QUARTERLY REPORT(The Second Quarter of the 73rd Term)
From July 1, 2020 to September 30, 2020

(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 Flows by 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. ....................................................... 6(4) Changes in the Number of Shares Issued and Outstanding, Capital Stock, etc. ............................ 6(5) Status of Major Shareholders......................................................................................................... 7(6) Status of Voting Rights.................................................................................................................. 9
2. Status of Directors and Officers ........................................................................................................ 9
IV. Status of Accounting ........................................................................................................................ 10
1. Quarterly Consolidated Financial Statements ................................................................................. 11(1) Quarterly Consolidated Balance Sheets....................................................................................... 11(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income............................................................................................................... 13[Quarterly Consolidated Statements of Income] ......................................................................... 13[Quarterly Consolidated Statements of Comprehensive Income] ............................................... 14(3) Quarterly Consolidated Statements of Cash Flows ..................................................................... 15
2. Other................................................................................................................................................ 21
PART II. INFORMATION ON GUARANTY COMPANIES, ETC. OF THE
SUBMITTING COMPANY ................................................................................................ 22[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:

November 13, 2020

Quarterly accounting period:

The Second Quarter of the 73rd Term (From July 1, 2020 to September 30,
2020)

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

72nd term
consolidated cumulative
second quarter

Accounting period

From April 1, 2019
to September 30, 201973rdnd term
consolidated cumulative
second quarter
From April 1, 2020
to September 30, 2020

22,59922,20345,970

1,440

1,347

2,783

△894

853

212

△1,196

1,291

△117

49,10949,17449,01874,184

69,15371,709△24.81

25.67

6.14

－

25.63

6.12

62.6

67.2

64.3

2,218

△1,481

4,837△1,248△1,154

6,580

△230

△1,172△4,431

8,377

10,851

14,725Net sales(Millions of yen)

Ordinary income(Millions of yen)
Profit (or loss (△))
attributable to owners of theparent(Millions of yen)Comprehensive income(Millions of yen)
Net assets (Millions of yen)
Total assets (Millions of yen)
Net income (or loss (△)) per
share
(Yen)
Fully diluted net income per
share
(Yen)
Equity ratio(%)
Cash flows from operating
activities (Millions of yen)
Cash flows from investing
activities (Millions of yen)
Cash flows from financing
activities (Millions of yen)
Cash and cash equivalents at
the end of period(Millions of yen)

Term
Accounting period

72nd term
consolidated
second quarter
From July 1, 2019
to September 30, 201972nd term
From April 1, 2019
to March 31, 2020

73rd term
consolidated
second quarter
From July 1, 2020
to September 30, 2020

Net income (or loss (△))

△31.9312.78
per share (Yen)
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. Diluted net income per share in the 72nd term consolidated cumulative second quarter is not stated above due to net loss
per share, though potential share exists.

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 second quarter.
No change of organization was made to any of the Company’s principal associated companies.

-1-II. Status of Business
1. Business Risks, etc.
The current consolidated cumulative second 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 second quarter fell into an extremely difficult
situation due to the stagnant economic activities caused by the spread of the new corona virus infection(COVID-19). It also remained uncertain because the containment of the new corona virus infection(COVID-19) could not be predicted and it was concerned that the effect on the economy was prolonged.
Under such circumstances, the effect on the corporate performance of our Group (the Company, itsconsolidated subsidiaries and the companies accounted for under the equity method) from the spread of the
new corona virus infection (COVID-19) was slight in the electronic materials segment but profound in the industrial
application structural materials segment, the electrical insulating materials segment, and the display materials segment.
Consequently the results of operations for the current consolidated cumulative second quarter showed net salesof 22,203 million yen (a 1.8% decrease as compared with the year-earlier quarter), an operating income of
1,375 million yen (a 4.1% increase as compared with the year-earlier quarter), an ordinary income of 1,347
million yen (a 6.4% decrease as compared with the year-earlier quarter) and a profit attributable to ownersof the parent of 853 million yen (loss attributable to owners of the parent of 894 million yen in the yearearlier quarter).
Business results with respect to each segment are as follows.
a. Electronic materials segment
In the electronic materials segment, net sales were 14,915 million yen (a 3.2% increase as compared withthe year-earlier quarter) due to an increase in sales of materials for flexible printed circuit boards (the amountof orders received decreased by 1.3% and the production output increased by 9.8% as compared with theyear-earlier quarter on a non-consolidated basis of the Submitting Company) and materials for rigid printed
circuit boards, while the segment income or loss recorded an income of 1,337 million yen (a 20.4% increase
as compared with the year-earlier quarter) due to a profit improvement of Satosen Co., Ltd., etc.
b. Industrial application structural materials segment
In the industrial application structural materials segment, net sales were 4,343 million yen (a 0.2% increase
as compared with the year-earlier quarter) due to a decrease in sales of materials for aircraft and water
treatment pressure vessels and to the launch of new in-car products, while the segment income or loss
recorded an income of 476 million yen (a 23.4% decrease as compared with the year-earlier quarter) due toa decrease in sales of materials for aircraft and water treatment pressure vessels.
c. Electrical insulating materials segment
In the electrical insulating materials segment, net sales were 1,156 million yen (a 25.5% decrease ascompared with the year-earlier quarter) due to a decrease in sales of insulating materials for heavy electricalmachinery, while the segment income or loss recorded an income of 67 million yen (a 60.9% decrease ascompared with the year-earlier quarter) due to a decrease in net sales.
d. Display materials segment
In the display materials segment, net sales were 1,333 million yen (a 28.6% decrease as compared with theyear-earlier quarter) due to the overall decrease of sales, while the segment income or loss recorded anincome of 51 million yen (a 65.8% decrease as compared with the year-earlier quarter) due to a decrease in net
sales..
e. Other (other businesses)
In other businesses, net sales were 454 million yen (a 16.2% increase as compared with the year-earlier-2-

