SANIX INCORPORATED
Summary of Consolidated Financial Statements
For the First Half Ended September 30, 2016
[Japanese Standards]

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

Consolidated Financial Statements for the First Half ended September 30, 2016
SANIX INCORPORATED
Stock Listed:Tokyo Stock Exchange First Section, Fukuoka Stock Exchange

Code No;

4651

URL:

http://sanix.jp

President and CEO:Shin-ichi Munemasa

Contact:

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

1. Business Results – Operating results for the First Half ended September 30, 2016
(April 1, 2016 to September 30, 2016)(1) Consolidated Operating Results(In Millions of Yen)First Half
From April 1 to September 30
FY2016FY2015%change

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

23,651

Operating Income ··················································%change(22.8%)

30,631(30.4%)

103－(2,483)－

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

202－(2,364)－Net Income ···························································

(146)

－

(2,940)－Net Income per Share (¥) ········································(¥3.05)－(¥61.51)－

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

－

－

－

－

(Note) Comprehensive Income ································

(366)

－

(2,965)－(2) Consolidated Financial Position(In Millions of Yen)
As of September 30

As of March 31

FY2016FY2015

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

29,79831,248Net Assets ····························································

2,263

2,629

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

7.5%

8.3%

Net assets per share(¥) ···········································¥46.66¥54.34(Reference) Equity Capital ·······································

2,230

2,597

2. Dividends
At the end of
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter

0.00

0.00

0.00

0.00

0.00

0.00

Annual(Dividend per Share)
FY2015 ended March 31, 2016······························

0.00

0.00

FY2016 ended March 31, 2017······························

0.00

0.00

FY2016 ended March 31, 2017 (Forecast)···············

3. Forecasts for Consolidated Business Results (April 1, 2016 to March 31, 2017)(In Millions of Yen)
Fiscal Year 2016
Full Year%change

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

46,670(24.6%)

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

600－

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

480－

Net Income ···························································

(60)

－

Net Income per Share (¥) ········································(¥1.26)* Notes(1) Quarterly Changes in significant subsidiaries during the period(Changes in scope of consolidations resulting from change in subsidiaries): None
Number of subsidiaries newly consolidated－
Name of subsidiaries newly consolidated－
Number of subsidiaries excluded from consolidation－
Name of subsidiaries excluded from consolidation－(2) Application of Particular Accounting Procedures to the Preparation of Quarterly Consolidated Financial
Statements: None(3) Quarterly Changes in accounting policies and accounting estimates retrospective restatementⅰ) Changes in accounting policies based on revisions of accounting standard: Noneⅱ) Changes in accounting policies other than ones based on revisions of accounting standard: Noneⅲ) Changes in accounting estimates: Noneⅳ) Retrospective restatement: None(4) Quarterly - Number of issued and outstanding shares (common stock)(Shares)
First Half

Full Year

Sep. 30, 2016

March 31, 2016

Number of issued and outstanding shares ,end of period (including treasury stock)48,919,396

48,919,396

Number of treasury stock at the end of period ······················································

1,113,518

1,113,443

Average number of shares during the period ·······················································

47,805,889* 47,806,196* September 30, 2015

* Indication of Implementation status about the quarterly review:
This summary of financial statements is exempt from audit procedure required by Financial instruments and Exchange Act. It
has 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 ineconomical conditions. For details of these assumptions, prospects and plans, and for notes appropriate use of forecasts for thebusiness results, please see page 2 of the Attachment.

Index of the attachment
1. Qualitative Information for the first half ended September 30, 2016 ............... 2(1) Information of Consolidated Business Results....................................................................... 2(2) Information of Consolidated Financial Position ...................................................................... 3(3) Information on the Future Outlook,4
Including the Forecasts of Consolidated Business Results .................................................

