SANIX INCORPORATED
Consolidated Financial Statements
For the First 3 Quarters
Ended December 31, 2013

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

Consolidated Financial Statements
For the First 3 Quarters ended December 31, 2013

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

Code No;

4651

URL:

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

President and CEO:Shin-ichi MUNEMASA

Contact:

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

1. Consolidated Financial Highlights for the first 3 Quarters ended December 31, 2013
(1) Consolidated Operating Results(Millions of Yen)First 3 Quarters
From April 1 to December 31
FY2013%change

FY2012%change

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

51,532

88.1%

27,402

17.1%

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

2,421

-

166

(64.8%)

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

2,185

-

84

(80.3%)Net Income··········································································

1,301

-

(125)

-

Net Income per Share (¥)··················································¥27.27-(¥2.64)-Net Income per Share(, Diluted(¥)····································

-

-

-

-

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

1,392

-

(102)

-

(2) Consolidated Financial Position(Millions of Yen)

As of December 31

As of March 31

FY2013

FY2012

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

42,459Net Assets ···········································································

10,247

8,837

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

24.1%

30.2%

Net assets per share(¥)······················································¥214.11¥184.62

Reference

29,196

Shareholders’ equity as of September 30 2013

10,218 million yen

Shareholders’ equity as of March 31 2013

8,808 million yen

2. Dividends
At the end of
1st

2nd

3rd

4th

Quarter

Quarter

Quarter

Quarter

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

-

0.00

-

0.00

0.00

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

-

0.00

-

0.00

0.00

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

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

84,50094.9%

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

6,300

236.8%

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

6,000

235.4%Net Income··········································································

3,600

128.6%Net Income per Share (¥) ··················································¥75.44-SANIX INCORPORATED revised initial projections for annual operational results publicly announced on May 14, 2013.

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

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

Full Year

Ended

Ended

December 31,2013

March 31,2012

48,919,396

48,919,396

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

1,196,843

1,210,375

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

47,711,006

47,709,272*Implementation status about the quarterly review:
This summary of financial statements is exempt from quarterly review procedure required by Financial Instruments andExchange Act. A part of quarterly review for securities report based on Financial Instruments and Exchange Act have notfinished at the time of disclosure of this summary of financial statements.
*Note to ensure appropriate use of forecasts:
Forecasts in this document are based on assumptions, prospects and plans as of the date of this document. Actual results may
differ significantly from these forecasts, due to various factors affecting the Company’s business performance, such as change ineconomical conditions.

Index of the attachment
1. Qualitative Information for the First 3 Quarters ended December 31, 2013

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

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

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

3

2. Other Information

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, 2013

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

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

7(3)Note for this Consolidated Financial Statements………………………………………………………….….…

9

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

10

4. Supplemental Information
Consolidated Net Sales by Segment ......……………………………………………………………………...…

－1－

11

1

1.Qualitative Information for the First 3 Quarters ended December 31, 2013
(1) Qualitative Information of Consolidated Operation Results
The Japanese economy in the current consolidated cumulative third quarter (from April 1, 2013 to December 31,2013) steadily progressed with corporate performance improving and personal consumption recovering due to a
weaker yen and higher stock prices in response to financial and monetary policies by the government. On the other
hand, unstable factors such as risk of downward swings in emerging economies persisted.

Under such a business environment, our Company Group concentrated its business resources on the commercial
solar power system, which has rapidly expanded under a “Renewable Energy Feed in Tariff Purchasing Program”,
which started in July 2012 and has widely stimulated demand. By rapidly expanding this business, we havepositioned ourselves to move forward as an energy business, together with electricity sales, recycling waste plastic
to be used as fuel, another pillar of our business.

As for net sales in the current consolidated cumulative third quarter, in the Commercial Photovoltaic Solution(CPS)
segment, full-scale sales and installation of “commercial photovoltaic(PV) systems” started in the previous
consolidated cumulative fourth fiscal quarter and “wholesale of photovoltaic components” recorded a significant
income increase. On the other hand, the home sanitation(HS) business segment recorded a decrease in sales as aresult of the large shift in personnel structure to the CPS. In the establishment sanitation(ES) business segment,“photovoltaic systems” for operators of buildings or condominiums, etc., recorded a sales increase. And In theenvironmental resource development(ERD) business segment, all “waste plastic recycle”, “power generation” of the
TOMAKOMAI Power Plant and “organic waste water recycle” recorded a sales increase. As a result, net sales ofthe entire Group were ¥51,532 million (an increase of 88.1% as compared with the same period in the previousyear).

As for income, in the CPS segment, as a result of a large increase in installation sales and wholesale transactionsof photovoltaic systems, income increased significantly. As a result, with regard to profit of the entire Group,
operating income was ¥2,421 million (¥166 million in the same period in the previous year), ordinary income was¥2,185 million (¥84 million in the same period in the previous year) and net income was ¥1,301 million (net loss of¥125 million in the same period in the previous year).

