SANIX INCORPORATED
Consolidated Financial Statements
For the First 3 Quarters
Ended December 31, 2014

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

Consolidated Financial Statements for the First 3 Quarters ended December 31, 2014
SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

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

President and CEO:Shin-ichi Munemasa

Contact:

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

1. Consolidated Financial Highlights for the first 3 Quarters ended December 31, 2014
(1) Consolidated Operating Results(Millions of Yen)First 3 Quarters
From April 1 to December 31
FY2014%change

FY2013%change

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

69,62735.1％

51,532

88.1%

Operating Income···················································(3,779)

-

2,421

-

Ordinary Income·····················································(4,049)

-

2,185

-

Net Income····························································(5,244)

-

1,301

-

Net Income per Share (¥) ········································(¥109.83)-¥27.27-Net Income per Share(, Diluted(¥) ·····························

-

-

-

-

(Reference) Comprehensive Income ·························(5,057)

1,392-

As of December 31

As of March 31

FY2014FY2013(2) Consolidated Financial Position(Millions of Yen)

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

52,94955,316

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

6,983

11,827

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

13.1％

21.3%

Net assets per share(¥) ···········································¥145.57¥214.17

Reference

Shareholders’ equity as of December 31, 2014

6,955 million yen

Shareholders’ equity as of March 31, 2014

11,798 million yen

2. Dividends
At the end of
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter

FY2013 ended March 31, 2013. ……………….

0.00

0.00

0.00

0.00

0.00

FY2014 ending March 31, 2014 ……...................

0.00

0.00

0.00
0.00

0.00

Annual(Dividends per Share)

FY2014 ending March 31, 2014(forecast) ……..

3. Forecasts for Consolidated Business Results(For the fiscal year ending March 31, 2015)(Millions of Yen)FY2014
Full Year%change

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

97,00015.2%

Operating Income ··················································(1,160)-Ordinary Income ····················································(1,430)-Net Income ···························································(2,720)-Net Income per Share (¥) ········································(¥56.93)-

SANIX INCORPORATED revised projections for annual operational results publicly announced on October 31, 2014

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

Full Year

Ended

Ended

December 31,2014

March 31,2014

Number of shared issued and outstanding at period end…………………….

48,919,396

48,919,396

Number of treasury stocks at period end……………………………………...

1,137,543

1,186,243

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

47,751,728

47,714,474*Implementation status about the quarterly review:
This summary of financial statements is exempt from quarterly review procedure required by Financial Instruments and ExchangeAct. A part of quarterly review for securities report based on Financial Instruments and Exchange Act have not finished at the time of
disclosure of this summary of financial statements.
*Note to ensure appropriate use of forecasts:
Forecasts in this document are based on assumptions, prospects and plans as of the date of this document. Actual results may differ
significantly from these forecasts, due to various factors affecting the Company’s business performance, such as change in economic
conditions.

Index of the attachment
1. Qualitative Information for the first 3 quarters ended December 31, 2014

2(1) Qualitative Information of Consolidated Operation Results .....................................…….……………........

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

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

4

2. Other Information

4(1) Changes in significant subsidiaries during the period ........................................................………….….…

4(2) Adoption of special quarterly accounting methods..............……………...……………………………………

4(3) Changes in accounting principles, procedures and presentation methods...........................………….…...

4

3. Consolidated Financial Statements for the first 3 quarters ended December 31, 2014

5(1) Consolidated Quarterly Balance Sheets ....................................................................….....…………….…

5(2) Consolidated Quarterly Statements of Income and Comprehensive Income......................…………...…..

8

Consolidated Quarterly Statements of Income
For the First 3 Quarters………………………………………………………………………………….

8

Comprehensive Income
For the First 3 Quarters For the First Half…………………………………………………………….

