QUARTERLY REPORT(The Third Quarter of the 71th Term)
From October 1, 2018 to December 31, 2018

(TRANSLATION)

ARISAWA MFG. CO., LTD.

TABLE OF CONTENTS
Page Number
Cover Page
PART I.

INFORMATION ON THE BUSINESS............................................................................. 1

I. General Conditions of Business ....................................................................................................... 1
1. Changes in Principal Management Indicators, etc. ........................................................................ 1
2. Description of Business ............................................................................................................... 1
II. Status of Business .......................................................................................................................... 2
1. Business Risks, etc....................................................................................................................... 2
2. Analyses of Consolidated Financial Position, Business Results and Cash Flowsby the Corporate Managers ...................................................................................................... 2
3. Agreements with Managerial Implications, etc. ............................................................................ 4
III. Status of the Submitting Company ................................................................................................ 5
1. Status of Shares, etc. .................................................................................................................... 5(1) Total Number of Shares, etc. ...................................................................................................... 5(2) Status of Stock Acquisition Rights, etc. ...................................................................................... 5(3) Status of Exercise of Moving Strike Convertible Bonds, etc. ...................................................... 5(4) Changes in the Number of Shares Issued and Outstanding, Capital Stock, etc. ............................ 5(5) Status of Major Shareholders ..................................................................................................... 6(6) Status of Voting Rights .............................................................................................................. 7
2. Status of Directors and Officers ................................................................................................... 7
IV. Status of Accounting ..................................................................................................................... 8
1. Quarterly Consolidated Financial Statements ............................................................................... 9(1) Quarterly Consolidated Balance Sheets ...................................................................................... 9(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated
Statements of Comprehensive Income .................................................................................... 11[Quarterly Consolidated Statements of Income] ..................................................................... 11[Quarterly Consolidated Statements of Comprehensive Income] ............................................ 12
2. Other ......................................................................................................................................... 18
PART II. INFORMATION ON GUARANTY COMPANIES, ETC. OF THE
SUBMITTING COMPANY............................................................................................ 19[Independent Auditors’ Quarterly Review Report]

Cover Page
Document to be filed:

Quarterly Report

Statutory basis:

Article 24-4-7, paragraph 1 of the Financial Instruments and Exchange Act

Filing to:

Director-General of the Kanto Local Finance Bureau

Date of filing:

February 14, 2019

Quarterly accounting period:

The Third Quarter of the 71th Term (From October 1, 2018 to December 31,
2018)

Company name (Japanese):

Kabushiki-Kaisha Arisawa Seisakusho

Company name (English):Arisawa Mfg. Co., Ltd.

Name and title of representative:

Yuta Arisawa, President and Representative Director

Location of head office:5-5, Minami-honcho 1-chome, Joetsu-shi, Niigata

Telephone number:(025) 524-5126

Contact person:

Shuichi Kubota, General Manager, Accounting Department

Place of contact:5-5, Minami-honcho 1-chome, Joetsu-shi, Niigata

Telephone number:(025) 524-5126

Contact person:

Shuichi Kubota, General Manager, Accounting Department

Places where copies of this Quarterly Report are

Arisawa Mfg. Co., Ltd., Tokyo Branch Officemade available for public inspection:(12-5, Yanagibashi 2-chome, Taito-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)

PART I. INFORMATION ON THE BUSINESS
I. General Conditions of Business1. Changes in Principal Management Indicators, etc.
Term
Accounting period
Net sales

70th term
consolidated cumulative
third quarter
From April 1, 2017
to December 31, 2017

71th term
consolidated cumulative
third quarter
From April 1, 2018
to December 31, 2018

From April 1, 2017
to March 31, 2018

30,32534,69640,909

3,193

3,644

4,044

2,655

2,411

3,453

4,708

1,530

4,498

52,64452,75652,49372,24872,03772,322

74.18

66.73

96.35

73.52

66.29

95.51

68.1

69.3

68.6

70h term
consolidated
third quarter
From October 1, 2017
to December 31, 2017

71th term
consolidated
third quarter
From October 1, 2018
to December 31, 2018

(Millions of yen)

Ordinary income(Millions of yen)
Profit attributable to ownersof the parent(Millions of yen)Comprehensive income(Millions of yen)
Net assets (Millions of yen)
Total assets(Millions of yen)
Net income per share (Yen)
Fully diluted net income per
share
(Yen)
Equity ratio
(%)

Term
Accounting period

70th term

Net income per share (Yen)
30.61
17.58
Note: 1. As Arisawa Mfg. Co., Ltd. (hereinafter referred to as either the “Company” or the “Submitting Company”, as the casemay be) prepares the quarterly consolidated financial statements, the changes in principal management indicators, etc.
of the Submitting Company are not stated above.
2. Consumption tax, etc. are not included in the amount of net sales.
3. During the current consolidated third quarter, the Company finalized the provisional accounting treatment for businesscombinations. As a result, figures as of previous consolidated cumulative third quarter and previous consolidated fiscal
year reflect the important revision of the initially allocated amounts of acquisition price.
4. Partial amendments to "Accounting Standards for Tax Effect Accounting" (Accounting Standards Board of Japan No.
28, February 16, 2018), etc. were applied at the beginning of the current consolidated fiscal first quarter. Principal
Management Indicators, etc. for the previous consolidated cumulative third quarter and the previous consolidated fiscal
year are shown after retroactive application of the said Accounting Standards, etc.

