QUARTERLY REPORT(The Second Quarter of the 72nd Term)
From July 1, 2019 to September 30, 2019

(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 14, 2019

Quarterly accounting period:

The Second Quarter of the 72nd Term (From July 1, 2019 to September 30,
2019)

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

71st term
consolidated cumulative
second quarter

Accounting period
Net sales

From April 1, 2018
to September 30, 2018

72nd term
consolidated cumulative
second quarter
From April 1, 2019
to September 30, 2019

From April 1, 2018
to March 31, 201922,70722,59944,728

2,590

1,440

4,297

1,775

△894

2,861

(Millions of yen)

Ordinary income(Millions of yen)
Profit (or loss (△))
attributable to owners of theparent(Millions of yen)

71st term

Comprehensive income(Millions of yen)
Net assets (Millions of yen)

1,310

△1,1962,200

52,521

49,10953,462

Total assets (Millions of yen)

71,46374,18473,09649.16△24.81

79.15

48.77

－

78.70

69.8

62.6

69.3

1,084

2,218

2,893

△1,454△1,248△3,304△1,695

△230

△576

6,728

8,377

7,718

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

71th term
consolidated
second quarter
From July 1, 2018
to September 30, 2018

72nd term
consolidated
second quarter
From July 1, 2019
to September 30, 2019

Net income (or loss (△))

25.36
△31.93per 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.
4. The provisional accounting treatment for business combinations, which were conducted in the previous consolidated
second quarter, was finalized during the previous consolidated third quarter. As a result, figures as of the previous
consolidated cumulative second quarter and the previous consolidated second quarter reflect the important revision of theinitially allocated amounts of acquisition price.

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 outlook of Japanese economy in the current consolidated cumulative second quarter remained uncertain
due to the impact of trade friction between the United States and China on the global economy and theslowdown of the Chinese economy, etc.
Under such circumstances, results of operations for the current consolidated cumulative second quarter
showed net sales of 22,599 million yen (a 0.5% decrease as compared with the year-earlier quarter), an
operating income of 1,321 million yen (a 23.7% decrease as compared with the year-earlier quarter), an
ordinary income of 1,440 million yen (a 44.4% decrease e as compared with the year-earlier quarter) and aloss attributable to owners of the parent of 894 million yen (profit attributable to owners of the parent of
1,775 million yen in the year-earlier quarter). The main cause of this loss is that the recognition of tax
expenses of 1,584 million yen regarding the sale of all shares of the affiliate company accounted for underequity method (Polatechno Co., Ltd.), which is to be conducted in the third quarter, was conducted in thesecond quarter.
Business results with respect to each segment are as follows.
a. Electronic materials segment
In the electronic materials segment, net sales were 14,453 million yen (a 1.7% decrease as compared withthe year-earlier quarter) and consisting mainly of the sales of our mainstay product, i.e. materials for flexible
printed circuit boards (the amount of orders received increased by 4.3%, and the production output increasedby 7.0%, as compared with the year-earlier quarter on a non-consolidated basis of the Submitting Company),
while the segment income was 1,110 million yen (a 19.9% decrease as compared with the year-earlier
quarter).
b. Industrial application structural materials segment
In the industrial application structural materials segment, net sales (consisting mainly of the sales offilament winding molded products as well as honeycomb panels and prepregs for aircraft) were 4,334 million
yen (a 1.8% increase as compared with the year-earlier quarter), while the segment income was 621 million
yen (a 16.2% decrease as compared with the year-earlier quarter).
c. Electrical insulating materials segment
In the electrical insulating materials segment, net sales (consisting mainly of the sales of prepregs and glass
cloth for electrical insulation) were 1,553 million yen (a 1.1% decrease as compared with the year-earlier
quarter), while the segment income was 173 million yen (a 24.8% decrease as compared with the year-earlier
quarter).
d. Display materials segment
In the display materials segment, net sales (consisting mainly of the sales of 3D imaging-related materials)
were 1,867 million yen (a 3.7% increase as compared with the year-earlier quarter), while the segment
income was 150 million yen (a 87.5% increase as compared with the year-earlier quarter).
e. Other (other businesses)
In other businesses, net sales were 391 million yen (a 3.2% increase as compared with the year-earlier
quarter), while the segment income was 108 million yen (a 0.0% 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-2) Financial Position
Total assets as of the end of the current consolidated cumulative second quarter were 74,184 million yen,
an increase of 1,088 million yen compared with the end of the previous year. This was due largely to anincrease of 1,316 million yen in property, plant and equipment.
Total liabilities as of the end of the current consolidated cumulative second quarter were 25,074 million
yen, an increase of 5,440 million yen compared with the end of the previous year. This was due largely to
an increase of 3,354 million yen in short-term loans payable and an increase of 1,824 million yen in "Other"in "Non-current liabilities".
Total net assets as of the end of the current consolidated cumulative second quarter were 49,109 million
yen, a decrease of 4,352 million yen compared with the end of the previous year. This was due largely to adecrease of 1,980 million yen in retained earnings and an increase of 1,963 million yen in treasury shares.

