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 2017 Ending March 31, 2017 (Japanese GAAP)
Company Name:Grandy House Corporation
Stock Exchange Listing:
Securities Code:
8999
URL:
Representative:
Hiroyuki Murata, President
Inquiries:
Atsuo Saito, Senior Managing Director
Scheduled date of quarterly securities report filing:
February 9, 2017
Scheduled date of dividend payment commencement:―
Preparation of quarterly supplementary explanatory materials:
None
Quarterly results briefing held:
None

February 6, 2017
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, 2017
(April 1, 2016 to December 31, 2016)(1) Consolidated Operating Results
Net Sales(Percentage figures show the year-on-year increase (decrease).)Net Income Attributableto Owners of the Parent
Operating Income
Ordinary Income
Company(¥ million)%(¥ million)%(¥ million)%(¥ million)%

33,645

9.3

2,233

7.0

2,313

7.0

1,414

3.6

30,785

13.8

2,086

29.3

2,162

28.3

1,365

32.1

Nine months ended
December 31, 2016
Nine months ended
December 31, 2015
Note: Comprehensive Income

Nine months ended December 31, 2016: ¥1,453 million (7.3%)
Nine months ended December 31, 2015: ¥1,354 million (29.9%)
Net Income per ShareNet Income per Share(Diluted)(¥)(¥)

Nine months ended
December 31, 2016
Nine months ended
December 31, 2015

49.16

—

47.44

—

Total Assets(¥ million)
44,99639,545Net Assets(¥ million)
17,788
16,623(2) Consolidated Financial Position

December 31, 2016
March 31, 2016
Reference: Shareholders' equity

Shareholders' Equity Ratio
%
39.1
41.6

Net Assets per Share(¥)
611.19571.58December 31, 2016: ¥17,588 million
March 31, 2016: ¥16,448 million

2. Dividends
1Q-End2Q-End(¥)——

Fiscal 2016
Fiscal 2017
Fiscal 2017 (Forecast)

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

Period-End

Total

(¥)
12.00

(¥)
12.00

14.00

14.00

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

3. Consolidated Financial Forecasts for Fiscal 2017 (April 1, 2016 to March 31, 2017)

Net Sales

Full Fiscal Year(¥ million)
45,000%
7.9(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)
%
(¥)
3,150
13.8
3,250
13.5
1,970
13.7
68.46

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:(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) 2016
December 31,
2) Number of treasury shares
3) Average number of shares issued andoutstanding for the period

2016
Nine months
ended December
31, 2016

Yes
None
None
None

30,823,200 shares

March 31, 2016

30,823,200 shares

2,046,245 shares

March 31, 2016

2,046,245 shares

28,776,955 shares

Nine months
ended December
31, 2015

28,776,955 shares*

Disclosure concerning the implementation status of quarterly review proceduresThis Quarterly Consolidated Financial Report is exempt from the quarterly review procedures required by the Financial
Instruments and Exchange Act of Japan. At the time of this report's disclosure, the quarterly review process for quarterly
consolidated financial statements under the Financial Instruments and Exchange Act has not been completed.

*

Explanation concerning the appropriate use of forecasts and other special instructions
The forecast data presented in this report are based on currently available information and contain a significant number of
uncertainties. Actual results may differ from forecast data due to changes in business conditions.

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. MATTERS CONCERNING SUMMARY INFORMATION (Notes) .................................................................... 4(1) Changes of Important Subsidiaries during the Period ............................................................................................. 4(2) Adoption of Specific Methods for Preparation of the Quarterly Consolidated Financial Statements ..................... 4(3) Changes in Accounting Policies, Accounting Estimates, and Restatements ........................................................... 4
3. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS ........................................................................ 5(1) Quarterly Consolidated Balance Sheets................................................................................................................... 5(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .............. 7(Quarterly Consolidated Statements of Income) .....................................................................................................7(Consolidated cumulative third quarter) .............................................................................................................. 7(Quarterly Consolidated Statements of Comprehensive Income)............................................................................8(Consolidated cumulative third quarter) .............................................................................................................. 8(3) Notes to Quarterly Consolidated Financial Statements ........................................................................................... 9(Notes on Going Concern Assumptions) .................................................................................................................9(Notes on Significant Changes in the Amount of Shareholders' Equity) .................................................................9(Segment and Other Information)............................................................................................................................9―1―