2. Matters relating to Summary Information (Notes)........................................................ 5(1) Quarterly Changes in Significant Subsidiaries during the Period........................................ 5(2) Application of Particular Accounting Procedures
5to the Preparation of Quarterly Consolidated Financial Statements ...................................
(3) Quarterly Changes in Accounting Policies and Changes or Restatement of
5
Accounting Estimates. .....................................................................................................
(4) Added Information ............................................................................................................ 5

3. Important Information regarding Assumption of Going Concern ......................... 6
4. Quarterly Consolidated Financial Statements for the first half ended
8
September 30, 2016....................................................................................................................
(1) Quarterly Consolidated Balance Sheets ................................................................................. 8(2) Quarterly Consolidated Statements of Income and Comprehensive Income .................... 10
Quarterly Consolidated Statements of Income
for the first half of the fiscal year ending March 31,2017 .................................................. 10
Quarterly Consolidated Statements of Comprehensive Income
for the first half of the fiscal year ending March 31,2017 .................................................. 11(3) Quarterly Consolidated Statements of Cash flows ................................................................ 12(4) Notes to the Quarterly Consolidated Financial Statements.................................................. 13
Notes to the Assumption of a Going Concern ........................................................................ 13
Notes to Remarkable changes in the amount of shareholders’ equity ............................... 14
Segment Information, etc. ....................................................................................................... 14

5. Supplement Information .......................................................................................................... 16
Consolidated Net Sales by Division ......................................................................................... 16

2

1. Qualitative Information for the first half ended September 30, 2016(1) Information of Consolidated Business Results
In the first half of the fiscal year ending March 31, 2017 (April 1, 2016 to September
30, 2016), the Japanese economy stayed on a modest recovery path. However, theoutlook remained uncertain, with sluggish consumer spending and the risk of downturnin corporate earnings amid deceleration in certain emerging economies.
Under this business environment, the Group recognizes the need to further
strengthen its business foundations to achieve sustainable growth and began to
execute its new medium-term business plan (FY2016-FY2018). Under its policy of
promoting management reform, in the first half under review, the Group pursued
initiatives that included implementing a voluntary retirement program, consolidating andeliminating stores, and downsizing logistics and production operations with the aim ofbusiness rationalization.
As for sales in the first half under review, the Solar Engineering (SE) Division was notable to avoid the adverse effect of changes in the market environment for the solar
electric power business and posted a sharp decline in sales. As a consequence, the net
sales of the entire Group were ¥23,651 million (falling 22.8% year on year).
In terms of profitability, although sales declined sharply, lower costs as a result ofmanagement rationalization initiatives and lower materials costs, among other factors,
led to an improvement in the gross margin, and operating income and ordinary incomein the first half moved into the black. As a consequence, for the whole Group, theoperating Income was ¥103 million compared to the operating loss of ¥2,483 million in
the same period of the previous year, and the ordinary Income was ¥202 million
compared to the ordinary loss of ¥2,364 million in the same period of the previous year.
The Group posted expenses related to voluntary retirement including special retirement
allowances of ¥177 million as extraordinary losses. Reflecting the extraordinary losses,
the Group posted a net loss belonging to the shareholders of the parent company of¥146 million, compared to a net loss belonging to the shareholders of the parent
company of ¥2,940 million in the same period of the previous year.
Consolidated results of individual divisions for the first quarter were as follows:a. Solar Engineering (SE) Division
Sales of PV systems decreased 32.2% year on year, and wholesale sales of PV
systems declined 73.6% year on year, reflecting decline in the number of installationsof commercial PV systems. As a consequence, the sales were ¥11,972 million(decreased 39.3% year on year).
Despite the sharp decline in sales, operating income increased significantly to ¥385
million, compared to an operating loss of ¥1,372 million in the same period of the