(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 8,377 million yen, increasing 1,649 million yen, or 24.5%, as compared with theend 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 earned from operating activities were 2,218 million yen (a 104.5% increase as compared with theyear-earlier quarter). This was due largely to an increase in the Funds comprising the postings of 1,437
million yen in income before income taxes, 961 million yen in depreciation as well as a decrease in the Funds
comprising the postings of 368 million yen in increase in notes and accounts receivable-trade and 287 million
yen in increase in other assets.
(Cash flows from investing activities)
Funds disbursed from investing activities were 1,248 million yen (a 14.2% decrease as compared with theyear-earlier quarter). This was due largely to an increase in the Funds comprising the proceeds of 380 million
yen from sales of investment securities as well as a decrease in the Funds comprising the expenditure of
1,294 million yen for purchases of property, plant and equipment and the expenditure of 194 million yen forpurchase of investment securities.
(Cash flows from financing activities)
Funds disbursed for financing activities were 230 million yen (a 86.4% decrease as compared with theyear-earlier quarter). This was due largely to an increase in the Funds comprising the proceeds of 3,495
million yen from short-term loans payable as well as a decrease in the Funds comprising the expenditure of
2,285 million yen for acquisition of treasury stock, the expenditure of 1,147 million yen for repayments oflong-term loans payable and the payment of 1,083 million yen in cash dividends.

(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) Business and Financial Tasks to be Addressed
There was no significant change in the tasks to be addressed by our Group in the current consolidated
cumulative second quarter.
In this regard, the Company has a basic policy in place as to how the persons controlling the Company’s
financial and business policymaking shall act, and the contents, etc. of such basic policy (the matters set forthin Article 118, item 3 of the Ordinance for Enforcement of the Companies Act) are as follows.
1) Contents of the basic policy and the efforts toward the realization of the basic policy (including, but notlimited to, effective utilization of the assets of the Company and formation of an appropriate corporategroup)The Company, ever since its initiation in 1909, has been working on technological innovations andproduct development to build up unique technologies that integrate the “weaving, coating and molding”
elements of its expertise while consistently fulfilling users’ needs, thereby increasing its corporate
value under favorable labor-management climate. The Company’s Board of Directors believes that the-3-Company is obligated to adhere to such time-honored principle of nurturing technologicalaccumulation and also to understand, foster and enhance the said corporate value in the long run.
In light of the above, our Group stands on a management policy centering on the motto “Creation,
Innovation and Challenge” as we aim to enhance profitability through creation of new business bases
and new markets with the utmost emphasis on the pursuit of safety and quality.
2) Efforts to prevent inappropriate persons from controlling the Company’s financial and business
policymaking
The Company decided not to continue the protective measures (Takeover defensive measures) asof the end of the 71st Ordinary General Meeting of Shareholders held on June 27, 2019. However, if
any acquisition of large block shares of the Company is made, we will strive to gather necessary andsufficient information which may enable the shareholders to make an appropriate judgement on thepros and cons of such acquisition of large block shares, and seek to secure time and information
required for the shareholders' considering by disclosing opinions of the Board of Directors, etc.

(5) Research and Development Activities
The Group’s total expenses for research and development activities incurred in the current consolidated
cumulative second quarter amounted to 1,032 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 second quarter.

3. Agreements with Managerial Implications, etc.
At the board meeting as of August 27, 2019, the Company resolved to apply for the tender offer made by Nippon
Kayaku Co., Ltd., for all common shares (9,280,000 shares) of the affiliate company accounted for under equity method(Polatechno Co., Ltd.) hold by the Company and entered into the Tender offer application agreement.

More information is described in “IV. Status of Accounting - 1. Quarterly Consolidated Financial
Statements - [Notes] - Significant subsequent events”.

