Good afternoon. My name is Uchida, Chief Financial Officer.

Thank you for joining us today. I will start by reviewing our results for the first quarter of the fiscal year to March 2021.

Although performance for the first quarter of the financial year could not avoid being lower than the previous period of the last fiscal year due to the impact of COVID-19, we have proved racing well against our plan, mainly due to strong performance from resources and energy and innovation and corporate development. Even under the spread of COVID-19, we are adapting to remote working and utilizing digital tools across all of our offices worldwide to maintain our operations and to implement necessary countermeasures.

Please turn to page 3. I will now summarize our operating results for the first quarter of the fiscal year.

Core operating cash flow decreased by JPY31.6 billion year-on-year to JPY110.8 billion, and representing progress to full year target of 28%. Profit for the period decreased by JPY62.4 billion year-on-year to JPY62.6 billion, representing purpose to full year target of 35%.

Due to the slowdown in commodity markets and economic activity arising from COVID-19, our results are lower year-on-year, however, factors such as high iron ore prices, strong trading in oil and LNG, and FTTPL earnings mean that we are progressing steadily with our initial plan. However, staggered consolidation of earnings from some of our affiliated companies with different reporting periods mean that it remains possible that the full impact of COVID-19 on our consolidated results will be reflected from the second quarter onward.

Moreover, in the areas of mobility, healthcare services and materials we’re at the start of the period, we were expecting quite a large impact we need to be cautious about the future prospects. In the global economy, we have seen China resume economic activity in advance of other countries.

While in the U.S., Japan and other major developed market, economies began to reopen from May and June. Although, it seems that the worst period of economic shutdown may have passed sooner than we expected, some countries and regions are experiencing ongoing viral spread or a second wave of infections.

So we continue to be cautious about any expectations of a rapid return to normality as management will continue to manage risk closely and take heed of the business environment in which we operate. Please turn to page 4.

Next, I would like to discuss the progress of one corporate strategies, surfacing the profitability of core businesses and pursuing new businesses. Core operating cash flow from our core areas of Resources and Energy, Infrastructure and Machinery and Chemicals was JPY106.9 billion with profit for the period of JPY60.5 billion, accounting for more than 90% of our total operating cash flow and profit.

In Resources and Energy, we made steady progress, supported by high iron ore prices. Oil and LNG trading was strong, contributing to a steady start of the year with core operating cash flow of JPY78.3 billion, and profit of JPY35.7 billion.

In Machinery and Infrastructure, progress was largely in line with plan due to contribution from asset recycling. However, we will continue to watch performance closely from the second quarter when the full impact of COVID-19 is expected to emerge.

In chemicals, progress was also largely in line with plan, with basic chemicals trading and agricultural supply businesses contributing to good performance despite the spread of COVID-19. We are making progress in business restructuring and reorganization after existing businesses.

In lifestyle, we formed the holding company to combine four subsidiaries operating logistics for retail and restaurant businesses, and also a new subsidiary which aggregates Import Export businesses. In innovation and corporate development, we have started discussing some merging two of our ICT related subsidiaries.

In chemicals, we have decided to sell out of San-ei Sucrochemical chemical. Even amidst a pandemic, we will not slow our down efforts to strengthen our competitive position by intensifying and increasing the sophistication of our operations.

Please look at page five. I will now review progress on another over medium term management plan strategies to evolve our financial strategy and portfolio management.

Cash inflow for the period included core operating cash flow of ¥110 billion, along with inflow mainly from asset recycling of ¥40 billion arising from the sale of assets such as power generation business in North America. Cash outflows included investments and loans of ¥145 billion and a ¥40 billion outflow for the acquisition of shares during the period as part of the share buyback previously announced.

Investment and loan items included integrated development if Mitsui and Co head office in Tokyo. Iron ore business in Australia and the LNG project under development, the business environment remains severe and we will continue to manage the company with focus on cash flow and maintain strict investment discipline including closely reviewing FIG investment and maintenance CapEx and ongoing investment in existing businesses.

Please turn to page six for a review of the balance sheet and the end of the first quarter. Compared to the end of March 2020, net interest bearing debt has increased ¥48.2 billion yen to ¥3.5 trillion.

