• The business combination described in this document involves securities of Japanese companies. The business combination is subject todisclosure requirements of Japan that are different from those of the United States. Financial information included in this document, if any,
was excerpted from financial statements prepared in accordance with foreign accounting standards that may not be comparable to thefinancial statements of United States companies.
• It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal securities laws, since theissuers are located in Japan and some or all of their officers and directors reside outside of the United States. You may not be able to sue aJapanese company or its officers or directors in a Japanese court for violations of the U.S. securities laws. It may be difficult to compel aJapanese company and its affiliates to subject themselves to a U.S. court’s judgment. You should be aware that the issuer may purchasesecurities otherwise than under the business combination, such as in the open market or through privately negotiated purchases.
• This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shall prevail. GL Sciences Inc. and Techno Quartz Inc. assume no responsibility
for this translation or for direct, indirect or any other forms of damages arising from the translation.

(Stock Exchange Code 5217)
June 5, 2024
(Date of commencement of measures for electronic provision: May 30, 2024)
To Shareholders with Voting Rights:
Ikunobu Sonoda
President
Techno Quartz Inc.
1-32-2, Honcho, Nakano-ku, TokyoNOTICE OF
THE 48th ANNUAL GENERAL MEETING OF SHAREHOLDERS
Dear Shareholders:
We would like to express our appreciation for your continued support and patronage.
We are pleased to inform you that the 48th Annual General Meeting of Shareholders of Techno Quartz
Inc. (the “Company”) will be held for the purposes as described below.
In convening this year’s Annual General Meeting of Shareholders, the Company has taken measures forelectronic provision and posted matters subject to measures for electronic provision as “Notice of the 48th
Annual General Meeting of Shareholders” on the website indicated below.
The Company’s website
https://www.techno-q.com/ir/meeting-of-shareholders/ (in Japanese)
The matters subject to measures for electronic provision are also posted on the Tokyo Stock Exchange(TSE) website in addition to the website indicated above. Access the TSE website (TSE Listed Company
Search), enter the Company’s name “Techno Quartz” in the “Issue name (company name)” field or theCompany’s securities code “5217” in the “Code” field and click “Search,” select “Basic information,” andthen “Documents for public inspection/PR information.” Under “Filed information available for public
inspection,” click the “Click here for access” button below [Notice of General Shareholders
Meeting/Informational Materials for a General Shareholders Meeting] and you can find the notice ofconvocation.
Tokyo Stock Exchange website
https://www2.jpx.co.jp/tseHpFront/JJK020010Action.do?Show=Show
If you are unable to attend the meeting, you can exercise your voting rights in writing or via the Internet.
Please review the Reference Documents for the General Meeting of Shareholders included in the matterssubject to measures for electronic provision, and pursuant to “Guidance for exercising voting rights” onpage 4 (Japanese original) and “Guidance for exercising voting rights via the Internet, etc.” on page 5(Japanese original), exercise your voting rights no later than 5:30 p.m. Japan time on Thursday, June 20,
2024.

-1 -

1. Date and Time:

Friday, June 21, 2024 at 10:30 a.m. Japan time

2. Place:

Harmony Hall
3F, Harmony Square
1-32-2, Honcho, Nakano-ku, Tokyo, Japan

3. Meeting Agenda:
Matters to be reported: 1. The Business Report, Consolidated Financial Statements for theCompany’s 48th Fiscal Year (April 1, 2023 to March 31, 2024) andresults of audits by the Accounting Auditor and the Audit and Supervisory
Committee of the Consolidated Financial Statements
2. Non-consolidated Financial Statements for the Company’s 48th Fiscal
Year (April 1, 2023 to March 31, 2024)
Proposals to be resolved:
Proposal 1:
Approval of Share Transfer Plan
Proposal 2:
Appropriation of Surplus
Proposal 3:
Election of Five (5) Directors (excluding Directors who are Audit andSupervisory Committee Members)
Proposal 4:
Election of Two (2) Directors who are Audit and Supervisory Committee
Members
Proposal 5:
Election of One (1) Substitute Director who is an Audit and Supervisory
Committee Member
4. Matters Determined for Convocation:(1) Among matters subject to measures for electronic provision, the following matters are notincluded in the documents to be delivered to shareholders who requested the delivery of
documents in accordance with laws and regulations and provision of Article 15 of theCompany’s Articles of Incorporation. Accordingly, documents to be delivered to shareholders
who requested the delivery of documents are part of the documents audited by the Audit andSupervisory Committee and Accounting Auditor in preparing the audit reports.
1) “Consolidated Statement of Changes in Equity” and “Notes to Consolidated Financial
Statements” which are part of the Consolidated Financial Statements2) “Non-consolidated Statement of Changes in Equity” and “Notes to Non-consolidated
Financial Statements” which are part of the Non-consolidated Financial Statements
3) Financial statements, etc. related to the final business year of the other wholly-owned
subsidiary in the share transfer (GL Sciences Inc.) in Proposal 1 “Approval of Share
Transfer Plan” in the Reference Documents for the General Meeting of Shareholders(2) If you exercise your voting rights in duplicate via the Internet and in writing, the vote via theInternet shall be treated as valid. If you exercise your voting rights more than once via theInternet, the last vote exercised shall be treated as valid.
(3) If neither a vote for nor against a proposal is indicated in the voting rights exercise form, it shallbe deemed a vote for.
Should the matters subject to electronic provision require revisions, the revised versions will be posted oneach of the websites indicated above.
<To shareholders attending the meeting>
When attending the meeting, please submit the enclosed voting rights exercise form at thereception.
◎ We will not distribute souvenirs in consideration of fairness between shareholders attending themeeting and shareholders unable to attend the meeting. Also, we will not hold a reception forshareholders due to constraints of the venue. We would kindly appreciate your understanding.
◎

-2 -

-3 -

Reference Documents for the General Meeting of Shareholders
Proposals and References
Proposal 1:

Approval of Share Transfer Plan

The details of the Proposal are as stated in “Reference Documents for the General Meeting of Shareholders
Supplement to Proposal 1.”
Proposal 2:

Appropriation of Surplus

The Company recognizes the stable return of profit to shareholders as an important issue. Furthermore, in order toenhance its equity capital and increase earning power, the Company will, as a policy, actively work to improve dividendlevels from medium- to long-term perspectives, while building a stronger management foundation.
Under such a policy, the Company proposes appropriation of surplus as follows, taking into comprehensive
consideration such factors as business results for the fiscal year under review and payout ratio.
1. Matters concerning year-end dividends(1) Type of dividend property
Cash(2) Matters related to the allotment of dividend property and the total amount thereof
130 yen per share of common stock of the Company
Total amount: 502,665,150 yen(3) Effective date of distribution of surplus
June 24, 2024
2. Matters concerning appropriation of surplus
Not applicable-4 -Proposal 3:

Election of Five (5) Directors (excluding Directors who are Audit and Supervisory Committee
Members)

The terms of office of all four (4) Directors (excluding Directors who are Audit and Supervisory Committee Members)
will expire at the conclusion of this year’s Annual General Meeting of Shareholders. Accordingly, the election of five (5)Directors (excluding Directors who are Audit and Supervisory Committee Members) is proposed.
The Audit and Supervisory Committee comprehensively reviewed the status of execution of duties, performance, andother matters during the fiscal year under review for each of the candidates. As a result, it judged that the candidates are
suitable for serving as the Company’s Directors.
The candidates for Directors (excluding Directors who are Audit and Supervisory Committee Members) are as follows.

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions
April 1982
April 2012
July 2014
July 2015

Ikunobu Sonoda(July 21, 1959)[Reappointment]

April 2017
June 2018

1
June 2019

Joined GL Sciences Inc.
Chief Manager, Marketing and Sales Promotion Dept.,
Sales Division
Operating Officer; Chief Manager, Marketing and Sales
Promotion Dept.
Operating Officer; Chief Manager, General Planning
Dept.
Operating Officer; Chief Manager, Management
Planning OfficeDirector; Chief Manager, Management Planning Office,GL Sciences Inc.
Director, the Company
President (incumbent)

Number ofshares of theCompany
held

3,800
shares[Significant concurrent positions]
Chairman, Hangzhou Techno Quartz Inc.
[Reason for nomination as candidate for Director]
As President of the Company, Mr. Ikunobu Sonoda is responsible for overall management and demonstrates
outstanding leadership with his wealth of experience and wide-ranging knowledge and insights gained in the sales
and management planning divisions of the parent company. The Company judges that he is capable ofappropriately fulfilling his duties as a Director of the Company and thus nominates him again as a candidate for
Director.

-5 -

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions
January 2004
May 2005
January 2008
July 2008
May 2010
June 2011
February 2012

Hiroshi Takahashi June 2014
(February 15, 1957) June 2016
June 2017[Reappointment]
2June 2019
June 2020
June 2021
June 2023

3

Joined the Company
Chief Manager, Production Dept., Hangzhou Techno
Quartz Inc.
President
Chief Manager, Manufacturing Control Dept.,
Production Division, the Company
Executive Officer; General Manager, Sales Division
Director, General Manager, Sales Division
Director, General Manager, Sales Division; Deputy
General Manager, Production Division
Director; General Manager , Sales Division
Managing Director; General Manager, Sales Division
Managing Director; Head of Semiconductor Business; incharge of Hangzhou Techno Quartz Inc.; General
Manager, Sales Division
Managing Director; Head of Semiconductor Business; incharge of Hangzhou Techno Quartz Inc.
Senior Managing Director; Head of Semiconductor
Business; in charge of Hangzhou Techno Quartz Inc.
Senior Managing Director
Vice President (incumbent)

Number ofshares of theCompany
held

4,900
shares[Significant concurrent positions]
Director, Hangzhou Techno Quartz Inc.
[Reason for nomination as candidate for Director]
Mr. Hiroshi Takahashi is thoroughly conversant with industry circumstances and the market through his wealth ofexperience in the sales and manufacturing divisions both in Japan and overseas. He is currently spearheading theGroup’s management as the person responsible for the semiconductor business overall. The Company judges that
he is capable of appropriately fulfilling his duties as a Director of the Company and thus nominates him again asa candidate for Director.
November 1997 Joined the Company
April 2016
Deputy General Manager, Production Division; Chief
Manager, Manufacturing Dept.
July 2016
Executive Officer; Deputy General Manager,
Production Division; Chief Manager, Manufacturing
Dept.
Isamu Masuda
April 2017
Executive Officer; Deputy General Manager,
Production Division
2,600(August 18, 1970)
sharesJune 2017
Executive Officer; General Manager, Production
Division[Reappointment]
June 2019
Director; General Manager, Production Division(incumbent)[Significant concurrent positions]
Director, Hangzhou Techno Quartz Inc.
Representative Director, AISINTEC Co., Ltd.
[Reason for nomination as candidate for Director]
Mr. Isamu Masuda has been engaged in the manufacturing and production engineering divisions for many years
and has a wealth of knowledge and experience in the needs of both manufacturer and user regarding the Company’s
products. He is currently spearheading the Group’s management as the person responsible for the production
division. The Company judges that he is capable of appropriately fulfilling his duties as a Director of the Company
and thus nominates him again as a candidate for Director.

-6 -

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions
September 1996
April 2016

July 2016
Hidekazu Tegawa(July 14, 1970)

June 2017[Reappointment]
4June 2019

Joined the Company
Chief Manager, Domestic Sales Dept., Sales Division;
Head of Kansai Regional Sales Office; Head of
Hokuriku Regional Sales Office
Executive Officer; Chief Manager, Domestic Sales
Dept, Sales Division.; Head of Kansai Regional Sales
Office; Head of Hokuriku Regional Sales Office
Executive Officer; Deputy General Manager, Sales
Division; Chief Manager, Domestic Sales Dept., Sales
Division
Director, General Manager , Sales Division(incumbent)

Number ofshares of theCompany
held

2,000
shares[Significant concurrent positions]
Director, Hangzhou Techno Quartz Inc.
Director, AISINTEC Co., Ltd.
[Reason for nomination as candidate for Director]
Mr. Hidekazu Tegawa is thoroughly conversant with industry circumstances and the market due to his wealth ofexperience gained from many years in domestic sales. He is currently spearheading the Group’s management as
the person responsible for the sales division. The Company judges that he is capable of appropriately fulfilling his
duties as a Director of the Company and thus nominates him again as a candidate for Director.
April 1988
Joined The Mitsubishi Bank, Ltd. (currently MUFG
Bank, Ltd.)
February 2007
Deputy Director, Global Compliance Division
April 2010
Seconded to Mitsubishi UFJ NICOS Co., Ltd.; Deputy
Director, Credit Planning Division
April 2015
General Director, Health Insurance Association
Operation No. 1, MUFG Bank, Ltd.
December 2017
Chief Manager, Accounting Dept., the Company
Toshihiro Asada
July 2018
Executive Officer; Deputy General Manager,(August 22, 1964)
400
Administrative Division; Chief Manager, Accounting
sharesDept[New appointment]
April 2022
Seconded to Hangzhou Techno Quartz Inc.
April 2023
Executive Officer; General Manager, Administrative
Division; Chief Manager, Accounting Dept., theCompany
April 2024
Executive Officer; General Manager, Administrative
Division; Chief Manager, General Affairs Dept.; Chief
Manager, Accounting Dept. (incumbent)[Reason for nomination as candidate for Director]
Mr. Toshihiro Asada has served at a financial institution for many years, working at an international fundexchange, planning, human resource, risk control, and other divisions. He has a wealth of experience and wideranging knowledge and insights in various fields and is currently spearheading administrative divisions such as
the General Affairs Dept. and Accounting Dept. as the person responsible. The Company judges that he is capableof appropriately fulfilling his duties as a Director of the Company and thus nominates him as a candidate for
Director.
(Notes)1. There are no special interests between each candidate and the Company.
2. The number of shares of the Company held by candidates for Directors is as of March 31, 2024 and includes the number of shares heldin the name of the Company’s Director Shareholding Association. Also, the number of shares of the Company held by the new candidate
includes the number of shares held through the Techno Quartz Employee Shareholding Association. If this proposal is approved and the
new candidate assumes office as Director, the Company will conduct a process in his exit from the association such as withdrawal ofshares held based on the regulations of the Techno Quartz Employee Shareholding Association.

-7 -3. The Company has entered into a directors and officers liability insurance agreement with an insurance company for the purposes of
preventing hesitation in the execution of duties and securing excellent human resources, and plans to renew the insurance agreement
during their terms of office. The details of the agreement are outlined in “2. Outline of directors and officers liability insurance agreement”
under “III. Company Officers” in the Business Report.

-8 -Proposal 4:

Election of Two (2) Directors who are Audit and Supervisory Committee Members

The terms of office of two (2) Directors who are Audit and Supervisory Committee Members, Shigeki
Taniguchi and Taketo Morita will expire at the conclusion of this year’s Annual General Meeting of Shareholders.
Accordingly, the election of two (2) Directors who are Audit and Supervisory Committee Members is proposed.
The Audit and Supervisory Committee has previously given its approval to this proposal.
The candidates for Directors who are Audit and Supervisory Committee Members are as follows.

No.

Name
(Date of birth)

Shigeki Taniguchi(May 9, 1953)

1

2[Reappointment][Outside][Independent]

Career summary, positions, responsibilities
and significant concurrent positions
April 1976
April 1997
April 1999
April 2002
June 2010
June 2013
March 2017
June 2018

Joined The Yamagata Bank, Ltd.
General Manager, Hanatate Branch
General Manager, Daigakubyoin-mae Branch
Chief, Secretariat
Director; Chief, Secretariat
Chief, 120-year History Compilation Office
President, Yamagin Business Services Ltd.
Director, Audit and Supervisory Committee Member,the Company (incumbent)

Number ofshares of theCompany
held

200
shares[Reason for nomination as candidate for Outside Director and expected roles]
The Company renominated Mr. Shigeki Taniguchi as a candidate for Audit and Supervisory Committee Member
as Outside Director, expecting him to conduct audits and supervision from an objective standpoint, based on a
wealth of experience in branches and company management at a bank and its affiliated company as well as broad
knowledge and insight.
October 2004
Registered at the Tokyo Bar Association
October 2004
Joined Matsuda & Partners
June 2013
Auditor, LCR Real Estate Investment Management, Inc.
Taketo Morita(incumbent)(March 23, 1976) April 2016
Partner, Matsuda & Partners (incumbent)—
June 2020
Director, Audit and Supervisory Committee Member,[Reappointment]
the Company (incumbent)[Outside][Independent][Significant concurrent positions]
Partner (attorney-at-law), Matsuda & Partners[Reason for nomination as candidate for Outside Director and expected roles]
Mr. Taketo Morita is conversant with corporate legal affairs and corporate governance as an attorney-at-law and
the Company renominated him as a candidate for Audit and Supervisory Committee Member as Outside Director,
expecting him to conduct audits and supervision from an objective standpoint, based on his deep insight andexpertise.
(Notes)
1. Mr. Shigeki Taniguchi and Mr. Taketo Morita are candidates for Outside Directors. The Company has designated Mr.
Shigeki Taniguchi and Mr. Taketo Morita as independent directors as prescribed by the Tokyo Stock Exchange andsubmitted that designation to the said Exchange on the assumption of the approval of this proposal.
2. Mr. Shigeki Taniguchi will have served as an Outside Director and a Director who is an Audit and Supervisory Committee
Member of the Company for six (6) years at the conclusion of this Annual General Meeting of Shareholders. Although he
was an executive of The Yamagata Bank, Ltd. that is the Company’s main creditor, seven (7) years have passed since heretired from the bank and therefore, the Company judges that he has independence.
3. Mr. Taketo Morita will have served as an Outside Director and a Director who is an Audit and Supervisory Committee
Member of the Company for four (4) years at the conclusion of this Annual General Meeting of Shareholders
4. The Company has entered into a limited liability agreement with Mr. Shigeki Taniguchi and Mr. Taketo Morita, in
accordance with the Articles of Incorporation of the Company, to limit liability for damages to the amount stipulated bylaws and regulations. In the event that Mr. Shigeki Taniguchi and Mr. Taketo Morita are re-appointed, the Company plans
to continue this agreement.
5. The Company has entered into a directors and officers liability insurance agreement with an insurance company for the
purposes of preventing hesitation in the execution of duties and securing excellent human resources, and plans to renew theinsurance agreement during their terms of office. The details of the agreement are outlined in “2. Outline of directors andofficers liability insurance agreement” under “III. Company Officers” in the Business Report.

-9-

(Reference) Skill Matrix of the Board of Directors
The Company structures the Board of Directors based on the idea of ensuring diversity and balance with afocus on Directors’ knowledge, experience, ability, and internationality.
If Proposal 3 and Proposal 4 are approved as originally proposed at this Annual General Meeting of
Shareholders, the Board of Directors of the Company will consist of members with the following skills:

Name

Corporate
Positions at the Company
management

Ikunobu
SonodaPresident●

HiroshiTakahashi

Vice President

●

Isamu
MasudaDirector●

Hidekazu
TegawaDirector●

Toshihiro
Asada

Director

KazuyaIshikawa

ShigekiTaniguchi

TaketoMoritaDirector
Full-time Audit andSupervisory Committee
Member(Outside Director)
Director
Audit and Supervisory
Committee Member(Outside Director)
Director
Audit and Supervisory
Committee Member(Outside Director)

ESG/
Socialcontribution

International
business●

Industryknowledge
and insight/
Marketing

●
●

●
●

●

●

●

Legal affairs/
Riskmanagement●●* The above table does not represent all of the expertise and experience that the Directors possess.

HR/ Labor

●
●

●

●

- 10 -

Finance &accounting

●

●

●
●

R&D/
Industrial
engineering

●

●

●

●

●

●

●

●

●

●

●

●

Proposal 5:

Election of One (1) Substitute Director who is an Audit and Supervisory Committee
MemberIn order to ensure that the number of incumbent Audit and Supervisory Committee Members does not fall
below that required by laws and regulations, the election of one (1) substitute Director who is an Audit andSupervisory Committee Member is proposed.
The effectiveness of the election in this Proposal may be cancelled by a resolution of the Board of Directors,
only before the candidate assumes the position of Director who is an Audit and Supervisory Committee
Member.
The Audit and Supervisory Committee has previously given its approval to this proposal.
The candidate for substitute Director who is an Audit and Supervisory Committee Member is as follows.

Name(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions
August 1983
August 1983
November 1984

Jiro Nakashima(October 3, 1950)[Reappointment][Outside][Independent]

October 2006
June 2011
June 2012
September 2013

Registered as a certified public accountant
Opened Nakashima Jiro Certified Public
Accountant Office (incumbent)
Partner, Serizawa Accounting Office (currently
GYOSEI & CO.)
Established GYOSEI & CO., Representative
Partner
Retired from and left GYOSEI & CO.
Audit & Supervisory Board Member, Makino
Milling Machine Co., Ltd.
Auditor, SEC ELEVATOR CO., LTD. (incumbent)

Number ofshares of theCompany
held—[Reason for nomination as candidate for substitute Audit and Supervisory Committee Member and expectedroles]The Company judged that Mr. Jiro Nakashima is capable of conducting audits and supervision with a wealthof experience as a certified public accountant from a professional point of view and therefore nominated him
as a substitute Audit and Supervisory Committee Member as Outside Director.
(Notes)1. There are no special interests between Mr. Jiro Nakashima and the Company.
2. Mr. Jiro Nakashima is a candidate for a substitute Audit and Supervisory Committee Member (candidate for Outside
Director).
3. In the event that Mr. Jiro Nakashima assumes office as Audit and Supervisory Committee Member, the Company plans toenter into a limited liability agreement with him in accordance with the Articles of Incorporation of the Company, to limit
liability for damages to the amount stipulated by laws and regulations.
4. In the event that Mr. Jiro Nakashima assumes office as Audit and Supervisory Committee Member, the Company plans tosubmit him as an independent director to the Tokyo Stock Exchange.
5. The Company has entered into a directors and officers liability insurance agreement with an insurance company and plansto renew the insurance agreement during his term of office. The details of the agreement are outlined in “2. Outline of
directors and officers liability insurance agreement” under “III. Company Officers” in the Business Report. In the eventthat Mr. Jiro Nakashima assumes office as Outside Director who is an Audit and Supervisory Committee Member, he will
be included in the insured of the said insurance agreement.

- 11 -

Business Report(April 1, 2023 to March 31, 2024)

I. Analysis of Operating Results
1. Operating results for the fiscal year under review
In the Japanese economy in the fiscal year under review (April 1, 2023 to March 31, 2024), while a recoveryof consumer spending had been at a temporary standstill due to inflation, employment and income
environments improved and a sign of increasing capital investment was seen against a backdrop of strong
corporate revenue and thus the economy continued to gradually recover. However, amid the unstableinternational situation, it is necessary to monitor the impact on the domestic economy from a surge in raw
materials and energy prices, inflation, and the rapidly weakening yen and the outlook still remains uncertain.
In the semiconductor industry, of which the Group is a part, though memory inventories continued pilingup due to declining demand for personal computers and smartphones, the current situation is modestly
recovering. In addition, following an increase in demand in the generative AI field, proactive, far-sighted
capital investments have been successively planned and conducted such as new construction and expansionof cutting-edge semiconductor fabs in and outside Japan. Thus, steady growth continues to be expected.
In the environment as mentioned above, the Company will efficiently conduct production activities by
uncovering new demand toward the future, making preparations for building a framework for production
expansion in Japan, and promoting other operational improvements. In addition, the amount of orders received
and net sales are on a recovery trend in the near term and the order backlog continues to remain high.
As a result, net sales for the fiscal year under review were 17,065 million yen (down 14.9% from theprevious fiscal year) and operating profit was 3,615 million yen (down 11.1% from the previous fiscal year),ordinary profit was 3,838 million yen (down 11.9% from the previous fiscal year), and profit attributable toowners of parent was 2,729 million yen (down 7.7% from the previous fiscal year).
2. Status of capital investment
The total amount of capital investment in the fiscal year under review was 1,185 million yen. This was due
mainly to the replacement of old equipment and new machinery and equipment purchases.
3. Status of financing
No significant financing through capital increases, corporate bond issues, or large-scale borrowing were
implemented in the fiscal year under review.
4. Status of business transfer, absorption-type company split, or incorporation-type company split
There are no matters particularly worthy of note.
5. Status of acquisition of business of other companies
There are no matters particularly worthy of note.
6. Succession of rights and obligations concerning the business of other corporations, etc., due to anabsorption-type merger or absorption-type company split
There are no matters particularly worthy of note.
7. Status of acquisition or disposition of shares or other equity interests or share acquisition rights, etc. inother companies
There are no matters particularly worthy of note.
8. Issues to be addressed
For the Japanese economy in fiscal 2024, as the impact of COVID-19 has subsided and economic activity
continues its trend toward normality, the strong performance of companies is expected to support
improvements in income and expansion of investments and a gradual recovery continues to be expected.
However, it will also be necessary to continue monitoring that outlook, as it is likely to remain uncertain due
to various factors, including globally surging food and energy prices against the backdrop of unstable- 12 -

international situations and the impact of financial policies such as a removal of the negative interest rate
policy.
In the semiconductor industry, on the other hand, data volumes are expected to increase further due to the
spread of remote work worldwide, and the expanding demand for AI semiconductors, 5G telecommunication,and the full-scale introduction of autonomous driving, among other factors. For these reasons, it is expectedthat semiconductors will remain in short supply, and the trend of growth in semiconductor demand willcontinue over the medium to long term.
Amid such circumstances, the Company and GL Sciences Inc., which is our parent company, executed theManagement Integration Agreement concerning the establishment of joint holding company (joint sharetransfer) as of May 10, 2024.
Since the foundation, the Company and GL Sciences Inc. have preserved the common basic philosophy
of: “fully demonstrating their social roles to the public; enhancing the value of their existence; bringing
happiness to each of their employees; and maintaining and further developing their companies.” Through thismanagement integration, we will be able to ensure sustainable growth for the group as a whole, and increase
their corporate values and further contribute to the development of their stakeholders.
In terms of receipt of orders by the Group, positive results were seen from upfront investment activities ofmanufacturers in anticipation of market recovery, which is expected to lead to a recovery trend in the second
half of this fiscal year. In addition, the semiconductor market is expected to keep growing steadily against the
backdrop of strong potential demand, such as plans that include government subsidization for semiconductors
being promoted in various parts of the world. For these reasons, the Company has not changed its outlook forthe medium- to long-term expansion of receipt of orders.
Medium- to long-term growth strategies and issues that the Company should continue to address undersuch circumstances are as follows:(1) Enhancement of production capacity
 We will promote capital investments to build a framework for production expansion in Japan.
 We will promote the advancement of quality management and aim to enhance production capacity
through stronger cooperation with external partners and subcontractors.
(2) Strengthening of sales capabilities
 We will strengthen our relationships with our business partners and develop and expand highly
value-added products in our efforts to expand the market for mass-produced quartz and silicon
products.
 In addition to strengthening our marketing of developed and mass-produced silicon products, wewill work on expanding products with high degrees of difficulty, such as flame-processed products.
(3) Operational efficiency
 We will promote digital transformation (DX) for the automation and improved efficiency ofoperations by re-examining workflows and operational procedures.
 We will make further use of system tools that contribute to efficiency, such as remote work andmeeting systems.
(4) Strengthening of management foundations
 We will proceed with various measures contributing to strengthening sustainability and responses
to the strengthening of corporate governance.
 We will engage in management that is conscious of financial indicators and stock price in our efforts
to strengthen IR functions and risk management.
 We will strengthen management by sharing know-how in each field through management
integration.
(5) Human resource development
 We will strive to develop excellent human resources by enhancing our various training programs,
proceeding with the production of operation manuals, and revitalizing personnel rotations, among
other means.
 We will activate the exchanges of human resources within the Group through management
integration and make efforts to raise employees’ awareness and capabilities.
- 13 -

9. Trends in Assets and profits and losses(i)Trends in assets and profits and losses of the corporate group(Millions of yen, unless otherwise specified.)
45th fiscal year ended 46th fiscal year ended 47th fiscal year ended
March 31, 2021
March 31, 2022
March 31, 2023

48th fiscal year ended
March 31, 2024
(Fiscal year underreview)

Net sales

12,791

15,82020,063

17,065

Ordinary profit

2,368

3,231

4,354

3,838

Profit attributable to owners ofparent

1,606

2,200

2,957

2,729

Profit per share (yen)415.32568.97764.97705.89Total assets

15,27318,31023,79225,753

Total net assets

11,254

13,77916,59019,1542,910.36

3,563.16

4,290.54

4,953.67

Net assets per share (yen)(Notes)1. Profit per share is calculated with the average number of shares outstanding during the period under review(number of shares less treasury shares) and net assets per share is calculated with the total number of shares
outstanding at the end of the period (number of shares less treasury shares).
2. The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020) and other standards since the 46th fiscal period. Figures for assets and profits and losses from the 46th fiscal
year onward reflect the application of the Accounting Standard and other standards.
3. On October 1, 2022, the Company conducted a share split at a ratio of five shares for one share of common stock.
Profit per share and net assets per share have been calculated assuming that the share split was conducted at the
beginning of the 45th fiscal year.

(ii) Trends in assets and profits and losses of the Company(Millions of yen, unless otherwise specified.)
45th fiscal year ended 46th fiscal year ended 47th fiscal year ended
March 31, 2021
March 31, 2022
March 31, 2023

48th fiscal year ended
March 31, 2024
(Fiscal year underreview)

Net sales

11,441

13,887

16,93314,808

Ordinary profit

1,714

2,497

3,199

3,216

Profit attributable to owners ofparent

1,173

1,732

2,230

2,315

Profit per share (yen)303.35447.99576.87598.86

Total assets

14,25815,93019,54020,956

Total net assets

10,03911,50813,352

15,1762,596.14

2,975.91

3,453.25

3,924.88

Net assets per share (yen)(Notes)1. Profit per share is calculated with the average number of shares outstanding during the period under review(number of shares less treasury shares) and net assets per share is calculated with the total number of shares
outstanding at the end of the period (number of shares less treasury shares).
2. The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020) and other standards since the 46th fiscal period. Figures for assets and profits and losses from the 46th fiscal
year onward reflect the application of the Accounting Standard and other standards.
3. On October 1, 2022, the Company conducted a share split at a ratio of five shares for one share of common stock.
Profit per share and net assets per share have been calculated assuming that the share split was conducted at the
beginning of the 45th fiscal year.

- 14 -

10. Significant parent company and subsidiaries(i)Relationship with the parent company
GL Sciences Inc. is the parent company that owns 2,542,000 shares of the Company (65.81% of voting
rights). It is engaged in the manufacturing and sale of precision scientific instruments, scientific research
instruments, their consumables, and other products.
The Company also has a trading relationship with GL Sciences Inc. concerning scientific-related
products.
Consolidated net sales of GL Sciences Inc. in its 57th fiscal year (April 1, 2023 to March 31, 2024)
amounted to 37,148 million yen (down 4.0% from the previous fiscal year) and profit attributable toowners of parent was 3,430 million yen (down 2.0% from the previous fiscal year).

(ii) Status of significant subsidiaries
Company name

Votingright ratio

CapitalHangzhou Techno Quartz
Inc.

24,100 thousand USD

100%

AISINTEC Co., Ltd.

3,000 thousand JPY

100%

100 thousand USD

100%

GL TECHNO America, Inc.

Description of main businesses
Processing, manufacturing and saleof quartz and silicon products forsemiconductor manufacturing
equipment
Processing of high-purity quartz
glass, crystalline silicon, etc.
Manufacture, sale, andimport/export of components forsemiconductor manufacturing
equipment and others(Note) There are no subsidiaries that are specified wholly owned subsidiaries.

(iii) Results of business combinations
There are no matters particularly worthy of note.
11. Description of main businesses
The main businesses of the Group include the manufacture and sale of quartz jigs for semiconductor
manufacturing equipment, scientific instruments, and industrial heating equipment, as well as siliconprocessing, based on quartz glass processing technology.
12. Principal business locations (as of March 31, 2024)(i) Techno Quartz Inc.
Head office:Domestic production bases:
Main sales offices:

1-32-2, Honcho, Nakano-ku, Tokyo
Zao Factory (Yamagata City, Yamagata)
Zao-South Factory (Yamagata City, Yamagata)
Tokyo Sales Office (Nakano-ku, Tokyo)
Tohoku Regional Sales Office (Yamagata City, Yamagata)
Kansai Regional Sales Office (Kyotanabe City, Kyoto)
Kyushu Regional Sales Office (Kumamoto City, Kumamoto)Hokuriku Regional Sales Office (Toyama City, Toyama)(ii) Hangzhou Techno Quartz Inc.
Head office and factory:Hangzhou City, Zhejiang province, China(iii) AISINTEC Co., Ltd.
Head office and factory:

Kitakata City, Fukushima(iv) GL TECHNO America, Inc.
Head office and factory:

California, USA- 15 -

13. Employees(i)Employees of the corporate group (as of March 31, 2024)
Change from end of
previous fiscal year
Down 54

Number of employees
544(Note) The above number of employees does not include temporary employees (14).

(ii) Employees of the Company (as of March 31, 2024)
Number of
employees
299

Change from end of
previous fiscal year
Up 10

Average age
38.5 years

Average length ofservice12.3 years(Note) The above number of employees does not include temporary employees (12).

14. Major lenders (as of March 31, 2024)
Lenders
The Yamagata Bank, Ltd.
MUFG Bank, Ltd.

Outstanding borrowings(Millions of yen)
1,141
1,094

- 16 -

II. Status of Shares
1. Total number of shares authorized to be issued:

15,600,000 shares

2. Total number of shares outstanding:

3,866,655 shares(excluding 33,345 shares of treasury shares)

3. Number of shareholders:

1,947

4. Major shareholders
Name
GL Sciences Inc.
Techno Quartz Employees Shareholding Association
The Yamagata Bank, Ltd.
MSIP CLIENT SECURITIESMUFG Bank, Ltd.
Custody Bank of Japan, Ltd. (trust account)
Goldman Sachs International
Yusuke Kida
Yuzuru Maruyama
The Yamaguchi Bank, Ltd.

Number of shares held
(Shares)

Ratio of shareholding(%)

2,542,000
64,70050,00040,30040,00025,30024,40024,00020,00020,000

65.74
1.67
1.29
1.04
1.03
0.65
0.63
0.62
0.52
0.52

(Note) The ratio of shareholding is calculated after deducting the number of treasury shares (33,345).

5. Other important matters concerning shares
There are no matters particularly worthy of note.

- 17 -

III. Company Officers
1. Directors
Position

Name

President (Representative
Director)
Vice President
Director

Ikunobu Sonoda

Director

Hidekazu Tegawa

Director (Full-time Audit andSupervisory Committee Member)

Kazuya Ishikawa

Director (Audit and Supervisory
Committee Member)
Director (Audit and Supervisory
Committee Member)

Shigeki Taniguchi

Hiroshi Takahashi
Isamu Masuda

Taketo Morita

Responsibilities and important concurrent
positions
Chairman, Hangzhou Techno Quartz Inc.
Director, Hangzhou Techno Quartz Inc.
General Manager, Production Division
Director, Hangzhou Techno Quartz Inc.
Representative Director, AISINTEC Co., Ltd.
General Manager, Sales Division
Director, Hangzhou Techno Quartz Inc.
Director, AISINTEC Co., Ltd.
Director, Hangzhou Techno Quartz Inc.
Audit & Supervisory Board Member, AISINTEC
Co., Ltd.

Partner (attorney-at-law), Matsuda & Partners(Notes)
1. Mr. Kazuya Ishikawa, Mr. Shigeki Taniguchi, and Mr. Taketo Morita are Outside Directors.
2. Mr. Kazuya Ishikawa, Mr. Shigeki Taniguchi, and Mr. Taketo Morita are independent directors with no risk of conflictsof interest with general shareholders, whose designation is required by the Tokyo Stock Exchange.
3. The Company has appointed Mr. Kazuya Ishikawa as a full-time Audit and Supervisory Committee Member with theaim of further enhancing the effectiveness of audits and supervision and cooperation with the Audit Department, as
well as improving communication with Executive Officers. Mr. Kazuya Ishikawa has worked at financial institutions
for many years and has considerable knowledge of finance and accounting.
4. The Company has entered into limited liability agreements with the three Outside Directors to limit their liability to
the amount stipulated by laws and regulations.

2. Outline of directors and officers liability insurance agreement
The Company has entered into a directors and officers liability insurance agreement with an insurancecompany for the purposes of preventing hesitation in the execution of duties and securing excellent humanresources. The outline of the agreement is as follows:(i)

Scope of insured
Directors (excluding Audit and Supervisory Committee Members) and Directors who are Audit andSupervisory Committee Members of the Company.