-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, 2019)

Number of shares issued andoutstanding as of the filingdate of this Quarterly Report(As of November 14, 2019)

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

Remarks

Common stock

36,326,524

36,327,824

Tokyo Stock Exchange(First Section)

Number of sharesconstituting one
full unit: 100

Total

36,326,524

36,327,824

---

---

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

(2) Status of Stock Acquisition Rights, etc.
1) Details of Stock Option Scheme
Date of Resolution

June 27, 2019

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

4 directors of the Company, 208 employees of the Company, and
14 directors and employees of subsidiaries of the Company

※

3,260

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

326,000

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

922※

July 1, 2021 through June 30, 2024

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※

Issuance priceAmount credited to equity capital

1,090
545

Being a director or an employee of the Company (including anadvisor and a counselor) or a director or an employee of a
subsidiary of the Company (including an advisor) 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, 2019).

-5-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 July 1, 2019 to
September 30, 2019
(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

72,50036,326,524

17,6877,570,716

17,6596,682,708

The increases are due to the exercise of stock acquisition rights.
In the period from October 1, 2019 to October 31, 2019, the number of shares issued and outstanding increased by
1,300 shares, and the amount of capital stock and that of legal capital surplus increased by 412 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, 2019
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

3,307,300

9.62

Japan Trustee Services Bank, Ltd.
(Trust account)

8-11, Harumi 1-chome,
Chuo-ku, Tokyo

1,747,600

5.08

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

1,472,166

4.28

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）

1,245,300

3.62

Tachibana Securities Co. Ltd.

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

1,110,000

3.23

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

2.91

Arisawa Kenko Ltd.

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

834,338

2.42

NORTHERN TRUST CO.(AVFC)
50 BANK STREET CANARY WHARF
RE NVI01(Standing Proxy: The Hongkong and LONDON E 14 5 NT, UK
Shanghai Banking Corporation Ltd., (11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo)
Tokyo Branch)

764,600

2.22

STATE STREET LONDON CARE
OF STATE STREET BANK AND
TRUST, BOSTON SSBTC A/C UK
ONE LINCOLN STREET, BOSTON MA USALONDON BRANCH CLIENTS 02111
UNITED KINGDOM(11-1, Nihonbashi 3-chome, Chuo-ku, Tokyo)(Standing Proxy: The Hongkong andShanghai Banking Corporation Ltd.,Tokyo Branch)

687,600

2.00

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)

683,982

1.99---

12,853,816

37.41

Total

Note: 1. In addition to the above, the company owns 1,967,700 shares as treasury stock.
2. 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).”
3. 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, 2019. Therefore, such

-7-

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
Address: Sumitomo Mitsui Trust Bank, Limited and two joint holders thereof: 4-1, Marunouchi 1 chome, Chiyoda-ku, Tokyo

Number of shareholdings etc.
: 1,488,200
Holding ratio of share certificates etc. : 4.12%
4.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, 2019. 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: BlackRock Japan Co., Ltd. and one joint holder thereof: 8-3, Marunouchi 1 chome, Chiyoda-ku, Tokyo

Number of shareholdings etc.
: 1,259,700
Holding ratio of share certificates etc. : 3.48%
5. 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, 2019. 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
Number of shareholdings etc.

: Sumitomo Mitsui Asset Management Company, Limited: 5-1, Atago 2 chome, Minato-ku, Tokyo: 1,090,300

Holding ratio of share certificates etc. : 3.01%
6. Though it is described in the Amendment Report on Bulk Holding available for public inspection as of August 15, 2019that Strategic Capital, Inc. hold the shares described below as of August 7, 2019, the Company has confirmed nobeneficial ownerships of the number of shares as of September 30, 2019. Therefore, such number of shares is not includedin above-mentioned Status of Major Shareholders. Details of the Report on Bulk Holding are as follows:
Bulk Holders: Strategic Capital, Inc.
Address
Number of shareholdings etc.

: 14-15, Higashi 3 chome, Shibuya-ku, Tokyo: 2,279,500

Holding ratio of share certificates etc. : 6.29%
7. Though it is described in the Amendment Report on Bulk Holding available for public inspection as of September 17,
2019 that Nippon Value Investors KK hold the shares described below as of September 13, 2019, the Company has
confirmed no beneficial ownerships of the number of shares as of September 30, 2019. Therefore, such number of sharesis not included in above-mentioned Status of Major Shareholders. Details of the Report on Bulk Holding are as follows:
Bulk Holders: Nippon Value Investors KK
Address
Number of shareholdings etc.