Shareholders equity increased ¥53 billion to ¥3.9 trillion. As a result, net DER was unchanged at 0.91 times.

Page seven please, strategic focus. Despite the spread of COVID-19 during the first quarter, we have taken necessary measures and have continued to move steadily forward with our strategy.

In energy solutions, progress included loans and commercial operations at Fukushima gas fired power plant and investing in the largest hydrogen station developer and operator in the US. Looking ahead, we will be pursuing business in areas such as smart energy services and climate change with false.

In healthcare nutrition, at our Asian hospital operations, we are starting to introduce integrated medicine, while contributing to the COVID-19 response and the development of new business models. We will continue to seek accelerated growth in medical and related areas.

In market Asia, Bussan Auto Finance Indonesia, we use AI technology to develop and introduce our credit collection scoring systems, supporting our efforts to strengthen risk management as a business expense. Focused on Asia, we will continue to make active use of DX to develop new business models and leverage the shift of power to consumers.

Please turn now to page eight. The global COVID-19 pandemic shows no signs of abating.

So allow me to explain its current and expected impact only three. In resources and energy, the price of iron ore remains high and all has begun some early recovery.

But coal prices have fallen and remain low. Machinery and infrastructure remains the area of most concern, as a high level of uncertainty persists in automobiles and other areas.

In Materials Business, there is growing impact on both chemicals and iron and steel products, particularly a fall in automotive industry, demand and reduced operation rates. In Lifestyle, the negative impacts on hospital business is beginning to ease, while the impact on services for cafeterias, event facilities and suchlike might linger more than expected.

The impact on retail foodstuffs and fashion business is also deepening. On the other hand, in innovation and corporate development, we see good performance at businesses such as digital security, which have contributed to positive results.

The operating environment is changing day by day and the level of uncertainty remains very high. We have not revised the business plan in the first quarter, but we will be making a thorough review during the second quarter.

In the meantime, the businesses have been instructed to firstly focus on the countermeasures to the pandemic and to continue monitoring its effect. Although the worst period of macroeconomic stagnation may have passed, and our first quarter has produced a solid start relative to the plan, it is expected that the true impact on each business from COVID-19 will be reflected from the second quarter onwards.

For subsequent periods, we need to be mindful of the delayed consolidation of some affiliated companies with different reporting periods, heightened credit risk and the possibility of changes to the business plans. We also need to be wary of any subsequent waves of infection and also be prepared for a scenario, where activities will not recover to before COVID-19 levels.

That concludes my part of the presentation. I will now hand over to Tetsuya Shigeta, our Global Controller to explain details of our results for the first quarter.

Good afternoon. My name is Tetsuya Shigeta, Global Controller and I will now provide details of our operating results.

Please look at page 10. First, I will explain the main changes in the core operating cash flow by segment compared to the first quarter of the previous fiscal year.

Core operating cash flow for the first quarter of the year was JPY 110.8 billion, and year-on-year decrease of JPY 31.6 billion. In Minerals & Metal Resources core operating cash flow decreased by JPY 15.8 billion to JPY 41.9 billion, mainly due to a decline in sales price and volume with coal and Australian coal mining operations.

In Energy, the core operating cash flow decreased by JPY 22.3 billion to JPY 36.4 billion, mainly due to a decline in oil and gas prices and production volumes. In Machinery & Infrastructure, the core operating cash flow decreased by JPY 5.3 billion to JPY 12.9 billion, mainly due to a decrease in dividends from equity method affiliates.

Chemicals achieved core operating cash flow of JPY 15.7 billion, year-on-year increase of JPY 9.2 billion, which is mainly due to a one-time factor at an overseas affiliate. In the Lifestyle segment, the core operating cash flow was ¥3.6 billion, a year-on-year decrease of ¥3.8 billion, which is mainly due to a decline in dining out and purchasing demand at retail food and fashion affiliates.

Innovation & Corporate Development achieved core operating cash flow of ¥12.7 billion yen, a year-on-year increase of ¥14.8, mainly due to strong commodities trading in addition to FVTPL profit. Please turn to page 11.

I will now explain the main changes in profit by segment compared to the first quarter of the previous fiscal year. Profit for the quarter decreased ¥62.4 billion to ¥62.6.

