QUARTERLY REPORT(The Third Quarter of the 73rd Term)
From October 1, 2020 to December 31, 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 Flowsby the Corporate Managers ........................................................................................................... 2
3. Agreements with Managerial Implications, etc................................................................................. 3
III. Status of the Submitting Company ..................................................................................................... 4
1. Status of Shares, etc. ......................................................................................................................... 4(1) Total Number of Shares, etc. ........................................................................................................... 4(2) Status of Stock Acquisition Rights, etc. .......................................................................................... 4(3) Status of Exercise of Moving Strike Convertible Bonds, etc. ......................................................... 4(4) Changes in the Number of Shares Issued and Outstanding, Capital Stock, etc. ............................. 4(5) Status of Major Shareholders .......................................................................................................... 5(6) Status of Voting Rights ................................................................................................................... 5
2. Status of Directors and Officers ........................................................................................................ 5
IV. Status of Accounting .......................................................................................................................... 6
1. Quarterly Consolidated Financial Statements ................................................................................... 7(1) Quarterly Consolidated Balance Sheets .......................................................................................... 7(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated
Statements of Comprehensive Income .......................................................................................... 9[Quarterly Consolidated Statements of Income] ........................................................................... 9[Quarterly Consolidated Statements of Comprehensive Income] ............................................... 10
2. Other................................................................................................................................................ 16
PART II. INFORMATION ON GUARANTY COMPANIES, ETC. OF THE
SUBMITTING COMPANY ................................................................................................ 17[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 12, 2021

Quarterly accounting period:

The Third Quarter of the 73rd Term (From October 1, 2020 to December 31,
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
Accounting period
Net sales

72nd term
consolidated cumulative
third quarter
From April 1, 2019
to December 31, 201973rd term
consolidated cumulative
third quarter
From April 1, 2020
to December 31, 2020

From April 1, 2019
to March 31, 2020

34,32734,60645,970

2,221

2,290

2,783

△118

1,380

212

△22

2,146

△117

49,09150,06349,01871,53769,55371,709

△3.38

41.50

6.14

－

41.43

6.12

64.7

67.8

64.3

72nd term
consolidated
third quarter
From October 1, 2019
to December 31, 201973rd term
consolidated
third quarter
From October 1, 2020
to December 31, 2020

(Millions of yen)

Ordinary income(Millions of yen)
Profit (or loss (△))
attributable toowners 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
(%)

Term
Accounting period

72nd term

Net income per share (Yen)
23.20
15.83
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 third 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 third 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 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 third quarter.

(1) Financial Position and Operating Results1) Operating Results
The Japanese economy in the current consolidated cumulative third 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 (COVID19) could not be predicted and it was concerned that the effect on the economy was prolonged. Under suchcircumstances, the results of operations of our group (the Company, its consolidated subsidiaries and thecompanies accounted for under the equity method) for the current consolidated cumulative third quarter
showed net sales of 34,606 million yen (representing a 0.8% increase as compared with the year-earlier
quarter), an operating income of 2,223 million yen (representing an 7.0% increase as compared with theyear-earlier quarter), an ordinary income of 2,290 million yen (representing a 3.1% increase as comparedwith the year-earlier quarter) and a profit attributable to owners of the parent of 1,380 million yen (lossattributable to owners of the parent of 118 million yen in 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 23,752 million yen (a 5.7% increase as compared withthe year-earlier quarter) due to a steady increase in sales of our mainstay product, i.e. materials for flexible
printed circuit boards (the amount of orders received increased by 2.4%, and the production output increasedby 10.5%, as compared with the year-earlier quarter on a non-consolidated basis of the Submitting Company),
while the segment income was 2,197 million yen (a 13.6% increase as compared with the year-earlier quarter)
due to an increase in sales.
b. Industrial application structural materials segment
In the industrial application structural materials segment, net sales were 6,451 million yen (a 0.1% decrease
as compared with the year-earlier quarter) due to a decrease in sales of materials for aircraft and the sales
launch of in-car materials, while the segment income was 639 million yen (a 33.6% decrease as comparedwith the year-earlier quarter) due to a decrease in sales of materials for aircraft, etc.
c. Electrical insulating materials segment
In the electrical insulating materials segment, net sales were 1,732 million yen (a 23.7% decrease ascompared with the year-earlier quarter) due to a decrease in sales of insulating materials for heavy electricalmachinery, while the segment income was 121 million yen (a 51.1% decrease as compared with the yearearlier quarter) due to a decrease in sales.
d. Display materials segment
In the display materials segment, net sales were 2,042 million yen (a 20.6% decrease as compared withthe year-earlier quarter) due to a decrease in sales of polarization control optical components by ColorLink
Japan Ltd., etc., while the segment income was 123 million yen (a 18.3% decrease as compared with theyear-earlier quarter) due to a decrease in sales.
e. Other (other businesses)
In other businesses, net sales were 627 million yen, representing a 14.3% increase as compared with theyear-earlier quarter, while the segment income or loss recorded a segment income of 174 million yen (a19.3% 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 not-2-include consumption tax, etc.
2) Financial Position
Total assets as of the end of the current consolidated cumulative third quarter were 69,553 million yen, adecrease of 2,156 million yen compared with the end of the previous year. This was largely due to the salesof investment securities, which resulted in an increase of 1,327 million yen in cash and deposits and adecrease of 4,034 million yen in investment securities.
Total liabilities as of the end of the current consolidated cumulative third quarter were 19,489 million
yen, a decrease of 3,201 million yen compared with the end of the previous year. This was due largely to adecrease of 3,238 million yen in income taxes payable.
Total net assets as of the end of the current consolidated cumulative third quarter were 50,063 million yen,
an increase of 1,045 million yen compared with the end of the previous year. This was due largely to anincrease of 611 million yen in valuation difference on available-for-sale securities.

