Financial Highlights

Analysis on Operating Results
Descriptions and statements in relation to forward-looking projections disclosed in this document reflect the judgment of
the Group as of March 31, 2020.
Operating Results Review for the Current Fiscal Year
During the fiscal year ended March 31, 2020, business conditions of the Japanese economy have recovered moderately,
although some weakness remained. This is due in part to the effects of various government policies amid the improving labormarket and increasing salary levels. The global economy continued to recover moderately as a whole, despite the risks ofuncertainty related to developments in trade issues, the outlook for the Chinese economy and the government policies.
Meanwhile, the global outbreak of COVID-19 has been constraining the economic activity since January 2020, and theeconomy has slowed rapidly.
Under such circumstances, in order to achieve the Midterm Business Plan 2020, covering the period up to FY2020 (fiscal
year ending March 31, 2021), the Group has been trying its best to implement the priority measures: i) strategic development
investment, ii) business strategy (enhancement of foundation field and expansion of growth field) and iii) efforts ofsustainable ESG.
The domestic business environment in which the Group operates has continued to face challenges including a downward
trend in the level of public spending, a sharp increase in labor costs arising from shortage of human resources, and somedelays in civil engineering projects and construction work.
In the overseas businesses, the Group sought to accelerate business developments centered around Europe and the UnitedStates., where stable market growth is expected. As part of it, the Group has sought to achieve further business expansion
especially through Aqua-Aerobic Systems, Inc., the subsidiary located in the United States, as our business base.
The operating results of the Group for the fiscal year ended March 31, 2020 are as presented in the table below.

Net sales

Fiscal year ended
March 31, 2019
(Millions of yen)

Fiscal year ended
March 31, 2020
(Millions of yen)

Increase/(decrease)(Millions of yen)

Increase/(decrease)(%)

117,342

128,723

11,381

9.7

Operating income

7,607

8,223

615

8.1

Ordinary income

7,624

8,132

508

6.7

Profit attributable to owners of parent

5,170

5,677

506

9.8

123,807125,011

1,204

1.0

Outstanding orders

142,351

138,639(3,711)(2.6)

The Group’s business consists of two segments: Plant Engineering Business Segment including EPC as foundation field andforeign business as growth field and Service Solutions Business Segment including O&M as foundation field and PPP as
growth field.
Operating results by segment are as follows:(Plant Engineering Business)
The operating results of the Plant Engineering Business are as presented in the table below.
In the EPC business, the net sales showed a steady growth, while the operating income remained at the same level year on
year due to the differences in the composition of projects. Both net sales and operating income in the international businessremained approximately at the same level year on year.
Fiscal year ended
March 31, 2019
(Millions of yen)

Fiscal year ended
March 31, 2020
(Millions of yen)

Increase/(decrease)(Millions of yen)

Increase/(decrease)(%)

Net sales

65,51772,366

6,848

10.5

Operating income

3,191

3,188

(3)

(0.1)

Sales orders

73,91567,861(6,053)(8.2)

Outstanding orders

83,04778,542(4,505)(5.4)(Service Solutions Business)
The operating results of the Service Solutions Business are as presented in the table below.
Both net sales and operating income in the O&M business showed a steady growth. Both net sales and operating income in
the PPP business also showed a steady growth.

63
63

METAWATER REPORT2020
METAWATERREPORT
2020

Fiscal year ended
March 31, 2020
(Millions of yen)

Increase/(decrease)(Millions of yen)

Increase/(decrease)(%)

Net sales

51,82456,356

4,532

8.7

Operating income

4,416

5,035

619

14.0

Sales orders

49,89257,150

7,258

14.5

Outstanding orders

59,30360,097793

1.3

Financial Position Review for the Current Fiscal Year
Total assets as of March 31, 2020 decreased by ¥13,151 million compared to March 31, 2019 to ¥119,469 million.
Current assets decreased by ¥13,596 million compared to March 31, 2019 to ¥101,941 million due to a decrease in work inprocess and cash and deposits, offsetting with an increase in accounts receivable - trade. Non-current assets increased by¥444 million compared to March 31, 2019 to ¥17,527 million due to an increase in assets for retirement benefits.
Current liabilities decreased by ¥1,992 million compared to March 31, 2019 to ¥54,333 million due to a decrease in advances
received, offsetting with an increase in accounts payable - trade. Non-current liabilities decreased by ¥1,720 million comparedto March 31, 2019 to ¥15,542 million due to a decrease in PFI and other project finance loans.
Total net assets decreased by ¥9,438 million compared to March 31, 2019 to ¥49,592 million due to a decrease resulting
from purchase of treasury stock.
Cash Flow Review
The balance of cash and cash equivalents (hereinafter the “funds”) as of March 31, 2020 decreased by ¥14,920 million
compared to March 31, 2019 to ¥12,876 million. An analysis of the cash flows for the fiscal year ended March 31, 2020 and
related commentary thereon is presented below:(Cash flows from operating activities)
The funds generated by operating activities was ¥3,521 million (¥2,715 million decrease year to year): ¥8,132 million ofincome before income taxes and ¥1,098 million of depreciation, offsetting with ¥1,859 million increase in notes and accounts
receivable - trade and ¥2,537 million used for payment of income taxes.
(Cash flows from investing activities)
The funds used for investing activities was ¥1,380 million (¥575 million increase year to year): ¥600 million used for purchaseof property, plant and equipment and ¥179 million used for purchase of intangible assets.
(Cash flows from financing activities)
The funds used for financing activities was ¥17,072 million (¥14,455 million increase year to year): ¥1,607 million used for
payment of dividends, ¥844 million used for repayments of PFI and other project finance loans and ¥14,288 million used forpurchase of treasury stock.
Issues to be Addressed
In the Group’s main business in the domestic water and sewage treatment market, the financial difficulties of local
governments and shortage of engineers have become evident, which are attributable to the population decline. In addition,measures for facilities and equipment, which are aging, as well as natural disasters such as large earthquakes and torrential
rains are urgent issues. Under these circumstances, new government policies including revisions of the PFI Act and theWater Supply Act (promulgated in December 2018) are encouraging public-private partnerships using private funds,
technology and know-how in public infrastructure development as well as studies of expanded coverage areas as measures
to strengthen the management of water and sewage business operators. In addition, the creation of new business
opportunities and business models backed by technological innovations such as IoT, AI and 5G is expected in the future.
On the other hand, overseas water and sewage market, mainly in Europe and the United States, are faced with needs forcountermeasures against aging facilities and equipment and the tightening of environmental regulations. While in areas
including emerging Asian countries, demand is growing for the development of a water and sewage infrastructure in
conjunction with the increasing population and demand for water. Going forward, the emergence of business opportunities inline with these issues and needs of the water and sewage market of each country is expected to continue.
In light of this business environment, the Group has developed the Midterm business plan 2020, covering the period up to
FY2020 (fiscal year ending March 31, 2021), as the first stage in achieving its long-term vision (ten-year-vision). The entire
Company is working together to address three priority issues of “strategic development investment,” “business strategy,”and “efforts of sustainable ESG,” in order to achieve the management targets for FY2020 of sales orders of ¥140.0 billion,
net sales of ¥130.0 billion, and operating income of ¥9.0 billion. The economy has continued to rapidly slowed down since
January 2020, due to the impact of COVID-19. Since the trends going forward are uncertain at present, the impact of COVID19 is not incorporated in the plan for FY2020.

METAWATERREPORT2020
2020
METAWATERREPORT

Financial Information

Sales orders

Fiscal year ended
March 31, 2019
(Millions of yen)64
64Consolidated Balance Sheets

Thousands of
U.S. dollars

Millions of yen
As of March 31,
2018

As of March 31,
2019

As of March 31,
2020

As of March 31,
2020

Assets

As of March 31,
2018

As of March 31,
2019

As of March 31,
2020

As of March 31,
2020

Liabilities

Current assets

Current liabilities

Cash and deposits*325,805*3

28,589*3

13,645

125,379

Accounts payable - trade

18,372

18,27819,801

181,944

Notes and accounts receivable - trade*3

72,164*3

76,282*3

78,109717,715

Electronically recorded obligations

8,155

8,380

11,603

106,615

269

337

276

2,536

855

7,856

Work in process

2,623

4,670

3,357

30,846

Short-term loans payable

Supplies

3,299

3,932

4,711

43,287

Current portion of PFI and other projects
finance loans

2,118

19,461

Income taxes payable

2,173

2,419

2,206

20,270101,941

936,699

Advances received

10,71916,075

9,011

82,798

857

1,361

1,340

12,312

204

517

579

5,320

1,508

Other current assets*4

Total current assets

105,401*4

2,062

115,538*4*3

Provision for warranties for completed
construction
Provision for loss on construction
contracts