9(3) Note regarding assumption of a going concern…………………………………………………………..……

10

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

10

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

11

2

1. Qualitative Information for the first 3 Quarters ended December 31, 2014
(1) Qualitative Information of Consolidated Operation Results
In the first 3 Quarters of the fiscal year ending March 31, 2015 (April 1, 2014 to December 31, 2014), the Japanese
economy was affected by weak demand following the last-minute shopping spree ahead of the consumption tax hike.
However, business conditions remained on a modest recovery path, supported by improvement in corporate earnings
and employment.
Under such a business environment, our Group concentrated on sales and installation of commercial photovoltaic(PV) systems. In a move to restructure the Group’s commercial PV business, the Group established the West JapanSE Business Headquarters in the West Japan region, which is its main area of operation, and the East Japan SE
Business Headquarters, with a view to establishing a system for direct sales and direct installation in the East Japan
Region, effective April 1, 2014. In addition, the Group’s wholly owned subsidiary SANIX Engineering Incorporated,which had been in charge of the commercial PV business, had the business taken over by the Solar Engineering (SE)Division, effective June 1, 2014. As a result of this restructuring, the Group changed the name of the Commercial
Photovoltaic Solution (CPS) Division to the Solar Engineering (SE) Division and also transferred the business of PV
systems for homes, etc. belonging to the Home Sanitation (HS) Division and the Establishment Sanitation (ES)Division to the SE Division.
Figures for the same period of the previous year have been restated to reflect the new segment classification for year
on year comparison.
As for sales in the first quarter under review, the SE Division posted substantial revenue growth in PV systems. In theEnvironmental Resources Development (ERD) Division, revenue from the electricity sales of TOMAKOMAI Power
Plant increased, but plastic fuel revenue declined due to decreases acceptance volumes. The HS and ES Divisions
posted sharp revenue declines because they transferred PV business to the SE Division and focused on sanitationrelated maintenance for existing customer. As a consequence, the Net Sales of the entire group were ¥69,627 million,
or up 35.1% from a year earlier.
In terms of profitability, in the SE Division, PV systems registered increased profit. However, the Company was
impacted due to the inability to engage in installation projects, with some exceptions, in the Kyushu and Shikoku
district due to Electric Power’s decision to suspend its response to applications. As a result, profit growth was notenough to absorb fixed costs and the segment posted an operating loss. The ERD Division reported decreased profit
due to a reduction in acceptance volumes. The HS and ES Divisions showed decreased profits due to lower sales asa result of switching to a system of focusing on maintenance for existing customer. As a consequence, for the wholegroup, the operating loss of ¥3,779 million compared to the operating income of ¥2,421 million in the same period ofa prior year, and the ordinary loss was ¥4,049 million (ordinary income of ¥2,185 million in the same period of a prioryear). As a result of a review of the realizablility of deferred tax assets based on its earnings forecast, the Group reduced deferred
tax assets and posted income taxes-deferred of ¥847 million, with the net loss of ¥5,244 million from net income of ¥1,301

million of net income in the year earlier period.

Consolidated results of individual divisions for this first half were as follows:3

Earnings of Individual Divisions:
Solar Engineering (SE) Division
In this 3 Quarters, the number of installations of commercial PV systems increased to ¥51,752 million.
The division posted an operating loss of ¥3,075 million (compared with operating income of ¥2,215 million in the same
period of the previous year), reflecting a sharp increase in fixed costs such as labor costs as a percentage of sales.
This is because the Group expects the number of installations of PV systems to increase steadily through the second
half of this fiscal year and continued to actively recruit installation staff necessary to improve and expand theinstallation system. However, in the 3 Quarters under review, the timing of installations was delayed largely because
power companies took a long time investigation for grid connection and sales only increased 69.9% compared withthe same period of the previous year.
(For reference: Changes in SE Division staff: Average number of staff increased from 683 in Apr-Dec 2013 to 2,706
in Apr-Dec 2014)

Environmental Resources Development (ERD) Division
Revenue from plastic fuel decreased 13.1% year on year, reflecting a reduction in the acceptance volume of waste
plastic. Revenue from electricity sales rose 13.3% compared to the same period of the previous year due to stable
operation of the TOMAKOMAI Power Plant. Revenue from organic waste processing fell 14.8% year on year, due todecreased acceptance volume. As a result, the net sales decreased 7.5% to ¥11,152 million compared to the year
earlier period. The operating income decreased 34.9% to ¥708 million due to decrease in sales.

Home Sanitation (HS) Division
The HS Division transferred house-use PV system business, which was included in its results for the first half of theprevious fiscal year, to the SE Division and focused on sanitation management-related maintenance for existingcustomer including “termite control” and “sub-floor/roof ventilation system”. As a result, the net sales decreased 19.6%
to ¥5,934 million compared to the year earlier period. The operating income decreased 31.7% to ¥1,274 million due
to decrease in sales.

Establishment Sanitation (ES) Division
The ES Division transferred house-use PV system business, which was included in its results for the first half of theprevious fiscal year, to the SE Division and focused on sanitation management-related maintenance for existingcustomer of buildings, condominiums, etc. As a result, the net sales decreased 52.1% to ¥787 million compared to
the year earlier period. The operating loss of ¥57 million due to decrease in sales (operating loss of ¥20 million in thesame period of a prior year).

(2) Qualitative Information of Consolidated Financial Position
Total assets amounted to 52,949 million yen at the end of the first 3 Quarters of this consolidated fiscal year, decreaseof ¥2,367 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in raw
materials and supplies and the other hand a decrease in cash and deposits. Liabilities amounted to ¥45,966 million,
an increase of ¥2,477 million from the end of the previous consolidated fiscal year. This was mainly due to an increase4in Short-term loans payable.Net assets totaled ¥6,983 million, a decrease of 4,844 million from the end of the previous
consolidated fiscal year. This was primarily due to the net loss of ¥5,244 million incurred during this first half.
Consequently, the ratio of owners’ equity was 13.1% compared to 21.3% in the same period of a year earlier.

