Denka : Notice of Convocation of the 165th Ordinary General Meeting of Shareholders Other Matters Subject to the Electronic Provision

This document has been translated from the Japanese original for reference purposes only.

In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Notice of Convocation of the 165th Ordinary General Meeting of Shareholders

Other Matters Subject to the Electronic Provision (Matters for Which Document Provision is Omitted)

Company's Systems and Policies

Consolidated Statement of Changes in Net Assets

Notes to Consolidated Financial Statements

Non-consolidated Statement of Changes in Net Assets

Notes to Non-consolidated Financial Statements

(from April 1, 2023 to March 31, 2024)

Denka Co., Ltd.

(Securities Code: 4061)

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Company's Systems and Policies

1. Systems to Ensure the Appropriateness of Operations

The Company has determined the following by the resolution of the Board of Directors as a system to ensure the appropriate execution of duties.

1. Systems to ensure that Directors' and employees' execution of duties complies with laws and regulations and the Articles of Incorporation

The Board of Directors of the Company performs important decision-making concerning business execution in accordance with laws and regulations, the Articles of Incorporation, and the Board of Directors Regulations and oversees Directors' and Executive Officers' execution of duties.

Executive Directors and Executive Officers execute their duties under supervision by the President and oversee employees' execution of duties at divisions for which they are responsible.

The Audit Committee performs investigations of matters including the development and implementation status of internal control systems by attending corporate and other important meetings, receiving briefings from Directors, reviewing important documents, and other means, and audits the execution of duties by Directors from an independent standpoint.

The Company establishes the Denka Group Ethics Policy as a set of action guidelines for all the officers and employees of the Company and its subsidiaries concerning compliance, and corporate rules and regulations are established to ensure compliance with specific laws and regulations and the Articles of Incorporation.

In accordance with the provisions of the Denka Group Ethics Policy, the Company maintains a resolute attitude against antisocial forces and does not provide any payoff. Based on this policy, the Company establishes an internal system.

Regarding internal audits, the Company establishes the Internal Control Department as a dedicated department that conducts comprehensive internal auditing. In addition, regarding specialized or specific fields, business units and various committees provide education on compliance with rules and regulations and audit compliance statuses according to functions and report to the responsible officers, as necessary.

The Internal Control Department also performs assessment of statuses of design and operation of internal controls for the purpose of preparing a "report of internal control over financial reporting" specified by the Financial Instruments and Exchange Act and reports the result to the responsible officer.

The Company establishes the Compliance Hotline System to supplement internal audits by the departments described above to swiftly identify and address any violations.

1. Systems for storage and management of information related to Directors' execution of duties The Company records information related to Directors' execution of duties in accordance with the

Board of Directors Regulations, job descriptions, and other internal rules and regulations, and stores and manages such information based on the document retention regulations.

3) Rules and other systems for management of risk of loss

The Company formulates the Risk Management Guidelines to provide policies for responding to incidents that may greatly affect corporate activities.

Regarding such items as the environment, health and safety, and quality control, cross- organizational committees are established to comprehensively manage risks. Regarding items unique to departments, the relevant departments are responsible for managing associated risks.

4) Systems to ensure that Directors' execution of duties is efficient

The Company adopts the executive officer system to optimize the management decision-making function of the Board of Directors and to strengthen each function of business execution and oversight by separating them.

Apart from the Board of Directors as the decision-making body, the Company establishes the Management Committee consisting of Directors (including Directors who are Audit Committee Members) and some Executive Officers. Depending on the agenda, relevant executive officers also participate in the meeting of the Management Committee to streamline and accelerate deliberation on important managerial matters.

For such important matters as budget formulation and capital investment, the Company sets up deliberative councils or special committees by function.

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The job descriptions specify basic duties and decision-making authority of Directors, Executive Officers, and employees to enhance efficiency of execution of duties.

5) Systems to ensure the appropriateness of operations of the Group

Regarding management of subsidiaries, the Company specifies organizations responsible for each subsidiary. These supervisory organizations take responsibility for supervising. In addition, they provide guidance, administration, and oversight in accordance with the situation of each subsidiary.

Regarding ordinary operations of subsidiaries, the Company respects the autonomy and independence of each affiliated company. Regarding compliance with laws and regulations and social norms, the Company applies the Denka Group Ethics Policy and other relevant rules and regulations to affiliated companies and provides education and oversight.