quarter), while the segment income was 134 million yen (a 24.5% increase 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 second quarter were 69,153 million yen,a decrease of 2,555 million yen compared with the end of the previous year. This was due largely to a decreaseof 3,674 million yen in cash and deposits
Total liabilities as of the end of the current consolidated cumulative second quarter were 19,978 million
yen, a decrease of 2,712 million yen compared with the end of the previous year. This was due largely to adecrease of 2,958 million yen in income taxes payable.
Total net assets as of the end of the current consolidated cumulative second quarter were 49,174 million
yen, an increase of 156 million yen compared with the end of the previous year. This was due largely to anincrease of 533 million yen in Valuation difference on available-for-sale securities.

(2) Status of Cash Flows
Cash and cash equivalents (hereinafter referred to as the “Funds”) as of the end of the current consolidated
second quarter amounted to 10,851 million yen, increasing 2,473 million yen, or 29.5%, as compared withthe end of the previous consolidated second quarter.
The following is the status of each cash flow category during the current consolidated cumulative second
quarter and the key factors of such status.
(Cash flows from operating activities)
Funds disbursed from operating activities were 1,481 million yen (a 2,218 million yen earned for theprevious consolidated fiscal year). This was due largely to an increase in the Funds comprising the postingsof 1,367 million yen in income before income taxes, 1,001 million yen in depreciation as well as a decreasein the Funds comprising 3,233 million yen in income taxes paid, etc. and 991 million yen in increase ininventories.
(Cash flows from investing activities)
Funds disbursed from investing activities were 1,154 million yen (a 7.5% decrease as compared with theyear-earlier quarter). This was due largely to a decrease in the Funds comprising the expenditure of 788
million yen for purchases of property, plant and equipment.
(Cash flows from financing activities)
Funds disbursed for financing activities were 1,172 million yen (a 408.5% increase as compared with theyear-earlier quarter). This was due largely to a decrease in the Funds comprising the payment of 992 million
yen in cash dividends and the payment of 992 million yen in cash dividends paid to non-controlling interests.

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

(4) Accounting Estimates and Assumptions Used in Making Such Estimates
There was no material change in a statement of the accounting estimates and assumptions used in making
such estimates in ”Analyses of Consolidated Financial Position, Business Results and Cash Flows by the
Corporate Managers” stated in the Financial Report for the previous business year.
Note that the accounting estimates in connection with the spread of the new corona virus infection(COVID-19) in the current consolidated cumulative second quarter is described in “IV. Status of Accounting- 1. Quarterly Consolidated Financial Statements - [Notes] – Additional information”.

(5) Business and Financial Tasks to be Preferentially Addressed
There was no material change in business and financial tasks to be preferentially addressed by our Groupin the current consolidated cumulative second quarter.

(6) Research and Development Activities
The Group’s total expenses for research and development activities incurred in the current consolidated
cumulative second quarter amounted to 971 million yen.
-3-

In this regard, there was no significant change in the status of research and development activities of ourGroup in the current consolidated cumulative second quarter.