1. QUALITATIVE INFORMATION ON FINANCIAL STATEMENTS(1) Explanation regarding Operating Results
During the nine months ended December 31, 2016, although some areas of weakness remain, the Japanese
economy presented higher expectations for its sustained recovery as positive growth was recorded for threeconsecutive quarters, including the previous quarter, and stock prices recovered the level at the beginning of year
along with the reversal to the weakening of the Japanese yen. However, uncertainty over the economic outlook
remained including in terms of policies the new U.S. administration is expected to adopt after the inaugurationand their effects on the global economy.
In the housing sector, the favorable environment for house buying continued due to interest rate on housing
loans remaining at record low levels despite some signs of rising rates, as well as improvement in employment
and income conditions and the continuation of various support measures to promote house buying. As a result,
new housing starts grew steadily.
Under these circumstances, the Grandy House Group positioned the consolidated fiscal year under review,which is the second year of the three-year medium-term business plan (drawn up in 2015), as an important year
to achieve management targets in the final year, and continued to strive to expand and reinforce business underthe basic policy of "continuous growth through reinforcing the core operation (new homes)" and "expansion ofbusiness through enhancement of the stock business."
With regard to new home sales, one of our core operations, we launched in December 2016 "Yotsuba noMori" (literally, "Four-leaf Clover Hill") housing lots (Tsukuba City, Ibaraki Prefecture), consisting of a total of
211 lots, the largest housing lot development ever by our group, in our designated focus area, which stretchesfrom southern Ibaraki Prefecture to Kashiwa City in Chiba Prefecture. Prior to the launch, we opened the
Tsukuba Branch in November 2016 to promote our sales in and around Tsukuba City including the housing lot
above. In terms of our efforts to improve our market share, we worked to enhance the quality and attractivenessof our products, including development of energy generating/saving houses, as well as to cultivate existing
markets more extensively by utilizing "Grandy Plaza" as our hubs for information dissemination and locations forholding various events. As a result of these efforts, new home sales for the nine months ended December 31,
2016 reached a record high of 1,034.
In existing home sales, we continued to expand our sales by building up inventory of products. In addition,
the branch in Setagaya Ward, Tokyo, opened in March 2016 with the aim of expanding our sales in the
Metropolitan area, started to contribute to business performance. As a result of these initiatives, for the ninemonths ended December 31, 2016, existing home sales increased by 13 from the same period of the previous year
to 100.
As a result of these initiatives, the Group's consolidated results for the third quarter (cumulative) of Fiscal
2017 were as follows. Net sales were ¥33,645 million, up 9.3% from the same period of the previous fiscal year;
operating income rose to ¥2,233 million, an increase of 7.0% year-on-year; ordinary income was ¥2,313 million,
an increase of 7.0% year-on-year; and net income attributable to owners of the parent company totaled ¥1,414
million, an increase of 3.6% year-on-year.
Results by business segment are presented as follows.
Real Estate Sales
In the new home sales business, we worked to expand our sales areas and to improve our market share. With
respect to expansion of our sales areas, we made efforts to expand our house products in terms of both quantityand quality in our designated key area between southern Ibaraki Prefecture and Kashiwa City in Chiba
Prefecture. In December 2016, we started selling 10 lots prior to the official launch of "Yotsuba no Mori" (211lots, Tsukuba City in Ibaraki Prefecture), the largest-scale subdivisions in housing lots in the history of our group.
Having realized the participation of Yamamoto Hori Architects (Shibuya Ward, Tokyo), an architect group
distinguished for its work starting with concept creation, the housing lots, consisting of four blocks with different
concepts, propose a functional and open townscape without utility poles (cables buried underground) andprovided with pedestrian paths and segregated bikeways, as well as a secure and safe living environment by
equipping all houses with seismic control structures as standard. Furthermore, before starting to sell the housing
lots, we worked to cover the breadth of our focus areas, opening the Tsukuba Branch (Tsukuba City, Ibaraki
Prefecture) in November 2016 to enhance our sales in and around Tsukuba City including "Yotsuba no Mori."With respect to our efforts to improve our market share, while we communicated the latest information
through events based at our "Grandy Plaza" showrooms such as "Town Openings" of new subdivisions inhousing lots, we also worked to cultivate existing markets more extensively by holding various events such as"Whole Townscape Viewing Tour" and the public recording of a TV program (Grandy Ouchi Gohan (Home―2―