Non-current assets
Property, plant and equipment

833

*3

844

*3

Buildings and structures, net

1,189

1,300

1,222

11,228Other current liabilities

7,340

8,111

8,658

79,555

Machinery and equipment, net

818

970

1,172

10,769Total current liabilities

48,92756,32654,333499,246

Tools, furniture and fixtures, net

423

462

391

3,592

Construction in progress

235

153

117

1,075

Long-term loans payable

2,050

1,847

1,539

14,141Other property, plant and equipment,
net

315

301

280

2,572

PFI and other projects finance loans

9,849

90,498

3,184

29,256

Liability for retirement benefit

5,294

4,603

4,025

36,984

Other non-current liabilities

88

107

128

1,176

Total non-current liabilities

18,982

17,262

15,542

142,809

67,91073,58969,876642,065

*2

2,982

*2

3,188

*2

Intangible assets

Non-current liabilities*3

11,549*3

10,705*3

Software

890

517

445

4,088

Software in progress

94

29

144

1,323

Goodwill

1,842

1,670

1,671

15,354

Customer-related assets

2,769

2,539

2,506

23,026

Shareholders’ equity

Other intangible assets

1,463

1,314

1,240

11,393

Capital stock

11,946

11,946

11,946

109,767

Total intangible assets

7,060

6,072

6,008

55,205

Capital surplus

15,08015,08015,080138,564Retained earnings

30,21433,83037,900348,249(0)(0)(14,289)(131,296)

57,24160,85650,638465,294

Investments and other assets
Investment securities*1, *4

1,345
224*1, *4

1,342
196*1, *4

Total liabilities
Net assets

1,568

14,407

Treasury stock

173

1,589

Total shareholders’ equity

Long-term loans receivable*4

Guarantee deposits

1,528

1,604

1,561

14,343

Assets for retirement benefits

821

1,374

2,172

19,957

Valuation difference on available-for-salesecurities

54

49

54

496

Deferred tax assets - non-current

3,541

3,268

2,783

25,571

Foreign currency translation adjustment

84

(371)

(366)

(3,363)

47

35

74

679

Remeasurements of defined benefit plans(2,474)(1,645)(882)(8,104)

7,509

7,822

8,333

76,568

Total accumulated other comprehensive
income(2,335)(1,967)(1,194)(10,971)

17,551

17,082

17,527161,049

Non-controlling interests

136

142

148

1,359

122,952

132,620

119,469

1,097,757

Total net assets

55,04259,03149,592455,683

122,952

132,620

119,469

1,097,757

Other non-current assets
Total investments and other assets
Total non-current assets
Total assets*4*4

Accumulated other comprehensive income

Total liabilities and net assets
METAWATER REPORT2020
METAWATERREPORT
2020

Financial Information

Total property, plant and equipment

65
65

Thousands of
U.S. dollars

Millions of yen

METAWATERREPORT2020
2020
METAWATERREPORT

66
66

Consolidated Statement of Income and Statement of Comprehensive Income[Consolidated Statement of Comprehensive Income][Consolidated Statement of Income]Thousands of
U.S. dollars

Millions of yen
Fiscal year ended
March 31, 2018
Net sales
Cost of sales

110,895*1

Gross profit
Selling, general and administrative
expenses
Operating income

Fiscal year ended
March 31, 201986,925

17,224
6,745

Fiscal year ended
March 31, 2020

128,723

1,182,789

101,846

935,826

26,877

246,963

18,653

171,395

8,223

75,558117,342*1

23,970*2, *4

Fiscal year ended
March 31, 2020

91,442*1

25,899*2, *4

18,291
7,607*2, *4Non-operating income:Interest income

193

194

175

1,608

Dividends income

34

56

52

477

Foreign exchange gain

—

152

—

—

Miscellaneous income

17

7

25

229

Total non-operating income

245

410

253

2,324

Non-operating expenses:
217

218

190

1,745

Loss on valuation of investment
securities

—

87

—

—

68

624

Loss on disposal of non-current
assets

66

*3

84

*3

Foreign exchange loss

236

—

59

542

Miscellaneous loss

4

3

25

229

526

394

344

3,160

Ordinary income

6,465

7,624

8,132

74,722

Income before income taxes

6,465

7,624

8,132

74,722

Income taxes - current

2,187

2,526

2,355

21,639

Income taxes - deferred

325

(80)

91

836

Total income taxes

2,513

2,446

2,446

22,475

Net income

3,951

5,178

5,686

52,246

Profit attributable to non-controllinginterests

20

7

8

73

Profit attributable to owners of parent

3,931

5,170

5,677

52,163

Total non-operating expenses

67
67

*3

METAWATER REPORT2020
METAWATERREPORT
2020

Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2020

3,951

5,178

5,686

52,246

Valuation difference on available-forsale securities

21

(4)

4

36

Foreign currency translation
adjustment

(49)

(455)

4

36

Remeasurements of defined benefit
plans

364

828

763

7,010

772

7,093

Net income
Other comprehensive income

Total other comprehensive income
Comprehensive income

*1

336

*1

367

*1

4,287

5,545

6,458

59,340Comprehensive income attributableto owners of parent

4,267

5,538

6,450

59,266Comprehensive income attributable
to non-controlling interests

20

7

8

73

(Details)

Financial Information

Interest expenses

Thousands of
U.S. dollars

Millions of yen

METAWATERREPORT2020
2020
METAWATERREPORT

68
68

Consolidated Statement of Changes in Shareholders’ Equity

Fiscal year ended March 31, 2019

Fiscal year ended March 31, 2020
(Millions of yen)

(Millions of yen)

Shareholders’ equity

Balance at April 1, 2018

Shareholders’ equity

Capital stock

CapitalsurplusRetainedearnings

Treasurystock

11,94615,08030,214(0)

Total
shareholders’equity57,241

Balance at April 1, 2019

Changes during the year

Capital stock

CapitalsurplusRetainedearnings

Treasurystock

11,94615,08033,830(0)60,856

Changes during the year

Dividends from surplus(1,555)(1,555)

Dividends from surplus(1,607)(1,607)

Profit attributable to ownersof parent

5,170

5,170

Profit attributable to ownersof parent

5,677

5,677

(0)

Purchase of treasury stock

Purchase of treasury stock(0)

Changes in other equity, net
Total changes during the year
Balance at March 31, 2019

—

—

3,615

(0)

3,614

Total changes during the year

11,94615,08033,830(0)60,856

Balance at March 31, 2020

(14,288)

—

—

4,070

(14,288)(10,218)

11,94615,08037,900(14,289)

50,638

Accumulated other comprehensive income

Total
Valuation
Foreign currency Remeasurements accumulateddifference onof definedothertranslation
available-for-salebenefit planscomprehensive
adjustment
securities
income54

84(2,474)(2,335)

Noncontrollinginterests

Total net
assets136

55,042

Changes during the year

Total
Valuation
Foreign currency Remeasurements accumulateddifference onof definedothertranslation
available-for-salebenefit planscomprehensive
adjustment
securities
incomeBalance at April 1, 2019

49

(371)

(1,645)(1,967)

Noncontrollinginterests

Total net
assets142

59,031

Changes during the year

Dividends from surplus(1,555)

Dividends from surplus(1,607)

Profit attributable to ownersof parent

5,170

Profit attributable to ownersof parent

5,677

Purchase of treasury stock(0)

Purchase of treasury stock(14,288)

Changes in other equity, net

(4)

(455)

828

367

5

373

Changes in other equity, net

4

4

763

772

6

779

Total changes during the year

(4)

(455)

828

367

5

3,988

Total changes during the year

4

4

763

772

6

(9,438)

Balance at March 31, 2019

49

(371)

(1,645)(1,967)

142

59,031

Balance at March 31, 2020

54

(366)

(882)

(1,194)

148

49,592METAWATER REPORT2020
METAWATERREPORT
2020

METAWATERREPORT2020
2020
METAWATERREPORT

Financial Information

Balance at April 1, 2018(14,288)

Changes in other equity, net

Accumulated other comprehensive income

69
69

Total
shareholders’equity70
70Consolidated Statement of Cash Flows

Fiscal year ended
March 31, 2018

Shareholders’ equity
Capital stock
Balance at April 1, 2019109,767

CapitalsurplusRetainedearnings

Treasurystock

138,564

310,851(0)559,184

Changes during the year
(14,766)

Profit attributable to ownersof parent

52,16352,163Purchase of treasury stock(131,287)(131,287)

Balance at March 31, 2020——

37,397(131,287)(93,889)

109,767

138,564

348,249(131,296)

465,294

Accumulated other comprehensive income
Total
Valuation
Foreign currency Remeasurements accumulateddifference onof definedothertranslation
available-for-salebenefit planscomprehensive
adjustment
securities
income450(3,408)(15,115)(18,074)

Noncontrollinginterests

Total net
assets1,304

542,414

8,132

74,722

Depreciation

1,441

1,348

1,098

10,089

140

138

148

1,359

(349)

(156)

(196)

(1,800)

68

(550)

(631)

(5,798)

(194)

510

(19)

(174)

37

313

61

560

(228)

(250)

(228)

(2,095)Interest expenses

217

218

190

1,745

Foreign exchange (gain)/loss

209

(174)

59

542

66

84

68

624

—

87

—

—

(4,311)(4,165)(1,859)(17,081)

1,292(2,707)

605

5,559

(858)

248

5,169

47,496

2,067

5,361

(7,073)(64,991)

1,496

441

501

4,603

Subtotal

7,562

8,372

6,027

55,379Interest and dividends income
received

228

250

228

2,095

Interest expenses paid

(220)

(220)

(196)

(1,800)

Income taxes paid

(2,394)(2,165)(2,537)(23,311)

Net cash provided by operating
activities

Dividends from surplus(14,766)

Profit attributable to ownersof parent

52,163Purchase of treasury stock(131,287)

Changes in other equity, net

36

36

7,010

7,093

55

7,157

Total changes during the year

36

36

7,010

7,093

55

(86,722)496(3,363)(8,104)(10,971)

5,175

6,236

3,521

32,353

50

34

23

211

(527)

(555)

(600)

