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 2015
(The Fiscal Year Ended March 31, 2015 under Japanese GAAP)May 11, 2015
Company Name:Grandy House Corporation
Stock Exchange Listing:Tokyo Stock Exchange
Securities Code:8999
URL
http://www.grandy.co.jp
Representative:
Hiroyuki Murata, President
Inquiries:
Atsuo Saito, Senior Managing Director
TEL: +81-28-650-7777
Scheduled date of the Ordinary General Meeting of Shareholders:June 26, 2015
Scheduled date of Securities Report filing:
June 26, 2015
Scheduled date of dividend payment commencement:
June 29, 2015
Preparation of annual supplementary explanatory materials:
No
Annual results briefing held:
Yes (For analysts)(Figures are rounded down to the nearest million yen unless otherwise stated)

1. Consolidated Financial Results for Fiscal 2015 (April 1, 2014 to March 31, 2015)(Percentage figures show the year-on-year increase (decrease))(1) Consolidated Operating Results
Fiscal 2015
Fiscal 2014

Net Sales(¥ million)
37,46937,259Operating Income(¥ million)%
2,415(17.6)
2,932
26.5

Note: Comprehensive Income

Fiscal 2015: ¥1,583 million (−10.8%)

%
0.6
14.5

Net Income per Share(Diluted)
(¥)
(¥)
54.47
―
61.25
―

(Reference) Equity in earnings of affiliates

Net Income(¥ million)%
1,567(11.1)
1,762
29.5

Fiscal 2014: ¥1,775 million (30.4%)

Net Income per Share
Fiscal 2015
Fiscal 2014

Ordinary Income(¥ million)%
2,514(17.1)
3,034
26.8

Return on Equity
%
10.9
13.7

Ordinary Income /Total Assets

Operating Income /Net Sales
%
6.4
7.9

%
7.2
9.5

Fiscal 2015: ¥― million Fiscal 2014: ¥― million(2) Consolidated Financial Position
March 31, 2015
March 31, 2014

Total Assets(¥ million)
35,84633,524

Net Assets
Shareholders’ Equity Ratio(¥ million)%
15,08441.9
13,655
40.7(Reference) Shareholders’ equity

Fiscal 2015: ¥15,009 million

Fiscal 2014: ¥13,655 million

Net Assets per Share(¥)
521.57474.53(3) Consolidated Cash Flows

Fiscal 2015
Fiscal 2014

Cash Flows from Operating Cash Flows from Investing Cash Flows from Financing Cash and Cash Equivalents at
Activities
Activities
Activities
the End of the Period(¥ million)(¥ million)(¥ million)(¥ million)
700
(172)
531
6,614
(185)
(454)
987
5,554

2. Dividends

Fiscal 2014
Fiscal 2015
Fiscal 2016 (Forecast)

Annual Dividend per Shares
1Q-End2Q-End3Q-EndPeriod-End

(¥)
―
―
―

(¥)
0.00
0.00
0.00

(¥)
―
―
―

(¥)
8.00
8.00
12.00

Total
(¥)
8.00
8.00
12.00

Total Dividends(¥ million)
230
230

Ratio of Dividends
to Net Assets(Consolidated)
%
%
13.1
1.7
14.7
1.6
20.3

Payout Ratio(Consolidated)

3. Consolidated Financial Results Forecasts for Fiscal 2016 (April 1, 2015 to March 31, 2016)
Net SalesInterim Period
Full Fiscal Year(¥ million)
19,50040,500%
8.7
8.1(Percentage figures show the year-on-year increase (decrease) for each corresponding period)
Net Income
Attributable to Owners Net Income per Share
Operating Income
Ordinary Incomeof the Parent Company(¥ million)%(¥ million)%(¥ million)
%
(¥)
1,150
14.3
1,200
13.8
730
14.0
25.37
2,700
11.8
2,750
9.4
1,700
8.4
59.07

* Explanatory Notes(1) Changes in the number of important subsidiaries during the period(changes in specified subsidiaries resulting in a change in the scope of consolidation): None
Newly included: ―Excluded: ―(2) Changes in accounting policies, accounting estimates, and restatements
1) Changes in accounting policies in connection with revision to accounting standards, etc. :2) Changes in accounting policies other than 1) :3) Changes in accounting estimates :4) Restatements :(3) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding as of the
March 31, 2015
period-end (including treasury stock)2) Number of treasury stock
March 31, 2015
3) Average number of shares issued and outstanding for
Fiscal 2015
the period

None
None
None
None

30,823,200 shares March 31, 201430,823,200 shares

2,046,198 shares March 31, 2014

2,046,198 shares

28,777,002 shares Fiscal 2014

28,777,002 shares(Reference) Non-Consolidated Financial Results
1. Non-Consolidated Financial Results for Fiscal 2015 (April 1, 2014 to March 31, 2015)(1) Non-Consolidated Operating Results
Net Sales(¥ million)
Fiscal 2015
18,284
Fiscal 2014
19,603

%
(6.7)
11.2

Net Income per Share(Percentage figures show the year-on-year increase (decrease))
Operating Income
Ordinary Income
Net Income(¥ million)%(¥ million)%(¥ million)%
1,084(30.7)
1,771(13.5)
1,327
1.4
1,565
31.6
2,048
34.5
1,309
32.3

Net Income per Share (Diluted)

(¥)
46.14
45.49

Fiscal 2015
Fiscal 2014

(¥)
―
―

(2) Non-Consolidated Financial Position
Total Assets
Net Assets
Shareholders’ Equity Ratio(¥ million)(¥ million)%
March 31, 2015
22,233
12,82057.3
March 31, 2014
20,399
11,631
57.0(Reference) Shareholders’ equity March 31, 2015: ¥12,745 million March 31, 2014: ¥11,631 million

Net Assets per Share(¥)
442.91404.202. Non-Consolidated Financial Results Forecasts for Fiscal 2016 (April 1, 2015 to March 31, 2016)

Interim Period
Full Fiscal YearNet Sales(¥ million)
9,270
19,000%3.0
3.9(Percentage figures show the year-on-year increase (decrease) for each corresponding period)
Operating Income
Ordinary Income
Net Income
Net Income per Share(¥ million)%(¥ million)%(¥ million)
%
(¥)
510
12.7
1,140
3.4
910
0.4
31.62
1,180
8.8
1,850
4.4
1,340
0.9
46.56

* Disclosure concerning the implementation status of audit proceduresThis Consolidated Financial Report is not subject to the audit procedures required by the Financial Instruments and Exchange Act of Japan. At the time of this report’s
disclosure, audit procedures for consolidated financial statements under the Financial Instruments and Exchange Act were in progress.

