Shin Etsu Chemical : Matters Not Included in Delivered Documents Concerning Notice of Convocation of the 147th Ordinary General Meeting of Shareholders

This English language translation is prepared for reference only. In the event of any discrepancy between the text of this translation and the text of the original Japanese-language, the Japanese language text will prevail.

To: All Shareholders of Shin-Etsu Chemical Co., Ltd. (the "Company")

MATERIALS CONCERNING

NOTICE OF CONVOCATION OF

THE 147TH ORDINARY GENERAL MEETING

OF SHAREHOLDERS

Matters not Included in Delivered Documents Upon Request for Delivery of Documents

Pursuant to Laws and Regulations and the Articles of Incorporation Among the Matters for Which Electronic Provision Measures are Taken

1. Matters Concerning Stock Acquisition Rights
   Issued by the Company･･････････････････････････1
2. System to Ensure the Properness of Operations and
   the Progress thereof･････････････････････････････4
3. Notes to Consolidated Financial Statements･･････････9
4. Notes to Non-Consolidated Financial Statements･････20

Shin-Etsu Chemical Co., Ltd.

The above matters are not stated in the documents to be delivered to the Shareholders who requested the delivery thereof in accordance with the provisions of laws and regulations and the Company's Articles of Incorporation.

Matters Concerning Stock Acquisition Rights Issued by the Company

1. State of Stock Acquisition Rights (Stock Options) (as of March 31, 2024)

(1) General Description of Stock Acquisition Rights

The stock acquisition rights (stock options) the Company has issued are summarized below:

	Number of	Type & Number of		Amount
Chronological	Issue Price	Payable per	Exercisable Period
Stock	Shares Stock	Eligible
Number of Issue	per Share	Share upon
Acquisition	Acquisition Rights	of Rights	Grantees
(Date Issued)	(Yen)	Exercise of
Rights	are Entitled to
		Rights (Yen)
14th Issue of Stock
Acquisition Rights		101,000 shares of	Distributed		October 1,2020	Employees of
(for Distribution to	202	Common Stock in	2,382	through
gratis	Company
Employees)		the Company		March 31, 2024
(09/30/2019)
15th Issue of Stock						Directors of
Acquisition Rights		157,000 shares of			September 3,2021	Company
(for Distribution to	314	Common Stock in	400.8	2,625	through	(excluding
Directors)		the Company			March 31, 2025	Outside
(09/02/2020)						Directors)
15th Issue of Stock
Acquisition Rights		440,500 shares of	Distributed		September 3,2021	Employees of
(for Distribution to	881	Common Stock in	2,625	through
gratis	Company
Employees)		the Company		March 31, 2025
(09/02/2020)
16th Issue of Stock						Directors
					(excluding
Acquisition Rights
	327,500 shares of			September 2, 2023	Outside
(for Distribution to
655	Common Stock in	618.4	3,701	through	Directors) and
Directors and
	the Company			August 31, 2028	Corporate
Corporate Officers)
					Officers of
(09/01/2021)
					Company
16th Issue of Stock		876,500 shares of			September 2, 2023
Acquisition Rights		Distributed		Employees of
(for Distribution to	1,753	Common Stock in	3,701	through
gratis	Company
Employees)		the Company		August 31, 2028
(09/01/2021)
17th Issue of Stock						Directors
					(excluding
Acquisition Rights		477,000 shares of			February 11, 2025
			Outside
(for Distribution to
954	Common Stock in	797.8	3,583	through	Directors) and
Directors and
	the Company			February 9, 2030	Corporate
Corporate Officers)
					Officers of
(02/10/2023)
					Company
17th Issue of Stock		1,263,000 shares of			February 11, 2025
Acquisition Rights		Distributed		Employees of
(for Distribution to	2,526	Common Stock in	3,583	through
gratis	Company
Employees)		the Company		February 9, 2030
(02/10/2023)
18th Issue of Stock						Directors
				December 1, 2025	(excluding
Acquisition Rights		468,500 shares of
			Outside
(for Distribution to				through
4,685	Common Stock in	1,056	4,947	Directors) and
Directors and	November 29,
	the Company			Corporate
Corporate Officers)				2030
				Officers of
(11/30/2023)
					Company
18th Issue of Stock		1,472,500 shares of			December 1, 2025
Acquisition Rights				Employees of
	Distributed		through
(for Distribution to	14,725	Common Stock in	4,947
gratis	November 29,	Company
Employees)		the Company
			2030
(11/30/2023)

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Notes 1. The terms and conditions on which to exercise stock acquisition rights in the 14th and 15th issue are outlined below:

1. 1. 1. Those persons to whom the stock options are issued may exercise such stock options even after they cease to be a Director or an employee of the Company, within two (2) years from the later of such cessation of being a Director or an employee of the Company or the commencement of the exercisable period of rights (but only before the exercisable period of rights expires).
      2. In the event of the death of any person to whom the stock options are issued, heirs of such deceased person may exercise such stock options within two (2) years from the later of such death or the commencement of the exercisable period of rights (but only before the exercisable period of rights expires). Notwithstanding the foregoing, in the event of the death of any recipient of stock options that occurs after such recipient ceases to be a Director or an employee of the Company, heirs of such deceased person may exercise such stock options only within the period during which such deceased recipient would have been entitled to exercise such stock options in accordance with paragraph (1) above.
      3. Other conditions are as prescribed in the Stock Option Allotment Agreement.
   2. The terms and conditions on which to exercise stock acquisition rights in each of the 16th through 18th issues are outlined below:
   3. 1. Those persons to whom the stock options are issued may exercise such stock options even after they cease to be a Director, a Corporate Officer or an employee of the Company, within two (2) years from the later of such cessation of being a Director, a Corporate Officer or an employee of the Company or the commencement of the exercisable period of rights (but only before the exercisable period of rights expires).
      2. In the event of the death of any person to whom the stock options are issued, heirs of such deceased person may exercise such stock options within two (2) years from the later of such death or the commencement of the exercisable period of rights (but only before the exercisable period of rights expires). Notwithstanding the foregoing, in the event of the death of any recipient of stock options that occurs after such recipient ceases to be a Director, a Corporate Officer or an employee of the Company, heirs of such deceased person may exercise such stock options only within the period during which such deceased recipient would have been entitled to exercise such stock options in accordance with paragraph (1) above.
      3. Other conditions are as prescribed in the Stock Option Allotment Agreement.
   4. The Company carried out a 5-for-1 share split of its common shares as of April 1, 2023. As for the 14th through 17th issues of stock acquisition rights, Type & Number of Shares Stock Acquisition Rights are Entitled to, Issue Price per Share, and Amount Payable per Share upon Exercise of Rights are figures that have been adjusted after the share split.
2. State of Stock Acquisition Rights (Stock Options) Held by Directors and Audit & Supervisory Board Members of the Company
   The portion of the stock acquisition rights (stock options) described in (1) General Description of Stock Acquisition Rights above that belong to the Directors and Audit & Supervisory Board Members of the Company are broken down as below:

	Chronological Number of Issue	Number of Stock	Number of
	Acquisition Rights	Optionees
	15th Issue of Stock Acquisition	250	3
	Rights
Directors	16th Issue of Stock Acquisition	340	4
Rights
(Excluding Outside
17th Issue of Stock Acquisition	410	4
Directors)
Rights
	18th Issue of Stock Acquisition	2,090	4
	Rights

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2. State of Stock Acquisition Rights (Stock Options) Distributed to Corporate Officers and Employees during the Fiscal Year under Review

Pursuant to a resolution adopted by the Board of Directors on November 15, 2023, the 18th Issue of Stock Acquisition Rights, intended as incentive stock options, was issued as of November 30,

2023 for distribution to 12 Corporate Officers and 116 employees, as outlined below:

	Number of Stock	Type & Number of		Amount Payable per
Eligible	Shares Stock	Issue Price per Share	Share upon	Exercisable Period of
Grantees	Acquisition Rights	Acquisition Rights	(Yen)	Exercise of	Rights
		are Entitled to		Rights (Yen)
Corporate Officers of		259,500 shares of			December 1, 2025
2,595	Common Stock in	1,056	4,947	through
Company	the Company			November 29, 2030
Employees of		1,472,500 shares of			December 1, 2025
14,725	Common Stock in	Distributed gratis	4,947	through
Company	the Company			November 29, 2030

Note: Terms and conditions on which to exercise stock acquisition rights are as described in Note 2 of 1. (1) General Description of Stock Acquisition Rights above.

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System to Ensure the Properness of Operations and the Progress thereof

1. System to Ensure the Properness of Operations

"The Group actively conducts in sustainable business practices and creates the value sought by society and industry through the provision of unrivaled key materials technologies." In accordance with the foregoing business principle, the Board of Directors of the Company has resolved to carry out these systems and arrangements as described below.