(5,513)Purchase of intangible assets

(217)

(114)

(179)

(1,644)

Loss on disposal of property, plantand equipment
Loss/(gain) on valuation of
investment securities(Increase)/decrease in notes andaccounts receivable(Increase)/decrease in inventory

Changes during the year

Balance at March 31, 2020

7,624

1,359

455,683

Increase/(decrease) in notes andaccounts payable - trade
Increase/(decrease) in advances
received
Other cash flows from operating
activities

Financial Information

Balance at April 1, 2019

Fiscal year ended
March 31, 2020

6,465

Increase/(decrease) in liabilities for
retirement benefits(Increase)/decrease in assets for
retirement benefits
Increase/(decrease) in provision forwarranties for completed construction
Increase/(decrease) in provision forloss on construction contracts
Interest income and dividends
incomeChanges in other equity, net
Total changes during the year

Fiscal year ended
March 31, 2020

Income before income taxes

Amortization of goodwill(14,766)

Fiscal year ended
March 31, 2019

Cash flows from operating activities

Total
shareholders’equityDividends from surplus

Thousands of
U.S. dollars

Millions of yen(Thousands of U.S. dollars)

Cash flows from investing activities
Net (increase)/decrease in time
deposits
Purchase of property, plant andequipment

71
71

METAWATER REPORT2020
METAWATERREPORT
2020

Purchase of investment securities

(110)

(95)

(223)

(2,049)Acquisition of newly consolidated
subsidiaries

—

—

(426)

(3,914)

Payments of loans receivable

(1)

—

(2)

(18)

Collection of loans receivable

28

27

27

248

Other cash flows from investing
activities

(91)

(103)

0

0

Net cash used in investing activities

(868)

(805)

(1,380)(12,680)METAWATERREPORT2020
2020
METAWATERREPORT

72
72

[Notes to Consolidated Financial Statements](Basis of Presentation)
The accompanying consolidated financial statements of METAWATER Co., Ltd. (the “Company”) and consolidated subsidiaries are prepared on the basisof accounting principles generally accepted in Japan, which are different in certain respects as to the application and disclosure requirements ofThousands of
U.S. dollars

Millions of yen
Fiscal year ended
March 31, 2018

Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 2020

Fiscal year ended
March 31, 2020

International Financial Reporting Standards, and are compiled from the consolidated financial statements prepared by the Company as required by the
Financial Instruments and Exchange Act of Japan.
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation.

Cash flows from financing activities(Presentation of Amounts in the Consolidated Financial Statements)

Proceeds from short-term loans
payable

452

55

—

—

Repayments of short-term loans
payable

(740)

(282)

(330)

(3,032)

Repayments of PFI and otherprojects finance loans

(825)

(833)

(844)

(7,755)Purchase of treasury stock

(0)

(0)

(14,288)(131,287)(1,503)(1,555)(1,607)(14,766)

(1)

(1)

(1)

(9)

(2,619)(2,617)(17,072)(156,868)

The yen amounts are truncated at millions and U.S. dollar amounts are rounded off in thousands. The total Japanese yen and U.S. dollar amounts shownin the financial statements do not necessarily agree with the sum of the individual amounts. U.S. dollar amounts presented in the financial statements
are included solely for convenience. The rate of ¥108.83 to US$1.00, prevailing on March 31, 2020, has been used for translation into U.S. dollar amounts
in the financial statements. The inclusion of such amounts should not be construed as a representation that Japanese yen amounts have been or could in
the future be converted into U.S. dollars at that or any other rate.

(Principles of Consolidation)

Cash dividends paid

The accompanying consolidated financial statements include the accounts of the Company and any significant companies controlled directly or indirectlyby the Company.

Cash dividends paid to noncontrolling interests
Net cash used in financing activities

Investments in companies over which the Company exercises significant influence in terms of their operating and financial policies have been accounted
for by the equity method.
As of March 31, 2020, the numbers of consolidated subsidiaries were 10 (9 in 2019). Non-consolidated subsidiaries whose combined assets, net sales,

Effect of exchange rate change on cash
and cash equivalents

(63)

4

11

101

profit and retained earnings are not significant in the related consolidated totals, have not been consolidated with the Company. Investments in nonconsolidated subsidiaries and affiliated companies which have immaterial effect on the consolidated financial statements are accounted for at cost

Net increase/(decrease) in cash andcash equivalents

1,625

2,819

(14,920)(137,094)

without applying the equity method of accounting. METAWATER USA, INC. and five other subsidiaries are consolidated using their financial statements
as of their fiscal year end, which falls on December 31 and necessary adjustments are made to their financial statements to reflect any significant

Cash and cash equivalents at March 31

23,352*1

24,977

24,977*1

27,796*1

27,796

255,407

12,876

118,312transactions from January 1 to March 31. All significant intercompany balances and transactions have been eliminated in consolidation.

(Summary of Significant Accounting Policies)
1. Valuation standard and methods for significant assets(1) Securities

Financial Information

Cash and cash equivalents at April 1

1)Available-for-sale securities
Available-for-sale securities with market value
Available-for-sale securities with market value are stated at fair value based on the market price as of the end of the accounting period. Any
unrealized gain or loss, net of applicable taxes is reported as a component of accumulated other comprehensive income. The cost of
securities sold is calculated using the moving average method.

Available-for-sale securities without market value
Available-for-sale securities without market value are stated at cost using the moving average method.

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(2) Inventory(2) Method for amortizing actuarial gain or loss and prior service cost
Prior service cost is amortized as incurred by the straight-line method over a period not exceeding the estimated average remaining service1) Supplies
Supplies are stated at cost using the weighted average method. (Balance sheet amounts are written down on the basis of any decreased

period of employees (10 to 14 years) at the time of occurrence.

profitability.)

Actuarial gain or loss is amortized from the fiscal year following the year in which the gain or loss is recognized, amortized by the straightline method over a period not exceeding the average remaining service period of the employees (10 to 14 years) at the time of occurrence.

2) Work in process
Work in process is stated at cost using the individual identification method.
5.

Recognition for revenue and cost
For long-term construction contracts whose outcome can be estimated reliably, the percentage-of-completion method is adopted. The stage(3) Derivativesof completion of a contract is determined by the percentage of the cost incurred to date to the estimated total cost. When the outcome of

Derivatives are stated at fair value.

the construction contracts cannot be estimated reliably, the completed-contract method is adopted.
2.

Method of depreciation and amortization
6.

(1) Property, plant and equipment

Foreign currency translation

Depreciation of property, plant and equipment is mainly computed by the declining-balance method over the applicable useful lives. However,Monetary receivables and payables in foreign currencies are translated into yen using the spot exchange rates on the consolidated balance

the buildings acquired on and after April 1, 1998 (excluding accompanying facilities) and the accompanying facilities and structures acquired

sheet date, and translation adjustments are recorded as gains or losses. For foreign subsidiaries assets and liabilities are translated into yen

on and after April 1, 2016 are depreciated by the straight-line method.

using the spot exchange rates on the consolidated balance sheet date; revenues and expenses are translated into yen using the average

Useful lives of assets are principally as follows:

exchange rates during the period; and translation adjustments are included in foreign currency translation adjustment under net assets.

Buildings and structures:

2 to 50 years

Machinery and equipment:

2 to 17 years

7.

Hedge accounting(1) Hedge accounting method
As interest rate swaps meet the requirements for short-cut method, the accounting is applied to them.

(2) Intangible assets
Intangible assets are amortized by the straight-line method. Computer software for internal use is amortized by the straight-line method over(2) Hedging instruments and hedged items

the estimated useful life of 5 years. Customer-related assets are amortized by the straight-line method over the estimated useful life of 17

Hedging instruments: Interest rate swaps

years.

Hedged items: Interest on loans payable3.

Accounting standard for significant allowances and provisions(3) Hedging policy(1) Allowance for doubtful accounts

Allowances for ordinary debt are computed based on the historical rate of default. For certain debts, such as those where recovery is(4) Method for evaluating hedging effectivenessdoubtful, the Company considers the likelihood of recovery on an individual basis and records an allowance for the amount of debt expected

The evaluation of hedging effectiveness is omitted for interest rate swaps as the requirements for short-cut method are met.

to be unrecoverable. Allowance for doubtful accounts was not recorded at the end of the fiscal year ended March 31, 2020.

(2) Provision for warranties for completed construction

8.

The amortization method and amortization period of goodwill

Financial Information

Interest rate swaps are used on some of loans payable from financial institutions to avoid risks resulting from interest rate fluctuation.

To provide for potential loss on receivables, the Company provides an allowance for the expected amount of irrecoverable receivables.

Goodwill is amortized by the straight-line method over a period of 10 or 15 years.

The Company records provision for warranties for completed construction based on the estimated amount of future warranties forconstruction revenue in order to provide for costs of free-of-charge repair under defect liability for contract construction.
9.

Cash and cash equivalents in the consolidated statement of cash flows
Cash and cash equivalents consist of cash at hand, demand deposits at banks, and highly liquid short-term investments with negligible risk of(3) Provision for loss on construction contracts

fluctuation in value and maturities of three months or less.

In order to provide for potential loss on construction contracts, the Company records provision for loss on construction contracts at an
estimated amount of loss on contracts undelivered at the end of the fiscal year, loss of which are expected to be incurred and such expectedamount of loss can be reasonably estimated.

10.

Consumption tax
Consumption tax and local consumption tax are excluded from respective transaction amounts.

4.

