SANIX INCORPORATED
Consolidated Financial Statements
For the First Half September 30, 2013

The financial figures in this document are based on Japanese Accounting Standards and accompanying laws. Amounts are rounded off to 1 decimal
place. This document is an English translation of the Japanese-language original.

Consolidated Financial Statements
For the First Half ended September 30, 2013

SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

http://www.sanix.jp/index_e.htm

President and CEO:Shin-ichi MUNEMASA

Contact:

Kozo Inoue, Management Corporate Officer, General Manager of Management & Planning Division

1. Consolidated Financial Highlights for the first half ended September 30, 2013
(1) Consolidated Operating Results(Millions of Yen)First Half
From April 1 to September 30
FY2013%change

FY2012%change

Net Sales ············································································

31,692

74.3%

18,184

17.7%

Operating Income ······························································

1,495

185.3%

524

96.6%

Ordinary Income·································································

1,443

183.7%

508

114.5%Net Income ·········································································

1,051

177.4%

379-

Net Income per Share (¥)··················································¥22.05

-

¥7.95

-

Net Income per Share(, Diluted(¥)····································

-

-

-

-

(Reference) Comprehensive Income ······························

1,053

189.0%

364-(2) Consolidated Financial Position(Millions of Yen)

As of September 30

As of March 31

FY2013

FY2012

Total Assets·········································································

29,196

33,664

Net Assets···········································································

9,894

8,837

Shareholders’ Equity Ratio (%) ·······································

29.3%

30.2%

Net assets per share(¥)·····················································¥206.73¥184.62

Reference

Shareholders’ equity as of September 30 2013

9,863 million yen

Shareholders’ equity as of March 31 2013

8,808 million yen

2. Dividends
At the end of
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter

Annual(Dividends per Share)
FY2012 ended March 31, 2012. …………………………..

-

0.00

-

0.00

0.00

FY2013 ending March 31 ,2013(forecast) ………………...

-

0.00

-

0.00

0.00

3. Forecasts for Consolidated Business Results(For the fiscal year ending March 31,2014)(Millions of Yen)FY2013Full Year%change

Net Sales·············································································

71,50064.9%

Operating Income·······························································

8,000

327.7%

Ordinary Income·································································

7,950

344.4%Net Income ·········································································

5,100

223.8%Net Income per Share (¥)··················································¥106.90-

There is no change from initial projections for annual operational results publicly announced on May 14, 2013.

4. Others(1) Changes in significant subsidiaries during the period: None
(2) Adoption of special quarterly accounting methods: None
(3) Changes in accounting principles, accounting estimates and correction of prior errorsⅰ)Changes in accounting principles due to revisions to accounting standards: Noneⅱ)Changes other than shown in ⅰ) above: Noneⅲ)Changes in accounting estimates: Noneⅳ)Correction of prior period error: None
(4) Number of Shares Issued and Outstanding(Shares)
First Half

Number of shared issued and outstanding at period end··································

Full Year

Ended

Ended

September 30,2013

March 31,2012

48,919,396

48,919,396

Number of treasury stocks at period end·····························································

1,207,973

1,210,375

Average number of shares issued and outstanding during the fiscal term·······

47,709,228

47,709,298*Implementation status about the quarterly review:
This summary of financial statements is exempt from quarterly review procedure required by Financial Instruments andExchange Act. A part of quarterly review for securities report based on Financial Instruments and Exchange Act have notfinished at the time of disclosure of this summary of financial statements.
*Note to ensure appropriate use of forecasts:
Forecasts in this document are based on assumptions, prospects and plans as of the date of this document. Actual results may
differ significantly from these forecasts, due to various factors affecting the Company’s business performance, such as change ineconomical conditions.

Index of the attachment
1. Qualitative Information for the first half ended September 30, 2013

1(1) Qualitative Information of Consolidated Operation Results .......................................…….……………........

1(2) Qualitative Information of Consolidated Financial Position ......................................………..…..….…….…

2(3) Qualitative Information of the Forecast of Consolidated Business Results …………..….………………...…

3

2. Other Information

3(1) Changes in significant subsidiaries during the period ..........................................................………….….…

3(2) Adoption of special quarterly accounting methods................……………...……………………………………

3(3) Changes in accounting principles, procedures and presentation methods............................………….…...

3

3. Consolidated Financial Statements for the first half ended September 30, 2013

4(1) Consolidated Quarterly Balance Sheets ......................................................................….....…………….…

4(2) Consolidated Quarterly Statements of Income and Comprehensive Income........................…………...…..