: 1-8-1 Marunouchi, Chiyoda-ku, Tokyo: 3,021,700

Holding ratio of share certificates etc. : 8.33

-8-(6) Status of Voting Rights
1) Shares issued and outstanding
As of September 30, 2019
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 1,967,700

---

---

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

Common stock 34,280,600

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

Common stock

Category

Number of shares issued and outstanding

342,806---

78,224------36,326,524

---

---

Total number of voting rights held by--342,806--shareholders
Note:
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) Treasury Stock, etc.
As of September 30, 2019
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

1,967,700---

1,967,700

5.41

---

1,967,700---

1,967,700

5.41

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, 2019 to September 30, 2019) and the current consolidated cumulative
second quarter (From April 1, 2019 to September 30, 2019) 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, 2019)

Current consolidated
second quarter(As of September 30, 2019)

AssetsCurrent assets
Cash and deposits

8,193,697

8,756,255

16,127,374

16,266,512

Securities

1,401,188

1,538,322

Merchandise and finished goods

4,012,943

3,305,089

Work in process

1,941,748

2,039,559

Raw materials and supplies

3,378,698

3,646,523

Other

1,190,214

1,747,005

Allowance for doubtful accounts△668,052△600,508

Total current assets

35,577,813

36,698,759

11,998,454

13,314,867

Goodwill

219,309

190,067

Other

175,923

204,021

Total intangible assets

395,233

394,089

23,142,852

22,412,487

Notes and accounts receivable-trade*Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets
Investment securities
Other

2,125,569

1,545,184

Allowance for doubtful accounts△143,823△180,725

Total investments and other assets

25,124,598

23,776,947

Total non-current assets

37,518,286

37,485,904

Total assets

73,096,100

74,184,664- 11 -

(Thousands of yen)
Current consolidated
second quarter(As of September 30, 2019)

Previous consolidated
fiscal year
(As of March 31, 2019)
Liabilities
Current liabilities
Notes and accounts payable-trade*

6,105,195

6,119,850

Current portion of bonds

36,80036,800

Short-term loans payable

5,394,122

8,748,226

Current portion of long-term loans payable

779,820

657,972

Income taxes payable

300,788679,867

Provision for bonuses

510,407

638,484

3,957

2,915

3,041,830

2,978,649

16,172,921

19,862,765

128,000

109,600

Long-term loans payable

1,265,465

1,197,759

Net defined benefit liability

626,885

639,950

Asset retirement obligations

92,502

91,783

Other

1,348,196

3,172,838

Total non-current liabilities

3,461,049

5,211,931

19,633,971

25,074,697

Capital stock

7,541,693

7,570,716

Capital surplus

6,653,615

6,682,708

Retained earnings

35,130,363

33,149,684△4,764△1,968,516

49,320,907

45,434,592

745,120

653,518

Provision for directors' bonuses
Other

*

Total current liabilities
Non-current liabilities
Bonds payable

Total liabilities
Net assets
Shareholders’ equity

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

443

1,721

Foreign currency translation adjustment

707,571434,530

Remeasurements of defined benefit plans△147,916△119,617

Total accumulated other comprehensive income

1,305,219

970,152

Subscription rights to shares

144,419

147,200

Non-controlling interests

2,691,582

2,558,021

Total net assets

53,462,129

49,109,966

73,096,100

74,184,664

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](Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)

Previous consolidated
cumulative second quarter(From April 1, 2018
to September 30, 2018)
Net sales

22,707,154

22,599,910

Cost of sales

18,496,710

18,771,640

Gross profit

4,210,443

Selling, general and administrative expenses*

Operating income

2,477,449

3,828,270*

2,506,776

1,732,994

1,321,493

Interest income

163,334

155,386

Dividends income
Share of profit of entities accounted for using equity
methodForeign exchange gains

