Report of Operations
Matters related to the current state of the Corporate group
Progress and outcomes of operations

This is to report results of the operations for the 54 th term (from April 1 st , 2023 to March 31 st ,2024)
As for the world economies during the fiscal year, although there were still geopolitical risks suchas Russia's invasion of Ukraine and escalating tensions in the Middle East, economic activities weregetting normalized and there was a gradual pickup in business confidence. At the same time, there
were increasing downside risks to the economies, such as prolonged monetary tightening to counter
inflation in the US and real estate market adjustments in China, eventually leading to heightened
uncertainty regarding future prospects.
Looking at Asian countries, China expanded domestic demand mainly through investment into
infrastructure and manufacturing sectors after the change of the zero-corona policy, and India's GDP
growth rate exceeded that of the previous year based on the successful implementation of inflation
control policies mainly in the energy and food sectors, but in other regions, GDP growth rate went
down significantly, especially in export-dependent countries. Although there was an improvement inexports to South Korea, Taiwan, Vietnam, and other countries in the second half of the period,
thanks to increased demand driven by AI related market emergence and other new technologies,
exports were not strong enough to recover from the previous decline.
As for next fiscal year, although the Asian economies are expected to be on a gradual recovery
trend, economic slowdown caused by the real estate market adjustment and excess inventory
adjustment in China is expected to affect many Asian countries, especially in exports, and the highpolicy interest rates are expected to hinder the Asian economies. Thus, the situation remains
unpredictable as to whether the Asian economies will be able to achieve the projected GDP growthrate of approximately 5%.
As to Japan economies, the lowering of the new type of coronavirus infection to category 5 led tofurther normalization of socioeconomic activities, and the economies were getting normalized
gradually. However, further depreciation of Japanese currency and persistently high prices of energy
and materials have not resolved the problems that continue to hinder economic recovery.
Under these circumstances, the Corporate Group diversified its businesses by making Vannsh LifeSciences, an API manufacturer in India, an affiliate through investment, and explored entry into newmarkets and new business segments in each Business unit. In the Market segments where we havebeen positioning ourselves as Explore, we have been implementing strategies such as recruitinghuman resources and opening a representative office in Vietnam to strengthen our capacities so that
we can achieve our goals without standing still until the next generation shows up.
Consolidated Sales Revenues for the fiscal year grew at all Group companies, reaching 16,971
million yen, making 14.6% increase from the previous fiscal year. Although expenses increased dueto wage hikes to cope with rising prices in various countries and systemic responses to changes inlaws and regulations, consolidated Operating Income increased by 12.6% from the previous fiscal
year to 972 million yen. Consolidated Ordinary Profit increased by 4.1% year-on-year to 1,002
million yen because of foreign exchange gains from utilization of foreign currency denominatedassets and loss from disposal of inventories to further strengthen quality control and reduction oflong-term inventories.
On a non-consolidated basis, Sales Revenues increased by 11.9% year-on-year to 13,834 million
yen thanks to overall growth in the materials-related businesses. Operating Income increased by
26.9% to 502 million yen, despite a rise in cost of sales due to foreign exchange effects and anincrease in overhead expenses. Ordinary Income increased by 29.8% year-on-year to 882 million yen
as a result of an increase in dividends and aggressive use of financial assets.
In the 55th term, we will strive to achieve our vision by pursuing sustainable corporate groupmanagement, giving due consideration to the environment, fulfilling our social responsibilities,
improving efficiency and productivity, and securing further credibility from all stakeholders.

Overview of each of the businesses in this period– Consolidated basis (LY% of Sales/Gross Profit) –Electronics Materials Business
The business grew by 11.2% in sales and 6.8% in profit. Japan, China, Korea, and India madegrowths in both sales and profit, but in Thailand, both sales and profit declined due to sluggish
demand for air conditioners in the United States.
As for Automotive Electronics segment, semiconductors shortage issue in the global market were
getting resolved gradually, and the segment was supported by a strong demand in the marketplaces.
In addition, the number of qualifications at local customers in each country increased. Both sales andprofit increased based on sales growth of x-EVs and Autonomous Driving related applications. HomeAppliance & IT segment declined in both sales and profit, due to less nesting demands andthe economic slowdown in China also gave a negative impact. Sales and profit in Coating/Dispensing
equipment business for chemicals dealt in increased. Other than increasing equipment sales in Japan,
a laboratory was set up in China to begin dispensing services for test substrates, and equipment sales
were also successful. As to Electronics Chemicals segment, our product lineup is expanding. In addition,a project to create new segments launched, and investigation is being continued. As a strategy forregional expansion, the Guangzhou branch was registered as Sales office and a sales representative
was deployed in Chongqing. To enhance technical service capabilities, Field Application Engineering
professionals were assigned in Japan and Thailand. Also, a laboratory establishment and technicalservice person deployment in Korea is under consideration. Decision was made to make Coatings
containing organic solvents “Carbon Neutral” no later than the end of fiscal year of 2024.