3. Agreements with Managerial Implications, etc.
In the current consolidated second quarter, there was no decision made on, or execution of, agreements with managerial
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 outstandingClass

Number of shares issued
and outstanding as of theend of the second quarter(As of September 30, 2020)

Number of shares issued andoutstanding as of the filingdate of this Quarterly Report(As of November 13, 2020)

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

Remarks

Common stock

36,402,424

36,404,924

Tokyo Stock Exchange(First Section)

Number of sharesconstituting one
full unit: 100

Total

36,402,424

36,404,924

---

---

Note: The number of shares issued through the exercise of stock acquisition rights in the period from November 1, 2020 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
Date of Resolution

June 25, 2020

Category and number of persons to whom stock acquisitionrights shall be granted
Number of stock acquisition rights (Units)

4 directors of the Company, 147 employees of the Company, and
13 directors and employees of subsidiaries of the Company

※

3,268

Class, contents and number of shares subject to stockacquisition rights ※Common stock

Amount to be paid per share at the time of exercising eachstock acquisition right (Yen)※
Exercise period for stock acquisition rights

890※

July 1, 2022 through June 30, 2025

Issuance price and amount credited to equity capital in theevent of share issuance through the exercise of stockacquisition rights (Yen) ※Conditions for the exercise of stock acquisition rights

326,800※

Issuance priceAmount credited to equity capital

1,061
530.5

Being a director or an employee of the Company or a director oran employee of a subsidiary of the Company at the time of
exercising the rights.

Matters concerning the transfer of stock acquisition rights※

Any transfer of stock acquisition rights shall be subject to theapproval of the Board of Directors.

Matters concerning the grant of stock acquisition rights inconnection with acts of reorganization ※In the event that a merger agreement in which the Company
becomes a defunct company has been approved, or that a
proposal for approval of a stock swap agreement (or for a transferof shares) in which the Company becomes a wholly owned
subsidiary has been approved at a general meeting ofshareholders, except where the surviving company or theCompany’s wholly owning parent company succeeds to the
obligation to grant stock acquisition rights, the Company shall beable to acquire the stock acquisition rights without consideration.

The details shown above are as of the date of issuance of Stock Acquisition Right certificates (August 17, 2020).

2) Status of Other stock acquisition right-5-

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.
PeriodFrom July 1, 2020 to
September 30, 2020
(See Note 1)
Note:

1.
2.

Capital stock(Thousands of yen)

Number of shares issued andoutstanding

Legal capital surplus(Thousands of yen)

ChangeBalance

ChangeBalance

ChangeBalance

13,40036,402,424

4,247

7,601,353

4,247

6,713,344

The increases are due to the exercise of stock acquisition rights.
In the period from October 1, 2020 to October 31, 2020, the number of shares issued and outstanding increased by
2,500 shares, and the amount of capital stock and that of legal capital surplus increased by 792 thousand yen
respectively, all through the exercise of stock acquisition rights.

-6-(5) Status of Major Shareholders

Full name or
corporate name

Address

As of September 30, 2020
Ratio of the numberof shares held to thenumber of shares
Number ofissued andshares held
outstanding(excluding treasury
stock) (%)

The Master Trust Bank of Japan,
Ltd. (Trust account)11-3, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo

4,071,300

12.23

Tachibana Securities Co. Ltd.

13-14 NihonbashiKayabacho 1-chome,
Chuo-ku, Tokyo

1,572,500

4.72

Custody Bank of Japan, Ltd. (Trustaccount)

8-12, Harumi 1-chome,
Chuo-ku, Tokyo

1,504,900

4.52

Mitsubishi Gas Chemical Company, 5-2, Marunouchi 2-chome,
Inc.
Chiyoda-ku, Tokyo

1,472,166

4.42

INTERTRUST TRUSTEES（CAYMAN）LIMITED SOLEL
190 ELGIN AVENUE, GEORGE TOWN,Y IN ITS CAPACITY AS
GRAND CAYMAN KY1-9005, CAYMAN
TRUSTEE OF JAPAN-UP
ISLANDS (Shinagawa Intercity Tower A, 15-1,（Standing Proxy: Mizuho Bank
Konan 2-chome, Minato-ku, Tokyo)Ltd., Settlement & Clearing Services
Department）

1,299,400

3.90

The Hachijuni Bank, Ltd.
(Standing Proxy: The Master Trust
Bank of Japan, Ltd.)

178-8, Nakagosho Okada,
Nagano-shi, Nagano(11-3, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo)

1,000,930

3.00

Arisawa Kenko Ltd.

11-44, Nishishiro-cho 3-chome,
Joetsu-shi, Niigata

834,338

2.50

DFA INTL SMALL CAP VALUE
PORTFOLIO(Standing Proxy: Citibank Japan
Ltd.)

Palisades West 6300, Bee Cave Road Building
One, Austin, TX 78746 US(27-30, Shinjuku 6-chome, Shinjuku-ku, Tokyo)

697,582

2.09

Custody Bank of Japan, Ltd. (Trustaccount5)

8-12, Harumi 1-chome,
Chuo-ku, Tokyo

655,400

1.97

The Daishi Bank, Ltd.