3previous year, reflecting a remarkable improvement in the gross margin as a result of
lower expenses mainly due to management rationalization and lower materials costs.
b. Home Sanitation (HS) Division
Sales of basic repair and house reinforcement construction services for ordinary
homes rose from a year ago, while sales of termite control services fell from a year
earlier. As a result, the sales were ¥3,319 million (decreased 7.7% year on year).
The operating income stood at ¥513 million (decreased 12.7% year on year) mainly
due to a decrease in segment sales.
c. Establishment Sanitation (ES) Division
Sales

in

water

proofingofbuildingandanti-rustequipment

installation,

maintenance-related services for buildings and condominiums, increased from a year
ago. As a result, net sales were ¥489 million (increased 7.5% year on year).
The operating income came to ¥30 million (increased ¥16.6% year on year) chiefly
due to an increase in segment sales.
d. Environmental Resources Development (ERD) Division
Plastic fuel sales remained flat from a year earlier, reflecting rises in unit prices
primarily for regular properties despite lower collection volume of waste plastic.
Electricity sales rose 72.9% year on year due to an increase in electricity sales atTomakomai Power Plant and the expansion of the volume of sales to high-voltage
consumers in the PPS (power producer and supplier) business. As a consequence, thesales were ¥7,870 million (increased 14.6% year on year).
Operating income stood at ¥577 million, compared to an operating loss of ¥178
million in the same period of the previous year, reflecting an improvement in the grossmargin mainly attributable to an increase in income at Tomakomai Power Plant as aresult of legal inspections and periodic repairs a year ago and a reduction in expenses
for inspections and repairs.

(2) Information of Consolidated Financial Position
a. The status of Assets, Liabilities and Net Assets
Total assets as of the end of the first quarter under review were ¥29,798 million, adecrease of ¥1,450 million, compared with the end of the previous consolidated fiscal
year, mainly due to a decrease in notes and accounts receivable-trade by ¥824 million,a decrease in raw materials and supplies by ¥580 million, and a decrease in
non-current assets by ¥221 million, while cash and deposits increased of ¥210 million.
Total liabilities were ¥27,535 million, a decrease of ¥1,083 million, compared with theend of the previous consolidated fiscal year, mainly due to, a decrease in notes andaccounts payable-trade by ¥2,464 million, the decrease in accounts payable-other by¥1,152 million, a decrease in long-term loans payable by ¥368 million, a decrease in

4other current assets by ¥358 million, while the short-term loans payable increased of¥3,528 million.
Net assets were ¥2,263 million, a decrease of ¥366 million, compared with the end of
the previous consolidated fiscal year, mainly due to the net loss belonging to theshareholders of the parent company was ¥146 million.
As a consequence, the shareholders’ equity ratio was 7.5%, compared with 8.3% at
the end of the previous consolidated fiscal year.

b. The status of Cash Flows
Cash and cash equivalents as of September 30, 2016 totaled ¥2,802 million, an
increase of ¥583 million from March 31, 2016.
The following is the situation and major factors in each category of cash flows in thefirst half under review.
ⅰ) Net cash provided by (used in) operating activities
Net cash used by operating activities totaled ¥2,251 million (compared to the used
net cash of ¥6,640 million in the same period last year). This was mainly due to adecrease in notes and accounts payable-trade of ¥2,385 million, and a decrease inother current liabilities of ¥1,352 million, while notes and accounts receivable-tradedecreased of ¥824 million, and inventories decreased of ¥902 million.
ⅱ) Net cash provided by (used in) investing activities
Net cash provided by investing activities totaled ¥109 million (compared to the used
net cash of ¥91 million in the same period last year). This was mainly due toproceeds from withdrawal of time deposits of ¥715 million, payments into time
deposits of ¥430 million, and the purchase of property, plant and equipment of ¥189
million.
ⅲ) Net cash provided by (used in) financing activities
Net cash provided by financing activities amounted to ¥2,777 million (compared tothe provided net cash of ¥2,665 million in the same period last year), mainly due to anincrease in short-term loans payable of ¥3,528 million, which was partially offset by
the repayment of long-term loans payable of ¥521 million.

(3) Information on the Future Outlook, Including the Forecasts of Consolidated
Business Results
There is no change in the forecast of consolidated business results for the current
fiscal year ending March 31, 2017, from the forecasts announce on May 12, 2016.

5

2. Matters relating to Summary Information (Notes)(1) Quarterly Changes in Significant Subsidiaries during the Period: NoneOn August 12, 2016, the Company established Shanri (Shanghai) Energy Scienceand Technology Co., Ltd. and includes the company in the scope of consolidationfrom the second quarter. The company is not a specified subsidiary.

