Note: This is an excerpt translation of the “Shihanki-Houkokusho” for the convenience of overseas stakeholders. In cases where
any differences occur between the English version and the original Japanese version, the Japanese version shall prevail. RIKENTECHNOS CORPORATION assumes no responsibility for this translation or for direct, indirect or any other forms of damages
arising from the translation.

Quarterly Consolidated Financial Statements(Pursuant to Article 24-4-7, Paragraph 1 of theJapanese Financial Instruments and Exchange Act)
Second quarter of
the 89th term

From July 1, 2017
to September 30, 2017

RIKEN TECHNOS CORPORATION
2-101, Kanda-Awajicho, Chiyoda-ku, Tokyo, JapanQuarterly Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Leased assets, net
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Leased assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

As of March 31, 2017

As of September 30, 2017

14,508,274
23,762,379
5,731,533
558,400
4,823,450
429,567
1,133,890(129,560)
50,817,935

14,332,796
23,989,778
6,625,361
562,639
4,746,866
388,840
1,147,721(128,429)
51,665,574

9,737,777
9,222,775
6,427,165
22,460932,233
618,154
26,960,565

9,390,954
9,226,766
6,419,585
29,764
1,003,355
671,164
26,741,591

483,537
3,745
2,656,002
3,143,285

387,748
2,913
2,380,319
2,770,981

6,035,880
54,916502,834
230,356
603,906(3,770)7,424,123
37,527,975
88,345,910

6,681,091
52,485
527,853
253,799
476,136(3,770)7,987,596
37,500,169
89,165,744

(Thousands of yen)
As of March 31, 2017
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for director stock benefits
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets*2

16,913,755
6,544,873
315,635
10,231
575,041
625,177
63,1002,529,349
27,577,165

As of September 30, 2017*2

16,903,269
6,235,927
87,3409,534
599,547
524,462
44,2642,643,531
27,047,876

4,000,000
4,866,068
21,468
1,159,930
17,4101,069,617
310,128
127,782
11,572,407
39,149,572

2,280,000
4,806,981
25,4281,384,660
68,742
1,066,575
312,367
134,677
10,079,435
37,127,311

8,514,018
6,670,465
27,137,248(3,108,532)
39,213,200

8,514,018
7,090,224
28,013,556(1,743,642)
41,874,157

2,785,333

3,258,300

502,996(527,469)
2,760,859
7,222,277
49,196,337
88,345,910

223,788(494,950)
2,987,138
7,177,136
52,038,432
89,165,744

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Thousands of yen)Six months ended
September 30, 2016
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent*1

43,171,574
34,501,764
8,669,810
5,757,294
2,912,515

Six months ended
September 30, 2017

*1

45,890,214
37,500,409
8,389,804
5,834,911
2,554,893

17,257
66,816−24,109108,182

13,91471,02014,80387,988
187,727

65,235
269,835
8,111
343,182
2,677,515

93,913−14,060107,9732,634,646

2,075
0
2,075

2,143
64,35866,501

−
7,695
7,695
2,671,895
822,554
1,849,341
725,544
1,123,796

6,871
21,76928,641
2,672,506
849,353
1,823,153
620,515
1,202,637

Consolidated Statements of Comprehensive Income(Thousands of yen)Six months ended
September 30, 2016
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

Six months ended
September 30, 2017

1,849,341

1,823,153

249,834(2,479,413)
41,192(2,188,386)(339,045)

473,924(399,473)
25,37999,8301,922,983(172,582)

1,428,915(166,462)

494,067(3) Consolidated Statements of Cash Flows(Thousands of yen)Six months ended
September 30, 2016

Six months ended
September 30, 2017

Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Decrease in provision for bonuses
Increase (decrease) in provision for directors’ bonuses
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in net defined benefit liability
Increase in provision for director stock benefits
Interest and dividend income
Interest expenses
Gain on sales of investment securities
Loss (gain) on sales of property, plant andequipment
Loss on retirement of property, plant andequipment
Decrease (increase) in notes and accounts receivable trade
Increase in inventories
Increase (decrease) in notes and accounts payable trade
Decrease in accrued consumption taxes
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash used in investing activities