* Explanation concerning the appropriate use of forecasts and other special instructions(Disclaimer)
Results forecasts and other forward-looking statements contained in this report are based on assumptions, beliefs, and uncertainties in light of information available to
the Company’s management as of the publication date. Actual results may differ materially from forecasts due to a variety of factors. Therefore, the Company does notguarantee the accuracy of forecasts and other forward-looking statements and its ability to achieve stated targets. Please refer to “1. ANALYSIS OF OPERATINGRESULTS AND FINANCIAL POSITION (1) Analysis of Operating Results” on page 2 of the attachment materials for information regarding the underlying
assumptions for financial results forecasts and an explanation concerning the appropriate use of forecasts and other notes.

Attachment Materials: Table of Contents
1. ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION.............................................................. 2(1) Analysis of Operating Results ................................................................................................................................. 2(2) Analysis of Financial Position................................................................................................................................. 4(3) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2015 and Fiscal 2016 ...................... 5(4) Business and Other Risks ........................................................................................................................................ 5
2. OVERVIEW OF THE CORPORATE GROUP ........................................................................................................ 9
3. MANAGEMENT POLICY .................................................................................................................................... 10(1) Basic Management Policy ..................................................................................................................................... 10(2) Target Management Benchmarks .......................................................................................................................... 10(3) Medium- and Long-Term Management Strategies ............................................................................................... 10(4) Pending Issues ....................................................................................................................................................... 10(5) Other Matters Important to the Company’s Management ..................................................................................... 10
4. BASIC APPROACH TO THE SELECTION OF ACCOUNTING STANDARDS ................................................ 11
5. CONSOLIDATED FINANCIAL STATEMENTS .................................................................................................. 12(1) Consolidated Balance Sheets ................................................................................................................................ 12(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ............................ 14(Consolidated Statements of Income) ......................................................................................................................... 14(Consolidated Statements of Comprehensive Income) ............................................................................................... 15(3) Consolidated Statements of Changes in Net Assets .............................................................................................. 16(4) Consolidated Statements of Cash Flows ............................................................................................................... 17(5) Notes to Consolidated Financial Statements ......................................................................................................... 18(Notes Concerning Going Concern Assumptions) ...................................................................................................... 18(Segment and Other Information) ............................................................................................................................... 19―1―

1. ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION(1) Analysis of Operating Results
During the first half of the fiscal year ended March 31, 2015, there was a pullback from the last-minute surge
in demand triggered by April’s consumption tax hike. This was followed by price increases resulting from thedepreciation of the yen, and together these factors caused consumer spending to remain weak. However, theJapanese economy has begun to see a moderate recovery in the expectation of a better employment and income
environment buoyed by improved corporate earnings and higher stock prices due to the effects of the economic andmonetary policies followed by the government and the Bank of Japan.
The housing sector was materially affected by the pullback from the last-minute surge in demand. Home orders
remained sluggish, with a year-on-year decrease in the number of new housing starts for each of the twelve
consecutive months until February 2015. However, the number of housing starts showed signs of recovery at the endof the fiscal year under review, which was attributable to demand supported by measures implemented to mitigate
the burden of the increase in consumption tax levied on homebuyers as well as an all-time low mortgage rate. Suchsigns raised expectations for a recovery in demand.
Against this background, the Grandy House Group worked diligently to expand its new home sales business inline with its theme of “further strengthening the Group’s core business (real estate sales).” In Chiba Prefecture, apriority area for the fiscal year under review, sales expanded in general accordance with our expectations. In order tomaintain market share in our existing operating base, we opened a new branch and a showroom where customers
can experience features of our houses. Total cumulative sales of new homes since the inception of the new homesales business in 1996 reached 10,000 in September 2014.
With these initiatives, new home sales during the fiscal year under review, though sluggish in the first half due
to the prolonged influence of the consumption tax hike, recovered steadily after the summer, when the effects of thetax hike moderated. This trend continued to the point where we achieved record quarterly sales in the fourth quarterand record annual sales of 1,170 units. Revenues for the fiscal year under review showed a slight increase, but wereunable to compensate for the decline in the first half, resulting in a decline in profits.
As a result of these factors, the Grandy House Group’s consolidated results for Fiscal 2015 were as follows. Net
sales were ¥37,469 million, up 0.6% from the previous fiscal year; operating income fell to ¥2,415 million, a declineof 17.6%; ordinary income was ¥2,514 million, a decline of 17.1%; and net income totaled ¥1,567 million, a decline of
11.1%.
Results by business segment are presented as follows.

 Real Estate Sales
In the new home sales business, CHIBA Grandy House (Chiba Prefecture), which was marking its second year
in business, worked to secure inventory for sale and strengthen its sales structure, and was thus able to achieve an
expansion in sales largely as planned. In Tochigi Prefecture, an existing major operating base, Utsunomiya Higashi
Branch (Utsunomiya, Tochigi Prefecture) was opened in July 2014. Large numbers of customers were able toexperience the safety, functionality and comfort of our homes at the new branch’s showroom, “Grandy Plaza
Utsunomiya.” In terms of our product offering, we focused extensively on developing “"All-in-One Homes” thatfeature all-electric facilities with fitted lights in all rooms and an exterior with parking spaces for two or more
vehicles. The Group’s one-stop production system and long-term warranty are also selling points of this home,providing customers with safety and security in their lives. In terms of sales promotion activities, we organized
campaigns to encourage customers to make online reservation for visits and held various events to commemorate theachievement of total sales of 10,000 homes, such as the “Countdown Campaign” and the “Thank You Campaign.”
With these efforts, new home sales, although weak in the first half due to the prolonged influence of theconsumption tax hike, recovered to set a quarterly record high of 330 units in the fourth quarter (three months ended
March 31, 2015). As a result, new home sales for the fiscal year under review were up 19 units on the previous year,
reaching a record-high level of 1,170 units. Profits saw a certain level of improvement in the second half as a resultof thorough management of home orders, but failed to recover from a decline in the first half. With respect to ourexisting home sales business, the overall number of properties available in the entire industry did not recover, eventhough there was an increase in the number of auction properties. This situation continued to contribute to weaksales. As a result, existing home sales for the fiscal year under review were down 16 units at 112 units.
Accounting for each of these factors, revenues in the real estate sales segment rose 0.6% year-on-year to ¥34,587
million. Segment profit fell to ¥2,256 million, down 19.7% from the previous fiscal year.