2. Description of Business
There was no material change in information regarding the business lines of our corporate group (the Company
and its associated companies; hereinafter referred to as either the “Group” or “our Group”, as the case may be) in
the current consolidated cumulative third quarter.
The changes, with respect to each Reportable segment, of principal associated companies in the current
consolidated cumulative third quarter are as follows;(Industrial application structural materials)
Protec Arisawa Japan Co., Ltd., which was a consolidated subsidiary of the Company, extinguished through anabsorption-type merger with the Company as the surviving entity in the current consolidated fiscal second quarter,and so has been excluded from the scope of consolidation.

-1-II. Status of Business
1. Business Risks, etc.
The current consolidated cumulative third quarter saw neither any new business risks, etc. emerging nor any
significant change in the business risks, etc. stated in the Financial Report for the previous business year.

2. Analyses of Consolidated Financial Position, Business Results and Cash Flows by the Corporate
Managers
Matters stated concerning the future in the text are based on judgments made as of the end of the current
consolidated second quarter.

(1) Financial Position and Operating Results1) Operating Results
The Japanese economy in the current consolidated cumulative third quarter remained on a recovery track,
owing to improvement in corporate earnings and employment situation, etc. While the economy in Westerncountries is making a slow recovery, a sense of uncertainty regarding the economic outlook persisted due
largely to the general misgivings about the apparent deceleration of growth in most major emerging
economies.
Under such circumstances, our group (the Company, its consolidated subsidiaries and the companies
accounted for under the equity method) saw a year-on-year upturn in both net sales and operating income asa result of the stagnant demand for electronic materials for use primarily in multifunctional mobile terminals
and efforts to improve the profitability of industrial application structural materials.
As a result, the business results for the current consolidated cumulative third quarter showed net sales of
34,696 million yen (representing a 14.4% increase as compared with the year-earlier quarter), an operating
income of 2,648 million yen (representing an 0.5% increase as compared with the year-earlier quarter), an
ordinary income of 3,644 million yen (representing a 14.1% increase as compared with the year-earlier
quarter) and a profit attributable to owners of the parent of 2,411 million yen (representing a 9.2% decrease
as compared with the year-earlier quarter).
Business results with respect to each segment are as follows.
a. Electronic materials segment
In the electronic materials segment, net sales were 22,632 million yen, representing a 13.8% increase ascompared with the year-earlier quarter and consisting mainly of the sales of our mainstay product, i.e.
materials for flexible printed circuit boards (the amount of orders received increased by 7.0%, and the
production output increased by 1.3%, as compared with the year-earlier quarter on a non-consolidated basisof the Submitting Company), while the segment income or loss recorded a segment income of 2,240 million
yen (an 4.0% decrease as compared with the year-earlier quarter).
b. Industrial application structural materials segment
In the industrial application structural materials segment, net sales (consisting mainly of the sales offilament winding molded products as well as honeycomb panels and prepregs for aircraft) were 6,291 million
yen, representing a 18.1% increase as compared with the year-earlier quarter, while the segment income orloss recorded a segment income of 1,040 million yen (a 29.3% increase as compared with the year-earlier
quarter).
c. Electrical insulating materials segment
In the electrical insulating materials segment, net sales (consisting mainly of the sales of prepregs and glass
cloth for electrical insulation) were 2,406 million yen, representing a 0.8% decrease as compared with theyear-earlier quarter, while the segment income or loss recorded a segment income of 344 million yen (a24.4% decrease as compared with the year-earlier quarter).
d. Display materials segment
In the display materials segment, net sales (consisting mainly of the sales of 3D imaging-related materials)
were 2,786 million yen, representing a 32.0% increase as compared with the year-earlier quarter, while thesegment income or loss recorded a segment income of 93 million yen (a segment loss of 111 million yen forthe year-earlier quarter).

-2-

e. Other (other businesses)
In other businesses, net sales were 579 million yen, representing a 2.5% increase as compared with theyear-earlier quarter, while the segment income or loss recorded a segment income of 151 million yen (a16.4% decrease as compared with the year-earlier quarter).
It should also be noted that the amounts of net sales, orders received, etc. stated in this section do notinclude consumption tax, etc.
2) Financial Position
Total assets as of the end of the current consolidated cumulative third quarter were 72,037 million yen, adecrease of 284 million yen compared with the end of the previous year. This was due largely to a decreaseof 2,230 million yen in cash and deposits.
Total liabilities as of the end of the current consolidated cumulative second quarter were 19,281 million
yen, a decrease of 547 million yen compared with the end of the previous year. This was due largely to adecrease of 597 million yen in income taxes payable.
Total net assets as of the end of the current consolidated cumulative second quarter were 52,756 million
yen, an increase of 262 million yen compared with the end of the previous year. This was due largely to anincrease of 1,186 million yen in retained earnings.