Performance Chemical Business
Sales and Profit significantly increased by 28.0% and 26.2% respectively. Increase in profit was mainly brought by
success of pricing adjustments based on currency exchange fluctuation in Aerospace and Aviation segment,
although business environment was not favorable due to further depreciation of ASIAN currencies, especiallyJapanese Yen therefore most of the existing businesses were negatively impacted by this through the year. On amarket segment basis, Tire, Chemical Intermediate and Personal Care segments in addition to Aerospace &Aviation segment contributed to the entire business growth. Especially Aerospace and Aviation segment grewsignificantly, and the 2nd business project progressed following the success of the 1st one. Sales start of the 2nd
project is expected in the 2nd quarter of FY2024. Personal Care segment continuously focused on a global market
trend which is called “Natural Beauty” and business started in Korea as well as Vietnam through the collaborationin the global team. In addition, a person in charge of technical support was deployed in Japan to take care of global
business and now the establishment of Technical Laboratory is being planned. On the other hand, Paint and Ink,Adhesive, Biocide, Chemical and Lubricant for textile segments were in slowdown in Sales under the above toughbusiness circumstances. Electronics Chemical segment has been positioned as exploration while new projects
started in semiconductor and display applications.

Fine Chemical Business
Sales and profit grew significantly by 22.4% and 17.0% respectively. Profit rate was negatively impacted byweakened Japanese Yen against US dollars and Euro. All segments in Pharmaceutical which consist of NewMedicine, Biological Medicine and Generic Medicine grew nicely though Fine Chemical segment such asExcipient business was slow in Sales. A person in charge of Quality Assurance was deployed newly in Japan andit is being planned to hire another personnel in India to ensure and improve suppliers’ quality assurance. In addition,
one more person in charge of material sourcing was deployed in India to enhance supply capability. Investment instart-up company, whose name is Vannsh Life Sciences Pvt Ltd., based in India was completed. As a result, thecompany who has manufacturing capabilities for APIs of Oncology and Intermediates joined ARB Group. The
capabilities would help to expand geographies further to the US and other countries. Finally, another investment
project is on-going and is expected as a competitive edge in terms of business development in Performance
Chemical Business and Electronics Chemical Business in addition to Fine Chemical Business.

Life Science Business
The business resulted in 0.2% of small growth in sales and 16.8% of growth in profit. High-value-added
Bio-industry segment contributed to the increase in profit. Culture equipment for vaccine production
was sold as planned and sales of cGMP-compliant reagent products commercialized from the previous
fiscal year grew substantially. In addition, new next-generation DNA sequencer pretreatment products
were introduced and increased the sales. In Bioresearch segment, sales grew thanks to the expansion ofLGC's product portfolio. Sales of auxiliary equipment for semiconductor manufacturing research werein line with the plans. Enzyme reagents for research use, which had been sluggish in the previous fiscal
year due to the sharp currency depreciation of JPY and cost increases, returned to higher sales andprofits through cost reviews and price adjustments. Genome editing service business (sgRNA) grew via
contract agreements with several customers. In Sterilization segment, acquisition of new customers inthe pharmaceutical sector led to an increase in profit, but sales declined in the medical equipment sector
due to suspension of orders from a large customer. Regarding the Nano Membrane business, sales grew
more than planned thanks to growth in an OEM business and achievement of several projects.

Hu-Vet Business
The business resulted in 10.8% negative growth in sales and 0.7% negative growth in profit. Main
reason for the decrease in sales was inventory adjustments at customers in reaction to the special
demand for medical connectors for artificial heart-lung and dialysis applications in the previous fiscalyear. In other segments, sales and profits were flat year on year or increased. In Livestock Milk
Inspection Kit business, the profit grew after reviewing costs. The departure of dairy farmers, which
had been continuing since the previous fiscal year, had a negative impact on domestic sales, but on theother hand, overseas export sales were strong and full-year sales resulted in flat compared to theprevious year. As for the Safety Testing segment, pesticide residue testing kit business for Asia
contributed to increased sales. In Food Testing segment, sales of bacteria testing equipment werestrong, including related reagents and consumables, despite ongoing turmoil on the supplier side due tocorporate acquisitions. In Water Level/Quality Monitoring Machine business, sales of water quality
meters for aquaculture and river monitoring increased. Regarding Fertility treatment segment, sales
grew in equipment and consumables as the disruption on the customer side caused by the tight supply
and demand of drugs in fertility treatment industry that occurred in the previous fiscal year subsided.

Test & Measurement Business
Sales and profit increased by 9.9% and 2.9% respectively. As for Automotive segment,in Japan big projects of ADAS (Advanced Driver Assistance System)-related testing system and Pressure MappingSensors were successful at Automotive customers and Tire customers. In China CASE-related investment
continued to be aggressive enough to receive orders for a considerable number of ADAS related Dummies
successfully, on the other hand, ADAS-related system orders decreased, and profit also declined compared to thelast fiscal year due to intense competition against competitors. Strain Gauges, which were targeting at China
Automotive industry, were delivered to many Chinese customers successfully and grew nicely becoming one of
the core businesses. From the next fiscal year those will be possible to be commercialized in all industries in China,
while sales activities were limited only to Automotive segments until now. Further synergies with Fiber-Optics
Sensing Systems, which had been launched in the last fiscal year, are expected in Environment, Civil engineering,
Aerospace segments. As for Electronics and Aviation & Aerospace segments, Shock Testing Equipment, whichhad been newly developed, were supplied to several customers in Japan with stable quality. Unfortunately, somesystems were postponed in delivery until the next fiscal year. Sales promotion also started in East Asia, someinquiries were gotten from Japanese companies in Korea and China. As for Medical Equipment segment, FB
Automation Co.,LTD, who became one of our Group companies in October 2022 dealing mainly in ElectricValves and Pumps used for Medical Analysis Instruments, contributed to growth in sales of the entire Test &Measurement business, although sales declined slightly compared to the last fiscal year as entity due to sluggish
overseas economies and excess inventory in their main customers.