1071-1, Higashiborimae-dori 7-bancho,
Chuo-ku, Niigata-shi, Niigata
628,903

1.89

13,737,419

41.29(Standing Proxy: The Master Trust(11-3, Hamamatsu-cho 2-chome,
Bank of Japan, Ltd.)
Minato-ku, Tokyo)
Total

---

Note: 1. The ratio of the number of shares held to the total number of shares issued (except for treasury stock) is displayed with thenumbers truncating the numbers beyond the third decimal point.
2. In addition to the above, the company owns 3,136,029 shares as treasury stock.
3. The number of shares held by Mitsubishi Gas Chemical Company, Inc. includes 966,306 shares that have been contributed
by Mitsubishi Gas Chemical Company, Inc. as the trust property of retirement benefit trust. The pertinent name in the
Company’s register of shareholders is “The Master Trust Bank of Japan, Ltd. (Retirement benefit trust account and
Mitsubishi Gas Chemical Company, Inc. account).”
4. Though it is described in the Amendment Report on Bulk Holding available for public inspection as of September 6, 2018that Sumitomo Mitsui Trust Bank, Limited and a joint holder thereof hold the shares described below as of August 31, 2018,
the Company has confirmed no beneficial ownerships of the number of shares as of September 30, 2020. Therefore, such
number of shares is not included in above-mentioned Status of Major Shareholders. Details of the Amendment Report on
Bulk Holding are as follows:
Bulk Holders: Sumitomo Mitsui Trust Bank, Limited and two joint holders thereof-7-Address
Number of shareholdings etc.

: 4-1, Marunouchi 1 chome, Chiyoda-ku, Tokyo: 1,488,200

Holding ratio of share certificates etc. : 4.12%
5.Though it is described in the Amendment Report on Bulk Holding available for public inspection as of December 20, 2018that BlackRock Japan Co., Ltd. and a joint holder thereof hold the shares described below as of December 14, 2018, theCompany has confirmed no beneficial ownerships of the number of shares as of September 30, 2020. Therefore, such
number of shares is not included in above-mentioned 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
Number of shareholdings etc.

: 8-3, Marunouchi 1 chome, Chiyoda-ku, Tokyo: 1,259,700

Holding ratio of share certificates etc. : 3.48%
6. Though it is described in the Amendment Report on Bulk Holding available for public inspection as of December 21,
2018 that Sumitomo Mitsui Asset Management Company, Limited hold the shares described below as of December 14,
2018, the Company has confirmed no beneficial ownerships of the number of shares as of September 30, 2020. Therefore,such number of shares is not included in above-mentioned Status of Major Shareholders. Details of the Report on Bulk
Holding are as follows:
Bulk Holders
Address: Sumitomo Mitsui Asset Management Company, Limited: 5-1, Atago 2 chome, Minato-ku, Tokyo

Number of shareholdings etc.
: 1,090,300
Holding ratio of share certificates etc. : 3.01%
7. Though it is described in the Amendment Report on Bulk Holding available for public inspection as of September 25,
2020 that Strategic Capital, Inc. hold the shares described below as of September 16, 2020, the Company has confirmed
no beneficial ownerships of the number of shares as of September 30, 2020. 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
Address: Strategic Capital, Inc.
: 14-15, Higashi 3 chome, Shibuya-ku, Tokyo

Number of shareholdings etc.
: 2,902,100
Holding ratio of share certificates etc. : 7.98%
8. Though it is described in the Amendment Report on Bulk Holding available for public inspection as of October 2, 2020
that Nippon Value Investors KK hold the shares described below as of September 30, 2020, the Company has confirmed
no beneficial ownerships of the number of shares as of September 30, 2020. 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
Address: Nippon Value Investors KK: 8-1 Marunouchi 1 chome, Chiyoda-ku, Tokyo

Number of shareholdings etc.
: 1,421,500
Holding ratio of share certificates etc. : 3.91%-8-

(6) Status of Voting Rights
1) Shares issued and outstanding
As of September 30, 2020
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)

---

---

---

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

Common stock 3,136,000

---

---

Shares with full voting rights (Other)(See Note 1)

Common stock 33,192,400

Shares constituting less than one full unit
(See Note 2)

Common stock

Category

Number of shares issued and outstanding

331,924---

74,024------36,402,424

---

---

Total number of voting rights held by--331,924--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. 29 shares of treasury stock are included in the row "Shares constituting less than one full unit".

2) Treasury Stock, etc.
As of September 30, 2020
Name and address of shareholder

Number of shares held
Under thenames ofothersFull name or corporate
nameAddress

Arisawa Mfg. Co., Ltd.