(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) 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 third quarter is described in “IV. Status of
Accounting - 1. Quarterly Consolidated Financial Statements - [Notes] – Additional information”.

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

(5) Research and Development Activities
The Group’s total expenses for research and development activities incurred in the current consolidated
cumulative third quarter amounted to 1,436 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.

-3-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, 2020

Class

Number of shares issued
and outstanding as of thefiling date of this Quarterly
Report(As of February 12, 2021)

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

Remarks

Common stock

34,428,424

34,432,424

Tokyo Stock Exchange(First Section)

Number of sharesconstituting one
full unit: 100

Total

34,428,424

34,432,424

---

---

Note: The number of shares issued through the exercise of stock acquisition rights in the period from February 1, 2021 to
the filing date of this Quarterly Report is not included in the column “Number of shares issued and outstanding as of
the filing date 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.
PeriodFrom October 1, 2020 toNovember 30, 2020
(See Note 1)
November 30, 2020
(See Note 2)

Capital stock(Thousands of yen)

Number of shares issued andoutstanding

Legal capital surplus(Thousands of yen)

ChangeBalance

ChangeBalance

ChangeBalance

4,000

36,406,424

1,268

7,602,621

1,268

6,714,612△2,000,000

34,406,424－

7,602,621－

6,714,612

From December 1, 2020
to December 31, 2020
22,00034,428,424
6,974
7,609,595
6,974
6,721,586(See Note 1)
Note: 1 The increases are due to the exercise of stock acquisition rights.
2 This is due to the retirement of treasury stock.
3 In the period from January 1, 2021 to January 31, 2021, the number of shares issued and outstanding increased by
4,000 shares, and the amount of capital stock and that of legal capital surplus increased by 1,268 thousand yen
respectively, all through the exercise of stock acquisition rights.

-4-(5) Status of Major Shareholders
As the current quarterly accounting period is the third quarter, there is no matter to be stated.

(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, 2020).
1) Shares issued and outstanding
As of December 31, 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)

---

---

---

Common stock 3,136,000

---

---

Category

Shares with full voting rights (Treasury
stock, etc.)
Shares with full voting rights (Other)
Shares constituting less than one full unit

Common stock 33,192,400
Common stock

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".
3. The number of shares issued and outstanding was 34,428,424 shares as of December 31, 2020 due to the retirement of
2,000,000 shares of treasury stock as of November 30, 2020.

2) Treasury Stock, etc.
As of December 31, 2020
Name and address of shareholder
Full name or corporate
nameAddress

Arisawa Mfg. Co., Ltd.

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

Number of shares held
Under own
name3,136,000

Under thenames ofothers---Total

3,136,000

Ratio of the number ofshares held to thenumber of sharesissued and outstanding
(%)
8.61

Total
--3,136,000--3,136,000
8.61
Note: 2,000,000 shares of treasury stock were retired as of November 30, 2020, and the number of treasury stock was
1,136,000 shares (the ratio of the number of shares held to the number of shares issued and outstanding is 3.30%) asof the end of the current third quarter.

