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

Consolidated Financial Report
For the First Quarter of Fiscal 2020 Ending March 31, 2020 (Japanese GAAP)
Company Name:Grandy House Corporation
Stock Exchange Listing:
Securities Code:
8999
URL:
Representative:
Yasuro Hayashi, President
Inquiries:
Nobuyasu Takeuchi, Director & Administration Manager
Scheduled date of quarterly securities report filing:
August 8, 2019
Scheduled date of dividend payment commencement:―
Preparation of quarterly supplementary explanatory materials:
None
Quarterly results briefing held:
None

August 5, 2019
Tokyo Stock Exchange
https://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 the First Quarter of the Fiscal Year Ending March 31, 2020
(April 1, 2019 to June 30, 2019)(1) Consolidated Operating Results

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

10,5502.0

589(16.8)

632(15.1)

420

43.3

10,341

1.4

709

34.7

744

34.2

293

(20.8)

Three months ended
June 30, 2019
Three months ended
June 30, 2018
Note: Comprehensive income

Three months ended June 30, 2019: ¥419 million (49.6%)
Three months ended June 30, 2018: ¥280 million (-22.3%)
Net Income per ShareNet Income per Share(Diluted)(¥)(¥)

Three months ended
June 30, 2019
Three months ended
June 30, 2018

14.58

14.40

10.18

10.01

Total Assets(¥ million)
48,953
46,864

Net Assets(¥ million)
21,024
21,124(2) Consolidated Financial Position

June 30, 2019
March 31, 2019
Reference: Shareholders' equity

Shareholders' Equity Ratio
%
42.6
44.7

Net Assets per Share(¥)
721.91725.35June 30, 2019: ¥20,832 million
March 31, 2019: ¥20,932 million

2. Dividends
1Q-EndAnnual Dividend per Shares
3Q-End
(¥)
(¥)
0.00
—

2Q-End(¥)——

Fiscal 2019
Fiscal 2020
Fiscal 2020 (Forecast)

0.00

—

Period-End

Total

(¥)
18.00

(¥)
18.00

23.00

23.00

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

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

Net Sales

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

%
2.2

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

Note: Revisions to the most recently announced financial forecasts in the current quarter: None* Explanatory Notes(1) Changes of important subsidiaries during the period(changes in specified subsidiaries resulting in a change in the scope of consolidation): None
Newly included: —Excluded: —(2) Adoption of specific methods for preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and restatements
1) Changes in accounting policies in connection with revision to accounting standards, etc.:
2) Changes in accounting policies other than 1):
3) Changes in accounting estimates:
4) Restatements:

None
None
None
None

(4) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding
June 30, 201930,823,200 shares March 31, 201930,823,200 shares
as of the period-end (including treasury shares)June 30, 2019
1,965,245 shares March 31, 2019
1,965,245 shares
2) Number of treasury shares
3) Average number of shares issued andThree months ended
Three months ended
28,857,955 shares
28,837,955 shares
June 30, 2019
June 30, 2018
outstanding for the period*

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

*

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

Attachment Materials: Table of Contents
1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS.................................................................. 2(1) Explanation regarding Operating Results ................................................................................................................ 2(2) Explanation regarding Financial Position ................................................................................................................ 3(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts ............................................ 3
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES................................................. 4(1) Quarterly Consolidated Balance Sheets................................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .............. 6(Quarterly Consolidated Statements of Income)(Consolidated cumulative first quarter) ...................................................................................................................6(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative first quarter) ...................................................................................................................7(3) Notes to Quarterly Consolidated Financial Statements ........................................................................................... 8(Notes on Going Concern Assumptions) .................................................................................................................8(Notes on Significant Changes in the Amount of Shareholders' Equity) .................................................................8(Segment Information) ............................................................................................................................................8(Important subsequent events) .................................................................................................................................9―1―