(2) Application of Particular Accounting Procedures to the Preparation of Quarterly
Consolidated Financial Statements: None(3) Quarterly Changes in Accounting Policies and Changes or Restatement of
Accounting Estimates: None(4)Added Information: Application of the Implementation Guidance on Recoverability of Deferred Tax
AssetsFrom the first quarter of this fiscal year, the Company has been applying the
Implementation Guidance on Recoverability of Deferred Tax Assets (ASBJ Guidance
No. 26, March 28, 2016).

6

3. Important Information regarding Assumption of Going Concern
The Group recorded a significant operating loss, ordinary loss, and net loss
belonging to the shareholders of the parent company both in the fiscal year ended
March 31, 2015 and the fiscal year ended March 31, 2016. Also in the first half underreview, the operating loss and ordinary loss improved to operating income of ¥103
million and ordinary income of ¥202 million, respectively, but the Group posted a net
loss belonging to the shareholders of the parent company of ¥146 million. The Group’s
interest-bearing debt is ¥15,785 million, which is high compared with its liquidity on
hand and the Company recognizes that it is susceptible to events and conditions thatcast significant doubt on going concern assumptions.
To overcome the situation, the Company believes that, in light of the businessenvironment surrounding the solar electric power business, it is essential to further
strengthen the business foundation to achieve sustainable growth. The Company isthus focusing on the following measures as part of the medium-term business plan
(FY2016 - FY2018) announced on April 15, 2016.
ⅰ) A well-balanced allocation of management resources to business divisions
The Company is scaling down the SE Division to an appropriate size based on areasonable analysis of the external environment, rebuilding the HS Division and ESDivision, and further improving efficiency of the Environmental Resources
Development Division.
ⅱ) Strengthening the business base through thorough streamlining
The Company is disposing of assets in accordance with the downsizing of the SE
Division (the elimination and consolidation of stores, the scaling down of the
production of power conditioners, the downsizing of logistics and production
operations, and the closing of a logistics center).
The Company called for voluntary retirement (approximately 500 employees, May
16 to May 31, 2016) in accordance with sales and, as a result, 391 employees took
voluntary retirement, which was less than the number called for but is more or less inline with the initial plan if the reduction in employees retiring for personal reasons, etc.
is taken into account. The Company is also lowering the level of wages across theboard.
ⅲ) Enhancement of the governance system
At the 38th Annual general Meeting of Shareholders held on June 29, 2016, theCompany increased the number of outside directors by one to a total of three. The
Company is also strengthening the management oversight functions of the Board of
Directors and changing the business execution system to clarify the responsibilities of

7each business division.

The Company expects that its profitability will improve through these initiatives andwill remain in the black. The medium-term business plan (FY2016 - FY2018) has
been formulated on the assumption of the continued support of the main financing
bank. The Company expects to continue to receive support and cooperation in
financing and will work to stabilize cash management.
However, we have not completed these initiatives, and the support and cooperationof the main financing bank is not ensured, although we have obtained theirunderstanding. We therefore recognize significant uncertainty about the going
concern assumption.

8

4. Quarterly Consolidated Financial Statements for the first half ended
September 30, 2016
(1) Quarterly Consolidated Balance Sheets(In Millions of Yen)

As of March 31

As of Sep. 30

FY2015FY2016

Assets :Current Assets :Cash and deposits

3,038

3,248

Notes and accounts receivable-trade

6,693

5,868

962

883

Merchandise and finished goods
Work in process-construction

514

264

Raw materials and supplies

5,688

5,107

Other

727

928

Allowance for doubtful accounts

(693)

(598)

16,93015,702

Buildings and structures (net of depreciation)

1,909

1,821

Machinery, Equipment and Vehicles(net of depreciation)

1,323

1,226

Land

8,001

7,941

Other, net

1,183

1,263

Total Property, Plant and Equipment

12,417

12,252

Goodwill

289

233

Other

151

143

Intangible Fixed Assets, net

440

376

Investments and Other Assets :

