellation of lease contracts

2,548,034

2,709,901

Income taxes – current

857,424

899,993

Income taxes – deferred(53,592)(17,903)

Total income taxes

803,832

882,089

1,744,202

1,827,811––

1,744,202

1,827,811

Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company―9―

(Consolidated Statements of Comprehensive Income)(Thousands of Yen)
Fiscal 2017
(From April 1, 2016
to March 31, 2017)
Net income

Fiscal 2018
(From April 1, 2017
to March 31, 2018)

1,744,202

1,827,811

Valuation difference on available-for-sale securities

42,767(12,517)

Total other comprehensive income

42,767(12,517)

1,786,969

1,815,294

1,786,969

1,815,294––

Other comprehensive income

Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to non-controllinginterests― 10 ―

(3) Consolidated Statements of Changes in Net Assets
Fiscal 2017 (From April 1, 2016 to March 31, 2017)
Shareholders' equity

Balance as of the beginning of the period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during the period
Dividends from surplus
Net income attributable to owners of parent
company
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

2,077,500

2,205,165

12,551,499
31,883
12,583,383

Total
shareholders'equity(351,831) 16,482,333
31,883(351,831) 16,514,217(345,323)(345,323)

1,744,202

1,744,202—
2,077,500—
2,205,165

1,398,879
13,982,262

Treasuryshares—(351,831)(Thousands of Yen)
Accumulated othercomprehensive income
Subscription
Total
Valuationrights todifference on accumulatedsharesotheravailablecomprehensive
for-saleincomesecurities
Balance as of the beginning of the period
Cumulative effects of changes in accounting policies
Restated balance
Changes of items during the period
Dividends from surplus
Net income attributable to owners of parent
company
Net changes to items other than shareholder equity
Total changes of items during the period
Balance as of the end of the period(34,074)(34,074)

175,000(34,074)(34,074)

175,000

Total net
assets

16,623,258
31,883
16,655,142(345,323)
1,744,202

42,76742,767
8,692

42,76742,767
8,692― 11 ―

24,99924,999200,000

67,767
1,466,646
18,121,788

1,398,879
17,913,096

Fiscal 2018 (From April 1, 2017 to March 31, 2018)
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

2,205,165

13,982,262

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

1,827,811

1,827,811

Retainedearnings

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

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
income8,692
8,692

Subscription
rights toshares200,000

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

(4) Consolidated Statements of Cash Flows(Thousands of Yen)
Fiscal 2017
(From April 1, 2016
to March 31, 2017)
Net cash provided by (used in) operating activities
Net income before income taxes
Depreciation and amortization
Stock compensation expense
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 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
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― 13 ―

Fiscal 2018
(From April 1, 2017
to March 31, 2018)

2,548,034
272,503
24,999232,659

2,709,901
280,971–
70,253

31,97433,325

2,282

1,462

2,293
80,126(6,628)
328,937(5,829)30,396(13,910)62,667(7,460)328,820–
15,888(65,429)(69,990)(5,694,866)(458,298)

177,527

177,274

578,810(1,462,206)
8,919(331,251)(1,100,740)

83,7183,214,622
9,887(306,693)(761,817)(2,885,279)

2,155,999–(487,541)
6,750(20,652)
1,099(56,488)18(17,666)
12,000(562,480)

500,000(94,544)–(23,234)
1,127(514,807)
1,271
–
4,267
(125,919)

4,211,200
805,000(462,904)–(21,000)(1,048,000)
418,300(621,852)
1,000,000(21,000)–

22,265(344,900)(46,804)
4,140,591
692,830
7,782,687
8,475,518(402,281)(39,088)(691,657)
1,338,423
8,475,518
9,813,941

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

― 14 ―

(Segment and Other Information)[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 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, 2017 (April 1, 2016 to March 31, 2017)(Thousands of Yen)
Reportable Segment
Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