(ii) Outline of the agreement
1) Substantive premium contribution by the insureds
Insurance premiums, including premiums for insurance riders, are paid by the Company, with nosubstantive contribution made by the insureds.
2) Insured events to be covered by the agreement
The agreement covers damages, including those pertaining to insurance riders, that may arise from theliability of insured Directors and others in relation to the execution of their duties or from receiving aclaim pertaining to the pursuit of said liability. However, the agreement contains certain disclaimers,such as in cases where the damages arose from acts committed by the insured while the insured wasaware of the violation of laws and regulations.
3. Amount of compensation of Directors(i)Matters related to the determination of compensation amounts of the Company’s Directors and themethods of calculation of such amounts
The Company’s Board of Directors, at its meeting held on February 19, 2021, resolved the following- 18 -

policy for the determination of compensation of individual Directors:
1)

Basic policy
Compensation of the Company’s Directors shall be determined in accordance with the following
basic policy.
• The compensation system shall place importance on sound and sustainable corporate
growth and the enhancement of shareholder value.

2)•

It shall be oriented toward a competitive compensation structure and a level that is capableof securing excellent human resources.

•

The objectivity and transparency of the compensation determination process and theappropriateness of compensation shall be ensured.

Policy concerning the determination of amounts of compensation (monetary compensation) for
individual Directors
The Company determines the amounts of compensation (monetary compensation) for individual
Directors in accordance with the following policy within the limit approved by resolution of theAnnual General Meeting of Shareholders:
Fixed compensation• Monthly fixed-amount compensation
Monthly fixed-amount compensation comprises a basic compensation portion and an allowance
portion, which is calculated according to individual Directors’ duties. Amounts are determinedwith reference to the salary of the highest-level employee, on the basis of the individual’s
position and responsibilities, taking into comprehensive account business results, themanagement environment, and other factors. The monthly fixed-amount compensation of parttime Audit and Supervisory Committee Members shall be the basic compensation portion only,
in light of the nature of their duties. In principle, the compensation amounts are determined after
the conclusion of the Annual General Meeting of Shareholders held in June every year for the
one-year period from July of that year until June of the following year.
Performance-linked compensation• Officers’ bonuses
Officers’ bonuses are paid with the main objective of raising awareness of the improvement ofbusiness results each fiscal year. They are determined on the basis of the Implementation Criteria
for Officers’ Bonuses in light of the level of payments of annual employee bonuses linked with
six-monthly business results (degree of achievement of net sales targets and operating margin).
In principle, they are paid after the announcement of the financial results for the fiscal year inquestion. Part-time Audit and Supervisory Committee Members are not eligible for officers’
bonuses.
Other monetary compensation• Retirement benefits
Retirement benefits, which are paid to retiring Directors (excluding Audit and Supervisory
Committee Members) and Directors who are Audit and Supervisory Committee Members, aredetermined according to the basic compensation portion of the retiring Director’s monthly fixedamount compensation, position (coefficient), length of service, and other factors, in accordancewith the Criteria for Granting of Retirement Benefits. They are determined on the assumption of
approval by resolution of the Annual General Meeting of Shareholders and are paid after the
Director’s retirement.

3)

Policy concerning the determination of the apportionment of the amounts of individual Directors’compensation
The Company has deferred the introduction of non-monetary compensation for the immediate future,and compensation shall be 100% monetary compensation. Performance-linked compensation’s
percentage of monetary compensation shall be within 30% approximately.

4)

Method of the determination of contents of individual Directors’ compensation
The contents of compensation of individual Directors are determined individually by the Board of- 19 -

Directors for Directors (excluding Audit and Supervisory Committee Members) and by the Audit
and Supervisory Committee for Directors who are Audit and Supervisory Committee Members,
upon consultation based on 2) Policy concerning the determination of amounts of compensation(monetary compensation) for individual Directors.
(ii) Reason for the Board of Directors’ judgment that the contents of individual Directors’ compensation for
the fiscal year under review are in line with the determination policy
In determining the compensation of the Company’s individual Directors, Representative Director andPresident prepared a draft proposal, and multifaceted consideration was conducted, including ofconformity with the determination policy, considering the opinions of the Audit and Supervisory
Committee, whose members are all Independent Outside Directors. For this reason, the Board of
Directors has also deemed that the compensation is in line with the determination policy.
(iii) Total amounts of compensation by officer category, total amounts by type of compensation and numberof eligible officers
Amount by compensation type
Officer Category
Directors (excluding the
Audit and Supervisory
Committee Members)(Of which, Outside Directors)
Directors (Audit andSupervisory Committee
Members)(Of which, Outside Directors)

Total(Millions of yen)

Total amount

Number of
eligible
Directors(Millions of yen)

Fixedcompensation

Performancelinked
compensation

110
(—)

85
(—)

15
(—)

9
(—)

5
(0)

18
(18)

16
(16)

1
(1)

0
(0)

3
(3)

129

102

16

10

8

Retirement
Benefits(Notes)
1. Performance-linked compensation is officer bonuses and is calculated and paid by multiplying a further coefficient by
the multiplier for the employee bonuses paid on the basis of the degree of achievement of net sales targets and operating
margin in the relevant fiscal year.
2. The above retirement benefits include the provision for officers’ retirement benefits recorded in the fiscal year underreview.
3. The maximum amount of compensation for Directors (excluding Audit and Supervisory Committee Members) andDirectors (Audit and Supervisory Committee Members) was resolved at the 44th Annual General Meeting of
Shareholders held on June 23, 2020 at up to 150 million yen per year for Directors (excluding Audit and Supervisory
Committee Members) and up to 30 million yen per year for Directors (Audit and Supervisory Committee Members).
There were five (5) Directors (excluding Audit and Supervisory Committee Members) and three (3) Directors (Audit
and Supervisory Committee Members) at the conclusion of that Annual General Meeting.

(iv) Reasons for selection of performance indicators as the basis for calculation of performance-linked
compensation
The degree of achievement of net sales targets and operating margin, which are the major managementtargets in the annual management plan, are employed as the basis for calculation of performance-linked
compensation as performance indicators that show plainly the outcomes of the relevant fiscal year.

- 20 -

4. Outside officers(i)Significant concurrent positions at other corporations and relationships of the Company with the relevant
other corporations
Director (Audit and Supervisory Committee Member), Mr. Taketo Morita, serves concurrently as aPartner of his concurrent employer, Matsuda & Partners. There are no significant transactions or otherrelationships between the Company and Matsuda & Partners.

(ii) Outline of major activities in the fiscal year under review
1)

Attendance at meetings of the Board of Directors and Audit and Supervisory Committee
Board of Directors(20 meetings held)

Director(Full-time Audit andSupervisory Committee
Member)Director(Audit and Supervisory
Committee Member)
Director(Audit and Supervisory
Committee Member)

2)

Audit and Supervisory
Committee(13 meetings held)
Number of
Attendance
meetings
rateattendedNumber ofmeetings
attended

Attendance
rate

KazuyaIshikawa

20

100%

13

100%

ShigekiTaniguchi

20

100%

13

100%

TaketoMorita

20

100%

13

100%

Comments made in meetings of the Board of Directors and Audit and Supervisory Committee
Audit and Supervisory Committee Members, Mr. Kazuya Ishikawa, Mr. Shigeki Taniguchi, and Mr.
Taketo Morita, leveraged their wealth of experience and high degree of professional expertise togive advice and make recommendations on corporate management to ensure the legality andappropriateness of decisions made by the Board of Directors from objective and neutral viewpoints.
In meetings of the Audit and Supervisory Committee, they report on and discuss the status of
implementation and results of audits and receive explanations and reports from Directors andOperating Officers on the execution of their duties.

(iii) Outline of duties conducted concerning their expected roles
In the fiscal year under review in particular, in light of the expansion of the business of the Group in
Japan and overseas, the Audit and Supervisory Committee Members conducted priority audits of thestatus of the establishment of company-wide risk management systems and the effectiveness of thosesystems from a group governance perspective and made recommendation in the Board of Directors.
They each fulfilled their roles as Outside Directors by providing appropriate supervision of and advice
to management from objective and neutral standpoints, Mr. Kazuya Ishikawa employing his wealth ofexperience and extensive insights gained at financial institutions and business corporations, Mr. Shigeki
Taniguchi his wealth of experience and extensive insights into corporate management and other areas
gained at a financial institution and its affiliated company, and Mr. Taketo Morita his high degree ofprofessional expertise and knowledge and wealth of experience as an attorney.

- 21 -

IV. Accounting Auditor
1. Accounting Auditor’s name
A&A Partners
2. Accounting Auditor’s compensation for the fiscal year under review(i) Amount of compensation for the fiscal year under review:(ii) Total amount of money or other economic benefits to be paid by theCompany and the Company’s subsidiaries:

Amount of compensation
21 million yen
21 million yen(Notes)
1. In the audit agreement concluded between the Company and the Accounting Auditor, no distinction is madebetween audit compensation for audits under the Companies Act and audits under the Financial Instruments andExchange Act, and such distinction cannot be substantively made. For this reason, the amount in (i) above includes
the amount of compensation for audits under the Financial Instruments and Exchange Act.
2. As a result of deliberation of the appropriateness of the number of audit hours and compensation amounts, andother matters contained in the audit plan for the fiscal year under review, after confirming comparisons between
the audit plan and the results of the previous fiscal year, and the changes in audit hours and compensation amounts,
and in light of the Practical Guidelines for Cooperation with Accounting Auditors published by the Japan Audit &Supervisory Board Members Association, the Audit and Supervisory Committee has given its consent to the
Accounting Auditor’s compensation in accordance with Article 399, Paragraph 1 of the Companies Act.
3. A subsidiary of the Company, Hangzhou Techno Quartz Inc., obtains audits from an accounting auditor other thanthe Accounting Auditor of the Company.

3. Details of non-audit services
There are no matters particularly worthy of note.
4. Overview of limited liability agreement
There are no matters particularly worthy of note.
5. Policy for determination of dismissal or non-reappointment of Accounting Auditor
If the Accounting Auditor is deemed to fall under any of the items of Article 340, Paragraph 1 of theCompanies Act, the Audit and Supervisory Committee shall dismiss the Accounting Auditor with theunanimous approval of all Audit and Supervisory Committee Members.
In addition, the Audit and Supervisory Committee comprehensively judges the performance and status of
the execution of the Accounting Auditor’s duties, such as the standard of quality control, expertise,independence, and other abilities of the Accounting Auditor, and if it finds that the appropriateness andreliability of the audit cannot be ensured, the Audit and Supervisory Committee shall decide the contents of a
proposal for dismissal or non-reappointment of the Accounting Auditor to be submitted to the General
Meeting of Shareholders.

- 22 -

V. Systems and Policies of the Company
The Company’s Board of Directors has resolved to establish systems for ensuring the appropriateness of businessactivities as stipulated in the Companies Act and the Ordinance for Enforcement of the Companies Act, andsystems for internal control over financial reports as stipulated in the Financial Instruments and Exchange Act,
as described below.
The Company will work continuously on the development and operation of these systems to further strengtheninternal control.
1. Systems for ensuring the appropriateness of business activities(i)

Systems to ensure that the execution of duties by Directors of the Company and its subsidiaries complies
with laws, regulations, and the Articles of Incorporation
1)

As advocated in the statement that “Management will not give in to personal greed” in the“fundamental spirit of establishment and management philosophy,” the Company requires its
directors and employees to thoroughly follow laws and regulations as a matter of course, and to act
with integrity in accordance with high ethical standards and values that are required of a member ofsociety.

2)

From the perspective of further strengthening corporate governance, the Board of Directors strives
to build effective internal control systems and to establish company-wide systems for compliancewith laws, regulations, and the Articles of Incorporation.
With the enhancement of audits by internal audit officers and audits by the Directors who are Audit
and Supervisory Committee Members (hereinafter, “Audit and Supervisory Committee Members”),
we ensure the effectiveness of internal control systems in our efforts toward the early detection andcorrection of issues.

3)(ii) Systems for the storage and management of information on the execution of duties by Directors
Information on the execution of duties by Directors is recorded and retained in written documents orelectromagnetic media (hereinafter, “documents and other data”) in accordance with laws, regulations,and internal regulations. Directors, Audit and Supervisory Committee Members, Accounting Auditors,
and others may, at any time, inspect and copy these documents and other data as necessary in accordancewith the Document Management Rules.
(iii) Regulations and other systems concerning the management of the risk of loss of the Company and its
subsidiaries
To respond to the risks of the Company as an enterprise, we decide the departments in charge of the
managing and responding to each risk and take appropriate actions. We also develop regulations asnecessary from the viewpoint of risk management.
With regard to risks pertaining to compliance, the environment, disasters, quality, information security,
export control, and other related matters, the relevant responsible departments establish rules andguidelines, conduct training, and produce and distribute manuals, and the General Affairs Department
conducts monitoring of cross-organizational risk status and company-wide responses. For risks that have
newly emerged, the Board of Directors will swiftly designate Director to assume responsibility for
responding to those risks.
(iv) Systems to ensure that the duties of Directors of the Company and its subsidiaries are executed efficiently
1)

The Company holds regular meetings of the Board of Directors once a month and extraordinary
meetings as necessary.

2)

Directors execute the duties that they are respectively in charge of appropriately and efficiently inaccordance with rules regarding their authorities and decision-making, such as the Regulations of
the Board of Directors.
The Board of Directors sets company-wide goals for all Directors and employees, builds
information systems using IT technology so that it can make decisions swiftly to achieve those goals,
and secures systems for efficient business execution.

3)(v) Systems to ensure that the execution of duties by Directors and other officers and employees of the- 23 -

Company and its subsidiaries complies with laws, regulations and the Articles of Incorporation
1)

In the “fundamental spirit of establishment and management philosophy,” the Company requires its
Directors and employees to thoroughly follow laws and regulations as a matter of course and to act
with integrity in accordance with high ethical standards and values that are required of a member ofsociety.

2)

From the perspective of further strengthening corporate governance, the Board of Directors strives
to build effective internal control systems and to establish company-wide systems for compliancewith laws, regulations, and the Articles of Incorporation.

3)

Compliance education and awareness are implemented so that officers and employees comply withrules pertaining to compliance systems, such as the corporate philosophy, code of conduct, and codeof corporate ethics, and engage in corporate activities while maintaining their own high ethicalstandards.

4)

With the enhancement of audits by internal audit officers and audits by the Audit and Supervisory
Committee Members, we ensure the effectiveness of internal control systems in our efforts toward
the early detection and correction of issues.

5)

We establish mechanisms to appropriately handle consultations and reports regarding violation oflaws and regulations, and other such acts and work toward the early detection and correction of
misconduct and other such acts, and protection of whistleblowers. We establish and operate a hotline
as a means by which employees may directly provide information on acts that are doubtful underlaws and regulations.

(vi) Systems to ensure the appropriateness of business activities in a group of enterprises comprising theCompany, its parent company, and its subsidiaries
1)

2)

3)

4)

The companies of the Group share a common Management Philosophy and require their Directors
and employees to thoroughly follow the Management Philosophy and act with integrity inaccordance with the same high ethical standards and values as the Company.
With regard to the management of subsidiaries, subsidiaries are appropriately administered inaccordance with the Rules for Administration of Affiliated Companies, while respecting theindependence of the individual subsidiaries. The Company appoints Directors responsible forsubsidiaries’ businesses and gives them the authority and responsibility to build legal compliancesystems and risk management systems. Head Office promotes, operates, and manages these systems.
To ensure that corporate activities are conducted legally, properly, and efficiently by the Group, theinternal audit department audits the status of business execution and internal control of allcompanies of the Group.
The Audit and Supervisory Committee Members work closely together with the Accounting
Auditor and internal control officers to conduct effective and proper monitoring and audits of theentire Group that accommodate consolidated management.

(vii) Matters related to employees appointed to assist in the duties of the Audit and Supervisory Committee
Members in the case where such assistance is requested by the Audit and Supervisory Committee
Members
Employees belonging to the internal audit department will assist in the duties of the Audit andSupervisory Committee Members under their direction when the Audit and Supervisory Committee
Members so request.
(viii) Matters related to the independence of the employees under the preceding item from the Directors;
1)

Internal audit officers who are assisting the Audit and Supervisory Committee Members shall be
under the direction and supervision of the Audit and Supervisory Committee Members and shallnot receive direction or supervision from other directors.

2)

Prior consent of the Audit and Supervisory Committee Members is required for changes and othermatters of personnel and organization of the internal audit officers.

(ix) System for the Directors and employees of the Company and its subsidiaries to report to the Audit andSupervisory Committee Members and other systems for reporting to the Audit and Supervisory- 24 -

Committee Members;
1)
2)

Directors and employees report on the status of the execution of their duties at important meetings,
such as Board of Directors meetings, as needed.
Directors and employees report to the Audit and Supervisory Committee without delay on decisions
that have a material impact on the business or organization of the Group, the status of
implementation of internal audits, and the status and details of reports made through the compliancehotline.

3)

Directors and employees report to the Audit and Supervisory Committee without delay when they
become aware of serious violations of laws and regulations or the Articles of Incorporation, facts of
misconduct in the execution of duties, or facts that have the potential to cause substantial damage
to the Company or individual subsidiaries.

4)

If the Audit and Supervisory Committee Members request reports on business or conduct
investigations of the status of business operations and assets, Directors and employees respondswiftly and precisely and cooperate with the Audit and Supervisory Committee Members.

5)

Methods of reporting (who may make reports, who will receive those reports, timing of reports,etc.) are determined by consultation between the Board of Directors and the Audit and Supervisory
Committee.

(x) Systems to ensure that persons who have made reports to the Audit and Supervisory Committee andAudit and Supervisory Committee Members are not treated unfavorably on the grounds of having madesuch reports.
Unfair treatment of Directors and employees of the Group who have made reports to the Audit andSupervisory Committee and Audit and Supervisory Committee Members for reason of having madesuch reports is strictly prohibited.
(xi) Matters related to policies for the procedures for advance payment or reimbursement of expenses
incurred in the execution of duties by the Audit and Supervisory Committee Members and for thetreatment of other expenses or obligations incurred in the execution of duties, and other systems to ensure
effective execution of audits by the Audit and Supervisory Committee Members
1)

Directors cooperate with audits conducted by the Audit and Supervisory Committee Members andprovide a budget for expenses to be incurred in audits (limited to those expenses related to the
execution of duties by the Audit and Supervisory Committee) to ensure the effectiveness of audits.
In addition, when requests for advance payments or other similar arrangements are made, theresponsible department deals with said expenses or obligations promptly after deliberation.

2)

The Representative Director holds meetings with the Audit and Supervisory Committee on a regularbasis to exchange opinions and communicate with them regarding the management of the Company.
In addition, the Representative Director ensures the attendance of the Audit and Supervisory
Committee Members at meetings that are important for ensuring the appropriateness of business
operations, such as management planning meetings.
The Audit and Supervisory Committee receives briefings on annual plans for internal audits
conducted by the Audit Department in advance and may request amendment of such plans. In
addition, the Audit and Supervisory Committee receives reports on the status of implementation ofinternal audits as appropriate and may, when it deems it necessary, request the implementation of
additional audits, the formulation of business improvement measures, etc.
In order to form their own opinions, the Audit and Supervisory Committee Members may, at theirown discretion, work with external experts such as attorneys, certified public accountants,
consultants, and other advisors when they find it necessary for the implementation of audits.

3)4)(xii) Development of systems for the elimination of anti-social forces
Directors and employees of the Group thoroughly follow the GL Sciences Group Corporate Activity
Policy and the Compliance Rules, resolutely confront anti-social forces and groups that pose a threat tothe order and safety of civic society, and cut off any connections with such forces and groups.

- 25 -

2. Overview of the operating status of systems for ensuring the appropriateness of business activities
The Company has developed systems for ensuring the appropriateness of business activities as describedabove, and, during the fiscal year under review (April 1, 2023 to March 31, 2024), the Company implemented
specific initiatives as follows in accordance with the basic policy:(i)With regard to the status of holding of major meetings, the Board of Directors held 20 meetings (12regular and 8 extraordinary meetings), which all Outside Directors who have no special interests with
the Company were required to attend in order to ensure the legality of the execution of duties by Directors
and to enhance the appropriateness and effectiveness of the execution of duties by Directors. Added tothis, 13 Audit and Supervisory Committee meetings (12 regular and 1 extraordinary), one management
planning meeting, 12 management meetings, and two Compliance Committee meetings, including one
workshop, were held.

(ii) Audit and Supervisory Committee Members have conducted audits in accordance with the audit plan
determined by the Audit and Supervisory Committee, and held discussion meetings with Representative
Director and President, other Directors, the internal audit department, and the Accounting Auditor, in its
efforts toward close coordination, including exchanges of opinions.
(iii) The internal audit department has conducted audits of the execution of operations by each division of theCompany and the operations of subsidiaries, internal control audits, and follow-up audits in accordancewith the internal audit plan.
3. Systems regarding internal control pertaining to financial reports under the Financial Instruments andExchange Act
The Group establishes systems to ensure the propriety of documents and other information concerning
financial accounting and operates those systems appropriately.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Statements in the above report are made according to the following.
1. Monetary amounts stated are rounded down to the nearest indicated unit, and values per share and other figures
are rounded off to the nearest whole number.
2. Average ages, average length of service, and percentages are rounded down to the first decimal place.

- 26 -

Consolidated Financial Statements
Consolidated Balance Sheet(As of March 31, 2024)(Thousands of yen)
AssetsDescription
Current assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetaryclaims - operating
Accounts receivable - trade

Liabilities
AmountDescription

Amount16,078,500

Current liabilities
Electronically recorded obligations operating
Accounts payable - trade

4,185,776

3,994,587
237

330,761
319,984

1,543,424

Short-term borrowings

2,037,349

3,944,653

Lease liabilities

50,893Finished goods

608,911

Income taxes payable

613,072

Work in process

2,042,156

Provision for bonuses

294,651

Raw materials and supplies

3,479,495

Other539,063

Other

467,634

Non-current liabilities

Allowance for doubtful accounts(2,598)Long-term borrowings

2,413,676
1,877,637

Non-current assets

9,675,077

Lease liabilities

114,206

Property, plant and equipment

9,098,224

Deferred tax liabilities

143,085

Buildings and structures
Machinery, equipment andvehiclesLand

3,706,031

Retirement benefit liability
Provision for retirement benefits for
directors (and other officers)
Asset retirement obligations

208,425

Leased assets
Construction in progress
Other

136,625
174,951
224,212Other

25,000Intangible assets

277,148

Investments and other assets

299,704

Shareholders’ equity

17,721,329

Investment securities

43,463

Share capital

829,350

Long-term loans receivable

11,323

Capital surplus

1,015,260

Deferred tax assets

67,261Retained earnings

15,917,933

Other

177,657

Total assets

3,505,094
1,351,309

Total liabilities

44,400922

6,599,452
Net assets

Treasury shares
Accumulated other comprehensive
incomeValuation difference on availablefor-sale securities
Foreign currency translation
adjustment
Total net assets

19,154,124

Total liabilities and net assets

25,753,577

25,753,577- 27 -(41,215)
1,432,795
3,453
1,429,341

Consolidated Statement of Income(April 1, 2023 - March 31, 2024)(Thousands of yen)
Description

AmountNet sales

17,065,522

Cost of sales

11,580,358

Gross profit

5,485,164

Selling, general and administrative expenses

1,869,465

Operating profit

3,615,698

Non-operating income
Interest income

582

Dividend income

1,070

Subsidy income

116,487

Foreign exchange gains

105,341

Other

26,428249,910Non-operating expenses
Interest expenses

24,603

Other

3,000

Ordinary profit

27,604
3,838,004

Extraordinary income
Gain on sale of non-current assets

3,041

Gain on acceptance of national subsidies

153,230

156,271

Extraordinary losses
Loss on retirement of non-current assets

19,523

Loss on valuation of investment securities

5,601

Profit before income taxes

25,125
3,969,150

Income taxes-current

1,238,950

Income taxes-deferred

727

1,239,677

Profit2,729,472

Profit attributable to owners of parent

2,729,472- 28 -

Consolidated Statement of Changes in Equity(April 1, 2023–March 31, 2024)(Thousands of yen)
Shareholders' equity
Share capital
Balance at beginning of
periodTreasurysharesTotal shareholders'equityCapital surplus

Retained earnings

829,350

1,015,260

13,691,133(40,931)

15,494,812––(502,672)–(502,672)––

2,729,472–

2,729,472

–

–

–

(283)

(283)

–

–

–

–

–

–

–

2,226,800(283)

2,226,516

829,350

1,015,260

15,917,933(41,215)

17,721,329

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other thanshareholders' equity
Total changes during
periodBalance at end of period

Accumulated other comprehensive
incomeValuation difference on
Foreign currency
Total accumulated otheravailable-for-saletranslation adjustment comprehensive income
securities
Balance at beginning of
periodTotal net assets(7,331)

1,102,793

1,095,462

16,590,275

–

–

–

(502,672)–––

2,729,472

–

–

–

(283)

10,785326,547

337,332

337,332

10,785326,547

337,332

2,563,849

3,453

1,429,341

1,432,795

19,154,124

Changes during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other than shareholders'equityTotal changes during
periodBalance at end of period- 29 -

Notes to Consolidated Financial Statements(Notes on Significant Accounting Policies for Preparation of Consolidated Financial Statements)
1. Scope of consolidation
Number of consolidated subsidiaries
3 companies
Names of consolidated subsidiaries
Hangzhou Techno Quartz Inc.
AISINTEC Co., Ltd.
GL TECHNO America, Inc.
2. Fiscal years of consolidated subsidiaries
Closing date of consolidated subsidiaries
Hangzhou Techno Quartz Inc.
December 31
AISINTEC Co., Ltd.
March 31GL TECHNO America, Inc.
March 31
For Hangzhou Techno Quartz Inc., which is our consolidated subsidiary, the financial statements as of theabove closing date are used in preparing the consolidated financial statements, with necessary adjustments
being made for consolidation purposes with regard to important transactions between the said date and theconsolidated closing date.
3. Accounting policies(1) Valuation standards and methods for significant assets(i) Securities
Available-for-sale securities
Securities other thanStated at fair value (with the entire amount of valuation differences
shares, etc. that do notrecorded directly into net assets, and the cost of securities sold calculated
have a market priceusing the moving-average method)
Shares, etc. that do notStated at cost using the moving-average method
have a market price(ii) Inventories
Inventories held for ordinary sales
Valuation standards are based on the cost method (by writing down the book value based on a decline inprofitability).
a. Finished goods
Specific identification method (however, moving average method for raw
and work inmaterials in process)processb. Raw materials andMoving average method
supplies(2) Depreciation and amortization of significant assets(i) Property, plant and equipment (excluding leased assets)
The Company and its domestic consolidated subsidiaries adopt the declining balance method andoverseas consolidated subsidiaries adopt the straight-line method based on the accounting standard of therelevant countries.
However, the Company and its domestic consolidated subsidiaries adopt the straight-line method forbuildings (excluding facilities attached to buildings) acquired on or after April 1, 1998 and facilities
attached to buildings and structures acquired on or after April 1, 2016.
(ii) Intangible assets (excluding leased assets)
Straight-line method
The service life is determined based on the same standard as the method provided for in the Corporation
Tax Act.
However, software (for internal use) is amortized by the straight-line method based on the internal usable
period (five years).
(iii) Leased assets
Leased assets related to finance lease transactions with the right of ownership not transferred
Depreciated using the straight-line method over the lease term with zero residual value.
(3) Recognition of significant allowances and provisions(i) Allowance for
To provide for potential credit losses on receivables, allowance for doubtful
doubtful accounts
accounts is recorded at an estimated amount of uncollectible receivables- 30 -

(ii) Provision forbonuses(iii) Provision for
retirement benefits
for directors (andother officers)

calculated based on the historical rate of credit loss for general receivables
and determined in consideration of collectibility of individual receivables for
doubtful accounts and distressed receivables.
To provide for the payment of bonuses to employees, provision for bonuses
is recorded at an amount accrued for the fiscal year under review out of theestimated amount to be paid.
To provide for the payment of retirement benefits to officers (including
operating officers), the Company records the amount required to be paid at
the fiscal year-end based on the internal regulations.

(4) Recognition of significant revenue and expenses
The Company and its consolidated subsidiaries manufacture and sell quartz and silicon products,
mainly targeting semiconductor manufacturing equipment manufacturers.
The performance obligation of the Company and its consolidated subsidiaries is principally to provide
products to customers. This obligation is deemed to have been satisfied at the time the products aredelivered and control is transferred to the customer, in principle, and revenue is recognized at that timeof delivery. For domestic sales, if the period of time from when the product is shipped until control istransferred to the customer is the usual period, revenue is recognized at the time of shipping and forexport sales, revenue is recognized at the time the product arrives at a place agreed on with thecustomer.
Transaction price is calculated by deducting the amount of discount, etc. from consideration promised
under contracts with customers.
Considerations for these performance obligations are received within approximately one year aftersatisfaction of such obligations in accordance with the separately specified payment conditions and do
not include significant finance elements.
(5) Other significant matters for preparation of consolidated financial statements(i) Accounting treatment related to retirement benefits
To provide for the payment of retirement benefits to employees, the Company recognizes the amountbased on the estimated amount of retirement benefit obligations and pension assets as of the end of the
fiscal year under review.
In calculating retirement benefit liability and retirement benefit expenses, the simplified method isapplied in which an amount of benefits required to be paid for voluntary retirement at the fiscal year-end
is deemed as retirement benefit obligations.
(ii) Translation of foreign currency denominated assets and liabilities into Japanese currency
Foreign currency denominated monetary receivables and payables are translated into Japanese yen at the
spot exchange rate on the closing date and translation difference is treated as profit or loss.
Assets and liabilities of overseas consolidated subsidiaries are translated into Japanese yen at the spot
exchange rate on the closing date and revenue and expenses are translated into Japanese yen at the averageexchange rate during the period. The resulting translation difference is recorded in foreign currencytranslation adjustment under net assets.
(Notes on Accounting Estimates)
Valuation of inventories(1) Amount recorded in the fiscal year under review
Inventories (excluding supplies)
5,838,807 thousand yen
Loss on valuation of inventories
132,074 thousand yen(2) Information on significant accounting estimates related to identified items(i) Calculation method
As stated in the consolidated financial statements “Notes, (Notes on Significant Accounting Policies for
Preparation of Consolidated Financial Statements), 3. Accounting policies, (1) Valuation standards andmethods for significant assets, (ii) Inventories,” the amount of inventories on the balance sheet is
calculated based on the cost method (by writing down the book value based on a decline in profitability).
(ii) Major assumption
For inventories stored beyond a certain period of time, the book value is written down assuming that theirprofitability has decreased.
- 31 -

(iii) Impact on the consolidated financial statements for the following fiscal year
If the semiconductor market condition deteriorates worse than expected in future and the net sale value of
inventories significantly declines or the number of elapsed years increases, the amount to be recognizedin the consolidated financial statements for the following fiscal year may be significantly impacted.

(Consolidated Balance Sheet)(1) Accumulated depreciation of property, plant and equipment
10,202,613 thousand yen
Accumulated depreciation includes accumulated impairment loss of 53,422 thousand yen.
(2) Pledged assets
Buildings and structures
2,046,189 thousand yen
Land1,012,268 thousand yen
Total
3,058,458 thousand yen
Liabilities corresponding to pledged assets
Short-term borrowings
310,366 thousand yen
Long-term borrowings
403,009 thousand yen
Total
713,375 thousand yen(3) The amount of reduction entry of land acquired in previous fiscal years due to acceptance of national
subsidies, etc. is 300,000 thousand yen which is deducted in the amount recorded in the consolidatedbalance sheet.

(Consolidated Statement of Changes in Equity)
1. Class and total number of issued shares for the fiscal year under review
Common stock
3,900,000 shares
2. Dividends(1) Amount of dividends paid
Resolution

Class of shares

Annual General
Meeting of
Shareholders Common stock
held on June 20,
2023

Total dividends(thousands ofyen)

Source ofdividends

Dividend per
share
(yen)

Record date

Effective date

502,672

Retainedearnings

130

March 31, 2023

June 21, 2023

(2) Dividends for which the record date is in the fiscal year under review, and the effective date is in the following
fiscal year
Resolution

Class of shares

Annual General
Meeting of
Shareholders Common stock
held on June 21,
2024

Total dividends(thousands ofyen)

Source ofdividends

Dividend per
share
(yen)

Record date

Effective date

502,665

Retainedearnings

130

March 31, 2024

June 24, 2024

- 32 -

(Financial Instruments)
1. Status of financial instruments(1) Policies on financial instruments
The Group manages funds mainly by short-term deposits and basically raises funds through borrowings
from financial institutions.
(2) Contents and risk of financial instruments and risk management system
Notes receivable – trade, electronically recorded monetary claims – operating, and accounts receivable –trade, all of which are trade receivables, are exposed to customers’ credit risk. Regarding such risk, theGroup sets up lines of credit in accordance with the Group’s internal regulations and regularly controls
due dates and balances. In addition, we set up a system in which lines of credit are reviewed asnecessary in accordance with the status of transactions with customers.
Investment securities are mainly shares and exposed to fluctuation risk of market price. However, theseshares are those of companies with which we have business relationships and we regularly monitor themarket value and conduct the appropriate management and valuation based on the Securities Management
Regulations.
Electronically recorded obligations – operating and accounts payable – trade, both of which are trade
payables have a due date within one year.
Short-term borrowings are mainly for raising funds related to business transactions. Long-termborrowings are for raising funds related to business transactions and capital investments. Borrowings at a
variable rate are exposed to interest volatility risk and therefore, the Group basically raises long-termborrowings at a fixed interest rate.
(3) Supplementary explanation on fair value of financial instruments
Not applicable
2. Fair value of financial instruments
The book value on the consolidated balance sheet and fair value of financial instruments and their difference
as of March 31, 2024 (closing date of the fiscal year under review) are as follows.
(Thousands of yen)Book value
Fair value
DifferenceLong-term borrowings
Total liabilities

1,877,637
1,877,637

1,845,608
1,845,608(32,028)(32,028)(Notes)1. “Cash and deposits,” “notes receivable - trade,” “electronically recorded monetary claims - operating,” “accounts
receivable - trade,” “electronically recorded obligations - operating,” “accounts payable – trade,” and “short-termborrowings” are omitted, because they comprise cash and their fair value approximate their book value as they are settled
in a short period of time.
2. Scheduled redemption amount of monetary receivables after the consolidated balance sheet date(Thousands of yen)
Due after 5
Due within 1 Due after 1 year
Due after 10
years throughyear
through 5 years
years
10 years
237

−

−

−

Electronically recorded monetary claims operating

1,543,424−−−

Accounts receivable - trade

3,944,653

−

−

−

Total

5,488,314−−−

Notes receivable - trade

3. Scheduled repayment amount of short-term borrowings and long-term borrowings after the consolidated balance sheet
date(Thousands of yen)
Category

Due within 1
year

Due after 1 year Due after 2 years Due after 3 years Due after 4 years
through 2 years through 3 years through 4 years through 5 years

Short-term borrowings

2,037,349

−

−

−

−

Long-term borrowings−

437,679

391,984

323,712

323,7122,037,349

437,679

391,984

323,712

323,712

Total- 33 -

3. Fair value information by appropriate classification within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to theobservability and materiality of inputs used to measure fair value.
Level 1:
Fair value calculated using (unadjusted) quoted prices in active markets for
identical assets or liabilities
Level 2:
Fair value calculated using inputs that are directly or indirectly observable, otherthan the Level 1 inputs
Level 3:
Fair value calculated using important inputs that cannot be observed
If multiple inputs are used that are significant to the fair value measurement, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.
Financial assets and financial liabilities with the carrying amount not recorded using the fair value(Thousands of yen)
Fair value
Level 1

Level 2

Level 3Total

Long-term borrowings−

1,845,608−

1,845,608

Total liabilities−

1,845,608−

1,845,608

Note: A description of the valuation techniques and inputs used in the fair value measurements
Long-term borrowings
The fair value of long-term borrowings is measured using the discounted cash flow method based on the sum of principal
and interest, remaining maturities and an interest rate reflecting credit risk, and is classified as Level 2.