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

3,135,800---

3,135,800

8.61

---

3,135,800---

3,135,800

8.61

Total

Under own
name

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

2. Status of Directors and Officers
No applicable matter.

-9-

Total

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 second quarter (From July 1, 2020 to September 30, 2020) and the current consolidated cumulative
second quarter (From April 1, 2020 to September 30, 2020) conducted by Ernst & Young ShinNihon LLC under
the provisions of Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act.

- 10 -

1. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Thousands of yen)Previous consolidated
fiscal year
(As of March 31, 2020)

Current consolidated
second quarter(As of September 30, 2020)

AssetsCurrent assets
Cash and deposits

14,714,069

11,040,030

Notes and accounts receivable-trade

17,697,085

17,010,310

Securities

1,558,445

2,194,722

Merchandise and finished goods

3,083,432

3,675,784

Work in process

2,017,729

2,130,366

Raw materials and supplies

3,177,428

3,469,053

Other

1,059,764

643,222

Allowance for doubtful accounts△585,049△134,435

Total current assets

42,722,906

40,029,054

12,925,137

13,387,794

225,017234,969

14,207,192

14,378,051

Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Other

1,766,893

1,276,271

Allowance for doubtful accounts△137,662△152,503

Total investments and other assets

15,836,423

15,501,820

Total non-current assets

28,986,578

29,124,583

Total assets

71,709,484

69,153,638- 11 -

(Thousands of yen)Previous consolidated
fiscal year
(As of March 31, 2020)

Current consolidated
second quarter(As of September 30, 2020)

Liabilities
Current liabilities
Notes and accounts payable-trade

6,916,079

6,843,080

Current portion of bonds

36,80036,800

Short-term loans payable

4,866,202

4,741,818

Current portion of long-term loans payable

187,669

183,379

Income taxes payable

3,428,200

469,347

Provision for bonuses

570,517

527,494

4,793

2,250

Other

2,415,558

2,778,264

Total current liabilities

18,425,820

15,582,434

91,20072,800Long-term loans payable

2,567,816

2,775,074

Net defined benefit liability

738,606

720,721

Asset retirement obligations

92,31091,941

Other775,563

735,889

4,265,495

4,396,427

22,691,316

19,978,861

Capital stock

7,594,026

7,601,353

Capital surplus

Provision for directors' bonuses

Non-current liabilities
Bonds payable

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

6,706,017

6,713,344

Retained earnings

34,256,590

34,112,885

Treasury stock△3,204,797△3,204,971

Total shareholders’ equity

45,351,837

45,222,612

448,970

982,729

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges△1,311

1,976

Foreign currency translation adjustment

478,798

349,613

Remeasurements of defined benefit plans△141,260△104,788

785,197

1,229,530

Total accumulated other comprehensive income
Subscription rights to shares

166,148

166,881

Non-controlling interests

2,714,984

2,555,752

Total net assets

49,018,167

49,174,776

71,709,484

69,153,638

Total liabilities and net assets- 12 -

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income[Quarterly Consolidated Statements of Income][Consolidated cumulative second quarter]
Previous consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2020
to September 30, 2020)

Net sales

22,599,910

22,203,695

Cost of sales

18,771,640

18,486,327

Gross profit

3,828,270

Selling, general and administrative expenses*

Operating income

2,506,776

3,717,368*

2,342,126

1,321,493

1,375,241

155,386

148,698

Non-operating income
Interest income
Dividends income

56,81150,910Other

154,975

145,204

Total non-operating income

367,172

344,812Interest expenses

47,11654,147

Foreign exchange losses

43,443

166,895

Other

157,603

151,313

Total non-operating expenses

248,163

372,355

1,440,502

1,347,698

Gain on reversal of share acquisition rights

14,22926,431

Total extraordinary income

14,22926,431

Loss on retirement of non-current assets

5,146

6,793

Loss on valuation of investment securities

9,287

－

Other

2,894

－

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses

Total extraordinary losses

17,328

6,793

Income before income taxes

1,437,402

1,367,336

Income taxes

2,202,543

411,729

Profit (or loss(△))△765,140

955,607

128,973

101,942△894,114

853,665

Profit attributable to non-controlling interests
Profit (or loss(△)) attributable to owners of the parent- 13 -

[Quarterly Consolidated Statements of Comprehensive Income][Consolidated cumulative second quarter]
Previous consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)
Profit (or loss(△))(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2020
to September 30, 2020)△765,140

955,607△91,621533,739

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

1,277

3,287

△258,975△237,964

17,12636,471△98,834

568△431,026

336,103

Comprehensive income△1,196,167

1,291,711(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests△1,229,181

1,297,997

33,014△6,286- 14 -

(3) Quarterly Consolidated Statements of Cash Flows(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2020
to September 30, 2020)

Previous consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)
Cash flows from operating activities
1,437,402