Consolidated results of individual divisions for this quarter were as follows:
Commercial Photovoltaic solution (CPS) Division
Net sales of “commercial photovoltaic systems,” which includes transactions from sales to components procurement
and installation, were ¥22,308 million (¥443 million in the same period in the previous year) and “wholesale of PV
components” related to components such as solar power modules, etc., were ¥4,809 million (an increase of 164.9%
as compared with the same period in the previous year). As a result, net sales were ¥27,117 million yen (¥2,259
million in the same period in the previous year).
Operating income reflected cost increases in advertisement expenses, personnel expenses due to manpowerbuildup and logistics improvement expenses, etc., and operating income recorded ¥1,958 million(operating loss of¥587 million in the same period in the previous year).

－2－

2

Home Sanitation (HS) Division
In connection with shift of personnel from the HS to the CPS, net sales of the HS decreased, in particular, net salesof PV systems for household decreased 83.9% as compared with the same period in the previous year. As a result,net sales were ¥8,448 million(a decrease of 28.3% as compared with the same period in the previous year).
Operating income did not achieve an improvement in profit ratio due to a decrease in net sales which caused anincrease in fixed cost ratio, including selling and general administrative expenses, and operating income was¥1,095 million(a decrease of 27.8% as compared with the same period in the previous year).

Establishment Sanitation (ES) Division
The sales of works on buildings and condominiums related to maintenance or management leveled off as comparedwith the same period in the previous year and sales of PV systems which we have promoted in the KANTO Region
recorded an increase of 315.8% as compared with the same period in the previous year. As a result, net sales were
¥3,913 million (an increase of 72.2% as compared with the same period in the previous year).
Due to the effect of revenue increase, operating income was ¥108 million(an increase of 119.1% as compared withthe same period in the previous year).

Environmental Resources Development (ERD) Division“Waste plastics recycle” increased 4.9% as compared with the same period in the previous year due to an increasein acceptance volume of waste plastics, and “Power generation” increased 6.6% as compared with the same period
in the previous year as a result of stable operation of the TOMAKOMAI Power Plant. The “Organic waste water
recycle” increased 17.6% as compared with the same period in the previous year due to an increase in acceptancevolume of organic waste water. As a result, net sales were ¥12,053 million(an increase of 8.8% as compared withthe same period in the previous year).
Operating income was ¥1,087 million(an increase of 17.2% as compared with the same period in the previous year)
due to the effect of a revenue increase in all items on sale.

(2) Qualitative Information of Consolidated Financial Position
Total assets at the end of the current consolidated cumulative third quarter were ¥42,459 million, an increase of¥13,263 million as compared with the end of the previous consolidated fiscal year. Major factors were an increase innotes receivable ,accounts receivable and raw materials and supplies.

Total liabilities were ¥32,211 million, an

increase of 11,852 million as compared with the end of the previous consolidated fiscal year. Major factors were an
increase in notes payable and accounts payable and short-term loans payable.

Total net assets were ¥10,247

million, an increase of ¥1,410 million as compared with the end of the previous consolidated fiscal year. A major
factor was the recording of net income of ¥1,301 million yen.

As a result, the ratio of owners’ equity was 24.1% at the end of the current consolidated cumulative third quarter ascompared with 30.2% at the end of the previous consolidated fiscal year.

－3－

3

(3) Qualitative Information on the Forecast of Consolidated Business Results
As a result of a review of business results in the current consolidated cumulative third quarter and the forecast for
future business results, figures in the forecast for the full-year consolidated business results for the year ending
March 31, 2014, which were published on May 14, 2013, were revised.

Forecast for net sales was revised upward as we can expect an increase in the number of project start-ups andcompletion of installation in the current fourth quarter (from January 1, 2014 to March 31, 2014) in response to anincrease in orders received for installation and wholesale transactions in the CPS division and an increase ininstallation capacity by an increase in the number of personnel.

As for operating income, net sales will be revised upward, but as we expected a large increase in fixed costs,
including expenses for a large-scale manpower buildup of technicians to respond to an increase in orders received
for “commercial photovoltaic systems” since the summer in 2013 and expenses for an expansion of logistics
systems from large orders received for materials, etc., it was revised downward. Ordinary income was also revised
downward in addition to the reasons for the downward revision of operating income, and we expect currency
exchange losses due to the impact of a weaker yen on procurement of photovoltaic modules. As a result, current
net income will be ¥3,600 million.