1. System to Ensure That the Directors, Corporate Officers and Employees of the Company and Its Subsidiaries (hereinafter the "Group Companies") Perform Their Work Duties in Accordance with Applicable Laws and the Group Companies' Articles of Incorporation
   The Group Companies have a business principle of actively conducting sustainable business practices.
   The Company will maintain regulations concerning the Group Companies' compliance system, and the Group Companies' Directors, Corporate Officers and employees will perform their work duties in accordance with these regulations. The Internal Audit Department and other departments that are related to the contents of the audits will perform internal audits concerning the status of the operation of the compliance system.
   In order to uncover illegal activities at an early stage and correct such situations, the Company will establish a compliance consultation office and administer a compliance consulting/reporting system for Group Company executives and employees in accordance with the relevant internal regulations. Also, the Company will provide compliance training in an appropriate manner.
   The Company will appoint independent Outside Directors and Outside Audit & Supervisory Board Members, who will endeavor to preserve the compliance system from an independent point of view, by attending meetings of the Board of Directors and Managing Directors' meetings and/or by other actions.
2. System to Preserve and Administer Information Concerning the Company's Directors' and Corporate Officers' Performance of Their Work Duties
   Based on the regulations of information management and other internal regulations, the Company will prepare and preserve written and other records concerning the Directors' and Corporate Officers' performance of their work duties. The Company will promptly provide these records in response to a request from the Directors or Audit & Supervisory Board Members.
3. Regulations Concerning Management of Risk of Damage to the Group Companies, and Other Systems
   Along with maintaining regulations concerning the Group Companies' risk management system, the Company will establish a Risk Management Committee and facilitate the committee's work across the Group Companies, in order to discover and prevent risks that may occur in conjunction with the execution of the Group Companies' business.
   The Company will appoint Outside Directors and Outside Audit & Supervisory Board Members, who will endeavor to ensure the exchange of relevant information and appropriate risk management, by attending meetings of the Board of Directors and Managing Directors' meetings and/or by other actions.
4. System to Ensure That the Group Companies' Directors, Corporate Officers and Employees Perform Their Work Duties in an Effective Manner
   The Company will establish a system to ensure that the Group Companies' Directors, Corporate Officers and employees perform their work duties in an effective manner, in accordance with decision-making rules and division of work duties based on the regulations of the Board of Directors, regulations of the Corporate Officers, division of duties, the Group Companies' management regulations, and other internal regulations.

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Also, in order to increase the effectiveness of the Directors' and Corporate Officers' performance of their work duties, the Company will appoint Outside Directors, and these Outside Directors will not only observe and manage the Company's affairs from an independent viewpoint but also provide suggestions concerning all aspects of the Company's corporate management.

1. System to Ensure the Properness of the Activities of the Group Companies
   The Group Companies have a business principle of actively conducting sustainable business practices.
   The Company's Group Company Management Department, based on the Group Companies' Management Regulations, will require Group Companies to report to them important matters relating to the business of the subsidiaries. Also, the Company's Internal Audit Department and other departments that are related to the contents of the audits will, as necessary, work together with the Internal Audit Departments and other departments of the subsidiaries to perform internal audits of the relevant subsidiaries.
   The Company will establish the Group Audit & Supervisory Board Member Liaison Committee comprised of Full-time Audit & Supervisory Board Members and others from the Company and its main subsidiaries, and the Company's Audit & Supervisory Board Members will gather relevant information by attending important internal meetings, such as the meetings of the Board of Directors and the Managing Directors' Committee, and/or by other actions.
2. Matters Concerning Employees Who Are Requested by Audit & Supervisory Board Members to Assist with the Work Duties of the Audit & Supervisory Board Members
   The Company will appoint audit staff from among its employees, in accordance with the methods set forth in the Company's internal regulations, to assist the Audit & Supervisory Board Members with their work duties.
3. Matters Concerning the Independence from the Directors and the Corporate Officers of the Employees Referenced in the Previous Item and Ensuring of Such Employees' Compliance with the Instructions of the Audit & Supervisory Board Members
   The Company will appoint, terminate, and take other actions concerning the audit staff, in accordance with the methods set forth in the Company's internal regulations, with the consent of the Audit & Supervisory Board Members.
   The audit staff will comply with the instructions and orders of the Audit & Supervisory Board Members and assist with the work of the Audit & Supervisory Board Members.
4. System for Reporting to the Audit & Supervisory Board Members and for Ensuring that Persons Making Such Reports Are Not Treated in an Unfavorable Manner for Making Such Reports
   The Company's Directors, Corporate Officers and employees and the Company's subsidiaries' Directors, Corporate Officers, Audit & Supervisory Board Members, and employees as well as any persons who received reports from any of the above-referenced persons, shall promptly report the following matters to the Company's Audit & Supervisory Board Members, in accordance with the methods set forth in the Company's internal regulations:
5. • matters that will cause substantial damage to the Company or which have the potential of doing so;
   • important matters concerning management or financial information;
   • the status of the performance of internal audits;
   • material breaches of law or the Company's Articles of Incorporation;
   • the status of the administration of the compliance consulting/reporting system and the contents of reports made in connection with the system.