In segments where profits are mainly influenced by the same factors I just explained for the core operating cash flow, I will not go into further details here. In Mineral & Metal Resources, profits decreased ¥16.8 billion to ¥32.2 billion due to an impairment loss at Mozambique coal mining operations.

In Energy, profits decreased by ¥36.9 billion to ¥3.5 billion, due to an absence of deferred tax assets associated with FID for Mozambique Area 1, which was recorded in the same period of the previous fiscal year. In Machinery & Infrastructure, profits increased by ¥1.2 billion to ¥18.5 billion, mainly due to the sale of a power generation business in North America, and despite the absence of a one-time profit from the conclusion of arbitration related to a Brazilian gas supply business in the same period of the previous fiscal year.

In Chemicals, profits increased by ¥2.2 billion to ¥6.3 billion, mainly due to strong trading performance. In Iron & Steel products, profits decreased by ¥2.8 billion to negative ¥1.3 billion, mainly due to a decline in demand for steel for the automotive industry and decline in operating rate.

In the Lifestyle segment, profits decreased by ¥13.2 billion yen to negative ¥5.6 billion due to a decrease in demand at hospitals and service related businesses. Turning now to page 12.

Here, we will look at the factors influencing year-on-year changes in the first quarter profit. Base profit declined by approximately ¥10 billion.

Although strong headoffice LNG trading and FVTPL recovery are positive factors. The impact of COVID-19 contributed to a decline in profit of approximately ¥16 billion, primary in non-resources areas and LNG dividends decreased.

Next in resources related costs volume, the deterioration of mining conditions, resulting in lower volumes and higher costs contributed to a decline in profit of approximately ¥3 billion. In Energy, lower volumes resulting from a decline in production at MOECO’s offshore Thailand operations continued to decrease in profits of approximately ¥6 billion.

Asset recycling contributed to a decline of approximately ¥1.0 billion, due to the absence of gain on sale included in the same period of the fiscal -- of the previous fiscal year in Lifestyle and Innovation & Corporate Development, and despite the gain on sale of power generation businesses North America. In Commodity prices and ForEx, the decreasing price of oil and gas was the main factor in the decline in profit of approximately ¥11 billion, while the decrease in the price of coal was behind declines of approximately ¥8 billion.

In ForEx, yen strengthening against the Australian dollar was the main contributor to a declining profitable -- approximately ¥5 billion. Finally valuation gain and loss and special factors contributed to a decline of approximately ¥18 billion due to the adverse of deferred tax assets associated with the FID for Mozambique Area 1, included in the same period in the previous fiscal year, impairment loss of Northern coal business this Q1 and other factors.

That concludes my presentation. Thank you.

Now we'd like to go into Q&A session. Thank you very much for the explanation today.

I would like to ask two questions both related to the business results. My first question.

On page 12 of the presentation material, you talk about the COVID-19 impact or non-resources of ¥16 billion yang. It was mentioned earlier that the impact will become more clear in the second quarter and there may be some impact from delayed reporting from affiliated companies.

It would be very difficult to foresee the impact of COVID-19 now. However, the corona impact of ¥95 billion announced at the beginning of the year or non-resources.

And in the first quarter, the value is ¥16 billion, in AC or mobility it comes to a ¥70 billion, material ¥20 and others ¥10 billion. I believe these were the figures given.

So if we consider the ¥16 billion for the first quarter, I guess against the ¥95 billion, do you believe this is appropriate and of course you mentioned that chemicals and trading is very strong. And impact on healthcare may not be as big as was anticipated?

So can you talk about the Corona impact that you can see at the moment for businesses? And a second question is, the ¥180 billion, the full year figure of those, we believe that the iron ore price and the oil price, they may be favorable elements and are they are rating the dividend also is a positive factor.

But looking after foreign oil majors and semi majors, they're alone meet long-term old price forecast and did with a $55 maybe too much, but many are targeting around $60. Your price may be a little bit high.

So can you talk about the risk of lowering the price? And can you also talk about the positive and negative factors against the ¥180 figure that you have given us?

That is my second question. Thank you.

Thank you very much for your question. CFO, Uchida will answer both of your questions.

Yes. First of all, about the Corona impact.