1. Systems for reporting of matters relating to execution of duties by subsidiaries' directors etc. to the parent company
   The Company dispatches directors, etc. to subsidiaries from the organization that is responsible for the subsidiaries and information about important matters for the subsidiaries is exchanged and discussed at meetings of the Company's Board of Directors, etc.
   Regarding execution of duties, taking into account the degree of impact on the Group as a whole, subsidiaries report matters of greater importance to the parent company, that is the Company, via their supervisory organizations, in accordance with the Job Descriptions for Management of Affiliated Companies.
2. Subsidiaries' rules and other systems for management of risk of loss

The Company responds to incidents that may greatly affect subsidiaries' corporate activities in accordance with the Risk Management Guidelines.

Regarding such items as the environment, health and safety, and quality control at a subsidiary, directors, etc. dispatched to the subsidiary from the supervisory organization responsible for the subsidiary provide advice and guidance through discussion with specific organizations responsible for each such item.

iii) Systems to ensure that execution of duties by subsidiaries' directors, etc. is efficient The Company dispatches directors, etc. to subsidiaries from the supervisory organizations

responsible for the subsidiaries to facilitate information sharing between the Company and subsidiaries and to execute business systematically and efficiently by the Group as a whole.

Depending on the degree of importance of subsidiaries, the Company has subsidiaries introduce the shared accounting system and provides resources of administrative organizations to enhance efficiency of execution of duties of subsidiaries.

1. 1. Systems to ensure that execution of duties by subsidiaries' directors, etc. and employees complies with laws and regulations and the Articles of Incorporation
      The Company establishes the Denka Group Ethics Policy applicable to the Group, including to subsidiaries, and encourages all the officers and employees of subsidiaries to ensure compliance with laws and regulations. At the same time, the Company manages subsidiaries in accordance with the Job Descriptions for Management of Affiliated Companies.
      The Company's Internal Control Department is principally responsible for internal audits of subsidiaries and conducts internal auditing, in a timely manner, receiving support of the Company's Legal Department, as necessary.
      The Company establishes a whistleblower system for early detection and correction of non- compliant conduct at subsidiaries.
2. Systems concerning employees who provide assistance to the Audit Committee, matters concerning securing effectiveness of instructions to the employees and matters concerning independence of such staff from Directors (excluding Directors who are Audit Committee Members)
3. 
   The Company sets up the Audit Committee Office as an organization that provides assistance to the Audit Committee and assigns at least one exclusively assigned employee to the Audit Committee Office based on consultation with the Audit Committee in advance. The Audit Committee Office serves as the secretariat for the Audit Committee and is directly commanded by the Audit Committee.

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The Audit Committee are consulted in advance about performance evaluation of employees who belong to the Audit Committee Office and determination of any other personnel matters.

1. Systems concerning reporting to the Audit Committee by the Company's Directors (excluding Directors who are Audit Committee Members of the Company) and employees and by those of subsidiaries, other systems concerning reporting to the Audit Committee, and systems to ensure that they do not receive unfavorable treatment because of their reporting to the Audit Committee Directors (excluding Directors who are Audit Committee Members of the Company), Executive
   Officers, and employees of the Company and those of subsidiaries report on their duties, by organization or by subsidiary, periodically or as necessary, in accordance with the instructions and/or requests of the Audit Committee. In addition, if they discover matters that will or may cause significant harm to the Group, they will immediately report them to the Audit Committee either directly or indirectly via the appropriate lines of command or Compliance Hotline System.
   The Internal Control Department reports the results of internal audits of the Company and subsidiaries periodically to the Audit Committee.
   The Company establishes a whistleblower system as a system available for all the officers and employees of the Company and subsidiaries for reporting non-compliant conduct, designating the Audit Committee Office as one of the contacts of the whistleblower system. If the Audit Committee Office, etc. receives a report, the content of the report is reported to the Audit Committee.
   It is specified in the Denka Group Ethics Policy that no person who reports on non-compliant conduct using the whistleblower system, etc. receives unfavorable treatment because of his/her reporting.
2. Policy for treatment of expenses, etc. incurred by Audit Committee Members' execution of duties and other systems to ensure that the Audit Committee effectively perform auditing
   Directors secure the necessary budget in order not to impede execution of duties by Audit Committee Members. At the same time, when an Audit Committee Member makes a claim in accordance with Article 399-2, Paragraph 4 of the Companies Act, the expenses and liabilities relevant to the claim will be paid without delay, unless it is deemed that they are unnecessary for execution of duties of the said Audit Committee Member.
   The Internal Control Department and other internal auditing organizations collaborate with the Audit Committee and coordinate with its auditing so that both internal auditing organizations and the Audit Committee can perform their duties efficiently.