Accounting method for retirement benefits(1) Method of allocating projected retirement benefit obligation
In calculating the retirement benefit obligation, the benefit formula basis is used to allocate the projected retirement benefit obligation to theestimated periods of service of the eligible employees until the end of the fiscal year.

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(Unapplied Accounting Standards, etc.)(Notes to Consolidated Balance Sheets)- Accounting Standards Board of Japan (ASBJ) Statement No. 29 “Accounting Standard for Revenue Recognition” (March 31, 2020)*1.

Investments in non-consolidated subsidiaries and affiliated companies are as follows:- ASBJ Guidance No. 30 “Implementation Guidance on Accounting Standard for Revenue Recognition” (March 31, 2020)

As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

1,020

1,167

10,723As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

3,827

4,287

39,391

Investment securities(1) Outline
A comprehensive accounting standard on revenue recognition. Revenue is recognized by applying the following five steps.
Step 1: Identify the contract with a customer*2.

Accumulated depreciation of property, plant and equipment

Step 2: Identify performance obligations in the contract
Step 3: Determine the transaction price

Accumulated depreciation ofproperty, plant and equipment

Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the performance obligations are satisfied*3.
(2) Scheduled date of application“Current portion of PFI and other project finance loans” and “PFI and other project finance loans” are loans payable secured by the PFI businessfrom financial institutions to WATER NEXT YOKOHAMA Co., Ltd., which is a special purpose company established for the PFI business and the

They are scheduled to be applied from the beginning of the fiscal year ending March 31, 2022.

Company’s consolidated subsidiary, and other consolidated subsidiaries.
The amounts of assets including accounts receivable of the special purpose company corresponding to the above PFI and other project finance(3) Impact of application of the accounting standard, etc.

loans are as follows:

The impact of application is under evaluation at the time of preparing the consolidated financial statements.

As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

Cash and deposits

1,599

1,598

14,683

Notes and accounts receivable - trade

13,393

11,437105,090

14,993

13,035

119,773

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

Total

The following assets eliminated in the consolidation procedures are pledged as security.
As of March 31, 2019
(Millions of yen)
152

152

1,396

Long-term loans receivable

487

448

4,116

Total

639

601

5,522

The following assets are pledged as security for PFI and other project finance loans to subsidiaries and affiliated companies operating the PFI
business (non-consolidated).

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As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

Investment securities

408

431

3,960

Long-term loans receivable

195

169

1,552

Total

603

601

5,522

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Financial Information*4.

Investments in subsidiaries

78
78

*5.

Guarantees of indebtedness(Notes to Consolidated Statement of Comprehensive Income)

The Company provides guarantees to the following companies for their loans payable from financial institutions.

*1.

(1) Guarantee for loans payable
As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

144

126

1,157

Osaka Bioenergy Co., Ltd.

(2) Performance guarantee
As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

Ariake Water Management Co., Ltd.

27

27

248

Aizuwakamatsu Aqua Partner Co., Ltd.

542

523

4,805

Sasebo Aqua Solution Co., Ltd.

242

226

2,076

Sorami Bio Partners Co., Ltd.

63

63

578

Northern Akita Eco-resource Management Co.,
Ltd.

17

17

156

13

14

128

Gotemba Oyama Eco Partners Co., Ltd.

14

14

128

922

887

8,150

(Notes to Consolidated Statement of Income)*1.

Fiscal year ended
March 31, 2019
(Millions of yen)
Valuation difference on available-for-salesecurities
Amount arising during the year

(7)

6

Reclassification adjustments

—

—

—

Amount before tax effect

(7)

6

55

Tax effect

3

(1)

(9)

Valuation difference on available-forsale securities

(4)

4

36

(455)

4

36

Amount recognized during the year

533

546

5,016

Reclassification adjustments

659

553

5,081

Before tax effect adjustment

1,193

1,100

10,107

Tax effects

(365)

(336)

(3,087)

828

763

7,010

367

772

7,093

Amount recognized during the year

Remeasurements of defined benefit
plans
Total other comprehensive
incomeProvision for loss on construction contracts included in cost of sales are as follows:
Fiscal year ended March 31, 2019
(Millions of yen)

Fiscal year ended March 31, 2020
(Millions of yen)

Fiscal year ended March 31, 2020
(Thousands of U.S. dollars)

363

(74)

(679)

(Notes to Consolidated Statement of Changes in Shareholders’ Equity)
Fiscal year ended March 31, 2019
1. Shares issued

The major items and their amounts of selling, general and administrative expenses are as follows:
Fiscal year ended
March 31, 2020
(Millions of yen)

*4.

79
79

Fiscal year ended
March 31, 2020
(Thousands of U.S. dollars)

Salaries and allowances

4,050

4,284

39,364

Bonuses

1,466

1,484

13,635Retirement benefit expenses

501

424

3,895

Provision for warranties
for completed construction

446

(16)

(147)

1,908

2,374

21,813

Increase

Decrease

Number of shares
as of March 31, 201925,923,500——

25,923,500

Number of shares
as of April 1, 2018

Increase

Decrease

Number of shares
as of March 31, 2019

91

59

—

150

2. Treasury stock
Type of shares
Common stock(shares)(Details of the changes)
Increase resulting from purchase of shares less than one unit: 59 shares
3. Dividends(1) Dividends paid

The details of loss on disposal of non-current assets are as follows:
Fiscal year ended March 31, 2019

Fiscal year ended March 31, 2020

Loss on sales and retirement of machinery and equipment

Loss on sales and retirement of machinery and equipment

Total amount of research and development expenses included in general and administrative expenses and in production cost in the fiscal year are
as follows:
Fiscal year ended March 31, 2019
(Millions of yen)

Fiscal year ended March 31, 2020
(Millions of yen)

Fiscal year ended March 31, 2020
(Thousands of U.S. dollars)

1,908

2,374

21,813METAWATER REPORT2020
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Common stock(shares)Number of shares
as of April 1, 2018

Financial Information

Fiscal year ended
March 31, 2019
(Millions of yen)

Research and development expenses

*3.

55

Foreign currency translation adjustment

Type of shares*2.

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)

Fiscal year ended
March 31, 2020
(Millions of yen)

Remeasurements of defined benefit plans

Ofunato Sewer Management Co., Ltd.

Total

The following table presents reclassification adjustments and tax effects allocated to each component of other comprehensive income for theyears ended March 31, 2020 and 2019

Resolution

Type of shares

Total amount ofdividends(Millions of yen)

Dividend per share(Yen)

Cut-off date

Effective date

Board of Directors’
meeting held on May
23, 2018

Common stock

751

29.00

March 31, 2018

June 7, 2018

Board of Directors’
meeting held on
November 13, 2018

Common stock

803

31.00

September 30, 2018

December 4, 2018

(2) Dividends whose record date falls in the fiscal year ended March 31, 2019, but whose effective date is in the following fiscal year
Resolution

Type ofshares

Source ofdividends

Total amount ofdividends(Millions of yen)

Dividend pershare (Yen)

Cut-off date

Effective date

Board of Directors’
meeting held on May 22,
2019

Commonstock

Retainedearnings

803

31.00

March 31, 2019

June 6, 2019

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80
80

Fiscal year ended March 31, 2020

(Financial Instruments)

1. Shares issued

1. Overview

Type of shares
Common stock(shares)Number of shares
as of April 1, 2019

Increase

Decrease

Number of shares
as of March 31, 2020

25,923,500——

25,923,500(1) Group policy for financial instruments
The Group restricts its fund management to short-term deposits and raises funds through loans from financial institutions including banks.
Derivatives are used for receivables and payables arising from transactions associated with the actual demand, and the Group does not intend to
make speculative transactions.

2. Treasury stock
Type of shares

Number of shares
as of April 1, 2019

Increase

Decrease

Number of shares
as of March 31, 2020150

4,200,036—

4,200,186

Common stock(shares)(2) Type of financial instruments, related risk and risk management system
Although notes and accounts receivable - trade are exposed to customer credit risk, the Group works to reduce such risk in accordance with credit
management rules. Although trade receivables in foreign currencies arising from overseas operations are exposed to currency fluctuation risk, they

(Details of the changes)

are hedged with forward foreign currency contracts where necessary.

Increase resulting from purchase of shares less than one unit: 36 shares
Purchase of treasury stock in accordance with the resolution of the Board of Directors’ meeting held on October 29, 2019: 4,200,000 shares

Investment securities are mainly limited to shares of companies with which the Group has built a business relationship. Listed stocks are
exposed to risk of fluctuation in the market value, while they are marked to market on a quarterly basis.

3. Dividends(1) Dividends paid
Resolution

The payment terms of notes and accounts payable - trade are mostly one year or less than one year.