2. Status of Directors and Officers
No applicable matter.

-5-

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, 2020 to December 31, 2020) and the current consolidated cumulative
third quarter (From April 1, 2020 to December 31, 2020) conducted by Ernst & Young ShinNihon LLC under theprovisions of Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act.

-6-

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

Current consolidated
third quarter(As of December 31, 2020)

AssetsCurrent assets
Cash and deposits

14,714,069

Notes and accounts receivable-trade

17,697,085

Securities

1,558,445

945,933

Merchandise and finished goods

3,083,432

3,351,412

Work in process

2,017,729

2,215,073

Raw materials and supplies

3,177,428

3,274,045

Other

1,059,764

1,916,964

Allowance for doubtful accounts△585,049△146,462

Total current assets

42,722,906

44,860,388

12,925,137

13,232,961

225,017229,919

Investment securities

14,207,192

10,172,811

Other

1,766,893

1,206,530

Allowance for doubtful accounts△137,662△149,390

Total investments and other assets

15,836,423

11,229,951

Total non-current assets

28,986,578

24,692,832

Total assets

71,709,484

69,553,221

16,041,174*

17,262,247

Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets-7-

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

Current consolidated
third quarter(As of December 31, 2020)

Liabilities
Current liabilities
6,916,079

Notes and accounts payable-trade*

6,743,172

Current portion of bonds

36,80036,800

Short-term loans payable

4,866,202

4,685,748

187,669

182,724

Income taxes payable

3,428,200

189,231

Provision for bonuses

570,517

261,540

4,793

3,375

Current portion of long-term loans payable

Provision for directors' bonuses
Other2,415,558

Total current liabilities

18,425,820

15,059,466

91,20054,400Long-term loans payable

2,567,816

2,828,791

Net defined benefit liability

738,606

709,787

Asset retirement obligations

92,31091,498

Other775,563745,754

4,265,495

4,430,232

22,691,316

19,489,698

Capital stock

7,594,026

7,609,595

Capital surplus

6,706,017

6,721,586

Retained earnings

34,256,590

32,593,755

Treasury stock△3,204,797△1,159,226

Total shareholders’ equity

45,351,837

45,765,711

Valuation difference on available-for-sale securities

448,970

1,060,667

Deferred gains or losses on hedges△1,311

1,553*

2,956,874

Non-current liabilities
Bonds payable

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

Accumulated other comprehensive income

Foreign currency translation adjustment

478,798

396,425

Remeasurements of defined benefit plans△141,260△86,553785,197

1,372,093

Total accumulated other comprehensive income
Subscription rights to shares

166,148

181,736

Non-controlling interests

2,714,984

2,743,982

Total net assets

49,018,167

50,063,523

71,709,484

69,553,221

Total liabilities and net assets-8-(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, 2020
to December 31, 2020)

Previous consolidated
cumulative third quarter(From April 1, 2019
to December 31, 2019)
Net sales

34,327,306

34,606,706

Cost of sales

28,415,924

28,818,193

Gross profit

5,911,381

5,788,512

Selling, general and administrative expenses

3,833,508

3,564,820

Operating income

2,077,873

2,223,692

Interest income

239,325

218,168

Dividends income

100,368

87,694

Subsidy income

12,499119,592

Other

210,010

134,189

Total non-operating income

562,204

559,645

Non-operating income

Non-operating expenses
Interest expenses

71,12982,095

Foreign exchange losses

93,450

192,813

Other

253,589

218,076

Total non-operating expenses

418,168

492,985

2,221,909

2,290,351

262

515

1,271,030

320,704

14,244

26,6281,285,537

347,848

Impairment loss

448,357－

Impairment loss of goodwill

Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of securities
Other
Total extraordinary income
Extraordinary losses

175,447－

Loss on sales of investment securities

2,894

313,624

Other

28,85912,018

Total extraordinary losses

655,558

325,642

Income before income taxes

2,851,888

2,312,556

Income taxes

2,796,074

655,999

Profit55,813

1,656,557

Profit attributable to non-controlling interests

174,506

276,254△118,692

1,380,302

Profit (or loss(△)) attributable to owners of the parent-9-[Quarterly Consolidated Statements of Comprehensive Income][Consolidated cumulative third quarter]
Previous consolidated
cumulative third quarter(From April 1, 2019
to December 31, 2019)
Profit(Thousands of yen)
Current consolidated
cumulative third quarter(From April 1, 2020
to December 31, 2020)