1,458

1,465

Total Fixed Assets

14,317

14,09531,24829,798

Total Current Assets
Fixed Assets:
Property, Plant and Equipment :Intangible Fixed Assets :Total Assets

9(In Millions of Yen)

As of March 31

As of Sep. 30

FY2015FY2016

Liabilities :Current Liabilities :Notes and accounts payable-trade

7,227

4,762

Short-term loans payable

10,11813,646

896

744

3,298

2,145

Accrued income taxes

244

277

Allowance for resource-recycling expenses

37

39

Current portion of long-term loans payable
Accounts payable

Other

2,820

2,461

Total Current Liabilities

24,642

24,078

1,077

708

170

163

Non-Current Liabilities :Long-term loans payable
Provision for directors’ retirement benefits
Provision for disposal site closing expenses
Liability Related to Retirement Benefits

499

522

1,371

1,360

856

700

3,976

3,456

28,61827,535

14,041

14,0411

1Retained earnings(10,193)(10,339)

Treasury stock(1,481)(1,481)

Total Shareholders’ Equity

2,368

2,222

Other
Total Non-Current Liabilities
Total Liabilities
Net Assets :Shareholders’ Equity :Capital stock
Capital surplus

Valuation and translation adjustments :Valuation difference on available-for-sale securities

34

32

Foreign currency translation adjustment

46

(98)

Adjustment for Retirement Benefits (Cumulative)

148

74

Total Valuation and translation adjustments

229

7

31

32

Total Net Assets

2,629

2,263

Total Liabilities and Assets

31,24829,798Non-controlling Interests

10(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statements of Income)(For the first half of the fiscal year ending March 31, 2017)(In Millions of Yen)First Half
From April 1 to September 30
FY2016FY2015Net sales

30,631

23,651

Cost of sales

24,767

16,944Gross profit

5,863

6,707

Selling, general and administrative expenses

8,347

6,604

Operating income (loss)(2,483)

103

39

9

Non-operating income :Interest income
Dividends income

71Land and house rent revenue

34

32

Subsidy income

90-

Foreign exchange gains

29

156

Other

54

53

Total non-operating expenses

255

253

Interest expenses

107

113

Commission fee

85Non-operating expenses :

Other

19

35

Total non-operating expenses

136

154

(2,364)

202

284

177

Ordinary income (loss)
Extra ordinary loss :Cost of earlier voluntary retirement
Impairment loss

134-

Total extra ordinary loss

419

177

Income (loss) before income taxes and minority interests
Income taxes-current(2,784)

25

158

167

Income taxes-deferred(2)2

Total income taxes

155

169

(2,939)

(144)

0

1

(2,940)(146)

Net Income
Net Income (loss) belonging to the non-controlling shareholders
Net income (loss) belonging to the shareholders of the parent
company

11(Quarterly Consolidated Statements of Comprehensive Income)(For the first half of the fiscal year ending March 31, 2017)(In Millions of Yen)First Half
From April 1 to September 30
FY2016FY2015(2,939)

(144)

(9)

(2)

Deferred gains or losses on hedges(0)-

Foreign currency translation adjustment

(31)

(144)

Income before minority interests
Other comprehensive income :Valuation difference on available-for-sale securities

Retirement benefit adjustment

15

(74)

Total other comprehensive income

(26)

(221)

(2,965)(366)(2,965)

(367)

0

1

Comprehensive net income
Comprehensive income attributable toComprehensive income (loss) belonging to the shareholdersof the parent company
Comprehensive income (loss) belonging to non-controllingshareholders

12(3) Quarterly Consolidated Statements of Cash Flows(In Millions of Yen)First Half
From April 1 to September 30
FY2016FY2015Net Cash Provided by (Used in) Operating Activities(2,784)25

Depreciation and amortization

441

333

Amortization of goodwill

56

56

Income (loss) before income taxes and minority interests

Impairment loss

134-

Increase (decrease) in provision

(14)

(7)

Increase (decrease) in provision for retirement benefits

24

(84)