2,671,895
1,505,865
95,788(142,068)
6,800

2,672,506
1,638,605
95,788(98,780)(18,835)

12,544(824)

42,5195,803(84,073)
65,235(0)(99,002)51,331(84,934)
93,913(64,358)(2,075)

4,728

7,695

21,769305,855(355,711)(434,294)(942,041)(608,173)

98,819(86,699)
500,685
3,863,303
84,840(53,508)(749,867)
3,144,767(131,605)
402,1423,283,510
83,140(95,259)(664,167)
2,607,225(6,334)
619,124(2,722,881)(118,075)
118,853(1,543,299)

2,075

5,131

(144,606)(1,830)0−
1,834(46,937)(2,299,555)(70,466)−
92,134(1,000)4,356
17,048(1,495,316)

(Thousands of yen)Six months ended
September 30, 2016
Cash flows from financing activities
Net decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Proceeds from sales of treasury shares
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period*1

Six months ended
September 30, 2017

(305,448)
2,306,220(241,289)(9,562)8,143(15)(299,425)(483,273)(59,688)915,660(264,740)
137,500(239,605)(10,649)
147,798(137,661)(350,241)(481,016)−(1,198,617)(825,499)(83,434)

935,374
13,444,325
14,379,699(170,143)
14,369,863
14,199,720*1

Notes to Quarterly Consolidated Financial Statements
Basis of Presentation of Quarterly Consolidated Financial Statements
The accompanying quarterly consolidated financial statements of RIKEN TECHNOS CORPORATION (the“Company”) and its consolidated subsidiaries have been prepared in accordance with the provisions set forthin the Japanese Financial Instruments and Exchange Act and its related accounting regulations, and inaccordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to the application and disclosure requirements of International Financial ReportingStandards (“IFRS”).
In addition, amounts are rounded down to the nearest thousand yen.
Changes in Scope of Consolidation
RIMTEC CORPORATION conducted a company split as of April 1, 2017, with RIMTEC
MANUFACTURING CORPORATION, which was newly established, as the succeeding company. In
addition, as of the same date, RIKEN ELASTOMERS CORPORATION conducted a company split, withREC MANUFACTURING CORPORATION, which was newly established, as the succeeding company, andat the same time, it merged RIMTEC CORPORATION and changed its trade name to RIKEN AMERICASCORPORATION. As of the same date, REC MANUFACTURING CORPORATION changed its trade nameto RIKEN ELASTOMERS CORPORATION.
As a result, the Group comprises the Company and its 21 subsidiaries as of September 30, 2017.
RIKEN ELASTOMERS CORPORATION and RIMTEC MANUFACTURING CORPORATION are
included in the scope of consolidation from the second quarter under review, since the difference between the
Company’s consolidated closing date and the two companies’ closing date does not exceed three months.
RIMTEC CORPORATION is excluded from the scope of consolidation from the second quarter under review,as the difference exceeds three months.
Special Accounting Applied for Preparing Quarterly Consolidated Financial Statements(Calculation of taxes)
The Company computes the taxes first by reasonably estimating the effective tax rate after applying tax effectaccounting against income before income taxes for the fiscal year including the second quarter under review,and next by multiplying the quarterly income before income taxes by such estimated effective tax rate.
However, in cases where the calculation of taxes using such estimated effective tax rate yields a result that is
not reasonable to a significant extent, the effective statutory tax rate is used.