55,813

1,656,557

236,177

611,662

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

△443

2,865

△227,935△179,795

25,69054,707△111,385

139△77,897

489,579

Comprehensive income△22,083

2,146,137(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests△134,097

1,967,198

112,014

178,938- 10 -

[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 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)< 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 third quarter.
(Notes Related to Quarterly Consolidated Balance Sheets)* 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, 2020)
Notes and accounts receivable-trade
Notes and accounts payable-trade
Current liabilities and others (Notes payable - nonoperating, Electronically recorded obligations-nonoperating)- 11 -(Thousands of yen)
Current consolidated third quarter(As of December 31, 2020)－－

36,028
128,857－

86,740(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) and amortization of goodwill for the previous and current consolidated cumulative third quarters are as
follows.
Previous consolidated
cumulative third quarter(From April 1, 2019
to December 31, 2019)
Depreciation
Amortization of goodwill(Thousands of yen)
Current consolidated
cumulative third quarter(From April 1, 2020
to December 31, 2020)

1,457,908
43,861

1,537,612－(Notes Related to Shareholders’ Equity, etc.)
I Previous consolidated cumulative third quarter (From April 1, 2019 to December 31, 2019)
1. 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

2. Significant changes in the amount of shareholders’ equity
The Company bought back 3,128,300 shares upon a resolution by the Board of Directors held on August 27th,
2019. As a result, the treasury stock increased 3,199,887 thousand yen in the current consolidated cumulative third
quarter and amounted to 3,204,787 thousand yen as of the end of the current consolidated third quarter.
II Current consolidated cumulative third quarter (From April 1, 2020 to December 31, 2020)
1. 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

Record date

Effective
date

Source ofdividends

March 31, 2020

June 26, 2020

Retained earnings

2. Significant changes in the amount of shareholders’ equity
The Company terminated 2,000,000 shares upon a resolution by the Board of Directors held on October 29,
2020. As a result, the retained earnings and the treasury stock decreased by 2,045,767 thousand yen respectively inthe current consolidated cumulative third quarter, and the retained earnings amounted to 32,593,755 thousand yen
and the treasury stock to 1,159,226 thousand yen as of the end of the current consolidated third quarter.

- 12 -

(Segment Information, etc.)[Segment Information]
I Previous consolidated cumulative third quarter (From April 1, 2019 to December 31, 2019)
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
22,477,949
6,457,995
2,269,187
2,573,141
33,778,273
549,032
34,327,306
customers
Inter-segment
sales or594,321594,321－－－－－transfers
Total
22,477,949
6,457,995
2,269,187
2,573,141
33,778,273
1,143,353
34,921,627
Segment income
1,935,317
962,654248,190
150,617
3,296,780
146,501
3,443,281
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

3,296,780

Income in the category “Other”

146,501

Elimination of inter-segment transactions△65,556

Amortization of goodwill△43,861

Unallocated corporate expenses (See Note)△1,227,826△28,163
Operating income shown on the quarterly
2,077,873
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(Significant impairment losses on non-current assets)
In the electronic materials segment, with respect to the assets (including goodwill) in which investments
could not be expected to recover due to a downturn in profitability, the Company devalued their carrying amountto its recoverable amount and showed the relevant amount of its loss to extraordinary losses as impairment
losses.
In the display materials segment, with respect to the assets in which profit arising from operating activities
continues negative, the Company devalued their carrying amount to its memorandum value and showed therelevant amount of its loss to extraordinary losses as impairment losses.
In this regard, the amount of the relevant impairment losses shown in the previous consolidated cumulative
third quarter is 539,702 thousand yen in the electronic materials segment and 84,101 thousand yen in the display
materials segment.
(Material change of the amount of goodwill)In the electronic materials segment, the impairment loss of goodwill is shown, so the amount of goodwill
decreased. In this regard, the decreased amount of goodwill by the said event was 175,447 thousand yen in theprevious consolidated cumulative third quarter.

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II Current consolidated cumulative third quarter (From April 1, 2020 to December 31, 2020)
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
23,752,728
6,451,804
1,732,151
2,042,551
33,979,235
627,470
34,606,706
customers
Inter-segment
sales or
619,086
619,086－－－－－transfers
Total
23,752,728
6,451,804
1,732,151
2,042,551
33,979,235
1,246,556
35,225,792
Segment income
2,197,614
639,393
121,293
123,054
3,081,355
174,727
3,256,082
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

3,081,355

Income in the category “Other”

174,727

Elimination of inter-segment transactions

2,707

Unallocated corporate expenses (See Note)△1,016,334

Adjustment of inventories△18,763
Operating income shown on the quarterly
2,223,692
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.