(Revenue Recognition)
1. Disaggregation of revenue from contracts with customers
Disaggregation of revenue by business segment is as follows:(Thousands of yen)

Fiscal year under review(From April 1, 2023
To March 31, 2024)
Semiconductor Business
Quartz products
Silicon products
Others
Revenue from contracts with customers

14,477,516
2,414,689
173,315
17,065,522−

Other revenue
Net sales to external customers

17,065,522

2. Basic information for understanding revenue from contracts with customers
Basic information for understanding revenue is presented in “(Notes on Significant Accounting Policies for
Preparation of Consolidated Financial Statements), 3. Accounting policies, (4) Recognition of significant
revenue and expenses.”
3. Reconciliation of satisfaction of performance obligations within contracts with customers and cash
flows arising from such contracts, and the amount and timing of revenue arising from customers
existing at the end of the fiscal year under review expected to be recognized in and after the following
fiscal year
(1) Contract asset and contract liability balances
The receivables arising from contracts with the Group’s customers are notes receivable – trade, electronicallyrecorded monetary claims – operating, and accounts receivable – trade.
The Group has no balance of contract assets at the end of the fiscal year under review.
The balance of contract liabilities is immaterial at the end of the fiscal year under review. Contract liabilities
are included in other under current liabilities of the Consolidated Balance Sheet.
(2) Transaction price allocated to the remaining performance obligations
The transaction price allocated to the remaining performance obligations is omitted by applying the practical
expedient as the Company and its consolidated subsidiaries have no significant contract with an original
expected duration exceeding one year.
- 34 -

(Per Share Information)
1. Net assets per share
2. Profit per share

4,953.67 yen
705.89 yen(Significant Subsequent Events)(Management integration of the Company and GL Sciences Inc. by way of share transfer and transition to aholding company structure)
The Company and GL Sciences Inc. (“GL Sciences”) have, at the Board of Directors meeting held on May 10,2024, resolved to establish GLTECHNO HOLDINGS, INC. (the “Joint Holding Company”) as a wholly owningparent company of both companies and integrate their management (the “Management Integration”) by way of a
joint share transfer (the “Share Transfer”) as of October 1, 2024 (the “Effective Date”) (scheduled). Bothcompanies executed a management integration agreement and jointly prepared a share transfer plan regarding theShare Transfer.
1. Purpose of Management Integration
The two companies, namely: (a) GL Sciences, which has a diverse range of customers, is not easily affected bymacro trends, and has a solid business foundation of stably supporting the group’s profits; and (b) the Company,
which is expected to achieve further market growth and has established its status in a niche field, will act as thecore of the corporate group, and each of these two companies, as well as the group as a whole, will strive to makefurther leaps forward and achieve increased corporate value. More specifically, the Management Integration is
expected to enable the accomplishment of the following measures and effects:(1) Capturing growth opportunities through strengthened group strategy functions and optimized management
resource allocation
In the ever-changing environment surrounding GL Sciences and the Company, optimizing the allocation ofmanagement resources across the group is considered to be of the utmost importance in achieving a sustainable
increase in corporate value continuing into the future. In view of the fact that GL Sciences and the Company
have until now been making decisions on an independent footing, and the structure of the group, which has
two mutually different companies as its members, namely, (a) GL Sciences, which has a stable businessfoundation, and (b) the Company, which is affected by the economic cycle known as the “silicon cycle,” room
for improvement is recognized in terms of investment and optimal resource allocation to be made for thegrowth of the group as a whole. The Management Integration is therefore considered to enable the allocationof management resources in a manner that can achieve the growth of the group as a whole in line with thebusiness characteristics of GL Sciences and the Company, as well as active investments in the fields of growth.
(2) Improving management efficiency through the consolidation of administrative functions
Through the Management Integration, GL Sciences and the Company will have parallel positions under theumbrella of the Joint Holding Company, and it is considered that this will allow for personnel exchanges, theengagement of various human resources, and career development opportunities, which could not be realized
to date, as well as the further permeation of management philosophy, which the companies consider will
enable the assignment of the right person to the right position across the group, and the achievement of
improved operational efficiency and quality of the two companies as a result of their common functions being
consolidated in the Joint Holding Company.
(3) Maximizing value provided to stakeholders and expediting decision-making processes
Under the Joint Holding Company that has group strategy functions, GL Sciences and the Company will strive
to increase the value to be provided to their stakeholders, including their shareholders, business partners andemployees, by demonstrating synergies, and working toward the growth of the group as a whole.
The issue of parent-subsidiary listing, which may create a structural conflict of interest, has been discussed asa corporate governance issue. With regard to the two companies mutually utilizing management resources,
there is a recognized risk of certain restrictions or limitations arising in the future in their promoting suchmutual utilization in a prompt and smooth manner, due to concerns about possible conflicts of interest between
GL Sciences and the Company’s minority shareholders, as well as from the perspective of the Company
securing independence. However, as a result of the Share Transfer, by causing the Joint Holding Company tohave the function of developing group-wide management strategies and thereby separating the developmentof management strategies from the execution thereof and delegating decision-making authority to theCompany and GL Sciences concerning their business, as well as aligning interests within and outside thegroup, GL Sciences and the Company consider that they can build a structure that allows them to pursue
synergy effects through prompt decision-making and group-wide sharing of management resources.
- 35 -

2. Summary of transit to a holding company structure(1) Schedule for the Share Transfer
Board of directors meeting to approve the memorandum of
understanding on the Management Integration (bothcompanies)
Execution of the memorandum of understanding on theManagement Integration (both companies)
Record date for annual meeting of shareholders (bothcompanies)
Resolution of board of directors meeting to approve theManagement Integration Agreement and the Share Transfer
Plan (both companies)
Execution of the Management Integration Agreement andpreparation of the Share Transfer Plan (both companies)
Annual meeting of shareholders to approve the Share Transfer
Plan (the Company)
Annual meeting of shareholders to approve the Share Transfer
Plan (GL Sciences)
Final trading date on the Tokyo Stock Exchange (bothcompanies)
Date of delisting from the Tokyo Stock Exchange (bothcompanies)
Scheduled integration date (registration date of establishmentof the Joint Holding Company)
Joint Holding Company listing date

Friday, February 9, 2024
Friday, February 9, 2024
Sunday, March 31, 2024
Friday, May 10, 2024
Friday, May 10, 2024
Friday, June 21, 2024 (Scheduled)
Tuesday, June 25, 2024 (Scheduled)Thursday, September 26, 2024
(Scheduled)
Friday, September 27, 2024
(Scheduled)
Tuesday, October 1, 2024
(Scheduled)
Tuesday, October 1, 2024
(Scheduled)(Note) Shown above is the current schedule, and these dates are subject to change through mutual consultation between GL
Sciences and the Company whenever necessary due to the need for such change in carrying out the procedures for theManagement Integration and the Share Transfer, or for any other reason.

(2) Method of the Share Transfer
A joint share transfer will be conducted, pursuant to which the Company and GL Sciences will both become
the “wholly-owned subsidiaries in the share transfer,” and the Joint Holding Company to be newly establishedwill become the “wholly-owning parent company in the share transfer.”(3) Details of allotment pertaining to the Share Transfer

Share transfer ratios(Note 1)

(Note 2)

(Note 3)

GL Sciences

The Company

1.00

2.10

Detailed matters on the allotment of shares pertaining to the Share Transfer
It is planned that one (1) share of the Joint Holding Company’s common stock will be delivered for each share of GL
Sciences’ common stock and that two point one zero (2.10) shares of the Joint Holding Company’s common stock will
be delivered for each share of the Company, respectively. If, as a result of the Share Transfer, there is any fraction ofless than one (1) share in the respective numbers of shares of the Joint Holding Company’s common stock that are
required to be delivered to the shareholders of GL Sciences or the Company, the amount corresponding to such
fraction of less than one (1) share will be paid to the relevant shareholders in accordance with the provisions of Article
234 of the Companies Act and other related laws and regulations; provided, however, that the share transfer ratios
specified above are subject to change through mutual consultation between the two companies, if there is any materialchange in any of the conditions forming the basis for the calculation thereof.
Number of new shares to be delivered by the Joint Holding Company (planned):
18,379,715 shares of its common stock
The number of shares specified above is calculated based on GL Sciences’ total number of issued shares of 11,190,000
shares (as of March 31, 2024), and the Company’s total number of issued shares of 3,900,000 shares (as of March 31,2024). As the Company and GL Sciences are respectively planning that, before the Share Transfer takes effect, they
will cancel their treasury shares which are currently held or may hereafter be newly acquired by them, within the rangeof such treasury shares that can be cancelled in practice, it is not planned that the shares of the Joint Holding Company
will be allotted for the treasury shares respectively held by the Company and GL Sciences as of March 31, 2024 (GLSciences: 930,260 shares; the Company: 33,345 shares); provided, however, that, as the numbers of treasury shares tobe actually cancelled before the effective date of the Share Transfer have not yet been determined, the aforementioned
number of new shares to be issued by the Joint Holding Company is subject to change.
Handling, etc. of shares less than one unit

- 36 -

The number of shares constituting one unit of shares of the Joint Holding Company shall be 100 shares.
The shareholders of GL Sciences and the Company to whom the shares of the Joint Holding Company are allotted inany number less than one unit (i.e., 100 shares) as a result of the Share Transfer will be unable to sell their allottedshares on the Tokyo Stock Exchange or any other financial instruments exchange. However, it is possible forshareholders who may come to hold such shares less than one unit to demand the Joint Holding Company to purchasesuch shares less than one unit held by them, in accordance with Article 192, Paragraph 1 of the Companies Act. In
addition, since the Joint Holding Company plans to include a provision in its Articles of Incorporation to the effect thatthe shareholders of the Joint Holding Company who hold shares less than one unit are entitled to demand the Joint
Holding Company to sell them such number of the Joint Holding Company’s shares which, together with the numberof shares less than one unit held by them will constitute one unit, it is also possible for such shareholders to demand the
Joint Holding Company to sell them such number of the Joint Holding Company’s shares which, together with thenumber of shares less than one unit held by them, will constitute one unit, in accordance with Article 194, Paragraph 1of the Companies Act and such provision of the Articles of Incorporation.

(4) Handling of share options and bonds with share options incidental to the Share Transfer
Neither the Company nor GL Sciences has issued any share options or bonds with share options.
(5) Handling of expected delisting and the Joint Holding Company’s listing application
The Company and GL Sciences are planning to conduct a technical listing of the shares of the newly
established Joint Holding Company on the Tokyo Stock Exchange. The listing date is scheduled for October
1, 2024. Furthermore, as the Company and GL Sciences will become wholly-owned subsidiaries of the Joint
Holding Company upon the Share Transfer, their shares are respectively planned to be delisted from the Tokyo
Stock Exchange as of September 27, 2024, prior to the listing of the Joint Holding Company. The actual
delisting date will be determined pursuant to the relevant regulations of the Tokyo Stock Exchange.
3. Outline of accounting treatment to be performed
The accounting treatment pertaining to the Share Transfer is expected to fall under a “transaction under common
control, etc.,” in accounting standards in connection with business combinations, although the details of theaccounting treatment remain undecided as of now.
Note: Figures presented are rounded down to the nearest thousand yen.

- 37 -

Non-consolidated Financial Statements
Non-Consolidated Balance Sheet(As of March 31, 2024)(Thousands of yen)
AssetsLiabilities

Description
Current assets

Amount12,373,139

Cash and deposits

2,445,751

Notes receivable - trade
Electronically recorded monetaryclaims - operating

237
1,504,857

Accounts receivable - trade

3,351,243

Finished goods
Work in process
Raw materials and supplies
Advance payments to suppliers
Accounts receivable - other
Short-term loans receivable fromsubsidiaries and associates
Other
Non-current assets
Property, plant and equipment
Buildings
Structures

628,4131,501,072
1,933,027
360,285
233,559

Machinery and equipment

1,140,798

VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Intangible assets
SoftwareInvestments and other assets
Investment securities
Shares of subsidiaries andassociates
Investments in capital ofsubsidiaries and associates
Long-term loans receivable from
employees
Long-term loans receivable fromsubsidiaries and associates
Insurance funds

3,642
118,348
1,287,902
108,215
118,166
19,862
19,862
4,252,321
43,463

Deferred tax assets
Other
Total assets

Description
Current liabilities
Electronically recorded obligations operating
Accounts payable - trade
Short-term borrowings
Current portion of long-termborrowings
Lease liabilities
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received

400,000

Provision for bonuses

14,6908,583,272
4,311,089
1,505,277
28,737

Other
Non-current liabilities
Long-term borrowings
Lease liabilities
Provision for retirement benefits
Provision for retirement benefits for
directors (and other officers)
Asset retirement obligations
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Retained earnings
Legal retained earnings

Amount3,975,392
330,761
549,8121,550,000
426,801
34,686
106,727
228,218
460,155
26,840259,2512,138
1,804,846
1,468,649
82,449208,425
44,400922
5,780,238
15,172,719
829,350
1,015,260
1,015,260
13,369,323
161,637

510,400

Other retained earnings

13,207,685

2,609,262

General reserve

3,750,000

Retained earnings brought
forward9,457,685

11,323680,282

Treasury shares

145,202231,891
20,496
20,956,412

Valuation and translation adjustments
Valuation difference on availablefor-sale securities
Total net assets
Total liabilities and net assets- 38 -(41,215)
3,453
3,453
15,176,173
20,956,412

Non-Consolidated Statement of Income(April 1, 2023 - March 31, 2024)(Thousands of yen)
Description

AmountNet sales

14,808,945

Cost of sales

10,770,603

Gross profit

4,038,341

Selling, general and administrative expenses

1,369,247

Operating profit

2,669,094

Non-operating income
Interest income

4,909

Dividend income

310,252

Royalty income

133,120

Foreign exchange gains

99,931

Other

20,577568,791

Non-operating expenses
Interest expenses

19,620

Other

1,559

Ordinary profit

21,1803,216,706

Extraordinary income
Gain on sale of non-current assets

118

118

Extraordinary losses
Loss on retirement of non-current assets

8,670

Loss on valuation of investment securities

5,601

Profit before income taxes

14,272
3,202,551

Income taxes-current

922,105

Income taxes-deferred(35,168)

Profit886,937
2,315,614- 39 -

Non-Consolidated Statement of Changes in Equity(April 1, 2023–March 31, 2024)

Share capital
Balance at beginning of period
Changes during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

829,350(Thousands of yen)
Shareholders' equity
Capital surplus
Legal capital surplus
Total capital surplus
1,015,260
1,015,260

–
–
–

–
–
–

–
–
–

–

–

–

–
829,350–
1,015,260–
1,015,260

Shareholders' equity
Retained earnings
Other retained earnings
Retained earnings brought
General reserve
forward

Legal retained earnings
Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

161,637

3,750,000

7,644,744

–
–
–

–
–
–

(502,672)
2,315,614
–

–

–

–

–
161,637–
3,750,000

1,812,941
9,457,685

Shareholders' equity
Total retained earnings
Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

Treasury shares

Total shareholders' equity

11,556,381(40,931)

13,360,061(502,672)
2,315,614
–

–
–
(283)

(502,672)
2,315,614
(283)

–

–

–

1,812,941
13,369,323(283)(41,215)

1,812,658
15,172,719

Valuation and translation adjustments
Valuation difference on Total valuation and translation
available-for-sale securities
adjustments
Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders' equity
Total changes during period
Balance at end of period

Total net assets(7,331)(7,331)

13,352,729

–
–
–

–
–
–

(502,672)
2,315,614(283)

10,785

10,785

10,785

10,785
3,453

10,785
3,453

1,823,443
15,176,173- 40 -

Notes to Non-consolidated Financial Statements(Notes on Significant Accounting Policies)
1. Valuation standards and methods for assets(1) Securities
Available-for-sale securities
Securities other thanStated at fair value (with the entire amount of valuation differences
shares, etc. that do notrecorded directly into net assets, and the cost of securities sold calculated
have a market priceusing the moving-average method)
Shares, etc. that do notStated at cost using the moving-average method
have a market price(2) Inventories
Inventories held for ordinary sales
Valuation standards are based on the cost method (by writing down the book value based on a decline inprofitability).
(i) Finished goods
Specific identification method (however, moving average method for raw
and work inmaterials in process)process(ii) Raw materials
Moving average method
and supplies
2. Depreciation and amortization of non-current assets(1) Property, plant and equipment (excluding leased assets)
Declining balance method
The service life and residual value are determined based on the same standard as the method provided forin the Corporation Tax Act.
However, the Company adopts the straight-line method for buildings (excluding facilities attached tobuildings) acquired on or after April 1, 1998 and facilities attached to buildings and structures acquiredon or after April 1, 2016.
(2) Intangible assets (excluding leased assets)
Straight-line method
The service life is determined based on the same standard as the method provided for in the Corporation
Tax Act.
However, software (for internal use) is amortized by the straight-line method based on the internal usable
period (five years).
(3) Leased assets
Leased assets related to finance lease transactions with the right of ownership not transferred
Depreciated using the straight-line method over the lease term with zero residual value.
3. Recognition of allowances and provisions(1) Allowance for
To provide for potential credit losses on receivables, allowance for doubtful
doubtful accounts
accounts is recorded at an estimated amount of uncollectible receivables
calculated based on the historical rate of credit loss for general receivables
and determined in consideration of collectibility of individual receivables
for doubtful accounts and distressed receivables.
(2) Provision for
To provide for the payment of bonuses to employees, provision for bonuses
bonusesis recorded at an amount accrued for the fiscal year under review out of theestimated amount to be paid.
(3) Provision for
To provide for retirement benefits for employees, provision for retirement
retirement benefits
benefits is recorded at an amount of retirement benefit obligations andpension assets as of the end of the fiscal year under review(4) Provision for
To provide for the payment of retirement benefits to officers (including
retirement benefits
operating officers), the Company records the amount required to be paid atfor directors (andthe fiscal year-end based on the internal regulations.
other officers)
4. Recognition of significant revenue and expenses
The Company manufactures and sells quartz and silicon products, mainly targeting semiconductor
manufacturing equipment manufacturers.
- 41 -

The performance obligation of the Company is principally to provide products to customers. Thisobligation is deemed to have been satisfied at the time the products are delivered and control istransferred to the customer, in principle, and revenue is recognized at that time of delivery. For domestic
sales, if the period of time from when the product is shipped until control is transferred to the customer
is the usual period, revenue is recognized at the time of shipping and for export sales, revenue isrecognized at the time the product arrives at a place agreed on with the customer.
Transaction price is calculated by deducting the amount of discount, etc. from consideration promised
under contracts with customers.
Considerations for these performance obligations are received within approximately one year aftersatisfaction of such obligations in accordance with the separately specified payment conditions and do
not include significant finance elements.
5. Other significant matters for preparation of non-consolidated financial statements
Translation of foreign currency denominated assets and liabilities into Japanese currency
Foreign currency denominated monetary receivables and payables are translated into Japanese yen at the
spot exchange rate on the closing date and translation difference is treated as profit or loss.
(Notes on Accounting Estimates)
Valuation of inventories(1) Amount recorded in the fiscal year under review
Inventories (excluding supplies)
3,980,711 thousand yen
Loss on valuation of inventories
81,906 thousand yen(2) Information on significant accounting estimates related to identified items
This note is omitted as the same details are stated in the consolidated financial statements “Notes toConsolidated Financial Statements, (Notes on Accounting Estimates), (2) Information on significant
accounting estimates related to identified items.”(Non-Consolidated Balance Sheet)
1. Monetary receivables from and payables to subsidiaries and associates
Short-term monetary receivables
597,563 thousand yen
Long-term monetary receivables
680,282 thousand yen
Short-term monetary payables
366,967 thousand yen
2. Accumulated depreciation of property, plant and5,942,776 thousand yen
equipment
Accumulated depreciation includes accumulated impairment loss of 53,422 thousand yen.
3. Pledged assets
Buildings
1,466,203 thousand yen
Structures
27,070 thousand yen
Land948,862 thousand yen
Total
2,442,136 thousand yen
Liabilities corresponding to pledged assets
Short-term borrowings
Current portion of long-term borrowings
Total

250,000 thousand yen
8,370 thousand yen
258,370 thousand yen- 42 -

4. The amount of reduction entry of land acquired in previous fiscal years due to acceptance of national
subsidies, etc. is 300,000 thousand yen which is deducted in the amount recorded in the non-consolidatedbalance sheet.
(Statement of Income)Transaction volume with subsidiaries and associates
Net sales
Purchase of goods
Outsourcing
processing expenses
Amount of supply ofmaterials for a fee
OthersTransaction
volume Interest income
fromnon-business Dividend income
transactions
Royalty income
Others75,878 thousand yen
3,965,350 thousand yen
472,776 thousand yen
1,720,883 thousand yen
3,917
4,631
309,182
133,120
5,568

thousand yen
thousand yen
thousand yen
thousand yen
thousand yen(Non-Consolidated Statement of Changes in Equity)
Class and number of treasury shares at the end of the fiscal year under review
Common stock
33,345 shares(Tax Effect Accounting)Breakdown of deferred tax assets and deferred tax liabilities by major cause
Deferred tax assets
Provision for bonuses
83,468 thousand yen
Loss on valuation of inventories
35,842 thousand yen
Enterprise tax payable
23,767 thousand yen
Impairment loss
32,483 thousand yen
Loss on valuation of investment
1,708 thousand yen
securities
Retirement benefit liability
63,569 thousand yen
Provision for retirement benefits for
13,542 thousand yen
directors (and other officers)
Other
24,129 thousand yen
Subtotal of deferred tax assets
278,511 thousand yen
Valuation allowance(46,620) thousand yen
Total of deferred tax assets
231,891 thousand yen
Deferred tax assets, net
231,891 thousand yen- 43 -

(Transactions with Related Parties)
Subsidiaries and associates, etc.
Category

Name ofcompany

Voting rights
ownership(owned) ratio

Relationshipwith related
partyTransaction
contents

Transaction
amount(thousands ofyen)

Supply ofmaterials

Supply for afee(Note 1)

1,720,883

Conclusion oftechnical
supportagreement

Reception of
loyalty(Note 2)

132,344

Lending funds(Note 3)

Short-termloans receivable
400,000
fromsubsidiaries andassociates
Long-term loans
receivable from–subsidiaries andassociates

Hangzhou
Ownership
Subsidiary Techno Quartz
Direct 100%
Inc.
Lending funds

Description

Endingbalance(thousands ofyen)

Accounts
receivable other180,259

400,000

650,000

Purchase of
Procurement
Accounts
products and3,965,350
325,512(Note 4)payable - trade
raw materials
Transaction terms and policy on determination of transaction terms(Notes)1. Raw materials purchased by the Company are supplied for the purchase price.
2. The reception of loyalty is calculated by multiplying the amount of the relevant sales by the rate suggested by theCompany.
3. The interest rate was determined in consideration of the market interest rate.
3. Order prices were determined in consideration of actual prices in the market.

(Revenue Recognition)
Basic information for understanding revenue from contracts with customers is omitted as the same details arestated in the consolidated financial statements “Notes to Consolidated Financial Statements, (Revenue
Recognition).”(Per Share Information)
1. Net assets per share
2. Profit per share

3,924.88 yen
598.86 yen(Significant Subsequent Events)(Management integration of the Company and GL Sciences Inc. by way of share transfer and transition to aholding company structure).
This note is omitted as the same details are stated in the Notes to Consolidated Financial Statements(Significant Subsequent Events).

Note: Figures presented are rounded down to the nearest thousand yen.

- 44 -

Accounting Auditor’s Audit Report on the Consolidated Financial Statements

Independent Auditor’s Report
May 21, 2024
To the Board of Directors
Techno Quartz Inc.
A&A Partners
Chuo-ku, Tokyo
Designated Limited Liability Partner
Engagement Partner

Masahito Murata, CPA

Designated Limited Liability Partner
Engagement Partner

Hiromi Ito, CPA

Audit Opinion
In accordance with the provisions of Article 444, Paragraph 4 of the Companies Act, we have conducted an audit of
the Consolidated Financial Statements of Techno Quartz Inc. for the fiscal year from April 1, 2023 to March 31, 2024,
comprising the Consolidated Balance Sheet, Consolidated Statement of Income, Consolidated Statement of Changes
to Shareholders Equity, and Notes to the Consolidated Financial Statements.
In our opinion, the aforementioned Consolidated Financial Statements present fairly, in all material aspects, the statusof assets and profits and losses of the corporate group consisting of Techno Quartz Inc. and its consolidated subsidiaries
during the period covered by the Consolidated Financial Statements, in accordance with accounting principles generally
accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements.
We are independent of the Company and its consolidated subsidiaries as required by professional ethical requirements
in Japan, and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
As described in Significant Subsequent Events, the Company and GL Sciences Inc. have, at the Board of Directors
meeting held on May 10, 2024, resolved to establish a joint holding company and integrate their management by wayof a joint share transfer as of October 1, 2024, executed a management integration agreement, and jointly prepared ashare transfer plan.
This event does not affect our opinions.
Other Information
Other information comprises the Business Report and its annexed detailed statements. The Company’s management
is responsible for the preparation and disclosure of this other information. The Audit and Supervisory Committee is
responsible for overseeing Directors’ execution of their duties in the establishment and operation of the Company’s
reporting process for the other information.
Our opinion of the Consolidated Financial Statements does not cover the other information, and we do not express
any opinion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information ismaterially inconsistent with the Consolidated Financial Statements or our knowledge obtained in the audit and also to
remain alert for indications that the other information is otherwise materially misstated.
If, on the basis of the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated Financial
Statements
The Company’s management is responsible for the preparation and fair presentation of the Consolidated Financial
Statements in accordance with accounting principles generally accepted in Japan. This includes establishing andoperating such internal controls as management determines are necessary to enable the preparation and fair presentationof Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error.

- 45 -

In preparing the Consolidated Financial Statements, management is responsible for assessing whether it is appropriate
to prepare the Consolidated Financial Statements on a going concern basis and disclosing, as required by accounting
principles generally accepted in Japan, matters related to the going concern.
The Audit and Supervisory Committee is responsible for overseeing Directors’ execution of their duties in theestablishment and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the Consolidated Financial Statements as awhole are free from material misstatement, whether due to fraud or error, on the basis of our audit and to express an
independent opinion on the Consolidated Financial Statements in our auditor’s report. Misstatements can arise fromfraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the decisions of users of the Consolidated Financial Statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit process in conducting the following.
 We identify and assess the risks of material misstatements, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. The selection and application of audit procedures are at the discretion of
the auditor. We also obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
 Although it is not the purpose of our audit to express an opinion on the effectiveness of the Company’s internal
control, we do consider internal control relevant to the audit in order to design audit procedures that are appropriate
to the circumstances in our assessment of the risks.
 We evaluate the appropriateness of accounting policies adopted by management and the manner in which they areapplied, as well as the reasonableness of accounting estimates made by management and the appropriateness ofrelated supplementary notes.
 We reach a conclusion on the appropriateness of management’s preparation of the Consolidated Financial
Statements on a going concern basis and, on the basis of the audit evidence obtained, whether any material
uncertainty exists related to events and conditions that may cast significant doubt on the Company’s ability tocontinue as a going concern. If we conclude that such a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related supplementary notes in the Consolidated Financial Statements or, if suchsupplementary notes are inappropriate, express a modified opinion that excludes those matters. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to no longer be able to continue as a going concern.
 In addition to whether the disclosures and supplementary notes in the Consolidated Financial Statements are inconformity with accounting principles generally accepted in Japan, we also evaluate the overall presentation,
structure, and contents of the Consolidated Financial Statements, including the relevant supplementary notes, andwhether the underlying transactions and accounting events are fairly represented in the Consolidated Financial
Statements.
 We obtain sufficient and appropriate audit evidence of the financial information of the Company and its
consolidated subsidiaries to express an opinion on the Consolidated Financial Statements. We are responsible forthe direction, supervision and implementation of audits of the Consolidated Financial Statements. We are solely
responsible for the audit opinion.
We report to the Audit and Supervisory Committee regarding the planned scope and timing of the audit, significant
audit findings, including any significant deficiencies in internal control identified during the audit, and any othermatters required by auditing standards.
We report to the Audit and Supervisory Committee on compliance with the provisions on professional ethics in Japan
concerning independence, matters that are reasonably believed to affect the independence of the auditor, and thecontents of measures or safeguards, if we take measures to eliminate disincentives or apply safeguards to reduce
disincentives to an acceptable level.
Conflicts of Interest
There are no interests between the Company and its consolidated subsidiaries and A&A Partners or its engagement
partners that require disclosure under the provisions of the Certified Public Accountants Act.

- 46 -

Accounting Auditor’s Audit Report on the Non-Consolidated Financial Statements

Independent Auditor’s Report
May 21. 2024
To the Board of Directors
Techno Quartz Inc.

A&A Partners
Chuo-ku, Tokyo
Designated Limited Liability Partner
Engagement Partner

Masahito Murata, CPA

Designated Limited Liability Partner
Engagement Partner

Hiromi Ito, CPA

Audit Opinion
In accordance with the provisions of Article 436, Paragraph 2, item 1 of the Companies Act, we have conducted an
audit of the Non-consolidated Financial Statements of Techno Quartz Inc. for the 48th Business Year of the Company
from April 1, 2023 to March 31, 2024, comprising the Non-consolidated Balance Sheet, Non-consolidated Statementof Income, Non-consolidated Statement of Changes to Shareholders Equity, Notes to Non-consolidated Financial
Statements, and Supplementary Schedules.
In our opinion, the aforementioned Non-consolidated Financial Statements present fairly, in all material aspects, thestatus of assets and profit and loss of the Company during the period covered by the Non-consolidated Financial
Statements, in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are described in the Auditor’s Responsibilities for the Audit of the Non-consolidated Financial
Statements. We are independent of the Company as required by professional ethical requirements in Japan, and wehave fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Emphasis of Matter
As described in Significant Subsequent Events, the Company and GL Sciences Inc. have, at the Board of Directors
meeting held on May 10, 2024, resolved to establish a joint holding company and integrate their management by wayof a joint share transfer as of October 1, 2024, executed a management integration agreement, and jointly prepared ashare transfer plan.
This event does not affect our opinions.
Other Information
Other information comprises the Business Report and its annexed detailed statements. The Company’s management
is responsible for the preparation and disclosure of this other information. The Audit and Supervisory Committee is
responsible for overseeing Directors’ execution of their duties in the establishment and operation of the Company’s
reporting process for the other information.
Our opinion of the Non-consolidated Financial Statements does not cover the other information, and we do not
express any opinion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information ismaterially inconsistent with the Non-consolidated Financial Statements or our knowledge obtained in the audit andalso to remain alert for indications that the other information is otherwise materially misstated.
If, on the basis of the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit and Supervisory Committee for the Non-consolidated Financial
Statements
The Company’s management is responsible for the preparation and fair presentation of the Non-consolidated
Financial Statements in accordance with accounting principles generally accepted in Japan. This includes establishing- 47 -

and operating such internal controls as management determines are necessary to enable the preparation and fairpresentation of Non-consolidated Financial Statements that are free from material misstatement, whether due to fraud
or error.
In preparing the Non-consolidated Financial Statements, management is responsible for assessing whether it isappropriate to prepare the Non-consolidated Financial Statements on a going concern basis and disclosing, as requiredby accounting principles generally accepted in Japan, matters related to the going concern.
The Audit and Supervisory Committee is responsible for overseeing Directors’ execution of their duties in theestablishment and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the Non-consolidated Financial Statements as
a whole are free from material misstatement, whether due to fraud or error, on the basis of our audit and to express an
independent opinion on the Non-consolidated Financial Statements in our auditor’s report. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the decisions of users of the Non-consolidated Financial Statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit process in conducting the following.
 We identify and assess the risks of material misstatements, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. The selection and application of audit procedures are at the discretion of
the auditor. We also obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
 Although it is not the purpose of our audit to express an opinion on the effectiveness of the Company’s internal
control, we do consider internal control relevant to the audit in order to design audit procedures that are appropriate
to the circumstances in our assessment of the risks.
 We evaluate the appropriateness of accounting policies adopted by management and the manner in which they areapplied, as well as the reasonableness of accounting estimates made by management and the appropriateness ofrelated supplementary notes.
 We reach a conclusion on the appropriateness of management’s preparation of the Non-consolidated Financial
Statements on a going concern basis and, on the basis of the audit evidence obtained, whether any material
uncertainty exists related to events and conditions that may cast significant doubt on the Company’s ability tocontinue as a going concern. If we conclude that such a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related supplementary notes in the Non-consolidated Financial Statements or, if suchsupplementary notes are inappropriate, express a modified opinion that excludes those matters. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to no longer be able to continue as a going concern.
 In addition to whether the disclosures and supplementary notes in the Non-consolidated Financial Statements arein conformity with accounting principles generally accepted in Japan, we also evaluate the overall presentation,
structure, and contents of the Non-consolidated Financial Statements, including the relevant supplementary notes,
and whether the underlying transactions and accounting events are fairly represented in the Non-consolidated
Financial Statements.
We report to the Audit and Supervisory Committee regarding the planned scope and timing of the audit, significant
audit findings, including any significant deficiencies in internal control identified during the audit, and any othermatters required by auditing standards.
We report to the Audit and Supervisory Committee on compliance with the provisions on professional ethics in Japan
concerning independence, matters that are reasonably believed to affect the independence of the auditor, and thecontents of measures or safeguards, if we take measures to eliminate disincentives or apply safeguards to reduce
disincentives to an acceptable level.
Conflicts of Interest
There are no interests between the Company and A&A Partners or its engagement partners that require disclosure
under the provisions of the Certified Public Accountants Act.

- 48 -

Audit and Supervisory Committee’s Audit Report

Audit Report
The Audit and Supervisory Committee audited the performance of duties by Directors for the 48th BusinessYear from April 1, 2023 to March 31, 2024, and hereby reports on the method and results of that audit.
1.

Method and Contents of Audit
In regard to the content of resolutions of the Board of Directors regarding the matters stated in Article399-13, Paragraph 1, items (i) (b) and (c) of the Companies Act, as well as the systems developed inaccordance with those resolutions (internal control systems), the Audit and Supervisory Committee
periodically received reports from Directors, employees, and others. regarding the status of theestablishment and operation of those systems and, as necessary, requested explanations and expressed
opinions in regard thereto, in addition to which the Audit and Supervisory Committee conducted
audits using the following methods.
(i)
In conformity with the standards for auditing by the Audit and Supervisory Committee determinedby the Audit and Supervisory Committee and in accordance with the audit policies, division ofduties, and other requirements, the Audit and Supervisory Committee, in cooperation with the Audit
Department, which is responsible for internal control of the Company, attended important meetings,
received reports from Directors, employees, and others regarding matters related to the performanceof their duties, requested explanations as necessary, viewed important decision-making documents,
and inspected the status of operations and assets regarding the head office, sales offices, andfactories, while also utilizing means via telephone lines, the internet, and other means. Additionally,in regard to subsidiaries, the Audit and Supervisory Committee communicated and exchanged
information with the directors and other personnel of subsidiaries, and received business reports ona regular basis.
(ii) The Audit and Supervisory Committee oversaw and verified whether the Accounting Auditor
maintained its independent position and conducted an appropriate audit, received reports from the
Accounting Auditor on the status of the performance of its duties, and requested explanations asnecessary. Additionally, the Audit and Supervisory Committee received notification from the
Accounting Auditor that, in accordance with the “Quality Control Standards for Audits” (BusinessAccounting Council), and other standards, it had developed systems in order to ensure that its duties
are appropriately performed (i.e., notification of the matters stated in the items of Article 131 of theRegulations on Corporate Accounting) and requested explanations as necessary.
Using the methods above, the Audit and Supervisory Committee examined the Business Report, thesupplementary schedules thereto, the Non-Consolidated Financial Statements (i.e., Non-Consolidated
Balance Sheet, Non-Consolidated Statement of Income, Non-Consolidated Statement of Changes in
Equity, and Notes to Non-Consolidated Financial Statements), the supplementary schedules to the NonConsolidated Financial Statements, and the Consolidated Financial Statements (i.e., the Consolidated
Balance Sheet, Consolidated Statement of Income, Consolidated Statement of Changes in Equity, andNotes to Consolidated Financial Statements) for the fiscal year under review.

2.

Audit Results(1)
Results of the audit of Business Report and other documents(i)
We find that the Business Report and the supplementary schedules thereto accurately present
the status of the Company in accordance with laws, regulations, and the Articles ofIncorporation.
(ii) We do not find any misconduct nor any material fact constituting a violation of any law,regulation, or the Articles of Incorporation in relation to Directors’ performance of theirduties.
(iii) We find the content of the resolutions of the Board of Directors regarding internal control
systems to be reasonable. Additionally, we do not find any matters that should be commented
upon in regard to the statements in the Business Report or Directors’ performance of theirduties relating to the internal control systems.
- 49 -

(2)(3)

Results of the audit of the Non-consolidated Financial Statements and supplementary schedules
theretoWe find the methods and results of the audit by the Accounting Auditor, A&A Partners, to bereasonable.
Results of audit of the Consolidated Financial Statements
We find the methods and results of the audit by the Accounting Auditor, A&A Partners, to bereasonable.