made Meals): Tochigi Television) sponsored by our company. In terms of products, we developed houseproducts with the concept of energy generation/saving as well as comfortable lifestyles, as can be seen in ourefforts to increase the ratio of houses equipped with solar power generation systems, in addition to the proposals
we have made to our existing customers. As a result, new home sales for the nine months ended December 31,
2016 reached a record high of 1,034 (increase of 95 year-on-year).
In existing home sales, under our policy of enhancement of the stock business, we continued our efforts tobuild up sufficient inventory (over 100 homes at any time, of which over 60 are completed) to increase thequantity of home sales and to expand our sales areas. With the contribution made by the establishment of a new
branch (Setagaya Ward, Tokyo) in March 2016 targeting the Metropolitan area (Tokyo, and Saitama, Chiba andKanagawa Prefectures), our property inventory as of December 31, 2016 was 111 homes (up 10 homes year-onyear), exceeding planned 100 homes for two consecutive quarters. We are now completing construction of robust
purchase and sales structures. As a result of our efforts, existing home sales for the nine months ended December
31, 2016 rose to 100, an increase of 13 from the same period of the previous fiscal year.
As a result of these initiatives, sales in the real estate sales segment increased 9.8% year-on-year to ¥31,169
million. Segment profit rose to ¥2,083 million, up 8.3% from the same period of the previous fiscal year.
Construction Material Sales
In the construction material sales segment, new housing starts for wooden houses increased year-on-year for
twelve consecutive months up to December, and demand continued to grow steadily. Meanwhile, the wood prices
began rising affected by factors such as more concerns for tightening supply due to strong construction demand
as well as the weakening of the Japanese yen. Under such circumstances, though almost full utilization of
production capacity continued to be a restraining factor for sales expansion of our core product, pre-cut materials,
we recorded increase in net sales thanks to the sales growth of housing equipment and construction materials
other than pre-cut materials. On the other hand, segment profit declined due to tough competition and risingmaterial costs.
As a result of these factors, sales in the construction materials sales segment increased 4.0% year-on-year to¥2,282 million. Segment profit rose to ¥108 million, down 22.9% from a year earlier.
Real Estate Leasing
In the real estate leasing segment, demand for prime properties with relatively new facilities such as recently
built properties rose in the office market in and around Utsunomiya City, Tochigi Prefecture, which is our mainmarket, resulting in continuing low level of inventory, mainly of larger offices. In the parking lot market, weobserved occasional cases of price decreases in some areas where competition remained tough between parking
lots in the vicinity.
Under these circumstances, sales decreased as a result of our having sold one pay-by-the-hour parking lot(Mito City, Ibaraki Prefecture) during the last period while not making investment in new managed assets.
Segment profit also declined due to the decreased sales as well as an increase in administrative costs that we had
incurred in the course of carrying out major maintenance work on tenant buildings.
As a result of these factors, sales in the real estate leasing segment decreased by 1.7% year-on-year to ¥193
million. Segment profit declined to ¥111 million, down 13.7% year-on-year.
(2) Explanation regarding Financial Position
Total consolidated assets as of December 31, 2016 were ¥44,996 million, up ¥5,451 million from theprevious consolidated fiscal year, due mainly to an increase in current assets. This was chiefly due to an increasein cash deposits, as well as an increase in inventories owing mainly to the purchase, development andconstruction of property for sale.
Total liabilities increased by ¥4,286 million to ¥27,208 million. This is mainly due to an increase in shortterm loans payable as a result of increased inventories.
Total net assets stood at ¥17,788 million as of December 31, 2016. This represents an increase of ¥1,164
million from the balance recorded as of March 31, 2016. After accounting for the payment of dividends, thisincrease was largely due to the acquisition of net income attributable to owners of the parent company.
(3) Explanation regarding Future Prospects including Consolidated Financial Forecasts
There is no change to financial forecasts announced on May 9, 2016.
―3―