(2) Management Policy, Management Strategy, etc.
There was no significant change, during the current consolidated cumulative third quarter, in the
management policy, management strategy, etc. set by our Group.

(3) Business and Financial Tasks to be Addressed
There was no significant change in the tasks to be addressed by our Group in the current consolidated
cumulative third quarter.
In this regard, the Company has a basic policy in place as to how the persons controlling the Company’s
financial and business policymaking shall act, and the contents, etc. of such basic policy (the matters set forthin Article 118, item 3 of the Ordinance for Enforcement of the Companies Act) are as follows.
1) Contents of the basic policy and the efforts toward the realization of the basic policy (including, but
not limited to, effective utilization of the assets of the Company and formation of an appropriate
corporate group)
The Company, ever since its initiation in 1909, has been working on technological innovations andproduct development to build up unique technologies that integrate the “weaving, coating and molding”
elements of its expertise while consistently fulfilling users’ needs, thereby increasing its corporate
value under favorable labor-management climate. The Company’s Board of Directors believes that theCompany is obligated to adhere to such time-honored principle of nurturing technologicalaccumulation and also to understand, foster and enhance the said corporate value in the long run.
In light of the above, our Group stands on a management policy centering on the motto “Creation,
Innovation and Challenge” as we aim to enhance profitability through creation of new business bases
and new markets with the utmost emphasis on the pursuit of safety and quality.
2) Efforts to prevent inappropriate persons from controlling the Company’s financial and business
policymaking
Stock markets in late years witnessed such takeover methods that, for instance, force through largescale purchases of shares without providing sufficient explanation to, or consultation with, theshareholders and the management of the target company. Many of the takeovers using such methods
apparently entail erosion of corporate value and forced sales of shares, etc. to the detriment ofshareholders’ interests.
Such being the case, we acknowledged the need to ensure proper disclosure of necessary andsufficient information and also secure the time required for examination and consideration of an offer
to purchase by presenting a set of rules and procedures for large-block purchasers and purchaseofferors (hereinafter individually referred to as a “Purchaser”) to comply with. Thus the Company,
pursuant to the provisions of its Articles of Incorporation, established the measures to address largescale acquisitions of the Company’s shares (hereinafter referred to as the “Rules”) and obtained theshareholders’ approval of the Rules at the 69th Ordinary General Meeting of Shareholders held on
June 28, 2017.

-3-

In the event that: (i) invocation of a countermeasure is approved under the Rules at a general
meeting of shareholders, etc. held to confirm the shareholders’ intentions; (ii) the Purchaser does notcomply with the Rules; or (iii) it is evident that a large-scale acquisition of the Company’s shares or
any similar act or an offer of any of such acts (hereinafter individually referred to as a “Purchase”)
will impair the Company’s corporate value, the countermeasure(s) shall be invoked in accordancewith the Rules.
(For the details of the Rules, please refer to the Company’s website at: http://www.arisawa.co.jp/)
3) The fact that the aforesaid efforts, in accordance with the basic policy, do not erode the Company’s
corporate value and the common interests of the shareholders and that such efforts do not aim to
maintain the status of the Company’s directors and officers
The Company’s Board of Directors believes that, with the Company’s shares listed on the stock
exchange for unfettered trading by the investors, a large-scale purchase of the Company’s sharesconducted against the will of the Company’s Board of Directors or an offer to purchase entailing achange of control of the Company should not be ruled out by the Company’s Board of Directors if
and to the extent that such acts contribute to the common interests of the shareholders throughenhancement of the Company’s corporate value, and so the final judgment as to the said acts should
be made collectively by the shareholders of the Company.
If and when such Purchase is conducted, we deem it best to collect detailed information from thePurchaser and provide the shareholders with sufficient levels of disclosure (in order for theshareholders to make a proper judgment) and also to have the Company’s Board of Directors express
its opinions, inviting the shareholders to directly express their intentions at a general meeting ofshareholders, etc. as to which of the cases is more conducive to securing and enhancing theCompany’s corporate value and the common interests of the shareholders. The Rules set forth asfollows:
a. Judgment by direct resolution of the shareholders
The Rules provide that the shareholders shall directly pass judgment on whether an offer topurchase made by a Purchaser should be approved, except where the Purchaser does not comply
with the Rules, etc. It is virtually impossible, in the process and procedures of confirming theshareholders’ intentions, for a director of the Company to make individual solicitations, etc. inpursuit of his or her own interests, and no room is left for an arbitrary intent of any of theCompany’s directors to impinge on the shareholders’ intentions.
b. Restrictions on invocation of countermeasures by the judgment of the Board of Directors
Invocation by the Company’s Board of Directors of a countermeasure without confirming theshareholders’ intentions is possible only when any breach of the Rules or erosion of theCompany’s corporate value and the common interests of the shareholders is evident, and also theso-called “sunset clause” is attached to limit the valid term of the Rules to approximately two (2)years.
Therefore, the Company’s Board of Directors believes that this “Basic Policy for the Control of
Kabushiki-Kaisha” represents the Company’s efforts to secure and maintain the Company’s
corporate value and the common interests of the shareholders and that such basic policy does not
impair the interests of the Company’s shareholders.