Increase (decrease) in allowance for doubtful accounts

(221)

(124)

Interest income and dividends income

(46)

(11)

Interest expenses

107

113

6,857

824

Increase (decrease) in notes and accounts receivable-trade
Increase (decrease) in inventories

201

902

Increase (decrease) in other assets

(140)

(198)

(9,859)(2,385)

Increase (decrease) in accrued consumption taxes

(903)

(204)

Increase (decrease) in liabilities(284)(1,352)20

39(6,409)(2,073)46

10Interest expenses paid

(109)

(128)

Income taxes paid

(182)

(69)

Income taxes refund

16

9(6,640)(2,251)

Payments into time deposits(1,368)(430)

Proceeds from withdrawal of time deposits

1,669

715

Purchase of property, plant and equipment

(360)

(189)

-

60

Other, net

(31)

(46)

Net cash provided by (used in) investing activities

(91)

109

Net increase (decrease) in short-term loans payable

3,425

3,528

Repayment of long-term loans payable

(657)

(521)

Increase (decrease) in notes and accounts payable-trade

Other, net
SubtotalInterest and dividends income received

Net cash provided by (used in) operating activities

Net Cash Provided by (Used in) Investing Activities

Proceeds from sales of property, plant and equipment

Net cash provided by (used in) financing activities

Redemption of bonds

(10)

(10)

Repayments of finance lease obligations

(119)

(133)

Other, net
Net cash provided by (used in) financing activities

27

(85)

2,665

2,777

(0)

(52)

Net increase (decrease) in cash and cash equivalents(4,066)

583

Cash and cash equivalents, beginning of the period

5,329

2,218

Cash and cash equivalents, last month of the quarter

1,263

2,802

Effect of exchange rate change on cash and cash equivalents

13(4) Notes to the Quarterly Consolidated Financial Statements(Notes to Assumption of Going Concern)
The Group recorded a significant operating loss, ordinary loss, and net loss
belonging to the shareholders of the parent company both in the fiscal year ended
March 31, 2015 and the fiscal year ended March 31, 2016. Also in the first half underreview, the operating loss and ordinary loss improved to operating income of ¥103
million and ordinary income of ¥202 million, respectively, but the Group posted a net
loss belonging to the shareholders of the parent company of ¥146 million. The Group’s
interest-bearing debt is ¥15,785 million, which is high compared with its liquidity on
hand and the Company recognizes that it is susceptible to events and conditions thatcast significant doubt on going concern assumptions.
To overcome the situation, the Company believes that, in light of the businessenvironment surrounding the solar electric power business, it is essential to further
strengthen the business foundation to achieve sustainable growth. The Company isthus focusing on the following measures as part of the medium-term business plan
(FY2016 - FY2018) announced on April 15, 2016.
ⅰ) A well-balanced allocation of management resources to business divisions
The Company is scaling down the SE Division to an appropriate size based on areasonable analysis of the external environment, rebuilding the HS Division and ESDivision, and further improving efficiency of the Environmental Resources
Development Division.
ⅱ) Strengthening the business base through thorough streamlining
The Company is disposing of assets in accordance with the downsizing of the SE
Division (the elimination and consolidation of stores, the scaling down of the
production of power conditioners, the downsizing of logistics and production
operations, and the closing of a logistics center).
The Company called for voluntary retirement (approximately 500 employees, May
16 to May 31, 2016) in accordance with sales and, as a result, 391 employees took
voluntary retirement, which was less than the number called for but is more or less inline with the initial plan if the reduction in employees retiring for personal reasons, etc.
is taken into account. The Company is also lowering the level of wages across theboard.
ⅲ) Enhancement of the governance system
At the 38th Annual general Meeting of Shareholders held on June 29, 2016, theCompany increased the number of outside directors by one to a total of three. The
Company is also strengthening the management oversight functions of the Board of

14

Directors and changing the business execution system to clarify the responsibilities ofeach business division.