 Construction Material Sales
In the construction material sales segment, orders remained sluggish due to a decline in the number of new
housing starts. After the consumption tax hike, prices of timber used in construction were on a downward track due
to a decline in demand resulting from the pullback from the housing demand surge. From December 2014 onwards,
the depreciation of the euro against the yen caused a fall in the prices of materials, particularly those from Europe.
―2―Under these circumstances, we continued to carry out careful sales targeting of customers and promoted sales ofprocessed construction materials in addition to pre-cut materials, resulting in a rise in profits in the segment.
However, sales dropped slightly due to an increase in the ratio of sales to Group companies.
As a result, revenues in the construction material sales segment decreased 0.4% year-on-year to ¥2,600 million,
while segment profit was ¥153 million, up 27.0% from the previous fiscal year.

 Real Estate Leasing
In the real estate leasing segment, the office leasing market around Utsunomiya—a major area of businessdevelopment—was stable in general, with small-scale demand mainly for properties with new facilities. Under thesecircumstances, we continued to work to increase the profitability of existing properties. In consideration of
long-term profitability, we sold a rental condominium (Utsunomiya, Tochigi Prefecture) in March 2015.
As a result, revenues in the real estate leasing segment increased 7.7% year-on-year to ¥281 million, while
segment profit was ¥172 million, up 29.7% from the previous fiscal year.
Outlook
The Japanese economy is forecast to continue to see a moderate recovery supported by an expectation that theresults of the government and Bank of Japan’s ongoing economic and monetary easing policies and of improvements
in corporate earnings will contribute to improvements in employment, wages, and consumer spending.
Given such a business environment, we will stick to our business strategy of concentrating management
resources on our core business—the new home sales business and continue to focus on expanding our operatingbase and increasing market share. We will work to strengthen our business foundation with the aim of achieving acontinuous increase in revenues and profits for the year ending March 31, 2016 and for the years beyond.
Taking into account the above factors, Grandy House is forecasting consolidated net sales of ¥40,500 million
for the fiscal year ending March 31, 2016. This represents an 8.1% increase year-on-year. Operating income isforecast to rise 11.8% to ¥2,700 million. Ordinary income is forecast to increase 9.4% to ¥2,750 million, with net
income attributable to owners of the parent company improving 8.4% to ¥1,700 million.

―3―(2) Analysis of Financial Positiona. Consolidated Balance Sheet
Total assets stood at ¥35,846 million as of March 31, 2015, up ¥2,321 million compared with the end of theprevious fiscal year. This upswing was mainly due to, in addition to the increase of ¥1,058 million in cash anddeposits, the change in the inventory level of completely-finished new homes (real estate for sale) and thestrengthening of our procurement activities aimed at an increase in the number of existing properties—which
together resulted in an increase of ¥2,339 million in total current assets.
Total liabilities grew ¥892 million compared with the previous fiscal year-end to ¥20,762 million. This increase
mainly consisted of the growth in the funds for projects (short-term debts) stemming from the increase in the amountof real estate for sale, the rise in accounts payable for construction contracts, and an issuance of corporate bonds(¥150 million).
Total net assets stood at ¥15,084 million as of the end of the fiscal year under review. This represents an increaseof ¥1,428 million from the balance recorded as of March 31, 2014. After accounting for the payment of ¥230 millionof dividends, this increase was largely attributable to ¥1,567 million of net income for the fiscal year under review.
b. Cash Flows
Cash flows from operating and investing activities resulted in increases in cash and cash equivalents respectively,
and cash flows from financing activities resulted in a decrease in cash and cash equivalents in the fiscal year underreview. As a result, the balance of cash and cash equivalents at the end of the period amounted to ¥6,614 million, up¥1,059 million year-on-year.
Factors contributing to movements in the Company’s cash flows during the fiscal year under review are presented
as follows.
(Cash Flows from Operating Activities)
Net cash provided by operating activities amounted to ¥700 million (a decrease of ¥185 million for the fiscal
year ended March 31, 2014). This was mainly attributable to the total net income before income taxes anddepreciation and amortization of ¥2,739 million, while there was an increase in inventories (¥1,058 million) andincome taxes paid (¥1,092 million).
(Cash Flows from Investing Activities)
Net cash used in investment activities amounted to ¥172 million (a decrease of ¥454 million for the fiscal year
ended March 31, 2014). This was primarily because, despite having sold assets including the “Grandy Heights
Wakakusa” rental condominium (Utsunomiya, Tochigi Prefecture), we purchased a business site (Oyama, Tochigi
Prefecture), and constructed the Interpark branch (to be opened in May 2015) and the adjoining “Grandy Plaza
Interpark” showroom (Utsunomiya, Tochigi Prefecture).
(Cash Flows from Financing Activities)
Net cash provided by financing activities amounted to ¥531 million (an increase of ¥987 million for the fiscal
year ended March 31, 2014). This was mainly due, besides dividend payments, to an increase in short-term debts
accompanied by the rise in inventories and an issuance of corporate bonds to raise funds for capital expenditure.

―4―Trends in the Group’s cash flow-related indices are presented as follows.
Fiscal 2013
Shareholders’ equity ratio (%)
Equity ratio on market value basis (%)
Interest-bearing liabilities to cash flow ratio (years)
Interest coverage ratio (times)