May 22, 2024
Audit and Supervisory Committee, Techno Quartz Inc.
Audit and Supervisory Committee Member (full-time)
Kazuya Ishikawa [Seal]
Audit and Supervisory Committee Member
Shigeki Taniguchi [Seal]
Audit and Supervisory Committee Member
Taketo Morita [Seal](Note)

Audit and Supervisory Committee Members, Kazuya Ishikawa, Shigeki Taniguchi, and Taketo
Morita, are outside directors provided for in Article 2, item (xv) and Article 331, Paragraph 6of the Companies Act.

- 50 -

(NOTICE OF CONVOCATION OF THE 48th ANNUAL GENERAL MEETING OF SHAREHOLDERS)

Reference Documents for the General Meeting of Shareholders
Supplement to Proposal 1

Techno Quartz Inc.

- 51 -

Proposal 1: Approval of Share Transfer Plan
The Company and GL Sciences Inc. (“GL Sciences”), regarding establishing a joint holding company and integrating their
management (the “Management Integration”) by way of a joint share transfer (the “Share Transfer”), agreed to establishing
GLTECHNO HOLDINGS, INC. (the “Joint Holding Company”), which will become a wholly owning parent company of bothcompanies effective October 1, 2024 (the “Effective Date”), and executed a management integration agreement (the “Management
Integration Agreement”) and jointly prepared a share transfer plan (the “Share Transfer Plan”) as of May 10, 2024, in accordance withthe relevant resolutions adopted at their respective board of directors meetings held on the same date.
Therefore, we request your approval of the Share Transfer Plan.
The reason for carrying out the Share Transfer, an overview of the contents of the Share Transfer Plan, and other matters related tothis proposal are shown below.
1. Reason for the Share Transfer(1) Background to the Share Transfer
GL Sciences was established in 1968 for the manufacture and sales of gas chromatography column fillers and consumableparts. At present, GL Sciences principally engages in the development, manufacture and sales of gas/liquid chromatographyequipment and consumable parts, etc. A stable demand for chromatography and other analytical instruments is expected tocontinue hereafter, in view of the use of such instruments in a wide range of fields, including: food and beverages;
pharmaceuticals; cosmetics and perfumeries; environmental (water quality, air, and soil); metals and mining; petrochemicals;
energy; automobiles; and public research institutions. However, due to intensified competition expected in the future, GL
Sciences is working on current tasks such as: seizing overseas markets where growth can be expected; strengthening its
development capabilities to enable the timely supply of products; and making strategic investments to ensure sustainable growth.
The Company was established in 1976 as a subsidiary of GL Sciences, for the manufacture and sales of products for laboratory
equipment. Subsequently, in 1978, it entered the field of quartz glass products for semiconductor manufacturing equipment,
which has currently become its main business. While the semiconductor industry, to which the Company belongs, has a uniqueeconomic cycle known as the “silicon cycle,” the continuous expansion of the market has been recognized, owing to factors suchas further digitalization based on the worldwide spread of smartphones and the explosive development of AI technologies.
Although the semiconductor market continues to be in the adjustment phase, it is expected to recover in the second half of 2024.
In addition, the amount of data to be processed is expected to further increase in the future in connection with 5G communications,the Internet of Things (IoT), AI and deep learning, and the full-scale implementation of automated driving, and it is presumed
that the trends toward increased demand for semiconductors will continue on a medium-to-long term basis.
While economic activities are moving towards normalization in Japan as a result of COVID-19 having been reclassified as aClass 5 disease, the future prospects of the Japanese economy continue to be unclear, principally due to a deteriorated outlook
for the global economy resulting from the prolonged situation in Russia and Ukraine, as well as inflation caused by soaring
energy prices and the further weakening of the Japanese yen, and the business environment has greatly changed for both GL
Sciences and the Company. In their business activities since their foundation, the GL Sciences and the Company have bothpreserved the common basic philosophy of: “fully demonstrating their social roles to the public; enhancing the value of their
existence; bringing happiness to each of their employees; and maintaining and further developing their companies.” “Astockholder and a staff show the sociality sufficiently to society, and raise the existence value, and win prosperity of a staff
individual and make maintenance of an enterprise and development be, and distribute the technology and the benefit obtained
from there among society justly.” In the difficult circumstances described above, both GL Sciences and the Company haveidentically come to recognize the need to build a solid management foundation that unites their corporate group more than everand to combine their own respective strengths, in order to ensure sustainable growth for the group as a whole, and increase theircorporate values and further contribute to the development of their stakeholders. It is for this reason that GL Sciences and theCompany have decided to implement the Management Integration and have executed the Management Integration Agreement.
(2) Purpose of the Share Transfer
The two companies, namely: (a) GL Sciences, which has a diverse range of customers, is not easily affected by macro trends,
and has a solid business foundation of stably supporting the group’s profits; and (b) the Company, which is expected to achieve
further market growth and has established its status in a niche field, will act as the core of the corporate group, and each of thesetwo companies, as well as the group as a whole, will strive to make further leaps forward and achieve increased corporate value.
More specifically, the Management Integration is expected to enable the accomplishment of the following measures and effects:
1) Capturing growth opportunities through strengthened group strategy functions and optimized management resource
allocation
In the ever-changing environment surrounding GL Sciences and the Company, optimizing the allocation of management
resources across the group is considered to be of the utmost importance in achieving a sustainable increase in corporate value
continuing into the future. In view of the fact that GL Sciences and the Company have until now been making decisions on
an independent footing, and the structure of the group, which has two mutually different companies as its members, namely,(a) GL Sciences, which has a stable business foundation, and (b) the Company, which is affected by the economic cycle
known as the “silicon cycle,” room for improvement is recognized in terms of investment and optimal resource allocation to
be made for the growth of the group as a whole. The Management Integration is therefore considered to enable the allocationof management resources in a manner that can achieve the growth of the group as a whole in line with the businesscharacteristics of GL Sciences and the Company, as well as active investments in the fields of growth.
More specifically, it is considered that consolidating investment-related functions in the Joint Holding Company will
principally enable centralized administration and the accumulation of know-how which is currently dispersed across the group,
as well as the formulation of strategies based on the overview of the group as a whole, implementation of investments inaccordance therewith, and efficient development of human resources having professional expertise. In addition toconventional organic growth, inorganic growth will also be pursued by means of mergers and acquisitions.
Furthermore, with regard to the strengthening of human resources, which has specifically been an issue for the Company
that has rapidly grown along with the increasing demand for semiconductors, the Management Integration will enable the- 52 -

assignment of personnel, with an eye focused on the strategies of the group as a whole, whereby human resource aspects will
be reinforced in both business operations and administration, and it is considered that this will result in supporting the further
growth of the Company.
Moreover, the Management Integration is expected to not only contribute to the optimized allocation of management
resources, but also to business synergies such as the following between GL Sciences and the Company, on a medium-to-longterm basis: joint development using their related technologies; sales expansion through approaches to their common and newcustomers; and the strengthening of sales functions through their mutual use of business bases.
2) Improving management efficiency through the consolidation of administrative functions
Through the Management Integration, GL Sciences and the Company will have parallel positions under the umbrella of the
Joint Holding Company, and it is considered that this will allow for personnel exchanges, the engagement of various humanresources, and career development opportunities, which could not be realized to date, as well as the further permeation ofmanagement philosophy, which the companies consider will enable the assignment of the right person to the right position
across the group, and the achievement of improved operational efficiency and quality of the two companies as a result of theircommon functions being consolidated in the Joint Holding Company.
More specifically, the two companies are considering consolidating various operations such as: strategic operations incharge of company-wide strategies and resource allocations, etc.; administration operations in charge of managing generalaffairs, accounting, finance, investor relations, etc.; personnel operations in charge of recruitment, education, and training,etc.; IT operations in charge of IT research, the furtherance of digital transformation (DX), and the development of futuresystem plans, etc. In addition, improving the efficiency and sophistication of such operations is not only expected to contributeto the strengthening of corporate functions and group governance, but also to the top-line synergy effects on a medium- tolong-term basis, which will be achieved through the improved professionalism and productivity of the respective businessdivisions by freeing them from administrative work, as well as through activities such as further promoting sales andstrengthening new product development capabilities.
3) Maximizing value provided to stakeholders and expediting decision-making processes
Under a holding company that has group strategy functions, GL Sciences and the Company will strive to increase the value
to be provided to their stakeholders, including their shareholders, business partners and employees, by demonstratingsynergies, and working toward the growth of the group as a whole.
The issue of parent-subsidiary listing, which may create a structural conflict of interest, has been discussed as a corporate
governance issue. With regard to the two companies mutually utilizing management resources, there is a recognized risk ofcertain restrictions or limitations arising in the future in their promoting such mutual utilization in a prompt and smoothmanner, due to concerns about possible conflicts of interest between GL Sciences and the Company’s minority shareholders,
as well as from the perspective of the Company securing independence. However, as a result of the Share Transfer, by causing
the Joint Holding Company to have the function of developing group-wide management strategies and thereby separating thedevelopment of management strategies from the execution thereof and delegating decision-making authority to GL Sciences
and the Company concerning their business, as well as aligning interests within the group, GL Sciences and the Company
consider that they can build a structure that allows them to pursue synergy effects through prompt decision-making and groupwide sharing of management resources.
By strengthening the group strategy functions through realizing the above measures and effects, the Joint Holding Company aims toachieve consolidated net sales of 50 billion yen in the fiscal year ending March 31, 2027.
2. Overview of the Share Transfer Plan
The following “Share Transfer Plan (Copy)” provides details on the Share Transfer Plan.
Share Transfer Plan (Copy)
GL Sciences Inc. (the “First Party”) and Techno Quartz Inc. (the “Second Party”) have agreed to carry out a share transfer by wayof a joint share transfer, and have jointly prepare this share transfer plan (the “Share Transfer Plan”) according to the following.
Article 1 (Share Transfer)According to the provisions of the Share Transfer Plan, the First and Second Parties shall establish a wholly owning parent company(the “Joint Holding Company”) by way of a joint share transfer that causes the Joint Holding Company to acquire all of the issued
shares of the First Party and Second Party on the date of establishment (as defined in Article 6; the same shall apply hereinafter) by
way of a share transfer (the “Share Transfer”).
Article 2 (Purpose of the Joint Holding Company, trade name, location of head office, total number of authorized shares, and othermatters stipulated in the Articles of Incorporation)
1. The purpose, trade name, location of the head office and total number of authorized shares of the Joint Holding Company shallbe as follows.
(1) Purpose
The purpose of the Joint Holding Company shall be as described in Article 2 of the Articles of Incorporation in Attachment.
(2) Trade name
The trade name of the Joint Holding Company shall be ジーエルテクノホールディングス株式会社, and the name in
English shall be GLTECHNO HOLDINGS, INC.
(3) Location of head office
The head office of the Joint Holding Company shall be located in Shinjuku-ku, Tokyo, and the address of the head officeshall be 6-22-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo.
(4) Total number of authorized shares
The total number of authorized shares of the Joint Holding Company shall be 50,000,000 shares.
2. In addition to the matters listed in the preceding paragraphs, matters stipulated in the Articles of Incorporation of the Joint Holding- 53 -

Company shall be as stated in the Articles of Incorporation in the Attachment.
Article 3 (Names of Directors at the time of incorporation and names of Accounting Auditors at the time of incorporation of the Joint
Holding Company)
1. The names of the Directors at the time of incorporation of the Joint Holding Company (excluding Directors at the time ofincorporation who are Audit and Supervisory Committee members at the time of incorporation) shall be according to the following.
Directors at the time of incorporation Yoshihiro Nagami
Directors at the time of incorporation Ikunobu Sonoda
Directors at the time of incorporation Osamu Serizawa
2. The names of the Directors at the time of incorporation who serve as Audit and Supervisory Committee Members at the time ofincorporation of the Joint Holding Company shall be according to the following.
Audit and Supervisory Committee Member at the time of incorporation
Takahiro Saito (Outside Director)
Audit and Supervisory Committee Member at the time of incorporation
Yumiko Nagasawa (Outside Director)
Audit and Supervisory Committee Member at the time of incorporation
Taketo Morita (Outside Director)
3. The names of the Accounting Auditor at the time of incorporation of the Joint Holding Company shall be according to thefollowing.
Audit Corporation A&A Partners
Article 4 (Shares to be issued upon the Share Transfer, and their allotment)
1. For shareholders of common stock of the First and Second Parties just prior to the time that all of the shares of the First andSecond Parties are acquired (the “base time”), at the time of the Share Transfer, the Joint Holding Company shall issue common
stock of the Joint Holding Company equal to the sum of (i) the number obtained by multiplying the total number of common
stock issued by the First Party at the time of the base time by 1, and (ii) the total number of common stock issued by the Second
Party at the time of the base time multiplied by 2.10 in place of the common stock of the First and Second Parties held
respectively by them.
2. The Joint Holding Company shall allocate the common stock of the Joint Holding Company to be issued according to theprovisions of the preceding paragraph to the shareholders of the common stock of the First and Second Parties at the time of
the base time according to the respective ratio specified in the following items.
(1) For shareholders of the First Party, one share of common stock of the Joint Holding Company for each share of common stockof the First Party held
(2) For shareholders of the Second Party, 2.10 shares of common stock of the Joint Holding Company for each share of common
stock of the Second Party held
3. For the calculations in the preceding two paragraphs, fractions of less than one share shall be handled based on Article 234 of
the Companies Act and other related laws and regulations.
Article 5 (Matters related to the amount of capital, reserves, etc. of the Joint Holding Company)
The amount of capital, reserves, etc. of the Joint Holding Company on the date the Joint Holding Company is established shall beaccording to the following.
(1)
Amount of capital: 300,000,000 yen(2)
Amount of legal capital surplus: 0 yen(3)
Amount of legal retained earnings: 0 yen
Article 6 (Date of establishment of the Joint Holding Company)
The date on which the establishment of the Joint Holding Company is registered (the “Joint Holding Company Establishment
Date”) shall be October 1, 2024. However, the First and Second Parties may change the Joint Holding Company Establishment
Date upon mutual consultation and agreement, if necessary for proceedings related to the Share Transfer and other reasons.
Article 7 (Shareholders meetings for approval of the Share Transfer Plan)
The First and Second Parties shall, at respective annual general meeting of shareholders to be held in June 2024, ask for approval
for the Share Transfer Plan and matters necessary for the Share Transfer. However, if necessary for procedures of the Share
Transfer or other reasons, the First and Second Parties may change the schedule of the general meeting of shareholders for asking
for such approval upon mutual consultation and agreement.
Article 8 (Stock listing and administrator of shareholder register)
1. The First and Second Parties shall cooperate with each other to carry out necessary procedures for listing common stock
issued by the Joint Holding Company on the Standard Market of the Tokyo Stock Exchange on the Joint Holding Company
Establishment Date.
2. Mitsubishi UFJ Trust and Banking Corporation shall be the shareholder register administrator at the time of theestablishment of the Joint Holding Company.
Article 9 (Dividends of surplus)
1. Dividends of surplus up to 70 yen per share may be paid by the First Party to shareholders or registered shares pledgees
stated or recorded in the final shareholder register as of March 31, 2024.
2. Dividends of surplus up to 130 yen per share may be paid by the Second Party to shareholders or registered shares pledgees
stated or recorded in the final shareholder register as of March 31, 2024.
3. Except for cases specified in the preceding two paragraphs, during the period from the creation of the Share Transfer Plan
until the Joint Holding Company Establishment Date, the First and Second Parties shall not adopt any resolution for
dividends of surplus with a record date prior to the Joint Holding Company Establishment Date. However, this shall not
apply in cases where an agreement has been made after consultation between the First and Second Parties.
Article 10 (Cancellation of treasury shares)
Based on a resolution of their respective boards of directors held by the day before the establishment date of the Joint Holding- 54 -

Company, the First and Second Parties shall cancel the treasury shares held by each party as of the base time which can bepractically cancelled at the base time (including treasury shares acquired through purchase of shares related to a request fromdissenting shareholders for purchase of shares as specified in Article 806, Paragraph 1 of the Companies Act issued at the Share
Transfer).
Article 11 (Management of company assets, etc.)
After the creation of the Share Transfer Plan, the First and Second Parties shall execute their business and manage and operate
their assets with the care of a good manager until the Joint Holding Company Establishment Date and shall have their subsidiaries
execute their duties and manage and operate property with the care of a good manager. Unless otherwise specified in the Share
Transfer Plan, the First and Second Parties shall consult in advance and obtain mutual agreement before taking any action that
could have a significant impact on their property or rights and obligations, or have the other party execute it.
Article 12 (Effectiveness of the Share Transfer Plan)
The Share Transfer Plan shall become invalid if the First Party or Second Party is not able to obtain resolutions on the Share
Transfer Plan and matters necessary for the Share Transfer at the general meeting of shareholders as stipulated in Article 7, or if
approval and other permissions required for implementing of the Share Transfer is not obtained from the relevant government
agencies by the Joint Holding Company Establishment Date, or if the Share Transfer is canceled pursuant to the following article.
Article 13 (Change in the share transfer terms and cancellation of the Share Transfer)
The First Party and Second Party may change the terms and conditions of the Share Transfer or other contents of the Share Transfer
Plan, etc. or cancel the Share Transfer upon mutual consultation and agreement if a significant change occurs in or any fact were
found to significantly affect the financial or management status of either the First Party or Second Party during the period fromthe creation of the Share Transfer Plan until the Joint Holding Company Establishment Date, or if a serious obstacle to theimplementation of the Share Transfer arises or becomes apparent, or if it becomes extremely difficult to achieve the objectives of
the Share Transfer Plan.
Article 14 (Consultation)
Other than matters stipulated in the Share Transfer Plan, matters not stipulated in the Share Transfer Plan and other mattersnecessary for the Share Transfer shall be separately determined based on mutual consent after consultation between the First andSecond Parties in accordance with the purpose of the Share Transfer Plan.
(Hereinafter blank)- 55 -

In witness whereof, the parties hereto certify that the Share Transfer Plan has been prepared in duplicate with each party retaining
one copy after affixing their name and seal.

May 10, 2024

First Party:
6-22-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo
GL Sciences Inc.
President Yoshihiro Nagami

Second Party:
1-32-2, Honcho, Nakano-ku, Tokyo
Techno Quartz Inc.
President Ikunobu Sonoda- 56 -

Attachment
Articles of Incorporation
Chapter 1 General Rules(Trade name)
Article 1 The name of the Company shall be GL TECHNO HOLDINGS KABUSHIKI KAISHA, and the name in English shall be
GLTECHNO HOLDINGS, INC.
(Purpose)
Article 2 The purpose of the Company shall be to manage the business activities of the following companies by operating thefollowing businesses and owning shares or equity in the companies that operate these businesses.
(1) Manufacture and sale of laboratory equipment, biochemistry equipment including for test and diagnosis, and scientificresearch equipment(2) Manufacture and sale of laboratory agents and reagents and manufacture and sales of equipment for handling and managing
such chemicals(3) Manufacture and sale of semiconductor manufacturing equipment and industrial equipment derived from such(4) Manufacture and sale of glass for manufacturing electronics products such as semiconductors, solar batteries, liquid crystal,and light emitting diodes, and ceramic products such as quartz glass, silicon carbide, and alumina(5) Manufacture and sale of measuring instruments(6) Manufacture and sale of chemical industrial products, electrical equipment, and electronics equipment to be supplied forlaboratory equipment(7) Manufacture and sale of overall gas supply equipment including design and work of special gas pipes to be supplied forlaboratory equipment(8) Manufacture and sale of medical equipment(9) Manufacture and sale of various measuring machines(10) Manufacture and sale of educational equipment(11) Design, development, manufacture, and sale of heating equipment(12) Manufacture and sale of temperature control equipment(13) Manufacture and sale of vacuum system equipment(14) Design, development, manufacture, and sale of processing machines, jigs, and components(15) Processing and cleansing of metal components and ceramic components(16) Manufacture and sale of cards, tags, labels, etc. on which identification and collateral information are recorded and theirreader/writers(17) Manufacture and sale of identification equipment using biometric information(18) Manufacture and sale of safety device and facilities for crime prevention, fire prevention, disaster prevention, andemergency measures(19) Manufacture and sale of equipment and facilities for managing and monitoring people, animals, and goods through optics,
radio waves, infrared rays, laser beams, sound waves, ultrasonic waves, magnetic sensors, and items (16) and (17)(20) Development, manufacture, and sale of electronics equipment, control equipment, computers for industrial use and their
peripheral devices as well as systems and software related to such(21) Manufacture and sale of computers and their peripheral devices(22) Manufacture and sale of equipment related to offices and other facilities(23) Processing, manufacture, and sale of equipment related to machine tools, devices, etc.
(24) Manufacture and sale of application products and application systems using the preceding items(25) Sample treatment, measurement, education, training, and consultation related to the preceding items(26) Sale of software, technologies, and information related to the preceding items(27) Import and export of goods, technologies, and software related to the preceding items(28) Various businesses regarding electric work, telecommunication work, and fittings of facilities related to the preceding
items(29) Any businesses incidental to the preceding items
2. The Company may engage in businesses of items of the preceding paragraph, the following businesses, and any operations
incidental or related to these businesses.
(1) Operations related to corporate planning, general affairs, human resources, finance of the group companies, etc. and otheroperations deemed to be necessary(2) Concentration and allocation of funds for the group companies, etc., lending operations, and management of surplus funds(Location of head office)
Article 3 The head office of the Company shall be located in Shinjuku-ku, Tokyo.
(Publishing method)
Article 4 The Company’s method for public notice shall be electronic public notice. However, if it is not possible to make an electronic
public notice due to some accident or other unavoidable reason, it shall be published in the Nihon Keizai Shimbun.
Chapter 2 Shares(Total number of shares that can be issued)
Article 5 The total number of authorized shares of the Company shall be 50,000,000 shares.
(Acquisition of treasury shares)
Article 6 The Company may acquire its own shares through market transactions, etc. based on a resolution by the Board of Directors.

- 57 -

(Share unit number)
Article 7 The share unit number of the Company shall be 100 shares.
(Rights of fractional shareholders)
Article 8 The Company shareholders may not exercise rights other than the rights listed below regarding shares held by suchshareholder that constitute less than one unit.
(1) Rights listed in each item of Article 189, Paragraph 2 of the Companies Act.
(2) Right to make requests under Article 166, Paragraph 1 of the Companies Act.
(3) Right to receive an allotment of shares for subscription and allotment of share acquisition rights for subscription basedon the number of shares held by shareholders(4) Right to make requests shown in the following article(Demand for additional purchase of fractional unit shares)
Article 9 According to the provisions in the Rules for Handling Shares, shareholders having shares less than one unit of the Company
may request the Company to sell the number of shares that, together with the number of shares less than one unit held bysuch shareholders, constitute the share unit number.
(Shareholder Register Administrator)
Article 10 The Company shall appoint a Shareholder Register Administrator.
2. The Shareholder Register Administrator and their place of business shall be selected by a resolution of the Board of
Directors and shall be announced publicly.
3. The Company’s shareholder register and share acquisition rights registry shall be stored at the place of business of the
Shareholder Register Administrator. The Shareholder Register Administrator shall make an entry and record into theshareholder register and share acquisition rights registry and handle other clerical work related to shares and shareacquisition rights, and such shall not be handled by the Company.
(Rules for Handling Shares)
Article 11 In addition to stipulations in laws and regulations or the Articles of Incorporation, an entry and record into the Company’s
shareholder register and share acquisition rights registry, purchase and sale of fractional unit shares, other handling ofshares and share acquisition rights, procedures, etc. in exercising rights by shareholders, etc., and fees shall be according
to the Rules for Handling Shares established by the Board of Directors.
(Record Date)
Article 12 The Company shall deem shareholders having voting rights who are stated or recorded in the final shareholder register asof March 31 of every year to be the shareholders who may exercise their rights at the Annual General Meeting of
Shareholders for the relevant business year.
2. Notwithstanding the preceding paragraph, if necessary, by making public announcement based on a resolution of theBoard of Director, the Company may deem shareholders or registered share pledgees who are stated or recorded in its
final shareholder register as of a certain day to be shareholders or registered share pledgees who may exercise theirright.
Chapter 3 General Meeting of Shareholders(Convocation)
Article 13 The Company’s Annual General Meeting of Shareholders shall be convened in June of each year, and extraordinary general
meetings of shareholders shall be convened whenever necessary.
(Convenor and Chairman)
Article 14 General Meetings of Shareholders shall be convened and chaired by the President based on a resolution of the Board of
Directors, excluding particular instances stipulated in laws and regulations. If there is an accident involving the President,
another Director shall convene the General Meeting of Shareholders according to the order predetermined by the Board of
Directors.
(Measures for electronic provision, etc.)
Article 15 When the Company convenes a general meeting of shareholders, it shall take measures for providing information that
constitutes the content of reference documents for the general meeting of shareholders, etc. in electronic format.
2. Among items for which the measures for providing information in electronic format will be taken, the Company may
exclude all or some of those items designated by the Ministry of Justice Order from statements in the paper-based
documents to be delivered to shareholders who requested the delivery of paper-based documents by the record date ofvoting rights.
(Method of resolutions at general meeting)
Article 16 Unless otherwise provided for by laws and regulations or the Articles of Incorporation, resolutions of a General Meetingof Shareholders shall be made by a majority of the votes of the shareholders who are present at the meeting and entitled toexercise their votes at such meetings.
2. Unless otherwise provided for by the Articles of Incorporation, resolutions of a General Meeting of Shareholders asprescribed in Article 309, Paragraph 2 of the Companies Act shall be made by at least two-thirds of the votes of theshareholders present at the meeting where the shareholders holding at least one-third of the voting rights of theshareholders entitled to exercise their votes at such meetings are present.

- 58 -

(Meeting minutes of general meeting)
Article 17 Meeting minute shall be prepared for the agenda of the General Meeting of Shareholders. A summary of the progress of
the agenda and the results thereof, along with other matters provided for by laws and regulations shall be stated or recordedin the meeting minutes.
(Exercise of voting rights by proxy)
Article 18 A shareholder of the Company may exercise their voting rights by authorizing one (1) other shareholder of the Company
with voting rights to act as a proxy.
2. In the case of the preceding paragraph, the shareholder or their proxy shall submit a document certifying the proxyright to the Company for each General Meeting of Shareholders.
Chapter 4 Directors and Board of Directors(Establishment of Board of Directors)
Article 19 The Company shall establish the Board of Directors.
(Number of members)
Article 20 The Company shall have no more than five Directors (excluding Directors who are Audit and Supervisory Committee
Members).
2. The Company shall have no more than five Directors who are Audit and Supervisory Committee Members.
(Election of Directors)
Article 21 Directors shall be elected by resolution at the General Meeting of Shareholders and distinguished as Audit and Supervisory
Committee Members and other Directors.
2. Elections of Directors shall be resolved by a majority of the votes of the shareholders present at the meeting where
shareholders holding at least one-third of the voting rights of the shareholders entitled to exercise their votes at suchmeetings are present.
3. The election of Directors shall not be conducted by cumulative voting.
(Term of office of Directors)
Article 22 The term of office of Directors shall be until the conclusion of the Annual General Meeting of Shareholders for the lastbusiness year ending within one year after their election.
2. Notwithstanding the preceding paragraph, the term of office of Audit and Supervisory Committee Members shall be
until the conclusion of the Annual General Meeting of Shareholders for the last business year ending within two years
after their election.
3. The term of office of Audit and Supervisory Committee Members elected as a substitute for an Audit and Supervisory
Committee Member retired before the expiration of their term of office shall be until the expiration of the term ofoffice of the retired Audit and Supervisory Committee Member.
(Convener and Chairperson of the Board of Directors)
Article 23 Board of Directors meeting shall be convened and chaired by the President, excluding particular instances stipulated inlaws and regulations. If there is an accident involving the President, another Director shall convene and chair the Board of
Directors meetings according to the order predetermined by the Board of Directors.
(Notice of Convocation of the Board of Directors)
Article 24 Notices of convocation of the Board of Directors meetings shall be issued to each Director at least three days prior to thedate of the meeting. However, this period may be shortened in cases of emergency.
(Method of resolutions by the Board of Directors)
Article 25 A resolution of the Board of Directors shall be adopted by a majority vote at a session with an attendance of a majority of
Directors.
(Omission of resolution of the Board of Directors)
Article 26 In accordance with Article 370 of the Companies Act, if all Directors agree in writing or electronically on matters to beresolved by the Board of Directors, the Company shall deem such matter to be resolved to have been adopted by aresolution of the Board of Directors.
(Delegation of execution of duties to Directors)
Article 27 In accordance with Article 399-13, Paragraph 6 of the Companies Act, the Company may delegate a decision regarding
execution of important duties to a Director by resolution of the Board of Directors (excluding matters set forth in itemsof Paragraph 5 of the same Article).
(Board of Directors Regulations)
Article 28 Matters concerning the Board of Directors shall be governed by the Board of Directors Regulations established by the
Board of Directors, in addition to laws and regulations and the Articles of Incorporation.
(Remuneration, etc. for Directors)
Article 29 Remuneration, bonuses and other property benefits received by Directors from the Company in exchange for the executionof duties (the “Remuneration, etc.”) shall be determined by a resolution of the General Meeting of Shareholders after
distinguishing according to Audit and Supervisory Committee Members and other Directors.

- 59 -

(Representative Director and Executive Director)
Article 30 The Company shall, by resolution of the Board of Directors, elect a Representative Director.
2. The Board of Directors may, by its resolution, elect one President, as well as a small number of Vice President, Senior
Managing Director, and Managing Director as needed.
3. The President controls operations of the Company and Vice President, Senior Managing Director, and Managing
Director assist the President and execute the operations or share the operations.
(Exemption of Directors from liability)
Article 31 The Company may enter into an agreement with Directors (excluding those who are Executive Officers, etc.) in accordancewith Article 427, Paragraph 1 of the Companies Act to limit their liability pursuant to Article 423, Paragraph 1 of theCompanies Act to the amount stipulated by laws and regulations.
Chapter 5 Audit and Supervisory Committee(Establishment of Audit and Supervisory Committee)
Article 32 The Company shall establish the Audit and Supervisory Committee.
(Notice of Convocation of the Audit and Supervisory Committee)
Article 33 Notices of convocation of the Audit and Supervisory Committee meetings shall be issued to each Audit and Supervisory
Committee Member at least three days prior to the date set for the meeting. However, this period may be shortened incases of emergency.
(Method of resolutions by the Audit and Supervisory Committee)
Article 34 A resolution of the Audit and Supervisory Committee shall be adopted by a majority vote at a session with an attendanceof a majority of Audit and Supervisory Committee Members.
(Audit and Supervisory Committee Regulations)
Article 35 Matters concerning the Audit and Supervisory Committee shall be governed by the Audit and Supervisory Committee
Regulations established by the Audit and Supervisory Committee, in addition to laws and regulations and these Articles
of Incorporation.
Chapter 6 Accounting Auditor(Establishment of Accounting Auditor)
Article 36 The Company shall have an Accounting Auditor.
(Election of Accounting Auditor)
Article 37 Accounting Auditors shall be elected by resolution at a General Meeting of Shareholders.
(Term of office of Accounting Auditors)
Article 38 The term of office of Accounting Auditors shall be until the conclusion of the Annual General Meeting of Shareholders
for the last business year ending within one year after their election.
2. Unless otherwise resolved at the Annual General Meeting of Shareholders in the preceding paragraph, the Accounting
Auditor shall be deemed to have been reelected at such Annual General Meeting of Shareholders.
(Remunerations, etc. for Accounting Auditors)
Article 39 Remuneration, etc. for Accounting Auditors shall be determined by the Representative Director based on the consent of
the Audit and Supervisory Committee.
Chapter 7 Calculation(Business Years)
Article 40 The business year of the Company shall commence on April 1st of each year and end on March 31st of the following year.
(Year-end Dividends)
Article 41 The Company will, by a resolution of the General Meeting of Shareholders, distribute dividends from surplus by cash toshareholders or registered share pledgees stated or recorded in the final shareholder register as of March 31 of every year(the “Year-end Dividends”).
(Interim Dividends)
Article 42 The Company may, by a resolution of the Board of Directors, distribute dividends from surplus as stipulated in Article
454, Paragraph 5 of the Companies Act to shareholders or registered share pledgees stated or recorded in the shareholder
register as of September 30 of every year (the “Interim Dividends”).
(Exemption period for Year-end Dividends, etc.)
Article 43 In cases where cash related to the Year-end Dividends and Interim Dividends has not been received after the lapse of threefull years from the date of commencement of payment thereof, the Company shall be exempt from the obligation to pay
such dividends.
2. No interest shall accrue on the unpaid Year-end Dividends and Interim Dividends.

- 60 -

Supplementary Provisions
1. Notwithstanding the provisions in Article 40, the first year of business of the Company shall be from the Company establishment
date until March 31, 2025.
2. Notwithstanding the provisions in Article 29, the amount of the Remuneration, etc. for the Company’s Directors from theCompany establishment date until the conclusion of the first Annual General Meeting of Shareholders shall be respectively
as follows.
(1) The Remuneration, etc. for Directors excluding Directors who are Audit and Supervisory Committee Members
The total amount of the Remuneration, etc. shall be no more than 150 million yen per year.
(2) The Remuneration, etc. for Directors who are Audit and Supervisory Committee Members
The total amount of the Remuneration, etc. shall be no more than 30 million yen per year.
3. These supplementary provisions shall be deleted at the conclusion of the Company’s first Annual General Meeting of
Shareholders.

- 61 -

3. Matters concerning the reasonableness of provisions related to matters provided under Article 773, Paragraph 1, Items 5 and 6of the Companies Act(1) Matters concerning the shares of the Joint Holding Company to be delivered by the Joint Holding Company to shareholdersof both companies upon the Share Transfer, and the allotment of shares of the Joint Holding Company
Both companies have determined the allotment ratio for common stock of the Joint Holding Company to be allotted anddelivered to the shareholders of each company upon the establishment of the Joint Holding Company by the Joint Share (the“share transfer ratio”) as follows.
(i) Details of allotment pertaining to the Share Transfer (Share Transfer Ratio)
GL Sciences
The Company
Share transfer ratios
1.00
2.10
(Note 1) Detailed matters on the allotment of shares pertaining to the Share Transfer
It is planned that one (1) share of the Joint Holding Company’s common stock will be delivered for eachshare of GL Sciences’ common stock and that two point one zero (2.10) shares of the Joint Holding
Company’s common stock will be delivered for each share of the Company, respectively. If, as a result of the
Share Transfer, there is any fraction of less than one (1) share in the respective numbers of shares of the Joint
Holding Company’s common stock that are required to be delivered to the shareholders of GL Sciences or
the Company, the amount corresponding to such fraction of less than one (1) share will be paid to the relevant
shareholders in accordance with the provisions of Article 234 of the Companies Act and other related laws
and regulations; provided, however, that the share transfer ratios specified above are subject to change throughmutual consultation between the two companies, if there is any material change in any of the conditions
forming the basis for the calculation thereof.
(Note 2) Number of new shares to be delivered by the Joint Holding Company (planned):
18,379,715 shares of its common stock
The number of shares specified above is calculated based on GL Sciences’ total number of issued shares of
11,190,000 shares (as of March 31, 2024), and the Company’s total number of issued shares of 3,900,000
shares (as of March 31, 2024). As GL Sciences and the Company are respectively planning that, before theShare Transfer takes effect, they will cancel their treasury shares which are currently held or may hereafter
be newly acquired by them, within the range of such treasury shares that can be cancelled in practice, it is notplanned that the shares of the Joint Holding Company will be allotted for the treasury shares respectively heldby GL Sciences and the Company as of March 31, 2024 (GL Sciences: 930,260 shares; the Company: 33,345
shares); provided, however, that, as the numbers of treasury shares to be actually cancelled before theeffective date of the Share Transfer have not yet been determined, the aforementioned number of new shares
to be issued by the Joint Holding Company is subject to change.
(Note 3) Number of shares constituting one unit of shares of the Joint Holding Company and handling of shares lessthan one unit
The number of shares constituting one unit of shares of the Joint Holding Company shall be 100 shares.
The shareholders of GL Sciences and the Company to whom the shares of the Joint Holding Company areallotted in any number less than one unit (i.e., 100 shares) as a result of the Share Transfer will be unable tosell their allotted shares on the Tokyo Stock Exchange or any other financial instruments exchange. However,
it is possible for shareholders who may come to hold such shares less than one unit to demand the Joint
Holding Company to purchase such shares less than one unit held by them, in accordance with Article 192,
Paragraph 1 of the Companies Act. In addition, since the Joint Holding Company plans to include a provisionin its Articles of Incorporation to the effect that the shareholders of the Joint Holding Company who holdshares less than one unit are entitled to demand the Joint Holding Company to sell them such number of the
Joint Holding Company’s shares which, together with the number of shares less than one unit held by themwill constitute one unit, it is also possible for such shareholders to demand the Joint Holding Company to sellthem such number of the Joint Holding Company’s shares which, together with the number of shares lessthan one unit held by them, will constitute one unit, in accordance with Article 194, Paragraph 1 of theCompanies Act and such provision of the Articles of Incorporation.
(ii) Grounds for Details of Allotment Pertaining to the Share Transfer
a. Grounds and reasons for details of allotment
To ensure the fairness of the share transfer ratio and other aspects of the Share Transfer, GL Sciences has appointed Mitsubishi
UFJ Morgan Stanley Securities Co., Ltd. (“Mitsubishi UFJ Morgan Stanley Securities”) as its financial advisor and third-party
valuation institution, and TMI Associates as its legal advisor. Meanwhile, the Company has appointed Daiwa Securities Co., Ltd.
(“Daiwa Securities”) as its financial advisor and third-party valuation institution, and City-Yuwa Partners as its legal advisor.
Both companies have obtained valuation reports with regard to the share transfer ratio from their respective third-party valuation
institutions as of February 8, 2024.
GL Sciences and Techno Quartz carefully examined the share transfer ratio upon comprehensively taking into consideration:(i) the calculation results and advice regarding the share transfer ratio that were provided by their respective financial advisors
and third-party valuation institutions; (ii) the advice from their respective legal advisors; and (iii) the results of due diligencemutually conducted on one another, their respective financial conditions, business performance trends, share price trends, etc.,
in addition to having a series of negotiations and discussions, and ultimately reached the conclusion that the share transfer ratio
described in (1) (i) above is appropriate, and decided on the share transfer ratio in the Share Transfer at their respective board of
directors meetings held on February 9, 2024, and agreed to the same in the memorandum of understanding.
In addition, with regard to the conditions forming the basis for the calculation of the share transfer ratios specified above, GL
Sciences and the Company have confirmed that there has been no material change therein after the execution of the memorandumof understanding, which would affect such share transfer ratios, and have also agreed to such share transfer ratios in theManagement Integration Agreement and the Share Transfer Plan, both dated May 10.