As we just indicated at the beginning of the year, we said that Corona impact would probably come to around ¥200 billion, ¥100 billion for market and also ¥95 billion to ¥100 billion for non-resources. Of course it will depend on how we analyze the impacts, but for non-resources in the first quarter, on the peer basis, we are seeing negative impact of ¥16 billion.

We are conducting month end hearings on the corona impact, but the level has not changed. Of course, it is a very ambiguous with materials, I believe that may be -- the impact may be bigger for materials and for mobility ¥70 billion, maybe the impact may not be that big on an annual basis.

So, there are some fluctuations, but in total we are seeing the COVID-19 start to come to ¥100 billion. And that has not changed.

Of course, in different areas, we may be a little bit on the conservative side, but in total our outlook has not changed since the April announcement. And when it comes to delayed reporting and consolidation of affiliated companies in Machinery & Infrastructure, they are many that will be impacted.

And we believe that in the second quarter, the April to June figure will be reflected. So there will be an impact coming from that delayed reporting in the second quarter.

And as for your second question, the positive and negative factors on an annual basis, when it comes to iron ore, I think it is close to last year's prices. We believe that is a positive factor.

When it comes to the oil price, there is an upside opportunity there, and I mentioned earlier. Of course, there is delay in the reporting, but if the current situation continues or if the recovery from COVID-19 is slow.

There will be other factors like credit cost or credit risks starting to appear going forward. And some may be included in the ¥100 billion I talked about earlier, but in individual business plans, there may be some reviews or revisions necessary, another APAC can be a negative factor.

And when it comes to the long-term oil price, all measures are starting to lower the price and at the end of March, we said that the assumption of the oil price will be continued and impairment was also recorded. But in the first quarter, we had focused very closely on the movement of the oil price.

When it comes to the long-term outlook post-corona or with corona situation should be analyzed to see what will happen to the oil price, mid to long-term demand and supply will also be considered. There are many different opinions and we are in touch with third-parties and third-party institutions.

There has been revisions to mid to long-term outlook after April, but there is not much of a change. So, we will continue to monitor the situation subsequent to the second quarter.

We believe that discussion will continue in this area. Does that answer your question?

Well, as for the mid to long-term or the price, I have a follow-up question, more detailed one. The most recent financial report to the Ministry of Europe company $30 to $80 was mentioned.

And so for the mid to long-term price, well, you have not disclosed the numbers, but $80 is the one that that's what you see in the financial report, then you have reduced -- oil measures in overseas have reduced the level to $60. So, it seems to be a higher compared to that.

So, can you comment on that?

Uchida speaking. Well, we haven't given the timeframe.

But from the financial report to the Ministry, there is a range for oil prices, and $30 to $80 is based on our assumptions that we use and therefore, in the longer term, it could reach $80, that's why we have the range upon to $80. And whether that is appropriate, it would bring us back to the level that we are talking about.

For the mid to long-term, various outside institutions have not reduced the level yet and 65 maybe a bit too far, but some companies have reduced the level significantly. So, what sort of prospects that you have, it really depends on the market and environment of course, it is difficult to talk about the mid to long-term, but based on that, even if there is an impairment loss, there won't be direct impact on core operating cash flow.

So, how -- it all depends on how to distribute the cost or allocate the cost between different period. And I would like to watch what's happening in the environment.

Well, then what you said about other energy companies not reducing the levels that much. So, $80, which timeframe are you talking about?

That's not clear and curve to reach level. Well, about 2025 that is the year that they are looking ahead into and the timing, they're coming up with $60.

And if your final goal is $80, and if you compare the curve that will reach that level, and so $60 in 2025 is probably not deviate from the timeframe that you're talking about $80, is that correct?

Well, not that deviated -- I'm not sure how much, but we're starting from slide 30 and 30 was surprised at the end of March. And then we have drawn forward curve to draw the curve.

And other companies are not the major -- all majors but not just for majors, but we are looking at the other institutions that are coming up with the prospects and what other oil majors would do rather than that, we're looking at the resource companies, forecasts and depending on how they may change; we would like to have discussions internally. So, those levels have not been reduced so much.

The COVID-19 impacts may not have been fully reflected in the forecast from the institutions. So, how those numbers will be revised will be closely watched.