Type of shares

Board of Directors’
meeting held on May
22, 2019

Common stock

Board of Directors’
meeting held on
November 12, 2019

Common stock

Although some of trade payables are denominated in foreign currencies and are exposed to currency fluctuation risk, they are hedged with

Total amount ofdividends(Millions of yen)

Dividend per share
(Yen)

803

31.00

Cut-off date

Effective dateforward foreign currency contracts where necessary.
Loans payable are mainly used for the acquisition of shares of subsidiaries, with the maximum maturity period of 7 years after the balance

March 31, 2019

June 6, 2019sheet date. PFI and other project finance loans are intended to raise funds for specific businesses such as the PFI business, with the maximum
maturity period of 15 years and 8 months after the accounting period. Although some of PFI and other project finance loans are exposed to risk of

803

31.00

September 30, 2019

December 3, 2019

interest rate fluctuation, while they are hedged with derivatives (interest rate swaps).
Derivatives include forward foreign currency contracts which are used to hedge currency fluctuation risk associated with trade receivables andpayables, and interest rate swaps which are used to hedge risk of fluctuation in interest on loans payable. The evaluation of hedging effectivenessResolution

Type of shares

Total amount ofdividends(Thousands of U.S.
dollars)

Board of Directors’
meeting held on May
22, 2019

Common stock

7,378

0.28

March 31, 2019

June 6, 2019

Board of Directors’
meeting held on
November 12, 2019

Common stock

7,378

0.28

September 30, 2019

December 3, 2019

Dividend per share(U.S. dollars)

Cut-off date

Effective dateis omitted based on the judgment that interest rate swaps meet the requirements for short-cut method.

2. Fair value of financial instruments
The carrying value of financial instruments on the consolidated balance sheets as of March 31, 2020 and 2019 and estimated fair value are shown(please see Note 2).

(2) Dividends whose record date falls in the fiscal year ended March 31, 2020, but whose effective date is in the following fiscal year
Resolution

Type ofshares

Source ofdividends

Total amount ofdividends(Millions of yen)

Dividend pershare (Yen)

Cut-off date

Effective date

Board of Directors’
meeting held on May 21,
2020

Commonstock

Retainedearnings

868

40.00

March 31, 2020

June 5, 2020

Resolution

Type ofshares

Source ofdividends

Cut-off date

Effective date

Board of Directors’
meeting held on May 21,
2020

Commonstock

Retainedearnings

March 31, 2020

June 5, 2020

Total amount ofdividends
Dividend per share(Thousands of U.S.
(U.S. dollars)
dollars)
7,975

0.36

Financial Informationin the following table. The financial instruments whose fair value is deemed extremely difficult to determine are not included in the table below(Notes to Consolidated Statement of Cash Flows)*1.

Cash and cash equivalents in the consolidated statement of cash flows are reconciled to cash and deposits in the consolidated balance sheets asfollows:

Cash and deposits
Time deposits with maturities of over threemonthsCash and cash equivalents
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Fiscal year ended
March 31, 2019
(Millions of yen)

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)

28,58913,645

125,379

(792)

(769)

(7,066)

27,796

12,876

118,312METAWATERREPORT2020
2020
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82

As of March 31, 2019

(Note 1) Computation method of fair values of financial instruments and other matters concerning securities and derivatives
AssetsCarrying value(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)

(1) Cash and deposits

28,58928,589—The fair value of cash and deposits is based on their carrying amount, since the fair value approximates their carrying amount due to the short(2) Notes and accounts receivable - trade76,282

76,33249

maturity period of the instrument.

(1)

Cash and deposits(3) Investment securities
Available-for-sale securities

103

103

—

104,976

105,025

49(1) Accounts payable - trade18,27818,278—(2) Electronically recorded obligations

8,380

8,380

—

(3) Short-term loans payable

337

337

—

(4) Current portion of PFI and other projects
finance loans

844

844

—

(5) Long-term loans payable

1,847

1,840

(6)

(6) PFI and other projects finance loans

10,705

10,974269

Total assets(7) Derivatives
Total liabilities(2)

Notes and accounts receivable - trade
The fair value of notes and accounts receivable - trade is based on their present value calculated by discounting the amount of each receivableclassified by a certain period using a discount rate that reflects the credit risk and the period until the maturity.

(3)

Investment securities
The fair value of stocks is based on their prices quoted on the concerned stock exchanges.

—

—

—

Liabilities

40,39240,655262(1)

Accounts payable - trade, (2) Electronically recorded obligations, (3) Short-term loans payable and (4) Current portion of PFI and other project
finance loans

As of March 31, 2020

The fair value of accounts payable - trade, electronically recorded obligations, short-term loans payable and current portion of PFI and otherproject finance loans is based on their carrying amounts, since the fair value approximates their carrying amounts due to the short maturity
Carrying value(Millions of yen)

Fair value(Millions of yen)

Difference(Millions of yen)

(1) Cash and deposits

13,645

13,645—(2) Notes and accounts receivable - trade78,10978,088

(20)

110

110

—

91,86591,844(20)

period of the instruments.

(5)(3) Investment securities
Available-for-sale securities
Total assets(1) Accounts payable - trade

19,801

19,801—(2) Electronically recorded obligations

11,603

11,603

—

276

276

—

The fair value of long-term loans payable and PFI and other project finance loans is computed based on their present value calculated bydiscounting the aggregate value of principal and interest using the discount rate at which a similar and new borrowing is assumed to be made.

(7)

Derivatives(3) Short-term loans payable(4) Current portion of PFI and other projects
finance loans(5) Long-term loans payable

855

855

—

1,539

1,560

21

Since interest rate swaps under short-cut method are treated together with long-term loans payable and PFI and other project finance loans that

(6) PFI and other projects finance loans

9,849

10,060211

are subject to hedging, their fair value is included in the fair value of PFI and other project finance loans.

—

—

—

43,925

44,158233

Carrying value(Thousands of U.S.
dollars)

Fair value(Thousands of U.S.
dollars)

Difference(Thousands of U.S.
dollars)(1) Cash and deposits

125,379

125,379—(2) Notes and accounts receivable - trade717,715

717,522(183)

Total liabilities(3) Investment securities
Available-for-sale securities

1,010

1,010

—

844,114843,921(183)(1) Accounts payable - trade

181,944

181,944—(2) Electronically recorded obligations

106,615

106,615

—

2,536

2,536

—

Total assets(3) Short-term loans payable(4) Current portion of PFI and other projects
finance loans(5) Long-term loans payable

7,856

7,856

—

14,141

14,334

192(6) PFI and other projects finance loans

90,49892,437

1,938

—

—

—

403,611405,7522,140(7) Derivatives
Total liabilities

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The fair value of interest rate swaps is based on the quoted price obtained from the counterparty financial institution.

Financial Information(7) Derivatives

83
83

Long-term loans payable and (6) PFI and other project finance loans(Note 2) The amount of financial instruments recorded in the consolidated balance sheets, of which it is deemed extremely difficult to determine the fairvalue.

Category
Unlisted stocks (including shares of non-consolidated
subsidiaries and affiliated companies)

As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S.
dollars)

1,238

1,457

13,387Since there is no quoted market price for the above item and it is deemed extremely difficult to determine its fair value, the item is not includedin “(3) Investment securities”.

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84

(Note 4) The repayment schedule for loans payable and PFI and other project finance loans subsequent to the consolidated closing date

(Note 3) The redemption schedule for monetary receivables subsequent to the consolidated closing date
As of March 31, 2019

As of March 31, 2019
Due in one year or
less(Millions of yen)

Due after one year Due after five years
Due after ten years
through five years through ten years(Millions of yen)
(Millions of yen)
(Millions of yen)

Cash and deposits

28,589———Notes and accounts receivable - trade

62,894

4,892

3,971

4,524

91,483

4,892

3,971

4,524

Total

Due in one year or
less(Millions of yen)

Due after one year Due after five years
through five years through ten years(Millions of yen)
(Millions of yen)

Due after ten years
through fifteen
years(Millions of yen)

Due after fifteen
years(Millions of yen)

Loans payable

337

1,292

554

—

—

PFI and other projects finance loans

844

3,477

3,694

3,532

—

1,181

4,769

4,249

3,532

—

Due after ten years
through fifteen
years(Millions of yen)

Due after fifteen
years(Millions of yen)

Total
As of March 31, 2020
As of March 31, 2020
Due in one year or
less(Millions of yen)

Due after one year Due after five years
Due after ten years
through five years through ten years(Millions of yen)
(Millions of yen)
(Millions of yen)

Cash and deposits

13,645———

Notes and accounts receivable - trade

66,676

3,857

3,802

3,773

80,322

3,857

3,802

7,546

Total

Due in one year or
less(Millions of yen)
Loans payable

276

1,266

272

—

—

PFI and other projects finance loans

855

3,320

3,735

2,794

—

1,131

4,587

4,007

2,794

—

Total
Due in one year or Due after one year Due after five years
Due after ten years
through five years through ten years
less(Thousands of U.S.
(Thousands of U.S. (Thousands of U.S. (Thousands of U.S.
dollars)
dollars)
dollars)
dollars)
125,379———

Notes and accounts receivable - trade612,661

35,44034,93534,668738,050

35,44034,93569,337Total

Due after ten years
Due in one year or Due after one year Due after five years
Due after fifteen
through fifteen
lessthrough five years through ten years
years
years
(Thousands of U.S. (Thousands of U.S. (Thousands of U.S.
(Thousands of U.S.
(Thousands of U.S.
dollars)
dollars)
dollars)
dollars)
dollars)
Loans payable

2,536

11,632

2,499

—

—

PFI and other projects finance loans

7,856

30,50634,31925,673—

10,392

42,14836,81825,673

—

Total

85
85

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2020
METAWATERREPORT

Financial Information

Cash and deposits

Due after one year Due after five years
through five years through ten years(Millions of yen)
(Millions of yen)

86
86

(Securities)(Derivatives)

Available-for-sale securities

1. Derivative transactions to which hedge accounting is not applied
No items to report.

As of March 31, 2019
Category

Carrying value(Millions of yen)

Acquisition cost
(Millions of yen)