- 62 -

b. Matters relating to the valuation(a) Name of the valuation institutions and relationship with GL Sciences and the Company
Neither Mitsubishi UFJ Morgan Stanley Securities, as the valuation institution of GL Sciences, nor Daiwa Securities, as
the valuation institution of the Company, is a related party of either GL Sciences or the Company or has any material interest
that should be specifically noted in connection with the Share Transfer.
(b) Outline of calculation
Mitsubishi UFJ Morgan Stanley Securities has adopted and made calculations using: (a) the market stock price analysis on
the grounds that the shares of the Companies are listed on a financial instruments exchange and their market stock prices areavailable; (b) the comparable peer company multiple analysis on the grounds that there exist multiple comparable listed peer
companies with respect to both Companies and that the stock price is available for comparable peer company multiple
analysis; and (c) the discounted cash flow analysis (“DCF Analysis”) in order to reflect the status of future business activities
to the assessment.
For the market stock price analysis, the closing price of the share price on the calculation base date on the Tokyo Stock
Exchange and the simple average of the closing prices on the respective transaction dates for the respective periods of one (1)month prior to the calculation base date, three (3) months prior to the calculation base date and six (6) months prior to thecalculation base date on the Tokyo Stock Exchange have been adopted with the calculation base date of February 8, 2024.
The calculation of prices using the DCF Analysis is based on various factors, such as the profits in the financial prospects
and investment plans provided by the management of GL Sciences and the Company, all of which have been acknowledged
by both Companies to be used for the purpose of the calculation, results of the due diligence conducted on GL Sciences andthe Company and other information generally made available to the public. For the avoidance of doubt, the financial prospectsof the Companies on which the calculations are based do not include those for fiscal years in which significant increases ordecreases in profits are expected.
The results of the calculations under each of the above methods are as follows. The results of the calculations of the sharetransfer ratio below represent the results of the calculations of the number of common stock of the Joint Holding Company tobe allotted for one common share of the Company where one common share of the Joint Holding Company is allotted for one
common share of GL Sciences.
Adopted method
Calculation results of share transfer ratio
Market stock price analysis
1.90 to 2.08
Comparable peer company multiple analysis
1.62 to 2.43
DCF Analysis
1.55 to 2.90
(Note) The analysis by Mitsubishi UFJ Morgan Stanley Securities and the analysis of the underlying share transfer ratio
are provided to the board of directors of GL Sciences for its reference only. Such analysis does not constitute a financial
opinion or recommendation of Mitsubishi UFJ Morgan Stanley Securities or its affiliates, nor does it provide its approval of
the Share Transfer, or an opinion or recommendation to the shareholders of GL Sciences or the Company regarding the transfer
and acquisition of shares and the exercise of the shareholder rights, including the exercise of voting rights, or their consent to
the Share Transfer or any other related matters. Mitsubishi UFJ Morgan Stanley Securities relies on the information that isalready publicly available or any information provided by GL Science or the Company or otherwise obtained for the analysis
and calculation of the share transfer ratio, assuming that such information is accurate and complete, and has not independently
verified the accuracy and completeness thereof. Also, Mitsubishi UFJ Morgan Stanley Securities assume that the financial
prospects reflect the best prospects and judgement currently available with respect to the future financial condition of GL
Science and the Company and has been reasonably prepared and provided by the management of GL Science and the Company.
Mitsubishi UFJ Morgan Stanley Securities has not made or obtained any independent assessment or appraisal of the assets
and liabilities (including contingent liabilities) of GL Science, the Company or their affiliates, nor has it requested any thirdparty institution to value or appraise them. Mitsubishi UFJ Morgan Stanley Securities’ analysis is based on economic, financial,market, and other conditions as of the calculation base date of the share transfer ratio calculation report and on information
available to Mitsubishi UFJ Morgan Stanley Securities as of such date. Although there is a possibility that an event occurringon or after the date may affect the basis on which the Mitsubishi UFJ Morgan Stanley Securities’ analysis and the share transfer
ratio calculation report have been prepared, Mitsubishi UFJ Morgan Stanley Securities is not obligated to update, revise orreconfirm the share transfer ratio calculation report or its analysis. In addition, the preparation of the share transfer ratio
calculation report and the underlying analysis therefor was a complex process and is not necessarily suitable for partial analysis
or summary description. The valuation ranges based on the specific analysis described herein may not be considered as
Mitsubishi UFJ Morgan Stanley Securities’ assessment of the actual value of GL Science or the Company.
Daiwa Securities, on the other hand, has adopted and made calculations using: (a) the market share price method, on the
grounds that the shares of GL Sciences and the Company are listed on a financial instruments exchange and that their market
share prices are therefore available; and (b) the discounted cash flow method (the “DCF Method"), in order to reflect the
future status of business activities in the assessment.
For the market share price method, the closing price of the share price on the calculation reference date on the Tokyo Stock
Exchange and the simple average closing prices on the Tokyo Stock Exchange over the one (1) month, three (3) months andsix (6) months periods prior to the calculation reference date have been adopted with the calculation reference date of February
8, 2024.
Under the DCF Method, the corporate value is evaluated by discounting future cash flows, etc. based on financial forecasts
prepared by GL Sciences and the Company to the present value, using a certain discount rate. For the avoidance of doubt, thefinancial forecasts of the two companies which the calculations are based do not include those for fiscal years in whichsignificant increases or decreases in profits are expected.
The results of the calculations under each of the methods above are as specified in the table below. The results of thecalculations of the share transfer ratio specified below show the numbers of the Joint Holding Company’s common stock to
be allotted for each share of the Company’s common stock, where one (1) share of the Joint Holding Company’s common
stock is allotted for each share of GL Sciences’ common stock.

- 63 -

Adopted Methods
Market share price method
DCF Method

Share Transfer Ratio Calculation Results
1.90 to 2.08
1.72 to 2.41(iii) Handling of expected delisting and the Joint Holding Company’s listing application
GL Sciences and the Company are planning to conduct a technical listing of the shares of the newly established joint holding
company on the Tokyo Stock Exchange. The listing date is scheduled for October 1, 2024. Furthermore, as GL Sciences and theCompany will become wholly-owned subsidiaries of the Joint Holding Company upon the Share Transfer, their shares arerespectively planned to be delisted from the Tokyo Stock Exchange as of September 27, 2024, prior to the listing of the Joint
Holding Company. The actual delisting date will be determined pursuant to the relevant regulations of the Tokyo Stock Exchange.
(iv) Measures to ensure fairness
As GL Sciences is the controlling shareholder of the Company, and the Company is a subsidiary of GL Sciences, the Share
Transfer constitutes a material transaction, etc. for the Company. Therefore, the following measures have been taken to ensure
the fairness of the Share Transfer:a. Obtaining valuation reports from independent third-party valuation institutions
To ensure the fairness and adequacy of the Share Transfer, as set out in (ii) a. above, GL Sciences appointed Mitsubishi UFJ
Morgan Stanley Securities, and the Company appointed Daiwa Securities, respectively, as third-party valuation institutions
independent of each such company, and received a share transfer ratio valuation report to form the basis for their agreement on
the share transfer ratios to be used for the Share Transfer. It should be noted that neither of the two companies have obtained awritten opinion (known as “a fairness opinion”) from their third-party valuation institutions to the effect that the share transfer
ratios specified above are adequate for their respective shareholders from a financial perspective.
b. Advice from independent law firms
To ensure the fairness and adequacy of the Share Transfer, GL Sciences appointed TMI Associates, and the Company
appointed City-Yuwa Partners, respectively, as legal advisors independent of each such company, and they have been receiving
legal advice from their legal advisors concerning matters such as the procedures for the Share Transfer, as well as the decisionmaking methods and process involved in the Share Transfer. Neither TMI Associates nor City-Yuwa Partners is a related partyof either company, or has any material interest in the Management Integration that should be specifically stated.
(v) Measures to avoid conflicts of interest
As GL Sciences is the controlling shareholder of the Company, and the Company is a subsidiary of GL Sciences, the Share
Transfer constitutes a material transaction, etc., with a controlling shareholder for the Company. Therefore, the following
measures have been taken to avoid conflicts of interest:a. Obtaining a written report from a special committee with no interest in the Company
In order to exercise care in the Company’s decision making regarding the Management Integration, so as to thereby (i) avoid
the risk of arbitrariness and conflicts of interest in the Company’s board of directors meeting’s decision-making process andensure the fairness thereof, as well as to (ii) confirm that the decision by the Company’s board of directors meeting to carry out
the Management Integration would not be disadvantageous for the Company’s minority shareholders, on November 21, 2023
the Company’s board of directors meeting established a special committee (the “Techno Quartz Special Committee”) made upof three (3) members: Mr. Kazuya Ishikawa, Mr. Shigeki Taniguchi, and Mr. Taketo Morita, each an outside director of theCompany notified to the Tokyo Stock Exchange as an independent officer, who has no interest in GL Sciences or the Company.
The members of the Techno Quartz Special Committee have not changed since it was first established, and such committee has
elected Mr. Kazuya Ishikawa as its chair by a mutual vote of the committee members.
The Company’s board of directors meeting has requested the Techno Quartz Special Committee to provide advice as to: (a)whether the purpose of the Management Integration can be found to be legitimate and reasonable (including whether theManagement Integration will serve to increase the Company’s corporate value); (b) whether the fairness and adequacy of thetransaction terms of the Management Integration (including the share transfer or share exchange ratios in the event of a joint
share transfer or share exchange) has been ensured; (c) whether sufficient consideration has been given to the interests of theCompany’s shareholders through fair procedures in the Management Integration; and (d) whether, in addition to (a) through (c)above, the Management Integration is not disadvantageous to the Company’s minority shareholders ((a) through (d) are
hereinafter collectively referred to as the “Techno Quartz Inquiry Matters”).
In addition, the Company’s board of directors meeting resolved that it will make decisions on the Management Integration by
giving maximum respect to the Techno Quartz Special Committee’s opinion. More specifically, if the Techno Quartz Special
Committee considers the Management Integration to be disadvantageous to the Company’s minority shareholders, theCompany’s board of directors meeting will not approve the promotion and execution of the Management Integration.
The Company’s board of directors meeting resolved to grant the Techno Quartz Special Committee the authority to: (a)negotiate (including indirect negotiations through the Company and its advisors) on transaction terms, etc., as necessary; (b)appoint advisors to the Techno Quartz Special Committee at the Company’s expense (including the authority to retrospectively
approve City-Yuwa Partners as the Company’s legal advisor and Daiwa Securities as the Company’s financial advisor and thirdparty valuation institution, whose appointment was approved by the Company’s board of directors meeting); and (c) receive
information necessary for them to review and make determinations on the Management Integration from the Company and GL
Sciences (including their officers and employees). It should be noted that the remuneration paid to the committee members of
the Techno Quartz Special Committee is only fixed remuneration that is paid irrespective of the success of the Management
Integration and the content of the report, and does not include any contingency fees conditioned on the announcement or
implementation, etc. of the Management Integration.
The Techno Quartz Special Committee conducted careful examination of the Techno Quartz Inquiry Matters by holding a totalof 10 meetings for a total of approximately 9.5 hours from December 5, 2023 to February 8, 2024, as well as by stating theiropinions, exchanging information, and collecting information, etc. through e-mails, etc. outside of meetings, and holding ad hoc
discussions as necessary.

- 64 -

More specifically, at the initial meeting of the Techno Quartz Special Committee, the Techno Quartz Special Committee first
confirmed whether there were any issues with the independence and expertise of Daiwa Securities as the Company’s financial
advisor and third-party valuation institution and City-Yuwa Partners as its legal advisor, and respectively approved such parties
as its financial advisor and third-party valuation institution, and legal advisor, and confirmed that it can receive professional
advice as necessary for the Techno Quartz Special Committee.
The Techno Quartz Special Committee also approved the Company directors, etc., involved in examining the Management
Integration upon confirming that their independence from GL Sciences had been ensured and that there were no problems froma conflict-of-interest perspective.
The Techno Quartz Special Committee then: (a) received explanations from the Company regarding the details of theManagement Integration proposal and the purpose, significance and expected synergies, etc. of the Management Integration, as
well as the background to the preparation of the Company’s business plan and the content thereof, etc., and asked questions andreceived answers regarding these matters; (b) received explanations from GL Sciences regarding the purpose, significance andexpected synergies, etc. of the Management Integration, the structure of the Management Integration, the reasons for selecting
the timing of the Management Integration and the basic policy regarding the proposed integration ratio, as well as the
management policy of the group after the Management Integration, and asked questions and received answers regarding suchmatters; (c) received explanations on the results and reasons for the calculations of the share transfer ratios as well as the scheme
for the Management Integration from the Company’s financial advisor and third-party valuation institution, Daiwa Securities,
and asked questions and received answers regarding such matters; (d) received advice from the Company’s legal advisor, CityYuwa Partners, regarding the details of measures to ensure the fairness of the Management Integration from a procedural
perspective as well as the decision-making method and process of the Company’s board of directors meeting regarding theManagement Integration and other measures to avoid conflicts of interest, and asked questions and received answers regarding
such matters; and (e) collected information regarding the Management Integration from related materials, etc. submitted inrelation to the Management Integration, and also used such information to carefully discuss, examine, and deliberate on Techno
Quartz Inquiry Matters.
It should be noted that the Techno Quartz Special Committee was involved in the negotiation process of the Management
Integration, such as by discussing the negotiation policy, etc. multiple times, and stating its opinion to the Company on multiple
occasions upon receiving timely reports on the process and details, etc. of discussions and negotiations regarding theManagement Integration from the Company.
With that background, the Techno Quartz Special Committee conducted careful deliberation and examination of the Techno
Quartz Inquiry Matters based on such explanations, the results of valuations, and other examination materials, and submitted
its written report to the Company’s board of directors meeting on February 8, 2024, generally as set out below.
(a). Whether the purpose of the Management Integration can be found to be justifiable and reasonable (including whether
the Management Integration will serve to improve the Company’s corporate value)
According to an examination of the materials that the Techno Quartz Special Committee has received from the Company
and the results of interviews, etc. with the Company and GL Sciences, the Company’s management issues are the need to:(i) secure scarce personnel resources; (ii) further improve production capacity; and (iii) establish strong corporate functions
to support both site and business sides of the Company, to capture market growth under the anticipated medium- to longterm trend of expansion in semiconductor demand in the business environment. The purpose of the Management Integration
is to achieve further increased corporate value in the future, with the aim of having the entire group leap forward by
establishing a stronger unity than ever with GL Sciences which possesses a robust business foundation capable ofconsistently supporting the group’s revenue, under the anticipated medium- to long-term trend of expansion insemiconductor demand while undergoing short-term adjustment phases. the Techno Quartz Special Committee also
considers that there are no particular doubts about the management environment and management issues surrounding theCompany as recognized by the Company, and that the above purposes are reasonable.
In addition, the Management Integration will contribute to the increased corporate value of the entire GL Sciences group,
including the Company, as the Management Integration will enable them to achieve measures and effects such as: (i)capturing growth opportunities through strengthened group strategy functions and optimized management resource
allocation; (ii) improving management efficiency through the consolidations, etc., of administrative functions; and (iii)maximizing value provided to stakeholders and expediting decision-making processes. The explanations that the Techno
Quartz Special Committee received from the Company and GL Sciences, as well as the responses that the Company and
GL Sciences gave to the questions that the Techno Quartz Special Committee asked the Company and GL Sciences withrespect to the above measures and effects, etc., were found to be reasonable in terms of their contents. Therefore, theTechno Quartz Special Committee considers that the measures and effects, etc. for the increased corporate value assumed
by the two companies are reasonable, and that a certain increase in corporate value is expected as a result of theManagement Integration.
In addition, as the Company and GL Sciences consider that: (i) there could be a risk of certain restrictions and limitations
on the mutual utilization of management resources because of concerns about conflicts of interest with their respective
minority shareholders if the Company and GL Sciences maintain their current capital relationship, in which they are in aposition to conduct independent business operations as listed companies; (ii) the rapid decision-making and further sharingof management resources across the entire group can be realized through the establishment of a joint holding company
through the Management Integration, thereby dissolving the parent-subsidiary listing structure with the aim of aligninginterests within the group; and that (iii) the scheme of the Share Transfer is the best option to respect the corporate culturesand climates of both companies and to establish a structure that allows each company to develop its strengths and pursue
synergies while maintaining their respective business frameworks. Considering that, in the Share Transfer, the minority
shareholders of the Company, as shareholders of the Joint Holding Company, will be in a position to continuously enjoy
the benefits of increased corporate value resulting from the Management Integration, in implementing the Management
Integration in order to increase the possibility of achieving synergies in accordance with the considerations of the twocompanies as set forth above, the decision to select the Share Transfer as the legal scheme thereof is considered to be
sufficiently reasonable.
Furthermore, although there are disadvantages that may arise to the Company and each of its stakeholders due to theCompany no longer being a listed company as a result of the Management Integration, such as: (i) difficulty in acquiring- 65 -

human resources; (ii) damage to credibility; (iii) weakening of the governance system; and (iv) limitation of information
disclosure, etc., these disadvantages are considered to be limited because the Joint Holding Company will continue toperform the relevant functions as a listed company after the Management Integration.
In light of the above, the Management Integration will contribute to the increased corporate value of the Company, andthe purpose of the Management Integration is considered justifiable and reasonable in light of the grounds for choosing therelevant corporate structure, and the possible disadvantages that may be assumed.
(b). Whether the fairness and adequacy of the terms of the Management Integration (including the share transfer or shareexchange ratio in the event of a joint share transfer or share exchange) is maintained
The Techno Quartz Special Committee obtained a share transfer ratio valuation report from the Company’s financial
advisor and third-party valuation institution, Daiwa Securities. In light of the share transfer ratio of the Company’s sharesin the said valuation report, the share transfer ratio (1:2.10) for the Management Integration exceeds the upper limit value
ratio of the calculation results based on the market share price method, and the premium over the market share price forthe share price used as the basis for the share transfer ratios exceeds an average level compared to respective premiums
from the share prices of the immediately preceding day, one (1)-month average, three (3)-month average, and six (6)-monthaverage in the cases of management integration projects by way of the share transfer method. In addition, the share transfer
ratios for the Management Integration are at a level above the range of the median ratio of 2.06 of the calculation results
under the DCF Method. According to the explanation that the Techno Quartz Special Committee received from Daiwa
Securities, Daiwa Securities’ calculation methods for the share transfer ratio, the market share price method and the DCF
Method are considered to be general and reasonable methods in light of current practices. As for the DCF Method, it isconfirmed that the content of the calculation was reasonable in light of current practices, and that there is nothing
particularly unreasonable in the business plans of the Company and GL Sciences which are used as the basis for the
calculation.
In addition, in the process of negotiating and determining the share transfer ratios for the Management Integration, theTechno Quartz Special Committee examined whether the share transfer ratios for the Management Integration arereasonable in light of the interests of the Company’s minority shareholders, upon receiving advice from Daiwa Securities
on the negotiation policy from a financial standpoint, giving instructions regarding the negotiation policy with GL Sciences,and receiving reports on the negotiation process.
Moreover, no unreasonableness is found in the method of the Management Integration as any of the Company’s minority
shareholders who are not satisfied with the share transfer ratios for the Management Integration will be provided with amethod to secure their economic interests through the procedures of exercising dissenting shareholders’ appraisal rights asprovided for in the Companies Act.
Furthermore, neither any circumstances that would be disadvantageous to the Company’s minority shareholders nor any
other specific circumstances that would cast doubt on the fairness of the process for determining the share transfer ratios
for the Management Integration have been found by the Techno Quartz Special Committee as a result of examining thedraft of the memorandum of understanding and other transaction terms that have been shared by the Company related to
the Share Transfer.
Comprehensively taking the above points into consideration, the Techno Quartz Special Committee has concluded thatthe fairness and adequacy of the terms of the Management Integration (including the share transfer ratios) have been
ensured.
(c). Whether sufficient consideration has been given to the interests of the Company’s minority shareholders through fair
procedures in the Management Integration
The Techno Quartz Special Committee has determined that sufficient consideration has been given to the interests of theminority shareholders of the Company through fair procedures in the Management Integration in light of the facts that: (i)the Company’s board of directors meeting has established the Techno Quartz Special Committee, which is independent
from both GL Sciences and the Company; (ii) in the course of examining the Management Integration, the Company hasreceived advice from its legal advisor, City-Yuwa Partners, and its financial advisor and third-party valuation institution,
Daiwa Securities, both of which are independent of both GL Sciences and the Company, and that the Techno Quartz Special
Committee, upon approving the Company’s above-listed legal advisor and financial advisor, has received their professional
advice on as-needed basis; (iii) a share transfer ratio calculation report has been obtained from Daiwa Securities, a thirdparty valuation institution independent of both GL Sciences and the Company; and (iv) the Management Integration does
not pose any particular issues of coerciveness, and there is also no unreasonableness in the fact that no market check has
been conducted and no majority-of-minority conditions have been set.
(d). Whether the Management Integration is disadvantageous to the Company’s minority shareholders, in light of (a) through(c) above
As a result of examining the above factors, the decision by the Company’s board of directors meeting to promote andimplement the Management Integration is not considered to be disadvantageous to the minority shareholders of theCompany, in light of the facts that: (i) the Management Integration will contribute to an increase in the corporate value of
the Company, and the purpose of the Management Integration is considered to be fair and adequate as described in (a)above; and (ii) the fairness and adequacy of the transaction terms of the Management Integration, including the sharetransfer ratios, are ensured, and sufficient consideration has been given to the interests of the minority shareholders of theCompany through fair procedures as described in (b) and (c) above.
b. Unanimous approval of all of the Company’s directors (including directors who are audit and supervisory committee
members) who do not have an interest in the Management Integration
The Company has carefully examined the Management Integration, respecting the content of the written report to the maximum
extent possible, while taking the share transfer ratio valuation report obtained from Daiwa Securities and the legal advice obtained
from City-Yuwa Partners into consideration. As a result, at the Company’s board of directors meeting held on February 9, 2024,
all of the Company directors (including directors who are audit and supervisory committee members) who participated in the
deliberation and resolution unanimously deliberated and resolved on the execution of the memorandum of understanding.

- 66 -

(2) Matters regarding the amounts of capital and reserves of the Joint Holding Company
GL Sciences and the Company have determined the amounts of capital and reserves of the Joint Holding Company upon
the establishment of the Joint Holding Company by the Share Transfer as follows.
(1) Amount of capital
300,000,000 yen(2) Amount of legal capital surplus
0 yen(3) Amount of legal retained earnings
0 yen
These amounts of capital and reserves have been determined within the range stipulated in Article 52 of the Regulations on
Corporate Accounting after comprehensively considering and examining the size and other circumstances of the Joint Holding
Company and upon consultation between GL Sciences and the Company.
4. Matters regarding GL Sciences(1) Details of financial statements of the final fiscal year (Fiscal year ended March 31, 2024)
Details of GL Sciences’ financial statements for fiscal year ended March 31, 2024 are excluded from this document inaccordance with the provisions of laws and regulations and Article 15 of the Company’s Article of Incorporation. Suchdetails are posted on the Company’s website and the TSE website.
(2) Details of events materially affecting the status of corporate property that occurred in the final business year
Not applicable
5. Details of events materially affecting the status of corporate property that occurred in the Company after the last day of the final
business year
Not applicable.

- 67 -

6. Matters stipulated in Article 74 of Regulations for Enforcement of the Companies Act regarding persons who will become Directorsof the Joint Holding Company (excluding Directors who are Audit and Supervisory Committee Members)
Persons who will become Directors of the Joint Holding Company (excluding Directors who are Audit and Supervisory
Committee Members) are as follows.

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1982
April 2006
April 2007
October 2007

July 2012
October 2012
April 2013

June 2013

July 2013
Yoshihiro Nagami(August 12, 1959)
1

April 2015

June 2015

July 2015
April 2018
October 2018
June 2019
July 2019
October 2020

(1) Number of GL
Sciences’ shares held(2) Number of sharesof the Company held(3) Number of the
Joint Holding
Company’s sharesallotted

Joined GL Sciences Inc.
Manager, Sales Section 2, Osaka Branch Office
Manager attached to Sales Division
Seconded overseas; Executive Vice President,
SHIMADZU-GL SCIENCES (SHANGHAI)LABORATORY SUPPLIES CO., LTD.
Operating Officer, in charge of overseas, GL
Sciences Inc.
Operating Officer; Deputy Executive Senior
Manager, Sales Division
Operating Officer; Deputy Executive Senior
Manager, Sales Division; Chief Manager,
Affiliated-Abroad Company Administrative OfficeDirector; Executive Senior Manager, Sales
Division; Chief Manager, Sales Administration
Dept.; Chief Manager, Affiliated-Abroad Company
Administrative OfficeDirector; Executive Senior Manager, Sales
Division; Chief Manager, Affiliated-Abroad(1) 36,860 sharesCompany Administrative Office(2) –Director; Chief Manager, Management Planning(3) 36,860 shares
Office, GL Sciences Inc.
Director, GL Solutions Inc.
President; Chief Manager, Internal Audit Office;Chief Manager, Management Planning Office, GL
Sciences Inc.
President; Chief Manager, Internal Audit Office
President
President, GL Sciences (Shanghai) Limited(incumbent)
President; Chief Manager, Management Planning
Office, GL Sciences Inc.
President (incumbent)
Director, AGI Glass Academy Co., Ltd.
(incumbent)[Significant concurrent positions]
President, GL Sciences Inc.
President, GL Sciences (Shanghai) Limited
Director, AGI Glass Academy Co., Ltd.
[Reason for nomination as candidate for Director]
Mr. Yoshihiro Nagami is responsible for overall management as President of GL Sciences Inc. He has a wealth ofknowledge and insight through his experience in domestic and overseas sales and greatly contributed todevelopment of GL Sciences and its group. The Company judges that he is also capable of appropriately fulfilling
duties as a Director of the newly established Joint Holding Company, and thus nominates him as a candidate for
Director.

- 68 -

Name(Date of birth)

No.

Career summary, positions, responsibilities
and significant concurrent positions

April 1982
April 2012

Joined GL Sciences Inc.
Chief Manager, Marketing and Sales Promotion
Dept., Sales Division
Operating Officer; Chief Manager, Marketing andSales Promotion Dept.
Operating Officer; Chief Manager, General
Planning Dept.
Operating Officer; Chief Manager, Management
Planning OfficeDirector; Chief Manager, Management Planning (1) 8,600 shares
Office, GL Sciences Inc.
(2) 3,892 shares
Director, Techno Quartz Inc.
(3) 16,773 shares
Director, Hangzhou Techno Quartz Inc
President, Techno Quartz Inc. (incumbent)
Chairman, Hangzhou Techno Quartz Inc.
(incumbent)
Director, GL TECHNO America, Inc. (incumbent)

July 2014
July 2015
April 2017
Ikunobu Sonoda(July 21, 1959)

June 2018

June 20192(1) Number of GL
Sciences’ shares held(2) Number of sharesof the Company held(3) Number of the Joint
Holding Company’s
shares allotted[Significant concurrent positions]
President, Techno Quartz Inc.
Chairman, Hangzhou Techno Quartz Inc.
[Reason for nomination as candidate for Director]
Mr. Ikunobu Sonoda has a wealth of experience and wide-ranging knowledge and insights gained in the sales andmanagement planning divisions of GL Sciences Inc. and since 2019, as President of Techno Quartz Inc., he is
responsible for overall management and demonstrates outstanding leadership. The Company judges that he is also
capable of appropriately fulfilling duties as a Director of the newly established Joint Holding Company, and thus
nominates him as a candidate for Director.

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1983
May 2009
September 2011
June 2013
June 2014
Osamu Serizawa(May 25, 1960)

April 2017
June 20183
October 2018

(1) Number of GL
Sciences’ shares held(2) Number of sharesof the Company held(3) Number of the Joint
Holding Company’s
shares allotted

Joined The Mitsubishi Bank, Ltd. (currently
MUFG Bank, Ltd.)
General Manager, Kanda-Ekimae Branch
General Manager, On-site Credit Supervision
Office, Credit Division
Audit & Supervisory Board Member,
SEIKAGAKU CORPORATION
Director; General Manager, Business
Administration Dept., SEIKAGAKUCORPORATION(1) 2,943 shares
Advisor to Administrative Division, GL Sciences (2) –Inc.
(3) 2,943 shares
Director; Executive Senior Manager,
Administrative Division (incumbent)
Director, GL Sciences (Shanghai) Limited(incumbent)[Significant concurrent positions]
Director; Executive Senior Manager, Administrative Division, GL
Sciences Inc.
Director, GL Sciences (Shanghai) Limited[Reason for nomination as candidate for Director]
Mr. Osamu Serizawa worked at listed companies, including a financial institution. He has abundant managerial
experience and a wealth of knowledge and experience concerning financial and administrative aspects and as a
Director of GL Sciences Inc., greatly contributed to management and overall administrative operations of GL
Sciences and its group. The Company judges that he is also capable of appropriately fulfilling duties as a Directorof the newly established Joint Holding Company, and thus nominates him as a candidate for Director.
(Notes)1. The number of shares of both companies held by each candidate is as of March 31, 2024, and includes the number ofshares held in the name of the Director Shareholding Association of both companies. In addition, the number of shares- 69 -

of the Joint Holding Company to be allotted are based on such shareholding status, taking into account the share transfer
ratio. The actual number of shares of the Joint Holding Company to be allotted may vary depending on the number ofshares held immediately prior to the date of the establishment of the Joint Holding Company.
2. There are no special interests between each candidate and the Company and GL Sciences Inc., nor are they expected
to have any special interests with respect to the Joint Holding Company.
3. If each of the candidates for Directors assumes the office, the Joint Holding Company will enter into a liability
insurance agreement provided for in Article 430-3, Paragraph 1 of the Companies Act with an insurance company,
under which legal damages or legal costs, etc. to be borne by Directors resulting from their duties will be covered.

- 70 -

7. Matters stipulated in Article 74-3 of the Regulations for Enforcement of the Companies Act regarding persons who will become
Directors who are Audit and Supervisory Committee Members of the Joint Holding Company
Persons who will become Directors who are Audit and Supervisory Committee Members of the Joint Holding Company
are as follows.

No.

Name
(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1987
May 2005

November 2008

February 2011
Takahiro Saito(December 25, 1963)

1

April 2013
July 2016
September 2016
June 2023

February 2024

(1) Number of GL
Sciences’ shares held(2) Number of sharesof the Company held(3) Number of the Joint
Holding Company’s
shares allotted

Joined The Sanwa Bank, Limited (currently
MUFG Bank, Ltd.)
Deputy General Manager, Singapore Branch,
UFJ Bank Limited (currently MUFG Bank,
Ltd.)
General Manager, Corporate Banking
Department No. 2, Shibuya Branch, MUFG
Bank, Ltd.
General Manager, Esaka Branch, MUFG Bank,
Ltd.
General Manager, Aoyama Branch, MUFG
(1) – shares
Bank, Ltd.
(2) – shares
Retired from MUFG Bank, Ltd.
(3) – shares
President and Representative Director, Solution
Design Co., Ltd.
Retired from Solution Design Co., Ltd.
Director, Audit and Supervisory Committee
Member, GL Sciences Inc. (incumbent)
Auditor, FLOM, Inc. (incumbent)[Significant concurrent positions]
Director, Audit and Supervisory Committee Member, GL Sciences
Inc.
Auditor, FLOM, Inc.
[Reason for nomination as candidate for Outside Director and expected roles]
Mr. Takahiro Saito has extensive experience and knowledge gained through his service at financial institutions,engagement in management of an investment fund management company, and service as an outside director atseveral investees. The Company judges that Mr. Takahiro Saito will provide management supervision and advisefrom a global viewpoint and from a neutral and objective perspective and contribute to the enhancement of thefunctions of the Board of Directors and the sustainable growth of the entire group, and thus nominates him as a
candidate for Outside Director who is an Audit and Supervisory Committee Member.

- 71 -

No.

Name(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

April 1984
July 1997
June 2000

December 2004
August 2008
June 2018
June 2018

June 2018
June 2019
June 2020
Yumiko Nagasawa(November 6, 1959)

June 2020
June 20212
September 2022
June 2023(1) Number of GL
Sciences’ shares held(2) Number of sharesof the Company held(3) Number of the Joint
Holding Company’s
shares allotted

Joined Nikko Securities Co., Ltd. (currently
SMBC Nikko Securities Inc.)
Vice President, Individual Investment Division,
Citibank N.A. (Tokyo)
Vice President, SSB Citi Asset Management Co.,
Ltd. (currently Franklin Templeton Japan Co.,Ltd.)
Director General, Foster Forum
Representative Director of Nagasawa Building
Co., Ltd. (incumbent)
Facilitator, Foster Forum (incumbent)
Representative Director and Vice Chairperson,
Nippon Association of Consumer Specialists(incumbent)
Outside Director, Yamaguchi Bank, Ltd.
Director, Japan Industrial Association(incumbent)
Outside Director, Yamaguchi Financial Group,(1) – sharesInc.
(2) – shares
Vice Chairperson, NPO Consumer Organization(3) – sharesof Japan (incumbent)
Outside Director, Yakult Honsha Co., Ltd.
(incumbent)
Director, Audit and Supervisory Committee
Member, GL Sciences Inc. (incumbent)
Audit and Supervisory Board Member, I-O
Wealth Advisors, Inc. (incumbent)
Director, Audit and Supervisory Committee
Member, Yamaguchi Financial Group, Inc.
(incumbent)[Significant concurrent positions]
Director, Audit and Supervisory Committee Member, GL Sciences
Inc.
Director, Audit and Supervisory Committee Member, Yamaguchi
Financial Group, Inc.
Outside Director, Yakult Honsha Co., Ltd.
Representative Director of Nagasawa Building Co., Ltd.
[Reason for nomination as candidate for Outside Director and expected roles]
Ms. Yumiko Nagasawa has extensive experience and knowledge at financial institutions and incorporated
associations as well as experience as outside directors at business corporations. The Company judges that Ms.
Yumiko Nagasawa will provide management supervision and advise from a neutral and objective perspective andcontribute to the enhancement of the functions of the Board of Directors and the sustainable growth of the entire
group, and thus nominates her as a candidate for Outside Director who is an Audit and Supervisory Committee
Member.