2. MATTERS CONCERNING SUMMARY INFORMATION (Notes)(1) Changes of Important Subsidiaries during the Period
Not applicable.
(2) Adoption of Specific Methods for Preparation of the Quarterly Consolidated Financial Statements
Not applicable.
(3) Changes in Accounting Policies, Accounting Estimates, and Restatements(Changes in accounting policies)(Application of "Revised Implementation Guidance on Recoverability of Deferred Tax Assets")
We have applied "Revised Implementation Guidance on Recoverability of Deferred Tax Assets" (ASBJ
Guidance No. 26, March 28, 2016) (hereinafter, the "Recoverability Implementation Guidance") from the firstquarter ended June 30, 2016 and partially revised the accounting method of recoverability of deferred tax assets.
The Recoverability Implementation Guidance has been applied in accordance with the transitional treatment
set forth in Article 49-4 of the Recoverability Implementation Guidance. The differences between (i) theamounts of deferred tax assets and deferred tax liabilities when provisions applicable from paragraphs 1 to 3 ofArticle 49-3 of the Recoverability Implementation Guidance were applied as of April 1, 2016, and (ii) theamounts of deferred tax assets and deferred tax liabilities at the end of the fiscal year ended March 31, 2016,
were added to Retained Earnings as of April 1, 2016.
As a result, Deferred Tax Assets (investments and other assets) and Retained Earnings increased by¥31,883 thousand as of April 1, 2016.
(Application of Practical Solution on a change in depreciation method due to Tax Reform 2016)
Pursuant to the revised Corporation Tax Law, we have applied "Practical Solution on a change indepreciation method due to Tax Reform 2016" (Practical Issues Task Force No. 32, June 17, 2016) starting in
the consolidated first quarter under review. Accordingly, we have changed the depreciation method applied tostructures which were acquired on or later than April 1, 2016 from the declining balance method to thestraight line method.
As a result, the operating income, ordinary income, and net income before income taxes have eachincreased by ¥1,067 thousand.

―4―3. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS(1) Quarterly Consolidated Balance Sheets(Thousands of Yen)FY2016(As of March 31, 2016)

Third Quarter of FY2017(As of December 31, 2016)

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

7,789,687

8,416,001

523,636580,378–

499,977

11,423,421

10,689,288

10,5396,742

Real estate for sale in process

7,996,211

13,882,533

Merchandise and finished goods

206,665

205,606

Real estate for sale
Costs on uncompleted construction contracts

Raw materials and supplies

115,304

141,353

Deferred tax assets

130,226

99,531

Other

955,924

439,174

Allowance for doubtful accounts(3,588)(5,059)29,148,028

34,955,527

3,123,508

3,066,301

Machinery, equipment and vehicles, net

11,457

17,276

Tools, furniture and fixtures, net

56,69660,2085,599,701

5,510,221

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

Land
Leased assets, net

76,55992,427

Construction in progress

148,441

281,468

9,016,365

9,027,905

66,44766,753

Investment securities

889,407443,218

Long-term loans receivable

20,446

19,624

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

Deferred tax assets

160,847

202,836

Other

260,837

301,629

Allowance for doubtful accounts(17,279)(21,075)

Total investments and other assets
Total non-current assets
Total assets―5―

1,314,260

946,233

10,397,072

10,040,892

39,545,100

44,996,420

(Thousands of Yen)FY2016(As of March 31, 2016)

