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 Third Quarter of Fiscal 2018 Ending March 31, 2018 (Japanese GAAP)
Company Name:
Securities Code:
Representative:

Grandy House Corporation
Stock Exchange Listing:
8999
URL:
Hiroyuki Murata, President
Nobuyasu Takeuchi, Executive Officer Department Manager,
Inquiries:
Corporate Administrative Department
Scheduled date of quarterly securities report filing:
February 8, 2018
Scheduled date of dividend payment commencement:―
Preparation of quarterly supplementary explanatory materials:
None
Quarterly results briefing held:
None

February 2, 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 the Third Quarter of the Fiscal Year Ending March 31, 2018
(April 1, 2017 to December 31, 2017)(1) Consolidated Operating Results

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

32,839

(2.4)

1,856

(16.9)

1,933(16.4)

1,283

(9.3)

33,645

9.3

2,233

7.0

2,313

7.0

1,414

3.6

Nine months ended
December 31, 2017
Nine months ended
December 31, 2016
Note: Comprehensive income

Nine months ended December 31, 2017: ¥1,294 million (-11.0%)
Nine months ended December 31, 2016: ¥1,453 million (7.3%)
Net Income per ShareNet Income per Share(Diluted)(¥)(¥)

Nine months ended
December 31, 2017
Nine months ended
December 31, 2016

44.58

44.02

49.16

—

Total Assets(¥ million)
46,80845,682

Net Assets(¥ million)
19,02818,121(2) Consolidated Financial Position

December 31, 2017
March 31, 2017
Reference: Shareholders' equity

Shareholders' Equity Ratio
%
40.2
39.2

Net Assets per Share(¥)
653.49622.78December 31, 2017: ¥18,832 million
March 31, 2017: ¥17,921 million

2. Dividends
1Q-End2Q-End(¥)——

Fiscal 2017
Fiscal 2018
Fiscal 2018 (Forecast)

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

Period-End

Total

(¥)
14.00

(¥)
14.00

16.00

16.00

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

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

Net Sales

Full Fiscal Year(¥ million)
44,000%0.1(Percentage figures show the year-on-year increase (decrease) for each corresponding period.)
Net Income
Attributable toOperating Income
Ordinary Income
Net Income per ShareOwners of the Parent
Company(¥ million)%(¥ million)%(¥ million)
%
(¥)
2,260
(16.8)
2,350(16.2)
1,520(12.9)
52.79

Note: Revisions to the most recently announced financial forecasts in the current quarter: Yes* Explanatory Notes(1) Changes of important subsidiaries during the period(changes in specified subsidiaries resulting in a change in the scope of consolidation): None
Newly included: —Excluded: —(2) Adoption of specific methods for preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and restatements
1) Changes in accounting policies in connection with revision to accounting standards, etc.:
2) Changes in accounting policies other than 1):
3) Changes in accounting estimates:
4) Restatements:(4) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding
December 31,
as of the period-end (including treasury shares) 2017
December 31,
2) Number of treasury shares
3) Average number of shares issued andoutstanding for the period

2017
Nine months
ended December
31, 2017

None
None
None
None

30,823,200 shares

March 31, 201730,823,200 shares

2,005,245 shares

March 31, 2017

2,046,245 shares

28,781,511 shares

Nine months
ended December
31, 2016

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

*

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

Attachment Materials: Table of Contents
1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS.................................................................. 2(1) Explanation regarding Operating Results........................................................................................................... 2(2) Explanation regarding Financial Position .......................................................................................................... 3(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts ....................................... 3
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS ........................................................................ 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 third quarter) ....................................................................................................... 6(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative third 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 and Other Information) ......................................................................................................................8―1―