No.

Name(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions

October 2004
October 2004
June 20133

Taketo Morita(March 23, 1976)

April 2016
June 2020(1) Number of GL
Sciences’ shares held(2) Number of sharesof the Company held(3) Number of the Joint
Holding Company’s
shares allotted

Registered at Tokyo Bar Association
Joined MATSUDA & PARTNERS
Auditor, LCR Real Estate Investment
Management, Inc. (incumbent)
Partner, MATSUDA & PARTNERS (incumbent)(1) – shares
Director, Audit and Supervisory Committee(2) – shares
Member, Techno Quartz Inc. (incumbent)(3) – shares[Significant concurrent positions]
Partner, MATSUDA & PARTNERS
Director, Audit and Supervisory Committee Member, Techno QuartzInc.

- 72 -

No.

Name(Date of birth)

Career summary, positions, responsibilities
and significant concurrent positions(1) Number of GL
Sciences’ shares held(2) Number of sharesof the Company held(3) Number of the Joint
Holding Company’s
shares allotted[Reason for nomination as candidate for Outside Director and expected roles]
Mr. Taketo Morita is conversant with corporate legal affairs and corporate governance as an attorney-at-law. The
Company judges that Mr. Taketo Morita will conduct audits and supervision from an objective perspective basedon his deep insight and expertise and contribute to the enhancement of the functions of the Board of Directors andthe sustainable growth of the entire group, and thus nominates him as a candidate for Outside Director who is an
Audit and Supervisory Committee Member.
(Notes)1. The number of shares of both companies held by each candidate is as of March 31, 2024, and includes the number ofshares held in the name of the Director Shareholding Association of both companies. In addition, the number of sharesof the Joint Holding Company to be allotted are based on such shareholding status, taking into account the share transfer
ratio. The actual number of shares of the Joint Holding Company to be allotted may vary depending on the number ofshares held immediately prior to the date of the establishment of the Joint Holding Company.
2. There are no special interests between each candidate and the Company and GL Sciences Inc., nor are they expected
to have any special interests with respect to the Joint Holding Company.
3. Mr. Takahiro Saito, Ms. Yumiko Nagasawa, and Mr. Taketo Morita are candidates for Outside Directors.
4. If the election of Mr. Takahiro Saito, Ms. Yumiko Nagasawa, and Mr. Taketo Morita is approved, the Joint Holding
Company plans to register them as independent directors based on provisions of the Tokyo Stock Exchange.
5. If the election of each of the candidates for Outside Directors is approved, the Joint Holding Company will enter into
an agreement limiting their liability for damages provided for in Article 423, Paragraph 1 of the Companies Act basedon provisions of Article 427, Paragraph 1 of the same Act. The amount of liability for damages is limited to theminimum amount provided for in Article 425, Paragraph 1 of the same Act.
6. If each of the candidates for Outside Directors assumes the office, the Joint Holding Company will enter into a liability
insurance agreement provided for in Article 430-3, Paragraph 1 of the Companies Act with an insurance company,
under which legal damages or legal costs, etc. to be borne by Directors resulting from their duties will be covered.

- 73 -

8. Matters stipulated in Article 77 of the Regulations for Enforcement of the Companies Act regarding an entity that will become theaccounting auditor of the Joint Holding Company
The entity which will become the accounting auditor of the Joint Holding Company is as follows.
(As of April 1, 2024)
Name
Location of the principal office

Audit Corporation A&A Partners
D Square 2nd Floor, 1-16-11 Nihonbashi Chuo-ku Tokyo
July 1990
EstablishedMay 2007
Changed the name to Audit Corporation A&A Partners
July 200731 persons joined from Misuzu Audit Corporation(formerly Chuo Aoyama PriceWaterhouse Coopers
Audit Corporation) and its Tokyo office was relocated(Chuo-ku, Tokyo)
January 2009
Business alliance with Plante&Moran, a midsize
accounting firm in the U.S.
September 2010 Relocated the Tokyo office to the current location
History(Chuo-ku, Tokyo)
April 2011
Joined Japan Venture Capital Association (supporting
member)August 2011
Joined Morison International (currently Morison Global
Limited; the headquarters: London), an international
accounting firm group
January 2016
Joined Association of Certified Fraud Examiners Japan(premium membership)
July 2018
Joined International Computer Auditing Education
Association of Japan (ICAEA JAPAN)
Number of audit clients
129 companies
Paid-in capital
52 million yen
Partners and staff
Partners: 16 persons
Staff
CPA: 33 persons
CPAUS: 3 persons
CISA: 3 persons
Others: 33 persons
Total: 88 persons* Excludes part-time staff[Reason for nomination as candidate for accounting auditor]
Audit Corporation A&A Partners was selected as a candidate for the accounting auditor because the said auditing firm
has the expertise, independence and internal control systems, etc., required of the accounting auditor of the Joint
Holding Company and therefore was determined as qualified.

- 74 -

Reference Documents Concerning GL Sciences Inc.
for the General Meeting of Shareholders
in Relation to Proposal 1

Details of Financial Statements of GL Sciences’
Final Fiscal Year (Fiscal Year Ended March 31, 2024）(see the following pages)- 75 -

Business Report of GL Sciences Inc.
(April 1, 2023 to March 31, 2024)

I. Overview of the Corporate Group
1. Business progress and results
The Japanese economy in the fiscal year under review (April 1, 2023 to March 31, 2024) showed a moderate
recovery, thanks to economic activities moving toward normalization as a result of COVID-19 having been
reclassified as a Class 5 disease. However, the future prospects remain unclear due to the lasting impact ofsoaring prices of crude oil and other energy sources and raw materials as well as inflation from the continued
weakening of the Japanese yen. These situations have been affected by geopolitical risks such as the prolonged
situation in Ukraine and heightened tensions in the Middle East.
Under these economic circumstances, with the aim of achieving the Medium-term Management Plan (fromthe fiscal year ended March 31, 2022 to the fiscal year ended March 31, 2024), the Analytical Instrument
Business has worked on efforts such as the sustainable expansion of the chromatography business and thestrengthening of the management foundations under the slogan of “Taking on Challenges.” The Semiconductor
Business has also strived to enhance production capacity and sales capabilities, among other efforts, with theaim of establishing its position as one of the world’s leading general manufacturers of semiconductor-related
precision parts in the field of quartz glass and silicon processing.
As a result, during the fiscal year under review, net sales decreased by 4.0% year on year to 37,148 million
yen. In profit figures, operating profit decreased by 5.3% year on year to 5,714 million yen, ordinary profit
decreased by 5.6% year on year to 6,108 million yen, and profit attributable to owners of parent decreased by
2.0% year on year to 3,430 million yen.
The Group’s results by segment in the fiscal year under review are as follows:(Millions of yen)(Results by segment)
Net sales

Operating profit

Fiscal year
ended March
31, 2023

Fiscal year
ended March
31, 2024

YoY change(%)

Fiscal year
ended March
31, 2023

Fiscal year
ended March
31, 2024

YoYchange (%)

Analytical Instrument
Business

17,163

18,281

6.5

1,888

1,962

3.9

Semiconductor
Business

20,00317,029(14.9)

4,068

3,615

(11.1)

Automated
Recognition Business

1,513

1,836

21.3

67

134

98.5

Subtotal

38,67937,148

(4.0)

6,024

5,712

(5.2)

–

–

9

1

(87.8)

38,67937,148

6,034

5,714

(5.3)

Elimination orCompany-wide
Consolidated Total

–
(4.0)

- 76 -

Status of individual segments(Analytical Instruments Business)
In the Analytical Instruments Business, net sales exceeded the previous fiscal year’s result, following easing of
global supply shortages of semiconductors and components, which had negatively affected the production.
Net sales in Japan increased due to strong sales of consumables in many areas, including food, the environment,
contract analysis, and inorganic chemistry. In particular, columns for liquid chromatography, parts and components,
standard reagents, and after-sales services were strong. Sales of instruments exceeded the previous fiscal year’s
result as we were able to limit the impact of delayed equipment work at a customer site. The Company’s and othercompanies’ high performance liquid chromatography-related instruments for water quality analysis and contracted
analysis as well as gas chromatography-related products and other companies’ instruments in the areas of carbon
neutrality, including customized instruments, were strong, resulting in increased sales of instruments overall.
Overseas net sales exceeded the previous fiscal year’s result in many areas, mainly Asia and North America,
despite impacts from the situations in Ukraine and the Middle East. By product, columns for liquid chromatography
intended mainly for pharmaceutical companies, consumables for environmental analysis, and OEM products
remained strong, resulting in increased sales.
As a result, net sales for the fiscal year under review were 18,281 million yen (up 6.5% from the previous fiscal
year) and operating profit was 1,962 million yen (up 3.9% from the previous fiscal year).
(Semiconductor Business)
In the semiconductor industry, though memory inventories continued piling up due to declining demand for personal
computers and smartphones, the current situation is recovering modestly. In addition, following an increase indemand in the generative AI field, proactive, far-sighted capital investments have been successively planned andconducted, such as new construction and expansion of cutting-edge semiconductor fabs in and outside Japan. Thus,
steady growth continues to be expected.
In the environment as mentioned above, this business will efficiently conduct production activities by uncovering
new demand toward the future, making preparations for building a framework for production expansion in Japanand promoting other operational improvements. In addition, the amount of orders received and net sales are on arecovery trend in the near term and the order backlog remains high.
As a result, net sales for the fiscal year under review were 17,029 million yen (down 14.9% from the previous
fiscal year) and operating profit was 3,615 million yen (down 11.1% from the previous fiscal year).
(Automated Recognition Business)
In the Automated Recognition Business, net sales increased from the previous fiscal year thanks to steady shipments
of products integrated into medical instruments (including vital check systems), products equipped with secure
microcomputers that are integrated into entry/exit management systems, and other automated recognition products
for housing-related facilities.
By product category, net sales exceeded the previous fiscal year’s results in all subsegments: products integrated
into instruments, finished products, and other products for automated recognition.
As a result, net sales for the fiscal year under review were 1,836 million yen (up 21.3% from the previous fiscal
year) and operating profit was 134 million yen (up 98.5% from the previous fiscal year).
2. Status of capital investment and financing
The total amount of capital investment in the fiscal year under review was 1,722 million yen. It was directed
mainly toward the replacement of old equipment.
There are no matters requiring a statement regarding financing.
3. Status of business transfer, absorption-type company split, or incorporation-type company split
There are no matters particularly worthy of note.
4. Status of acquisition of business of other companies
There are no matters particularly worthy of note.

- 77 -

5. Succession of rights and obligations concerning the business of other corporations, etc., due to anabsorption-type merger or absorption-type company split
There are no matters particularly worthy of note.
6. Status of acquisition or disposition of shares or other equity interests or share acquisition rights, etc. inother companies
There are no matters particularly worthy of note.
7. Issues to be addressed
In terms of future economic outlook, it is expected that economic activity will continue its trend toward normality
due mainly to a recovery of inbound consumption with the downgrading of COVID-19 to a Class 5 infectious
disease in Japan. However, the outlook is likely to remain uncertain due to various factors, including adeteriorating global economic outlook due to the prolonged situation Ukraine and geopolitical risks in the Middle
East, and inflation caused by soaring energy prices and the weakening yen.
Amid such circumstances, the Company and Techno Quartz Inc., a subsidiary, executed a management
integration agreement concerning the establishment of a joint holding company (joint share transfer) as of May
10, 2024.
The Company and Techno Quartz have, since their foundation, preserved the common basic philosophy:“fully demonstrating their social roles to the public; enhancing the value of their existence; bringing happinessto each of their employees; and maintaining and further developing their companies.” Through this management
integration, the two companies will be able to ensure sustainable growth for the group as a whole, and increase
their corporate value and further contribute to the development of their stakeholders.
In response to these issues to be addressed, the following provides an outline of the Group’s measures foreach segment:(Analytical Instrument Business)(i) Strengthen core products and improve profitability(ii) Invest strategically for sustainable growth(iii) Expand after-sales services by field engineers(iv) Enhance product database(v) Enrich the Company’s product lineup available for sale in the overseas market(Semiconductor Business)(i) Build up production capacity(ii) Enhance sales capabilities(iii) Improve operational efficiency(iv) Strengthen business foundations(v) Develop human resources(Automated Recognition Business)(i) Promote areas of growth expectations(ii) Improve quality(iii) Push forward active sales frameworks
We respectfully ask for the continued support of our shareholders going forward.

- 78 -

8. Trends in assets and profits and losses(Millions of yen, unless otherwise specified.)
57th fiscal year ended
54th fiscal year ended 55th fiscal year ended 56th fiscal year ended
March 31, 2021

March 31, 2022

March 31, 2023

March 31, 2024
(Fiscal year underreview)

Net sales

29,217

33,11938,67937,148

Ordinary profit

3,915

4,998

6,468

6,108

Profit attributable to owners ofparent

2,257

2,795

3,499

3,430

Profit per share (yen)220.00272.45341.05334.38

Total assets

38,68342,97551,011

55,567

Total net assets

27,756

31,52935,57840,2092,328.13

2,612.48

2,913.37

3,279.13

Net assets per share (yen)(Notes)1. For the 57th fiscal year under review, please refer to “(1) Business progress and results” above.
2. The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March
31, 2020) and other standards since the 55th fiscal year, and figures for assets and profits and losses from the55th fiscal year onward reflect the application of the Accounting Standard and other standards.

- 79 -

9. Significant subsidiaries(i)

Status of significant subsidiaries

Company name

CapitalVoting right ratio

FLOM Inc.

50 million JPY

100.00%Development, manufacture, and sale ofscientific and labor-saving devices

GL Sciences (Shanghai)
Limited135 million JPY

100.00%

Sale of analytical instruments

GL Sciences B.V.

1,018 thousand EUR

100.00%GL Sciences, Inc.

475 thousand USD

100.00%

GLOS Co., Ltd.

6 million JPY

100.00%Techno Quartz Inc.

829 million JPY

65.81%

24,100 thousand USD

Techno Quartz Inc.
100.00%

3 million JPY

Techno Quartz Inc.
100.00%GL TECHNO America, Inc.

100 thousand USD

Techno Quartz Inc.
100.00%GL Solutions Inc.

100 million JPY

100.00%Hangzhou Techno Quartz
INC.
AISINTEC Co., Ltd.

Description of main businesses

Development and sale of analytical sample
pretreatment equipment
Sale of analytical instruments
Sale of analytical instruments
Processing and assembly of the Company’s
products
Processing, manufacture, and sale of quartz andsilicon products for semiconductor
manufacturing equipment
Processing, manufacture, and sale of quartz andsilicon products for semiconductor
manufacturing equipment
Processing, manufacture, and sale of quartz andsilicon products for semiconductor
manufacturing equipment
Manufacture, sale, and import/export ofcomponents for semiconductor manufacturing
equipment and others
Development, manufacture, and sale ofentry/exit management systems, devices, andintegrated management systems for chemical
substances(ii) Results of business combinations
The Company has 10 consolidated subsidiaries. Net sales for the fiscal year under review after
consolidation with subsidiaries amounted to 37,148 million yen (down 4.0% year on year), ordinary
profit was 6,108 million yen (down 5.6% year on year), and profit attributable to owners of parent
was 3,430 million yen (down 2.0% year on year).
(iii) Status of specified wholly owned subsidiaries as of the end of the fiscal year
There are no matters particularly worthy of note.

- 80 -

10. Principal business segments and descriptions of businessBusiness segment
Analytical Instruments Business
Semiconductor Business
Automated Recognition BusinessBusiness description
Development, manufacture, and sale of chromatography equipment,
related consumables, etc.
Processing, manufacture, and sale of quartz and silicon products forsemiconductor manufacturing equipment
Development, manufacture, and sale of entry/exit management
systems, devices (build-ins into other companies’ devices), andintegrated management systems for chemical substances

11. Principal business locations
Head office:Domestic production bases:

Domestic sales bases:
Overseas production base:Overseas sales bases:

Shinjuku-ku, Tokyo
General Technical Division (Iruma City, Saitama), Fukushima Factory(Fukushima City, Fukushima), Techno Quartz Inc. (Yamagata City,
Yamagata), AISINTEC Co., Ltd. (Kitakata City, Fukushima)
Tokyo Sales Department (Shinjuku-ku, Tokyo), Osaka Branch Office(Chuo-ku, Osaka), Yokohama Branch Office (Midori-ku, Yokohama)Hangzhou Techno Quartz INC. (China)
GL Sciences B.V. (Netherlands)
GL Sciences, Inc. (USA)GL TECHNO America, Inc. (USA)GL Sciences (Shanghai) Limited (China)

12. Employees
Number of employees
Analytical Instruments Business
Semiconductor Business
Automated Recognition Business
Total

505
544
42
1,091

Change from end of
previous fiscal year
Up 3
Down 54
Down 2
Down 53(Notes)1. The above number of employees does not include 90 part-time employees (76 in the Analytical Instruments
Business, 12 in the Semiconductor Business, and 2 in the Automated Recognition Business).
2. Part-time employees represent the average number of persons employed in the fiscal year under review(converted to 7 hours, 15 minutes per day).

13. Major lenders
Lender
MUFG Bank, Ltd.
The Yamagata Bank, Ltd.
The Yamaguchi Bank, Ltd.
The Minato Bank, Ltd.

Outstanding borrowings(Millions of yen)
2,265
1,522
822
696

- 81 -

II. Status of Shares
1. Total number of shares authorized to be issued:

22,380,000 shares

2. Total number of shares outstanding:

10,259,740 shares(excluding 930,260 shares of treasury stock)

3. Number of shareholders:

3,999

4. Major shareholders
Name
GL Sciences Employee Shareholding Association
Shimadzu Corporation
Ms. Reiko MoriMUFG Bank, Ltd.
The Yamaguchi Bank, Ltd.
The Minato Bank, Ltd.
Tokyo Small and Medium Business Investment &Consultation Co., Ltd.
WWF Japan
YMC Co., Ltd.
J.P. Morgan SE – Luxembourg Branch 381639

Number of shares held
(Shares)
852,872
580,000
506,094498,200
496,000
444,000

Ratio of theshareholding (%)
8.3
5.7
4.9
4.9
4.8
4.3

425,700

4.1

400,000
337,700
256,000

3.9
3.3
2.5

(Note) The Company holds 930,260 shares of treasury stock but is excluded from the above list of major
shareholders. The ratio of shareholding is calculated after deducting the number of treasury stock.

5. Other important matters concerning shares
Not applicable.

- 82 -

III. Company Officers
1. Directors
Name
Yoshihiro Nagami

Position in the Company

Toshio Kurokawa

President(Representative Director)
Director

Osamu Serizawa

Director

Yoshitaka Honda

Director

Takahiro Saito

Director (Full-time Audit
and Supervisory Committee
Member)Director (Audit andSupervisory Committee
Member)Kazuaki Kagohara

Yumiko Nagasawa

Director (Audit andSupervisory Committee
Member)Responsibilities and important concurrent
positions
President, GL Sciences (Shanghai) Limited
Director, AGI Glass Academy Co., Ltd.
Executive Senior Manager, Sales Division
Director, GL Sciences (Shanghai) Limited
Executive Senior Manager, Administrative
Division
Director, GL Sciences (Shanghai) Limited
In charge of Production Division
In charge of General Technical Division
Executive Senior Manager, General Technical
Division
Chief Manager, Product R&D Dept.
Auditor, FLOM, Inc.
President, Kagohara Certified Public
Accountant Office
Representative Director, Corporate FinanceResearch Institute Co., Ltd.
Director, Audit and Supervisory Committee
Member, Dualtap Co., Ltd.
Director, Audit and Supervisory Committee
Member, Yamaguchi Financial Group, Inc.
Outside Director, Yakult Honsha Co., Ltd.
Representative Director, Nagasawa Building Co.,
Ltd.

(Notes)
1. Mr. Takahiro Saito, Mr. Kazuaki Kagohara, and Ms. Yumiko Nagasawa are Outside Directors. They are
independent directors with no risk of conflicts of interest with general shareholders, whose designation is requiredby the Tokyo Stock Exchange.
2. The Company has appointed Mr. Takahiro Saito as a Full-time Audit and Supervisory Committee Member withthe aim of further enhancing the effectiveness of audits and supervision and cooperation with the Internal Audit
Office, as well as improving communication with Executive Officers. Mr. Takahiro Saito, Audit and Supervisory
Committee Member, has a wealth of experience at financial institutions and business corporations and has
considerable knowledge of finance and accounting.
3. Mr. Kazuaki Kagohara, Audit and Supervisory Committee Member, is a certified public accountant and has
considerable knowledge of finance and accounting.
4. Mr. Takahiro Saito, Audit and Supervisory Committee Member, was newly elected and assumed office at the56th Annual General Meeting of Shareholders held on June 22, 2023.
5. Mr. Takao Tamura, Director, and Mr. Shoji Takaoka, Audit and Supervisory Committee Member, retired upon
expiration of their terms of office at the conclusion of the 56th Annual General Meeting of Shareholders held on
June 22, 2023.
6. Ms. Yumiko Nagasawa, Audit and Supervisory Committee Member, has served as Director and Audit andSupervisory Committee Member of Yamaguchi Financial Group, Inc. since June 28, 2023.
7. Mr. Takahiro Saito, Audit and Supervisory Committee Member, has served as Auditor of FLOM, Inc. since
February 29, 2024.
8. Changes in the responsibilities and significant concurrent positions of Directors after the end of the fiscal year
under review are as follows.
Responsibilities and significant concurrent positions
Name

Yoshitaka Honda

After change

Before change

In charge of Production Division
In charge of General Technical Division
Executive Senior Manager, General
Technical Division

In charge of Production Division
In charge of General Technical Division
Executive Senior Manager, General
Technical Division
Chief Manager, Product R&D Dept.

- 83 -

Date of change

April 1, 2024

2. Outline of limited liability agreement
The Company has concluded a limited liability agreement with three Directors (Audit and Supervisory
Committee Members) to limit their liability for damages under Article 423, Paragraph 1 of the Companies Act,in accordance with Article 427, Paragraph 1 of the same Act.
The maximum amount of liability for damages under the agreement shall be the minimum amount of liability
stipulated in Article 425, Paragraph 1 of the same Act.
3. Outline of directors and officers liability insurance agreement
The Company has entered into a directors and officers liability insurance agreement with an insurance company,
as stipulated in Article 430-3, Paragraph 1 of the Companies Act, which covers legal liability for damages andlitigation expenses to be borne by Directors as a result of their duties. The outline of the agreement is as follows:(i)

Scope of insured
Directors (excluding Audit and Supervisory Committee Members), Directors (Audit and Supervisory
Committee Members), Executive Officers, employees in management position, outside dispatchedofficers, and retired officers of the Company(ii) Outline of the agreement••

Substantive premium contribution by the insureds
Insurance premiums are paid by the Company, with no contribution made by the insureds.
Insured events to be covered by the agreement
Legal liability for damages and litigation expenses incurred by the insured due to a claim for damages
arising from acts committed by the insured based on his/her position (including acts of omission) will
be covered.
However, the insured shall not be eligible for compensation where the damages arose from criminal
acts committed by the insured, acts committed by the insured while the insured was aware of theviolation of laws and regulations, etc.

4. Compensation of Directors(i)Policy for the determination of compensation of individual Directors
The Company has established a policy for the determination of compensation of individual Directors(excluding Audit and Supervisory Committee Members) by resolution of the Board of Directors. The
outline of the policy is as follows:
Policy for the Determination of Compensation of Individual Directors (Excluding Audit andSupervisory Committee Members)Composition, level, and other details of compensation•

The maximum amount of compensation for Directors (excluding Audit and Supervisory Committee
Members) shall be up to 150 million yen per year, as resolved at the 48th Annual General Meeting of
Shareholders held on June 24, 2015. If the annual compensation limit is revised in the future, therevised amount shall be the upper limit.
• For the composition of compensation for Directors (excluding Audit and Supervisory Committee
Members), fixed compensation, which is a combination of basic salary and executive allowanceaccording to the positions of individual Directors, shall be the annual compensation and shall be paidin equal monthly installments.
• The amount of annual compensation shall be determined according to position, with reference to thesalary of the highest-ranked employee and the standards of general society.
Compensation determination processIn determining the amounts of compensation for Directors (excluding Audit and Supervisory
Committee Members), advice and recommendations are received from the Audit and Supervisory
Committee, which has been granted the right to state its opinions at the General Meeting of- 84 -

Shareholders. The amounts are then determined every fiscal year by the Board of Directors, and thedetermination is not further re-entrusted to the Representative Director.
In determining the amounts of compensation for individual Directors (excluding Audit and Supervisory
Committee Members), the Company receives advice and recommendations from the Audit and Supervisory
Committee, including regarding the consistency with the policy for determination. The Board of Directors
has also deemed that compensation is in line with the policy.
The policy for the determination of compensation of individual Directors (Audit and Supervisory
Committee Members) is decided by resolution of the Audit and Supervisory Committee. The outline of thepolicy is as follows:
Policy for the Determination of Compensation of Individual Directors (Audit and Supervisory
Committee Members)Composition, level, and other details of compensation•

The maximum amount of compensation for Directors (Audit and Supervisory Committee Members)
shall be up to 30 million yen per year, as resolved at the 50th Annual General Meeting of Shareholders
held on June 22, 2017. If the annual compensation limit is revised in the future, the revised amountshall be the upper limit.
• The composition of compensation shall be monthly compensation, namely basic salary, only in lightof the contents of their duties.
• The amounts of annual compensation for individual Audit and Supervisory Committee Members shallbe determined according to full-time/part-time status, the status of the division of duties, withreference to the standards of general society and the compensation levels of Directors who are not
Audit and Supervisory Committee Members, among other factors.
Compensation determination processThe amounts of annual compensation for individual Audit and Supervisory Committee Members are
determined every fiscal year by consultation with all Audit and Supervisory Committee Members.

(ii) Resolutions at the general meeting of shareholders regarding the compensation of Directors
The 48th Annual General Meeting of Shareholders held on June 24, 2015 resolved the maximum amountof annual compensation for Directors (excluding Audit and Supervisory Committee Members) to be within
150 million yen. There were five Directors (excluding Audit and Supervisory Committee Members) at theconclusion of the said General Meeting.
The 50th Annual General Meeting of Shareholders held on June 22, 2017 resolved the maximum amountof annual compensation for Directors (Audit and Supervisory Committee Members) to be within 30 million
yen. There were three Directors (Audit and Supervisory Committee Members) at the conclusion of the said
General Meeting.

- 85 -

(iii) Total amount and other information about compensation for Directors
Officer Category

Total amount(Millions of yen)Amount by compensation type(Millions of yen)
Fixed
Retirementcompensation
Benefits

Number of
eligible Directors

Directors (excluding the Audit
and Supervisory Committee
114
107
6
5
Members)
Directors (Audit andSupervisory Committee
25
24
1
4
Members) (Of which, Outside
(25)
(24)
(1)
(4)
Directors)(Notes) 1. Retirement Benefits refers to the provision for directors’ retirement benefits recorded in the fiscal year
under review.
2. The total amounts, fixed compensations, retirement benefits, and numbers of eligible Directors include
those for one Director (not an Audit and Supervisory Committee Member) and one Director (an Audit andSupervisory Committee Member) who retired at the conclusion of the 56th Annual General Meeting of
Shareholders held on June 22, 2023.
3. Other than the above amount of compensation, 6 million yen for one retiring Director (not an Audit andSupervisory Committee Members) and 7 million yen for one retiring Outside Director (an Audit andSupervisory Committee Member) are paid as retirement benefits for directors based on a resolution by the56th Annual General Meeting of Shareholders held on June 22, 2023.

- 86 -

5. Outside Officers(i)Significant concurrent positions at other corporations and relationships of the Company with the relevant
other corporations
Category

Director(Audit and Supervisory
Committee Member)

Name

Takahiro Saito

Director(Audit and Supervisory
Committee Member)

Kazuaki Kagohara

Director(Audit and Supervisory
Committee Member)

Yumiko Nagasawa

Significant concurrent positions

Auditor, FLOM, Inc.
President, Kagohara Certified Public Accountant Office
Representative Director, Corporate Finance ResearchInstitute Co., Ltd.
Director, Audit and Supervisory Committee Member,
Dualtap Co., Ltd.
Director, Audit and Supervisory Committee Member,
Yamaguchi Financial Group, Inc.
Outside Director, Yakult Honsha Co., Ltd.
Representative Director, Nagasawa Building Co., Ltd.

(Notes)1. FLOM, Inc. is a wholly owned subsidiary of the Company. Mr. Takahiro Saito is not an executor of businessof the said company, and the Company judges that Mr. Takahiro Saito is independent.
2. Although Yamaguchi Financial Group, Inc. is a financial holding company that holds Yamaguchi Bank, Ltd.,a major shareholder of and major lender to the Company, under its umbrella, Ms. Yumiko Yamaguchi is not an
executor of business of the said company, and there is no risk of a conflict of interests with general shareholders.
3. Although the Company recorded sales to Yakult Honsha Co., Ltd., the Company judges that Ms. YumikoNagasawa is independent, since the amount of those sales is insignificant at less than 1% of the consolidated
sales of the Company.
4. There are no capital or business relationships or special interests between the Company and any other significant
concurrent positions.

- 87 -

(ii) Outline of major activities and duties performed in relation to expected roles
Position

Director(Audit and Supervisory
Committee Member)

Director(Audit and Supervisory
Committee Member)

Director(Audit and Supervisory
Committee Member)

Name

Takahiro Saito

Kazuaki Kagohara

Yumiko Nagasawa

Major activities in the
Company
Mr. Takahiro Saito attended
all 11 meetings of the Boardof Directors and othermanagement meetings held
after his assumption of officeon June 22, 2023 as well as 10
Audit and Supervisory
Committee meetings held after
his assumption of office, andmade comments necessary fordeliberation on proposals
based on his experience as an
outside director of businesscorporations.
Mr. Kazuaki Kagohara
attended all 15 meetings of theBoard of Directors and othermanagement meetings, as well
as all 14 Audit andSupervisory Committee
meetings held during the fiscal
year under review, and madecomments necessary fordeliberation on proposals fromhis professional viewpoint as acertified public accountant.
Ms. Yumiko Nagasawa
attended all 15 meetings of theBoard of Directors and othermanagement meetings, as well
as all 14 Audit andSupervisory Committee
meetings held during the fiscal
year under review, and madecomments necessary fordeliberation on proposals
based on her experience as an
outside director of businesscorporations.

- 88 -

Duties performed in relation
to expected roles
Mr. Takahiro Saito, with his
extensive experience andbroad knowledge offinancial institutions,business corporations, andoverseas businesses provides
oversight and advice onmanagement at the Board of
Directors meetings from aneutral and objective
standpoint, works tostrengthen the functions of
the Board of Directors, andfulfills the roles expected ofan Outside Director.
Mr. Kazuaki Kagohara, withhis advanced expertise andextensive experience as acertified public accountant,provides oversight andadvice on management at theBoard of Directors meetingsfrom a fair and objective
standpoint, works to ensure
the effectiveness of audits,and fulfills the roles
expected of an Outside
Director.
Ms. Yumiko Nagasawa,with her wealth ofexperience and knowledgeof financial institutions andincorporated associations, aswell as her experience as an
outside director of businesscorporations, provides
oversight and advice onmanagement from an
objective standpoint, works
to strengthen the functionsof the Board of Directors,
and fulfills the roles
expected of an Outside
Director.

IV. Accounting Auditor
1. Accounting Auditor’s Name
A&A Partners
2. Overview of contents of limited liability agreement
There are no matters particularly worthy of note.
3. Accounting Auditor’s compensation for the fiscal year under review
Amount of compensation(i) Amount of compensation for the fiscal year under review:(ii) Total amount of money and other economic benefits to be paidby the Company and the Company’s subsidiaries:

32 million yen
53 million yen(Notes)
1. As a result of deliberation of the number of audit days, personnel assignments, and other matters contained in
the audit plan for the fiscal year under view as explained by the Accounting Auditor, verification and evaluationof the audit results of the previous fiscal year, reasonableness of the state of execution of the audit,
appropriateness of the grounds for calculation of estimated compensation, and other considerations, the Audit
and Supervisory Committee has given its consent to the Accounting Auditor’s compensation according to
Article 399, Paragraph 1 of the Companies Act.
2. In the audit agreement concluded between the Company and the Accounting Auditor, no distinction is madebetween audit compensation for audits under the Companies Act and that for audits under the Financial
Instruments and Exchange Act. For this reason, the amount in (i) above includes the amount of compensation,
for audits under the Financial Instruments and Exchange Act.

4. Details of non-audit services
There are no matters particularly worthy of note.
5. Policy for determination of dismissal or non-reappointment of Accounting Auditor
If the Accounting Auditor is deemed to fall under any of the items of Article 340, Paragraph 1 of the Companies
Act, the Audit and Supervisory Committee shall dismiss the Accounting Auditor with the unanimous approvalof all Audit and Supervisory Committee Members.
In addition, the Audit and Supervisory Committee comprehensively judges the performance and status of theexecution of the Accounting Auditor’s duties, such as the standard of quality control, expertise, independence,and other abilities of the Accounting Auditor, and if it finds that the appropriateness and reliability of the audit
cannot be ensured, the Audit and Supervisory Committee shall decide the contents of a proposal for dismissal
or non-reappointment of the Accounting Auditor to be submitted to the General Meeting of Shareholders.

- 89 -

V. Systems and Policies of the Company
In its Management Philosophy, the Company and its subsidiaries (hereinafter, “the Group”) have declared that
“Management will not give in to personal greed (no mixing of business with personal matters), will always think
and act with the interests of the organization (corporation) in mind, and will distribute the profits fairly among thecompany, shareholders, employees, and society (mainly in the form of tax). We have thus established basic
management policies of maximizing corporate value while maintaining management transparency and fulfilling themanagement responsibilities entrusted by our shareholders.
1. System to ensure the appropriateness of business activities (internal control system)
The Board of Directors of the Company has resolved the following basic policy regarding the establishment ofa system to ensure the appropriateness of business operations (internal control system).
(1) Systems to ensure that the execution of duties by Directors and employees of the Company and its
subsidiaries complies with laws, regulations, and the Articles of Incorporationa)

The group companies of GL Sciences Inc. share a common Management Philosophy and require thedirectors and employees of the Group to thoroughly follow the GL Sciences Group Corporate Activity
Policy and to act with integrity in accordance with high ethical standards and values.

b) In accordance with the Management Philosophy and the GL Sciences Group Corporate Activity Policy,
we have established Compliance Rules and fulfill our social responsibility toward all stakeholders.
c)

The Group has established the Compliance Committee, chaired by a Director, as a system to promotecompliance. The Group conducts appropriate training for employees to raise awareness of compliance.

d)

For the development of an organizational structure for compliance, the Group has established a
Whistleblowing Desk as a contact point for advice and reports regarding compliance in accordancewith the Whistleblowing Rules established by the Company and regulations established by individual
group companies.

(2) Systems for the storage and management of information on the execution of duties by Directorsa)Information on the execution of duties and decision-making by Directors are recorded and saved in
written documents or electromagnetic media in accordance with laws and regulations and theDocument Management Rules and managed in a state that allows inspection and copying by Directors,
Directors who are Audit and Supervisory Committee Members (hereinafter “Audit and Supervisory
Committee Members”), Accounting Auditor, and others.

b)Information shall be strictly managed in accordance with the Document Management Rules andInformation Management Rules.