Forecast for Figures of a Full-Tear Consolidated Business Results in the Year Ending March 31, 2014
(from April 1, 2013 to March 31, 2014)
Net sales(Unit: million yen)
Operating income

Ordinary income

Net income

Net income per
share

Forecasts for thepreviousannouncement (A)71,500

8,000

7,950

5,100

¥106.90

This revised
forecasts (B)84,500

6,300

6,000

3,600

¥75.44

Amount ofincrease or
decrease(B-A)

13,000(1,700)(1,950)(1,500)---

Increase or
decrease
ratio

(%)

18.2

(21.3)(24.5)(29.4)---(Reference)
Business results inthe previous year
(Year ended March
31, 2013)

43,366

1,870

1,788

1,575

¥33.01（reference）Changes in number of employees(consolidated)
The end of March 2013

: 1,844

The end of June:: 1,905

The end of September: 2,180

The end of December:: 2,831(number of person)

－4－

4

2. Other Information(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in consolidation scope): None
(2) Adoption of special quarterly accounting methods : None
(3) Changes in accounting principles, procedures and presentation methods: None
ADDITIONAL INFORMATION(Stock Benefit Trust)
SANIX resolved to introduce “Stock Benefit Trust (Employee Stockholding Association Purchase-type)”(hereinafter the “Plan” and the “Trust”). The purpose of the Plan is to improve employees’ welfare and toincrease their motivations for work and awareness of the Company’s stock performance through its steadyprovision of the stock to the employee stockholding association and distribution of the profit created by trust
property management in order to increase our corporate value.
The Trust’s assets and liabilities, and income and expenses were included in the Group’s consolidated financial
statements. Since the Company’s stock held by the Trust was accounted for as treasury stock in the
consolidated financial statements. And as end of this First 3 Quarters, the book price of treasury stock is
115,637 thousand yen(number of treasury stock is 84,100), and carrying value of debt payable is 124,164
thousand yen.

－5－

5

3. Consolidated Financial Statements for the First 3 Quarters ended December 31, 2013
(1) Consolidated Quarterly Balance Sheets(thousands of Yen)

As of March 31
FY2012
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
Machinery, equipment and vehicles, net
Land
Other, net
Total Property, Plant and Equipment:
Intangible Fixed Assets:
Goodwill
Other, net
Total Property, Plant and Equipment:
Investments and Other Assets
Total Fixed Assets:
Total Assets:

3,559,160
7,356,616
60,036
260,0092,577,620
980,185(142,104)
14,651,525

6,219,012
12,984,510
143,689
976,086
4,720,456
1,547,779(368,077)
26,223,458

1,890,399
557,9978,889,529
988,192
12,326,117

1,926,256
1,305,659
9,210,631
1,618,253
14,060,800

625,370
60,123
685,493
1,533,173
14,544,785
29,196,310

541,365
57,717599,082
1,576,009
16,235,893
42,459,351

As of March 31
FY2012
Liabilities:
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 retirement benefits
Provision for directors' retirement benefits
Provision for disposal site closing expenses
Other
Total Non-Current Liabilities:
Total Liabilities:－6－

As of December 31
FY2013As of December 31
FY20135,459,789
3,338,000
3,166,433
362,883
83,0182,462,943
14,873,068

9,882,930
5,960,441
4,273,664
830,131
44,304
4,522,879
25,514,352

50,0002,819,551
1,419,934
179,756
373,699
643,1035,486,044
20,359,113

40,0003,560,626
1,461,505
180,881
411,787
1,042,269
6,697,070
32,211,423

6(thousands of Yen)

As of March 31
FY2012
Net Assets:
Shareholders' Equity:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total Shareholders' Equity:
Valuation and translation adjustments:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total Valuation and translation adjustments:
Minority Interests:
Total Net Assets:
Total Liabilities and Net Assets:－7－

As of December 31
FY2013

14,041,834(3,733,267)(1,610,889)
8,697,677

14,041,834
4,413(2,432,161)(1,596,594)
10,017,493

78,14732,356
110,503
29,016
8,837,197
29,196,310

97,661
102,854
200,516
29,91910,247,928
42,459,351

7(2) Consolidated Quarterly Statement of Income(thousands of Yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income:Interest income
Dividends income
Land and house rent revenue
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Commision paid
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary Income:
Income on retirement of fixed assets
Total extraordinary Income
Extraordinary loss:
Loss on retirement of fixed assets
Impairment loss
Total extraordinary loss
Income (loss) before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income (loss)－8－

First 3 Quarters
From April 1 to December 31
FY2013
FY2012
51,532,946
27,402,194
37,464,508
18,653,777
14,068,438
8,748,417
11,647,169
8,582,261
2,421,268
166,156
4,537
11,53051,053
34,775
101,897

7,245
7,750
56,28056,016
127,293

123,447
46,073
14,291
183,813
84,240139,708
35,492
172,732
14,642362,576
2,185,985

2,899
2,899

-

631
18,657
19,28967,851
181,366
12,145
193,512(125,660)
78(125,739)