40.2
34.7
—
—

Fiscal 2014
40.7
28.2
—
—

Fiscal 2015
41.9
24.5
23.1
2.5

Shareholders’ equity ratio: Shareholders’ equity/total assets
Equity ratio on a market value basis: Market capitalization/total assets
Interest-bearing liabilities to cash flow ratio: Interest-bearing liabilities/cash flows
Interest coverage ratio: Cash flows/interest payments
Notes:
1. Each index is calculated based on consolidated financial data.
2. Market capitalization is calculated based on the number of shares issued and outstanding as of the period-end(after deducting treasury stock).
3. Cash flows from operating activities are used as “cash flows” in the above calculation. As operating cash flows
for the fiscal years ended March 31, 2013 and March 31, 2014 were negative, interest-bearing liabilities to cash
flow ratio and interest coverage ratio data have been omitted for these two years.
4. Interest-bearing liabilities include all liabilities that bear interest under the liabilities section recorded on
consolidated balance sheets.
(3) Basic Policy Concerning the Allocation of Profits and Dividends for Fiscal 2015 and Fiscal 2016
Grandy House focuses on increasing the corporate value and returning more profits to shareholders as one of its
priority management issues. Until the fiscal year under review, the fundamental profit allocation policy was toensure the stable and continuous payment of dividends, with an increase in dividend payout based on businessgrowth. In the fiscal year ending March 31, 2016 and afterwards, however, the Company will adopt a new dividend
policy in which dividends will be paid in line with the Group’s performance, targeted at a consolidated dividend
payout ratio of 20%.
Purchase of treasury stock will be made depending on the Company’s financial position with the aim ofincreasing the value and profit per share and enhancing the Company’s capital efficiency.
Guided by the above-mentioned dividend policies, Grandy House has declared an annual dividend of ¥8 pershare for the fiscal year under review. The annual divided forecast for the year ending March 31, 2016 is ¥12 pershare (up by ¥4 year-on-year).
Under its Articles of Incorporation, Grandy House has adopted a flexible and fluid approach toward the payment
of dividends from surplus based, which is subject to a resolution of the Company’s Board of Directors. In accordancewith standard practice, however, Grandy House plans to continue paying a single annual dividend to shareholders ofrecord as of March 31 each year.
(4) Business and Other Risks
The Grandy House Group recognizes that a variety of factors has the potential to impact its operating results,financial position, and share price. Details are presented briefly as follows. Readers are reminded that forward-looking
statements are based on judgments in light of information currently available to management as of the date of thispublication.
 Risks relating to real estate salesi.

Housing demand
The Grandy House Group is mainly engaged in the sale of real estate and construction materials aswell as real estate leasing operations. In the fiscal year under review, sales from the real estate sales
segment accounted for 92.3% of total net sales on a consolidated basis. Real estate sales activities entail thesale of detached and custom-built houses, the development and sale of land for housing use, and related
additional exterior construction work. The sale of houses and land for housing use is affected by thewillingness of purchasers to spend as well as demand trends. The willingness of purchasers to spend as well
as demand trends are in turn susceptible to such factors as movements in economic conditions, interest
rates, and land prices as well as forecasts of the future and tax systems applicable to the housing sector.
Shifts in any of these factors have the potential to impact the Group’s performance and financial position.

ii.

Sales and marketing area
The Grandy House Group maintains its operating base largely in the North Kanto area. In Fiscal 2015,
the ratio of sales generated from activities in Tochigi Prefecture was as high as 53.9%. In recent years, the―5―Group has worked diligently to expand its operating base and lift the ratios of revenue generated in
prefectures outside Tochigi. In the fiscal year under review, the share of Ibaraki Prefecture (Mito, Ushiku,
other), Gunma Prefecture (Takasaki, Ota, other), and Chiba Prefecture (Kashiwa, other) sales as a ratio tototal sales were 24.8%, 11.4%, and 9.6%, respectively. Despite these endeavors, and for a variety ofreasons including competitive relationships, the Group’s performance and financial position may beaffected if the Company is unable to advance its strategies with respect to areas of particular emphasis
according to plans.
iii.

Competition
In relative terms, the Grandy House Group maintains competitive advantage in Tochigi Prefecture. In
the event, however, that a new entity with the capacity to significantly impact the Group’s land supply
structure enters the market, substantial potential exists for the Group’s performance and financial position
to be affected.
In major metropolitan areas, competition is heating up between the Group’s industry peers. Thankslargely to the Group’s insistence on providing high value-added products including houses built for salethat offer such outstanding qualities as excellent room layout, external appearance, and townscaping,Grandy House is essentially holding the line against home builders who are promoting a low-price strategy.
Should competition continue to intensify resulting in a marked drop in prices, the potential exists for theGroup’s performance and financial position to be affected.

iv.

The procurement of sites and inventory for saleIn its real estate sales business, the Grandy House Group engages in a full range of activities. These
activities include negotiations for the purchase of land (sites), discussions with government agencies, site
development, the acquisition of permits and approvals, construction work, and maintenance. The period
from the purchase of land to construction completion generally takes about eight months. In the event ofsuch wide-ranging circumstances as the inability to purchase land or sites according to plans in advance ofsales due to difficulties in securing land that offers a favorable location and conditions, and a sharp rise inland prices, or any other unforeseen matter including a natural disaster that delays the period of
construction resulting in the failure to produce inventory for sale, the potential exists for the Group’s
performance and financial position to be affected.

v.

Employees
The real estate industry is distinguished by the substantial mobility of its human resources and highrate of personnel turnover. The Grandy House Group is no exception and continuously confronts a highattrition rate particularly with respect to its sales staff. The principal reason is the extremely high productunit price and the significant amount of time and experience required for employees to achieve stable
results. Accordingly, it is not uncommon for employees to change jobs before reaching this point ofstability. Under these circumstances, the Company takes great pains to fully explain the nature of its workat the time of recruiting and hiring. Moreover, and in order to improve its retention rate, Grandy House
provides new employees with substantial education and on-the-job training. Every effort is made to ensurethat all employees are conversant with the Company’s sales and marketing activities that are deeply rooted
in the local community. In the event, however, that Grandy House is unable to secure sales staff on a stablebasis and according to plans, is unable to sufficiently foster the necessary human resources required tocarry out the important role of driving the Company’s business forward, and fails to improve its retention
rate, the potential exists for the Group’s performance and financial position to be affected.

vi.

Natural and other disasters
Large-scale natural and other disasters may give rise to substantial repair expenditure due to thedamage to business assets including operating bases as well as other damage to such merchandise as
detached houses. At the same time, any of the aforementioned disasters may force a suspension or delay ofoperations at business bases and work sites owing to physical injuries, property damage, and interruptions
to essential lifelines and social infrastructure. Furthermore, disasters may result in delays in construction
and delivery reflecting such factors as the time required to complete repairs and delays in the delivery of
construction materials. In each case, the potential exists for the Group’s performance and financial position
to be affected.

―6― Risks relating to financial position and operating resultsi.