6

Consolidated Quarterly Statements of Income For the First Half ……………………………………………...

6

Comprehensive Income For the First Half………………………………………………………………………...

6(3) Consolidated Quarterly Statement of Cash Flows....………………………………....................……………..

8(4)Note for this Consolidated Financial Statements………………………………………………………….….…

9

Segment Information………………………………………………………………………………………………..

10

4. Supplemental Information
Net Sales by Division .......…………………………………………..…………………………………………...…

11

1

1.Qualitative Information for the first half ended September 30, 2013
(1) Qualitative Information of Consolidated Operation Results
In the first half of the fiscal year ending March 31,2014, the Japanese economy recovered moderately on the backof heightened expectations regarding governmental economic policy and the effect of already-adopted financial
measures coupled with a rise in stock prices and the yen’s depreciation, as well as signs of a turnaround in
corporate earnings and personal consumption. On the other hand, the outlook for global economy remained
obscure with slowing growth in emerging countries economies and the continuing to stagnate.

Under such circumstances, our group have concentrated our business resources on commercial solar powersystem which is expected to become a huge market encouraged by the government’s active promotion for the useof green energy, including the “Renewable Energy Feed in Tariff Purchasing Program” started in July 2012, while
stimulating demand for it. As a result, we have determined to consider that commercial solar power system andelectricity sales, recycling waste plastic to be used as fuel, are the two important pillars of our group.

The Net Sales of the Commercial PV Solution(CPS) Division in the first half of this fiscal year recorded significant
increase with the “commercial solar power system” contributing to the sales, the construction of which started in fullscale during the fourth quarter of this fiscal year. The HS (Home Sanitation) Division recorded a revenue decreasein sales of “residential solar power system” due to the personnel cut and shift to the CPS Division. The ES(Establishment Sanitation) Division recorded a revenue growth in the commercial solar power systems for buildings
and condominiums contributing to the result. In the Environmental Resources Development (ERD) Division, therevenues from plastic fuel increased and those from the electricity sales also increased because TOMAKOMAI
Power Plant continued to be in stable operation. As a consequence, the Net Sales of the entire group were 31,692
million yen, or up 74.3% from a year earlier.

In terms of profitability, the CPS Division turned profitable and became a important pillar mainly due to the revenue
growth of commercial solar power system. In the HS Division, although the significant decrease of revenue from thesales of “residential solar power system”, recorded significant increase in profit due to the increase in sales ofexisting products with good net sales raw material ratio such as “termite control”. As a consequence, for the wholegroup, the operating income increased to 1,495 million yen up 185.3% for the same period of a prior year, and theordinary income was 1,443 million yen(183.7% for the same period of prior year), with the net income increasing to
1,051 million yen (177.4% for the same period of prior year)..

Consolidated results of individual divisions for this quarter were as follows:

Earnings of Individual Divisions:
Commercial Photovoltaic Solution (CPS) Division
In this first half, the sales of commercial solar power system started to contribute fully to the overall revenues fromthe 4th quarter of the last fiscal year recorded 11,758 million yen, and the wholesales of commercial solar power
modules and other components increased to 3,397 million yen for 278.8% for the same period of prior year. As aresult, the sales increased to 15,155 million yen compared to 896 million yen in the same period of a prior year.

2

The operating income was 953 million yen compared to the loss of 179million yen in the same period of a year
earlier, absorbing advertising costs for newspaper ads and labor cost and others.

Home Sanitation (HS) Division
The sales of the existing products such as “termite control” and “sub-floor/roof ventilation system,” increased 59.4%
compared to last year, the revenues of residential solar power system, on the other hand ,decreased 83.3%
compared to last year with the personnel shift to the CPS Division. As a result, the net sales of the division
decreased 27.7% to 6,088 million yen compared to the year-earlier period.
The operating income increased 17.3% to 1,168 million yen compared to the same period of a year earlier, due tothe increase in sales of existing products with better net sales raw material ratio.

Establishment Sanitation (ES) Division
The sales of works on buildings and condominiums related to maintenance and management run on same levelcompared to the year earlier period. The sales of solar power system increased 459.4% compared to the year
earlier period after reinforcing the sales activities for corporate customers and the construction structure. As a result,the net sales increased 79.0% to 2,600 million yen compared to last year.
The operating income increased 63.6% to 83 million yen compared to a year earlier, due to increase in sales.