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(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 third quarter(From April 1, 2019
to December 31, 2019)(1) Net income (or loss) per share (△)△3.38

Current consolidated
cumulative third quarter(From April 1, 2020
to December 31, 2020)

yen

41.50 yen

△118,692

1,380,302－－△118,692

1,380,302

35,159,633

33,258,817---

41.43 yen

---

---

---

55,761(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 third quarter is not stated above due to net loss
per share, though potential share exists.

(Significant Subsequent Events)(Additional acquisition of the subsidiary’s shares through the tender offer, etc.)
The Company passed a resolution at the Board of Directors’ Meeting held on December 2, 2020 of theadditional acquisition through the tender offer based on the law of Taiwan for the shares of ThinFlex
Corporation, a consolidated subsidiary of the Company (hereinafter referred to as “Taiwan Tender Offer”), andconducted Taiwan Tender Offer from December 8, 2020 and ended it on January 26, 2021.
Note that the terms and conditions of Taiwan Tender Offer were established and the acquisition procedure isin progress.
1. Summary of business combination(1) Name and business description of the combined entity
Name of the combined entity: ThinFlex Corporation
Business description: Production and sales of flexible printed circuit boards, etc.
(2) Date of business combination
Acquisition through the tender offer: January 26, 2021 (Deemed acquisition date: January 1, 2021)(3) Legal form of business combination
Share acquisition in exchange for cash(4) Company name after business combination
No change has been made.
(5) Ratio of voting rights of subsidiary’s shares after the additional acquisition
Ratio of voting rights before the business combination: 52.3%
Ratio of voting rights after the tender offer: 84.5%- 15 -

2. Acquisition cost of additionally acquired subsidiary’s shares and breakdown by type of consideration
Consideration
4,324,082
Cashfor acquisition
thousand yen
4,324,082
Acquisition costthousand yen
3. Summary of accounting treatments to be implemented
Based on “Accounting Standard for Business Combination” (Accounting Standards Board of Japan
Statement No. 21, January 16, 2019) and “Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures” (Accounting Standards Board of Japan, Guidance on
Accounting Standards No. 10, January 16, 2019), it will be treated as transactions under common control,etc.

2. Other
No applicable matter.

- 16 -

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

- 17 -

Independent Auditors’ Quarterly Review ReportFebruary 12, 2021
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 third quarter (From October 1, 2020 to December 31, 2020) and the consolidated
cumulative third quarter (From April 1, 2020 to December 31, 2020) of the consolidated fiscal year from April 1, 2020
to March 31, 2021, consisting of the quarterly consolidated balance sheets, quarterly consolidated statements of income,quarterly consolidated statements of comprehensive income 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 December 31, 2020 and the results of their operations in the
consolidated cumulative third quarter ended December 31, 2020 in accordance with the standards for preparation ofquarterly 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 isappropriate to prepare the quarterly consolidated financial statements based on the going concern assumption anddisclosing the items regarding the going concern assumption in accordance with the standards for preparation ofquarterly 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 accepted in Japan.
・ If we deem that there is a material uncertainty regarding events or conditions that may cast significant doubt
matters on the going concern assumption, we conclude whether the quarterly consolidated financial statements arefound to contain any matters that would lead one to believe that those are not fairly presented in accordance with thestandards for preparation of quarterly consolidated financial statements generally accepted in Japan based on theevidence we obtain. Moreover, if a material uncertainty regarding the going concern assumption exists, it is required
to promote awareness to the notes in the quarterly consolidated financial statements in the quarterly review report, or
if the notes regarding a material uncertainty in the quarterly consolidated financial statements are inappropriate, it isrequired 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 acompany 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 arefound to contain any 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 the quarterly 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 and accounting events.
・We obtain evidence regarding the financial information of the Company and its consolidated subsidiaries toexpress an opinion about the quarterly consolidated financial statements. The auditors are responsible for instruction,
supervision, and execution of 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 the scope of a planned
quarterly review and its timing of conduct, and material quarterly review findings.
The auditors make reports to Corporate Auditors and Board of Corporate Auditors on that they complied with thecode of professional ethics on independence in Japan, matters that are reasonably believed to have an impact on theauditors’ 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.