Dependence on debt
In the conduct of its real estate sales activities, the Grandy House Group procures all or a portion of thefunds required to purchase land earmarked for development and to meet development as well as building
construction expenses from financial and other institutions on an individual project basis. The subject land isgenerally lodged as collateral for each loan. In addition, debt finance is primarily the source of funds used topurchase and/or construct properties that underpin the Group’s real estate leasing activities as well aspurchase and/or construct properties that are used to establish business bases. As of March 31, 2015, thebalance of interest-bearing liabilities stood at ¥16,161 million.
In this context, a rise in interest rates or a prolonged period during which interest rates hover at a highlevel due to such factors as changes in economic conditions and restrictions on the access to debt and otherfunding owing to a deterioration in the Group’s credit standing can lead to difficulties in the conduct ofbusiness such as an increase in the interest expense burden, or a change in business plans. As a result, thepotential exists for the Group’s performance and financial position to be affected.

ii.

Decline in the values of non-current assets and real estate for saleWith its operating base in the North Kanto area, the Grandy House Group engages in such wide-ranging
activities as the acquisition, development, sale, and leasing of real estate. In the event of a deterioration in realestate market conditions, the Group may incur an impairment of its non-current assets or a major write-downof its real estate for sale and other assets. This then has the potential to affect the Group’s performance andfinancial position.

iii.

Change in performance due to delays in delivery
Revenues from the sale of detached housing are recorded for accounting purposes at the time of delivery.
While certain large-scale projects require a considerable amount of time through to delivery, the periodrequired from the purchase of land to building completion is generally around eight months. Naturally, strict
management is undertaken to monitor progress. In the event, however, of a delay in construction due to suchfactors as natural disasters or other unforeseen circumstance, or a substantial delay in delivery owing to
unexpected contingencies that result in the carryover of sales into the next period, the potential exists for theGroup’s performance to be affected. In addition, in the event that a hit product that contributes to theshortening of sales periods emerges, or orders received exceed the forecast number of properties sold due to avariety of factors including economic trends, and a drop-off in the supply of products for sale arises
thereafter, the potential exists for the Group’s performance and financial position to be affected.

iv.

Sharp rise in material prices
The detached housing products handled by the Group employ timber- and petroleum-related materials.
On this basis, and in the event of difficulties in reducing costs or passing on to consumers any increase in theprices of materials procured owing to fluctuations in market conditions and foreign currency exchange rates,
the potential exists for the Group’s performance and financial position to be affected.

 Risks relating to statutory and regulatory requirements
The Grandy House Group engages in business activities that are regulated by such wide-ranging legislation as
Building Lots and Buildings Transaction Business Act, Construction Business Act, and Act on Architects andBuilding Engineers. In addition, the Group is subject to a variety of statutory and regulatory requirements including
those stipulated under Japan’s City Planning Act, National Land Use Planning Act, Act on Regulation of Residential
Land Development, Building Standards Act, Housing Quality Assurance Act, and the Act on Assurance of
Performance of Specified Housing Defect Warranty. In the event that a revision or abolition of any of theaforementioned or other applicable statutory and regulatory requirements, or the establishment of any new statute or
regulation leads to an increase in expenditure or delays in assessment periods by governing agencies, the potential
exists for the Group’s performance to be affected.
Legislation related to such key issues as permits and approvals including Building Lots and Buildings
Transaction Business Act, Construction Business Act, and Act on Architects and Building Engineers stipulate theduration of validity and causes for cancellation. The Grandy House Group adheres strictly to all statutory andregulatory requirements and as of the date of this report has not incurred any cancellation or refusal to renew permits
and approvals. However, if for whatever reason a permit or approval is cancelled, or renewal is refused, and the Group
incurs difficulties in carrying out its mainstay business activities, the potential exists for the Group’s performance to beseriously affected.
Details of the Grandy House Group’s principal permits and approvals as well as durations of validity and causesof cancellation are presented in the following table.
―7―

Name of Permit,
Approval, etc.

Company NameGrandy House Corporation

Real estate operator
licenseIBARAKI Grandy House
Corporation
GUNMA Grandy House
Corporation
CHIBA Grandy House
Corporation
Chukojutaku Johokan
Corporation
Grandy House Corporation

Construction license
IBARAKI Grandy House
Corporation

Grandy House Corporation

IBARAKI Grandy House
Corporation
Architect officeregistration

GUNMA Grandy House
Corporation

CHIBA Grandy House
Corporation

General Livetech Corporation

Grandy Reform Corporation

Permits/Approval Number
Period of Validity

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

Minister of Land, Infrastructure and Transportation(4) No. 5942
October 21, 2014–October 20, 2019
The Governor of Ibaraki Prefecture (2) No. 6548
Building Lots
December 1, 2012–November 30, 2017
Article 65,
and
The Governor of Gunma Prefecture (2) No. 6860
Article 66,
Buildings
December 12, 2012–December 11, 2017
Transaction Article 67
The Governor of Chiba Prefecture (1) No. 16460
Business Act
April 4, 2013–April 3, 2018
Minister of Land, Infrastructure and Transportation(1) No. 8039
September 1, 2010–August 31, 2015
The Governor of Tochigi Prefecture
Authorization (Special-24) No. 22719
Article 28,
February 1, 2013–January 31, 2018
Construction
Article 29,
Business Act
The Governor of Ibaraki Prefecture
Article 29-2
Authorization (General-24) No. 32248
March 6, 2013–March 5, 2018
First class architect office registration
The Governor of Tochigi Prefecture
Registration A(c) No. 2430
November 28, 2011–November 27, 2016
First class architect office registration
The Governor of Tochigi Prefecture
Registration A(b) No. 2694
January 4, 2011–January 3, 2016
First class architect office registration
The Governor of Ibaraki Prefecture
Registration No. A3316
March 6, 2013–March 5, 2018
Second class architect office registration
Act onThe Governor of Ibaraki Prefecture
Architects
Article 26
and Building
Registration No. B5348
Engineers
March 29, 2013–March 28, 2018
First class architect office registration
The Governor of Gunma Prefecture
Registration No. 4164
November 30, 2012–November 29, 2017
First class architect office registration
The Governor of Chiba Prefecture
Registration No. 1-1304-7782
April 19, 2013–April 18, 2018
First class architect office registration
The Governor of Tochigi Prefecture
Registration No. A3461
December 9, 2014–December 8, 2019
Second class architect office registration
The Governor of Tochigi Prefecture
Registration No. B4539
June 7, 2013–June 6, 2018