1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS(1) Explanation regarding Operating Results
During the three months ended June 30, 2019, the Japanese economy was considered to be on a gradual recovery
path, although exports and production showed some softness.
In the housing sector, new housing starts of both custom-made and ready-made detached homes exceeded thosein the same period of the previous fiscal year considerably as favorable conditions for the acquisition of homes
continued with the interest rate on housing loans remaining at low levels, and as a planned consumption tax hikeseemed to trigger an anticipatory move.
Under these circumstances, the Grandy House Group continued to strive to expand and reinforce business underthe basic policy in the second medium-term business plan (from the fiscal year ended March 2019 to the fiscal year
ending March 2021) of "continuous growth through reinforcing the core operation (new homes)" and "expansion ofbusiness through enhancing the stock business."
With regard to new home sales, one of our core operations, we continued to strive to reinforce the organizationsof subsidiaries and boost the sales of strategic large housing lots while strengthening product appeal and expanding
into Saitama Prefecture, among others. In respect of existing home sales, we endeavored to build up inventory toward
the expansion of home sales.
Due to these efforts, both the number of homes sold and sales amounts for the first quarter of Fiscal 2020
increased in new and existing homes on a year-on-year basis, which, however, were not high enough to cover
increases in manufacturing expenses and selling, general and administrative expenses accompanying mainly
investments in human resources toward future business expansion. As a result, operating income and ordinary
income decreased. On the other hand, net income attributable to owners of the parent company increased as opposedto the same period of the previous fiscal year, which had booked an extraordinary loss.
Consequently, the Grady House Group's consolidated results for the first quarter of Fiscal 2020 were as follows.
Net sales were ¥10,550 million, an increase of 2.0% year-on-year; operating income declined to ¥589 million, adecrease of 16.8% year-on-year; ordinary income was ¥632 million, a decrease of 15.1% year-on-year; net income
attributable to owners of the parent company increased to ¥420 million, an increase of 43.3% year-on-year.
Results by business segment are presented as follows.
a. Real Estate Sales
In new housing sales, we conducted personnel changes in board members of subsidiaries April to reinforce theorganization and structure with the aim of revitalizing the subsidiaries that suffered a deviation from the plannedsales numbers in the previous fiscal year. In addition, for sales expansion, we boosted sales promotional activities,
centered on measures to sell out “Yotsuba no Mori” strategic large housing lots (211 lots, Tsukuba in Ibaraki
Prefecture) and GRAND BEAT PARK Kaminokawa (141 lots, Kaminokawamachi, Tochigi Prefecture) at an earlystage. In terms of products, we continued to differentiate our products from those of our competitors by pursuing our"Townscape creation" policy, which gives a theme to each housing lot and harmonized the distinctive appearance ofhomes and the uniform image of the housing lot as well as offering products that excelled in terms of design,functionality, energy-saving and safety.
On the other hand, as for expanding our sales areas, purchases of housing lots reached an immediate targeted
number in Saitama Prefecture, which is planned to make a full-scale contribution to earnings from the second half of
Fiscal 2020. To this end, in April, we set up a sales force in the Saitama Branch (Saitama, Saitama Prefecture) andupgraded it to the Saitama Regional Office, which has started activities to capture orders.
Through these initiatives, the number of new homes sold in the first quarter of Fiscal 2020 reached 316 homes(an increase of eight homes year-on-year).
In existing home sales, we continued making efforts to expand the number of homes sold by enhancing productinventory as we did in the previous fiscal year. Amid intensifying competition in procurement, we strove tostrengthen procurement through measures including expansion and reinforcement of activities in the metropolitan
area and exploration of new areas by setting up a goal of keeping 80 completed homes in inventory at any time
whereby orders received stayed above the level of the same period of the previous fiscal year. Consequently, thenumber of existing homes sold for the first quarter of Fiscal 2020 reached 35 homes (an increase of four homes yearon-year).
As a result of these initiatives, sales in the real estate sales segment increased by 2.9% year-on-year to ¥9,800
million. Segment profit was ¥573 million, a decrease of 13.7% year-on-year.

