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As for net sales in the fiscal year under review, sales increased in the Solar
Engineering (SE), Home Sanitation (HS), Establishment Sanitation (ES) andEnvironmental Resources Development (ERD) Divisions, and net sales of theentire Group stood at ¥52,531 million (up 3.6% year on year).
Profit increased significantly as a reaction to the adverse effects of the Hokkaido
Eastern Iburi earthquake that occurred in the previous fiscal year in the ERD
Division.
As a result, for the entire Group, operating income came to ¥2,791 million (up127.9% year on year), and ordinary income amounted to ¥2,592 million (up119.2% year on year).
Net income attributable to the owners of the parent company stood at ¥1,850million (up 670.7% year on year), showing a significant rise as a result of posting
expenses for restoring the facilities due the aforementioned earthquake as
extraordinary losses of ¥472 million in the previous fiscal year.

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[Net Sales]
In the breakdown of sales, the ERD Division increased mainly because theTomakomai Power Plant operated in the full year.
[Operating Income]In addition to the full-year operation of the Tomakomai Power Plant as
mentioned above, operating income also increased in Plastic Fuels, Organic
Wastewater and Final Disposal.
In addition, operating income declined in the SE Division due to the posting ofloss on valuation of inventories of ¥644 million in material costs.
The Energy Business Division experienced a loss compared with operating
income in the previous fiscal year due to a significant profit decline.

4Changes in quarterly net sales are as shown in the above chart.

5In the SE Division, the solar electric power market, which had continued
contracting, bottomed out and turned upward from the previous fiscal year. TheCompany also reviewed sales prices in response to lower FIT prices andpromoted new sales approaches, such as sales of solar electric power systems
with land for investors who do not own land. As a result, sales of solar electric
power systems increased 8.4% year on year, and net sales came to ¥15,195
million (up 5.3% year on year).
Operating income increased due to higher sales and a fall in the cost ofmaterials, but the Division decided to record inventories for power conditioners
that were manufactured in house and posted ¥644 million as a loss on valuationof inventories. This was because the Division revised the sales forecast and took
the collectability of receivables into account following the abolishment of sales ofall electricity of 10kW or more and less than 50kW and its shift from surplus
electricity sales to sales for self-consumption in the FIT system from FY2020. As
a result, the Division posted operating income of ¥901 million (down 25.1% year
on year).

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The HS Division strengthened the sales and construction systems for theDivision to be able to carefully craft proposals for the maintenance of ordinary
houses by increasing personnel through recruitment and newly establishing two
sales bases (Karatsu Sales Office and Omura Sales Office). As a result, termite
extermination increased 3.1% year on year, and underfloor/ceiling ventilation
systems rose 38.8% year on year, resulting in the division’s sales of ¥11,235
million (up 4.5% year on year).
Operating income stood at ¥2,061 million (down 7.6% year on year) due to a risein costs such as personnel expenses caused by the addition of personnel toexpand our operations despite higher sales.

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The ratio of subcontract expenses to net sales is rising due to an increase insales of solar electric power systems with land, and the marginal profit ratio is on
a declining trend. In addition, administrative expenses for land transactions areincreasing, making fixed costs rise.
The HS Division is able to maintain a high marginal profit ratio and will continue
to build a stable profit base.

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The ES Division enhanced relationships with the owners of buildings andcondominiums and partner companies, including management companies, byincreasing personnel through recruitment and newly establishing a sales base(Saitama Office). As a result, sales of anti-rust equipment installation (brandname: Daelman Shock), our main product, increased 21.3% year on year, andsales of building waterproof paint repair increased 55.3% year on year, resulting
in the division’s sales of ¥2,261 million (up 17.4% year on year).
Operating income declined to ¥281 million (down 1.9% year on year) due to arise in costs such as personnel expenses caused by the addition of personnel toexpand the business size despite higher sales.

9Plastic fuel sales increased 17.4% year on year because the Divisionemphasized an improvement in the profitability and quality of plastic fuels,
although the acceptance volume of waste plastics decreased due to the careful
examination of accepted articles. At the Tomakomai Power Plant, power plantsales increased 43.5% year on year as a reaction to six months of suspended
operation in the third and fourth quarters of the previous fiscal year (September
2018 to March 2019) caused by the Hokkaido Eastern Iburi earthquake. Finaldisposal also rose 42.4% year on year. As a result, net sales amounted to¥16,759 million (up 18.7% year on year).
Operating income increased to ¥3,483 million (up 721.7% year on year) thanks
to a rise in the number of operation days at the Tomakomai Power Plant andhigher sales of the final disposal business, in addition to an improvement in theprofitability and quality of plastic fuels due to the careful examination of waste
plastics and accepted articles in the organic wastewater recycling.

10In the Energy Business Division, net sales declined due to a fall in retail sales
caused by the declining number of high pressure contracts in the Power Producerand Supplier (PPS) business and a fall in the wholesale unit price caused bydeclining transaction prices in the wholesale market (JEPX). On the other hand,
the Division started business that combined solar power generation and electricity
retailing as a set in partnership with other companies, but this was insufficient tooffset the sales decline. As a result, net sales stood at ¥9,132 million (down13.9% year on year).
The Division posted an operating loss of ¥485 million (compared with operating
income of ¥412 million in the previous fiscal year) due to lower net sales and theimpact of the falling profit ratio resulted from the rising wholesale ratio.

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The summary of the factors for the differences between the revised plan and theactual results of operating income is shown in the above chart.

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The summary of the factors for the differences between operating income in theprevious fiscal year and in the fiscal year under review is shown in the abovechart.

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Forecasts for the consolidated business results for the fiscal year ending March
31, 2021 have not yet been determined because it is difficult to rationally assess
the impact that the COVID-19 outbreak will have on the Japanese economy andbusiness results of the Company. The Company will announce them as soon as
possible in the months ahead.
Each business segment could be affected by the spread of COVID-19, but we
recognize that the HS Division in particular will be most affected because theDivision implements door-to-door sales at customers’ houses.
The Company will take a flexible response in its business activities in light of thepandemic and the central and local government’s requests for the voluntarysuspension of business.

15The SE Division has been expanding the solar power electricity business withelectricity generated by solar power as an investment product based on the FIT
system under the assumption that all the electricity would be purchased.
However, because the FIT system has become an institutional design based on
self-consumption in the fiscal year under review, the Division expects that its
product concept and its proposals will undergo significant changes. For thisreason, the Division expects that, in the first half of the fiscal year ending March
31, 2021, its sales activities to be centered on the construction and sales of solar
electric power systems with land to which FIT has already been applies by thefiscal year ended March 31, 2020 and that are currently under review or havealready been accredited. Yet the Division anticipates that the second half will bea transitional period when it will try to gradually increase self-consumption
projects.
The Division thinks that self-consumption-type solar power generation, which will
be able to reduce environmental burdens and electricity costs, will become
widespread over the medium to long term.

16[Capital investment]
We will update and replace equipment at the plastic fuel plant in the ERD
Division and construct a place to expand landfill sites in Tomakomai, which isplanned to be used in the fiscal year ending March 31, 2022
The head office divisions will invest in information systems, including thereplacement of core systems for the purpose of improving operational efficiency.
Other than investments, the Tomakomai Power Plant plans to conduct thestatutory inspection of boilers in the fourth quarter of the fiscal year ending March
31, 2021.

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