(3) Regulations concerning the management of the risk of loss of the Company and its subsidiaries and othersystemsa)

To appropriately respond to various management risks, we have established the Rules for Risk
Management and set forth basic policies and systems to develop and build systems for risk
management of the Group.

b)With respect to significant management risks, we have established the Management Risk Review
Committee, comprising Directors, Full-time Audit and Supervisory Committee Members, andExecutive Officers, to discuss countermeasures and other matters and give instructions on response
measures.

c)

Directors and employees of the Group report to the Audit and Supervisory Committee Members of
the Company facts that are likely to cause substantial damage to the Company or individual groupcompanies, such as violations of laws and regulations.

d)

For the continuation of business operations of the Group in the event of unforeseen circumstances or- 90 -

crises, we develop emergency systems, such as by establishing response headquarters, and disseminate
them to the Directors and employees of the Group in accordance with the Rules for Disaster
Countermeasures.
(4) Systems to ensure that the duties of Directors are executed efficientlya)

The Board of Directors rationally clarifies the duties and authorities assigned to Directors to ensure
the efficient execution of duties by Directors, establishes authority rules and other regulations withcheck functions, and implements the development and operation of systems and other measures toensure effective cooperation among divisions.

b)

Directors set company-wide goals, build information systems using IT technology so that they canmake decisions swiftly to achieve those goals, and secure systems for efficient business execution.

c)

The Board of Directors makes use of the executive officer system in its efforts to speed up decisionmaking by the Board of Directors and improve management efficiency.

d)

The Company holds regular meetings of the Board of Directors once a month and extraordinary
meetings as necessary. In addition, the Company convenes management meetings, comprising fulltime Directors (including Directors who are Audit and Supervisory Committee Members) and
Executive Officers twice a month in principle.
Part-time Directors (including Directors who are Audit and Supervisory Committee Members) may
also attend management meetings as members.

(5) Systems to ensure the appropriateness of business activities in the corporate group consisting of theCompany and its subsidiariesa)

The group companies of GL Sciences Inc. share a common Management Philosophy and require the
Directors and employees of the Group to thoroughly follow the GL Sciences Group Corporate Activity
Policy and act with integrity in accordance with high ethical standards and values.

b)With regard to the management of subsidiaries, the division in charge of administration appropriately
administers the subsidiaries in accordance with the Rules for Administration of Subsidiaries and otherrules, while respecting the independence of the individual subsidiaries; however, certain operations
shall be subject to the approval of the Board of Directors of the Company.

c)

The Board of Directors of the Company obliges the directors of subsidiaries to provide regular reports
on important information, such as operating results and the financial condition of subsidiaries.

d)

To ensure that corporate activities are conducted legally, properly, and efficiently by the Group, theInternal Audit Office audits the status of business execution and internal control, working closelywith the Audit and Supervisory Committee Members and the Accounting Auditor, and reports its
results to the Audit and Supervisory Committee and the President.

e)

The Group takes appropriate measures in the event of reports of misconduct or other harmful behavior
in accordance with the Whistleblowing Rules established by the Company and other rules establishedby individual subsidiaries.

(6) Systems to ensure the credibility and appropriateness of financial reportinga)

To ensure the credibility of financial reporting, the Group builds systems to develop and operate
effective and appropriate internal controls in accordance with the Financial Instruments and Exchange
Act and other relevant laws and regulations.

b)

The Internal Audit Office conducts evaluations through the identification and recording of the statusof company-wide internal controls and operational processes regarding financial reporting, and reportson the results of improvements.

c)

The Group continuously evaluates whether internal controls regarding financial reporting are- 91 -

functioning properly and takes necessary remedial actions.

(7) Matters concerning ensuring the independence of employees who are to assist in the duties of the Audit andSupervisory Committee from Directors and the effectiveness of instructions to the employees concerneda)When Directors appoint employees to assist in the duties of the Audit and Supervisory Committee atthe request of the Audit and Supervisory Committee, Directors assign such employees. Directors
consult with the Audit and Supervisory Committee and give due consideration to the opinions of the
Audit and Supervisory Committee regarding the specific details of the assignments.

b)

Prior consent of the Audit and Supervisory Committee is required for the appointment, transfer andpersonnel evaluation, etc. of employees to assist in the duties of the Audit and Supervisory Committee.

c)An employee to assist in the duties of the Audit and Supervisory Committee conducts his/her duties
under the direction of the Audit and Supervisory Committee.

(8) Systems for reporting to the Audit and Supervisory Committee and the Audit and Supervisory Committee
Membersa)

Directors and employees of the Group report on important matters concerning the Company’s
management and business operations, as well as the status of the execution of duties, including
compliance risk management and internal controls, at important meetings, such as Board of Directors
meetings attended by Audit and Supervisory Committee Members.

b)

Directors and employees of the Group report to the Audit and Supervisory Committee and Audit andSupervisory Committee Members without delay on decisions that have a material impact on thebusiness or organization.

c)Directors and employees of the Group report to the Audit and Supervisory Committee and Audit andSupervisory Committee Members without delay when they become aware of serious violations of laws
and regulations or the Articles of Incorporation or facts of misconduct in the execution of duties, orfacts that have the potential to cause substantial damage to the Company or individual subsidiaries. In
addition, when the Audit and Supervisory Committee and Audit and Supervisory Committee Members
request reports on business or conduct investigations of the status of business operations and assets,
Directors and employees of the Group respond swiftly and precisely and cooperate with the Audit andSupervisory Committee and Audit and Supervisory Committee Members.

d)

The Group prohibits any unfavorable treatment of Directors and employees who have made reports to
the Audit and Supervisory Committee and Audit and Supervisory Committee Members by reason of
having made such reports.

(9) Other systems to ensure the effective execution of audits by the Audit and Supervisory Committeea)Directors cooperate with audits conducted by the Audit and Supervisory Committee Members andprovide a budget for expenses to be incurred in audits (limited to those expenses related to the
execution of duties by the Audit and Supervisory Committee) to ensure the effectiveness of audits. In
addition, when requests for advance payments or other similar arrangements are made, the responsible
department deals with said expenses or debt promptly after deliberation.

b)

The Representative Director holds meetings with the Audit and Supervisory Committee to the greatest
extent possible to exchange opinions and communicate with them regarding the management of theCompany. In addition, the Representative Director ensures the attendance of the Audit andSupervisory Committee Members at meetings that are important for ensuring the appropriateness ofbusiness operations, such as management meetings.

c)

The Audit and Supervisory Committee receives briefings on annual plans for internal audits conductedby the Internal Audit Office in advance and may request the amendment of such plans. In addition,
the Audit and Supervisory Committee receives reports on the status of implementation of internal
audits as appropriate and may, when they deem it necessary, request the implementation of additional- 92 -

audits, the formulation of business improvement measures, etc.
d)

The Audit and Supervisory Committee may cooperate with external experts such as attorneys andcertified public accountants when they find it necessary for the implementation of audits.

(10) Development of systems for the elimination of anti-social forces
Directors and employees of the Group thoroughly follow the GL Sciences Group Corporate Activity Policy
and the Compliance Rules, resolutely confront anti-social forces and groups that pose a threat to the orderand safety of civic society, and cut off any connections with such forces and groups.
2. Overview of the operating status of the internal control system
In accordance with the Basic Policy on Internal Control System Development, we are working to develop
systems to ensure the appropriateness of business operations of the Group and operate those systems
appropriately. An overview of the operating status of these systems is as follows:(i) With regard to compliance, we have established a Compliance Committee chaired by the President to raisecompliance awareness. Specifically, we have implemented various initiatives, such as holding meetings of
the Committee twice a year, conducting harassment training by organizational level, providing e-learning(IT-based training) six times a year, semi-monthly dissemination of compliance-related information inemail newsletters, the display of compliance awareness posters, and the distribution of complianceawareness leaflets to employees. In addition, as a contact point for advice and reports regarding compliance,
we have established a Whistleblowing Desk that reports to the Internal Audit Office and Full-time Audit
and Supervisory Committee Members and a Harassment Help Desk as an external contact point for seeking
advice about harassment.
(ii) With regard to significant management risks, the Management Risk Review Committee, comprising
Directors, Full-time Audit and Supervisory Committee members, and Executive Officers, deliberates onmatters such as countermeasures to those risks. For management risks of high-priority importance, theCommittee develops action plans to mitigate such risks, and the General Planning Department manages the
progress of those plans. Progress of the plans is reported in a timely manner by an appropriate staff member
to the monthly management meetings, and responses are considered. In this way, we address significant
management risks throughout the Company.
(iii) With regard to the execution of duties by Directors, 15 Board of Directors meetings and 18 management
meetings that included Executive Officers were held in the fiscal year under review, at which importantmatters for management were considered and decided, and the operational status of internal control systems
were followed up as appropriate.
(iv) With regard to the management of subsidiaries, the subsidiaries are administrated in accordance with theRules for Administration of Subsidiaries and other rules, while respecting the independence of theindividual subsidiaries. Directors of major subsidiaries and Directors of the Company who are in charge ofother subsidiaries report on important information, including operating results and the financial conditionof relevant subsidiaries, to the Board of Directors of the Company every month.
(v) The Internal Audit Office conducts internal audits of the Company and its subsidiaries based on annual
plans, confirms that corporate activities are being conducted legally, properly, and efficiently, and reports
to the Audit and Supervisory Committee and the President.
(vi) With regard to the internal control of financial reporting, we have established a secretariat and, in
accordance with the Financial Instruments and Exchange Act and other relevant laws and regulations, weevaluate the status of development and operation through the identification of the status of internal controls
for company-wide financial reporting and the monitoring of operational processes. The results of evaluationand improvement are reported to the Accounting Auditor and disclosed as Internal Control Reports after
being reviewed by the Accounting Auditor.
(vii) Four (4) staff members of the Internal Audit Office work as employees to assist in the duties of the Audit
and Supervisory Committee by an order of concurrent service, and they pursue their duties under the- 93 -

direction of the Full-time Audit and Supervisory Committee Members on a daily basis.
(viii) In terms of systems to ensure effective audits by the Audit and Supervisory Committee, the President, theofficer responsible for internal control, and the Audit and Supervisory Committee Members regularly
exchange opinions on important audit matters.
(ix) With regard to the elimination of anti-social forces, we have appointed a staff member in charge ofpreventing unreasonable demands within the General Affairs Department of the Administrative Division,
and we take actions in cooperation with external specialist agencies such as the police and our legal counsel.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
1. For the figures in this Business Report, monetary amounts are rounded down to the nearest indicatedunit, and values per share and other figures are rounded off to the nearest whole number.

- 94 -

Consolidated Balance Sheet(As of March 31, 2024)(Thousands of yen)
AssetsDescription
Current assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetaryclaims - operating
Accounts receivable - trade

Liabilities
AmountDescription

33,350,606

Current liabilities

7,451,146

10,607,773

Notes payable - trade
Electronically recorded obligations operating

495,751

Amount534,097
1,745,452

3,906,769

Accounts payable - trade

1,697,187

8,348,824

Short-term borrowings

3,276,871

Merchandise and finished goods

2,939,027

Income taxes payable

883,713Work in process

3,654,685

836,269

Raw materials and supplies

5,855,443

Provision for bonuses
Provision for retirement benefits for
directors (and other officers)
Other

Other

703,610

Allowance for doubtful accounts(4,652)

Non-current assets

22,216,955

Property, plant and equipment

17,065,845

Buildings and structures

7,391,118

Machinery, equipment andvehiclesLand

Non-current liabilities

24,215
1,609,966
4,750,734

Long-term borrowings
Deferred tax liabilities for land
revaluation
Provision for retirement benefits for
directors (and other officers)

3,431,035
97,024
104,455

3,755,938

Retirement benefit liability

225,701

5,070,837

Other892,517

Construction in progress
Other
Intangible assets
Investments and other assets

204,456
643,495
637,627
4,513,482

Total liabilities
Shareholders’ equity
Share capital

31,352,556
1,207,795

Investment securities

3,382,969

Capital surplus

1,815,038

Retirement benefit asset

518,428

Retained earnings

28,839,443

Other

617,142

Allowance for doubtful accounts

15,358,508
Net assets

Treasury shares
Accumulated other comprehensive(5,057)
incomeValuation difference on available-forsale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Non-controlling interests

Total assets

55,567,561- 95 -(509,720)
2,290,469
1,361,945
6,709(312,234)
1,178,581
55,4686,566,026

Total net assets

40,209,053

Total liabilities and net assets

55,567,561

Consolidated Statement of Income(April 1, 2023 - March 31, 2024)(Thousands of yen)
Description

AmountNet sales

37,148,173

Cost of sales

23,660,393

Gross profit

13,487,779

Selling, general and administrative expenses

7,773,647

Operating profit

5,714,132

Non-operating income
Interest income

1,629

Dividend income

63,470Foreign exchange gains

184,612

Subsidy income

116,487

Rental income from real estate

94,258Other

59,185

519,644

Non-operating expenses
Interest expenses

52,692

Cost of real estate lease revenue

61,487

Other

10,665

Ordinary profit

124,844
6,108,932

Extraordinary income
Gain on sale of non-current assets

3,041

Gain on sale of investment securities

11,996

Gain on acceptance of national subsidies

153,230

168,268

Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of shares of subsidiaries andassociates
Profit before income taxes

19,95011,2606,245,989

Income taxes-current

1,826,077

Income taxes-deferred

54,182

Profit31,2101,880,260
4,365,729

Profit attributable to non-controlling interests

935,074

Profit attributable to owners of parent

3,430,655- 96 -

Consolidated Statement of Changes in Equity(April 1, 2023 - March 31, 2024)(Thousands of yen)
Shareholders' equity
Share capital
Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Purchase of treasury sharesof consolidated subsidiaries
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

TreasurysharesTotal shareholders’equityCapital surplus

Retained earnings

1,207,795

1,815,039

26,075,674(509,615)

28,588,892−−(666,885)−(666,885)−−

3,430,655−

3,430,655

−

−

−

(105)

(105)

−

(0)

−

−

(0)

−

−

−

−

−

−

(0)

2,763,769(105)

2,763,663

1,207,795

1,815,038

28,839,443(509,720)

31,352,556

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Purchase of treasury sharesof consolidated subsidiaries
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Deferred
gains orlosses onhedges

Revaluation
reserve forland

Foreigncurrencytranslation
adjustment

Total
Remeasurements accumulatedof definedotherbenefit plans comprehensive
income743,973(8,676)(312,234)

871,347

7,184

1,301,594

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

617,972

15,385−

307,233

48,283

988,875

617,972

15,385−

307,233

48,283

988,875

1,361,945

6,709(312,234)

1,178,581

55,4682,290,469(Thousands of yen)
Total net assets

Non-controlling interests
Balance at beginning of
periodChanges during period
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury shares
Purchase of treasury sharesof consolidated subsidiaries
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period- 97 -

5,687,894

35,578,381−(666,885)−

3,430,655

−

(105)

−

(0)

878,132

1,867,007

878,132

4,630,671

6,566,026

40,209,053

Notes to Consolidated Financial Statements(Notes on Significant Accounting Policies for Preparation of Consolidated Financial Statements)
1. Scope of consolidation
Number and names of consolidated subsidiaries• Number of consolidated subsidiaries

10 companies• Names of consolidated subsidiaries
Japan…

FLOM, Inc., GLOS Co., Ltd., Techno Quartz Inc., AISINTEC Co., Ltd., GL Solutions Inc.

Overseas… GL Sciences (Shanghai) Limited, GL Sciences B.V., GL Sciences, Inc., Hangzhou Techno
Quartz INC., GL TECHNO America, Inc.
2. Application of equity method(1) Number of associates accounted for using equity method and names of major entities accounted for using
equity method
Not applicable.
(2) Names of associates not accounted for using equity method
Kyoto Monotech Co., Ltd., AGI Glass Academy Co., Ltd.
Reason for not applying equity method:
Companies not accounted for using equity method are excluded from the scope of application of equity
method because their impacts on profit/loss, retained earnings, etc. are immaterial and importance as awhole is not significant.
3. Fiscal years of consolidated subsidiaries
The consolidated subsidiaries Hangzhou Techno Quartz INC. and GL Sciences (Shanghai) Limited have fiscal
years ending on December 31.
The financial statements as of the above date are used in preparing the consolidated financial statements, withnecessary adjustments being made for consolidation purposes with regard to important transactions between thesaid date and the consolidated closing date.
4. Accounting policies(1) Valuation standards and methods for significant assets(i) Valuation standards and methods for securities
Available-for-sale securities• Securities other than shares, etc. that do not have a market priceStated at fair value (with the entire amount of valuation differences recorded directly into net assets, andthe cost of securities sold calculated using the moving-average method)• Shares, etc. that do not have a market priceStated at cost using the moving-average method(ii) Valuation standards and methods of net receivables and payables arising from derivative transactions
Stated at fair value(iii) Valuation standards and methods of inventories
Merchandise, raw materials and supplies: Stated at cost using the moving-average method(by writing down the book value based on a decline inprofitability)
Stated at cost using the specific identification method or the
Finished goods and work in process:weighted-average method(by writing down the book value based on a decline inprofitability)- 98 -

(2) Depreciation and amortization of non-current assets(i) Property, plant and equipment (excluding leased assets)
The Company and its domestic consolidated subsidiaries adopt the declining balance method andoverseas consolidated subsidiaries adopt the straight-line method.
However, the Company and its domestic consolidated subsidiaries adopt the straight-line method forbuildings (excluding attached facilities) acquired on or after April 1, 1998 and facilities attached tobuildings and structures acquired on or after April 1, 2016.
The major useful lives are as follows:
Buildings and structures
Machinery, equipment and vehicles
Others(ii) Intangible assets (excluding leased assets)

3 to 50 years
2 to 15 years
2 to 20 years

Software for internal use is amortized by the straight-line method based on the internal usable period (fiveyears). Software for sale is amortized by the greater of the amount based on the estimated sales quantity
or the amount calculated by the straight-line method based on the estimated marketable period (three
years).
(iii) Leased assets
Leased assets related to finance lease transactions with the right of ownership not transferred
Depreciated using the straight-line method over the lease term with zero residual value.
(3) Recognition of significant allowances and provisions(i) Allowance for doubtful accounts
To provide for potential credit losses on receivables, allowance for doubtful accounts is recorded at an
estimated amount of uncollectible receivables calculated based on the historical rate of credit loss forgeneral receivables and determined in consideration of collectibility of individual receivables for doubtful
accounts and certain other receivables.
(ii) Provision for bonuses
To provide for the payment of bonuses to employees, provision for bonuses is recorded at an amountaccrued for the fiscal year under review out of the estimated amount to be paid.
(iii) Provision for retirement benefits for directors (and other officers)
To provide for the payment of retirement benefits to officers (including operating officers), the amountrequired to be paid at the fiscal year-end based on the internal regulations is recorded.
(4) Recognition of significant revenue and expenses
In recognizing revenue, we identify performance obligations based on contracts with customers regarding
sale of products, providing services, and other sale in the Analytical Instruments Business, theSemiconductor Business, and the Automatic Recognition Business which are the Group’s major businesses.
Revenue is usually recognized at the following time point on which the Group’s performance obligation isdeemed to have been satisfied.
(i) Analytical Instruments Business and Automatic Recognition Business
The Analytical Instruments Business develops, manufactures, and sells gas chromatography and liquid
chromatography instruments, consumables, etc.
The Automatic Recognition Business develops, manufactures, and sells peripheral equipment using noncontact IC cards.
a. Revenue related to sales of products and goods
Regarding sales of products and goods, the performance obligation is deemed to have been satisfied at thetime the product or goods are delivered to the customer and the customer acquires control of the productor goods, and revenue is recognized at that time of delivery. For domestic sales, if the period of time fromwhen the product or goods are shipped until control is transferred to the customer is the usual period,
revenue is recognized at the time of shipping and for export sales, revenue is recognized at the time theproduct or goods arrived at a place agreed on with the customer.

- 99 -

b. Revenue related to services and other sales
Revenue related to services and other sales principally includes revenue from inspection, maintenance,
repair, relocation, and other operations related to products and the revenue is recognized at the time ofcompletion of service provision.
(ii) Semiconductor BusinessThis business manufactures and sells quartz and silicon products, mainly targeting semiconductor
manufacturing equipment manufacturers.
The performance obligation is principally to provide products to customers. This obligation is deemed tohave been satisfied at the time the products are delivered and control is transferred to the customer, inprinciple, and revenue is recognized at that time of delivery. For domestic sales, if the period of time fromwhen the product is shipped until control is transferred to the customer is the usual period, revenue isrecognized at the time of shipping and for export sales, revenue is recognized at the time the productarrived at a place agreed on with the customer.
Transaction price is calculated by deducting the amount of discount, etc. from consideration promised
under contracts with customers.
Considerations for these performance obligations are received within approximately one year aftersatisfaction of such obligations in accordance with the separately specified payment conditions and do notinclude significant finance elements.
(5) Other significant matters for preparation of consolidated financial statements(i) Accounting treatment related to retirement benefits
a. Method of attributing estimated retirement benefits to periods
In calculating retirement benefit obligations, the benefit formula basis is used as a method for attributing
the estimated retirement benefit payments to the period up to the fiscal year under review.
b. Methods of treating actuarial differences and past service costs as expenses
Actuarial differences are treated as expenses, pro rata based on the straight-line method for a fixed periodof years (three years) within the average remaining years of service of employees in the fiscal year whensuch differences occurred, from the fiscal year following the fiscal year when such differences occurred.
Past service costs are treated as expenses by straight-line method for a fixed period of years (three years)
within the average remaining years of service of employees in the fiscal year in which such costs
occurred.
c. Adoption of simplified method at small-scale companies, etc.
Certain consolidated subsidiaries determine retirement benefit liability and retirement benefit expenses byadopting the simplified method, which assumes the retirement benefit obligations to be the amount thatwould be payable if all eligible employees voluntarily terminated their services at the end of the fiscal
year.
(ii) Method of significant hedge accounting
a. Method of hedge accounting
Deferred hedge accounting is applied.
b. Hedged items and hedging instruments
Hedged items are foreign currency denominated transactions and hedging instruments are forward
exchange contracts.
c. Policy of hedging transactions
Hedge transactions are used only to cover risks that are based on actual needs and not used as speculative
instruments.

- 100 -

(Notes on Accounting Estimates)
Valuation of inventories(1) Amount recorded in the fiscal year under review
Inventories (excluding supplies)

12,112,571 thousand yen

Loss on valuation of inventories

166,062 thousand yen(2) Information on significant accounting estimates related to identified items(i) Calculation method
As stated in the consolidated financial statements “Notes to Consolidated Financial Statements, (Notes on
Significant Accounting Policies for Preparation of Consolidated Financial Statements), 4. Accounting
policies, (1) Valuation standards and methods for significant assets, (iii) Valuation standards and methodsof inventories,” the amount of inventories on the balance sheet is calculated based on the cost method (bywriting down the book value based on a decline in profitability).
(ii) Major assumption
For inventories stored beyond a certain period of time, the book value is written down assuming that theirprofitability has decreased.
(iii) Impact on the consolidated financial statements for the following fiscal year
a. Analytical Instruments Business and Automatic Recognition Business
If the market condition of each business deteriorates and the number of elapsed years and the turnover
period of inventories increase, the amount to be recognized in the consolidated financial statements forthe following fiscal year may be significantly impacted.
b. Semiconductor Business
If the semiconductor market condition deteriorates worse than expected in future and the net sale value of
inventories significantly declines or the number of elapsed years increases, the amount to be recognizedin the consolidated financial statements for the following fiscal year may be significantly impacted.
(Notes on Consolidated Balance Sheet)
1. Accumulated depreciation of property, plant and equipment

16,266,427 thousand yen

2. Revaluation of land
Pursuant to the Act on Revaluation of Land (Act No. 34 of March 31, 1998; last revised on June 29, 2001), theCompany revalued its land held for business on March 31, 2002.
Pursuant to the Act for Partial Revision of the Act on Revaluation of Land (Act No. 24 of March 31, 1999), therevaluation amount after deducting deferred tax liabilities for revaluation is recorded as “revaluation reserve forland” in net assets.
Method of revaluation
Calculation is made by applying reasonable adjustments to values computed using the method establishedand published by the Commissioner of the National Tax Agency for the calculation of land values that serveas the basis for taxable amounts of land-holding tax set forth in Article 16 of the Land-holding Tax Act (ActNo. 69 of 1991) as set forth in Article 2, Item 4 of the Order for Enforcement of Act on Revaluation of Land
(Cabinet Order No. 119 of March 31, 1998).
Date of the revaluation

March 31, 2002

Difference between fair values at the fiscal year-end and bookvalues after the revaluation of the land revaluated(109,254) thousand yen- 101 -

3. Pledged assets and corresponding liabilities
Pledged assets
Buildings and structures

3,126,101 thousand yen

Land2,237,387
Total

5,363,488 thousand yen

Liabilities corresponding to pledged assets
Short-term borrowings

562,334 thousand yen

Long-term borrowings

1,531,707

Total

2,094,041 thousand yen

4. For the previous years, the amount of reduction entry deducted from the acquisition cost of land due to theacceptance of national subsidies, etc. is 300,000 thousand yen.
5. Accumulated depreciation includes accumulated impairment loss.
(Notes on Consolidated Statement of Changes in Equity)
1. Class and total number of issued sharesClass of shares

Number of shares at
beginning of period

Increase in numberof shares during
periodDecrease in numberof shares during
periodNumber of shares at
end of period

Common stock(thousand shares)

11,190－－11,1902. Dividends(1) Amount of dividends paid
Resolution

Class of shares

Annual General
Meeting ofCommon stock
Shareholders heldon June 22, 2023

Total dividends(thousands ofyen)

Dividend per
share
(yen)

Record date

Effective date

666,885

65

March 31, 2023

June 23, 2023

(2) Dividends for which the record date is in the fiscal year under review, and the effective date is in thefollowing fiscal year
Resolution

Class ofsharesTotal
dividends(thousands ofyen)

Source ofdividends

Dividend
per share(yen)

Annual General
Meeting of
Shareholders to beheld on June 25,
2024

Commonstock

718,181

Retainedearnings

70- 102 -

Record date Effective date

March 31,2024

June 26, 2024

(Notes on Financial Instruments)
1. Status of financial instruments(1) Policies on financial instruments
The Group limits fund management to highly secure financial assets and principally procures funds byborrowing money from banks. In addition, derivatives are used to avoid risks stated below and not for
speculative purposes.
(2) Contents and risk of financial instruments and risk management system
Notes receivable - trade, electronically recorded monetary claims - operating, and accounts receivable trade, all of which are trade receivables, are exposed to customers’ credit risk. Regarding such risk, theGroup sets up lines of credit for each customer in accordance with the Group’s internal regulations andappropriately controls due dates and balances, while monitoring their credit standing as needed.
Investment securities are exposed to fluctuation risk of market price. However, these are mainly shares ofcompanies with which we have business relationships and we regularly monitor the fair value and conduct
the appropriate valuation and management based on the internal regulations.
Most of notes payable - trade and electronically recorded obligations - operating, and accounts payable trade, all of which are trade payables have a due date within one year.
Out of borrowings, short-term borrowings are mainly for raising funds related to business transactions andlong-term borrowings are for raising funds related to capital investments.
Derivative transactions are forward exchange contracts for the purpose of hedging the risk of exchange rate
fluctuations regarding foreign currency-denominated trade payables.
The internal regulations stipulate that the status of transactions shall be regularly reported to the relevant
officers. In addition, we only have transactions with domestic banks with a high credit standing to reduce
credit risk.
(3) Supplementary explanation on fair value of financial instruments
Regarding the contract amounts, etc. related to derivative transactions in “2. Fair value of financial
instruments,” the amounts themselves do not indicate the market risk related to derivative transactions.
2. Fair value of financial instruments
The book value on the consolidated balance sheet and fair value of financial instruments and their difference as ofMarch 31, 2024 (closing date of the fiscal year under review) are as follows.
(Thousands of yen)Book value(1) Securities and investment securities
Available-for-sale securities
Total assets(2) Long-term borrowings
Total liabilities

3,374,329
3,374,329
3,431,035
3,431,035

Fair value
3,374,329
3,374,329
3,370,330
3,370,330

Difference－－(60,704)(60,704)*1 “Cash and deposits,” “notes receivable - trade,” “electronically recorded monetary claims - operating,”“accounts receivable - trades,” “notes payable - trade,” “electronically recorded obligations - operating,”“accounts payable - trade,” “short-term borrowings,” “income taxes payable,” and “derivative transactions”
are omitted, because they comprise cash and their fair value approximate their book value as they are settled ina short period of time.

- 103 -

(Note 1) The amount of available-for-sale securities sold for the fiscal year under review is 18,841
thousand yen and the total amount of sales gains is 11,996 thousand yen.
In addition, for available-for-sale securities, acquisition costs or amortized costs, the book valueon the consolidated balance sheet, and their differences by category are as follows.
(Thousands of yen)
Category

Acquisition cost or
amortized cost

Book value

Difference(1) Shares

1,384,127

3,322,842

1,938,715(2) Others

－

－

－

Subtotal

1,384,127

3,322,842

1,938,715

Those for which the book value (1) Shareson the consolidated balance(2) Others
sheet does not exceed acquisition
cost or amortized cost
Subtotal

26,78023,580(3,200)30,31027,907(2,403)57,09051,487(5,603)

1,441,218

3,374,329

1,933,111

Those for which the book valueon the consolidated balance
sheet exceeds acquisition cost or
amortized cost

Total

(Note 2) Derivative transactions
Those to which hedge accounting is applied(Thousands of yen)
Method of hedge
accounting
Deferred hedge
accounting

Category
Forward exchange contracts
Long
U.S. dollar

Main hedged
item

Amount ofcontract

Over one year

Fair value

Accounts
payable - trade106,840－

11,315

The fair value is calculated based on the price presented from the partner financial institution.

(Note 3) Shares, etc. that do not have a market price(Thousands of yen)
Category

Book value

Unlisted stocks, etc.

8,639

The above is not included in “(1) Available-for-sale securities.”(Note 4) Scheduled redemption amount of monetary receivables after the consolidated balance sheet date(Thousands of yen)
Due within 1
year

Due after 1 year Due after 5 years
through 5 years through 10 years

Due after 10
years

495,751－－－

Electronically recorded monetary claims operating

3,906,769－－－

Accounts receivable - trade

8,348,824

－

－

－

Total

12,751,346

－

－

－

Notes receivable - trade(Note 5) Scheduled repayment amount of short-term borrowings and long-term borrowings after the
consolidated balance sheet date(Thousands of yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due within 1
Due after
year through 2 years through years through years throughyear
5 yearsyears
3 years
4 years
5 years
Short-term borrowings

3,276,871

－

－

－

－

－

Long-term borrowings－

895,007

833,034

633,732

503,712565,550

3,276,871

895,007

833,034

633,732

503,712565,550

Total- 104 -

3. Fair value information by level within the fair value hierarchy
The fair value of financial instruments is classified into the following three levels according to the observability
and materiality of inputs used to measure fair value.
Level 1:

Fair value measured using observable inputs, i.e., quoted prices in active markets for assets or
liabilities that are the subject of the measurement

Level 2:

Fair value measured using observable inputs other than Level 1 inputs

Level 3:

Fair value measured using unobservable inputs

If multiple inputs are used that are significant to the fair value measurement, the fair value measurement iscategorized in its entirety in the level of the lowest level input that is significant to the entire measurement.
(1) Financial assets and financial liabilities with the carrying amount recorded using the fair value(Thousands of yen)
Category
Securities and investment
securities
Available-for-sale securities
SharesOthersTotal assets

Fair value
Level 2
Level 3

Level 1－
27,907
27,907

3,346,422－
3,346,422

Total

－
－
－

3,346,422
27,907
3,374,329(2) Financial assets and financial liabilities with the carrying amount not recorded using the fair value
Category

Level 1Long-term borrowings－(Thousands of yen)
Fair value
Level 2
Level 3Total
3,370,330
3,370,330－

3,370,330
3,370,330－－
Total liabilities(Note) A description of the valuation techniques and inputs used in the fair value measurements
Securities and investment securities
Listed stock, etc. are valued using quoted prices. Because listed stock, etc. are traded on active
markets, their fair value is classified as Level 1. On the other hand, investment trusts held by theCompany are classified as Level 2, because the frequency of transactions in the market is low andthey are not recognized as quoted prices in active markets.
Long-term borrowings
The fair value of long-term borrowings is measured at present value by discounting the sum of
principal and interest at the interest rate that would be applied to similar new borrowings, and isclassified as Level 2.
(Notes on Real Estate for Lease, etc.)
1. Status of real estate for lease, etc.
The Company owns sections of office buildings for lease (including land) in the Tokyo metropolitan area.
2. Fair value of real estate for lease, etc.
Book value(Thousands of yen)
Fair value

1,643,486
1,407,369(Notes) 1. The book value on the consolidated balance sheet is the amount obtained by deducting
accumulated depreciation from acquisition cost.
2. Calculation method of fair value
The fair value is calculated by the Company principally based on the “Japan Real Estate Appraisal
Standards” (including those adjusted using indicators, etc.).