(4) Research and Development Activities
The Group’s total expenses for research and development activities incurred in the current consolidated
cumulative third quarter amounted to 1,506 million yen.
In this regard, there was no significant change in the status of research and development activities of ourGroup in the current consolidated cumulative third quarter.

3. Agreements with Managerial Implications, etc.
In the current consolidated third quarter, there was no decision made on, or execution of, agreements withmanagerial implications, etc.

-4-

III. Status of the Submitting Company
1. Status of Shares, etc.
(1) Total Number of Shares, etc.
1) Total number of shares
Class

Total number of shares authorized to be issued

Common stock

130,000,000

Total

130,000,000

2) Shares issued and outstanding
Number of shares issued
and outstanding as of theend of the third quarter(As of December 31,
20178

Class

Number of shares issued
and outstanding as of thefiling date of this Quarterly
Report(As of February 14, 2019)

Name of financial
instruments exchange
where the shares are listed
or authorized financial
instruments firms
association where theshares are registered

Remarks

Common stock

36,189,524

36,189,524

Tokyo Stock Exchange(First Section)

Number of sharesconstituting one
full unit: 100

Total

36,189,524

36,189,524

---

---

Note: The number of shares issued through the exercise of stock acquisition rights in the period from February 1, 2019 to thefiling date of this Quarterly Report is not included in the column “Number of shares issued and outstanding as of the filingdate of this Quarterly Report”.

(2) Status of Stock Acquisition Rights, etc.
1) Details of Stock Option Scheme
No applicable matter.
2) Status of Other stock acquisition right
No applicable matter.

(3) Status of Exercise of Moving Strike Convertible Bonds, etc.
No applicable matter.

(4) Changes in the Number of Shares Issued and Outstanding, Capital Stock, etc.
PeriodCapital stock(Thousands of yen)

Number of shares issued andoutstanding
ChangeBalance

ChangeFrom October 1, 2018 to
December 31, 2018
1,000
36,189,524
317(See Note)
Note: .The increases are due to the exercise of stock acquisition rights.

-5-Legal capital surplus(Thousands of yen)

Balance

ChangeBalance

7,529,099

317

6,641,022

(5) Status of Major Shareholders
As the current quarterly accounting period is the third quarter, there is no matter to be stated.
Though it is described in the Amendment Report on Bulk Holding available for public inspection as ofDecember 20, 2018 that BlackRock Japan Co., Ltd. and a joint holder thereof hold the shares described below asof December 14, 2018, the Company has confirmed no beneficial ownerships of the number of shares in thecurrent consolidated cumulative third quarter. Therefore, such number of shares is not included in abovementioned Status of Major Shareholders.
Details of the Report on Bulk Holding are as follows:
Bulk Holders: BlackRock Japan Co., Ltd. and one joint holder thereof
Address: 8-3, Marunouchi 1 chome, Chiyoda-ku, Tokyo
Number of shareholdings etc.
: 1,259,700
Holding ratio of share certificates etc. : 3.48%
Though it is described in the Amendment Report on Bulk Holding available for public inspection as ofDecember 21, 2018 that Sumitomo Mitsui Asset Management Company, Limited and a joint holder thereof holdthe shares described below as of December 14, 2018, the Company has confirmed no beneficial ownerships ofthe number of shares in the current consolidated cumulative third quarter. Therefore, such number of shares is notincluded in above-mentioned Status of Major Shareholders.
Details of the Report on Bulk Holding are as follows:
Bulk Holders: Sumitomo Mitsui Asset Management Company, Limited
and one joint holder thereof
Address: 5-1, Atago 2 chome, Minato-ku, Tokyo
Number of shareholdings etc.
: 1,090,300
Holding ratio of share certificates etc. : 3.01%-6-

(6) Status of Voting Rights
Since the “Status of Voting Rights” as of the end of the current third quarter cannot be stated herein as therelevant entries in the shareholder registry have yet to be confirmed, it is stated based on the shareholder
registry as of the most recent record date (September 30, 2018).
1) Shares issued and outstanding
As of December 31, 2018
Number of shares

Number of voting rights(Units)Remarks

Shares without voting rights

---

---

---

Shares with restricted voting rights(Treasury stock, etc.)