Additional Information(Transactions of delivering the Company’s own stock to employees etc. through trusts)(1) Board Benefit Trust (BBT)In accordance with the resolution at the 87th Ordinary General Meeting of Shareholders held on June 24,
2016, the Company introduced a new stock-based compensation plan “Board Benefit Trust (BBT)” on
September 14, 2016, for the purpose of raising awareness of Directors who execute business (excluding
Directors who are Audit & Supervisory Committee Members) and Executive Officers toward theircontributions to improving the mid- to long-term corporate performance and increasing the corporate
value as well as making Directors who do not execute business (excluding Directors who are Audit &Supervisory Committee Members) and Directors who are Audit & Supervisory Committee
Members contribute to increasing the mid- to long-term corporate value through supervision or audit.
(a) Overview of transactions
Based on the officers’ stock benefit plan which was established in advance, the Company and its
group companies (the “Group”) grant points to Directors etc. (Directors and Executive Officers). At
the time of their retirement, the Group provides shares in the Company to the Directors etc. who
satisfy requirements for beneficiaries in proportion to the points which the Group has granted to them.
With regard to the shares which will be provided to Directors etc. in the future, a trust bank acquires
the Company’s treasury shares through third-party allotment by using the money contributed by theCompany. Such shares are managed as trust assets separately.
(b) Shares in the Company remaining at the trust
The shares in the Company remaining at the trust are recorded as the treasury shares in net assets withthe book value (excluding associated costs) at the trust. The book value and number of these treasury
shares as of the end of the previous fiscal year were 209,960 thousand yen and 476 thousand shares,
respectively, while those as of the end of the second quarter under review were 209,960 thousand yen
and 476 thousand shares, respectively.
(c) Book value of loans payable recorded due to the application of the gross method
Not applicable.
(2) Stock Benefit Trust (Employee Stockholding Association Purchase-type)
For the purpose of promoting welfare benefits for employees and giving incentives pertaining to theimprovement of corporate value of the Company, the Company introduced “Stock Benefit Trust(Employee Stockholding Association Purchase-type )” (hereinafter referred to as the “Plan”), pursuant to
the resolution at the Board of Directors meeting held on May 24, 2017.
(a) Overview of transactions
The Plan is an incentive plan under which the benefits of a rise in the Company’s stock price arepassed along to all the employees who are members of the “RIKEN TECHNOS Employee
Stockholding Association” (hereinafter referred to as the “Stockholding Association”).
A trust bank as the trustee of the Plan acquires shares in the Company that are expected to beacquired by the Stockholding Association over the five years after the establishment of the trust, en
bloc in advance, and sells those shares in the Company to the Stockholding Association as needed
when it acquires the shares.
If the amount equivalent to gain on sales of shares by the trust bank was accumulated in trust assets
by the termination of this trust through the sale of shares to the Stockholding Association, theaccumulated amount is distributed as residual assets to the members of the Company’s employee
Stockholding Association who satisfy eligibility requirements for beneficiaries.
The Company has guaranteed loans that the trust bank received to acquire shares in the Company.
Therefore, if there is remaining loan amount that is equivalent to loss on sales of shares in the
Company due to a decline in the Company’s stock price at the time of termination of the trust, theCompany is required to pay the remaining loan amount under the guarantee agreement.

(b) Shares in the Company remaining at the trust
The shares in the Company remaining at the trust are recorded as the treasury shares in shareholders’equity with the book value (excluding associated costs) at the trust. The book value and number ofthese treasury shares as of the end of the second quarter under review were 128,260 thousand yen and
233 thousand shares.
(c) Book value of loans payable recorded due to the application of the gross method
128,641 thousand yen as of the end of the second quarter under review

Notes to Consolidated Balance Sheets
1. Notes receivable endorsed
As of March 31, 2017
Notes receivable endorsed

1,666(Thousands of yen)
As of September 30, 2017358

*2. Overdraft agreements and unused overdraft facility balanceTo efficiently secure equipment funds, the Company and its domestic consolidated subsidiaries haveentered into overdraft agreements with banks with which they do business.
The unused balance of these prescribed limit agreements is as follows:
As of March 31, 2017

(Thousands of yen)
As of September 30, 2017

Total overdraft facility limit
Outstanding borrowings within the limit

11,030,000
4,015,000

11,130,000
3,932,500

Unused balance

7,015,000

7,197,500

Notes to Consolidated Statements of Income*1. Main components of selling, general and administrative expenses
Main components of selling, general and administrative expenses are as follows:
Six months ended
September 30, 2016

(Thousands of yen)Six months ended
September 30, 2017

Freightage expenses

1,368,618

1,449,209

Salaries and bonuses

1,152,509

1,101,309

Provision for bonuses

109,966

153,332

Provision for directors’ bonuses

36,00044,264Retirement benefit expenses

88,661

111,770

Provision for director stock benefits

5,803

51,331

Provision of allowance for doubtful accounts

13,488(1,079)Research and development expenses

449,939

485,290

Notes to Consolidated Statements of Cash Flows*1. Reconciliation between “Cash and cash equivalents at end of period” in the consolidated statements ofcash flows and “Cash and deposits” in the consolidated balance sheetsSix months ended
September 30, 2016
Cash and deposits
Time deposits with maturities over 3 months
Cash and cash equivalents(Thousands of yen)Six months ended
September 30, 2017

14,504,420

14,332,796(124,720)(133,076)

14,379,699

14,199,720

Shareholders’ Equity and OthersI.