―2―b. Construction Material Sales
In construction material sales, the number of new housing starts for wooden houses managed to maintain the levelof the same period of the previous fiscal year due to a recovery in owner-occupied homes, etc. despite a decline in thenumber of homes for rent. Wood material prices remained almost unchanged on a year-on-year basis.
Under these circumstances, the Grandy House Group made efforts to expand receiving orders for building
materials and equipment in addition to pre-cut materials, which are our core product. Although we generally achieved
the sales plan for the first quarter of Fiscal 2020, which included a 10-day holiday period, segment profit decreased
due to the occurrence of an uncollectable account receivable in addition to an increase in personnel costs
accompanying the staffing reinforcement that had been implemented since the fourth quarter of the previous fiscal
year.
As a result of these factors, sales in the construction materials sales segment decreased by 9.2% year-on-year to¥686 million. Segment profit was ¥22 million, a decrease of 52.8% year-on-year.
c. Real Estate Leasing
In the real estate leasing, more stores were opened in or relocated to the city center in the office building market
in and around Utsunomiya, which is our main market, leading to an improvement in the vacancy rate. In the parking
lot market, competition remained intense between parking lots in the vicinity.
Under such circumstances, the Grandy House Group endeavored to improve the operation rate of existing assets
and reducing management costs. Consequently, sales in the real estate leasing segment for the first quarter of Fiscal
2020 were ¥63 million, an increase of 0.6% year-on-year, and segment profit was ¥41 million, a decrease of 4.1%
year-on-year, mainly to the occurrence of expenses for renovating properties for leasing.
(2) Explanation regarding Financial Position
As of the end of the first quarter of Fiscal 2020, total consolidated assets rose to ¥48,953 million, an increase of¥2,088 million, compared to the end of the previous consolidated fiscal year. This was due to an increase in current
assets caused primarily by the procurement of large housing lots while we were attempting to expand real estate sales
business.
Liabilities increased to ¥27,928 million, an increase of ¥2,188 million from the end of the previous consolidated
fiscal year, due to the procuring of funds for the acquiring of housing lots, as mentioned above, through short-termloans payable. We continued in the current fiscal year as well to switch our fund procurement method to financing
by bonds for part of our loans in order to reduce the burden of interest payments and to flexibly use funds.
Total net assets stood at ¥21,024 million as of June 30, 2019, down ¥99 million compared with the end of theprevious fiscal year. After accounting for the acquisition of net income attributable to owners of the parent company,
this decrease was largely due to the payment of dividends.
(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts
On July 8, 2019, the Grandy House announced its decision to acquire shares in PLAZA HOUSE INC. and
WELCOME HOUSE INC. On July 19, 2019, we acquired their shares and made both companies our subsidiaries as
per the announced plan. At this moment, we consider the impact of these acquisitions on the financial forecast for
Fiscal 2020 (announced on May 7, 2019) to be immaterial.

―3―2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES(1) Quarterly Consolidated Balance Sheets(Thousands of Yen)FY2019(As of March 31, 2019)

First Quarter of FY2020(As of June 30, 2019)

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

10,001,725

10,047,844

547,282

560,351

17,322,784

16,493,771

7,244

5,600

7,062,704

9,902,796

Merchandise and finished goods

244,048

240,029

Raw materials and supplies

128,188

115,549

Other

816,802867,001

Allowance for doubtful accounts(3,305)(4,095)36,127,474

38,228,849

3,201,619

3,189,418

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

4,171

5,262

Tools, furniture and fixtures, net

68,52367,501

Land

5,576,884

5,600,663

Leased assets, net

80,45678,241

Construction in progress

1,011

–

8,932,666

8,941,087

80,077

74,158Investment securities

363,031361,455

Long-term loans receivable

13,701

13,407

Deferred tax assets

413,834

389,443

Other

897,508

910,046

Allowance for doubtful accounts(1,030)(9,131)

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

Total investments and other assets
Total non-current assets

1,687,045

1,665,222

10,699,789

10,680,468

Deferred assets
Bond issuance costs

37,51244,145

Total deferred assets

37,51244,14546,864,776

48,953,462

Total assets―4―

(Thousands of Yen)FY2019(As of March 31, 2019)

First Quarter of FY2020(As of June 30, 2019)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,132,890

3,469,847

Short-term loans payable

17,324,800

19,061,200

Current portion of long-term loans payable

503,345368,845

Current portion of bonds

21,00021,000

Lease obligations

28,366

28,834

Income taxes payable

544,514132,281

Provision for warranties for completed construction

85,85382,121

Other

758,230

1,076,383

22,398,999

24,240,513

1,545,000

1,834,500

Long-term loans payable

881,461

899,264

Lease obligations

58,582

55,900

Provision for directors' retirement benefits

168,654

176,791

Net defined benefit liability

629,972

660,856

Asset retirement obligations

12,227

12,244

Other

45,73048,713

Total current liabilities
Non-current liabilities
Bonds payable

Total non-current liabilities
Total liabilities

3,341,627

3,688,270

25,740,627

27,928,783

2,077,500

2,077,500

Net assets
Shareholders' equity
Capital stock
Capital surplus

2,228,898

2,228,898

Retained earnings

17,011,385

16,912,610

Treasury shares(337,899)(337,899)

20,979,883

20,881,109(47,634)(48,330)

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets―5―(47,634)(48,330)

191,900

191,900

21,124,148

21,024,678

46,864,776

48,953,462

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated cumulative first quarter)(Thousands of Yen)
Three months ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

Three months ended
June 30, 2019
(From April 1, 2019
to June 30, 2019)