---

---

---

Shares with restricted voting rights (Other)

---

---

---

---

---

Category

Shares with full voting rights (Treasury
stock, etc.)

Common stock

Shares with full voting rights (Other)

Common stock 36,099,900

Shares constituting less than one full unit

Common stock

Number of shares issued and outstanding

7,200

360,999---

81,424------36,188,524

---

---

Total number of voting rights held by--360,999--shareholders
Note:1. 500 shares held in the name of Japan Securities Depository Center, Inc. are included in the row “Shares with full voting
rights (Other)”. 5 units of voting rights pertaining to shares with full voting rights held in the name of Japan Securities
Depository Center, Inc. are included in the column “Number of voting rights”.
2. 42 shares of treasury stock are included in the row "Shares constituting less than one full unit".

2) Treasury Stock, etc.
As of December 31, 2017
Name and address of shareholder

Number of shares held

Ratio of the number ofshares held to thenumber of sharesissued and outstanding(%)

Full name or corporate
nameAddress

Under own
name

Under thenames ofothers

Total

Arisawa Mfg. Co., Ltd.

5-5, Minami-honcho 1chome, Joetsu-shi,
Niigata

7,200

---

7,200

0.01

---

7,200

---

7,200

0.01

Total

2. Status of Directors and Officers
No applicable matter.

-7-

IV. Status of Accounting
1.

Method of Preparation of Quarterly Consolidated Financial Statements
The quarterly consolidated financial statements of the Company are prepared in compliance with the“Regulations for Terminology, Forms and Preparation Methods of Quarterly Consolidated Financial Statements”(Cabinet Office Ordinance No. 64 of 2007).

2.

Certification of Audit
The Company received a quarterly review of its quarterly consolidated financial statements for the current
consolidated third quarter (From October 1, 2018 to December 31, 2018) and the current consolidated cumulative
third quarter (From April 1, 2018 to December 31, 2018) conducted by Ernst & Young ShinNihon LLC under theprovisions of Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act.

-8-

1. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Thousands of yen)Previous consolidated
fiscal year
(As of March 31, 2018)

Current consolidated
third quarter(As of December 31, 2018)

AssetsCurrent assets
Cash and deposits

9,123,877

Notes and accounts receivable-trade*2

15,947,189

6,893,523*2

16,637,582

Securities

1,180,101

1,174,690

Merchandise and finished goods

3,915,375

3,357,063

Work in process

1,898,096

1,870,712

Raw materials and supplies

2,951,263

3,712,662

Other

1,328,865

1,336,484

Allowance for doubtful accounts△562,185△650,273

Total current assets

35,782,583

34,332,448

11,635,655

12,226,022

Goodwill

277,791

233,929

Other

172,949

183,792

Total intangible assets

450,740

417,721

Investment securities

23,365,824

23,152,535

Other

1,264,902

2,090,653

Allowance for doubtful accounts△176,835△181,493

Total investments and other assets

24,453,891

25,061,695

Total non-current assets

36,540,287

37,705,439

Total assets

72,322,870

72,037,888

Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets-9-

(Thousands of yen)
Current consolidated
third quarter(As of December 31, 2018)

Previous consolidated
fiscal year
(As of March 31, 2018)
Liabilities
Current liabilities
Notes and accounts payable-trade*2

Short-term loans payable
Current portion of long-term loans payable

6,794,393*2

6,580,570

4,242,472

4,490,719

864,130

901,652

Current portion of bonds

36,80036,800

Income taxes payable

930,529

333,347

Provision for bonuses

598,261

273,356

Provision for directors' bonuses

5,956

4,082

Provision for product warranties

125

42

Other

*2

Total current liabilities

2,509,831*2

3,221,474

15,982,499

15,842,046

164,800

128,000

Long-term loans payable

1,642,485

1,239,958

Net defined benefit liability

603,556

613,755

Asset retirement obligations

Non-current liabilities
Bonds payable

92,837

93,103

Other

1,342,953

1,364,549

Total non-current liabilities

3,846,632

3,439,366

19,829,132

19,281,412

Capital stock

7,458,242

7,529,099

Capital surplus

6,570,209

6,641,022

Retained earnings

33,493,564

34,680,132△4,467△4,70347,517,548

48,845,550

1,214,473

300,543－

1,707

Foreign currency translation adjustment

1,081,810

932,205

Remeasurements of defined benefit plans△176,694△151,631

Total accumulated other comprehensive income

2,119,588

1,082,824

Subscription rights to shares

127,640

134,479

Non-controlling interests

2,728,960

2,693,620

Total net assets

52,493,738

52,756,475

72,322,870

72,037,888

Total liabilities
Net assets
Shareholders’ equity

Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Total liabilities and net assets- 10 -

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income[Quarterly Consolidated Statements of Income][Consolidated cumulative third quarter](Thousands of yen)
Current consolidated
cumulative third quarter(From April 1, 2018
to December 31, 2018)