Environmental Resources Development (ERD) Division
The sales from plastic fuel increased in terms of volume, resulting in 4.4% increase compared to the year-earlier
period. The revenues from electricity sales showed a increase of 2.6% compared to a year earlier, due to the startof stable power generation at SANIX Energy’s TOMAKOMAI Power Plant even though it had a large-scale repairs
in July 2013. In addition, organic waste-water processing recorded 16.4% increase from last year due to increasedin terms of volume. As a result, the net sales increased 5.9% to 7,848 million yen compared to the year earlier
period.
The operating income decreased 34.7% to 518 million yen, due to the burden of large-scale repair expense of thepower plant which was not implemented on the same period of prior year.

(2) Qualitative Information of Consolidated Financial Position
Assets, Liabilities and Net Assets
Total assets amounted to 33,664 million yen at the end of the first half of this consolidated fiscal year, increase of
4,468 million yen from the end of the previous consolidated fiscal year. This was mainly due to an increase in Notes
and accounts receivable-trade and raw materials and supplies. Liabilities amounted to 23,770 million yen, an
increase of 3,411 million yen from the end of the previous consolidated fiscal year. This was mainly due to anincrease in Notes and accounts payable-trade and Short-term loans payable.
Net assets totaled 9,894 million yen, a increase of 1,056 million yen from the end of the previous consolidated fiscal
year. This was primarily due to the net profit of 1,051 million yen incurred during this first half.
Consequently, the ratio of owners’ equity was 29.3% compared to 30.2% in the same period of a year earlier.

3

Cash Flows
Cash and cash equivalents as of September 30, 2013 totaled 2,631 million yen, a decrease of 916 million yen
from as of March 31, 2012.

(Cash Flows from Operating Activities)
Net cash provided by operating activities totaled 2,252 million yen, a decrease of 3,166 million yen from the same
period last year. This was mainly due to an increase in notes and accounts receivable-trade of 2,094 million yen (up1,528 millions yen year-on-year) and an increase in inventory asset of 2,533 million yen (up 2,676 millions yen
year-on-year), despite the recording of net income before income taxes increased from the same period last year.

(Cash Flows from Investing Activities)
Net cash used for investing activities totaled 699 million yen, an increase of 610 million yen from the same period
last year. This was mainly due to the payments for purchase of property, plant and equipment by 694 million yen.

(Cash Flows from Financing Activities)
Net cash provided by financing activities amounted to 2,085 million yen (increase of 2,504 million yen from the lastyear) mainly due to an increase in loans payable. This purchases of treasury due to payments for acquisition oftreasury stocks caused by “Stock Benefit Trust (Employee Stockholding Association Purchase-type)”.

(3) Qualitative Information on the Forecast of Consolidated Business Results
There is no change in the forecast of consolidated business results for the current fiscal year ending March 2014,
the SANIX Group announced on May 14, 2013.

2. Other Information(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in consolidation scope): None
(2) Adoption of special quarterly accounting methods : None
(3) Changes in accounting principles, procedures and presentation methods: None
ADDITIONAL INFORMATION(Stock Benefit Trust)
SANIX resolved to introduce “Stock Benefit Trust (Employee Stockholding Association Purchase-type)”(hereinafter the “Plan” and the “Trust”). The purpose of the Plan is to improve employees’ welfare and toincrease their motivations for work and awareness of the Company’s stock performance through its steadyprovision of the stock to the employee stockholding association and distribution of the profit created by trust
property management in order to increase our corporate value.
The Trust’s assets and liabilities, and income and expenses were included in the Group’s consolidated financial
statements. Since the Company’s stock held by the Trust was accounted for as treasury stock in the
consolidated financial statements. And as this first half, the book price of treasury stock is 130,900 thousand
yen(number of treasury stock is 95,200), and carrying value of debt payable is 135,025 thousand yen.

4

3. Consolidated Financial Statements for the first half ended September 30, 2013
(1) Consolidated Quarterly Balance Sheets(thousands of Yen)
As of March 31

As of September 30

FY2012FY2013

Assets:Current Assets:
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process-construction
Raw materials and supplies
Other
Allowance for doubtful accounts
Total Current Assets:

3,559,160

2,663,733

7,356,616

9,450,973

60,036110,601

260,009522,592

2,577,620

4,798,162

980,185

1,032,851(142,104)(229,789)

14,651,525

18,349,125

Fixed Assets:
Property, Plant and Equipment:
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Other, net
Total Property, Plant and Equipment:
Intangible Fixed Assets:
Goodwill
Other, net
Total Property, Plant and Equipment:
Investments and Other Assets
Total Fixed Assets:

Total Assets:

1,890,399

1,840,897

557,997

1,061,064

8,889,529

8,889,529

988,192

1,344,873

12,326,117

13,136,364

625,370569,367

60,12358,394685,493627,761

1,533,173

1,551,579

14,544,785

15,315,706

29,196,310

33,664,831

5(thousands of Yen)
As of March 31

As of September 30

FY2012FY2013Liabilities:
Current Liabilities:
Notes and accounts payable-trade
Short-term loans payable
Accounts payable-other
Lease obligations
Provision
Other
Total Current Liabilities:

5,459,789

5,478,210

3,338,000

5,544,634

3,166,433

3,276,769

362,883

487,239

83,018

270,689

2,462,943

2,989,739

14,873,068

18,047,282

50,00040,0002,819,551

2,819,703

1,419,934

1,443,965

179,756

180,506

373,699

405,087

Non-Current Liabilities:
Bonds payable
Long-term loans payable
Provision for retirement benefits
Provision for directors' retirement benefits
Provision for disposal site closing expenses
Other
Total Non-Current Liabilities:

Total Liabilities:

643,103

834,1315,486,044

5,723,394

20,359,113

23,770,676

14,041,834

14,041,834

Net Assets:
Shareholders' Equity:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total Shareholders' Equity:

-

4,419

(3,733,267)(2,681,277)(1,610,889)(1,611,910)

8,697,677

9,753,065

78,14789,428Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total Valuation and translation adjustments:

Minority Interests:
Total Net Assets:
Total Liabilities and Net Assets:

32,356

20,672

110,503110,100

29,01630,9898,837,197

9,894,154

29,196,310

33,664,831

6(2) Consolidated Quarterly Statement of Income(thousands of Yen)First Half
From April 1 to September 30
FY2012

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income:Interest income
Dividends income
Land and house rent revenue
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Commision paid
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary Income:
Income on retirement of fixed assets
Total extraordinary Income
Extraordinary loss:
Loss on retirement of fixed assets
Total extraordinary loss
Income (loss) before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income (loss)

FY201318,184,562

31,692,361

12,338,285

22,689,226

5,846,277

9,003,134

5,321,998

7,507,243

524,278

1,495,890

3,051

3,840

8,676

4,628

34,04537,52028,22439,39973,99785,38882,356

92,7082,096

30,793

5,131

14,65089,584

138,151508,692

1,443,127

1,999
1,999

-

523
523

-

510,168

1,443,127

121,874

459,744

9,344(70,578)

131,218

389,165

378,949

1,053,962

(330)

1,973

379,280

1,051,989

7（Comprehensive Income）(thousands of Yen)First Halffrom April 1 to September 30
FY2012

Income before minority interests
Other comprehensive income
valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to parent company
Comprehensive income attributable to minority interests

FY2013378,949

1,053,962(4,188)

11,280(10,184)(11,683)(14,372)(403)

364,577

1,053,559

364,907

1,051,586

(330)

1,973

8

(3) Consolidated Quarterly Statement of Cash FlowsFirst Half
From April 1 to September 30
FY2012Net Cash Provided by (Used in) Operating Activities:
Income before income taxes
Depreciation and amortization
Increase (Decrease) in provision for retirement benefits
Amortization of goodwill
Increase (Decrease) in allowance for doubtful accounts
Interest and dividends income
Interest expenses
Loss (gain) on sales of noncurrent assets
Loss on retirement of noncurrent assets
Decrease (Increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Income taxes refund
Net cash provided by operating activities:
Net Cash Provided by (Used in) Investing Activities:
Increase in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Other
Net cash provided by (used in) investing activities:
Net Cash Provided by (Used in) Financing Activities:
Increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from sales of treasury stock
Purchase of treasury stock
Repayments of finance lease obligations
Other
Net cash provided by (used in) financing activities:
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at the end of period

FY2013510,168

1,443,127

185,378

224,648

14,361

24,03156,00356,003(4,600)97,333(11,727)(8,468)82,356

92,708(1,999)-523-(565,586)(2,094,356)

143,293(2,533,689)

427,453

44,906

252,824
1,088,447

911,120(1,742,633)

11,296

6,902(80,236)(92,109)(128,260)(426,316)

22,383
913,630

1,724(2,252,432)－(20,600)(83,827)(694,955)

5,233

15,105(3,790)(1,241)(6,261)

2,557(88,645)(699,134)(175,100)

2,208,974

200,000

455,025(380,862)(441,231)
135,080－－(131,682)(51,131)(100,109)(12,144)(40,722)(419,238)

2,085,335(1,684)(49,795)

404,062(916,026)

1,365,530

3,547,860

768
1,770,361

2,631,833

9(4) Notes for this Consolidated Financial Statements(Notes to going concern)

None(Notes to remarkable changes in Shareholders' Equity)
SANIX INC. transferred 98,200 of treasury stock to Trust & Custody Services Bank, Ltd. (trust account E) at 13TH
September,2013, and also transferred 3,000 of treasury stock to the SANIX employee stockholding association fromTrust & Custody Services Bank, Ltd. (trust account E) before 30TH September,2013. As the results, it increased 294
thousand yen of treasury stock, 4,419 thousand of yen of capital surplus, and decreased 7,820 thousand yen ofretained earnings.