1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS(1) Explanation regarding Operating Results
During the nine months ended December 31, 2017, the Japanese economy showed signs of slowly recovering
as positive growth was recorded for seven consecutive quarters, including the third quarter (Jul.–Sep.) of thisyear.
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 these days, as well as the continuation of various
support measures to promote home acquisition and an improvement in employment and income conditions, butcompetition 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 have made the Group's operations more
efficient by restructuring the Group's branches at the beginning of this fiscal year. As basically planned, we havepromoted sales of Yotsuba no Mori (literally, Four-leaf Clover Hill) housing lots of strategic value (211 lots,
Tsukuba, Ibaraki Prefecture) in our designated focus area, which stretches from southern Ibaraki Prefecture to
Kashiwa in Chiba Prefecture. In addition, we opened a new branch in Hitachinaka to bolster our sales in northern
Ibaraki Prefecture. Through initiatives such as these, we received orders for the nine months ended December 31,
2017 exceeding the figures in the same period of the previous fiscal year. However, both sales and profits for thenine months ended December 31, 2017 fell below the figures in the same period of the previous fiscal year
because new home sales have not yet rebounded due to the impact of a decrease in the backlog of orders at the
beginning of the fiscal year.
In existing home sales, as a result of our efforts for building up our product inventory and expanding ourbusiness in metropolitan areas, the orders received have recovered for three consecutive quarters until the second
quarter of the fiscal year. However, existing home sales for the third quarter under review decreased due to theimpact of a decrease in orders received for last December.
As a result of these initiatives, the Grandy House Group's consolidated results for the third quarter(cumulative) of Fiscal 2018 were as follows. Net sales were ¥32,839 million, down 2.4% from the same period of
the previous fiscal year; operating income declined to ¥1,856 million, a decrease of 16.9% year-on-year; ordinary
income was ¥1,933 million, a decrease of 16.4% year-on-year; and net income attributable to owners of theparent company totaled ¥1,283 million, a decrease of 9.3% year-on-year.
Results by business segment are presented as follows.
Real Estate Sales
In the new home sales, we have made the Group's operations more efficient by restructuring the Group's two
branches, in which Ibaraki Grandy House Koga branch was merged into our Kennan branch at the beginning of
the fiscal year. In the area between southern Ibaraki Prefecture and Kashiwa in Chiba Prefecture, which is
positioned as the key area for expanding our sales area, we launched full-scale sales of Yotsuba no Mori housing
lots of strategic value (211 lots, Tsukuba in Ibaraki Prefecture) in the fiscal year. The sales have proceeded asnearly as planned. Meanwhile, we opened Ibaraki Grandy House Hitachinaka branch to strengthen our operationsin the area north of Mito in Ibaraki Prefecture last November. In terms of products, we continue to differentiate
our products from those of our competitors by creating distinctive housing lots with concepts such as a high levelof 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 have been on track for recovery compared to the previous term since last June but showed only a slightrecovery in the third quarter under review because sales were favorable in Tochigi Prefecture and Tsukuba in
Ibaraki Prefecture but stagnant in the other areas.
As a result, new home sales for the nine months of the fiscal year resulted in 989 (a decrease by 45 year-onyear) because sales have not yet rebounded due to the impact of 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 the
Metropolitan area to expand existing home sales. In terms of product inventories, we have made efforts forreinforcing the procurement of homes with a new goal of 70 completed homes at any time and an increase insales of existing condominiums in the Metropolitan area. Through initiatives such as these, received orders haveincreased for three consecutive quarters until the second quarter of the fiscal year. However, existing home sales
for the third quarter under review decreased due to the impact of a decrease in received orders for last December.
―2―