1,367,336

Depreciation

961,595

1,001,911

Amortization of goodwill

29,241－

Share-based compensation expenses

26,82032,393Gain on reversal of subscription rights to shares△14,229△26,431

Increase ( decrease) in allowance for doubtful accounts△24,410

13,859

Increase ( decrease) in provision for bonuses

128,076△43,022

Increase ( decrease) in provision for product warranties

39△1

Increase ( decrease) in provision for directors' bonuses△1,041△2,543

Increase ( decrease) in net defined benefit liability

37,707

34,592

Loss ( gain) on redemption of investment securities

40,41324,209△212,197△199,608

Interest expenses

47,11654,147

Foreign exchange losses ( gains)Share of ( profit) loss of entities accounted for using
equity method
Loss ( gain) on sales of short-term and long-term
investment securities
Loss (gain) on valuation of investment securities

26,89486,004

16,672

39,991

2,894

－

9,287

－

Loss (gain) on liquidation of subsidiaries and associates

750－

Loss ( gain) on sales of non-current assets△63－

Loss on retirement of property, plant and equipment

Income before income taxes

Interest and dividends income

1,359

712

Decrease ( increase) in notes and accounts receivabletrade
Decrease ( increase) in inventories
Increase ( decrease) in notes and accounts payabletrade
Increase ( decrease) in accrued consumption taxes△368,380

696,277

254,274△991,765

83,394△77,199

78,096△222,039

Decrease ( increase) in other assets△287,353△193,353

Increase ( decrease) in other liabilities△124,340

32,259Subtotal

2,150,019

1,627,729

Interest and dividends income received

309,747

215,039

Interest expenses paid

△45,422△90,224

Income taxes paid

△195,569△3,233,587

Net cash provided by (used in) operating activities

2,218,775△1,481,043- 15 -

(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2020
to September 30, 2020)

Previous consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)
Cash flows from investing activities△106,000△478,489

Proceeds from withdrawal of time deposits－

200,000

Purchase of securities－△900,000

Proceeds from sales of securities－

900,000△1,294,806△788,318

Purchase of intangible assets△50,250△36,720

Purchase of investment securities△194,899△497,421

Payments into time deposits

Purchase of property, plant and equipment

Proceeds from sales of investment securities

380,724

458,033

Payments of loans receivable－△19,000

Collection of loans receivable

8,510

4,510

Decrease (increase) in other investments

8,109

2,571

△1,248,612△1,154,833

3,495,808△141,144

Proceeds from long-term loans payable

994,000

593,706

Repayments of long-term loans payable△1,147,154△384,452

Repayments of lease obligations△10,063△32,815

Redemption of bonds△18,400△18,400

Payments for long-term accounts payable - other△57,586△52,988

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase ( decrease) in short-term loans payable

Proceeds from issuance of common stock

48,306

12,360Purchase of treasury stock△2,285,268△173

Cash dividends paid

△1,083,648△992,745

Cash dividends paid to non-controlling interests△166,575△155,966

Net cash provided by (used in) financing activities△230,582△1,172,618

Effect of exchange rate change on cash and cash equivalents△80,727△66,199

Net increase ( decrease) in cash and cash equivalents

658,853△3,874,695

7,718,682

14,725,985

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period*- 16 -

8,377,536*

10,851,289

[Notes](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 estimated effective
tax rate. Such effective tax rate is reasonably estimated after applying tax effect accounting to the income before
income taxes for the consolidated fiscal year including the current consolidated second quarter.
(Additional information)< Accounting estimates >We supposed the establishment of the ranges that include the case of an early containment (by the end of
September 2020) in connection with the assumptions on the impact of the new coronavirus infection (COVID19) described in the additional information in the Financial Report for the previous consolidated fiscal year.
However, based on the infection status, we changed part of the assumptions, supposing that the impact willcontinue at least throughout the current consolidated fiscal year. Note that there was no material change in theaccounting estimates for the current consolidated cumulative second quarter.

- 17 -

(Notes Related to Quarterly Consolidated Statements of Income)* Major items under selling, general and administrative expenses and their respective amounts are as follows.
Previous consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2020
to September 30, 2020)

Salaries, benefits and bonuses

708,188703,502

Provision for bonuses

138,383

118,474

Provision for directors' bonuses

2,915

2,250

Retirement benefit expenses
Provision of allowance for doubtful
accounts

37,682

42,942

3,148

17,942(Notes Related to Quarterly Consolidated Statements of Cash Flows)* The correlation between the balance of cash and cash equivalents at the end of the current consolidated second
quarter and the amounts shown for the corresponding items on the quarterly consolidated balance sheets is asfollows.
Previous consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2020
to September 30, 2020)