40,673,836

3,030,458

258,437–

3,263,997

82,57040,673,836

6,294,456

341,007

Adjustments(Note 1)

AmountRecorded on
Consolidated
Financial
Statements(Note 2)

43,962,733–

43,962,733

3,346,567(3,346,567)–

47,309,300(3,346,567)

43,962,733

Total

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

2,497,353

148,167

155,461

2,800,982

4,323

2,805,306

Segment assets

34,271,665

2,128,917

3,801,304

40,201,887

5,481,056

45,682,944

Segment liabilities

26,204,510

1,665,758

72,64827,942,917(381,762)

27,561,155
272,503

Other items
Depreciation and amortization

172,046

51,251

49,204

272,503–

Interest income

1,412

12

–

1,424

–

1,424

Interest expenses

319,252

9,685–

328,937–

328,937

Increase in property, plant and equipment
and intangible assets

519,043

28,771

1,582

549,397–549,397― 15 ―

The fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)(Thousands of Yen)
Reportable Segment
Adjustments(Note 1)

AmountRecorded on
Consolidated
Financial
Statements(Note 2)

44,726,118–

44,726,118

79,4693,284,972(3,284,972)–

342,468

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

44,726,118

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

41,492,209

2,970,910

262,999–

3,205,503

41,492,209

6,176,413

Total

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

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

189,881

43,622

47,467

280,971–

280,971

Other items
Depreciation and amortization
Interest income

1,248

8

–

1,257

–

1,257

Interest expenses

319,997

8,822–

328,820–

328,820

8,342

3,204

118,323–

118,323

Increase in property, plant and equipment
106,777
and intangible assets
Note 1: Details of adjustments are presented as follows.

Segment profit(Thousands of Yen)
Fiscal 2017

Fiscal 2018

Eliminations of inter-segment transactions
Total

4,323

(9,487)

4,323(9,487)

Segment assets(Thousands of Yen)
Fiscal 2017

Fiscal 2018

Eliminations of inter-segment receivables(379,695)(360,148)

Eliminations of inter-segment unrealized profit(47,095)(52,371)

5,907,847

7,609,824

5,481,056

7,197,304

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 2017
Eliminations of inter-segment payables
Total

Fiscal 2018
(381,762)(362,033)(381,762)(362,033)

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

― 16 ―

[Related Information]
The fiscal year ended March 31, 2017 (April 1, 2016 to March 31, 2017)
1. Information by product and service(Thousands of Yen)
Real Estate Sales
Sales to outside customers

Construction
Material Sales

40,673,836

3,030,458

Real Estate
Leasing258,437

Total
43,962,733

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, 2018 (April 1, 2017 to March 31, 2018)
1. Information by product and service(Thousands of Yen)
Real Estate Sales
Sales to outside customers

Construction
Material Sales

41,492,209

2,970,910

Real Estate
Leasing
262,999

Total
44,726,118

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.

― 17 ―

[Information concerning Impairment Loss on Non-current Assets by Reportable Segment]
The fiscal year ended March 31, 2017 (April 1, 2016 to March 31, 2017)(Thousands of Yen)
Real Estate
Sales
Impairment loss

Construction
Material Sales

143,090–

Real Estate
Leasing

Corporate/
Offset

89,568

Total–

232,659

The fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)(Thousands of Yen)
Real Estate
Sales
Impairment loss

Construction
Material Sales

26,112–

Real Estate
Leasing
44,141

Corporate/
OffsetTotal–

70,253[Information concerning the Amortization Amount of Goodwill and the Unamortized Balance by Reportable
Segment]
The fiscal year ended March 31, 2017 (April 1, 2016 to March 31, 2017)
Not applicable.
The fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
Not applicable.
[Information concerning Gain on Negative Goodwill by Reportable Segment]
The fiscal year ended March 31, 2017 (April 1, 2016 to March 31, 2017)
Not applicable.
The fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018)
Not applicable.

― 18 ―