50,25656,811360,187－

295,978－

Other

212,129

154,975

1,081,887

367,172

Interest expenses

41,176

47,116

Loss on redemption of investment securities

31,592

61,160

Provision of allowance for doubtful accounts

95,887－

Other

55,883

139,886

Non-operating income

Total non-operating income
Non-operating expenses

Total non-operating expenses

224,541

248,1632,590,340

1,440,502

Gain on sales of non-current assets

441－

Gain on sales of investment securities

65,010－Gain on reversal of share acquisition rights

6,601

14,229

Other

6,790

－

Total extraordinary income

78,843

14,229Loss on retirement of non-current assets

7,435

5,146

Loss on valuation of investment securities

－

9,287

Other

－

2,894

Total extraordinary losses

7,435

17,328

Income before income taxes

2,661,748

1,437,402

740,349

2,202,543

1,921,399△765,140

146,165

128,973

1,775,233△894,114

Ordinary income
Extraordinary income

Extraordinary losses

Income taxes
Profit (or loss(△))
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, 2018
to September 30, 2018)
Profit (or loss(△))(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)

1,921,399△765,140△26,288△91,621

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△7,0571,277△488,849△258,975

13,526

17,126△102,046△98,834△610,714△431,026

Comprehensive income

1,310,684△1,196,167(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests

1,336,467△1,229,181△25,782

33,014- 14 -

(3) Quarterly Consolidated Statements of Cash Flows(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)

Previous consolidated
cumulative second quarter(From April 1, 2018
to September 30, 2018)
Cash flows from operating activities
Income before income taxes

2,661,748

1,437,402

Depreciation

902,319

961,595

Amortization of goodwill

29,241

29,241

Share-based compensation expenses

23,96526,820Gain on reversal of subscription rights to shares△6,601△14,229

Increase ( decrease) in allowance for doubtful accounts

100,835△24,410

Increase ( decrease) in provision for bonuses△3,549128,076

Increase ( decrease) in provision for product warranties

△82

39

Increase ( decrease) in provision for directors' bonuses△3,097△1,041

Increase ( decrease) in net defined benefit liability

23,20737,707

Loss ( gain) on redemption of investment securities△13,698

40,413

Interest and dividends income△213,591△212,197

41,176

47,116△137,454

26,894△360,187

16,672△6,790－△65,010

2,894

－

9,287

－

750

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

△619

△63

Loss on retirement of property, plant and equipment

2,426

1,359

△946,055△368,380△86,007254,274△262,819

83,394

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

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

141,268

78,096

Decrease ( increase) in other assets△108,761△287,353

Increase ( decrease) in other liabilities△30,059△124,340

Subtotal

1,681,802

2,150,019

Interest and dividends income received

293,018

309,747

Interest expenses paid

△42,011△45,422

Income taxes paid

△848,043△195,569

Net cash provided by (used in) operating activities

1,084,766

2,218,775- 15 -

(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)

Previous consolidated
cumulative second quarter(From April 1, 2018
to September 30, 2018)
Cash flows from investing activities－△106,000△1,075,368△1,294,806

1,758

－

△25,113△50,250△1,315,662△194,899

Proceeds from sales of investment securities

890,254

380,724

Payments of loans receivable△20,000－

Collection of loans receivable

33,760

8,510

－

8,109

55,672－△1,454,698△1,248,612△211,650

3,495,808

Proceeds from long-term loans payable

441,600

994,000

Repayments of long-term loans payable△542,270△1,147,154

Repayments of lease obligations△10,830△10,063

Redemption of bonds△18,400△18,400

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

Proceeds from issuance of common stock

115,765

48,306△175△2,285,268

Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities

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

Purchase of treasury stock△1,220,470△1,083,648

Cash dividends paid to non-controlling interests△191,154△166,575

Net cash provided by (used in) financing activities△1,695,171△230,582△39,209△80,727△2,104,313

658,853

8,832,805

7,718,682

Cash dividends paid

Effect of exchange rate change on cash and cash equivalents
Net increase ( decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period*- 16 -