1. Operational Status of Systems to Ensure the Appropriateness of Operations

1. Compliance structure

Based on the Denka Group Ethics Policy, which defines the fundamentals of compliance, and the Whistleblowing Policy, the Company continued to implement awareness activities, including training, during the fiscal year under review.

As stated in the Issues to be addressed, we have identified improprieties related to certain resin products manufactured and sold by the Company and Toyo Styrene Co., Ltd., an equity-method affiliate, and certified by Underwriters Laboratories Limited Liability Company, an independent safety science organization based in the United States, etc. We seriously take the findings in the investigation report received from an external investigation committee and are doing our utmost to implement drastic measures to ensure that the management stance of placing the highest priority on compliance permeates throughout the Group.

2) Business execution of Directors

The Board of Directors of the Company is composed of nine members, including four Outside Directors, and meetings of the Board of Directors were held 14 times during the fiscal year under review. Based on laws and regulations, the Articles of Incorporation, and the Board of Directors Regulations, decision-making was conducted regarding important business execution, reports were received from Directors and Executive Officers regarding required business execution conditions, and appropriate supervision was provided.

Additionally, with the intent of deliberation and consideration for important management issues, the Management Committee, composed of Directors (including Directors who are Audit Committee Members), and a portion of Executive Officers, was held once a month, with the intent of increasing efficiency of consideration of important management issues and accelerating decision-making.

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3) Business execution of the Audit Committee

The Audit Committee of the Company is composed of four members, including three Outside Directors, and meetings of the Audit Committee were held 14 times during the fiscal year under review. Additionally, the Audit Committee worked closely with the Internal Control Department and other departments to perform efficient and effective audits of the Company's divisions and departments, business sites, and subsidiaries, in addition to receiving briefings on the status of business execution, etc. at periodic divisional report meetings. They held necessary discussions concerning these and other activities at meetings of the Audit Committee.

Furthermore, to assist the duties of the Audit Committee, the Audit Committee Office was established and exclusive employees were assigned.

4) Risk management structure

To respond appropriately to events that may greatly affect the corporate activities of the Company, the Risk Management Guidelines were defined, containing categories of specific types of risk that may occur, and a controlling division and emergency contact structure are maintained. During the fiscal year under review, the Company focused on establishing an integrated risk management framework to enhance risk management efforts during regular operations. Denka Group Risk Management Committee and other relevant meetings were held periodically and as required, with reports submitted to the Board of Directors. Additionally, the Company conducted contingency response drills for executive officers, simulating scenarios such as an earthquake directly beneath the Tokyo metropolitan area.

5) Implementation of internal audits

Based on the internal auditing plan, the internal auditing organizations of the Company implement internal audits of the Company and Group companies, and while reporting the results to the Board of Directors and the Audit Committee, cooperate closely with the Audit Committee, working together to conduct operations that are mutually efficient.

(3) Basic Policies regarding the Control of the Company

Under the new Vision and management plan "Mission 2030" (eight years from fiscal 2023), the Company will enhance human resources and management value, and focus on creating value in businesses that incorporate the three elements of Specialty, Megatrends, and Sustainability. The Company will also set specific financial and non-financial targets for fiscal 2030 and focus on achieving them in order to enhance the corporate value and the common interests of shareholders from a medium- to long-term perspective.

Also, under this basic policy, the management plan "Denka Value up" (five years from fiscal 2018), has been formulated, to strive for the realization of continuous and sound growth.

The Company has not established so-called takeover defense countermeasures, but for certain large scale purchases that may damage corporate value and large scale purchases where sufficient information or time may not be provided to shareholders in order to consider whether it should accept or reject such a purchase attempt, within the scope permitted by laws and regulations, regulations of financial instruments exchanges etc., appropriate interactions are taken in order to prevent damage to the Company's corporate value and the common interests of its shareholders.