(3) Qualitative Information on the Forecast of Consolidated Business Results
The Company revised the consolidated earnings forecast for the fiscal year ending March 31, 2015 announced on
October 31, 2014, based on the results for the first 3 quarters and a review of expected results for the fourth quarter.

For further

information, please refer to the ” Revision of earnings forecast for the fiscal year ending March 31, 2015, Reduction in Deferred
Tax Assets, Review of Mid-term Business Plan, and Decrease on Officer’s Remuneration” announced on February 12, 2015.
Actual results may differ from the forecast depending on a range of factors.
The government reviewed the Renewable Energy Feed-in Tariff Purchasing Program and in January 2015 changed the output
control rules and the timing for determining the purchase price. Meanwhile, in the areas covered by Tokyo Electric Power, Chubu
Electric Power, and Kansai Electric Power, which have large grid capacities, small solar power generation facilities (those with alow voltage connection of 50kW or less), which are the main products that the Company sells, are out of the scope of output control,
and these areas are expected to be the Company’s main operating areas. The Company needs to develop marketing andstructures appropriate for these areas.
The Company will respond to changes in the solar power generation market appropriately and in a timely fashion primarily bytransferring personnel from Kyushu and Shikoku to Kanto, Kansai, and Chubu, taking into account the appropriate personnel
numbers for Kyushu and Shikoku. Meanwhile, to improve profitability, the Company will strive to lower the break-even point by
cutting costs, including costs for materials for solar power generation and logistics costs, and thoroughly reviewing fixed costs.
The Company will complete these initiatives in the fourth quarter.

2. Other Information(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in consolidation scope): None
(2) Adoption of special quarterly accounting methods : None
(3) Changes in accounting principles, procedures and presentation methods: None
ADDITIONAL INFORMATION(Stock Benefit Trust)
SANIX resolved to introduce “Stock Benefit Trust (Employee Stockholding Association Purchase-type)”(hereinafter the “Plan” and the “Trust”). The purpose of the Plan is to improve employees’ welfare and to increase
their motivations for work and awareness of the Company’s stock performance through its steady provision of thestock to the employee stockholding association and distribution of the profit created by trust property management
in order to increase our corporate value.
The Trust’s assets and liabilities, and income and expenses were included in the Group’s consolidated financial
statements. Since the Company’s stock held by the Trust was accounted for as treasury stock in the consolidated
financial statements. And as this first 3 quarters, the book price of treasury stock is ¥33 million (number of treasury
stock is 24 thousands), and carrying value of debt payable is ¥77 million.

5

3. Consolidated Financial Statements for the first 3 quarters ended December 31, 2014
(1) Consolidated Quarterly Balance Sheets（millions of Yen ）As of December 31
FY2014As of March 31
FY2013
Assets:Current Assets:
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process-construction
Raw materials and supplies
Other
Allowance for doubtful accounts
Total Current Assets:
Fixed Assets:
Property, Plant and Equipment
Buildings and structures, net
Mashinery, equipment and vehicles, net
Land
Other, net
Total Property, Plant and Equipment
Intangible fixed assets
Goodwill
Other, net
Total Intangible fixed Assets
Investments and Other Assets
Total Fixed Assets:
Total Assets:

9,237
22,205
113
584
5,447
1,686
(624)
38,648

8,715
16,291
666
1,694
9,176
696
(1,338)35,901

1,890
1,270
9,179
1,840
14,181

2,456
1,326
9,399
1,511
14,694

513
59
572
1,914
16,668

429
74
503
1,850
17,04855,31652,9496（millions of Yen ）As of December 31
FY2014As of March 31
FY2013Liabilities:
Current Liabilities:
Notes and accounts payable-trade
Short-term loans payable
Accounts payable-other
Lease obligations
Provision
Other
Total Current Liabilities:
Non-Current Liabilities:
Bonds payable
Long-term loans payable
Provision for director's retirement benefits
Provision for disposal site closing expenses
Provision for retirement benefits
Other
Total Non-Current Liabilities:
Total Liabilities:

20,114
5,000
4,836
1,720
236
4,673
36,581

18,742
8,534
5,162
193
44
6,788
39,467

30
3,695
181
429
1,534
1,036
6,907

20
3,303
170
450
1,467
1,086
6,499

43,48945,966

14,041
4(768)(1,581)
11,695

14,041
4(5,867)(1,514)
6,664

91
44
(33)
102
29

155
152
(16)
291
28

Net Assets:
Shareholders' Equity:
Capital stock
Capital surplus
Retained earning
Treasury stock
Total Shareholder's Equity:
Valuation and translation adjustments:
Valuation difference on available-for-sales securities
Foreign currency translation adjustment
Total Valuation on Retirement benefit
Total Valuation and translation adjustments:
Minority Interests:
Total Net Assets:

11,827

6,983

Total Liabilities and Net Assets:

55,31652,9497(2) Consolidated Quarterly Statement of Income（millions of Yen）

First 3 Quarters
From April 1 to December 31
FY2013

Net Sales
Cost of Sales
Gross profit
Selling, general and administrative expenses
Operating income(loss)
Non-operating income:Interest income
Dividends income
Land and house rent revenue
Subsidy income
Other
Total Non-operating income
Non-operating expenses:
Interest expenses
Commision paid
Foreign exchange losses
Other
Total Non-operating expenses
Ordinary income(loss)
Income(loss)before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income(loss)

FY201451,532
37,464
14,068
11,647
2,421

69,62755,885
13,741
17,520(3,779)

7
7
56
3
52
127

36
8
54
45
75
220

139
35
172
14
362
2,185
2,185
979
(96)
883
1,302
0
1,301

168
22
257
42
490
(4,049)(4,049)
349
847
1,196
(5,246)(1)(5,244)

8（Comprehensive Income）（millions of Yen）

First 3 Quarters
From April 1 to December 31
FY2013

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sales securities
Foreign currency translation adjustment
Remeasurements of defined benefit plens
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to parent company
Comprehensive income attributable to minority interests

FY2014
1,302(5,246)

19

63

70

108

－
90

16
188

1,392

(5,057)

1,391(5,055)

0

(1)

9

(3) Notes for this Consolidated Financial Statements(Notes to going concern) None

(Notes to remarkable changes in Shareholders' Equity) None

(Segment Information)
I. Prior First 3 Quarters (From April 1, 2013 to December 31, 2013)(millions of Yen)
Segments
Sales:
Sales to custmers
Internal sales among segments
and transfer accounts
Total
Operating income(loss)

SE

HS

ES

ERD

Total

Adjustment

Consolidated(note 1)

(note 2)30,454

7,381

1,642

12,05351,532－

51,532－30,454
2,215

－
7,381
967

－
1,642
(20)

－
12,053
1,087－
51,532
4,249－－(1,828)－51,532
2,421(note 1) Negative ¥1,828 million for adjustments of Operating income(loss) represents corporate expenses notallocated to reportable segments. Corporate expenses are mainly general and administrative expenses note
attributable to reportable segments.
(note 2) Operating income(loss) is adjusted to operating loss of Consolidated quarterly statements of income.

II. This First 3 Quarters (From April 1, 2014 to December 31, 2014)

Segments
Sales:
Sales to custmers
Internal sales among segments
and transfer accounts
Total
Operating income(loss)

SEHS

51,752

5,934－
51,752(3,075)

－
5,934
1,274

ES

Adjustment(note 1)(millions of Yen)
Consolidated(note 2)

ERD

Total

787

11,152

69,627－

69,627

－
787
(57)

－
11,152708－
69,627(1150)－－(2,628)－69,627(3,779)(note 1) Negative ¥2,628 million for adjustments of Operating income (loss) represents corporate expenses notallocated to reportable segments. Corporate expenses are mainly general and administrative expenses note
attributable to reportable segments.
(note 2) Operating income (loss) is adjusted to operating income of Consolidated quarterly statements of income.

10

4. Supplemental Information
Consolidated Net Sales by Segment（ millions of Yen)

Commercial photovoltaic power generation system
Wholesale of photovoltaic system components
Other
Commercial photovoltaic Solution Total:

First 3 Quartersfrom April 1 to December 31
FY2013
FY201425,596
48,636
4,809
3,039
48
76
30,45451,752

Changes
23,040(1,769)27
21,298Termite Eradication Service
Under-Roof/Floor Ventilation System
Foundation Repairing/Home Rainforcement System
Oter
Home Sanitation Division Total

2,524
1,311
747
2,796
7,381

2,136
854
427
2,516
5,934

(388)
(457)
(320)
(280)
(1,446)Anti-rust equipment installation
Repair of building water-works
Waterproofing of building
Other
Establishment Sanitation Division Total:

395
662
168
416
1,642

90
340
59
296
787

(305)
(321)
(108)
(120)
(855)

Plastic fuelIndustrial waste (Organic Waste Water Recycle)
Generation of electricity
Final disposal
Other

6,963
2,478
1,360
515
736

5,862
2,808
1,158
491
832

(1,101)
329
(201)
(23)
95

Environmental Resources Development Division Total:

12,053

11,152(901)

Total Net Sales:

51,532

69,62718,094