Unrealized gain (loss)(Millions of yen)Amounts in the consolidated balance sheets
exceeding acquisition cost:
StocksTotal

2. Derivative transactions to which hedge accounting is applied
Interest rate-related derivatives

103

33

70

103

33

70

As of March 31, 2019
Hedge accounting
methodAs of March 31, 2020
Category

Carrying value(Millions of yen)

Acquisition cost
(Millions of yen)

Unrealized gain (loss)(Millions of yen)Amounts in the consolidated balance sheets
exceeding acquisition cost:
Stocks
Total

Category

110

33

76

110

33

76

Carrying value(Thousands of U.S. dollars)

Acquisition cost(Thousands of U.S. dollars)

Unrealized gain (loss)(Thousands of U.S. dollars)

1,010

303

698

1,010

303

698

Amounts in the consolidated balance sheets
exceeding acquisition cost:
Stocks
Total

Short-cut method
for interest rate
swaps

Contract amount(Millions of yen)Contract amountdue after one year
(Millions of yen)

Fair value(Millions of yen)

Long-term loans
payable971

832(Note)

PFI and otherprojects financeloans

10,5719,806(Note)

11,543

10,638Type of derivativetransaction

Main hedged
itemsInterest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate
Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate
Total

(Note)

Since interest rate swaps to which short-cut method is applied are accounted together with long-term loans payable and PFI and other project
finance loans that are subject to hedging, their fair value is included in the fair value of such long-term loans payable and PFI and other project
finance loans.

As of March 31, 2020

Hedge accounting
methodContract amountdue after one year
(Millions of yen)

Fair value(Millions of yen)

Long-term loans
payable816

680(Note)

PFI and otherprojects finance
loans

9,806

9,029

(Note)

10,622

9,709

Contract amount(Thousands of
U.S. dollars)

Contract amountdue after one year
(Thousands of
U.S. dollars)

Fair value(Thousands of
U.S. dollars)

Main hedged
itemsInterest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate
Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate
Total

Hedge accounting
methodShort-cut method
for interest rate
swaps

Type of derivativetransaction

Main hedged
itemsInterest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rateLong-term loans
payable

7,497

6,248

(Note)

Interest rate swaps:
Payment on a
floating interest
rate/Receiving on
a fixed interest rate

PFI and otherprojects financeloans

90,10382,964(Note)

97,601

89,212

Total(Note)

Financial Information

Short-cut method
for interest rate
swaps

Contract amount(Millions of yen)Type of derivativetransaction

Since interest rate swaps to which short-cut method is applied are accounted together with long-term loans payable and PFI and other project
finance loans that are subject to hedging, their fair value is included in the fair value of such long-term loans payable and PFI and other project
finance loans.

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(4) The components of retirement benefit expenses are as follows:(Retirement Benefits)
1.

Overview of retirement benefit plans
The Company has lump-sum payment plans and a contract-type corporate pension plan as its defined benefit plan. In addition, the Company has adefined contribution pension plan. The Company has established a retirement benefit trust.
Certain overseas consolidated subsidiaries have a defined benefit or defined contribution plan.

Service cost

Certain domestic consolidated subsidiary has The Smaller Enterprise Retirement Allowance Mutual Aid Scheme. In addition to such scheme,

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)

736

697

6,404

Interest cost

154

157

1,442

certain domestic consolidated subsidiary has a retirement benefit plan under which such subsidiary pays additional retirement benefits to employees

Expected return on plan assets

(146)

(161)

(1,479)who meet the prescribed requirements upon their retirement.

Amortization of actuarial gain or loss

648

613

5,632

Amortization of prior service cost

8

8

73

(43)

(53)

(486)

1,358

1,263

11,605

In certain cases, the Group may also pay additional retirement benefits that are not subject to any actuarial calculations.

Other
2.

Fiscal year ended
March 31, 2019
(Millions of yen)

Defined benefit plans

Retirement benefit expenses(1) The changes in the retirement benefit obligation are as follows:

Retirement benefit obligation at the beginning of the year

Fiscal year ended
March 31, 2019
(Millions of yen)

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)
157,704

16,804

17,163Service cost

736

697

6,404

Interest cost

154

157

1,442

Actuarial gain and loss

117

195

1,791

Retirement benefits paid

(636)

(807)

(7,415)

Other

(12)

(10)

(91)

17,163

17,396

159,845

Retirement benefit obligation at the end of the year(5) The components of remeasurements of defined benefit plans included in other comprehensive income (before tax effect) are as follows:
Fiscal year ended
March 31, 2019
(Millions of yen)
Prior service cost

(6)

8

8

73

1,184

1,091

10,024

Total

1,193

1,100

10,107The components of remeasurements of defined benefit plans included in accumulated other comprehensive income (before tax effect) are as
follows:

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)

Unrecognized prior service cost

As of March 31, 2020
(Thousands of U.S. dollars)

16

7

64

Unrecognized actuarial gain and loss

2,355

1,264

11,614

Total

2,372

1,272

11,687

12,331

13,935

128,043

146

161

1,479

Actuarial gain and loss

653

673

6,183

Contribution by the companies

1,036

1,082

9,942

Retirement benefits paid

(267)

(353)

(3,243)

Stocks

29%

31%

Bonds

39

33

General accounts

20

19

Other

12

17

Total

100

100

Plan assets at fair value at the end of the year

43

44

404

13,935

15,544

142,828

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets as of March 31,
2019 and 2020 for the Company’s and the consolidated subsidiaries’ defined benefit plans:(7) The fair value of plan assets, by major category as a percentage of total plan assets are as follows:
As of March 31, 2019

(Note)

As of March 31, 2020

Financial Information

Fiscal year ended
March 31, 2020
(Millions of yen)

As of March 31, 2020
(Millions of yen)

Expected return on plan assets

Other

(3)

As of March 31, 2019
(Millions of yen)
Fiscal year ended
March 31, 2019
(Millions of yen)

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)

Actuarial gain and loss

(2) The changes in plan assets are as follows:

Plan assets at fair value at the beginning of the year

Fiscal year ended
March 31, 2020
(Millions of yen)

Retirement benefit trust established for the corporate pension plans is included and equivalent to 9.4% of total amount of plan assets as ofMarch 31, 2019 and 10.5% as of March 31, 2020.

As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

As of March 31, 2020
(Thousands of U.S. dollars)

Funded retirement benefit obligation

14,761

14,944

137,315

Plan assets at fair value(13,935)(15,544)(142,828)

The long-term expected rate of return on plan assets have been determined as a result of consideration of both the portfolio allocation at present
and in the future, and long-term rates of return from multiple plan assets at present and in the future.

826

(599)

(5,503)

Unfunded retirement benefit obligation

2,402

2,452

22,530Net amount of liabilities and assets recognized in the
consolidated balance sheet

3,228

1,852

17,017

Liability for retirement benefit

4,603

4,025

36,984Long-term expected rates of return on plan assets

Assets for retirement benefits

1,374

2,172

19,957

Expected rates of salary increase

Net amount of liabilities and assets recognized in the
consolidated balance sheet

3,228

1,852

17,017(8) The assumptions used in accounting for the defined benefit plans are as follows:
Fiscal year ended March 31,
2019
Discount rates

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METAWATER REPORT2020
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0.6–1.2%

Fiscal year ended March 31,
2020
0.05–1.2%

Mainly 1.5

Mainly 1.5

1.2–8.5

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90

3.

Defined contribution plans

As of March 31, 2020

Contributions of defined contribution plans for the fiscal years ended March 31, 2019 and 2020 were ¥142 million and ¥151 million (US$1,387

One year or less(Millions of yen)

thousand), respectively.
Unused tax losses (a)Valuation allowance
Deferred tax assets(Income Taxes)———

1. The significant components of deferred tax assets and deferred tax liabilities

As of March 31, 2019
(Millions of yen)

As of March 31, 2020
(Millions of yen)

One year or less(Thousands of
U.S. dollars)

As of March 31, 2020
(Thousands of U.S.
dollars)

Unused tax losses (a)Valuation allowance
Deferred tax assets

Deferred tax assets:
Enterprise tax payable

178

189

1,736

Accrued bonuses

824

872

8,012

Provision for loss on construction contracts

158

182

1,672

Provision for warranties for completed
construction

367

359

3,298

Excess of depreciation

328

330

3,032

Liability for retirement benefit

1,849

1,425

13,093

Unused tax losses (Note 2)

187

165

1,516

Other

705

753

6,919

4,600

4,278

39,309

(165)

(160)

(1,470)Subtotal
Valuation allowance for unused tax losses (Note 2)
Valuation allowance for the total amount of
deductible temporary differences(233)(2,140)

Valuation allowance subtotal (Note 1)

(422)

(394)

(3,620)Total deferred tax assets

4,177

3,884

35,688Gain on contribution of securities toretirement benefit trust

(727)

(858)

(7,883)

Other

(282)

(362)

(3,326)

Total deferred tax liabilities(1,009)(1,221)(11,219)

Net deferred tax assets (liabilities)

3,168

2,662

24,460

Deferred tax liabilities:

After one year
through two
years(Thousands of
U.S. dollars)———

After two years After three years After four years
through three
through four
through five
years
years
years
(Thousands of(Thousands of(Thousands of
U.S. dollars)
U.S. dollars)
U.S. dollars)
—
18
27
—
(18)
(0)
—
—
27

After five years(Thousands of
U.S. dollars)

Total(Thousands of
U.S. dollars)

1,460(1,451)9

1,516(1,470)36(a) Unused tax losses are multiplied by the effective statutory tax rate.