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Also, the Group Companies shall not unfavorably evaluate (in internal personnel records) or otherwise treat in an unfavorable manner, any of the above-referenced persons who makes a report, because of the making of such report.

1. System for the Purpose of Otherwise Ensuring That the Audits Performed by the Audit & Supervisory Board Members Will Be Performed Effectively

The Audit & Supervisory Board Members will hold periodic meetings with the Company's Accounting Auditors to exchange opinions, hold regular reporting meetings with the Company's Internal Audit Department, and take other measures to facilitate collaboration with them.

1. Matters Concerning Procedures for Advance Payment/Reimbursement of Expenses Arising from the Work of Audit & Supervisory Board Members and Other Matters Relating to the Treatment of Expenses and Other Financial Obligations Arising from Such Work
   If the Audit & Supervisory Board Members requests prepayment or reimbursement of any amounts necessarily incurred in the course of their audit work, the Company shall pay such amounts within a reasonable time and in a reasonable manner, unless it is clearly proven that such expenses were not necessarily incurred in the course of the audit work.
2. System to Cut Ties with Anti-social Forces
   The Group Companies shall adopt a consistently resolute attitude towards anti-social forces and shall take all measures necessary to cut itself off from any and all associations with anti-social forces.
   In accordance with this policy, our group will endeavor to develop internal systems under the leadership of the department in charge of managing these issues. Working closely with the police and other external organizations addressing these issues, our group will strongly push forward initiatives aimed at eradicating anti-social forces.

2. Overview of the Progress of the System to Ensure the Properness of Operations

The following shows an overview of the progress of the system to ensure the properness of operations for the fiscal year.

1. Progress of Compliance
   The Group Companies are working to perform corporate activities so as to ensure legal compliance.
   Out of laws and regulations related to corporate activities to be established or revised, etc., the Legal Department took the leadership in notifying and informing other departments of the Company of matters which are important. In addition, the Internal Audit Department made the annual audit plan in terms of the legality and reasonableness of business activities and audited each department, and reported the results thereof to the Directors and the Audit & Supervisory Board Members, etc.
   With respect to compliance, the Company held lectures by lawyers on compliance with the Antimonopoly Act and preventing bribes. In addition, in the training for new employees, the Company deepened their understanding of related laws and regulations, and explained the Company's approach and policies on compliance, etc., with reference to cases from other companies. Training for each class personnel included seminars on compliance with the Antimonopoly Act, Security Export Control and the like in addition to training seminars held by outside institutions such as government agencies as necessary, thereby ensuring compliance awareness. Additionally, in training for each class, the Company explained its initiatives toward respecting human rights, starting with its human rights policy and human rights due diligence, to raise awareness of human rights.

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(2) Progress of Preserving and Managing Information

For preserving and managing information, the Company audited each department concerning information management under the information management system, which was established following the Regulations of Information Management to confirm the preservation and management status of information including important documents. In addition, the Company held lectures by lawyers on precautions concerning information leaks and unauthorized acquisition of information.

With regard to information security, the Company continued its efforts to take multiple defensive measures against cyber-attacks at the Company and all domestic and overseas companies of the Group, and the Company kept an eye on the latest trends in cyber-attacks, received diagnoses from outside experts, and promptly took the necessary measures. Furthermore, in order to raise awareness of cyber security, the Company implemented multi-faceted measures, such as lectures by experts, training that simulated targeted attacks on e-mails, revision and distribution of guidelines for digital use related to cybersecurity, and training on information security for employees, etc.

(3) Progress of Managing the Risk of Damage

In the Company, the Risk Management Committee took the leadership in performing cross- sectional risk management activities in accordance with the Risk Management Regulations and thereby established a risk management system in order to detect and prevent the risks associated with the execution of operations. In addition, the Company held seminars on risk management in the training for each class of managerial personnel, thereby ensuring awareness.

Furthermore, the Company treated the prevention of accidents and disasters, etc. as its most important issue under the management policy that placed the first priority on safety, and regularly conducted environment and safety audits at the plants of the Company and its major subsidiaries in order to enhance the management system and take measures against the risks associated with processes and operations.