Cash and deposits
Time deposits with a deposit term of
more than three months
Securities (Money management fund)8,756,255

11,040,030△741,000△903,489

362,281714,748

Cash and cash equivalents

8,377,536

10,851,289(Notes Related to Shareholders’ Equity, etc.)
I Previous consolidated cumulative second quarter (From April 1, 2019 to September 30, 2019)
Dividends paid
(Resolution)

Class ofsharesOrdinary General
Meeting of
Shareholders ofJune 27, 2019

Common stock

Total amount ofdividends(Thousands ofyen)

Dividend
per share(Yen)

1,086,565

30.00

Record date

Effective
date

Source ofdividends

March 31, 2019

June 28, 2019

Retained earnings

II Current consolidated cumulative second quarter (From April 1, 2020 to September 30, 2020)
Dividends paid
(Resolution)

Class ofsharesOrdinary General
Meeting of
Shareholders ofJune 25, 2020

Common stock

Total amount ofdividends(Thousands ofyen)

Dividend
per share(Yen)

997,370

30.00- 18 -

Record date

Effective
date

Source ofdividends

March 31, 2020

June 26, 2020

Retained earnings

(Segment Information, etc.)[Segment Information]
I Previous consolidated cumulative second quarter (From April 1, 2019 to September 30, 2019)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Other
Total
(See Note)

Reportable segment
Industrial
application
structural
materials

Electronicmaterials

Electricalinsulating
materials

Displaymaterials

Subtotal

Net sales
Net sales toexternal
14,453,033
4,334,451
1,553,213
1,867,634
22,208,333
391,577
22,599,910
customers
Inter-segment
－
－
－
－
－
389,894
389,894
sales or transfers
Total
14,453,033
4,334,451
1,553,213
1,867,634
22,208,333
781,471
22,989,804
Segment income or
1,110,657
621,995
173,715150,172
2,056,540
108,274
2,164,814
loss ()Note:
The column “Other” represents business operations that do not fall under any of the reportable segments and includes
the related 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

2,056,540

Income in the category “Other”

108,274

Elimination of inter-segment transactions△40,173

Amortization of goodwill△29,241

Unallocated corporate expenses (See Note)△747,694

Adjustment of inventories△26,212
Operating income shown on the quarterly
1,321,493
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
No applicable matter.

- 19 -

II Current consolidated cumulative second quarter (From April 1, 2020 to September 30, 2020)
1. Information on the amount of net sales and income or loss with respect to each reportable segment(Thousands of yen)
Other
Total
(See Note)

Reportable segment

Net sales
Net sales toexternalcustomers
Inter-segment
sales ortransfers
Total

Electronicmaterials

Industrial
application
structural
materials

Electricalinsulating
materials

Displaymaterials

Subtotal

14,915,327

4,343,397

1,156,852

1,333,137

21,748,714

454,981

22,203,695

－

－

－

－

－

417,951

417,951

14,915,327
4,343,397
1,156,852
1,333,137
21,748,714
872,932
22,621,646
Segment income
1,337,718
476,594
67,94551,407
1,933,666
134,753
2,068,419
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

1,933,666

Income in the category “Other”

134,753

Elimination of inter-segment transactions

49

Unallocated corporate expenses (See Note)△666,686

Adjustment of inventories△26,540
Operating income shown on the quarterly
1,375,241
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
No applicable matter.

- 20 -

(Per Share Information)
The amounts of net income or loss per share and fully diluted net income per share with their respective basesof calculation are as follows.
Previous consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)(1) Net income (or loss) per share（△）

Current consolidated
cumulative second quarter(From April 1, 2020
to September 30, 2020)△24.81 yen

25.67yen△894,114

853,665------△894,114

853,665

36,032,251

33,251,980---

25.63yen

---

---

---

54,261(Basis of calculation)
Profit (or loss) attributable to owners of theparent (Thousands of yen)Amount not attributable to common
stockholders (Thousands of yen)
Profit (or loss) attributable to owners of theparent 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

---

---

Note: Diluted net income per share in the previous term consolidated cumulative second quarter is not stated above due to net loss
per share, though potential share exists.

(Significant subsequent events)(Cancellation of treasury stock)
The Company resolved to cancel treasury stock at the Board of Directors’ Meeting of October 29, 2020 under the provisionsof Article 178 of the Companies Act.

1. The reason for the cancellation: enhancing shareholder returns and improving capital efficiency
2. Class of shares to be cancelled: the Company’s common stock
3. Number of shares to be cancelled: 2,000,000 shares (5.49% out of the total number of shares issued and outstanding
before the cancellation)
4. Scheduled date of the cancellation: November 30, 2020
(Note)The total number of shares issued and outstanding after the cancellation is 34,402,424 shares (including treasury stock).