As a result, existing home sales for the nine months of the fiscal year resulted in 98 (a decrease by 2 year-onyear).
As a result of these initiatives, sales in the real estate sales segment decreased 2.3% year-on-year to ¥30,439
million. Segment profit declined to ¥1,698 million, down 18.5% from the same period of 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
prices rose and remained high due to the intensified competition with other companies. Under suchcircumstances, 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 of earnings, and increasingorders for non-residential buildings. Although there was an increase in orders received for non-residentialbuildings, we struggled to increase orders for residential buildings due to the intensified competition in sales tosmall and medium sized construction firms, which resulted in giving negative influences on sales of housing
equipment. Meanwhile, material prices rising and remaining at a high level have had a negative impact on our
profits.
As a result of these factors, sales in the construction materials sales segment decreased 3.6% year-on-year to¥2,201 million. Segment profit declined to ¥107 million, down 0.8% from a year earlier.
Real Estate Leasing
In the real estate leasing, the vacancy rate of office buildings continued to decline in and around Utsunomiya,Tochigi Prefecture which is our main market. In the parking lot market, competition remained intense between
parking lots in the vicinity.
In this context, we made efforts to improve the operation rate of existing assets and reduce management
costs. In addition to an improvement in the occupancy rate of leasing buildings, the renting out of the three
apartments acquired in connection with our purchase of land for housing development for the moment
contributed to our revenues. Furthermore, our management costs significantly decreased from the same period of
the previous year when a cost of large-scale renovation was recorded, which contributed to an increase in ourrevenues.
As a result of these factors, sales in the real estate leasing segment increased by 2.8% year-on-year to ¥198
million. Segment profit rose to ¥133 million, up 19.5% year-on-year.
(2) Explanation regarding Financial Position
Total consolidated assets as of the end of the third consolidated quarter were ¥46,808 million, up ¥1,125
million from the previous consolidated fiscal year due to an increase in current assets including real estate forsale.
Total liabilities grew ¥219 million compared with the previous consolidated fiscal year to ¥27,780 million.
This is mainly due to an increase in current liabilities including the acquisition of real estate for sale throughfunding via short-term loans.
Total net assets stood at ¥19,028 million as of December 31, 2017. This represents an increase of ¥906
million from the balance recorded as of March 31, 2017. This is largely due to the acquisition of net income
attributable to owners of the parent company despite the payment of dividends.
(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts
The financial forecasts announced on May 8, 2017 were revised based on our recent financial result trends
etc. For details, please refer to "Notice regarding revision of our financial forecasts (Japanese only)" announced
today.

―3―

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

Third Quarter of FY2018(As of December 31, 2017)

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

8,475,518

8,700,529

589,066

651,358

499,982–

14,054,910

15,391,650

2,368

5,112

Real estate for sale in process

11,021,975

10,606,106

Merchandise and finished goods

220,154

208,849

Real estate for sale
Costs on uncompleted construction contracts

Raw materials and supplies

147,599

188,215

Deferred tax assets

117,152

126,806

Other

456,190536,762

Allowance for doubtful accounts
Total current assets(4,316)(4,392)35,580,603

36,411,000

3,434,934

3,300,115

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

13,602

10,192Tools, furniture and fixtures, net

66,32473,2385,376,457

5,340,452

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

102,661

71,676

8,993,981

8,795,675

64,14069,167

448,642462,913

Investments and other assets
Investment securities
Long-term loans receivable

16,614

15,771

Deferred tax assets

240,664

242,727

Other

357,141

817,043

Allowance for doubtful accounts(18,843)(5,389)Total investments and other assets

1,044,218

1,533,065

10,102,340

10,397,908

45,682,944

46,808,908

Total non-current assets
Total assets―4―

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

Third Quarter of FY2018(As of December 31, 2017)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,231,631

3,140,401

Short-term loans payable

20,225,700

20,732,700

Current portion of long-term loans payable

495,152

511,802

Current portion of bonds

21,00021,000

Lease obligations

38,63225,703

Income taxes payable

410,406

200,560

Provision for warranties for completed construction

57,22356,728

Other635,983

697,092

25,115,729

25,385,987

87,00066,000Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable

1,587,719

1,502,511

Lease obligations

70,30551,647

Provision for directors' retirement benefits

132,954

157,929

Net defined benefit liability

508,917565,576

Asset retirement obligations

4,249

4,284

Other
Total non-current liabilities
Total liabilities

54,28046,9642,445,425

2,394,912

27,561,155

27,780,899

2,077,500

2,077,500

Net assets
Shareholders' equity
Capital stock
Capital surplus

2,205,165

2,217,178

Retained earnings

13,982,262

14,862,391

Treasury shares(351,831)(344,779)