The Company expects that its profitability will improve through these initiatives andwill remain in the black. The medium-term business plan (FY2016 - FY2018) has beenformulated on the assumption of the continued support of the main financing bank. The
Company expects to continue to receive support and cooperation in financing and will
work to stabilize cash management.
However, we have not completed these initiatives, and the support and cooperationof the main financing bank is not ensured, although we have obtained theirunderstanding. We therefore recognize significant uncertainty about the going concern
assumption.
Quarterly consolidated financial statements were prepared based on the assumptionof a going concern, and did not reflect the impact of these serious doubts regarding ourability to continue as a going concern.

(Notes to Remarkable Changes in the amount of Shareholders’ Equity): None(Segment Information, etc.)
Ⅰ The previous first half (From April 1, 2015 to September 30, 2015)ⅰ)Information concerning the Amount of Net Sales and Operating Income(loss) by Segment(In Millions of Yen)

Elimination
or Group(note 1)

Segments

Consolidated(note 2)

SE

HS

ES

ERD

Total

19,713

3,596

455

6,866

30,631-

30,631

-

-

-

-

-

-

-

Total

19,713

3,596

455

6,866

30,631-

30,631

Operating income (loss)(1,372)

588

25

(178)

(936)

(1,546)(2,483)

Sales:
Sales to customers
Internal sales among
segments and transfer
accounts(note 1)
Negative ¥1,546 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 quarterly consolidated statements of income.

15ⅱ) Information on Impairment Losses on Fixed Assets and Goodwill by Segment(Significant impairment losses on fixed assets)
The Company is implementing management rationalization initiatives, including a
voluntary retirement program and the elimination and consolidation of stores, anddecided to close certain business premises and cancel lease contracts. The
Company determined that the book value of assets that it planned to dispose of
was not recoverable and posted impairment losses.
In the first half under review, impairment losses of ¥91 million in the Solar
Engineering Division, ¥22 million in the Home Sanitation Division, and ¥20 million incorporate assets that are not allocated to any segments were posted.

Ⅱ The first half (From April 1, 2016 to September 30, 2016)ⅰ) Information concerning the Amount of Net Sales and Operating Income(loss) by Segment(In Millions of Yen)

SE

HS

ES

ERD

Total

Elimination
or Group(note 1)

11,972

3,319

489

7,870

23,651-

23,651

-

-

-

-

-

-

-

11,972

3,319

489

7,870

23,651-

23,651

385

513

30

577

1,506

(1,402)103

Segments

Consolidated(note 2)

Sales:
Sales to customers
Internal sales among
segments and transfer
accounts
Total
Operating income (loss)(note 1)
Negative ¥1,402 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 quarterly consolidated statements of income.

ⅱ) Information concerning Assets by Segment
During the first quarter under review, the assets of the SE Division decreased¥3,238 million from the end of the previous consolidated fiscal year.
This was mainly due to a decline in notes and accounts receivable-trade as aresult of a decrease in sales from the fourth quarter of the previous consolidated
fiscal year.

16

5. Supplemental Information
Consolidated Net Sales by Division(In Millions of Yen)

From April 1 to September 30
FY2016FY2015

ChangesCommercial PV system

16,24811,010(5,238)Wholesale of PV components

3,407

900

(2,506)

OthersSolar Engineering Total

57

61

4

19,713

11,972(7,740)

1,427

1,211

(215)

Under-Roof/Roof Ventilation System

493

486

(7)

Foundation Repairing/Home Reinforcement
System

203

287

84

1,472

1,333

(138)

3,596

3,319

(277)

Termite Eradication Service

OthersHome Sanitation Division Total
Anti-rust equipment installation

19

35

16

Repair of building water-woks

219

153

(66)

Water proofing of building

29

92

62

Others

185

207

21

Establishment Sanitation Division Total

455

489

34

3,455

3,449

(5)

1,613

2,789

1,176

843

858

14

Final disposal

386

382

(3)

OthersEnvironmental
Division Total :

567

389

(177)

Plastic fuelIndustrial waste
Recycle)(Organic

Waste

Water

Generation of electricity

Total Net Sales

Resources

Development
6,866

7,870

1,003

30,631

23,651(6,980)