And then we will come up with mid to long-term prospects. Compared to what we had expected initially, the COVID-19 and also environmental load and the energy transition from these perspectives oil prices may peak out earlier timing than expected.

So, we have to have a comprehensive review. And so that's why we have not changed so prospect this time.

Okay. Thank you.

Thank you very much.

Thank you very much. I would like to ask two questions.

The first question in energy segment, where oil price may be a bit high. The consolidated oil price is $65, I see.

And with that high price the appropriate may not be substantial. Maybe the volume went down or the dividends may have gone down.

But looking at the first quarter numbers, we believe that the second quarter there will be some differences in the reporting period, therefore it may go down to $30. And that is going to end up in a loss.

So in the first quarter, are there any special factors that did not bring about substantial profit? So can you talk about the energy oil price base and the situation that you're seeing at the moment?

And the second question. Of course, you talked about the market at the beginning.

Of course, the environment deteriorated and you knew coal businesses 90% was coming with a profit of bringing about cash. However, for example, still products and our style, these are the areas in which if the environment deteriorate, that loss is going to get bigger.

So, with Corona or post Corona, there are areas or segments that we will not be able to go back to or so these may be the last businesses. So assets you have 2 trillion of assets and there is no cash being born out of that there are 3 trillion.

So the external environment with COVID-19 is changing. So, maybe you should accelerate your movements in order to be able to recover or rebuild your assets in order to bring about profit with COVID-19 back that you're seeing in the first quarter.

Have you had discussions internally as to what to do, what countermeasures you can take to make it better? If that is so please share that discussion with us?

Thank you for the question. CFO, Uchida will answer your question.

Thank you very much. In the energy segment, the oil price consolidated, of course, it will be delayed in the first quarter.

It will be the price beforehand. So in the second quarter, I think there'll be a downward pressure as you just mentioned, but currently of course, our process will be decided and in the second -- first half, it will be $30 and the second half $35.

So, I think we need to think about the pluses and minuses. But in the material available in the energy segment, energy solution business unit has been added.

And traditionally energy solution, they have been working on comprehensively. So the assets from such projects and energy solution businesses will be transferred to this new business unit.

And of course, there'll be some proceeding costs, expenditures necessary, so, profitability will be coming in a direct manner. But in the first quarter, there will be JPY 3.3 billion of loss in energy, and some of the information is not to be disclosed.

However, they made some provisions necessary. That is why this is -- we get this figure, so, this maybe the special factor that you refer to.

And for your second question, Nosto, of course, the asset is very big, but healthcare is also included. IHH is involved as well.

So, it will take time for it to show movements in the cash flow. So, this is included, however, food and distribution businesses, of course, there may be pluses and minuses.

As for eating out businesses, there maybe services in both in depth and in distribution or logistics, there maybe some downward pressure, but eating in at home, I think these are doing well. And we have textiles as well and the sales at stores, they are being impacted very largely.

So, we are still in the early phases of taking countermeasures, but the growth rate is quite strong. That is something that we have been working on before corona, and we are using DX closer to the consumers.

And in this area, we talked about existing businesses restructuring the existing businesses and a number of businesses, companies have been integrated. This is not just for cost reduction, but we are looking at business strategies to integrate them.

So, we will see more synergy effect. That is what we are aiming for.

So, we are coming up with new retail and restaurant integrations. So this is something that we've been aiming for a long time.

However, these are some of the measures that we'll be taking. And of course, logistics and also some import and export businesses will be integrated as well.

So, we'll be able to enhance their functions further. That is the aim of such integration.

So in the mid-term business line, we have outline some of the integration that we've been working on and that have been implemented in the first quarter. Thank you.

Did that answer your question?

Well, I'd like to ask a related question in energy, the reduction in volume is a bigger when we compare it to the full year figure. Of course energy, when it comes to energy, the products not moving as much.

So, maybe the volume is going down. So, what is your thought on the volume in energy?

When it comes to sensitivity is a negative impact or you don't see such a negative impact as much, is that correct?

Well, this factor, Michael, in 2023 their test will be completed, and of course, the depreciation started early -- of course in 2023, of course, it will be completed. So, we will not make additional investments.

I think we are on the suppression of making additional investment that is quite big. I think that is a factor that we can refer to.

Thank you very much.