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

―8―2. OVERVIEW OF THE CORPORATE GROUP
The Grandy House Group (Grandy House and the Company’s affiliated companies) is comprised of GrandyHouse and six subsidiary companies. The Group’s principal business activities include the sales of real estate, the saleof construction materials, and the leasing of real estate.
Details of the business activities of the Group and the activities undertaken by the Company and each subsidiarycompany are presented as follows.
(1) Real Estate Sales
The Grandy House Group engages in a wide range of real estate-related activities from the procurement of landfor sale in lots through the acquisition of related permits and approvals to the management of housing landdevelopment work, housing design and construction, sales, and after-sales maintenance and service.
In its mainstay detached housing sale, design, and construction activities, the Group has adopted an oversight
structure by individual operating area. This takes into account the Group’s focus on operations that remain deeply
rooted in the local community. Each company is active within its own basic area of operations. Grandy House operates
mainly in Tochigi Prefecture and a portion of Ibaraki Prefecture. IBARAKI Grandy House and GUNMA GrandyHouse operate mainly in Ibaraki Prefecture and Gunma Prefecture, respectively. CHIBA Grandy House operates
mainly in Chiba Prefecture.
Chukojutaku Johokan is primarily engaged in the sale of existing homes. Grandy Reform is active in housing
maintenance and after-sales service as well as housing renovations.
(2) Construction Material Sales
General Livetech is involved mainly in the sale of construction materials and items focusing primarily on precut
materials.
(3) Real Estate Leasing
Grandy House is engaged in such activities as the leasing of its own buildings for rent as well as condominiums
and other properties. The Company is also active in the parking business.
The following schematic provides an overview of the structure and businesses of the Grandy House Group (as ofMarch 31, 2015).

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

Sale of pre-cut andother materials

Housingrenovations

General Livetech

Maintenance and aftersales service

Sale of existing homes

Grandy Reform

Chukojutaku Johokan

Maintenance and aftersales service consignment

Sale of detached housing and related activities(Ibaraki, Gunma and Chiba Prefecture)

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

IBARAKI Grandy HouseGUNMA Grandy HouseCHIBA Grandy House

Customers
Real Estate Sales―9―

Construction
Material Sales

Real Estate
Leasing

3. MANAGEMENT POLICY(1) Basic Management Policy
The Grandy House Group’s basic management policy entails providing homes that deliver comfort and peace ofmind to help realize a rich and abundant society. Guided by this policy, we have continued to nurture our housing landdevelopment capabilities since foundation. With this as our core competence, we have taken consistently positive
steps to add significant value to both land and buildings and provide attractive and appealing homes through aproprietary integrated system that extends from the purchase of land through housing design to construction, sales,
maintenance, and after-sales service. We will continue to work to enhance our corporate value by delivering better
homes to more customers and strive to meet various expectations of all stakeholders. At the same time, we will
fulfill our responsibility as a good corporate citizen.
(2) Target Management Benchmarks
The Grandy House Group seeks to expand its business, in particular focusing on an increase in net sales andordinary income as important benchmarks to measure its growth.
The Group’s targeted level of ROE, an indicator that demonstrates the maintenance of capital efficiency andshareholder gains, is 8% or above.
(3) Medium- and Long-Term Management Strategies
The medium-term basic policy of the Grandy House Group is to aim for sustainable growth by strengthening
our core business, namely real estate sales focusing on new homes. As a strategy to ensure such growth, we havebeen expanding our operating base and increasing market share in each area.
In the new home sales business, our core business, we will aim to achieve a steady growth in line with thefollowing basic strategies that take advantage of our strengths:
 Provision of high-value-added properties (conveniently situated land for sale, safety and security of land,
value-added townscapes, high-quality homes clearly differentiated from low-cost ones, and safety and reassurance
through long-term inspections and warranties, etc.) supported by the Group’s integrated operations that encompass
land procurement through to land development, housing design, construction management, and after-sales service.
 Exploration of business opportunities in operating areas through community-based sales activities andexpansion of business to areas adjacent to existing operating bases by taking advantage of the reputation for reliability
we have established in these bases exemplified by the motto “When it comes to detached homes, Grandy House.” Strengthening of marketing capabilities in self-cultivation (cultivate a wide range of customers and highlightthe advantages of the Company’s products) under the direct sales system.
With respect to the existing home sales business, we will work to expand our operating base in the existinghome market that will likely grow over the long term while differentiating our products from those of competitors
using the concept Design Renovated Homes.
Our business has expanded to the level where total sales of new homes exceeded 10,000 units. We will work to
expand home-related businesses such as home renovation for existing customers.
With respect to corporate governance, we plan to move to a “Company with Audit and Supervisory Committee”
organizational structure starting this fiscal year. Under the new organizational structure involving outside directors,
we will strive to strengthen corporate governance and further increase our corporate value.
(4) Pending Issues
The Japanese economy is expected to continue to see a moderate recovery, but quite a few factors causing
instability still exist, such as a further consumption tax hike and fluid movement of the world economy.
In recognition of the fact that the consumption tax hike in April 2014 affected our business results for the fiscal
year under review, the Grandy House Group will take various initiatives in order to build a robust management basethat will not be affected by external factors. Such initiatives include cultivating new operating bases, securing anadequate volume of favorable land for housing, establishing a sales system that allows us to avoid exposure to pricecompetition, and securing and developing human resources in line with an expansion in business. With these
initiatives, we will aim to achieve ongoing growth in profits and other aspects.
(5) Other Matters Important to the Company’s Management
The products and services handled by the Grandy House Group are essentially geared toward the individual
customer. In this regard, there are instances where members of the Board of Directors pursue dealings with theCompany. This includes the purchase and/or construction of homes. In each case, transactions are conducted at thesame price and profit level as those that apply to the Group’s general customer base. Again, this includes the price forhouses built for sale and ensures that transactions are conducted at an appropriate level of profit. For other products
such as custom-built homes, the terms and conditions of transactions are based on calculations regarding fair andappropriate prices as well as formal appraisals. Moreover, transactions are subject to prior approval by the Company’s
Board of Directors.
― 10 ―

4. 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.