2. Other
No applicable matter.

- 21 -

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

- 22 -

Independent Auditors’ Quarterly Review Report
November 13, 2020
To the Board of Directors of Arisawa Mfg. Co., Ltd.

Ernst & Young ShinNihon LLC
Niigata office

Akira Igarashi[Seal]

Designated Limited Liability Partner and Engagement Partner,

Certified Public Accountant
Eishi Daikoku[Seal]

Designated Limited Liability Partner and Engagement Partner,

Certified Public Accountant
Conclusion of Auditors
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 second quarter (From July 1, 2020 to September 30, 2020) and the consolidated
cumulative second quarter (From April 1, 2020 to September 30, 2020) of the consolidated fiscal year from April 1,2020 to March 31, 2021, consisting of the quarterly consolidated balance sheets, quarterly consolidated statements ofincome, quarterly consolidated statements of comprehensive income, quarterly consolidated statements of cash flows
and notes.
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 September 30, 2020 as well as the results of their operations andthe status of their cash flows in the consolidated cumulative second quarter ended September 30, 2020 in accordancewith the standards for preparation of quarterly consolidated financial statements generally accepted in Japan.
Basis for the Conclusion of Auditors
We conducted our quarterly review in accordance with the quarterly review standards generally accepted in Japan.
Our responsibility in the quarterly review standards is stated in “The Responsibility of Auditors in the Quarterly
Review Report of the Quarterly Consolidated Financial Statements.” We are independent of the Company and its
consolidated subsidiaries and fulfill other ethical responsibilities as an auditor.in accordance with the code ofprofessional ethics in Japan. We believe that the evidence we have obtained provides a basis for our conclusion
Responsibility of Management and Corporate Auditors and Board of Corporate Auditors 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.
In preparing the quarterly consolidated financial statements, management is responsible for assessing whether it is appropriate
to prepare the quarterly consolidated financial statements based on the going concern assumption and disclosing the items regarding
the going concern assumption in accordance with the standards for preparation of quarterly consolidated financial statements
generally accepted in Japan if such items are required to be disclosed.
Responsibility of Corporate Auditors and Board of Corporate Auditors is to monitor the execution of Directors’ duties in the
improvement and operation of the financial reporting process.

The Responsibility of Auditors in the Quarterly Review Report of the Quarterly Consolidated Financial Statements.
Responsibility of auditors is to express a conclusion on the quarterly consolidated financial statements from an
independent standpoint in the quarterly review report based on our quarterly review.

Auditors make professional judgements and conduct the followings with an attitude of professional skepticism through a quarterly
review process in accordance with the quarterly review standards generally accepted in Japan.
・We principally make inquiries to the management, the persons responsible for financial 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 acceptedin Japan.
・ If we deem that there is a material uncertainty regarding events or conditions that may cast significant doubt matters on thegoing concern assumption, we conclude whether the quarterly consolidated financial statements are found to contain any
matters that would lead one to believe that those are not fairly presented in accordance with the standards for preparation ofquarterly consolidated financial statements generally accepted in Japan based on the evidence we obtain. Moreover, if amaterial uncertainty regarding the going concern assumption exists, it is required to promote awareness to the notes in thequarterly consolidated financial statements in the quarterly review report, or if the notes regarding a material uncertainty in thequarterly consolidated financial statements are inappropriate, it is required to express a qualified conclusion or a negative
conclusion to the quarterly consolidated financial statements. Conclusion by the auditors is based on the audit evidence
obtained by the day of the quarterly review report, but a company may not be able to exist as the going concern depending on
future events or conditions.
・We evaluate not only whether the presentation and notes of the quarterly consolidated financial statements are found to containany matters that would lead one to believe that those are not in accordance with the standards for preparation of quarterly
consolidated financial statements generally accepted in Japan but also whether the presentation, structure, and contents of thequarterly consolidated financial statements including related notes as well as the quarterly consolidated financial statements
are found to contain any matters that would lead one to believe that those do not fairly present underlying transactions andaccounting events.
・We obtain evidence regarding the financial information of the Company and its consolidated subsidiaries to express an opinion
about the quarterly consolidated financial statements. The auditors are responsible for instruction, supervision, and executionof quarterly review regarding the quarterly consolidated financial statements. The auditors assume responsibility for an audit
opinion all by themselves.
The auditors make reports to Corporate Auditors and Board of Corporate Auditors on that they complied with the code ofprofessional ethics on independence in Japan, matters that are reasonably believed to have an impact on the auditors’ independence,and the details of safeguards if those are implemented to remove or mitigate inhibitors.

Interest
There exists no special interest between the Company as well as its consolidated subsidiaries and this audit corporation
or its engagement partners which is 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.