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Consolidated Statement of Changes in Net Assets

(From April 1, 2023 to March 31, 2024)

																			(Millions of yen)
									Shareholders' equity
		Capital stock		Capital surplus		Retained earnings		Treasury stock				Total
						shareholders'
																				equity
	Balance at beginning of the fiscal	36,998			49,406					183,391		(7,650)			262,145
	year
	Changes of items during the fiscal
	year
	Dividends from surplus											(7,764)							(7,764)
	Profit attributable to owners of parent											11,947							11,947
	Change in ownership interest of					(0)													(0)
	parent due to transactions with non-
	controlling interests
	Purchase of treasury stock														(150)			(150)
	Disposal of treasury stock					(0)									15			15
	Net changes of items other than																				-
	shareholders' equity
	Total changes of items during the		-			(0)					4,182		(134)			4,047
	fiscal year
	Balance at end of the fiscal year	36,998			49,405					187,574		(7,785)			266,192
																			(Millions of yen)
			Accumulated other comprehensive income				Non-
		Valuation	Deferred					Foreign					Total				Total
		difference		Revaluation					Remeasurements	valuation		controlling
		gains or				currency
		on available-	losses on	reserve for			translation		of defined	and		interests		net assets
		for-sale	land				benefit plans	translation
		hedges			adjustment
		securities							adjustments
	Balance at beginning of the fiscal	16,350	(246)	10,407			11,101			(3,277)	34,334			3,871		300,351
	year
	Changes of items during the fiscal
	year
	Dividends from surplus														-						(7,764)
	Profit attributable to owners of parent														-						11,947
	Change in ownership interest of														-						(0)
	parent due to transactions with non-
	controlling interests
	Purchase of treasury stock														-						(150)
	Disposal of treasury stock														-						15
	Net changes of items other than	(2,092)	211		-			5,578			3,311		7,009			5,506		12,516
	shareholders' equity
	Total changes of items during the	(2,092)	211		-			5,578			3,311		7,009			5,506		16,563
	fiscal year
	Balance at end of the fiscal year	14,257	(34)	10,407			16,680			33		41,344			9,377		316,915

(Note) Amounts are rounded down to the nearest million yen.

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Notes to Consolidated Financial Statements

(Significant Matters, etc. Providing the Basis for Preparation of Consolidated Financial Statements) 1. Scope of consolidation

(1) Consolidated subsidiaries

Number of consolidated subsidiaries: 41 Names of principal consolidated subsidiaries:

Denka Singapore Pte., Ltd.

Denka Advantech Pte., Ltd.

Denka Performance Elastomer LLC DENKA Polymer Co., Ltd.

Hinode Kagaku Kogyo

Akros Trading Co., Ltd.

Effective from the fiscal year under review, the newly established Denka SCGC Advanced Materials Co., Ltd. is included in the scope of consolidation as a consolidated subsidiary. In addition, four former consolidated subsidiaries, Denka Techno Advance Co., Ltd., Denka Q-Genomics G.K., POSCO CHEMIE Sdn. Bhd., and ESCEM Sdn. Bhd. were excluded from the scope of consolidation due to the completion of liquidation.

1. Principal non-consolidatedsubsidiaries Names of principal non-consolidated subsidiaries:
   Kyushu Plastic Kogyo K.K., Denka E-material K.K. Reason for exclusion from the scope of consolidation:
   The non-consolidated subsidiaries are excluded from the scope of consolidation because they are both small in scale and the aggregate amounts of their total assets, net sales, net income or loss (amount prorated to the ownership), and retained earnings (amount prorated to the ownership), etc. have no material impact on the consolidated financial statements.

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1. Application of the equity method
2. 1. Non-consolidatedsubsidiaries and affiliates to which the equity method is applied
      Number of non-consolidated subsidiaries and affiliates to which the equity method is applied: 11 Names of principal non-consolidated subsidiaries to which the equity method is applied:
      SUZAWA NAMAKON K.K.
      Names of principal affiliates to which the equity method is applied: TOYO STYRENE Co., Ltd.
      JUZEN Chemical Corporation Denak Co., Ltd.,
      Kurobegawa Electric Power Company
   2. Non-consolidatedsubsidiaries and affiliates to which the equity method is not applied Name of the principal non-consolidated subsidiary to which the equity method is not applied:
      Kyushu Plastic Kogyo K.K.
      Name of the principal affiliate to which the equity method is not applied: Shogawa Nama Concrete Kogyo K.K.
      Reason for not applying the equity method:
      The non-consolidated subsidiary and affiliate not subject to the equity method are excluded from the application of the equity method because their individual impacts on consolidated net income or loss, retained earnings, etc., are negligible, and their overall impact on the consolidated financial statements is immaterial.
3. Accounting periods of consolidated subsidiaries

Among the consolidated subsidiaries, Denka Singapore Pte., Ltd. and 30 other subsidiaries have a year-end balance sheet date of December 31.