― 11 ―

5. CONSOLIDATED FINANCIAL STATEMENTS(1) Consolidated Balance Sheets(Thousands of Yen)FY2014(As of March 31, 2014)

FY2015(As of March 31, 2015)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade

5,562,541
584,984

6,621,018
734,021

Real estate for sale
Costs on uncompleted construction contracts

8,903,433
9,388

10,704,928
6,251

Real estate for sale in process
Merchandise and finished goods

7,373,275
174,064

6,688,779
145,413

Raw materials and supplies
Deferred tax assets

138,064
126,944

111,279
122,613

Other
Allowance for doubtful accounts

321,913(4,196)401,046(5,344)23,190,415

25,530,008

4,680,319(1,435,893)

4,627,088(1,543,369)

Buildings and structures, net

3,244,425

3,083,718

Machinery, equipment and vehicles
Accumulated depreciation

25,121(13,112)23,840(15,055)

12,0098,785

273,207(231,169)

287,254(238,268)

42,03848,986

5,817,230
256,360

5,851,832
263,698

Accumulated depreciation(114,981)(156,372)

Lease assets, net

141,378

107,325

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

Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets

Construction in progress—

58,652

9,257,082

9,159,301

68,487

67,616

Investment securities
Long-term loans receivable

744,408
41,707

767,434
19,870

Deferred tax assets
Other

100,514155,166

108,270
197,708

Allowance for doubtful accounts(32,818)(3,816)

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

Total investments and other assets
Total non-current assets
Total assets― 12 ―

1,008,979

1,089,467

10,334,548

10,316,385

33,524,964

35,846,393

(Thousands of Yen)FY2014(As of March 31, 2014)

FY2015(As of March 31, 2015)

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

2,636,832
13,347,080

2,772,752
14,074,690

Current portion of long-term loans payable

410,495

400,508—

21,00049,77043,999582,687

Current portion of bonds
Lease obligations
Income taxes payable
Provision for warranties for completed construction
Other
Total current liabilities

735,391
63,040666,258

51,167
721,606

17,908,869

18,668,411—

129,000

1,461,426
103,482

1,409,644
69,525

Provision for directors’ retirement benefits
Net defined benefit liability

45,166286,655

71,204
358,010Other

63,82556,416

Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations

Total non-current liabilities

1,960,555

2,093,801

19,869,425

20,762,212

Capital stock
Capital surplus

2,077,500
2,205,165

2,077,500
2,205,165

Retained earnings
Treasury stock

9,712,087(351,814)

11,049,455(351,814)

13,642,938

14,980,306

12,60028,874

12,60028,874—75,00013,655,539

15,084,180

33,524,964

35,846,393

Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Subscription rights to shares
Total net assets
Total liabilities and net assets― 13 ―

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Thousands of Yen)
Fiscal 2014
(From April 1, 2013
to March 31, 2014)

Fiscal 2015
(From April 1, 2014
to March 31, 2015)

Net sales
Cost of sales

37,259,532
30,207,471

37,469,060
30,869,711

Gross profit

7,052,061

6,599,348

Selling, general and administrative expenses

4,119,884

4,183,500

Operating income

2,932,176

2,415,848

1,435
138

1,489
4,391

195,811
142,160

203,546
136,793

Non-operating income
Interest income
Dividends income
Operations consignment fee
Office work fee
Other26,881

36,271

Total non-operating income

366,427

382,493

Interest expenses
Other

263,944—279,207
4,828

Total non-operating expenses

263,944284,035

3,034,659

2,514,306

Gain on sales of non-current assets

—

2,051

Total extraordinary income

—

2,051

Loss on sale of non-current assets
Loss on retirement of non-current assets—
18,192

1,070
12,763

Impairment loss
Loss on cancellation of lease contracts

112,590
3,575

—
3,089

Total extraordinary loss

134,358

16,924

Net income before income taxes

2,900,301

2,499,433

Income taxes-current

1,161,509

942,000

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary loss

Income taxes-deferred(23,726)(10,150)

Total income taxes

1,137,782

931,849

Income before minority interests

1,762,518

1,567,583

Net income

1,762,518

1,567,583― 14 ―

(Consolidated Statements of Comprehensive Income)(Thousands of Yen)
Fiscal 2014
(From April 1, 2013
to March 31, 2014)
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Total other comprehensive income
Comprehensive income

Fiscal 2015
(From April 1, 2014
to March 31, 2015)

1,762,518

1,567,583

12,60016,273

12,60016,273

1,775,119

1,583,857

1,775,119—

1,583,857—

Comprehensive income attributable to:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests― 15 ―

(3) Consolidated Statements of Changes in Net Assets
Fiscal 2014 (From April 1, 2013 to March 31, 2014)(Thousands of Yen)
Valuation andtranslation adjustments

Shareholders’ equity

Valuation

Balance as of the beginning of the period

Capitalstock

CapitalsurplusRetained Treasury
earnings
stock2,077,500

2,205,165

8,179,785

Total net assets

securities

Total
valuationandtranslation
adjustments——

12,110,636

difference
Totalshareholders’ on availableequity
for-sale(351,814) 12,110,636

Changes of items during the period
Dividends from surplus(230,216)(230,216)(230,216)

Net income

1,762,518

1,762,518

1,762,518

Net changes to items other than shareholder
equityTotal changes of items during the period
Balance as of the end of the period——

1,532,302

2,077,500

2,205,165

9,712,087

12,60012,60012,6001,532,302

12,60012,6001,544,903(351,814) 13,642,938

12,60012,60013,655,539—

Fiscal 2015 (From April 1, 2014 to March 31, 2015)
Shareholders’ equity

Balance as of the beginning of the period

Capitalstock

CapitalsurplusRetained Treasury
earnings
stock2,077,500

2,205,165

9,712,087

Total
shareholders’equity(351,814) 13,642,938

Changes of items during the period
Dividends from surplus(230,216)(230,216)

Net income

1,567,583

1,567,583

Net changes to items other than shareholder
equityTotal changes of items during the period
Balance as of the end of the period—
2,077,500—

1,337,367

2,205,165 11,049,455—

1,337,367(351,814) 14,980,306(Thousands of Yen)
Valuation andtranslation adjustments
Valuation
Total
difference
valuation
on availableandfor-saletranslation
securities adjustments

Balance as of the beginning of the period

12,600

Subscription
rights to shares

Total net assets—

13,655,539

12,600Changes of items during the period
Dividends from surplus(230,216)

Net income

1,567,583

Net changes to items other than shareholder
equity16,273

16,27375,000Total changes of items during the period

16,273

16,27375,0001,428,641

Balance as of the end of the period

28,87428,87475,00015,084,180― 16 ―

91,273

(4) Consolidated Statements of Cash Flows(Thousands of Yen)
Fiscal 2014
(From April 1, 2013
to March 31, 2014)

Net cash provided by (used in) operating activities
Net income before income taxes
Depreciation and amortization
Stock compensation expense
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for warranties forcompleted construction
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Impairment loss
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