Thank you. I have two questions.

I also like to ask about LNG. The ¥2.1 billion received dividends.

It has been reduced to about one-third – one-sixth of the previous year. And because of the seasonality this number should be small.

But the full year on a full year basis last year there was ¥60 billion. So year-on-year without the one-six for the full year this year or was there any special factor involved?

That was my first question. And second question, Machinery & Infrastructure, IPP has fallen significantly in first quarter, I had thought that this would be a stable business.

So was this because a one-time factor and in the second quarter, we can expect the level to recover to the normal level. Is that correct?

Thank you very much for the questions. CFO, Uchida will answer those questions.

First, on the LNG dividend, obviously, because of the oil price drop, revenue may have dropped, but there doesn't seem to be a special factors but if you just look at the first quarter in this special environment. Of course, this is true for other affiliates, but we are more on the conservative side and dividends maybe adjusted.

And that is the general trend that we're seeing. But I'm sorry.

I don't think there were any special factors. And so, the oil price drop and on the four year basis what would will be the result that will be reviewed again in the second quarter As for IPP, well, there is a seasonal factor involved.

And also, there was some pending issues that were fixed, and there was cost involved. And that was a downside factor.

So there was some special factors are included in this area. Does that answer your question?

I see. Thank you.

Thank you very much. I have two questions.

I'd like to ask. The first question in the earlier question about energy, you talked about the possibilities of impairment going forward.

So, on a related note, if you need to record an impairment, for example, you need to think about the credit rating to think about cash flow, or investors returns. So with credit rating agencies, with COVID-19 many of the Japanese companies cash flow is going down, so there may be some pressure.

But what are the discussions that you're having with them? If there was an impairment the net DER may go down.

Credit rating agencies, have you had discussions with them? Can you talk about the discussions that you may have had with them?

That is my first question. The second question with COVID-19 the supply of resources, what are the interests that you're seeing?

For example, in Central and South America and iron ore businesses in Brazil, I'm sure there may be a lot of impact that you may be seeing. Of course, you're involved in Vale and in the first half there may be some impacts appearing.

What is the recovery, right, like in their iron ore businesses and what are the situations of the businesses that you have in these areas? Thank you.

Thank you very much for your question. CFO, Uchida would like to answer your questions.

First about the rating. The credit ratings in the medium term management plan before we made the announcement, we had Moody's ranked us negative when it comes to the outlook.

But we do not feel that we have a downward pressure. Cash flow allocation, if we make it accurate in the framework that we have and with the financial management, I believe that downward side risk is something that we can deal with.

And when it comes to the oil price and impairment losses related to the oil price, of course, the long-term oil price, how we're going to look at it? Of course, the impact on impairment is something that we need to consider, but at the end of March, for the full year, it went down substantially.

So there is a delta value. And looking at our balance sheet, looking at it as a whole, how much impact there is, is something that we need to think about.

I hope you can sense it from what I'm saying. But looking at the whole in fiscal year 2016, for example, I don't think that will be the scale of impairment that we'll be repeating this year.

When it comes to the process of resources and supply of resources, for iron ore for example, the Australian businesses is very strong. It is doing very well.

When it comes to Brazil or Vale, they have their production plan, I believe it is between $310 million to $330 million and Vale's explanation is that it is near to $310 million. That is explanation that they have given us.

So, when it comes to iron ore volume wise, we are not negatively be affected. When it comes to copper, in Chile in some of the projects, the operation rate has gone down.

However, when it comes to Collahuasi, I think it is very strong. Any additional comments, yes.

When it comes to their copper business, Anglo America, also there is a Corona impact. So 40% -- they have reduced the number of personnel by 40%.

And I think that is the impact we are seeing there. But the two-year target has not been revised.

And, of course, Caseronas, corona impact is appearing. And, of course, operation rate has been lowered, starting in -- at the end of March.

But actually the production is going up. That is all the comments that I have for now.

Thank you.

So cooper production volume. Has it gone up from the original forecast?

Collahuasi I believe is positive, but I do understand that there was a reduction in the number of employees, but the volume has not changed. So, there is not much impact on the copper volume.

Is that correct? And with the Vale, you receive dividend.