Six months ended September 30, 2016 (from April 1, 2016 to September 30, 2016)
1. Dividends paid
(Resolution)

Type of shares

Total dividends(Thousands of yen)

Dividends
per share(Yen)

Cut-off date

Effective date

Source ofdividends

Ordinary general
Retainedmeeting ofCommon stock
299,810
5
March 31, 2016
June 27, 2016
earnings
shareholders held on
June 24, 2016
(Note) Total dividends do not include 1,506 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

2. Dividends whose cut-off date is in the six-month period ended September 30, 2016 and whose
effective date is after the end of the second quarter ended September 30, 2016
(Resolution)

Type of shares

Total dividends(Thousands of yen)

Dividends
per share(Yen)

Cut-off date

Effective date

Source ofdividends

Board of Directors
September 30,
Retainedmeeting held on
Common stock
299,939
5
December 2, 2016
2016
earnings
November 7, 2016
(Note) Total dividends do not include 3,757 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

II. Six months ended September 30, 2017 (from April 1, 2017 to September 30, 2017)
1. Dividends paid
(Resolution)

Type of shares

Total dividends(Thousands of yen)

Dividends
per share(Yen)

Cut-off date

Effective date

Source ofdividends

Ordinary general
Retainedmeeting of
348,203
6
March 31, 2017
June 26, 2017
Common stockearnings
shareholders held on
June 23, 2017
(Note) Total dividends do not include 2,856 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

2. Dividends whose cut-off date is in the six-month period under review and whose effective date is after
the end of the second quarter under review(Resolution)

Type of shares

Total dividends(Thousands of yen)

Dividends
per share(Yen)

Cut-off date

Effective date

Source ofdividends

Board of Directors
September 30,
Retained
370,307
6
December 4, 2017
meeting held on
Common stock
2017
earnings
November 6, 2017
(Note) Total dividends do not include 4,255 thousand yen of dividends to Trust Account E. This is because shares in the
Company held by Trust Account E are recognized as treasury shares.

Segment Information and Others
Segment informationI.

Six months ended September 30, 2016 (from April 1, 2016 to September 30, 2016)
1. Information about net sales and profit or loss by reportable segment(Thousands of yen)
Reportable segment

Net sales(1) Sales to externalcustomers(2) Intersegment sales
or transfers
Total
Segment profit (loss)

Amountrecorded ontheAdjustment
consolidated(Note 2)statements ofincome(Note 3)Compound

Film

Food
wrapping
film

Total

Other
(Note 1)

Total

30,165,617

5,947,494

5,330,232

41,443,344

1,728,229

43,171,574–

43,171,574

113,200––

113,200

377,209490,409(490,409)–

30,278,817
2,690,627

5,947,494(128,978)5,330,232
371,928

41,556,544
2,933,577

2,105,439
25,33743,661,984
2,958,915(490,409) 43,171,574(46,399) 2,912,515(Notes) 1. The “Other” category is the business segment that is not included in the reportable segments, and represents the
manufacturing and sales of synthetic resin molding products and electric wire as well as the purchase and sales ofmerchandise.
2. The adjustment to segment profit (loss) represents negative 46,399 thousand yen in inter-segment eliminations.
3. Segment profit (loss) is adjusted to operating income in the consolidated statements of income.