6,728,492*

8,377,536

[Notes](Changes in Accounting Policies)<Application of IFRS 16 (Lease)>
IFRS 16 "Lease" (Published in January, 2016) (hereinafter, "IFRS 16") has been applied to the IFRS-applied
subsidiaries of our Group since the current consolidated first quarter. In applying IFRS 16, we adopted the method
allowed as Provisional measures where cumulative influence of application of this Standards is recognized on thecommencement date of such application.
Regarding the lease on the side of lessee which was classified into operating lease by applying IAS 17 in thepast, right-of-use assets and lease liability were recognized on the commencement date of such application.
A part of assets included in "Other” in “Investments and other assets” is transferred to right-of-use assets.
Along with the application of this Standard, Quarterly Consolidated Balance Sheets show that “Property, plantand equipment”, “Other” in “Current liabilities” and “Other” in “Non-current liabilities” increased respectively
by 372,024 thousand yen, 31,850 thousand yen and 299,701 thousand yen, while “Other” in “Investments andother assets” decreased by 41,461 thousand yen.
The influence on gain and loss in the current cumulative consolidated second quarter due to these changes was
slight.
(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.
(Notes Related to Quarterly Consolidated Balance Sheets)* Notes, etc. maturing at the end of the consolidated second 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 previous consolidated fiscal year falls on a bank holiday, thefollowing notes, electronically recorded monetary claims and electronically recorded obligations maturing at
the end of the consolidated second quarter are included in their respective balances as of the end of the previous
consolidated fiscal year.
(Thousands of yen)Previous consolidated fiscal year Current consolidated second quarter(As of March 31, 2019)(As of September 30, 2019)
Notes and accounts receivable-trade
Notes and accounts payable-trade
Current liabilities and others (Notes payablefacilities, Electronically recorded obligations-nonoperating)- 17 -

66,950130,679－－

51,206－

(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, 2018
to September 30, 2018)(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)

Salaries, benefits and bonuses

683,948

708,188

Provision for bonuses

120,581

138,383

Provision for directors' bonuses

2,858

2,915

Retirement benefit expenses
Provision of allowance for doubtful
accounts

33,26037,682

8,044

3,148

(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, 2018
to September 30, 2018)
Cash and deposits
Time deposits with a deposit term of
more than three months
Securities (Money management fund)Cash and cash equivalents

I(Thousands of yen)
Current consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)

6,845,845

8,756,255△535,000△741,000

417,647

362,2816,728,492

8,377,536(Notes Related to Shareholders’ Equity, etc.)
Previous consolidated cumulative second quarter (From April 1, 2018 to September 30, 2018)
Dividends paid

(Resolution)

Class ofsharesOrdinary General
Meeting of
Shareholders ofJune 28, 2018

Common stock

Total amount ofdividends(Thousands ofyen)

Dividend
per share(Yen)

1,224,579

34.00

Record date

Effective
date

Source ofdividends

March 31, 2018

June 29, 2018

Retained earnings

II Current 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- 18 -

Record date

Effective
date

Source ofdividends

March 31, 2019

June 28, 2019

Retained earnings

(Segment Information, etc.)[Segment Information]
I Previous consolidated cumulative second quarter (From April 1, 2018 to September 30, 2018)
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
14,698,956
4,257,503
1,569,732
1,801,587
22,327,780
379,374
22,707,154
customers
Inter-segment
－
－
－
－
－
396,797396,797
sales or transfers
Total
14,698,956
4,257,503
1,569,732
1,801,587
22,327,780
776,171
23,103,952
Segment income or
1,385,729
742,434
230,980
80,1092,439,252
108,260
2,547,513
loss ()Note: 1. 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. Segment income is calculated according to the monetary amount reflecting the important revision, which is stated in“Notes（business combinations etc.), of initially allocated amount of acquisition price following the finalization of theprovisional accounting”.

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

2,439,252

Income in the category “Other”

108,260

Elimination of inter-segment transactions△54,424

Amortization of goodwill△29,241

Unallocated corporate expenses (See Note)△703,377

Adjustment of inventories△27,476
Operating income shown on the quarterly
1,732,994
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, 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

Net sales
Net sales toexternalcustomers
Inter-segment
sales ortransfers
Total

Electronicmaterials

Industrial
application
structural
materials

Electricalinsulating
materials

Displaymaterials

Subtotal

14,453,033

4,334,451

1,553,213

1,867,634

22,208,333

391,577

22,599,910

－

－

－

－

－

389,894

389,894

14,453,033
4,334,451
1,553,213
1,867,634
22,208,333
781,471
22,989,804
Segment income
1,110,657
621,995
173,715150,172
2,056,540
108,274
2,164,814
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

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.
(Business Combinations)
Important revision of initially allocated amount of acquisition price in the comparison information
Provisional accounting was conducted in the previous consolidated second quarter for the business combination
with Satosen Co., Ltd., which was effected on November 30, 2017. Such provisional accounting has been finalized
in the previous consolidated third quarter. Due to such finalization of the provisional accounting, important
revision of the initially allocated amount of acquisition price is reflected on the comparative information describedin Quarterly Consolidated Financial Statements for the current cumulative consolidated second quarter.
As a result, the amount of goodwill which was calculated provisionally is revised, due to the said finalizationof accounting, from 355,527 thousand yen to 292,412 thousand yen, a decrease of 63,115 thousand yen. Suchdecrease of goodwill is due to the respective increases of 95,039 thousand yen in "Other" of "Intangible assets",and of 31,923 thousand yen in "Other" of "Non-current assets".
As a result, the influence on Quarterly Consolidated Statements of Income for the previous cumulative
consolidated second quarter is slight.