Previous consolidated
cumulative third quarter(From April 1, 2017
to December 31, 2017)
Net sales

30,325,502

34,696,479

Cost of sales

24,382,712

28,307,028

Gross profit

5,942,789

6,389,450

Selling, general and administrative expenses

3,306,235

3,740,685

Operating income

2,636,553

2,648,765

Interest income

237,864

247,878

Dividends income
Share of profit of entities accounted for using equity
methodOther

88,38997,087

382,051

538,963

340,889

399,547

1,049,193

1,283,475

Interest expenses

50,522

62,692

Provision of allowance for doubtful accounts

329,049

85,712

Other

112,652

139,597

Total non-operating expenses

492,224

288,001

3,193,522

3,644,240

Non-operating income

Total non-operating income
Non-operating expenses

Ordinary income
Extraordinary income
Gain on sales of non-current assets

2,960

34,125Gain on sales of securities

507,155

65,010Other

10,904

13,546

Total extraordinary income

521,020

112,681

Loss on retirement of non-current assets

7,898

48,759Loss on valuation of investment securities

63,595－－Extraordinary losses

Compensation for damage

91,68369－

Total extraordinary losses

71,562

140,443

Income before income taxes

3,642,980

3,616,478

Other

Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of the parent- 11 -

759,050

982,186

2,883,929

2,634,291

228,230

223,1442,655,699

2,411,146

[Quarterly Consolidated Statements of Comprehensive Income][Consolidated cumulative third quarter]
Previous consolidated
cumulative third quarter(From April 1, 2017
to December 31, 2017)
Profit(Thousands of yen)
Current consolidated
cumulative third quarter(From April 1, 2018
to December 31, 2018)

2,883,929

2,634,291

1,574,004△913,898

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges△5,153

1,707

Foreign currency translation adjustment

288,024△188,103

7,238

20,289△39,705△24,089

Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

1,824,407△1,104,094

Comprehensive income

4,708,337

1,530,197(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests

4,346,209

1,374,383

362,127

155,813- 12 -

[Notes](Change in the scope of consolidation or application of equity method)(1) Material change in the scope of consolidation
Protec Arisawa Japan Co., Ltd. which was the subsidiary of the Company, was combined into the Company
through an absorption-type merger, with the Company as the surviving entity, and extinguished and so havebeen excluded from the scope of consolidation as of the consolidated second quarter.
(Particular accounting treatments applied in preparation of quarterly consolidated financial statements)<Calculation of tax expenses>
Tax expenses are calculated by multiplying the quarterly income before income taxes by an estimatedeffective tax rate. Such effective tax rate is reasonably estimated after applying tax effect accounting to theincome before income taxes for the consolidated fiscal year including the current consolidated third quarter.
(Additional Information)(Application of the Partial amendments to "Accounting Standards for Tax Effect Accounting", etc.)
Partial amendments to "Accounting Standards for Tax Effect Accounting" (Accounting Standards Board ofJapan No. 28, February 16, 2018), etc. were applied at the beginning of the consolidated fiscal first quarter.
Deferred tax assets are shown in the column of Investments and other assets and deferred tax liabilities areshown in the column of Non-current liabilities.

- 13 -

(Notes Related to Quarterly Consolidated Balance Sheets)
1 Balance of discounted notes and accounts receivable
Previous consolidated fiscal
year(As of March 31, 2018)
Discounted notes and accounts receivable

Current consolidated fiscal
year(As of March 31, 2019)－17,822*2 Notes, etc. maturing at the end of the consolidated third quarter
For accounting treatment of notes, electronically recorded monetary claims and electronically recorded
obligations maturing at the end of the consolidated third quarter, settlement is made as of the clearing date ofeach note or as of the settlement date of each electronically recorded monetary claim and electronically recorded
obligation, as the case may be. As the end of the current consolidated third quarter falls on a bank holiday, thefollowing notes, electronically recorded monetary claims and electronically recorded obligations maturing at
the end of the consolidated third quarter are included in their respective balances as of the end of theconsolidated third quarter.
Previous consolidated fiscal year
(As of March 31, 2018)
Notes and accounts receivable-trade
Notes and accounts payable-trade
Current liabilities and others (Notes payable-facilities,
Electronically recorded obligations-non-operating)(Thousands of yen)
Current consolidated third quarter(As of December 31, 2018)

49,502
144,191

49,626
115,954

40,34360,968(Notes Related to Quarterly Consolidated Statements of Cash Flows)
Quarterly consolidated statements of cash flows for the current consolidated cumulative third quarter were notprepared. In this regard, the amounts of depreciation (including amortization of intangible assets except for
goodwill), amortization of goodwill and amortization of negative goodwill for the previous and current
consolidated cumulative third quarters are as follows.
Previous consolidated
cumulative third quarter(From April 1, 2017
to December 31, 2017)
Depreciation
Amortization of goodwill