2. The breakdown of major items that caused differences between the effective statutory tax rate and the effective income tax rate

As of March 31, 2019

As of March 31, 2020

30.6%

30.6%

Permanently non-deductible items such as entertainment expenses

4.0

1.9

Permanently non-taxable items such as dividends income

(0.1)

(0.2)

Per capita inhabitants’ tax

0.9

0.8

Tax credit for experiment and research expenses

(3.0)

(2.1)

Effective statutory tax rate
(Adjustment)

Reduction of deferred tax assets at end of period due to change in tax rates——

Changes in valuation allowance

3.4

(0.3)

Difference in tax rates of overseas consolidated subsidiaries

(0.5)

(0.4)

Other

(3.2)

(0.2)

Effective income tax rate

32.1

30.1

(Asset Retirement Obligations)
The Group recognizes asset retirement obligations to restore corporate offices to their original condition upon termination of their lease contracts.
However, the statement is omitted because the total amount of the asset retirement obligations is immaterial.

(Notes)1. The valuation allowance has decreased by ¥28 million (US$257 thousand). This decrease mainly consists of the reversal of the valuation
allowance relating to the provision for loss on construction contracts in the amount of ¥8 million (US$73 thousand) at the Company and theRegarding some of the obligation to restore corporate offices to their original condition, the Group estimate nonrecoverable amounts of deposits for
those premises and record the portion attributable to the current year as expenses, instead of recording asset retirement obligations.

valuation allowance for unused tax losses in the amount of ¥4 million (US$36 thousand) at a consolidated subsidiary, METAWATER USA, INC.
2. Amounts of unused tax losses and deferred tax assets by carryforward period
As of March 31, 2019

(Segment Information)[Segment Information]

One year or less(Millions of yen)
Unused tax losses (a)Valuation allowance
Deferred tax assets

Financial Information

(257)

—
—
—

After one year After two years After three years After four years
through two
through three
through four
through five
After five years
Total
years
years
years
years
(Millions of yen) (Millions of yen)
(Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)
—
—
2
3
159
165
—
—
(2)
(0)
(158)
(160)
—
—
—
3
1
4

1
(1)
—

After one year After two years After three years After four years
through two
through three
through four
through five
After five years
Total
years
years
years
years
(Millions of yen) (Millions of yen)
(Millions of yen) (Millions of yen) (Millions of yen) (Millions of yen)
—
—
23
—
162
187
—
—
(2)
—
(161)
(165)
—
—
21
—
1
22

(a) Unused tax losses are multiplied by the effective statutory tax rate.

1. Outline of reportable segment
The Company’s segments represent components of the Company for which separate financial information is available and that are subject toperiodical review by the board of directors in determining how to allocate operating resources and evaluating performance.
The Company has established business divisions by its products and services at the corporate office, each of which operates undercomprehensive domestic and overseas strategies developed for its products and services.
Therefore, the Group basically consists of two reportable segments: “Plant Engineering” and “Service Solutions”, which are based on the
Company’s business divisions in consideration of similarities of types and natures of products and services. “Plant Engineering” segment is primarily
involved in design and construction of water and sewage treatment plants. “Service Solutions” segment is primarily involved in operation, control andrepair of water and sewage treatment plant facilities.
2. Determination of sales, income or loss, assets, liabilities and other items for each reportable segment
Accounting treatment applied to the business segment reported is generally consistent with accounting treatment stated in “Important Matters for
Basis of Preparation of Consolidated Financial Statements”.
In addition, segment income is determined based on operating income, which is consistent with operating income for the consolidated
statement of income.

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3. Sales, income or loss, assets, liabilities and other items by reportable segment[Related Information]
Fiscal year ended March 31, 2019

Fiscal year ended March 31, 2020
(Millions of yen)

A description is omitted because similar information has been disclosed under segment information.

Reportable segments
Plant
Engineering
Business

Service
Solutions
Business

1. Information by products and services

Total

Adjustments(Note)

Consolidated
2. Information by region(1) Net sales

Net sales
Sales to third parties
Inter-segment sales and transfers
Net sales

65,517

51,824

117,342—

117,342

—

—

—

—

—
117,342

65,517

51,824

117,342—

Segment income

3,191

4,416

7,607

—

7,607

Segment assets

56,15846,512

102,671

29,949132,620A description is omitted because sales to third parties in Japan exceed 90% of net sales in the consolidated statement of income.

(2) Property, plant and equipment(Millions of yen)

Other items
Depreciation

765

582

1,348

—

1,348

Capital expenditures

584

307

891

—

891

(Note) The amount of corporate assets included in adjustments of segment assets is ¥29,949 million. The corporate assets mainly represent cash andJapan

The United States

Switzerland

Total

1,346

1,449

391

3,188

3. Information about major customers(Millions of yen)deposits and investment securities.
Name of customer

Net sales

Related business segment

TOKYO METROPOLITAN GOVERNMENT

19,967

Plant Engineering Business
Service Solutions Business

Fiscal year ended March 31, 2020
(Millions of yen)
Reportable segments
Adjustments(Note)

Fiscal year ended March 31, 2020

Plant
Engineering
Business

Service
Solutions
Business

Total

72,36656,356

128,723

—

—

—

—

—

—

72,36656,356

128,723—

128,723

Segment income

3,188

5,035

8,223

—

8,223

Segment assets

50,18753,053103,240

16,228

119,469

Consolidated

1. Information by products and services
A description is omitted because similar information has been disclosed under segment information.

Net sales
Sales to third parties
Inter-segment sales and transfers
Net sales

128,723
2. Information by region(1) Net sales
A description is omitted because sales to third parties in Japan exceed 90% of net sales in the consolidated statement of income.

Financial Information

Other items
Depreciation

630

467

1,098

—

1,098

Capital expenditures

526

267

794

—

794

(Thousands of U.S. dollars)(2) Property, plant and equipment(Millions of yen)Japan

The United States

Switzerland

Other

Total

1,327

1,421

404

30

3,184

Japan

The United States

Switzerland

Other

Total

12,193

13,057

3,712

275

29,256

Reportable segments
Adjustments(Note)(Thousands of U.S. dollars)

Plant
Engineering
Business

Service
Solutions
Business

Total

664,945

517,835

1,182,789

—

—

—

—

—

—

664,945

517,835

1,182,789—

1,182,789

Segment income

29,293

46,26475,558—75,558Segment assets

461,150

487,485

948,635

149,113

1,097,757

Consolidated

Net sales
Sales to third parties
Inter-segment sales and transfers
Net sales

1,182,789

Other items
Depreciation

5,788

4,291

10,089—10,089

Capital expenditures

4,833

2,453

7,295

—

7,295

(Note) The amount of corporate assets included in adjustments of segment assets is ¥16,228 million (US$149,113 thousand). The corporate assets
mainly represent cash and deposits and investment securities.

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3. Information about major customers(Millions of yen)
Name of customer

Net sales

Related business segment

TOKYO METROPOLITAN GOVERNMENT

17,267

Plant Engineering Business
Service Solutions Business(Thousands of U.S. dollars)Name of customer
TOKYO METROPOLITAN GOVERNMENT

Net sales

Related business segment

158,660

Plant Engineering Business
Service Solutions Business

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[Information about Impairment Loss on Non-current Assets by Reportable Segment](Related Party Information)

Fiscal year ended March 31, 2019

Fiscal year ended March 31, 2019No items to report.

1.

Business transactions with related parties(1)Business transactions between the company filing the consolidated financial statements and related parties

Fiscal year ended March 31, 2020

Unconsolidated subsidiaries and affiliated companies of the company filing the consolidated financial statements

No items to report.
Category

Related party

Address[Information about Amortization and Unamortized Balance of Goodwill by Reportable Segment]

OtheraffiliateFiscal year ended March 31, 2019

Amortization
Unamortized balance

Total

Corporate/
Eliminations

138

—

138

—

138

1,670

—

1,670

—

1,670

Fiscal year ended March 31, 2020

Amortization
Unamortized balance

Service
Solutions
Business

Total

Corporate/
Eliminations

Total

148

—

148

—

148

1,671

—

1,671

—

1,671

Subsidiaryof otheraffiliate

FUJI FURUKAWAENGINEERING &CONSTRUCTION
CO. LTD.

Saiwaiku,
Kawasaki
-shi

1,970

Design and execution of
construction of plantfacilities, air conditioning/
electricity/building/incidental
facilities, andtelecommunications

Subsidiary of Hokkaido Fuji Electric Chuo-ku,
other affiliateCo., Ltd.
Sapporo-shi

100

Sale, installation, and repairof electrical machinery andapparatus/control systems
and electronic components

2.

Accounts
payable trade

2,786

—

Entrustmentof theCompany’s
construction
contracts

Entrustment ofconstruction
contracts(Note 1, 2)

5,048

Accounts
payable trade

1,221

—

Acceptance ofconstruction
contracts ofsaid company

Acceptance ofconstruction
contracts(Note 1, 2)858

Accounts
receivable trade831

Concurrent
holding of
positions byofficers

Of the amounts stated above, the transaction amount excludes consumption taxes, while the balance at end of the fiscal year includes

Transaction terms and the policy to determine transaction terms

Totaltransactions, as well as by reference to actual situation of the market.

Total(2)Business transactions between consolidated subsidiaries of the company filing the consolidated financial statements and related parties

1,359

—

1,359

—

1,359

Unamortized balance

15,354—

15,354—

15,354

No items to report.