1. Progress of Efficient Execution of Duties by the Directors, etc.
   The Company has the Board of Directors and the Managing Directors' Committee as the bodies that discuss and determine the execution of operations. The Board of Directors discusses and determines important management issues, including basic policies of the Company and matters that need to be resolved according to laws and regulations or the Articles of Incorporation, etc. The Managing Directors' Committee discusses and decides on general business matters (excluding matters to be determined at Board of Directors meetings) in order to ensure prompt and efficient business execution. In this fiscal year, the Company held meetings of the Board of Directors thirteen times and meetings of the Managing Directors' Committee twelve times. All the meetings were attended by the Outside Directors and the Audit & Supervisory Board Members and various matters relating to the execution of operations were discussed and determined by receiving advice from the Outside Directors.
   Furthermore, the Group Companies have developed an efficient organizational framework and various regulations that will enable the Company to speedily respond to changes in the business environment.
2. Progress of Ensuring the Properness of Operations at the Group Companies
   The Company worked for proper and efficient management of the Group Companies in accordance with the Group Companies' Management Regulations and presented reports on the operations of major Group Companies at the Managing Directors' Committee to deliberate on issues while receiving reports on important matters related to the management.
   The Internal Audit Department audited each Group Company in terms of the legality and reasonableness of business activities in cooperation with the Group Companies as needed, and reported the results thereof to the Directors and the Audit & Supervisory Board Members, etc.

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1. Progress of Ensuring the Effectiveness of Audit Performed by the Audit & Supervisory Board Members
   The Audit & Supervisory Board Members, in addition to attending important internal meetings, such as meetings of the Board of Directors and the Managing Directors' Committee, audited the execution of operations by the Directors through receiving reports from Directors, Corporate Officers and employees, etc. on the execution of duties and through investigations, including inspection visits of offices/factories and subsidiaries of the Company. In order to improve the effectiveness of audits, the Audit & Supervisory Board Members received reports and explanations about accounting audit quarterly from the Accounting Auditor and exchanged opinions, and also exchanged information and opinions as needed to facilitate collaboration. Furthermore, the Audit & Supervisory Board Members received, from the Internal Audit Department, reports and explanations regularly on the status of internal audits, and exchanged opinions and collaborated with the Department. The Full-Time Audit & Supervisory Board Members reviewed approval documents and other documents, received reports such as those on the status of activities and the results of internal audits from the Internal Audit Department when appropriate, and gave advice and made requests as needed. In addition, the Group Audit & Supervisory Board Member Liaison Committee exchanged information and opinions to strengthen collaboration between the Audit & Supervisory Board Members of the Group.

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Notes to Consolidated Financial Statements

Basis of presenting consolidated financial statements

1. Scope of consolidation
(1) Information on consolidated subsidiaries
Number of consolidated subsidiaries-------99
Names of the principal consolidated subsidiaries	Shin-Etsu Handotai Co., Ltd.
SHINTECH INC.
Shin-Etsu Handotai America, Inc.	Shin-Etsu PVC B.V.
Shin-Etsu Handotai Taiwan Co., Ltd.	Shin-Etsu Polymer Co., Ltd.
S.E.H. Malaysia Sdn. Bhd.	Shin-Etsu Engineering Co., Ltd.
SHIN-ETSU HANDOTAI EUROPE LIMITED	SE Tylose GmbH & Co. KG
Shin-Etsu Silicones (Thailand) Limited	Asia Silicones Monomer Limited
JAPAN VAM & POVAL Co., Ltd.

1. Information on unconsolidated subsidiaries
   Name of the principal unconsolidated subsidiary Shin-EtsuMagnetics (Thailand) Ltd.
   Reasons for excluding unconsolidated subsidiaries from scope of consolidationThere are 35 unconsolidated subsidiaries excluded from the scope of consolidation as their total assets, net sales, net income (loss) and retained earnings in the aggregate are not material to the consolidated financial statements.

2. Application of equity method

1. Information on unconsolidated subsidiaries and affiliates to which equity method is applied
   Number of affiliates to which equity method is applied-------3
   Names of the principal subsidiaries and affiliates to which equity method is appliedMimasu Semiconductor Industry Co., Ltd.
   Shin-Etsu Quartz Products Co., Ltd.
2. Information on unconsolidated subsidiaries and affiliates to which equity method is not applied
   Name of the principal unconsolidated subsidiary and affiliate to which equity method is not applied
   Shin-Etsu Magnetics (Thailand) Ltd.
   Reasons for excluding unconsolidated subsidiaries and affiliates from scope of equity method
   There are 35 unconsolidated subsidiaries and 8 affiliates excluded from the scope of the equity method as their net income (loss) and retained earnings in the aggregate are not material to the consolidated financial statements.

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