- 20 -

(Per Share Information)
The amounts of net income per share and fully diluted net income per share with their respective bases ofcalculation are as follows.
Previous consolidated
cumulative second quarter(From April 1, 2018
to September 30, 2018)(1) Net income (or loss) per share（△）

Current consolidated
cumulative second quarter(From April 1, 2019
to September 30, 2019)49.16 yen

△24.81yen

1,775,233△894,114------

1,775,233△894,114

36,110,689

36,032,251

48.77yen

---

---

---

285,755－(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: 1. Diluted net income per share in the current term consolidated cumulative second quarter is not stated above due to net loss
per share, though potential share exists.
2. Net income per share and fully diluted net income per share in the previous consolidated cumulative second quarter are
calculated according to the monetary amount reflecting adjustments of the purchase price allocation following thedetermination of the provisional accounting treatment related to business combinations.

(Significant subsequent events)(Share transfer of the affiliate company accounted for under equity method)
The Company entered into the Tender Offer Application Agreement with Nippon Kayaku Co., Ltd.
(hereinafter referred to as “Tender Offeror”) as of August 27, 2019 and applied for the tender offer made by
Tender Offeror during the term of the tender offer from August 28, 2019 to October 10, 2019 for all shares(9,280,000 shares) of the affiliate company accounted for under equity method (Polatechno Co., Ltd.) hold by theCompany.
This tender offer was concluded upon expiration of the tender offer as of October 10, 2019 and the settlementof this tender offer was completed as of October 18, 2019. Therefore, Polatechno Co., Ltd. was excluded fromthe affiliate companies accounted for under equity method hold by the Company.
Number of transferred shares
Transfer priceGain on sale of investment securities

9,280,000 shares
9,215,040 thousand yen
1,253,012 thousand yen

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 14, 2019
To the Board of Directors of Arisawa Mfg. Co., Ltd.

Ernst & Young ShinNihon LLC
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
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, 2019 to September 30, 2019) and the consolidated
cumulative second quarter (From April 1, 2019 to September 30, 2019) of the consolidated fiscal year from April 1,
2019 to March 31, 2020, 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.
Responsibility of Management for the Quarterly Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the quarterly consolidated financial
statements in accordance with the standards for preparation of quarterly consolidated financial statements generally
accepted in Japan. This includes improvement and operation of such internal control as the management deems
necessary for the preparation and fair presentation of quarterly consolidated financial statements free from material
misstatement, whether due to fraud or error.
Responsibility of Auditors
Our responsibility is to express a conclusion on the quarterly consolidated financial statements from an independent
standpoint based on our quarterly review. We conducted our quarterly review in accordance with the quarterly review
standards generally accepted in Japan.
A quarterly review consists principally of making inquiries to the management and the persons responsible forfinancial and accounting matters, etc., applying analytical procedures and conducting other quarterly review procedures.
The quarterly review procedures are less exhaustive than the procedures for annual financial statement audits
conducted in accordance with the audit standards generally accepted in Japan.
We believe that the evidence we have obtained provides a basis for our conclusion.
Conclusion of Auditors
In our quarterly review, no matter has come to our attention that causes us to believe that the above quarterly
consolidated financial statements do not fairly present, in any material respect, the financial conditions of Arisawa
Mfg. Co., Ltd. and its consolidated subsidiaries as of September 30, 2019 as well as the results of their operations andthe status of their cash flows in the consolidated cumulative second quarter ended September 30, 2019 in accordancewith the standards for preparation of quarterly consolidated financial statements generally accepted in Japan.
Interest
There exists no special interest between the Company and this audit corporation or its engagement partners whichis required to be stated pursuant to the provisions of the Certified Public Accountants Act.
Note:

1. All the matters stated above have been electronically copied from the matters stated in the original quarterly review report. The
original quarterly review report is separately archived by the Company (the company submitting the Quarterly Report).
2. XBRL data are not included in the subject of the quarterly review.