2,185,985
979,976(96,000)
883,976
1,302,009
903
1,301,106

8（Comprehensive Income）(thousands of Yen)

Income before minority interests
Other comprehensive income
valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to parent company
Comprehensive income attributable to minority interests－9－First 3 Quartersfrom April 1 to December 31
FY2013
FY2012
1,302,009(125,660)
2,437
21,10623,544(102,116)

19,51470,49890,012
1,392,021(102,195)
78

1,391,118903

9(3) Notes for this Consolidated Financial Statements(Notes to going concern)

None(Notes to remarkable changes in Shareholders' Equity)
SANIX INC. transferred 98,200 of treasury stock to Trust & Custody Services Bank, Ltd. (trust account E) at 13TH
September,2013, and also transferred 14,100 of treasury stock to the SANIX employee stockholding associationfrom Trust & Custody Services Bank, Ltd. (trust account E) before 31ST December,2013. As the results, it decreased
14,968 thousand yen of treasury stock, increased 4,419 thousand of yen of capital surplus, and decreased 13,547
thousand yen of retained earnings.

－10－

10

(Segment Information)
I. Prior First 3 Quarters (From April 1, 2012 to December 31, 2012)(Thousands of Yen)
Segments

CPS

HS

ES

ERD

Total

Adjustment Consolidated(note 1)

(note 2)

Sales:
Sales to customers

2,259,009 11,789,234- 27,402,194

2,271,788 11,082,162 27,402,194

Internal sales among segments-

and transfer accounts

-

Total

2,259,009 11,789,234

Operating income(loss)(587,767)

-

-

-

-

1,518,235

49,654927,178-- 27,402,194

2,271,788 11,082,162 27,402,194

1,907,301 (1,741,144)

166,156(note 1) Negative 1,741,144 thousand yen for adjustments of Operating income(loss) represents corporate expenses
not allocated to reportable segments. Corporate expenses are mainly general and administrative expenses note
attributable to reportable segments.
(note 2) Operating income(loss) is adjusted to operating loss of Consolidated quarterly statements of income.

II. This First 3 Quarters (From April 1, 2013 to December 31, 2013)(Thousands of Yen)
Segments

CPS

HS

ES

ERD

Total

AdmustmentConsolidated(note1)(note2)

Sales:
Sales to customers

27,117,384

8,448,540－－－ 51,532,946

3,913,035 12,053,987 51,532,946

Internal sales among segments
and transfer accounts
Total

27,117,384

8,448,540

Operating income(loss)

1,958,372

1,095,719

－

－

－

－

－ 51,532,946

3,913,035 12,053,987 51,532,946
108,800

1,087,064－

4,249,957 (1,828,689) 2,421,268(note 1) Negative 1,828,689 thousand yen for adjustments of Operating income(loss) represents corporate expenses
not allocated to reportable segments. Corporate expenses are mainly general and administrative expenses note
attributable to reportable segments.
(note 2) Operating income(loss) is adjusted to operating income of Consolidated quarterly statements of income.

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

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

(note)Due to significant increase of “commercial PV systems” sales, asset on CPS segment increase 12,081,288
thousand yen as compared with the end of the previous fiscal year.

－11－

11

4. Supplemental Information
Consolidated Net Sales by Segment(Thousands of Yen)First 3 quartersfrom April 1 to Decemebr 31
FY2012
Commercial photovoltaic power generation system
Wholesale of photovoltaic system components
Other

Changes

FY2013443,274

22,259,254

21,815,979

1,815,734

4,809,223

2,993,488-

48,906

48,906

Commercial Photovoltaic Solution Total:

2,259,009

27,117,384

24,858,375

Solar photovoltaic power generation system

6,707,813

1,081,779(5,626,034)

Termite Eradication Service

1,966,882

2,524,900

558,017

Under-Roof/Floor Ventilation System

914,983

1,311,768

396,785

Foundation Repairing/Home Reinforcement System

546,839

747,920

201,081

Other

1,652,715

2,782,171

1,129,455

Home Sanitation Division Total:

11,789,234

8,448,540(3,340,694)

Solar photovoltaic power generation system

547,384

2,275,811

1,728,427

Anti-rust equipment installation

485,661395,545(90,115)

Repair of building water-works

567,467

662,112

94,644

Waterproofing of building

228,211

168,419(59,791)

443,063

411,145(31,917)

Establishment Sanitation Division Total:

2,271,788

3,913,035

1,641,246

Plastic fuel6,637,588

6,963,440

325,852

Generation of electricity

2,325,456

2,478,321

152,864

Industrial waste (Organic Waste Water Recycle)

1,157,294

1,360,547

203,252

493,728515,024

21,296

Other

Final disposal

468,094

736,652

268,558

Environmental Resources Development Division Total:

Other

11,082,162

12,053,987

971,824

Total Net Sales:

27,402,194

51,532,946

24,130,751－12－