So, production was between 300 to 310 and is closer to 310 million, I believe. So, this is not a negative impact, because Vale announced that they will be not paying dividends.

So, there is no negative impact there, is that the correct understanding?

Yes. Thank you very much.

When it comes to production of copper, so compared to the forecast at the beginning of the year, the numbers have not change. And your interpretation is correct.

And as for Vale, as you say, the production 310 million to 330 million was their focus. Last year it was a 302 million.

So we do see COVID-19 impact, but the volume, I believe, will increase. And as for the dividend payment, you have stated it correctly.

Vale business is -- the situation is as we just explained.

Thank you very much. And the other one, I’d like to ask to Uchida San, about the credit rating.

Have you had discussions with the agencies and what about the impairment of the energy businesses? In March, it went down, but the impairment test has gone down.

So, the long term perspective may have changed.

Of course it 2016 march, of course, that was a year in which a large impairment was recorded, but this year it is not going to be that big, is that correct? That is a forward looking information, but that is what we are thinking at the moment.

I'm not saying that there will not be any impact. Of course, the situation may change.

There is not much I can say here, but there will be some impact. Yes.

Thank you.

Thank you very much. Thank you.

There are two questions. As for chemicals, ITC and Novus, the current status and prospects, that's what I'm interested to know.

And lifestyle and healthcare IHH is started from the loss, as likewise, can you comment on the current status and future outlook? Those are the two questions.

Thank you for the questions. Uchida CFO will answer those questions.

As for ITC, there operation also has been continuing to recover and isn't related cost. There's very little.

There was a claim to the insurance. That's partly included.

But instant investigation and the cause has not been finalized yet. And it is expected to be finished by the end of this year, but there's a delay.

And as for the litigation, we're still at the early stage. And we are not in a position to disclose anything important.

And so Novus, there were several structural reforms that were ongoing. First, is the structural reform related costs that has been incorporated this time.

But the value is not that much. But in the second quarter, there was some that will be incorporated.

So, there's a positive factor. And also the founding prices in recent time, has improved.

It is not sustainable low yet, but there was a favorable factor on the Novus performance because of that and as for IHH, in the first quarter IHH the Indian related business impairment loss was recognized. And part of that loss has been incorporated, in our performance.

So, in the first quarter there is a large loss. But -- or negative factor.

But we had thought that the operating operation rate will be affected more severely, in Asia, that PCR is test has been outsourced. And so, some patience has been received, in IHS hospitals.

So, as I said, there was some easing of the downward pressure that we have been receiving. Therefore, compared to the initial forecast, even though there was a first quarter impairment loss, compared to the initial expectation, the downward pressure or negative pressure may have ease.

And we are on the recovery truck. Does that answer your question?

Thank you.

Thank you very much. I would like to ask a question.

One question, with this business results announcement, he also announced their share based compensation plan for you employees. The objectives have been outlined, but what are the changes you expecting from your employees by offering this plan?

Thank you.

Thank you very much for your question. Uchida will answer your question.

Thank you. To our employees, we would like to have a better re-numeration system.

And the HR system, as a whole is being reviewed currently. Of course, performance based treatment.

And also performance based I mean remuneration has been introduced and into mid-to-long-term with ease of being introduced. We would like to aim for mid-to-long-term growth of the company that is closely related to stock price.

That is something that our employees need to be sensitive of. Of course, directors have stocks as well.

So, performance wise, show time, the annual business results and individual performers is being reflected, but the allotment is not that big, but we would like to have the employees more aware of the movements of the stock prices, after a certain period at the time of retirement it will be divested to employees. So that is going to lead to improving the company's value, and I hope it will lead to better returns to investors.

Okay. Thank you very much for your answer.

And this is Uchida once again. This afternoon in the headline, we said that we may have been able to go through the worst period for Mitsui.

But I'd like to make a correction to say that we do not see that the first quarter was our bottom, depending on the spread of COVID-19 going forward, the second wave, for example, and of course, today in reporting from subsidiaries, and of course, there'll be some expenditures that will surface going forward. These are the areas that we'll be monitoring very closely going forward, so that we will be able to manage the situation When it comes to the global economy, looking at the indicators, of course, the bottom may have been hit during the first quarter.

That is what I wanted to say. With the announcement, thank you very much for your attention today.