Fiscal 2015
(From April 1, 2014
to March 31, 2015)

2,900,301
230,359—(221,276)

2,499,433
239,699
75,000—27,924

26,037

7,606(2,057)
286,655(1,574)
263,944
112,590—
18,192(187,423)(2,645,973)
336,899(25,659)(11,872)(27,854)
71,355(5,881)
279,207—(981)
12,763(141,270)(1,058,425)
135,919(27,707)

SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

1,100,510
1,574(280,858)(1,006,985)(185,759)

2,065,422
5,881(278,476)(1,092,098)
700,729

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Payments of loans receivableCollection of loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Other payments
Other proceeds(108,956)—(20,833)(210,000)(14,700)
4,179(111,582)
1,176(15,500)
21,440(301,704)
202,147(24,873)——
4,005(54,820)
13(11,000)
13,313

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
Cash dividends paid
Repayments of lease obligations
Net cash provided by (used in) financing activities(454,776)(172,917)

1,707,180
50,000(488,862)—(229,828)(51,157)
987,332

727,610464,300(526,069)
145,973(229,555)(50,594)
531,664

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period

346,796
5,207,745

1,059,476
5,554,541

Cash and cash equivalents at end of the period

5,554,541

6,614,018― 17 ―

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

― 18 ―

(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 andwhose operating results are regularly reviewed by the Company’s Board of Directors when making decisions about theallocation of management resources and assessing performance.
The Grandy House Group is engaged in 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 theperspective of similarity, relationships, and sharing of common management resources, these three businesses are
regarded as one business segment, Real Estate Sales. The Company devises overall strategies for this 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 andsale of pre-cut materials for housing and sale of construction materials and home facilities and equipment. In theReal 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 andloss are based on ordinary income. Inter-segment sales or transfers are calculated based on market prices.
3. Information relating to the amounts of net sales, profit and loss, assets, liabilities, and other items by reportablesegment
The fiscal year ended March 31, 2014 (April 1, 2013 to March 31, 2014)(Thousands of Yen)

Reportable Segment
Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

34,388,656

2,609,566

261,308—

2,677,549

73,48534,388,656

5,287,116

334,794

Adjustments(Note 1)

AmountRecorded on
Consolidated
Financial
Statements(Note 2)

37,259,532—

37,259,532

2,751,035(2,751,035)—

40,010,567(2,751,035)

37,259,532

Total

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

2,809,029

120,697

133,173

3,062,899(28,240)

3,034,659

Segment assets

23,668,428

2,096,663

4,501,781

30,266,873

3,258,090

33,524,964

Segment liabilities

18,357,219

1,750,983

89,332

20,197,535(328,110)

19,869,425
230,359

Other items
Depreciation and amortization

138,886

40,45851,014230,359—

Interest income

1,395

39

—

1,435

—

1,435

Interest expenses

251,612

11,886446

263,944—

263,944

Increase in property, plant andequipment and intangible assets

122,499

41,596

5,174

169,270—

169,270― 19 ―

The fiscal year ended March 31, 2015 (April 1, 2014 to March 31, 2015)(Thousands of Yen)

Reportable Segment
Real Estate
Sales

Construction
Material Sales

Real Estate
Leasing

34,587,410

2,600,345

281,304

Adjustments(Note 1)

AmountRecorded on
Consolidated
Financial
Statements(Note 2)

37,469,060—

37,469,060

Total

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

—

2,959,748

71,7703,031,518(3,031,518)—

34,587,410

5,560,094

353,074

40,500,579(3,031,518)

37,469,060

Segment profit

2,256,735

153,262

172,670

2,582,669(68,363)2,514,306

Segment assets

24,980,105

2,121,938

4,316,649

31,418,693

4,427,699

35,846,393

Segment liabilities

19,330,658

1,728,512

73,513

21,132,684(370,472)

20,762,212

143,435

44,20552,057

239,699—

239,699

Other items
Depreciation and amortization
Interest income

1,456

33

—

1,489

—

1,489

Interest expenses

267,118

11,861

227

279,207—279,207

Increase in property, plant andequipment and intangible assets

306,277

22,92713,016342,222—342,222

Note 1: Details of adjustments are presented as follows.

Segment profit(Thousands of Yen)
Fiscal 2014

Eliminations of inter-segment translation
Total

Fiscal 2015
(28,240)(68,363)(28,240)(68,363)

Segment assets(Thousands of Yen)
Fiscal 2014

Fiscal 2015

Eliminations of inter-segment receivables(331,050)(368,558)

Eliminations of inter-segment unrealized profit(23,452)(35,079)

3,612,593

4,831,337

3,258,090

4,427,699

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 2014

Eliminations of inter-segment payables
Total

Fiscal 2015
(328,110)(370,472)(328,110)(370,472)

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

― 20 ―

[Related Information]
The fiscal year ended March 31, 2014 (April 1, 2013 to March 31, 2014)
1.

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

Sales to outside customers

2.

Construction Material
Sales

Real Estate Leasing

2,609,566

261,308

34,388,656

Total
37,259,532

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, 2015 (April 1, 2014 to March 31, 2015)
1.

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

Sales to outside customers

2.

Construction Material
Sales

Real Estate Leasing

2,600,345

281,304

34,587,410

Total
37,469,060

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.

― 21 ―

[Information concerning Impairment Loss on Non-current Assets by Reportable Segment]
The fiscal year ended March 31, 2014 (April 1, 2013 to March 31, 2014)

Impairment loss

Real Estate Sales

Construction
Material Sales

112,590—

Real Estate
Leasing(Thousands of Yen)
Total

—

112,590

Adjustment
AmountTotal—

112,590

The fiscal year ended March 31, 2015 (April 1, 2014 to March 31, 2015)
Not applicable.
[Information concerning the Amount of Goodwill Amortization and the Balance of Unamortized Goodwill by
Reportable Segment]
The fiscal year ended March 31, 2014 (April 1, 2013 to March 31, 2014)
Not applicable.
The fiscal year ended March 31, 2015 (April 1, 2014 to March 31, 2015)
Not applicable.
[Information concerning Gain on Negative Goodwill by Reportable Segment]
The fiscal year ended March 31, 2014 (April 1, 2013 to March 31, 2014)
Not applicable.
The fiscal year ended March 31, 2015 (April 1, 2014 to March 31, 2015)
Not applicable.

― 22 ―