Net sales

10,341,270

10,550,042

Cost of sales

8,398,019

8,678,606

Gross profit

1,943,250

1,871,435

Selling, general and administrative expenses

1,234,066

1,281,578

709,183

589,856

Operating income
Non-operating income
Interest income

197

193

Dividends income

2,953

2,953

Operations consignment fee

58,57457,926

Office work fee

36,50038,022

Other

10,3383,290

Total non-operating income

108,564

102,386

69,356

55,686

Non-operating expenses
Interest expenses
Commission for syndicate loan

1,666

1,666

Other

2,382

2,695

Total non-operating expenses

73,40460,048744,343

632,194

Loss on retirement of non-current assets

5,925

4,872

Loss on cancellation of lease contracts

439–

Directors' retirement benefits

300,000–

Ordinary income
Extraordinary loss

Total extraordinary loss

306,365

4,872

Net income before income taxes

437,978

627,322

Income taxes – current

118,748

181,958

Income taxes – deferred

25,594

24,695

Total income taxes

144,342

206,653

Net income

293,635

420,668

Net income attributable to owners of the parent company

293,635

420,668―6―

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative first quarter)(Thousands of Yen)

Net income

Three months ended
June 30, 2018
(From April 1, 2018
to June 30, 2018)

Three months ended
June 30, 2019
(From April 1, 2019
to June 30, 2019)

293,635

420,668(12,864)(695)

Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income(12,864)(695)

280,770419,973

Comprehensive income attributable to owners of the parent
company

280,770419,973

Comprehensive income attributable to non-controlling interests––

Comprehensive income
Comprehensive income attributable to:―7―(3) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.
(Notes on Significant Changes in the Amount of Shareholders' Equity)
Not applicable.
(Segment Information)
I. The three months ended June 30, 2018 (April 1, 2018 to June 30, 2018)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

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

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

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

9,522,175

755,780

63,314

10,341,270–

10,341,270–

789,868

20,748810,617(810,617)–

9,522,175
664,374

1,545,649
46,66484,062
42,991

11,151,887
754,030(810,617)(9,686)

10,341,270
744,343

Total

Notes: 1 Adjustments of segment profit (-¥9,686 thousand) are eliminations of inter-segment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

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

II. The three months ended June 30, 2019 (April 1, 2019 to June 30, 2019)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

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

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

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

9,800,186

686,172

63,683

10,550,042–

10,550,042–

819,404

21,221

840,626(840,626)–

9,800,186
573,653

1,505,577
22,04484,90541,244

11,390,669
636,942(840,626)(4,748)10,550,042
632,194

Total

Notes: 1 Adjustments of segment profit (-¥4,748 thousand) are eliminations of inter-segment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

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

―8―(Important subsequent events)
Business combinations through acquisition
The Grandy House resolved to acquire all shares in PLAZA HOUSE INC. and WELCOME HOUSE
INC. to make them subsidiaries at the board of directors meeting held on July 8, 2019, as described below,
and entered into a share transfer agreement effective the same day. Subsequently, we acquired all shares inboth companies on July 19, 2019.
(1) Outline of business combinations
a. Names of acquired companies and their lines of business
Name of acquired company: PLAZA HOUSE INC.
Line of business: Real estate trading and brokerage
Name of acquired company: WELCOME HOUSE INC.
Line of business: Real estate trading and brokerageb. Main reasons for implementing business combinations
PLAZA HOUSE INC. and WELCOME HOUSE INC. are engaged in real estate trading and brokerage.
Their sales area is the district along the railway Denentoshi Line, centered on Kawasaki in Kanagawa
Prefecture. Going forward, both companies are expected to grow further through the reinforcement ofprocurement and sales, and the expansion of the detached home business in their sales area throughcollaboration with the Grandy House. Furthermore, we considered that making both companies
subsidiaries would allow us to expand into Kanagawa Prefecture, which is a new market for us, thereby
accelerating the Grandy House Group's business expansion. Thus, we came to the conclusion that wewill acquire their shares.
c. Date of business combinations
July 19, 2019
d. Legal format for business combinations
Acquisition of shares with cash as consideratione. Names of companies after business combinations
Unchangedf. Rate of voting rights acquired
100%
g. Main grounds for deciding to acquire companies
The Grandy House acquired the shares with cash as consideration.
(2) Breakdown of acquisition costs and considerations of acquired companies
PLAZA HOUSE INC.
Acquisition consideration
Acquisition costCash¥2,287,200,000¥2,287,200,000

Cash¥32,000,000¥32,000,000

WELCOME HOUSE INC.
Acquisition consideration
Acquisition cost(3) Amounts, reasons for occurrence, amortization methods and amortization periods of resultant goodwill
They are not confirmed yet at this moment.
(4) Amounts of assets received and liabilities assumed on the date of business combinations and a roughbreakdown
They are not confirmed yet at this moment.

―9―