1,230,549-- 14 -(Thousands of yen)
Current consolidated
cumulative third quarter(From April 1, 2018
to December 31, 2018)
1,387,281
43,861

(Notes Related to Shareholders’ Equity, etc.)
I Previous consolidated cumulative second quarter (From April 1, 2017 to December 31, 2017)
Dividends paid
(Resolution)

Class ofsharesOrdinary General
Meeting of
Shareholders ofJune 28, 2017

Common stock

Total amount ofdividends(Thousands ofyen)

Dividend
per share(Yen)

713,461

20.00

Record date

Effective
date

Source ofdividends

March 31, 2017

June 29, 2017

Retained earnings

II Current consolidated cumulative second quarter (From April 1, 2017 to December 31, 2017)
Dividends paid
(Resolution)

Class ofsharesOrdinary General
Meeting of
Shareholders ofJune 28, 2018

Common stock

Total amount ofdividends(Thousands ofyen)

Dividend
per share(Yen)

1,224,579

34.00- 15 -

Record date

Effective
date

Source ofdividends

March 31, 2018

June 29, 2018

Retained earnings

(Segment Information, etc.)[Segment Information]
I Previous consolidated cumulative third quarter (From April 1, 2017 to December 31, 2017)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Reportable segment
Electronicmaterials

Industrial
application
structural
materials

Electricalinsulating
materials

Displaymaterials

Subtotal

Other(See Note)

Total

Net sales
Net sales toexternal
19,896,877
5,326,627
2,425,983
2,110,567
29,760,055
565,446
30,325,502
customers
Inter-segment
sales or－－－－－625,277625,277transfers
Total
19,896,877
5,326,627
2,425,983
2,110,567
29,760,055
1,190,723
30,950,779
Segment income△111,752
2,332,550
804,644455,288
3,480,730
181,340
3,662,070
or loss ()Note: The column “Other” represents business operations that do not fall under any of the reportable segments and includes therelated goods sales, the logistics-related operations and other businesses, etc.

2. Difference between the aggregate amount of income or loss of reportable segments and the pertinent
amount shown on the quarterly consolidated statements of income as well as the key components of suchdifference (Matters concerning difference adjustment)(Thousands of yen)
IncomeAmountTotal of reportable segments

3,480,730

Income in the category “Other”

181,340

Elimination of inter-segment transactions△68,191

Unallocated corporate expenses (See Note)△931,336

Adjustment of inventories△25,988
Operating income shown on the quarterly
2,636,553
consolidated statements of income
Note: Unallocated corporate expenses are mostly general and administrative expenses
that are not attributable to any of the reportable segments.

3. Information on impairment loss on non-current assets or goodwill, etc. with respect to each reportablesegment(Material change of the amount of goodwill)
Regarding the "Electronic materials" segment, Satosen Co., Ltd. is included in the scope of
consolidation, due to the acquisition of stock of the said company, from the consolidated third quarter.
The increased amount of goodwill due to the said event is 292,412 thousand yen for the current
consolidated cumulative third quarter. The amount of goodwill reflects the important revision of theinitially allocated amounts of acquisition price, due to finalization of the provisional accounting
treatment described in [Notes (Business Combinations)]- 16 -

II Current consolidated cumulative third quarter (From April 1, 2018 to December 31, 2018)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Reportable segment
Electronicmaterials

Industrial
application
structural
materials

Electricalinsulating
materials

Displaymaterials

Subtotal

Other(See Note)

Total

Net sales
Net sales toexternal
22,632,723
6,291,123
2,406,831
2,786,181
34,116,860
579,619
34,696,479
customers
Inter-segment
sales or－－－－－594,710594,710transfers
Total
22,632,723
6,291,123
2,406,831
2,786,181
34,116,860
1,174,330
35,291,190
Segment income
2,240,316
1,040,188344,258
93,0683,717,831
151,577
3,869,408
Note: The column “Other” represents business operations that do not fall under any of the reportable segments and includes therelated goods sales, the logistics-related operations and other businesses, etc.

2. Difference between the aggregate amount of income or loss of reportable segments and the pertinent
amount shown on the quarterly consolidated statements of income as well as the key components of suchdifference (Matters concerning difference adjustment)(Thousands of yen)
IncomeAmountTotal of reportable segments

3,717,831

Income in the category “Other”

151,577

Elimination of inter-segment transactions△81,160

Amortization of goodwill△43,861△1,071,575

Unallocated corporate expenses (See Note)△24,045
Operating income shown on the quarterly
2,648,765
consolidated statements of income
Note: Unallocated corporate expenses are mostly general and administrative expenses
that are not attributable to any of the reportable segments.
Adjustment of inventories

3. Information on impairment loss on non-current assets or goodwill, etc. with respect to each reportablesegment
No applicable matter.
(Business Combinations, etc.)(Finalization of provisional accounting for business combinations and important revision of initially allocated amount ofacquisition price on comparative information)
Provisional accounting was conducted in the previous consolidated third quarter for the business combination
with Satosen Co., Ltd., which was effected in the previous consolidated third quarter. Such provisional
accounting has been finalized in this current consolidated third quarter.
Due to such finalization of the provisional accounting, important revision of the initially allocated amount ofacquisition price is reflected on the comparative information described in Quarterly Consolidated Financial
Statements for the current consolidated third quarter.
As a result, the amount of goodwill which was calculated provisionally is revised, due to the said finalizationof accounting, from 355,527 thousand yen to 292,412 thousand yen, a decrease of 63,115 thousand yen. Suchdecrease of goodwill is due to the respective increases of 95,039 thousand yen in "Other" of "Intangible assets",and of 31,923 thousand yen in "Other" of "Non-current assets".