Necessary adjustments are made in preparing the consolidated financial statements to reflect any significant transactions that took place between that date and the consolidated balance sheet date.

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4. Accounting policies

1. Standards and methods for valuation of principal assets Securities
   Available-for-sale securities
   Securities other than shares, etc. that do not have a market price Stated at market value
   (Valuation difference is reported as a separate component of net assets. The cost of sales is calculated principally using the moving-average method.)
   Shares, etc. that do not have a market price
   Stated principally at cost using the moving-average method Derivatives
   Stated at market value Inventories
   Stated principally at cost using the weighted-average method
   (Balance sheet amounts are calculated by writing down their net realizable value when there is evidence of deterioration in value.)

1. Depreciation method for principal depreciable assets Property, plant and equipment
   Principally, the straight-line method is applied. Intangible assets
   Principally, the straight-line method is applied. (However, software for internal use is amortized by the straight-line method over the estimated internal useful life (principally five years).)

Lease assets

1. For finance leases that do not transfer the ownership of the lease assets to the lessee, the straight- line method with no residual value is applied, regarding the lease term as the useful life. Furthermore, for consolidated subsidiaries overseas preparing their financial statements in accordance with International Financial Reporting Standards, International Financial Reporting Standard 16 Leases ("IFRS 16") or US GAAP Accounting Standards Update (ASU) 2020-5Leases is applied. Under IFRS 16 and ASU 2020-5, lessees record all leases as assets and liabilities on the balance sheet, in principle, and the straight-line method is used as the depreciation method for right-of-use assets recorded as assets.

2. Standards of accounting for principal allowances and provisions

• Allowance for doubtful accounts

Allowance for doubtful accounts is provided to cover possible losses on receivables. The Company records an estimated irrecoverable amount based on the historical write-off rate for ordinary receivables and based on assessment of recoverability of individual receivables for specific doubtful accounts.

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• Provision for bonuses

The Company provides reserve for payment of bonuses to employees based on the amount of estimated employees' bonuses.

• Provision for stock benefits

In order to provide benefit from the Company's shares, the amount of projected equity benefit at the end of the consolidated fiscal year is recorded, based on stock delivery regulations for Directors (excluding Directors who are Audit Committee Members and Outside Directors) and Executive Officers.

(4) Other significant matters providing the basis for preparation of consolidated financial statements

• Method of amortization of goodwill and amortization period

Goodwill is amortized within twenty years over a reasonable period, and amortized using the straight-line method.

• Method of hedge accounting

The Company adopts the deferral method of hedge accounting. Interest rate swaps that satisfy the criteria for application of the special method are accounted for by the special method provided by the accounting standards. Forward exchange contracts that satisfy the criteria for application of the appropriation method are accounted for by the appropriation method.

• Method of accounting for retirement benefits

In order to prepare for payment of employees' retirement benefits, based on the projected amounts at the fiscal year-end, the amount of retirement benefit obligation from which the amount of plan assets is deducted is recorded as net defined liability.

In calculating retirement benefit obligations, the benefit formula basis is adopted for attributing expected benefits to periods.

Prior service cost is principally recorded by the straight-line method over certain periods (principally 10 years) within the average remaining service period of employees expected to receive benefits.

Actuarial gains and losses are principally recorded by the straight-line method over certain periods (principally 10 years) within the average remaining service period of employees expected to receive benefits, commencing with the following fiscal year.

Unrecognized actuarial gains and losses and unrecognized prior service cost are recorded, after adjustment for tax effects, as remeasurements of defined benefit plans in accumulated other comprehensive income in the net assets section.

• Revenue and expense recognition standards

The details of the main performance obligations in the major businesses related to revenue from contracts with the Group's customers and the timing at which the Group typically satisfies these performance obligations (when it typically recognizes revenue) are as follows.

1. Revenue recognition related to product sales
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