2.

Financial Information

Service
Solutions
Business

Corporate/
Eliminations

Amortization

Fiscal year ended March 31, 2019

7,268

Purchase of
products

Transaction terms such as prices are determined through negotiation in each case based on a quotation as is the case with general

Reportable segments[Information about Gain on Bargain Purchase by Reportable Segment]

Purchase of
products(Note 1, 2)

Relationship

Nature oftransaction

consumption taxes.

(Thousands of U.S. dollars)

Plant
Engineering
Business

Purchase of
products(Held)
Direct 28.9

FUJI ELECTRIC CO.,
LTD.

1.

1,258

47,586Other
affiliate(Notes)Accounts
payable trade

Development, manufacture,and sale of products related
to power electronics
systems, electric
generation, electronic
devices and food
distribution, and provision ofservices related thereto

Kawasakiku,
Kawasakishi

Reportable segments
Plant
Engineering
Business

1,590(Held)
Direct 28.9

Mizuho-ku,
Nagoya-shi(Millions of yen)

Purchase of
products(Note 1, 2)

69,849NGK INSULATORS,
LTD.

Total

Balance atthe end ofyear(Millions ofyen)

Development, manufacture,and sale of products related
to electric power, ceramics,
electronics, and process
technology, and provision ofservices related thereto

Reportable segments
Service
Solutions
Business

Account
title

Type of business(Millions of yen)

Plant
Engineering
Business

Transaction
amount(Millions ofyen)

Percentage ofvoting rights
holding (held)(%)

Capital stock orcontributions(Millions of yen)

Note concerning the parent company or significant affiliated companies
No items to report.

No items to report.

Fiscal year ended March 31, 2020
No items to report.

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Fiscal year ended March 31, 2020
1.

(Per Share Information)
Fiscal year ended
March 31, 2019
(Yen)

Fiscal year ended
March 31, 2020
(Yen)

Fiscal year ended
March 31, 2020
(U.S. dollars)

Net assets per share

2,271.67

2,276.07

20.91

Net income per share

199.46231.52

2.12

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)

Business transactions with related parties(1)Business transactions between the company filing the consolidated financial statements and related parties
Unconsolidated subsidiaries and affiliated companies of the company filing the consolidated financial statements

Category

Related party

Other
affiliate

NGK INSULATORS,
LTD.

Other
affiliate

FUJI ELECTRIC
CO., LTD.

Address

Mizuho-ku,
Nagoya-shi

Kawasaki-ku,
Kawasaki-shi

Capital stockor
contributions(Millions ofyen)Type of business

Development, manufacture,and sale of products related
69,849to electric power, ceramics,(US$641,817
electronics, and process
thousand)technology, and provision ofservices related thereto

Development, manufacture,and sale of products related
47,586 to power electronics(US$437,250 systems, electronic devices,
thousand) food distribution and power
plant, and provision ofservices related thereto

Percentage
of votingrightsholding(held) (%)(Held)
Direct 25.3

(Held)
Direct 24.4

Subsidiaryof otheraffiliate

FUJI FURUKAWAENGINEERING &CONSTRUCTION
CO. LTD.

Saiwaiku,
Kawasaki-shi

Design and execution of
construction of plant
1,970
facilities, air conditioning/(US$18,101
electricity/building/incidental
thousand)facilities, andtelecommunications—

Subsidiaryof otheraffiliate

Hokkaido Fuji
Electric Co., Ltd.

Chuo-ku,
Sapporoshi

Sale, installation, and repair
100of electrical machinery and(US$918
apparatus/control systems
thousand)and electronic components—(Notes)1.

Relationship

Nature oftransaction

Transaction
amount(Millions ofyen)Account
title

Balance atthe endof year(Millions ofyen)

Purchase of
products

Purchase of
products (Note
1, 2)

958
(US$8,802
thousand)Accounts
payable trade797(US$7,323
thousand)Concurrent
holding of
positions byofficers

Purchase oftreasury stock(Note 3)

6,804
(US$62,519
thousand)——Purchase of
products(Note 1, 2)

8,292(US$76,192
thousand)Accounts
payable trade

Purchase oftreasury stock(Note 3)

7,484
(US$68,767
thousand)—Entrustment of
the Company’s
construction
contracts

Entrustmentofconstruction
contracts(Note 1, 2)

4,706(US$43,241
thousand)Accounts
payable trade

1,485(US$13,645
thousand)Acceptance ofconstruction
contracts ofsaid company

Acceptance ofconstruction
contracts(Note 1, 2)

764 Accounts(US$7,020 receivable thousand)
trade

671
(US$6,165
thousand)

3,153(US$28,971
thousand)Purchase of
products—

Of the amounts stated above, the transaction amount excludes consumption taxes, while the balance at end of the fiscal year includes
Transaction terms and the policy to determine transaction terms
Transaction terms such as prices are determined through negotiation in each case based on a quotation as is the case with general

Diluted net income per share is not presented as there are no diluted shares.

2.

Net income per share is calculated on the following basis.

Fiscal year ended
March 31, 2019
(Millions of yen)

Profit attributable to owners of parent

5,170

5,677

52,163

—

—

—

5,170

5,677

52,16325,923,379

24,523,326

24,523,326

Fiscal year ended
March 31, 2020
(Millions of yen)

Fiscal year ended
March 31, 2020
(Thousands of U.S.
dollars)

Profit not attributable to common shareholders
Profit attributable to owners of parent related tocommon stock
Average number of shares outstanding during theperiod (number of shares)
3.

Net assets per share are calculated on the following basis.
Fiscal year ended
March 31, 2019
(Millions of yen)

Total net assets

59,03149,592455,683

142

148

1,359

(Non-controlling interests included in the above)

(142)

(148)

(1,359)Net assets attributable to shares of common stock

58,88949,443454,31425,923,350

21,723,314

21,723,314

Deduction from total net assets

Number of common stock used for calculation of net
assets per share (number of shares)

The purchase of treasury stock was conducted through a tender offer with the purchase price of ¥3,402 (US$31.25) per share of common
stock in accordance with the resolution of the Board of Directors’ meeting held on October 29, 2019.

(Significant Subsequent Event)No items to report.

(2)Business transactions between consolidated subsidiaries of the company filing the consolidated financial statements and related parties
No items to report.

2.

Financial Informationtransactions, as well as by reference to actual situation of the market.
3.

1.

Net income per shareconsumption taxes.
2.

(Notes)

Note concerning the parent company or significant affiliated companies
No items to report.

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5.

[Supplementary Schedules][Schedule of Bonds]
No items to report.

[Schedule of Loans]
Balance as ofApril 1, 2019
(Millions ofyen)

Category

Balance as ofMarch 31, 2020
(Millions ofyen)

Balance as of
Balance as ofApril 1, 2019
March 31, 2020
(Thousands of U.S. (Thousands of U.S.
dollars)
dollars)

Averageinterest rate(%)

Due date

Short-term loans payable

337

276

3,096

2,536

3.32

—

Current portion of PFI andother project finance loans

844

855

7,755

7,856

1.06

—

Long-term loans payable

1,847

1,539

16,97114,141

3.21

April 25, 2022 toJanuary 14, 2026

PFI and other projects financeloans

10,705

9,849

98,36490,498

1.17

June 22, 2026 toNovember 30,
2033

Total

13,733

12,520126,187

115,041——(Notes)1.

“Average interest rate” is stated at weighted average interest rate on the balance of loans payable at the end of the fiscal year.

2.

Repayment schedule for long-term loans payable and PFI and other project finance loans (excluding current portion) per year for five years
subsequent to the consolidated balance sheet date

Due after one year
through two years(Millions of yen)

Due after two years
through three years(Millions of yen)

Due after three years
through four years(Millions of yen)

Due after four years
through five years(Millions of yen)

Long-term loans payable

276

446

272

272

PFI and other projects
finance loans

862

873

885

698

Category

Financial Information

Category

Due after one year
Due after two years
Due after three years
Due after four years
through two years
through three years
through four years
through five years(Thousands of U.S. dollars) (Thousands of U.S. dollars) (Thousands of U.S. dollars) (Thousands of U.S. dollars)Long-term loans payable

2,536

4,098

2,499

2,499

PFI and other projects
finance loans

7,920

8,021

8,131

6,413

[Schedule of Asset Retirement Obligations]
No items to report.

（1）The Company’s consolidated financial statements are prepared based on “Ordinance on Terminology, Forms, andPreparation Methods of Consolidated Financial Statements” (Ordinance of the Ministry of Finance No. 28 of 1976).
（2）The Company’s non-consolidated financial statements are prepared based on “Ordinance on the Terminology, Forms,
and Preparation Methods of Non-consolidated Financial Statements, etc.” (Ordinance of the Ministry of Finance No. 59
of 1963; hereinafter “Ordinance on Non-consolidated Financial Statements, etc.”)
The Company falls under a company submitting special financial statements, and therefore prepares its nonconsolidated financial statements pursuant to the provisions of Article 127 of Ordinance on Non-consolidated Financial
Statements, etc.
（3）The Company is carrying out special initiatives to ensure the appropriateness of its consolidated financial statements,
etc. Specifically, we have joined the Financial Accounting Standards Foundation and participate in trainings organized byaudit firms, etc., in order to develop a system to accurately grasp the content of accounting standards, etc., andappropriately respond to changes in accounting standards, etc.

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