- 17 -

(Per Share Information)
The amounts of net income per share and fully diluted net income per share with their respective bases ofcalculation are as follows.
Previous consolidated
cumulative third quarter(From April 1, 2016
to December 31, 2016)(1) Net income per share

Current consolidated
cumulative third quarter(From April 1, 2017
to December 31, 2017)74.18 yen

66.73 yen

2,655,699

2,411,146－－

2,655,699

2,411,146

35,802,682

36,134,606

73.52 yen

66.29 yen

---

---

318,324

236,993(Basis of calculation)
Profit attributable to owners of the parent(Thousands of yen)Amount not attributable to common
stockholders (Thousands of yen)
Profit attributable to owners of the parent
pertaining to common stock(Thousands of yen)
Average number of shares of common stockduring the period(2) Fully diluted net income per share(Basis of calculation)
Adjustment of profit attributable to ownersof the parent (Thousands of yen)
Increase in the number of shares of common
stockOutline of dilutive shares that were not includedin the calculation of fully diluted net income pershare due to a lack of dilutive effect and also
underwent a significant change after the end of
the previous consolidated fiscal year---

(Significant Subsequent Events)
No applicable matter.

2. Other
No applicable matter.

- 18 ----

PART II. INFORMATION ON GUARANTY COMPANIES, ETC. OF THE
SUBMITTING COMPANY
No applicable matter.

- 19 -

Independent Auditors’ Quarterly Review ReportFebruary 13, 2019
To the Board of Directors of Arisawa Mfg. Co., Ltd.

Ernst & Young ShinNihon LLC
Satoshi Ejima[Seal]

Designated Limited Liability Partner and Engagement Partner,

Certified Public Accountant
Makoto Iguchi[Seal]

Designated Limited Liability Partner and Engagement Partner,

Certified Public Accountant
We have conducted, under the provisions of Article 193-2, paragraph 1 of the Financial Instruments and ExchangeAct, a quarterly review of the quarterly consolidated financial statements of Arisawa Mfg. Co., Ltd. listed in the “Statusof Accounting” for the consolidated third quarter (From October 1, 2018 to December 31, 2018) and the consolidated
cumulative third quarter (From April 1, 2018 to December 31, 2018) of the consolidated fiscal year from April 1, 2018
to March 31, 2019, consisting of the quarterly consolidated balance sheets, quarterly consolidated statements of income,quarterly consolidated statements of comprehensive income and notes.
Responsibility of Management for the Quarterly Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the quarterly consolidated financial
statements in accordance with the standards for preparation of quarterly consolidated financial statements generally
accepted in Japan. This includes improvement and operation of such internal control as the management deems
necessary for the preparation and fair presentation of quarterly consolidated financial statements free from material
misstatement, whether due to fraud or error.
Responsibility of Auditors
Our responsibility is to express a conclusion on the quarterly consolidated financial statements from an independent
standpoint based on our quarterly review. We conducted our quarterly review in accordance with the quarterly review
standards generally accepted in Japan.
A quarterly review consists principally of making inquiries to the management and the persons responsible forfinancial and accounting matters, etc., applying analytical procedures and conducting other quarterly review procedures.
The quarterly review procedures are less exhaustive than the procedures for annual financial statement audits
conducted in accordance with the audit standards generally accepted in Japan.
We believe that the evidence we have obtained provides a basis for our conclusion.
Conclusion of Auditors
In our quarterly review, no matter has come to our attention that causes us to believe that the above quarterly
consolidated financial statements do not fairly present, in any material respect, the financial conditions of Arisawa
Mfg. Co., Ltd. and its consolidated subsidiaries as of December 31, 2018 and the results of their operations in the
consolidated cumulative third quarter ended December 31, 2018 in accordance with the standards for preparation ofquarterly consolidated financial statements generally accepted in Japan.
Interest
There exists no special interest between the Company and this audit corporation or its engagement partners whichis required to be stated pursuant to the provisions of the Certified Public Accountants Act.
Note: 1. All the matters stated above have been electronically copied from the matters stated in the original quarterly review report. The
original quarterly review report is separately archived by the Company (the company submitting the Quarterly Report).
2. XBRL data are not included in the subject of the quarterly review.