17,913,096

18,812,290

8,692

19,818

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―

8,692

19,818200,000

195,900

18,121,788

19,028,009

45,682,944

46,808,908

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated cumulative third quarter)(Thousands of Yen)
Nine months ended
December 31, 2016
(From April 1, 2016 to
December 31, 2016)

Nine months ended
December 31, 2017
(From April 1, 2017 to
December 31, 2017)

Net sales

33,645,506

32,839,105

Cost of sales

27,793,942

27,243,065

Gross profit

5,851,564

5,596,040

Selling, general and administrative expenses

3,618,122

3,739,075

Operating income

2,233,441

1,856,965

Interest income

1,074

1,043

Dividends income

5,204

6,203

Non-operating income

Operations consignment fee

178,904

176,619

Office work fee

121,046

114,805

Other

19,76941,135

Total non-operating income

325,999

339,807242,389

253,091

3,376

6,072

–

4,531

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

245,766

263,694

2,313,674

1,933,078

Gain on sales of non-current assets

3,440

–

Total extraordinary income

3,440

–

Loss on retirement of non-current assets

20,43912,492

Impairment loss

89,568

26,11245–

Ordinary income
Extraordinary income

Extraordinary loss

Loss on cancellation of lease contracts
Total extraordinary loss

110,053

38,604

Net income before income taxes

2,207,061

1,894,473

788,693

628,057

Income taxes – current
Income taxes – deferred

3,684(16,589)

792,377

611,467

Net income

1,414,683

1,283,006

Net income attributable to owners of the parent company

1,414,683

1,283,006

Total income taxes―6―

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative third quarter)(Thousands of Yen)
Nine months ended
December 31, 2016
(From April 1, 2016
to December 31, 2016)

Nine months ended
December 31, 2017
(From April 1, 2017
to December 31, 2017)

1,414,683

1,283,006

Valuation difference on available-for-sale securities

38,594

11,126

Total other comprehensive income

38,594

11,126

1,453,278

1,294,132

Comprehensive income attributable to owners of the parent
company

1,453,278

1,294,132

Comprehensive income attributable to non-controlling interests––

Net income
Other comprehensive income

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 and Other Information)
Segment Information
I. The nine months ended December 31, 2016 (April 1, 2016 to December 31, 2016)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

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

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

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

31,169,916

2,282,577

193,01333,645,506—

33,645,506—

2,415,179

61,8852,477,064(2,477,064)—

31,169,916
2,083,851

4,697,756
108,391

254,898
111,349

36,122,571
2,303,591(2,477,064)
10,08333,645,506
2,313,674

Total

Notes: 1 Adjustments of segment profit ¥10,083 thousand are eliminations of intersegment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

2. Information concerning the impairment loss of non-current assets and goodwill by reportable segment
In the real estate leasing segment, we implemented a book value reduction in property, plant andequipment down to the recoverable value and recorded the reduction amount in extraordinary loss as
impairment loss. The recorded amount of the impairment loss was 89,568 thousand yen during the ninemonth period ended December 31, 2016.
II. The nine months ended December 31, 2017 (April 1, 2017 to December 31, 2017)
1. Information relating to the amounts of net sales, profit and loss by reportable segment
Reportable Segment

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

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

Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

30,439,245

2,201,511

198,348

32,839,105—

32,839,105—

2,404,264

59,583

2,463,847(2,463,847)—

30,439,245
1,698,485

4,605,775
107,542

257,932
133,031

35,302,953
1,939,059(2,463,847)(5,981)

32,839,105
1,933,078

Total

Notes: 1 Adjustments of segment profit (-¥5,981 thousand) are eliminations of intersegment transactions.
2 Segment profit has been adjusted to ordinary income described in quarterly consolidated statements of income.

2. Information concerning the impairment loss of non-current assets and goodwill by reportable segment
In the real estate leasing segment, we implemented a book value reduction in property, plant andequipment down to the recoverable value and recorded the reduction amount in extraordinary loss as
impairment loss. The recorded amount of the impairment loss was 26,112 thousand yen during the ninemonth period ended December 31, 2017.
―8―