2. Information about impairment loss on non-current assets or goodwill and others by reportablesegment
Not applicable.
II. Six months ended September 30, 2017 (from April 1, 2017 to September 30, 2017)
1. Information about net sales and profit or loss by reportable segment(Thousands of yen)
Reportable segment

Net sales(1) Sales to externalcustomers(2) Intersegment sales
or transfers
Total
Segment profit (loss)

Amountrecorded ontheAdjustment
consolidated(Note 2)statements ofincome(Note 3)Compound

Film

Food
wrapping
film

Total

Other
(Note 1)

Total

32,247,905

6,553,872

5,335,605

44,137,383

1,752,831

45,890,214–

45,890,214

138,376

38,479–176,856

158,773335,629(335,629)–

32,386,281
2,442,794

6,592,352(126,958)

5,335,605
350,525

44,314,239
2,666,361

1,911,604 46,225,843(9,572) 2,656,789(335,629) 45,890,214(101,896) 2,554,893(Notes) 1. The “Other” category is the business segment that is not included in the reportable segments, and represents the
manufacturing and sales of synthetic resin molding products and electric wire as well as the purchase and sales ofmerchandise.
2. The adjustment to segment profit (loss) represents negative 101,896 thousand yen in inter-segment eliminations.
3. Segment profit (loss) is adjusted to operating income in the consolidated statements of income.

2. Information about impairment loss on non-current assets or goodwill and others by reportablesegment
Not applicable.

Business Combinations
Transactions, etc. under common control(1) Overview of transactions(a) Name of subject business and its business activities
Name of business: Compound manufacture and sales businessBusiness activities: Manufacture and sales of compounds(b) Date of business combination
April 1, 2017(c) Legal form of business combination
1) Company split
Splitting company

Successor company

Purpose of company split

RIMTEC CORPORATIONRIMTEC MANUFACTURING
CORPORATION

To split the manufacturing division andhave the succeeding company succeed
to it

RIKEN ELASTOMERSCORPORATIONREC MANUFACTURING
CORPORATION

Same as above

Surviving company

Merged company

Purpose of merger

RIKEN ELASTOMERSCORPORATIONRIMTEC CORPORATION

To integrate the sales divisions into thesurviving company

Before change of trade name

After change of trade name

Functions of company

RIKEN ELASTOMERSCORPORATIONREC MANUFACTURING
CORPORATIONRIKEN AMERICASCORPORATIONRIKEN ELASTOMERSCORPORATION

2) Merger

3) Change of trade nameSales and controlling company
Change of trade name of manufacturing
company(d) Name of company after business combination
RIKEN AMERICAS CORPORATION (consolidated subsidiary of the Company)
RIKEN ELASTOMERS CORPORATION (consolidated subsidiary of the Company)
RIMTEC MANUFACTURING CORPORATION (consolidated subsidiary of the Company)(e) Other matters concerning overview of transactions
To unify points of contact for customers and flexibly utilize manufacturing equipment as demandrequires in the North American business, subsidiaries have been reorganized into two
manufacturing subsidiaries and one controlling company that engages in sales.
(2) Overview of accounting treatments
Pursuant to the “Revised Accounting Standard for Business Combinations” (ASBJ Statement No. 21,
September 13, 2013) and the “Revised Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures” (ASBJ Guidance No. 10, September 13, 2013),
transactions were treated as those under common control.

Per Share Information
Basic earnings per share and the basis for calculation thereof, and diluted earnings per share and the basis
for calculation thereof are as follows:
Six months ended
September 30, 2016
(1) Basic earnings per share (yen)Six months ended
September 30, 2017

18.74

20.36

1,123,796

1,202,637––

1,123,796

1,202,637

59,97559,055

16.40

18.07

–

–

8,528

7,514

–

–

(Basis for calculation)
Profit attributable to owners of parent (Thousands of yen)Amount not attributable to common shareholders(Thousands of yen)
Profit attributable to owners of parent regarding common
stock (Thousands of yen)
Average number of shares of common stock outstanding
during the period (Thousands of shares)(2) Diluted earnings per share (yen)(Basis for calculation)
Adjustment on profit attributable to owners of parent(Thousands of yen)
Increase in common stock (Thousands of shares)
Outline of potential shares which were not used in
calculating diluted earnings per share because they haveno dilutive effects, and which had material changes after
the end of the previous fiscal year
(Note)

Because shares in the Company held by Trust Account E are recognized as treasury shares in the quarterly consolidated
financial statements, the number of those shares has been deducted from the average number of shares of common
stock outstanding during the period used for the calculation of basic earnings per share.

Significant Subsequent Events
Not applicable.