Third Quarter of FY2017(As of December 31, 2016)

Liabilities
Current liabilities
Accounts payable for construction contracts

3,054,103

3,179,162

Short-term loans payable

16,014,500

19,949,400

Current portion of long-term loans payable

382,592

485,473

Current portion of bonds

21,00021,000

Lease obligations

41,21440,446

Income taxes payable

566,028

270,661

Provision for warranties for completed construction

54,94057,449Other694,477

823,449

20,828,856

24,827,042

108,000

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

1,358,183

1,560,683

Lease obligations

39,13958,112

Provision for directors' retirement benefits

100,979

124,804

Net defined benefit liability

428,790

491,404

Asset retirement obligations

4,203

4,237

Other
Total non-current liabilities
Total liabilities

53,69055,0382,092,985

2,381,281

22,921,841

27,208,323

2,077,500

2,077,500

Net assets
Shareholders' equity
Capital stock
Capital surplus

2,205,165

2,205,165

Retained earnings

12,551,499

13,652,743

Treasury shares
Total shareholders' equity(351,831)(351,831)

16,482,333

17,583,577

Accumulated other comprehensive income
Valuation difference on available-for-sale securities(34,074)

4,520

Total accumulated other comprehensive income(34,074)

4,520

175,000

200,000

16,623,258

17,788,097

39,545,100

44,996,420

Subscription rights to shares
Total net assets
Total liabilities and net assets―6―

(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, 2015
(From April 1, 2015 to
December 31, 2015)

Nine months ended
December 31, 2016
(From April 1, 2016 to
December 31, 2016)

Net sales

30,785,492

33,645,506

Cost of sales

25,360,315

27,793,942

Gross profit

5,425,177

5,851,564

Selling, general and administrative expenses

3,338,543

3,618,122

Operating income

2,086,633

2,233,441

Interest income

1,237

1,074

Dividends income

5,205

5,204

Non-operating income

Operations consignment fee

167,666

178,904

Office work fee

109,232

121,046

Other

17,172

19,769Total non-operating income

300,514

325,999

Non-operating expenses
222,950

242,389

Commission for syndicate loan

Interest expenses

1,548

3,376

Total non-operating expenses

224,498

245,766

2,162,649

2,313,674

Gain on sales of non-current assets

–

3,440

Total extraordinary income

–

3,440

6,871

20,439Ordinary income
Extraordinary income

Extraordinary loss
Loss on retirement of non-current assets
Impairment loss
Loss on cancellation of lease contracts
Total extraordinary loss
Net income before income taxes–

89,568

181

45

7,052

110,053

2,155,596

2,207,061

Income taxes – current

802,634

788,693

Income taxes – deferred(12,181)

3,684

Total income taxes

790,452

792,377

Net income

1,365,143

1,414,683

Net income attributable to owners of the parent company

1,365,143

1,414,683―7―

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated cumulative third quarter)(Thousands of Yen)
Nine months ended
December 31, 2015
(From April 1, 2015
to December 31, 2015)
Net income

Nine months ended
December 31, 2016
(From April 1, 2016
to December 31, 2016)

1,365,143

1,414,683

Valuation difference on available-for-sale securities(10,870)

38,594

Total other comprehensive income(10,870)

38,594

1,354,273

1,453,278

Comprehensive income attributable to owners of the parent
company

1,354,273

1,453,278

Comprehensive income attributable to non-controlling interests––

Other comprehensive income

Comprehensive income
Comprehensive income attributable to:―8―(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, 2015 (April 1, 2015 to December 31, 2015)
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

28,394,963

2,194,195

196,333

30,785,492—

30,785,492—

2,406,086

61,7782,467,864(2,467,864)—

28,394,963
1,924,770

4,600,281
140,537

258,112129,029

33,253,357
2,194,337(2,467,864)(31,688)

30,785,492
2,162,649

Total

Notes: 1 Adjustments of segment profit (−¥31,688 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
Not applicable.
II. 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.

―9―