- 105 -

(Notes on Revenue Recognition)
1. Disaggregation of revenue from contracts with customers
Disaggregation of revenue by business segment is as follows:(Thousands of yen)
Reportable segment

Analytical instruments
Consumables for analyticalequipment
Quartz products for semiconductor
manufacturing
Silicon products for semiconductor
manufacturing
Others for semiconductor
manufacturing
Products integrated into instruments
for automatic recognition
Finished products for automatic
recognition

Analytical
Instruments
Business

Semiconductor
Business

Automatic
Recognition
Business

6,283,976－－

6,283,976

11,997,874－－

11,997,874－

14,472,967－

14,472,967－

2,414,689－

2,414,689－

142,320－

142,320－－

1,081,314

1,081,314－－

316,257

316,257－－

438,772

438,772

18,281,851

17,029,977

1,836,344

37,148,173

－

－

－

－

18,281,851

17,029,977

1,836,344

37,148,173

Others for automatic recognition
Revenue from contracts withcustomers
Other revenue
Net sales to external customers

Total

2. Basic information for understanding revenue
Basic information for understanding revenue is presented in “Notes to Consolidated Financial Statements(Notes on Significant Accounting Policies for Preparation of Consolidated Financial Statements), 4. Accounting
policies, (4) Recognition of significant revenue and expenses.”
3. Reconciliation of satisfaction of performance obligations within contracts with customers and cash flows
arising from such contracts, and the amount and timing of revenue arising from customers existing at the end of
the fiscal year under review expected to be recognized in and after the following fiscal year
(1) Contract asset and contract liability balances
Contract assets and contract liabilities of the Company and its consolidated subsidiaries are omitted as theimportance of their balance is immaterial and no significant changes have occurred. In addition, revenue
recognized during the fiscal year under review from performance obligations satisfied (or partly satisfied) in
the previous years is not significant.
(2) Transaction price allocated to the remaining performance obligations
The transaction price allocated to the remaining performance obligations is omitted by applying thepractical expedient as the Company and its consolidated subsidiaries have no significant contract with an
original expected duration exceeding one year. In addition, among consideration arising from contracts withcustomers, there are no significant amounts not included in transaction price.
(Notes on Per Share Information)
1. Net assets per share

3,279.13 yen

2. Profit per share

334.38 yen- 106 -

(Notes on Significant Subsequent Events)(Management integration of the Company and Techno Quartz Inc. by way of share transfer and transition to aholding company structure)
The Company and Techno Quartz Inc. (“Techno Quartz”) have, at the Board of Directors meeting held on May
10, 2024, resolved to establish GLTECHNO HOLDINGS, INC. (the “Joint Holding Company”) as a wholly
owning parent company of both companies and integrate their management (the “Management Integration”) by
way of a joint share transfer (the “Share Transfer”) as of October 1, 2024 (the “Effective Date”). Both companies
executed a management integration agreement and jointly prepared a share transfer plan regarding the Share
Transfer (the “Share Transfer Plan”).
1. Purpose of Management Integration
The two companies, namely: (a) the Company, which has a diverse range of customers, is not easily affected bymacro trends, and has a solid business foundation of stably supporting the group’s profits; and (b) Techno
Quartz, which is expected to achieve further market growth and has established its status in a niche field, will act
as the core of the corporate group, and each of these two companies, as well as the group as a whole, will strive
to make further leaps forward and achieve increased corporate value. More specifically, the Management
Integration is expected to enable the accomplishment of the following measures and effects:(1) Capturing growth opportunities through strengthened group strategy functions and optimized management
resource allocation
In the ever-changing environment surrounding the Company and Techno Quartz, optimizing the allocationof management resources across the group is considered to be of the utmost importance in achieving asustainable increase in corporate value continuing into the future. In view of the fact that the Company andTechno Quartz have until now been making decisions on an independent footing, and the structure of thegroup, which has two mutually different companies as its members, namely, (a) the Company, which has astable business foundation, and (b) Techno Quartz, which is affected by the economic cycle known as the“silicon cycle,” room for improvement is recognized in terms of investment and optimal resource allocation
to be made for the growth of the group as a whole. The Management Integration is therefore considered toenable the allocation of management resources in a manner that can achieve the growth of the group as awhole in line with the business characteristics of the Company and Techno Quartz, as well as active
investments in the fields of growth.
(2) Improving management efficiency through the consolidation of administrative functions
Through the Management Integration, the Company and Techno Quartz will have parallel positions under
the umbrella of the Joint Holding Company, and it is considered that this will allow for personnel exchanges,
the engagement of various human resources, and career development opportunities, which could not berealized to date, as well as the further permeation of management philosophy, which the companies consider
will enable the assignment of the right person to the right position across the group, and the achievement of
improved operational efficiency and quality of the two companies as a result of their common functions
being consolidated in the Joint Holding Company.
(3) Maximizing value provided to stakeholders and expediting decision-making processes
Under the Joint Holding Company that has group strategy functions, the Company and Techno Quartz will
strive to increase the value to be provided to their stakeholders, including their shareholders, business
partners and employees, by demonstrating synergies, and working toward the growth of the group as awhole.
The issue of parent-subsidiary listing, which may create a structural conflict of interest, has been discussed
as a corporate governance issue. With regard to the two companies mutually utilizing management
resources, there is a recognized risk of certain restrictions or limitations arising in the future in theirpromoting such mutual utilization in a prompt and smooth manner, due to concerns about possible conflictsof interest between the Company and Techno Quartz’s minority shareholders, as well as from theperspective of the Techno Quartz securing independence. However, as a result of the Share Transfer, bycausing the Joint Holding Company to have the function of developing group-wide management strategies
and thereby separating the development of management strategies from the execution thereof and delegating
decision-making authority to the Company and Techno Quartz concerning their business, as well as aligninginterests within and outside the group, the Company and Techno Quartz consider that they can build astructure that allows them to pursue synergy effects through prompt decision-making and group-wide
sharing of management resources.
- 107 -

2. Summary of transit to a holding company structure(1) Schedule for the Share Transfer
Board of directors meeting to approve the memorandum of
Friday, February 9, 2024
understanding on the Management Integration (both companies)
Execution of the memorandum of understanding on the
Friday, February 9, 2024
Management Integration (both companies)
Record date for annual meeting of shareholders (both companies) Sunday, March 31, 2024
Resolution of board of directors meeting to approve theManagement Integration Agreement and the Share Transfer Plan
Friday, May 10, 2024
(both companies)
Execution of the Management Integration Agreement andFriday, May 10, 2024
preparation of the Share Transfer Plan (both companies)
Annual meeting of shareholders to approve the Share Transfer
Friday, June 21, 2024 (Scheduled)Plan (Techno Quartz)
Annual meeting of shareholders to approve the Share Transfer
Tuesday, June 25, 2024 (Scheduled)Plan (the Company)
Final trading date on the Tokyo Stock Exchange (bothThursday, September 26, 2024
companies)(Scheduled)
Date of delisting from the Tokyo Stock Exchange (bothFriday, September 27, 2024 (Scheduled)companies)
Scheduled integration date (registration date of establishment of
Tuesday, October 1, 2024 (Scheduled)
the Joint Holding Company)
Joint Holding Company listing date
Tuesday, October 1, 2024 (Scheduled)(Note) Shown above is the current schedule, and these dates are subject to change through mutual consultation
between the Company and Techno Quartz whenever necessary due to the need for such change incarrying out the procedures for the Management Integration and the Share Transfer, or for any otherreason.
(2) Method of the Share Transfer
A joint share transfer will be conducted, pursuant to which the Company and Techno Quartz will both
become the “wholly owned subsidiaries in the share transfer,” and the Joint Holding Company to be newly
established will become the “wholly owning parent company in the share transfer.”(3) Details of allotment pertaining to the Share Transfer
The Company
Share transfer ratios

1.00

Techno Quartz
2.10(Note 1) Detailed matters on the allotment of shares pertaining to the Share Transfer
It is planned that one (1) share of the Joint Holding Company’s common stock will be delivered foreach share of the Company’s common stock and that two point one zero (2.10) shares of the Joint
Holding Company’s common stock will be delivered for each share of Techno Quartz, respectively. If,
as a result of the Share Transfer, there is any fraction of less than one (1) share in the respective
numbers of shares of the Joint Holding Company’s common stock that are required to be delivered tothe shareholders of the Company or Techno Quartz, the amount corresponding to such fraction of lessthan one (1) share will be paid to the relevant shareholders in accordance with the provisions of Article
234 of the Companies Act and other related laws and regulations; provided, however, that the sharetransfer ratios specified above are subject to change through mutual consultation between the twocompanies, if there is any material change in any of the conditions forming the basis for the calculation
thereof.
(Note 2) Number of new shares to be delivered by the Joint Holding Company (planned):
18,379,715 shares of its common stock
The number of shares specified above is calculated based on the Company’s total number of issued
shares of 11,190,000 shares (as of March 31, 2024), and Techno Quartz’s total number of issued sharesof 3,900,000 shares (as of March 31, 2024). As the Company and Techno Quartz are respectively
planning that, before the Share Transfer takes effect, they will cancel their treasury shares which are
currently held or may hereafter be newly acquired by them, within the range of such treasury shares that- 108 -

can be cancelled in practice, it is not planned that the shares of the Joint Holding Company will beallotted for the treasury shares respectively held by the Company and Techno Quartz as of March 31,
2024 (the Company: 930,260 shares; Techno Quartz: 33,345 shares); provided, however, that, as thenumbers of treasury shares to be actually cancelled before the Effective Date of the Share Transfer have
not yet been determined, the aforementioned number of new shares to be issued by the Joint Holding
Company is subject to change.
(Note 3) Handling, etc. of shares less than one unit
The number of shares constituting one unit of shares of the Joint Holding Company shall be 100 shares.
The shareholders of the Company and Techno Quartz to whom the shares of the Joint Holding
Company are allotted in any number less than one unit (i.e., 100 shares) as a result of the Share Transfer
will be unable to sell their allotted shares on the Tokyo Stock Exchange or any other financial
instruments exchange. However, it is possible for shareholders who may come to hold such shares lessthan one unit to demand the Joint Holding Company to purchase such shares less than one unit held by
them, in accordance with Article 192, Paragraph 1 of the Companies Act. In addition, since the Joint
Holding Company plans to include a provision in its Articles of Incorporation to the effect that theshareholders of the Joint Holding Company who hold shares less than one unit are entitled to demand
the Joint Holding Company to sell them such number of the Joint Holding Company’s shares which,
together with the number of shares less than one unit held by them will constitute one unit, it is also
possible for such shareholders to demand the Joint Holding Company to sell them such number of the
Joint Holding Company’s shares which, together with the number of shares less than one unit held by
them, will constitute one unit, in accordance with Article 194, Paragraph 1 of the Companies Act andsuch provision of the Articles of Incorporation.
(4) Handling of share options and bonds with share options incidental to the Share Transfer
Neither the Company nor Techno Quartz has issued any share options or bonds with share options.
(5) Handling of expected delisting and the Joint Holding Company’s listing application
The Company and Techno Quartz are planning to conduct a technical listing of the shares of the newly
established Joint Holding Company on the Tokyo Stock Exchange. The listing date is scheduled for October
1, 2024. Furthermore, as the Company and Techno Quartz will become wholly owned subsidiaries of the
Joint Holding Company upon the Share Transfer, their shares are respectively planned to be delisted fromthe Tokyo Stock Exchange as of September 27, 2024, prior to the listing of the Joint Holding Company. The
actual delisting date will be determined pursuant to the relevant regulations of the Tokyo Stock Exchange.
3. Outline of accounting treatment to be performed
The accounting treatment pertaining to the Share Transfer is expected to fall under a “transaction under common
control, etc.,” in accounting standards in connection with business combinations, although the details of theaccounting treatment remain undecided as of now.
Figures less than the indicated unit have been rounded down.

- 109 -

Non-consolidated Balance Sheet(As of March 31, 2024)
AssetsDescription
Current assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetaryclaims - operating
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Advance payments to suppliers
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment

Amount13,914,733
2,029,336
475,543
2,183,765

3,548,521

Structures
Machinery and equipment
Tools, furniture and fixtures
Land
Leased assets

97,419248,356
190,682
3,572,527
34,314

Construction in progress

29,504

Intangible assets

254,185

Allowance for doubtful accounts

Total assets

Accounts payable - trade

4,063,393
1,786,074
1,612,244
1,602,219
44,194
93,925
26,135(2,100)13,819,380
7,721,325

Buildings

Software
Software in progress
Other
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Investments in capital of subsidiaries
and associates
Long-term prepaid expenses
Prepaid pension costs
Long-term loans receivable from
employees
Distressed receivables
Other(Thousands of yen)
Liabilities
Description
AmountCurrent liabilities
5,402,162
Notes payable - trade42,326
Electronically recorded obligations 1,414,691
operating

63,136
186,471
4,576
5,843,869
3,335,164
1,727,835
135,000

Short-term borrowings
Current portion of long-term borrowings
Lease liabilities
Accounts payable - otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Unearned revenue
Provision for bonuses
Provision for retirement benefits for
directors (and other officers)
Other
Non-current liabilities
Long-term borrowings
Lease liabilities
Deferred tax liabilities
Deferred tax liabilities for land
revaluation
Provision for retirement benefits for
directors (and other officers)
Asset retirement obligations
Other
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus

14,161
427,164

Legal capital surplus
Other capital surplus

12,960Retained earnings

5,057
191,582(5,057)

27,734,113

Legal retained earnings
Other retained earnings
Reserve for tax purpose reduction
entry
General reserve
Retained earnings brought forward
Treasury shares
Valuation and translation adjustments
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total net assets
Total liabilities and net assets- 110 -

1,218,231
735,000
436,920
13,41173,650300,265
186,798
89,879
310,881303
492,967
16,22070,6152,270,174
1,528,860
24,301
497,563
97,02450,261
1,728
70,435
7,672,337
19,007,626
1,207,795
1,819,711
1,751,219
68,492
16,489,840
162,748
16,327,091
121,387
7,586,000
8,619,704(509,720)
1,054,150
1,359,675
6,709(312,234)
20,061,776
27,734,113

Non-consolidated Statement of Income(April 1, 2023 - March 31, 2024)(Thousands of yen)
Description

AmountNet sales

16,335,869

Cost of sales

10,351,086

Gross profit

5,984,782

Selling, general and administrative expenses

4,413,536

Operating profit

1,571,245

Non-operating income
Interest income

227

Dividend income

479,030

Foreign exchange gains

49,127

Rental income from real estate

94,258Other

34,212656,856

Non-operating expenses
Interest expenses

26,457

Cost of real estate lease revenue

61,487

Other

4,463

Ordinary profit

92,4082,135,694

Extraordinary income
Gain on sale of investment securities

11,996

11,996Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of shares of subsidiaries andassociates
Profit before income taxes

426
5,658

2,141,605

Income taxes-current

416,567

Income taxes-deferred

36,623

Profit6,085

453,191
1,688,414- 111 -

Non-consolidated Statement of Changes in Equity(April 1, 2023 - March 31, 2024)(Thousands of yen)
Shareholders’ equity
Capital surplus
Share capital
Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Legal capitalsurplus

Other capital surplus

Total capital surplus

1,207,795

1,751,219

68,492

1,819,711

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

−

1,207,795

1,751,219

68,492

1,819,711

Shareholders’ equity
Retained earnings
Other retained earnings
Legal retained
earnings
Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Total retained
earnings

Reserve for tax
purposereduction entry

General reserve

Retained earnings
brought forward

162,748

121,387

7,586,000

7,598,175−−−(666,885)(666,885)−−−

1,688,414

1,688,414

−

−

−

−

−

−

−

−

−

−

15,468,311

−

−

−

1,021,528

1,021,528

162,748

121,387

7,586,000

8,619,704

16,489,840- 112 -

(Thousands of yen)
Shareholders’ equity
Treasury shares
Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Total shareholders’ equity(509,615)

17,986,203−(666,885)−

1,688,414

(105)

(105)

−

−

(105)

1,021,423(509,720)

19,007,626

Valuation and translation adjustments

Balance at beginning of
periodChanges during period
Dividends of surplus
ProfitPurchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period

Valuationdifference on
available-for-salesecurities

Deferred gains orlosses on hedges

Revaluation
reserve for land

Total valuationand translation
adjustments

748,793(8,676)(312,234)

427,882

−

−

−

−

(666,885)

−

−

−

−

1,688,414

−

−

−

−

(105)

610,881

15,385−626,267

626,267

610,881

15,385−626,267

1,647,691

1,359,675

6,709(312,234)

1,054,150

20,061,776- 113 -

Total net
assets

18,414,085

Notes to Non-consolidated Financial Statements(Notes on Significant Accounting Policies)
1. Valuation standards and methods for assets(1) Valuation standards and methods for securities
Shares of subsidiaries and associates
Stated at cost using the moving-average method
Available-for-sale securities• Securities other than shares, etc. that do not have a market priceStated at fair value (with the entire amount of valuation differences recorded directly into net assets, andthe cost of securities sold calculated using the moving-average method)• Shares, etc. that do not have a market priceStated at cost using the moving-average method(2) Valuation standards and methods of net receivables and payables arising from derivative transactions
Stated at fair value(3) Valuation standards and methods of inventories
Merchandise, raw materials and supplies: Stated at cost using the moving-average method(by writing down the book value based on a decline inprofitability)
Finished goods and work in process:Stated at cost using the specific identification method or theweighted-average method(by writing down the book value based on a decline inprofitability)

2. Depreciation and amortization of non-current assets(1) Property, plant and equipment (excluding leased assets)
Declining balance method
However, the Company adopts the straight-line method for buildings (excluding attached facilities) acquiredon or after April 1, 1998 and facilities attached to buildings and structures acquired on or after April 1, 2016.
The major useful lives are as follows:
Buildings

3 to 50 years

Structures

7 to 40 years

Machinery and equipment

2 to 7 years

Tools, furniture and fixtures

2 to 20 years(2) Intangible assets (excluding leased assets)
Software is amortized by the straight-line method based on the internal usable period (five years).
(3) Leased assets
Leased assets related to finance lease transactions with the right of ownership not transferred
Depreciated using the straight-line method over the lease term with zero residual value.

- 114 -

3. Recognition of allowances and provisions(1) Allowance for doubtful accounts
To provide for potential credit losses on receivables, allowance for doubtful accounts is recorded at an
estimated amount of uncollectible receivables calculated based on the historical rate of credit loss forgeneral receivables and determined in consideration of collectibility of individual receivables for doubtful
accounts and certain other receivables.
(2) Provision for bonuses
To provide for the payment of bonuses to employees, provision for bonuses is recorded at an amountaccrued for the fiscal year under review out of the estimated amount to be paid.
(3) Provision for retirement benefits
To provide for the payment of retirement benefits to employees, the Company recognizes the amount basedon the estimated amount of retirement benefit obligations and pension assets as of the end of the fiscal year
under review.
Provision for retirement benefits and retirement benefit expenses are treated as follows.
a. Method of attributing estimated retirement benefits to periods
In calculating retirement benefit obligations, the benefit formula basis is used as a method for attributing theestimated retirement benefit payments to the period up to the fiscal year under review.
b. Methods of treating actuarial differences and past service costs as expenses
Actuarial differences are treated as expenses, pro rata based on the straight-line method for a fixed period ofyears (three years) within the average remaining years of service of employees in the fiscal year when suchdifferences occurred, from the fiscal year following the fiscal year when such differences occurred.
Past service costs are treated as expenses by straight-line method for a fixed period of years (three years)
within the average remaining years of service of employees in the fiscal year in which such costs occurred.
Accounting treatment of unrecognized actuarial differences and unrecognized past service costs for the nonconsolidated financial statements differs from that for the consolidated balance sheet.
(4) Provision for retirement benefits for directors (and other officers)
To provide for the payment of retirement benefits to officers (including operating officers), the amountrequired to be paid at the fiscal year-end based on the internal regulations is recorded.
4. Method of hedge accounting(1) Method of hedge accounting
Deferred hedge accounting is applied.
(2) Hedged items and hedging instruments
Hedged items are foreign currency denominated transactions and hedging instruments are forward exchange
contracts.
(3) Policy of hedging transactions
Hedge transactions are used only to cover risks that are based on actual needs and not used as speculative
instruments.

- 115 -

5. Recognition of revenue and expenses
In recognizing revenue, we identify performance obligations based on contracts with customers regarding sale ofproducts, providing services, and other sale in the Analytical Instruments Business which is the Company’sbusiness. Revenue is usually recognized at the following time point on which the Company’s performanceobligation is deemed to have been satisfied.
• The Analytical Instruments Business develops, manufactures, and sells gas chromatograph and liquid
chromatograph instruments, consumables, etc.
• Revenue related to sales of products and goods
Regarding sales of products and goods, the performance obligation is deemed to have been satisfied at thetime the product or goods are delivered to the customer and the customer acquires control of the product orgoods, and revenue is recognized at that time of delivery. For domestic sales, if the period of time from when
the product or goods are shipped until control is transferred to the customer is the usual period, revenue isrecognized at the time of shipping and for export sales, revenue is recognized at the time the product or goods
arrived at a place agreed on with the customer.
• Revenue related to services and other sales
Revenue related to services and other sales principally includes revenue from inspection, maintenance, repair,relocation, and other operations related to products and the revenue is recognized at the time of completion ofservice provision.
Transaction price is calculated by deducting the amount of discount, etc. from consideration promised undercontracts with customers. Considerations for these performance obligations are received within approximately
one year after satisfaction of such obligations in accordance with the separately specified payment conditions
and do not include significant finance elements.
6. Other significant matters for preparation of non-consolidated financial statements
Not applicable.
(Notes on Accounting Estimates)
Valuation of inventories(1) Amount recorded in the fiscal year under review
Inventories (excluding supplies)

4,955,750 thousand yen

Loss on valuation of inventories

18,159thousand yen(2) Information on significant accounting estimates related to identified items(i) Calculation method
As stated in the non-consolidated financial statements “Notes to Non-consolidated Financial Statements,(Notes on Significant Accounting Policies), 1. Valuation standards and methods for assets, (3) Valuation
standards and methods of inventories,” the amount of inventories on the balance sheet is calculated basedon the cost method (by writing down the book value based on a decline in profitability).
(ii) Major assumption
For inventories stored beyond a certain period of time, the book value is written down assuming that theirprofitability has decreased.
(iii) Impact on the non-consolidated financial statements for the following fiscal year
If the market condition deteriorates and the number of elapsed years and the turnover period of
inventories increase, the amount to be recognized in the non-consolidated financial statements for thefollowing fiscal year may be significantly impacted.

- 116 -

(Notes on Balance Sheet)
1. Accumulated depreciation of property, plant and equipment

5,779,107 thousand yen

2. Short-term monetary receivables from subsidiaries and associates

335,939 thousand yen

Short-term monetary payables to subsidiaries and associates

40,510 thousand yen

Long-term monetary payables to subsidiaries and associates

120 thousand yen

3. Revaluation of land
Pursuant to the Act on Revaluation of Land (Act No. 34 of March 31, 1998; last revised on June 29, 2001), theCompany revalued its land held for business on March 31, 2002.
Pursuant to the Act for Partial Revision of the Act on Revaluation of Land (Act No. 24 of March 31, 1999), therevaluation amount after deducting deferred tax liabilities for revaluation is recorded as “revaluation reserve forland” in net assets.
Method of revaluation
Calculation is made by applying reasonable adjustments to values computed using the method establishedand published by the Commissioner of the National Tax Agency for the calculation of land values that serveas the basis for taxable amounts of land-holding tax set forth in Article 16 of the Land-holding Tax Act (ActNo. 69 of 1991) as set forth in Article 2, Item 4 of the Order for Enforcement of Act on Revaluation of Land
(Cabinet Order No. 119 of March 31, 1998).
Date of the revaluation

March 31, 2002

Difference between fair values at the fiscal year-end and bookvalues after the revaluation of the land revaluated(109,254) thousand yen

4. Pledged assets and corresponding liabilities
Pledged assets
Buildings

1,043,056 thousand yen

Land1,078,118
Total

2,121,175 thousand yen

Liabilities corresponding to pledged assets
Short-term borrowings

36,570 thousand yen

Current portion of long-term borrowings

184,270

Long-term borrowings

1,104,160

Total

1,325,000 thousand yen(Notes on Non-consolidated Statement of Income)Transactions with subsidiaries and associates
Amount of transactions from operating transactions
Net sales

1,046,381 thousand yen

Purchases

295,297 thousand yen

Others25,380 thousand yen

Non-operating transactions

437,645 thousand yen(Notes on Non-consolidated Statement of Changes in Equity)
The number of treasury shares at the end of the fiscal year under review
Common stock

930,260 shares- 117 -

(Notes on Tax Effect Accounting)Breakdown of deferred tax assets and deferred tax liabilities by major cause
Deferred tax assets
Revaluation reserve for land (loss)
Provision for bonuses
Loss on valuation of shares of subsidiaries
and associates
Loss on valuation of investment securities
Accrued social insurance premium
Provision for retirement benefits for
directors (and other officers)
Enterprise tax payable
Loss on valuation of inventories
Other
Subtotal of deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities
Valuation difference on available-for-salesecurities
Revaluation reserve for land (gain)
Reserve for tax purpose reduction entry ofland (gain)
Prepaid pension costs
Other
Total deferred tax liabilities
Deferred tax liabilities, net

162,921 thousand yen
150,946
125,659
21,76623,054
20,356
18,43813,366
51,577
588,089 thousand yen(328,338)
259,750 thousand yen
569,982 thousand yen
97,02453,572
130,7972,960
854,338 thousand yen(594,588) thousand yen(Notes on Revenue Recognition)
Basic information for understanding revenue
Same as those of the Notes to Consolidated Financial Statements(Notes on Per Share Information)
1. Net assets per share
2. Profit per share

1,955.39 yen
164.57 yen(Notes on Significant Subsequent Events)(Management integration of the Company and Techno Quartz Inc. by way of share transfer and transition to aholding company structure)
The Company and Techno Quartz Inc. have, at the Board of Directors meeting held on May 10, 2024, resolved
to establish GLTECHNO HOLDINGS, INC. as a wholly owning parent company of both companies andintegrate their management by way of a joint share transfer (the “Share Transfer”) as of October 1, 2024. Bothcompanies executed a management integration agreement and jointly prepared a share transfer plan regarding theShare Transfer. For details, please refer to Notes on Significant Subsequent Events in Notes to Consolidated
Financial Statements.
Figures less than the indicated unit have been rounded down.

- 118 -

Accounting Auditor’s Audit Report on the Consolidated Financial Statements

Independent Auditor’s Report
May 24, 2024
To the Board of Directors
GL Sciences Inc.
A&A Partners
Chuo-ku, Tokyo
Designated Limited Liability Partner
Engagement Partner

Masahito Murata, CPA

Designated Limited Liability Partner
Engagement Partner

Hiromi Ito, CPA

Audit Opinion
In accordance with the provisions of Article 444, Paragraph 4 of the Companies Act, we have conducted an audit of theConsolidated Financial Statements of GL Sciences Inc. for the fiscal year from April 1, 2023 to March 31, 2024,
comprising the Consolidated Balance Sheet, Consolidated Statement of Income, Consolidated Statement of Changes toShareholders Equity, and Notes to the Consolidated Financial Statements.
In our opinion, the aforementioned Consolidated Financial Statements present fairly, in all material aspects, the statusof assets and profits and losses of the corporate group consisting of GL Sciences Inc. and its consolidated subsidiaries
during the period covered by the Consolidated Financial Statements, in accordance with accounting principles generally
accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements.
We are independent of the Company and its consolidated subsidiaries as required by professional ethical requirements inJapan, and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
As described in Significant Subsequent Events, the Company and Techno Quartz Inc. have, at the Board of Directors
meeting held on May 10, 2024, resolved to establish a joint holding company and integrate their management by way ofa joint share transfer as of October 1, 2024, executed a management integration agreement, and jointly prepared a sharetransfer plan.
This event does not affect our opinions.
Other Information
Other information comprises the Business Report and its annexed detailed statements. The Company’s management is
responsible for the preparation and disclosure of this other information. The Audit and Supervisory Committee is
responsible for overseeing Directors’ execution of their duties in the establishment and operation of the Company’s
reporting process for the other information.
Our opinion of the Consolidated Financial Statements does not cover the other information, and we do not express any
opinion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materiallyinconsistent with the Consolidated Financial Statements or our knowledge obtained in the audit and also to remain alert
for indications that the other information is otherwise materially misstated.
If, on the basis of the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated Financial
Statements
The Company’s management is responsible for the preparation and fair presentation of the Consolidated Financial
Statements in accordance with accounting principles generally accepted in Japan. This includes establishing and operatingsuch internal controls as management determines are necessary to enable the preparation and fair presentation ofConsolidated Financial Statements that are free from material misstatement, whether due to fraud or error.

- 119 -

In preparing the Consolidated Financial Statements, management is responsible for assessing whether it is appropriate
to prepare the Consolidated Financial Statements on a going concern basis and disclosing, as required by accounting
principles generally accepted in Japan, matters related to the going concern.
The Audit and Supervisory Committee is responsible for overseeing Directors’ execution of their duties in theestablishment and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole
are free from material misstatement, whether due to fraud or error, on the basis of our audit and to express an independent
opinion on the Consolidated Financial Statements in our auditor’s report. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisionsof users of the Consolidated Financial Statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit process in conducting the following: We identify and assess the risks of material misstatements, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. The selection and application of audit procedures are at the discretion of
the auditor. We also obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
 Although it is not the purpose of our audit to express an opinion on the effectiveness of the Company’s internal control,
we do consider internal control relevant to the audit in order to design audit procedures that are appropriate to thecircumstances in our assessment of the risks.
 We evaluate the appropriateness of accounting policies adopted by management and the manner in which they areapplied, as well as the reasonableness of accounting estimates made by management and the appropriateness of related
supplementary notes.
 We reach a conclusion on the appropriateness of management’s preparation of the Consolidated Financial Statements
on a going concern basis and whether any material uncertainty exists related to events and conditions that may castsignificant doubt on the Company’s ability to continue as a going concern on the basis of the audit evidence obtained.
If we conclude that such a material uncertainty exists, we are required to draw attention in our auditor’s report to therelated supplementary notes in the Consolidated Financial Statements or, if such supplementary notes areinappropriate, express a modified opinion that excludes those matters. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to nolonger be able to continue as a going concern.
 In addition to whether the disclosures and supplementary notes in the Consolidated Financial Statements are inconformity with accounting principles generally accepted in Japan, we also evaluate the overall presentation, structure,and contents of the Consolidated Financial Statements, including the relevant supplementary notes, and whether theunderlying transactions and accounting events are fairly represented in the Consolidated Financial Statements.
 We obtain sufficient and appropriate audit evidence of the financial information of the Company and its consolidated
subsidiaries to express an opinion on the Consolidated Financial Statements. We are responsible for the direction,
supervision, and implementation of audits of the Consolidated Financial Statements. We are solely responsible for theaudit opinion.
We report to the Audit and Supervisory Committee regarding the planned scope and timing of the audit, significant
audit findings, including any significant deficiencies in internal control identified during the audit, and any other mattersrequired by auditing standards.
We report to the Audit and Supervisory Committee on compliance with the provisions on professional ethics in Japan
concerning independence, matters that are reasonably believed to affect the independence of the auditor, and, if we takemeasures to eliminate disincentives or apply safeguards to reduce disincentives to an acceptable level, the contents ofthese measures or safeguards.
Conflicts of Interest
There are no interests between the Company and its consolidated subsidiaries and A&A Partners or its engagement
partners that require disclosure under the provisions of the Certified Public Accountants Act.

- 120 -

Accounting Auditor’s Audit Report on the Non-consolidated Financial Statements

Independent Auditor’s Report
May 24, 2024
To the Board of Directors
GL Sciences Inc.
A&A Partners
Chuo-ku, Tokyo
Designated Limited Liability Partner
Engagement Partner

Masahito Murata, CPA

Designated Limited Liability Partner
Engagement Partner

Hiromi Ito, CPA

Audit Opinion
In accordance with the provisions of Article 436, Paragraph 2, item 1 of the Companies Act, we have conducted an
audit of the Non-consolidated Financial Statements of GL Sciences Inc. for the 57th Business Year of the Company from
April 1, 2023 to March 31, 2024, comprising the Non-consolidated Balance Sheet, Non-consolidated Statement of Income,Non-consolidated Statement of Changes to Shareholders Equity, Notes to Non-consolidated Financial Statements, andSupplementary Schedules (the “Non-consolidated Financial Statements”).
In our opinion, the aforementioned Non-consolidated Financial Statements present fairly, in all material aspects, thestatus of assets and profits and losses of the Company during the period covered by the Non-consolidated Financial
Statements, in accordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities underthose standards are described in the Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements.
We are independent of the Company as required by professional ethical requirements in Japan, and we have fulfilled ourother ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Emphasis of Matter
As described in Significant Subsequent Events, the Company and Techno Quartz Inc. have, at the Board of Directors
meeting held on May 10, 2024, resolved to establish a joint holding company and integrate their management by way ofa joint share transfer as of October 1, 2024, executed a management integration agreement, and jointly prepared a sharetransfer plan.
This event does not affect our opinions.
Other Information
Other information comprises the Business Report and its annexed detailed statements. The Company’s management is
responsible for the preparation and disclosure of this other information. The Audit and Supervisory Committee is
responsible for overseeing Directors’ execution of their duties in the establishment and operation of the Company’s
reporting process for the other information.
Our opinion of the Non-consolidated Financial Statements does not cover the other information, and we do not express
any opinion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materiallyinconsistent with the Non-consolidated Financial Statements or our knowledge obtained in the audit and also to remainalert for indications that the other information is otherwise materially misstated.
If, on the basis of the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit and Supervisory Committee for the Non-consolidated Financial
Statements
The Company’s management is responsible for the preparation and fair presentation of the Non-consolidated Financial
Statements in accordance with accounting principles generally accepted in Japan. This includes establishing and operatingsuch internal controls as management determines are necessary to enable the preparation and fair presentation of Nonconsolidated Financial Statements that are free from material misstatement, whether due to fraud or error.

- 121 -

In preparing the Non-consolidated Financial Statements, management is responsible for assessing whether it isappropriate to prepare the Non-consolidated Financial Statements on a going concern basis and disclosing, as required byaccounting principles generally accepted in Japan, matters related to the going concern.
The Audit and Supervisory Committee is responsible for overseeing Directors’ execution of their duties in theestablishment and operation of the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Non-consolidated Financial Statements
Our responsibilities are to obtain reasonable assurance about whether the Financial Statements as a whole are free frommaterial misstatement, whether due to fraud or error, on the basis of our audit and to express an independent opinion on
the Non-consolidated Financial Statements in our auditor’s report. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions ofusers of the Non-consolidated Financial Statements.
In accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit process in conducting the following: We identify and assess the risks of material misstatements, whether due to fraud or error, and design and perform
audit procedures responsive to those risks. The selection and application of audit procedures are at the discretion of
the auditor. We also obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
 Although it is not the purpose of our audit to express an opinion on the effectiveness of the Company’s internal control,
we do consider internal control relevant to the audit in order to design audit procedures that are appropriate to thecircumstances in our assessment of the risks.
 We evaluate the appropriateness of accounting policies adopted by management and the manner in which they areapplied, as well as the reasonableness of accounting estimates made by management and the appropriateness of related
supplementary notes.
 We reach a conclusion on the appropriateness of management’s preparation of the Non-consolidated Financial
Statements on a going concern basis and whether any material uncertainty exists related to events and conditions that
may cast significant doubt on the Company’s ability to continue as a going concern on the basis of the audit evidence
obtained. If we conclude that such a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related supplementary notes in the Non-consolidated Financial Statements or, if such supplementary
notes are inappropriate, express a modified opinion that excludes those matters. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause theCompany to no longer be able to continue as a going concern.
 In addition to whether the disclosures and supplementary notes in the Non-consolidated Financial Statements are inconformity with accounting principles generally accepted in Japan, we also evaluate the overall presentation, structure,and contents of the Non-consolidated Financial Statements, including the relevant supplementary notes, and whether
the underlying transactions and accounting events are fairly represented in the Non-consolidated Financial Statements.
We report to the Audit and Supervisory Committee regarding the planned scope and timing of the audit, significant
audit findings, including any significant deficiencies in internal control identified during the audit, and any other mattersrequired by auditing standards.
We report to the Audit and Supervisory Committee on compliance with the provisions on professional ethics in Japan
concerning independence, matters that are reasonably believed to affect the independence of the auditor, and, if we takemeasures to eliminate disincentives or apply safeguards to reduce disincentives to an acceptable level, the contents ofthese measures or safeguards.
Conflicts of Interest
There are no interests between the Company and A&A Partners or its engagement partners that require disclosure under
the provisions of the Certified Public Accountants Act.

- 122 -

Audit and Supervisory Committee’s Audit Report

Audit Report
The Audit and Supervisory Committee audited the performance of duties by Directors for the 57th BusinessYear from April 1, 2023 to March 31, 2024, and hereby reports on the method and results of that audit.
1.

Method and Contents of Audit
In regard to the content of resolutions of the Board of Directors regarding the matters stated in Article399-13, Paragraph 1, items (i) (b) and (c) of the Companies Act, as well as the systems developed inaccordance with those resolutions (internal control systems), the Audit and Supervisory Committee
periodically received reports from Directors, employees, and others regarding the status of theestablishment and operation of those systems and, as necessary, requested explanations and expressed
opinions in regard thereto, in addition to which the Audit and Supervisory Committee conducted audits
using the following methods:(i)
In conformity with the standards for auditing by the Audit and Supervisory Committee determined by
the Audit and Supervisory Committee and in accordance with the audit policies, division of duties,
and other requirements, the Audit and Supervisory Committee, in cooperation with the internal audit
department and other departments responsible for internal control of the Company, attended important
meetings, received reports from Directors, employees, and others regarding matters related to theperformance of their duties, requested explanations as necessary, viewed important decision-making
documents and other materials, and inspected the status of operations and assets. Additionally, inregard to subsidiaries, the Audit and Supervisory Committee received monthly business reports andcommunicated and exchanged information with the directors, auditors, and other personnel ofsubsidiaries.
(ii) The Audit and Supervisory Committee oversaw and verified whether the Accounting Auditor
maintained its independent position and conducted an appropriate audit, received reports from the
Accounting Auditor on the status of the performance of its duties, and requested explanations asnecessary. Additionally, the Audit and Supervisory Committee received notification from the
Accounting Auditor that, in accordance with the “Audit Quality Control Review Standards” (BusinessAccounting Council) and other standards, it had developed systems in order to ensure that its duties
are appropriately performed (i.e., notification of the matters stated in the items of Article 131 of theRegulations on Corporate Accounting) and requested explanations as necessary.
Using the methods above, the Audit and Supervisory Committee examined the Business Report, thesupplementary schedules thereto, the Non-consolidated Financial Statements (i.e., Non-consolidated Balance
Sheet, Non-consolidated Statement of Income, Non-consolidated Statement of Changes in Equity, and Notes
to Non-consolidated Financial Statements), the supplementary schedules to the Non-consolidated Financial
Statements, and the Consolidated Financial Statements (i.e., the Consolidated Balance Sheet, Consolidated
Statement of Income, Consolidated Statement of Changes in Equity, and Notes to Consolidated Financial
Statements) for the fiscal year under review.

2.

Audit Results(1)
Results of the audit of Business Report and other documents(i)
We find that the Business Report and the supplementary schedules thereto accurately present
the status of the Company in accordance with laws, regulations, and the Articles ofIncorporation.
(ii) We do not find any misconduct nor any material fact constituting a violation of any law,regulation, or the Articles of Incorporation in relation to Directors’ performance of their duties.
(iii) We find the content of the resolutions of the Board of Directors regarding internal control
systems to be reasonable. Additionally, we do not find any matters that should be commented
upon in regard to the statements in the Business Report or Directors’ performance of their duties
relating to the internal control systems.
(2)

Results of the audit of the Non-consolidated Financial Statements and supplementary schedules
thereto- 123 -

(3)We find the methods and results of the audit by the Accounting Auditor, A&A Partners, to bereasonable.
Results of the audit of the Consolidated Financial Statements
We find the methods and results of the audit by the Accounting Auditor, A&A Partners, to bereasonable.

May 28, 2024
Audit and Supervisory Committee, GL Sciences Inc.
Audit and Supervisory Committee Member (full-time)
Takahiro Saito [Seal]
Audit and Supervisory Committee Member
Kazuaki Kagohara [Seal]
Audit and Supervisory Committee Member
Yumiko Nagasawa [Seal](Note)

Audit and Supervisory Committee Members, Takahiro Saito, Kazuaki Kagohara, and YumikoNagasawa, are outside directors provided for in Article 2, item (xv) and Article 331, Paragraph 6of the Companies Act.

- 124 -