10(Segment Information)
I. Prior First half (From April 1, 2012 to September 30, 2012)(Thousands of Yen)
Segments

CPS

HS

ES

ERD

Total

Adjustment Consolidated(note 1)

(note 2)

Sales:
Sales to customers

896,749

8,423,613

1,452,486

7,411,712 18,184,562－ 18,184,562

Internal sales among segments
－

－

－

Total

896,749

8,423,613

1,452,486

Operating income(loss)(179,791)

996,31451,040and transfer accounts－－

7,411,712 18,184,562
792,986－－－ 18,184,562

1,660,550 (1,136,272)

524,278(note 1) Negative 1,136,272 thousand yen for adjustments of Operating income(loss) represents corporate expenses
not allocated to reportable segments. Corporate expenses are mainly general and administrative expenses note
attributable to reportable segments.
(note 2) Operating income(loss) is adjusted to operating loss of Consolidated quarterly statements of income.

II. This First half (From April 1, 2013 to September 30, 2013)(Thousands of Yen)
Segments

CPS

HS

ES

ERD

Total

AdmustmentConsolidated(note1)(note2)

Sales:
Sales to customers

15,155,494

6,088,264

2,600,206－－－

15,155,494

6,088,264

2,600,206

953,487

1,168,736

83,505－ 31,692,361

7,848,396 31,692,361

Internal sales among segments
and transfer accounts
Total
Operating income(loss)

－

－

－

－ 31,692,361

7,848,396 31,692,361
518,191－

2,723,921 (1,228,030) 1,495,890(note 1) Negative 1,288,030 thousand yen for adjustments of Operating income(loss) represents corporate expenses
not allocated to reportable segments. Corporate expenses are mainly general and administrative expenses note
attributable to reportable segments.
(note 2) Operating income(loss) is adjusted to operating income of Consolidated quarterly statements of income.

TH(note) Since the commercial solar power business starts to contribute to the financial state from the 4quarter on last

fiscal year(FY2012), SANIX INC. newly add the “Commercial Photovoltaic Solution (CPS) Division” in addition to theexisting “Home Sanitation (HS) Division,” “Establishment Sanitation (ES) Division” and “Environmental Resources
Development (ERD) Division” as the four business divisions to be disclosed.

11

4. Supplemental Information
Consolidated Net Sales by Segment(Thousands of Yen)First Halffrom April 1 to Septemebr 30
FY2012
Commercial photovoltaic power generation system
Wholesale of photovoltaic system components
Other

Changes

FY2013-

11,728,606

11,728,606

896,749

3,397,202

2,500,453-

29,68429,684

Commercial Photovoltaic Solution Total:

896,749

15,155,494

14,258,744

Solar photovoltaic power generation system

5,143,917

860,212(4,283,704)

Termite Eradication Service

1,312,176

1,918,649

606,473

Under-Roof/Floor Ventilation System

551,344932,182

380,837

Foundation Repairing/Home Reinforcement System

326,430

530,896

204,466

Other

1,089,744

1,846,322

756,577

Home Sanitation Division Total:

8,423,613

6,088,264(2,335,349)

Anti-rust equipment installation

251,300

1,405,673

1,154,372

Repair of building water-works

330,840

313,364(17,476)

Waterproofing of building

405,833

488,346

82,512

Solar photovoltaic power generation system

155,275

112,493(42,782)309,235

280,328(28,907)

Establishment Sanitation Division Total:

1,452,486

2,600,206

1,147,719

Plastic fuel4,449,516

4,645,913

196,397

Industrial waste (Organic Waste Water Recycle)

1,519,343

1,559,432

40,088Generation of electricity

787,257

916,213

128,956

Final disposal

342,445

312,899(29,546)

Other

Other

313,150

413,937

100,787

Environmental Resources Development Division Total:

7,411,712

7,848,396

436,683

Total Net Sales:

18,184,562

31,692,361

13,507,798